Sitting of 10 February 1959

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
PRIVATE BUSINESS
  BRADFORD CORPORATION BILL (By Order)
  Read a Second time and committed.
  BRITISH TRANSPORT COMMISSION BILL (By Order)
  Second Reading deferred till Thursday.
  FINSBURY SQUARE BILL (By Order)
  Read a Second time and committed.
HUMBER BRIDGE BILL (By Order)
  NORTH DEVON WATER BILL (By Order)
  Second Reading deferred till Tomorrow.
  PORT OF LONDON BILL (By Order)
  Second Reading deferred till Thursday, 19th February.
  PORTSMOUTH CORPORATION BILL (By Order)
  Second Reading deferred till Tomorrow.
  RAILWAY PASSENGERS ASSURANCE BILL (By Order)
  Read a Second time and referred to the Examiners of Petitions for Private Bills.
SOUTH DERBYSHIRE WATER BILL (By Order)
  SOUTH DERBYSHIRE WATER BOARD BILL (By Order)
    TORQUAY CORPORATION (WATER) BILL (By Order)
    Second Reading deferred till Tuesday next.
    WALLASEY EMBANKMENT BILL (By Order)
    Read a Second time and committed.

    PETITIONS (COTTON AND FOOTWEAR INDUSTRIES)
    Mr. Anthony Greenwood: I beg to present two Petitions relating to the position of the cotton and footwear industries. One is signed by over 5,700 residents in the Borough of Rawtenstall and the other by 5,922 residents in the Borough of Bacup. Both of them are in broadly similar terms. They draw attention to the heavy dependence of these towns on the textile industry and stress the difficulties stemming from the reduction of exports and the increase in cheap imports from overseas. The position is exacerbated by the difficulties currently experienced by the footwear industry, the other major industry upon which the area depends for its prosperity, and new industries are needed in the whole Rossendale Valley.
    The Bacup Petition concludes by urging the House.
    to take action without delay to limit the import of cheap textiles produced under unfair competitive conditions and to devote itself to saving the cotton towns of Lancashire from becoming derelict by taking prompt action to stimulate and revive the cotton industry.
    The Petition from Rawtenstall ends with the plea that we will take similar action to prevent distress in the area and both Petitions conclude with the words:
    And your Petitioners, as in duty bound, will ever pray.
    To lie upon the Table.

ORAL ANSWERS TO QUESTIONS
  SCOTLAND

    Roads
    Mr. Rankinasked the Secretary of State for Scotland what consideration is being given to achieving uniformity of texture on road surfaces in Scotland.
    The Joint Under-Secretary of State for Scotland (Mr. Niall Macpherson): The standard specification for road works provides for several types of surfaces, all of which are skid resisting. Provided that surfaces satisfy these requirements, my right hon. Friend does not think that uniformity of texture is in itself desirable or practicable.
    Mr. Rankin: Does the Minister realise that most drivers do not believe that part of his Answer which says that these roads are anti..skid? Does he realise that in the course of a day's journey the long-distance driver may travel over thirty different types of surface and that this has an upsetting effect on the driver, particularly after rain, when the surfaces become slippery? This is one of the chief causes of accidents on the roads.
    Mr. Macpherson: I agree that frequent changes in surface are not desirable, but they do not necessarily mean a change in the running characteristics of the road.
    Mr. Rankinasked the Secretary of State for Scotland if, in order to improve road services, he will arrange for adequate distribution bins or other accumulations of anti-skid material to be placed on roadways for which he is responsible at equal divides so that on the initial coverage manpower would be conveyed quickly to the accumulations and spreading would proceed right away, when the need arose.
    Mr. N. Macpherson: The highway authorities who act as trunk road agents for my right hon. Friend maintain dumps of gritting material at strategic points and, in general, gritting is carried out from vehicles which are loaded mechanically from the most convenient dump. I doubt whether it would be an improvement to base the gritting arrangements on smaller dumps of material from which the grit would be spread manually.
    Mr. Rankin: Is the hon. Gentleman aware that the strategic points are very few indeed, and that during the recent frost epidemic I saw many roads where there was no grit available to be spread on surfaces that were obviously slippery? Will he draw the attention of his agents to that fact and ensure that they act a little more speedily than they have been doing?
    Mr. Macpherson: I think the hon. Gentleman will realise that if it was a question of small dumps, men would have to get to those dumps either on foot or by being conveyed. As it is, the grit is conveyed in lorries and is spread from them.

    Elections (Polling Places)
    Mr. Woodburnasked the Secretary of State for Scotland what representations he has received under Section 11 of the Representation of the People Act, 1949, urging him to establish sufficient polling booths to make convenient the maximum voting at elections.
    Mr. N. Macpherson: The designation of polling places is primarily a matter for the sheriff as returning officer. Since 1955 the only representations made to my right hon. Friend the Secretary of State related to one area in the Western Isles constituency; following them, the returning officer designated a new polling place.
    Mr. Woodburn: Is the hon. Gentleman aware that during the passage of the Representation of the People (Amendment) Act, 1958, which deals with the use of cars at elections, the Home Secretary, whom I take it was speaking also on behalf of the Secretary of State for Scotland, gave his endorsement to a more generous attitude towards the opening of new polling stations so that people could reach the polls easily? Is the hon. Gentleman in a similar frame of mind regarding polling booths in Scotland?
    Mr. Macpherson: I have stated the position. Polling stations are a matter primarily for the sheriff, with appeal to the Secretary of State.

    Glasgow (Overspill)
    Mr. Woodburnasked the Secretary of State for Scotland what representations he has received against his declared policy for dealing with Glasgow overspill; whether he will balance any complaint about costs against the necessity and desirability of securing a suitable re-location of population and industry in Scotland; and if he will make a statement.
    The Joint Under-Secretary of State for Scotland (Mr. J. Nixon Browne): My right hon. Friend has received no formal representations though he is aware that there are different views about the economic and social implications. Full consideration will be given to all views, but the overriding consideration must be that people cannot be condemned to live indefinitely under the shocking conditions in which they are now living in central Glasgow. Since the Report of

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    the Clyde Valley Regional Planning Committee in 1946 it has been known that overspill is the only solution.
    Mr. Woodburn: While thanking the hon. Gentleman for that reply, may I ask whether he would also keep in mind the desirability of combining his policy with the necessity of locating industry and population in areas which are now becoming steadily depleted and therefore relatively uninhabited?
    Mr. Browne: As the right hon. Gentleman says, this is more than a Glasgow problem. It is a challenge and opportunity for Scotland, and I warmly welcome the foresight and enterprise that are being shown by so many burghs and county councils.

    Slamannan Plateau, Stirlingshire (Agriculture)
    Mr. Woodburnasked the Secretary of State for Scotland what effect he estimates the withdrawal of Marginal Agricultural Production grants will have on the farmers on the Slamannan Plateau in Stirlingshire.
    The Joint Under-Secretary of State for Scotland (Lord John Hope): My right hon. Friend sees no reason to expect any considerable change in production in this area.
    A further Marginal Agricultural Production Scheme has now been made for the current cropping year and thereafter assistance on similar lines will continue to be available for a further three years for marginal farms of less than 150 acres of crops and grass.
    Mr. Woodburn: Whilst thanking the noble Lord for that assurance, may I ask whether he will give a further assurance that if these farmers in that area, which is rather difficult from the forestry and farming point of view, find that the withdrawal of these grants threatens their ability to continue farming, his Department will be quite prepared to consider their representations?
    Lord John Hope: Yes, Sir.

    Proposed New Town, Finnich Toll
    Mr. Hannanasked the Secretary of State for Scotland what representations he has received from local authorities and
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    other interested bodies concerning the proposal to build a new town at Finnich Toll, Stirlingshire; and if he will make a statement.
    Mr. J. N. Browne: Two local authorities have lodged objections and one has asked that its interest should be noted. In addition, numerous representations have been received from other bodies and private sources. The application for planning permission in principle has been referred to my right hon. Friend to decide. He will not decide this until after a public inquiry. For this purpose he has asked the promoters for a fuller statement of their proposals, and this will be made available to interested parties in advance of the inquiry.
    Mr. Hannan: Whilst it will give great satisfaction to those concerned to know that inquiries will take place first, may I ask whether the hon. Gentleman will convey to his right hon. Friend the strong feelings of many people that this proposal means that there will be extremely luxurious houses available only for a selected few and that the proposal will make no contribution towards meeting Scotland's need for houses to rent? Moreover, will the hon. Gentleman bear in mind that this area has been long looked upon as a national park by Glasgow citizens? Since it is also the highway to the Trossachs and the Highlands, will the hon. Gentleman make strong representations about it?
    Mr. Browne: My right hon. Friend is aware of these views, but I do not think that I should convey anything to him in advance of the inquiry.

    Technical Education
    Mr. G. M. Thomsonasked the Secretary of State for Scotland if he will make a statement on the reorganisation proposed in the advisory committees for technical education in Scotland.
    Mr. N. Macpherson: I have sent the hon. Member a copy of the proposals, which were generally welcomed at a recent meeting with industrial and educational bodies. My right hon. Friend will make a statement as soon as the arrangements have been fully worked out.
    Mr. Thomson: Is the hon. Gentleman aware that these proposals, as far as I understand, were very similar to proposals

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    published by the Labour Party last summer? Is he aware that we congratulate him on being converted to such sensible proposals?

    Independent Schools (Direct Grants)
    Mr. G. M. Thomsonasked the Secretary of State for Scotland which schools have applied to him for direct grants to replace grants until now given by local authorities; what are the amounts of the grants requested; and what reply he has made.
    Mr. N. Macpherson: I assume the hon. Gentleman is referring to independent schools which received contributions under Section 25 (1) of the Education (Scotland) Act, 1946, from education authorities who were reimbursed in full. Fourteen such schools have applied provisionally for direct grant. With permission I will circulate their names in the OFFICIAL REPORT.
    Mr. Thomson: Would the hon. Gentleman be good enough to answer my last point, which was what reply is being made to them? Will he bear in mind that this matter raises important principles, both in relation to the right of local authorities to dispose of their general grants and in relation to educational policy in Scotland generally? Would the hon. Gentleman agree to give the House fuller information about what his right hon. Friend proposes before any final decision is made?
    Mr. Macpherson: New regulations will be laid in connection with the direct grant and the House will have an opportunity to discuss them then.
    The following is the list:

    Aberdeen, Albyn School for Girls.

    Aberdeen, St. Margaret's School for Girls.

    Dumfries, Maxwelltown Benedictine Convent.

    Dumfries, St. Joseph's College.

    Dunbarton, St. Bride's School.

    Edinburgh, Melville College.

    Edinburgh, St. Mary's Cathedral Choir School.

    Edinburgh, John Watson's School.

    Glasgow, Westbourne School for Girls.

    Glasgow, Laurel Bank School.

    Glasgow, The Park School.

    Glasgow, Craigholme School.

    Glasgow, Kelvinside Academy.

    Renfrew, St. Columba's School.

    Probation Service
    Mr. Hannanasked the Secretary of State for Scotland if he will take steps to ensure that all new entrants to the probation service are given complete training by his Department.
    Mr. N. Macpherson: My right hon Friend has accepted an improved scheme for centralised training of new entrants recommended to him by the Scottish Central Probation Council, and arrangements are now being made to carry it into effect.

    Criminal Law (Detention Without Trial)
    Mr. Hector Hughesasked the Secretary of State for Scotland if he is aware that under the criminal law of Scotland a person may be detained without trial for a period not exceeding 110 days and may then be released without being given any opportunity, other than such release and a subsequent civil action for damages, of clearing his reputation; in view of the fact that injustice may be done thereby, if he will consider some appropriate rectification of the law; and what steps he intends to take to rectify this wrong.
    Mr. N. Macpherson: In Scotland a person may be committed by the sheriff to prison pending his trial on indictment, and may then be detained for a maximum of 110 days which includes the period of trial. During this period new evidence or doubt about the existing evidence may emerge and criminal proceedings may be dropped; if so, the person is released at once. My right hon. and learned Friend the Lord Advocate informs me that nobody is committed for trial on indictment unless there is a substantial prima facie case against him, and that only very occasionally are proceedings subsequently dropped. In these circumstances my right hon. Friend the Secretary of State does not think that the law requires amendment.
    Mr. Hughes: Does the Minister realise that where a man afterwards found to be innocent is kept in prison for this long period of 110 days a great injustice is done to him unless he is either given an opportunity of clearing his name or is given compensation for the long detention? Surely, a fair-minded Secretary of

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    State would take the view that here is a wrong seeking a remedy and would take steps to provide that remedy.
    Mr. Macpherson: In reply to the first part of the hon. and learned Member's supplementary question, I would say that no suggestion of suspicion or guilt should attach to anyone who is released without trial. Certainly, in the eyes of the law nobody is found guilty unless he has been proved guilty.
    Mr. Ross: Editors have been sacked.

    Proposed Pit, Dunbartonshire
    Mr. Benceasked the Secretary of State for Scotland what decision has been taken on planning grounds respecting the sinking of a pit in the Bearsden-Milngavie area of Dunbartonshire.
    Mr. J. N. Browne: My right hon. Friend is in consultation with my noble Friend the Minister of Power about this proposal and hopes to give his decision before very long.
    Mr. Bence: Is the hon. Gentleman aware that there is considerable concern in the county about the long-drawn arguments on whether this pit shall or shall not be sunk? Will he speed the matter urgently? Is he aware that many miners, who will be unemployed as a result of closure of pits, and many people in the area are concerned about whether they can get on with building new homes, for if a pit is sunk the Coal Board will stop them building there?
    Mr. Browne: Yes, Sir. My right hon. Friend will see that there is no unavoidable delay.

    Hospital Accommodation, Thurso
    Sir D. Robertsonasked the Secretary of State for Scotland if he is aware of the shortage of hospital accommodation in Thurso, following the doubling of the town's population in the last three years; and whether he intends to expand Dunbar Hospital on its present site or to build another hospital elsewhere.
    Mr. J. N. Browne: The Northern Regional Hospital Board, which is, of course, primarily concerned, has this matter under review. My right hon. Friend cannot at this stage say what decision the Board may come to.
    Sir D. Robertson: Is it not the case that the Caithness Hospital Board and Caithness medical men have been pressing for a considerable time for an extension of this hospital and particularly for a maternity wing? Will the hon. Gentleman say that delay is not being used as an instrument of policy?
    Mr. Browne: Yes, Sir.

    Sheriffs-substitute (Title, Status and Remuneration)
    Sir W. Anstruther-Grayasked the Secretary of State for Scotland when he proposes to introduce legislation to bring the title, status and remuneration of Scotland's sheriffs-substitute into line with the standards prevailing in English county courts since the County Courts Bill of 1958.
    Mr. N. Macpherson: The County Courts Bill is a purely consolidating Measure which makes no change in the law in England, and no changes are contemplated in Scotland.
    Sir W. Anstruther-Gray: Yes, Sir, that is so; but will my hon. Friend bear in mind that the position in Scotland is different, in that the title of sheriff-substitute is derogatory for persons holding important, permanent positions? Furthermore, the remuneration of Scottish sheriffs-substitute is inadequate for people doing that very responsible work.
    Mr. Macpherson: If the title is derogatory it has been so for over 200 years. I should have thought it would have been hallowed by use. In reply to the second part of the supplementary question, I would point out that the salaries of county court judges were fixed in April, 1957, and the salaries of sheriffs-substitute were fixed at the same time after careful consideration. I am afraid that I can hold out no prospects to my hon. and gallant Friend of an early review.

    Booklet, "Designing for Safety in the Home"
    Sir J. Duncanasked the Secretary of State for Scotland whether he will circulate more widely than to housing committees and their officers the new booklet entitled, "Designing for Safety

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    in the Home", and, in particular, circulate it to architects in private practice, to gas boards and to electricity officials.
    Mr. J. N. Browne: My right hon. Friend is anxious that this booklet should be widely read. It has been put on sale by Her Majesty's Stationery Office—price 1s. 3d.—and can also be obtained from main newsagents and booksellers. My right hon. Friend hopes that the publicity in the general Press and trade journals and on television will draw public attention to it. Copies have been sent to the Gas and Electricity authorities in Scotland and to other public bodies interested in housing.
    Sir J. Duncan: Will my hon. Friend congratulate the staff which prepared this excellent booklet, and will he see that film strips are made of it so that they may be shown in cinemas or on television if necessary?
    Mr. Browne: I thank my hon. Friend and will look into the suggestion made in the latter part of his supplementary question.

    Education, Glasgow
    Mr. Rankinasked the Secretary of State for Scotland whether he is aware of the educational crisis which has developed in Glasgow; and if he will meet in conference with the Education Committee of the City Corporation and the Educational Institute of Scotland to discuss the situation with a view to finding remedies.
    Mr. N. Macpherson: My right hon. Friend is aware of the special problems particularly engaging the attention of the Glasgow education authority, and at the authority's request I met representatives of the authority on 19th January. My right hon. Friend has received no request from the authority since then for a meeting along the lines suggested by the hon. Member.
    Mr. Rankin: Is the Minister aware of the very serious warning uttered by the Convenor of the Education Committee of Glasgow last Thursday? If such a conference is requested by Glasgow City Education Committee, may we take it from the tone of his reply that he or his right hon. Friend will be prepared to take part in such a conference with the bodies named in the Question?
    Mr. Macpherson: Yes, Sir. If the authority requests another conference, the request will certainly be given most serious consideration.

    Tweed Bridge, Coldstream
    Sir W. Anstruther-Grayasked the Secretary of State for Scotland whether he is now in a position to give an amended figure for the estimated cost of strengthening the bridge over the Tweed at Coldstream to enable it to carry the extra heavy loads directed over it.
    Mr. N. Macpherson: My right hon. Friend, the Minister of Transport and Civil Aviation, whose engineers are investigating this problem, informs me that a complete report on it is not yet available.
    Sir W. Anstruther-Gray: May I ask my hon. Friend if he will bear in mind, when having a report made, that it is not only the bridge itself which will have to carry heavy loads of 200 tons and more, but also the roads; that these have to be paid for partly by the authority, and that such heavy loads do a great deal of damage also in the Burgh of Coldstream?
    Mr. Macpherson: As my hon. and gallant Friend knows, the question of damage in the Burgh of Coldstream has already arisen and is under consideration. On the general question, a classified road is the responsibility of the road authority. Where a classified road forms part of an established abnormal-load route, the Government are prepared to pay the whole cost of any works specifically required because of the use of the road by the abnormal loads.

    John Waters
    Sir D. Robertsonasked the Secretary of State for Scotland, in view of continuing public concern because proceedings have not been brought, if he will move for an inquiry into all the circumstances of the case of John Waters, in order, in the general public interest, to restore public confidence in the local police force.
    Mr. D. Howellasked the Secretary of State for Scotland if he will move for an inquiry into the case of John Waters, details of which have been supplied to him by the hon. Member for Caithness and Sutherland (Sir D. Robertson).
    Mr. N. Macpherson: This is a matter for the criminal authorities, who decided not to prosecute. The complaints against the police have been fully investigated by my right hon. and learned Friend the Lord Advocate. My right hon. Friend has no power to order an inquiry; nor would he consider it appropriate to proceed under the Tribunals of Inquiry (Evidence) Act, 1921.
    Sir D. Robertson: Does the Secretary of State for Scotland deny that one or both of the police constables assaulted this boy?
    Mr. Macpherson: The Secretary of State for Scotland has not had access to the evidence in question. It is for the Lord Advocate, for the criminal authorities, to deal with these matters.
    Mr. Howell: Is it not a monstrous thing that when seventeen witnesses have said they saw a young man in good heart taken away by policemen and immediately on release lie was seen by other witnesses and a indeed, to have very extensive injuries indeed, no inquiry is to be held on this prima facie evidence? Why is it that the police authority will not order an inquiry? Why is it that the Secretary of State will not have regard to his duties in respect of the defence of civil liberties, and, indeed, of the good name of the police force, by clearing up this matter?
    Mr. Macpherson: I have already stated the responsibilities of the Secretary of State in my reply. The only power that could be used to hold such an inquiry is, as I said, in the Tribunals of Inquiry (Evidence) Act, 1921, under which a tribunal may be established in pursuance of a Resolution of both Houses of Parliament on matters of urgent public importance. [HON. MEMBERS: "Why not?"] This procedure has never been used in such a case—[HON. MEMBERS: "Oh."]—and my right hon. Friend does not consider that it would be appropirate in this case. The Chief Constable could hold an inquiry and there would be an appeal from any findings to the Secretary of State. My right hon. Friend has no power to order the Chief Constable to hold an inquiry and it is hard to envisage how he could have advised the Chief Constable to hold one, since the evidence on which it would have been held is the same
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    as the evidence which the criminal authorities considered insufficient to justify a prosecution.
    Mr. Woodburn: This seems to be a very roundabout way of stating the Scottish law. Clearly the simpliest way to establish either the innocence or the guilt of the constables is to prosecute. As I understand it, the Lord Advocate, representing the Crown, is responsible for all prosecutions in Scotland and therefore, if a prosecution has not taken place, it is because the Lord Advocate has decided on behalf of the Crown that no evidence exists for a prosecution. Is the Lord Advocate satisfied that his decision in this case is correct? If not, why is not the Lord Advocate justifying his decision here today?
    Mr. Macpherson: In reply to the last part of the supplementary question, the Question was put to my right hon. Friend asking what powers he had to hold an inquiry. My right hon. and learned Friend the Lord Advocate looked into this again at the instance of my hon. Friend the Member for Caithness and Sutherland (Sir D. Robertson), and he decided that the Crown Counsel's decision that the evidence was insufficient to warrant an inquiry was correct.
    Mr. M. Clark Hutchison: Will my hon. Friend bear in mind that this case has been looked into twice already, and can he say whether the aggrieved party has a right of action for damages in the civil court if he wants to take it up?
    Mr. Macpherson: The answer to the first part of the supplementary question is, "Yes, Sir." It was looked into by Crown Counsel and it was also looked into at the instance of my right hon. Friend by the Lord Advocate. The answer to the second part of the supplementary question is also "Yes." I would point out that my hon. Friend, in the course of the Adjournment debate last Tuesday, said that if he received an unsatisfactory answer from my right hon. and learned Friend the Lord Advocate—and I gather he considers he did get an unsatisfactory answer because he has put down this Question—the parents intended to bring a civil action. Therefore, I do not think it would be right to develop the argument as to guilt or otherwise now.
    Hon. Members: Oh.
    Mr. Shinwell: Are we to understand from the Under-Secretary that both the Lord Advocate and his right hon. Friend the Secretary of State have conducted their investigations into these allegations? If so, can the facts, so far as the investigation has clarified the situation, be made available to hon. Members, so that we may judge whether justice has been done in this matter? Can the hon. Gentleman say why there is this anxiety to conceal the facts from hon. Members? What have the Government got to hide in a matter of this sort? Would not it he satisfactory, from the point of view of police themselves, for a thorough inquiry to be conducted?
    Mr. Macpherson: In answer to the first part of that rather long supplementary question, my right hon. Friend the Secretary of State has not conducted an inquiry into this matter. My right hon. and learned Friend the Lord Advocate has investigated the matter, but my right hon. Friend the Secretary of State has not done so. In the course of the Adjournment debate, my right hon. and learned Friend gave his reasons why it would not be appropriate, on long-established legal grounds, to state why he had exercised his discretion one way or another in a matter of this kind.
    Mr. Ede: Did John Waters himself appear before the person making the investigation and make a statement to him?
    Mr. Macpherson: Perhaps the right hon. Gentleman will put down a Question about that, if he wants an answer.
    Mr. H. Morrison: I hope that the hon. Gentleman can see that there is some apprehension on both sides of the House about this matter. Is not it the case that he ought to have known the answer to the supplementary question of my right hon. Friend the Member for South Shields (Mr. Ede), about whether this boy was seen? Is there anything in law, in practice or otherwise, to prevent the Secretary of State appointing, say, some distinguished lawyer or judge to make inquiries and to report to him on whether there is a prima facie case? Nobody wishes to persecute the police force, but on the other hand, nobody wishes to see the sort of thing alleged happen, if it did. Will the hon. Gentleman make representations to the
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    Secretary of State to appoint some competent person to conduct an inquiry into the matter?
    Mr. Macpherson: No, Sir. I do not think that I should have known whether the boy, John Waters, was seen or not. This is a matter which was no doubt contained in the papers examined by the Lord Advocate and it is not a matter for the Secretary of State.
    Mr. Hamilton: Why is the Under-Secretary answering the Question?
    Mr. Macpherson: Because I have been asked whether the Secretary of State will appoint an inquiry. As I stated in the original Answer, I am advised that the Secretary of State has no power to appoint a judicial inquiry.
    Sir J. Hutchison: Is my hon. Friend aware that anxiety on this matter is not limited to the other side of the House? Whether it is his responsibility or the responsibility of his right hon. Friend is not a matter with which I am concerned. I am concerned with the truth of the matter and with the desirability that the allegations against the police should be cleared up one way or the other.
    Mr. Macpherson: I realise very fully the anxiety which is felt in many parts of the House, but the fact is that my right hon. and learned Friend the Lord Advocate decided that the evidence in this case was insufficient to warrant an inquiry.
    Mr. Woodburn: Is it not obvious from what has taken place in the House today that hon. Members are not satisfied that all the evidence was put before the Lord Advocate when he made his decision? Is it not up to the Lord Advocate, or the Secretary of State, to satisfy hon. Members that the boy and all those connected with him had sufficient opportunity to make their representations when the Lord Advocate made his decision? Would it not be unfortunate if it went out to the country that there was any sort of backstairs presentation of the case in which the victimised or allegedly victimised people were not given proper access to the judge?
    Mr. Macpherson: I fully understand the point of view which the right hon. Gentleman has put, but I am bound to

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    say that the question of whether or not to prosecute is bound to rest and does rest with the Lord Advocate. [HON. MEMBERS: "Where is he?"] He has to weigh evidence to see whether it is sufficient to warrant proceeding with a prosecution. As I have already said, at the request of my right hon. Friend my right hon. and learned Friend went into this matter very fully and arranged for evidence to be taken from various witnesses, especially at the instance of my hon. Friend the Member for Caithness and Sutherland.
    Mr. Woodburn: On a point of order. As the Lord Advocate himself is not prepared to give an assurance to the House which will satisfy hon. Members, and since the Under-Secretary cannot speak for the Lord Advocate, who is entitled to speak for himself, how can the hon. Gentleman give us an assurance that the Lord Advocate has considered all the facts?
    Mr. Speaker: The Question is addressed to the Secretary of State for Scotland.
    Mr. D. Howell: On a point of order. Can you help us in this matter, Mr. Speaker? There has been an Adjournment debate and we have put down Questions to which we have had an unsatisfactory Answer. How can the matter be raised again? The Under-Secretary has said that a Resolution of the House would be necessary to set up a committee of inquiry, which the House apparently feels to be necessary. How can we act to get that done?
    Mr. Speaker: The hon. Member must use his own ingenuity and knowledge of our procedure in order to judge how best to proceed. He knows more about this case than I do. He could put down a Motion, which is the only thing I can suggest. Let him consult his hon. Friends.
    Mr. Shinwell: Further to that point of order. You must be aware, Sir, that if a Motion is placed on the Order Paper, it is at the discretion of the Government whether they provide time to debate it. If the Government decline to find time, how are we to raise the matter? Merely to place a Motion on the Order Paper will carry us no further. If the Lord Advocate is now here, why cannot he answer?
    Mr. Speaker: The reason that the Lord Advocate does not answer is that the Question is addressed to another Minister. Hon. Members have complained to me about not getting far with Questions. I think that enough time has been spent on these Questions.

    Cypriot Prisoners, Perth (Letters)
    Mr. Grimondasked the Secretary of State for Scotland why letters written by Cypriot prisoners in Perth Prison are subject to censorship by the Colonial Office.
    Mr. N. Macpherson: These letters, like those written by all other prisoners are subject to censorship by the Prison Governor, who is ultimately responsible to my right hon. Friend, but in deciding whether they contain objectionable matter the Governor has the benefit of advice from the Colonial Office.
    Mr. Grimond: Is not this a rather strange situation? I understand that the Governor has informed a prisoner that a letter written to that prisoner cannot be delivered because it has failed to pass censorship by the Colonial Office. Is there any legal justification for that under the 1884 legislation? Should not the authority be the Secretary of State for Scotland?
    Mr. Macpherson: The position is as I have already stated. Letters, both inwards and outwards, are censored and subject to the rules governing prisoners' correspondence, the Prison (Scotland) Rules, 1952.

    Local Authorities and Public Boards (Capital Projects)
    Mr. Grimondasked the Secretary of State for Scotland, in view of the relaxation, in various directions, of the restrictions in borrowing for capital purposes, what fresh direction he is issuing to local authorities or public boards who have schemes awaiting finance.
    Mr. N. Macpherson: My right hon. Friend has already made it clear to local authorities and public boards that he will consider sympathetically the bringing forward of capital projects which could be completed by the end of 1959, especially in areas where unemployment is high, and he is glad to say that as a result of

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    their response it is now expected that works to the amount of about £7½ million will be carried out.
    Mr. Grimond: I am grateful for the attention which is being paid to the high unemployment in the Highlands, where urgent public works are needed. However, will the hon. Gentleman consider the case of works which cannot be completed by the end of this year, because many more works, piers, drainage, sewerage schemes and electrical supplies, for instance, are badly needed in the areas of high unemployment? Since the Government have removed many restrictions on borrowing—for instance, they have more or less abolished the C.I.C.—could not the hon. Gentleman extend the good work?
    Mr. Macpherson: I will certainly convey what the hon. Gentleman has said to my right hon. Friend.

    Gallery of Modern Art, Edinburgh
    Mr. Grimondasked the Secretary of State for Scotland what is to be contained in the gallery of modern art announced for Edinburgh; and if he will make a statement.
    Mr. N. Macpherson: This is a matter for decision by the Trustees of the National Galleries of Scotland, but my right hon. Friend understands that the new gallery is likely to be used for paintings, sculptures, prints and drawings by artists of the present century.
    Mr. Grimond: Are any of these pictures already in public control? For instance, is it proposed to move any paintings out of the National Gallery into this gallery?
    Mr. Macpherson: Yes, Sir. In its collection the National Gallery already has works by leading Scottish painters of the century. It is hoped that works by present and past Scottish artists, which have been collected by bodies such as the Scottish Modern Arts Association and the Scottish Committee of the Arts Council, will become available.

    Radiotherapy Service, Glasgow
    Mr. Hannanasked the Secretary of State for Scotland if it is still his intention to build a major radiotherapy institute in Glasgow for advanced techniques and
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    research to serve the population of the Western Region, and in some respects the whole of Scotland.
    Mr. J. N. Browne: Yes, Sir. Work is expected to start this year on a major radiotherapy unit at the Western Infirmary. The plans for a second unit associated with the Royal Infirmary are well advanced.
    Mr. Hannan: Surely, in the letter of 27th March, 1957, it was indicated that there was to be an Institute co-ordinating the cancer services in Glasgow? Does the hon. Gentleman realise that what he has said is most disappointing and contrary to the expert opinion that was tendered to us that long time ago? Will he have a look at the division that has taken place between the Western Infirmary and the Beatson Memorial Hospital, whereby the Western will have only 40 beds, and the Radium Centre will be about two miles away?
    Mr. Browne: Yes, Sir, but we think that the Regional Hospital Board is right in its latest decision.
    Mr. Hannan: On a point of order. I beg to give notice that, owing to the unsatisfactory nature of the reply, I will endeavour to raise this question on the Motion for the Adjournment.

    Statutes (Maximum Penalties)
    Mr. Hamiltonasked the Secretary of State for Scotland if he will publish in the OFFICIAL REPORT a list of Statutes in which maximum penalties of £500 or more are permissible.
    Mr. N. Macpherson: No, Sir. This information could not be obtained without undue expenditure of time and effort.
    Mr. Hamilton: Can the Joint Under-Secretary give an undertaking that he will publish in the OFFICIAL REPORT the number of Statutes enacted this century in which the maximum fine is £500 or more? Will he give the reasons why the Government have introduced this disgraceful fine in the comparatively irrelevant Bill about to come before the Scottish Grand Committee—the Deer Bill?
    Mr. Macpherson: Perhaps the hon. Gentleman will put down a Question about the first point so that we may consider it. His second point deals with a Bill now before the House and, therefore, it would not be appropriate for me to answer his supplementary question.

    Forth Road Bridge
    Mr. Hamiltonasked the Secretary of State for Scotland whether he will consider ways of speeding up work on the Forth Road Bridge as a contribution to the solution of the unemployment problem.
    Mr. N. Macpherson: The various stages in the construction of the bridge have been carefully phased to ensure that the work proceeds, not only as quickly as possible, but in an orderly and economic manner. It would not be practicable to alter the timetable at this stage.
    Mr. Hamilton: As the hon. Gentleman is evidently not prepared to make any attempt to relieve the unemployment problem in Scotland, will he consider the suggestion that, since there are now 100,000 or more unemployed in Scotland—just about the same number as there are red deer—at least, we should have as much time in the Scottish Grand Committee for discussing the 100,000 unemployed as we will have for discussing the 100,000 red deer?
    Mr. Macpherson: The question of business in the Scottish Grand Committee is not a matter for me. I have already told the House, in reply to a previous Question, about work to the value of £7½ million which we are putting in hand, but the question of phasing the work on the Forth Bridge is not very elastic. The work of preparing the foundations will take two years, and, until it is completed, work cannot start on the erection of the superstructure, work on which, however, is going on at the present time in the workshops of the consortium.
    Mr. Ross: In view of the unsatisfactory nature of the Answers to all Scottish Questions, I beg to give notice that I shall raise them on the Motion for the Adjournment.

  TRADE AND COMMERCE

    Trade with China
    Mr. Ellis Smithasked the President of the Board of Trade if he will make a statement on British experience in negotiating orders in China, and on the future prospects of trade with China.
    The Parliamentary Secretary to the Board of Trade (Mr. John Rodgers): The experience of United Kingdom exporters
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    has been generally good. Our exports to China increased by 120 per cent. in 1958, as compared with 1957, and I hope that they will continue at a high level.
    Mr. Ellis Smith: While acknowledging that encouraging reply, may I ask if the Parliamentary Secretary agrees that, economically, China is hardly scratched yet; and, in view of the enormous good will which there is in China for Britain, and especially for our engineering products, will he consult his right hon. Friend with a view to taking further and more urgent action?
    Mr. Rodgers: We should be very happy to take any steps we can to promote trade between the two countries. Perhaps it would interest the hon. Gentleman to know that the Federation of British Industries is hoping to stage an exhibition of British goods in Peking in the spring of 1960, but that the project, which has our support, is being held up because the Chinese have not yet given permission for the representatives of the organisers to go to Peking.

    Strategic Controls
    Mr. Swinglerasked the President of the Board of Trade if he will make a statement on the further relaxation of strategic controls on trade with the Communist States, with special reference to the propects of expanding United Kingdom trade.
    Mr. J. Rodgers: The controls are kept under regular review by the Paris Group, and if scope is found for them further changes may be made from time to time. Since the substantial relaxations made last August, there is ample scope for an increasing trade which I am anxious to promote.
    Mr. Swingler: Has the hon. Gentleman noticed a statement by the Foreign Secretary a couple of days ago that the time was ripe for a great expansion of Anglo-Soviet trade? May I ask him whether that statement was made with Board of Trade approval, and if so, does it mean that the Board of Trade is now going to make some proposals for a big expansion of trade, and does that mean further modifications of controls?
    Mr. Rodgers: The list of further amendments to the embargo list was

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    published quite recently in the Board of Trade Journal for 2nd January. I do not think I can go beyond that.

    Goole
    Mr. G. Jegerasked the President of the Board of Trade whether he is aware of the large increase in the number of unemployed in Goole; and whether he will now include that town in the Government aid scheme for developing new industries.
    Mr. J. Rodgers: Whilst the number of unemployed in Goole has unfortunately increased during the last few months, I am glad to say that the total of unemployment is not so high or persistent that my right hon. Friend would be justified in including the town on the list of areas to benefit from the Distribution of Industry (Industrial Finance) Act.
    Mr. Jeger: Does not the hon. Gentleman realise that the figures of unemployment on the books do not reflect the true position, that several hundred work-people of Goole have to leave the town every day to go to seek work in other towns, sometimes a long way off? Has the Board of Trade no contribution to make towards the unemployment problem in Goole, other than closing down the local flax mill, which it did a little while ago?
    Mr. Rodgers: The Board of Trade will naturally welcome any application for industrial development certificates in this area. As I believe the hon. Gentleman knows, there is a large traffic between Goole and Hull, and I hope to go up to Hull at the beginning of next week to discuss the matter.

    Crook, County Durham (Factory Space)
    Mr. Ainsleyasked the President of the Board of Trade if he is aware that a factory building of 35,000 ft. floor space stands empty, with ground available for further development, at Crook, County Durham; and if he will use his powers to bring to the notice of industrialists that ample and suitable unemployed workers are available.
    Mr. J. Rodgers: Yes, Sir. The facilities offered by this factory have been made known to our Regional Controller
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    in Newcastle and he will not fail to bring them to the notice of suitable industrialists.
    Mr. Ainsley: As this private timber factory had to close down because the local authority could no longer build houses for need within the area, will the hon. Gentleman ask his right hon. Friend to instruct the North-East Industrial Development Board to take over this empty factory and provide employment in an area where juvenile unemployment now stands at 8·3 per cent.?
    Mr. Rodgers: The Board of Trade, of course, has no power to direct industry to any place, and priority must be given to those places on the D.A.T.A.C. list.

    Industrial Development Certificates
    Mrs. Castleasked the President of the Board of Trade whether he will review the present arrangements for issuing industrial development certificates, in order to ensure that industrial expansion takes place in the areas of greatest need.
    Mr. J. Rodgers: The policy is kept under constant review. The hon. Lady will appreciate that the direct effect of this control is purely negative.
    Mrs. Castle: Is not it absurd that, instead of going to a distressed area like Blackburn, the British Nylon Spinners have quite recently taken their new plant to Gloucestershire, which is not on the Board of Trade priority list? Does not that make a mockery of planning under the Distribution of Industry (Industrial Finance) Act, and will the Board of Trade take powers to see that industrial development certificates are required not only for the purpose of new factories but for existing ones?
    Mr. Rodgers: The granting of industrial development certificates must be kept flexible, but I am quite confident that the granting of them has become more and more difficult in congested areas. Perhaps it would interest the hon. Lady if I gave her the three reasons for which they are issued. Firstly, they are freely granted in D.A.T.A.C. areas; secondly, in other areas of high unemployment, they are granted where the project is suitable or tied to a particular place; and, lastly,

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    in areas of low unemployment, the applicant must provide overriding reasons for being allowed to develop there.

    Automation
    Mr. Zilliacusasked the President of the Board of Trade if he will appoint a committee of inquiry into the importance of automation as a means of cheapening and speeding up production and making British goods competitive on the international market on the one hand, and on the other to report on the reorganisation of the economic system necessary to prevent automation resulting in large-scale unemployment.
    Mr. J. Rodgers: The Board has already conducted a survey of industry's plans for automation and some of the problems involved. The results were published in the Board of Trade Journal a year ago. I do not think that we can usefully carry general inquiries further, but I shall continue to watch developments in this field with the greatest of interest.
    Mr. Zilliacus: While thanking the hon. Gentleman for his reply, may I ask him whether he agrees that we are in danger of getting into a dilemma on this issue? On the one hand, unless we speed up automation, we shall fall behind in the export markets as compared with countries that are introducing automation rapidly, and, on the other hand, if we do introduce automation rapidly, is there not a danger of the same thing happening here as has already happened in the United States, where there are between 3 and 4 million unemployed?
    Mr. Rodgers: That is indeed a fair statement of the case. But I would point out to the hon. Gentleman that, through various instruments, the Treasury is doing a great deal of research work into the problem through the N.R.D.C., the D.S.I.R., the A.E.A., the Ministry of Supply, and the Admiralty.

    Cotton Textile Industry
    Mr. Boardmanasked the President of the Board of Trade whether, in view of the decision of the Restrictive Practices Court on the price agreement of the Yarn Spinners' Association, and the Court's anticipation that its ruling is likely to cause further deterioration in the employment position in the cotton towns, he will
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    take urgent steps to get other industries into the affected towns.
    Mr. J. Rodgers: As I told my hon. Friend the Member for Heywood and Royton (Mr. Leavey) on 3rd February, we shall do all we can to mitigate any hardship that may result from the implementation of the Court's decision.
    Mr. Boardman: Will the Minister make know to industrialists that this is not merely another appeal on behalf of Lancashire and that employers will find men and women in the cotton towns whose skill and industrial loyalty is completely unsurpassed? In order to encourage employers to go to this area, will he try to persuade his right hon. Friend to build a few new factories?
    Mr. Rodgers: I endorse the first part of the hon. Gentleman's supplementary question. Regarding the building of new factories, we have already issued the list of places where the Government are prepared to build factories and the list does not include the whole of Lancashire.
    Mr. Thorntonasked the President of the Board of Trade if he will give an assurance that no Treasury funds will be made available for any redundancy scheme for the cotton textile industry which does not provide compensation for redundant workers as well as for redundant directors and shareholders.
    Mr. H. Hyndasked the President of the Board of Trade what plans he has for paying compensation to workers displaced from cotton mills and to those put on short-time working.
    Mr. J. Rodgers: I am sure that those concerned with the current discussions in the cotton industry are alive to the human problems which any re-organisation scheme will create, but I do not think it would be helpful if I were to prejudge the Government's attitude to any proposals which after full consideration the industry may decide to put forward.
    Mr. Thornton: Having regard to the parlous condition of industry in Lancashire and to the approaching General Election, will the hon. Gentleman ask his right hon. Friend to keep uppermost in his mind those famous—or perhaps I should say infamous—words, "Too little and too late"?
    Mr. Rodgers: I think that the hon. Gentleman is overlooking the fact that the trade unions are being associated with the industry's discussions. They are represented on the Special Development Committee and also on the Cotton Board itself.
    Mr. S. Silverman: Is the hon. Gentleman satisfied that the Government have adequate powers to render any help of this kind? Has not he repeatedly told the House that the only powers possessed by the Government by way of persuasion are negative powers which prevent people from doing things in certain places? From his experience, and from our experience, is it not clear that this is not sufficient, and that the Government need positive powers to make sure that new industries are taken to those districts which are losing what they already have?
    Mr. Rodgers: That is a totally different question.

    Vegetables (Tariffs)
    Sir L. Plummerasked the President of the Board of Trade whether he will state the grounds on which he rejected the applications for an increase in tariffs on new potatoes, fresh tomatoes, broccoli, and cauliflowers or lettuce and endive.
    Mr. J. Rodgers: A statement of the reasons for rejecting these applications was sent to the applicants. They published it, and it has since been reproduced in the Board of Trade Journal. My right hon. Friend sent a copy to the hon. Member.
    Sir L. Plummer: I received that copy. Does not the Minister agree that this is a case of pressure from hon. Members on the back benches resulting in the Minister revealing some information to the House? Having published the reply, is not it time that the Minister looked at this again? It is totally unsatisfactory to horticultural interests and to the agriculture group of the Conservative Party and in any case it is an injustice.
    Mr. Rodgers: I do not accept that any decision was made because of pressure from the back benches on either side of the House.

    Sunderland
    Mr. Willeyasked the President of the Board of Trade (1) whether he will now proceed with the development
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    of the proposed trading estate on the north bank of the Wear at Sunderland;
    (2) whether he will authorise the construction of an advance factory at Sunderland.
    Mr. J. Rodgers: No, Sir. As my right hon. Friend said on 29th January in answer to the right hon. Member for Battersea, North (Mr. Jay), the Board of Trade is at present only prepared to build new factories in Dundee, Greenock, North Lanarkshire, West South Wales and North East Lancashire, where the need is greater.
    Mr. Willey: Is not the Parliamentary Secretary aware that the Question is about a trading estate? Is he aware that a considerable time ago a survey was held and plans prepared for this trading estate and everyone in Sunderland believes that the time has come for a beginning to be made on this project?
    Mr. Rodgers: Perhaps the hon. Gentleman overlooks the fact that at present there are about 28 empty Board of Trade factories in Development Areas and that 14 of these are in the North-East Development Area—and, although I admit that this does not include Sunderland, there is at Jarrow an empty factory with a capacity of over 100,000 square feet.
    Mr. Willey: Will the Parliamentary Secretary take more energetic action to get tenants for these empty factories? At the same time, will he realise that we in Sunderland want the trading estate now?
    Mr. Rodgers: I will certainly take what energetic steps I can.
    Mr. Willeyasked the President of the Board of Trade whether he will add Sunderland to the list of places where Government assistance under the Distribution of Industry (Industrial Finance) Act, 1958, will be available.
    Mr. J. Rodgers: At the recent revision of the list, Sunderland did not qualify for inclusion; but my right hon. Friend will certainly watch the position closely and will be prepared to add Sunderland should the level of unemployment unfortunately justify it.
    Mr. Wiley: Is the Parliamentary Secretary aware that unemployment in

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    Sunderland is already running at over 5,000 and that we do not want him to watch anything any longer, but to do something? Is not it time that at least he took this step to show he is in earnest about the deteriorating unemployment situation in Sunderland?
    Mr. Rodgers: Perhaps it will give the hon. Gentleman some comfort if I say that additional employment which is likely to accrue in Sunderland from projects which have been approved but not yet completed will provide 1,152 jobs and that, naturally, we should like to see further development of projects there.
    Mr. Willey: As I should welcome some action from the Government, I beg to give notice that at the earliest possible opportunity I shall endeavour to raise this matter on the Adjournment.

    Silicones (Anti-Dumping Order)
    Mr. Gowerasked the President of the Board of Trade what evidence he has regarding the effectiveness of the 4s. duty, which he imposed under the Anti-Dumping (No. 1) Order in January, 1958, in giving protection to the British silicone industry against the material injury which they were suffering by reason of this dumping; and what further action he proposes to take in the matter.
    Mr. J. Rodgers: The effectiveness of this duty is kept under regular review.
    Mr. Gower: As this is the only antidumping Order yet introduced and as this duty will be quite ineffective to meet the dumping of protected French silicones, will my hon. Friend look at this matter and reconsider whether the duty should be increased?
    Mr. Rodgers: If the Board of Trade were to take any specific action either to increase, reduce or remove the duty, I think the hon. Gentleman would agree that it would be improper to give any prior notification of that action because it would have the obvious risk of forestalling or withholding supplies from the market in anticipation of a change.

    New Industries, Tyneside
    Mr. Blenkinsopasked the President of the Board of Trade what action has been taken by his Department to bring new industries to Tyneside, in view of the sharp increase in unemployment.
    Mr. J. Rodgers: Jarrow, Hebburn and South Shields have been added to the list of places where Government assistance under the Distribution of Industry (Industrial Finance) Act, 1958, is available, and approval has been given to fifteen schemes for extensions to Government-financed factories in the area which should provide employment for an additional 950 people.
    Mr. Blenkinsop: Is the hon. Gentleman aware that in Newcastle alone there are 6,000 people out of work and there is great anxiety regarding the development of unemployment in the ship-repairing and shipbuilding industry? Will he look at the matter to see what action can be taken?
    Mr. Rodgers: I am aware of the serious position. In addition to the figures I have announced, the extensions of private factories recently approved consist of 24 under construction which will provide 1,390 additional jobs and 25 not yet started which will provide employment for 587 persons—a total of just under 2,000 jobs.

    Industrial Design
    Mr. M. Clark Hutchisonasked the President of the Board of Trade whether he is aware of the success of the Design Centre in the Haymarket, London; and if he will approach the Council of Industrial Design with a view to getting a similar centre established in Edinburgh.
    Mr. J. Rodgers: I am certainly aware of the success of the Design Centre in London; indeed, I visited it yesterday. There is already a Design Centre in Glasgow which was opened in 1957 and this should cater for the needs of those interested in good design throughout Scotland.

    THE PRIME MINISTER AND MR. DULLES (DISCUSSIONS)
    Mr. Lewisasked the Prime Minister whether he will make a statement on his recent official discussions with Mr. Dulles; to what extent these discussions included matters pertaining to his pending visit to the Union of Soviet Socialist Republics; and whether, in view of these talks, he will now announce the date of his departure to Moscow.
    The Prime Minister (Mr. Harold Macmillan): The discussions with Mr. Dulles covered a wide range of subjects including my forthcoming visit to Moscow, the date of which I announced on 5th February.
    Mr. Lewis: We express our regret at the illness of Mr. Foster Dulles. May we have an assurance from the Prime Minister that he in no way associated himself with the statement alleged to have been made that, before negotiations commence, threats of war are being used regarding Berlin? Does not the right hon. Gentleman feel it would be better if we were to say that before any question of war is discussed we should get together and try to reach some understanding?
    The Prime Minister: I am sure the whole House will join in wishing Mr. Dulles a speedy recovery from his illness. The Government stands upon the declaration made on behalf of the N.A.T.O. Powers regarding the matter of Berlin.

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

ORDERS OF THE DAY

  SUPPLY
  [1ST ALLOTTED DAY]
  Considered in Committee.
  [Sir CHARLES MACANDREW in the Chair]

  National Insurance and Family Allowances
  Motion made, and Question proposed,
  That a Supplementary sum, not exceeding £26,496,000, be granted to Her Majesty, to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1959, for sums payable by the Exchequer to the National Insurance Fund and the Industrial Injuries Fund and for payments in respect of family allowances.
  3.31 p.m.
  The Joint Parliamentary Secretary to the Ministry of Pensions and National Insurance (Miss Edith Pitt): The Vote relates to National Insurance and family allowances. The main item in this Supplementary Estimate is an addition to the £14 million deficiency payments in the original Estimate.
  Provision to meet this deficit was contained in Section 2 (3, a) of the National Insurance Act, 1954. Because it was known that deficiencies in the National Insurance Fund were inevitable, the 1954 Act gave authority to meet, in addition to the Exchequer supplement of about £125 million a year, deficiency payments up to a total of £325 million in the five-year period ending 31st March, 1960.
  The only use to which this Section has been put so far, since it was passed in 1954, is the provision of the £14 million in the main Estimate for 1958–59. The reason was largely that claims for unemployment benefit had been lower than the assumed figure. Now we have this addition to the £14 million of the Supplementary Estimate for £25 million, which is attributable to an increase in the level of unemployment. I will come to the reasons for that in a moment. Perhaps I might, for the convenience of the Committee, deal quickly with the other items.

  1003
  The Supplementary Estimate includes an additional £1½ million for family allowances, making a total estimated expenditure of £126¾ million. Among the principal factors which give rise to the increase, is, first, that there has been a higher birth rate in the country. There were 418,500 births in the first half of 1958 compared with our forecast of 414,400. The estimated number of births for the whole current year has been revised from 816,000 to 840,000.
  There has also been a small increase in the proportion of families qualifying for the 10s. family allowance for the third and subsequent children; in other words, the number of large families is larger than we estimated. There has also been a welcome increase in the number of children remaining at school over the minimum age, and, therefore, their family allowances continue. I am sure that the Committee will welcome those three signs as a mark of confidence and security in the country.
  I now return to National Insurance, which, in any event, would have been in deficit this year under the present system. My right hon. Friend gave the figures of the estimated deficit in the discussion we had on the 1957 National Insurance Act. The Government Actuary also gave the figures of the estimated deficit in his Report on the Bill now before Parliament, but since that Bill is in Committee I think that I should be out of order if I pursued it any further. The Supplementary Estimate now before us gives details which show that the deficit to which I have referred is larger than was foreseen when the original Estimate was drafted, owing to the higher incidence of unemployment.
  Unemployment hits the National Insurance fund in two ways. There is, of course, higher expenditure on the payment of unemployment benefit, and there is loss of income, in that we receive no contribution from the man who is unemployed and is drawing unemployment benefit because he gets a credit in that period. Those two factors mean, as it were, that unemployment counts two on a division.
  The Supplementary Estimate totals £25 million. I think that the Committee would wish me to explain that it is made up of additional expenditure on unemployment
  1004
  of £23 million, plus loss of contribution income to which I have already referred of £5 million; against that there is an offset from the expected saving on retirement pensions payable to late-age entrants who qualified for pension in July last year. In fact, larger numbers of these have remained in full-time work than we expected, and, therefore, are affected by the earnings rule. There is, therefore, some reduction in the amount we estimated we should have to pay out.
  I do not for one moment minimise the serious effect that unemployment has on the life of the individual, and even more so in the case of the family man. I have had experience of this, but it is not for me to deal with the vigorous measures which the Government have taken and are taking to deal with this matter. [HON. MEMBERS: "Why not?"] They are not the responsibility of my Department. It is for me to deal with unemployment benefit.
  Mr. Leslie Hale: On a point of order. My right hon. and hon. Friends have put down for discussion a Motion on the question of unemployment, which arises directly, and as I understood it, clearly on the Vote for the National Insurance Fund, which is having to carry a substantial amount of the cost. We were informed that it was intended to be a very wide debate on unemployment and that we could raise the issue. How can we have an effective debate on this vital issue when the Parliamentary Secretary says, "I cannot talk about it, because I come from the Ministry of Pensions"? The Minister of Pensions will say, too, "I cannot wind up the debate effectively because I come from the Ministry of Pensions".
  Why cannot the President of the Board of Trade be here? How can we have an effective discussion of this matter? Some Minister will have the duty of replying on one of the most important internal subjects which confronts the country. To those of us who represent constituencies which carry the heaviest part of this burden unemployment is a perpetual worry and concern.
  The Chairman: I did not select the Votes for discussion, so I cannot answer the questions which the hon. Gentleman has put to me.
  Mr. Hale: Surely I should be in order in moving the Adjournment of the debate, to call attention to the absence of any Minister responsible for unemployment. I am usually told that the Minister of Labour is responsible only for the administration of the employment exchanges. The President of the Board of Trade is the Minister concerned. [An HON. MEMBER: "He is there, too."] I did not see him.
  The Chairman: I think that I can see the President of the Board of Trade.
  Miss Pitt: As I was saying, it is for me to deal with unemployment benefit and I think I am entitled to point out the value of the present benefits. Unemployment benefit was increased with all other National Insurance benefits in January, 1958, to the highest level ever. Since then the Interim Index of Retail Prices has gone up two points. The benefit remains higher than at any time since January last year. It is conspicuously higher than when hon. Members opposite were in power.
  Mr. William Ross: And so are the figures of unemployment.
  Miss Pitt: In October, 1951, right hon. Members opposite then forming the Government of the day increased some pensions, not even all pensions, but did nothing at all about the short-term benefits, the benefits for sickness and unemployment. They left the rate at the original 26s. at which it was fixed when the 1946 Act was introduced. In real terms the present value of unemployment benefit is for a single person 15s. 11d. above the 1951 value and, for a married couple, 24s. 11d. above the 1951 value. The provision for dependent children has also been substantially increased. We agree that that is very important when we are thinking in terms of unemployment benefit.
  The increase in these benefit rates, of course, constitutes an element in the increased cost of National Insurance and puts the Fund into deficit in any event this year.
  Mr. Joseph Slater: In view of the statement she made referring to increases in unemployment benefit, will the hon. Lady tell the Committee how much the contribution has been increased since 1951?
  Miss Pitt: Certainly; the contributions have gone up when benefits have gone up. This is a contributory scheme, but the increased contributions are not sufficient to meet the increased benefits which we are paying out. The figures in the Supplementary Estimate reflect the increases in benefits to which I have just referred.
  It is important to bear in mind that the figures reflect to a much greater extent the improved benefit rates than the reflect—although they are certainly affected by it—the current levels of unemployment. Unemployment benefit is not a substitute for a job of work, but it is a provision against hardship. I am glad that it is a much better provision in these days. The duty of meeting that need and providing for that benefit is laid upon my Ministry. We are very conscious that we are not dealing with figures, but are dealing with people to whom losing their jobs is a personal tragedy. The more we can help them the more we wish to do so, but that provision to help in the form with which my Ministry is charged is now at the highest level. It involves us, therefore, in higher expenditure.
  I am sure that after debating this Estimate—as we shall, fully—the Committee will wish to authorise these payments to reinforce our universal system of social security insurance.
  Mr. George Chetwynd: Is that all?
  3.43 p.m.
  Mr. Frederick Lee: The hon. Lady the Parliamentary Secretary dealt, first, with the size of families and pointed to the fact that they are bigger now. She suggested that was because of the confidence people had in the future of the country. When one thinks in terms of the problems of the next three years, in which the bulge of school leavers is expected to go up by one-third, and when one looks at the position in areas where, at present, employment cannot be found for youngsters who have already left school, it is an exaggeration to talk about confidence in the future.
  The hon. Lady dealt with the £25 million under Subhead A which, we are informed in the details, arises
  "as a result of an increase in the level of unemployment".

  1007
  The Committee is now being asked to agree to the payment of that £25 million increase. On the question of unemployment which has increased and for which we are now asked to find extra money, I wish to protest that the Committee is being asked to discuss increased unemployment about which we have no real information. The latest figures available to the House were those for 8th December, 1958, which is more than two months ago. The hon. Lady touched on the question of the £23 million increase in benefits out of the total of £28 million. It is vital to our deliberations that we should know what has happened during the course of the last two months.
  I have read the weekend newspapers and almost every one shows that the newspaper world knows precisely what has happened since 8th December; but hon. Members do not know. I do not believe that, as a rule, the Minister of Labour is reticent in producing such information. On the contrary, he is always very good in trying to provide for the House the very latest figures as they become available. The Committee is being treated in a very offhand way. This debate depends in great measure on our having information about the latest position and we are having to debate figures which take no cognisance of the last two months and two days.
  It would appear that the Press is well aware of the figures which are to be issued. If, at this stage, the right hon. Gentleman can say anything to us about the reasons why there has been such a long time lag between the publication of the last figures and the present figures, or even if he can tell us, roughly, what is the position against which we are debating unemployment, I am sure that the Committee would be very grateful to him. Such figures as one can obtain of local unemployment certainly show fairly substantial increases. I am thinking, as was my hon. Friend the Member for Oldham, West (Mr. Hale), of the position in Lancashire. I know some of the local unemployment figures there, and they are not very reassuring.
  I do not know whether the publication of unemployment figures tends to have cognisance of coming events or not. I do not know whether we have reached
  1008
  a point at which it is necessary to soften up the public before the figures are issued, or to give the impression that they are even worse than they are found to be when they are made available. I hope that the Minister will not form some of the bad habits of the Prime Minister in this respect, but will treat these figures as something to which the House is entitled to have access at a time when we are discussing such important matters as the one we are discussing today.
  I have offered to give way if these figures can be given, but apparently no one on the Government Front Bench wishes to interrupt. [HON. MEMBERS: "Answer."] I have said to the right hon. Gentleman that if he is able now to give the Committee even rough figures of the state of unemployment as between 8th December and the latest convenient date I should be very happy to give way.
  The Minister of Labour and National Service (Mr. Iain Macleod): If the hon. Member wishes me to intervene, I shall be happy to do so. As the Committee knows, I have never been reluctant to give figures, but the Opposition did not put either my Vote down for debate—although I have a Supplementary Estimate—or that of the President of the Board of Trade. That is why we thought the Opposition wished the debate to be confined to National Insurance. It is also quite untrue that any of the Press knows the figures. They are being given in detail on Thursday, but I imagine that the Opposition wish to have them now. I have not got them in detail, but I have two key figures which I can give. The overall figure is 620,000 and the overall percentage has moved from 2·4 per cent. to 2·8 per cent.
  Miss Margaret Herbison: Can the Minister also give the separate figures for Scotland?
  Mr. Macleod: The Scottish percentage, I am sure, is 5·4. My impression is—I would not swear that this is right to a thousand—that the figure is 115,000.
  Mr. Lee: I am greatly obliged to the right hon. Gentleman for those figures, as I am sure all Members of the Committee will be. They confirm the figures which have been given in the Press during the past few days. [Interruption.] I have been saying that it is not fair that the

  1009
  Press should have such figures before the House of Commons has them. That was the point that I made. It would appear that there has been an increase of about 89,000 unemployed since the figures were given for 8th December, which is one of the biggest increases recorded in the figures which we have had.
  This is in some ways a unique occasion. We on this side of the Committee are compelled to concede that the Government have proved themselves more efficient in carrying out their avowed industrial policies than even Ministers themselves anticipated. Hence the need to finance an even higher level of unemployment than they considered possible in March, 1958, which was the beginning of this financial year.
  I must make it quite clear that we are not opposing the payment of this Supplementary Estimate. Indeed, as the year for which the Supplementary Estimate is required ends in about seven weeks from today, the question of opposition to it does not, of course, arise. I must make abundantly clear that, although we do not oppose the Estimate, it must not be considered that we approve the policies which made it necessary. This is an issue to which, no doubt, many of my hon. Friends will wish to make reference. We feel that if the payment of £26 million could be considered as the total cost of the Government's folly, and we could discharge both the debt and the Government by granting it, the British people would have transacted perhaps their best stroke of business, even for the bargaining season.
  While we cannot hope to impress upon the Government, whose policies have cost the nation about £1,700 million in lost industrial production during the past three years, the importance of a bill for £26 million for those who have been refused the right to continue their production efforts, it is our duty to examine the nature of this problem, even if we do not oppose it.
  On 24th February, 1958, which was just before the financial year which is under discussion began, the House had a debate on local unemployment. Very many constructive suggestions to deal with the problem were then made by right hon. and hon. Friends. On that occasion, the Minister of Labour, speaking of Government policy, gave us some
  1010
  idea of their calculations for the period ahead, that is, the period for the financial year which is now under discussion. He said:
  "The two main features of the January figures are that unemployment at 1·8 per cent., although certainly higher than for a number of recent years, is only one-tenth of 1 per cent. higher than the average for the last ten years…"
  Later, he went on to say:
  "We must bear in mind also that January and February are the seasonal peaks of unemployment … Then, in March, or in April at the latest, the seasonal improvement starts."—[OFFICIAL REPORT, 24th February, 1958; Vol. 583, c. 56.]
  When we are trying to assess how this Supplementary Estimate comes about, we see, by looking at the figures for 1958, that the main reason why we face this Estimate is that the Minister was hopelessly wrong. Indeed, no improvement came about. Looking through the figures for 1958, I doubt whether we ever again, during the whole of that year, got down to 1·8 per cent., of which he spoke in February and which was supposed to be the peak period of unemployment which would then decline.
  The figure, at the time when he was speaking on unemployment, stood at about 420,000. At the end of March, it was 430,000; by the end of April, which was the latest date on which he said it would begin to decline, it had reached 442,000; by the end of May it was 460,000; and by the end of June it had dropped to 432,000. The measure of the failure of the seasonal pattern about which the right hon. Gentleman had spoken is shown by the fact that this figure was 182,000 higher than the figure at the end of June, 1957.
  After this temporary dip, the line on the graph again turned upwards, and between 14th July and 11th August it rose to 446,000. By 30th October it was 514,000 and after reaching 535,000 at the end of November it declined slightly to 532,000 as at 8th December, which was the latest figure we had available before the right hon. Gentleman was good enough to give the figure which he has just given to the Committee.
  The complete failure of that seasonal pattern, which, I agree with the right hon. Gentleman, could usually be counted upon, was one of the major factors leading to the presentation of this Supplementary Estimate. One of the most

  1011
  remarkable things about it, when we ask ourselves why did not this seasonal pattern emerge, is, of course, that it did not emerge because the Government would not let it emerge. They did everything possible to prevent that seasonal pattern from repeating itself while, at the same time, budgeting as though it were bound to happen.
  I wish to point to one or two other rather disquieting features of the period under discussion. In a television interview on 23rd February, the date before the unemployment debate, in which he was discussing the first report of the Cohen Committee, the Prime Minister said:
  "The Government could not support a position in which there were five jobs for every three workers."
  It was blatantly untrue at the time he said it.
  On the question which he then raised, of unemployment as against vacancies, quite definitely the position since then has deteriorated very seriously. Indeed, the measure of the failure of the Government to take the steps necessary to obviate the need for this Supplementary Estimate is shown by the fact that vacancies as at 8th December—and my figures have to be based on that—were down to 163,000 as against 532,000 unemployed, or 3½ unemployed to every vacancy throughout Britain. That is the overall position.
  Again referring to the right hon. Gentleman's argument in the unemployment debate, when discussing the nature of unemployment and the problem we face he quite rightly pointed to what he called the "have" and "have not" areas. He was, of course, thinking of the old depressed areas, which we all remember so well. He said:
  "I admit frankly that that is an aspect which causes me great concern, because I think that it is the ugliest of all the ugly features of the inter-war years in unemployment."—[OFFICIAL REPORT, 24th February, 1958; Vol. 583, c. 56.]
  There has been one remarkable change since those days in that there is not a single Ministry of Labour region in the whole of the United Kingdom in which there are not more unemployed than there are vacancies. I am not arguing that by doing that he has merely spread the misery, but, judged by the figures, we still have the misery in those areas to which he referred and it is much worse than it was then.
  1012
  Indeed, in these areas, to which we were told the Government intended to pay very special attention, the position is now quite appalling. In Scotland, for instance, there are 12 unemployed for every vacancy. No doubt the latest figures will show that the position is even worse. In Wales, for every vacancy there are 6½ unemployed people; in the North-West—my own area—there are 5½ unemployed people to every vacancy; and in the Northern area. including Newcastle, there are 5 unemployed people for every vacancy. In other words, the very areas to which the Minister himself referred as
  "the ugliest of all the ugly features of the inter-war years in unemployment",
  are now re-emerging as places where, once a man is out of work, his chances of obtaining a job are more hopeless than in any other part of the country.
  During the year in which the Government have told us that they have been trying to create vacancies—they have said that that was the prime objective of their policy—we have seen the number of vacancies decline. In July, 1957, there were 330,000; in February, 1958, when these policies began, there were 200,000; in September, 1958, there were 179,000; and in December, 1958, there were 163,000. Much the worst of that position has appeared in the very areas where the Government are supposed to be bringing succour to people who need jobs. I do not know whether the right hon. Gentleman has the latest figures for vacancies, or whether that is asking too much of him. It is a relevant point, hut I do not wish to press it.
  I believe that merely to use the Government's new machinery of saying, "Where there is 4 per cent. unemployment we will bring special measures to bear" is not sufficient at all. In many of the cotton areas of Lancashire, for instance, in Scotland and in Wales, such is the lack of ability to get work that there is now a disconcerting drift to the South. We shall never achieve that level of unemployment, as expressed as a percentage, because hopeless people who cannot get jobs are drifting into other areas.
  I want to put a different policy to the Minister. I believe that it is necessary, when trying to establish a new policy approach to the problem, to consider unemployment as against vacancies, because

  1013
  only by that method can we see the serious impact of unemployment where people are without hope of getting further work.
  The Parliamentary Secretary said that she knew a little about unemployment. Unfortunately, so do I. But I wonder whether we all appreciate what it means to be unemployed in these areas in the conditions which I have been outlining. When a man seeks employment in these areas he goes to factories from which many others have already been turned away. He gets a kind of hopelessness in his quest, what might be described as a kind of finality about his unemployment, which does something to a man's soul from which it take years to recover. This is the sort of problem which we feel that the Government are not attempting to tackle.
  I sometimes wonder what sort of response the Minister of Labour would get in these areas to his suggestion to the Tory Party Conference that the Government's policy is
  "not the assassin, but the guardian of full employment".
  I have heard of some grisly guardians in my time, but none quite as bad as this. The hopelessness of the position in such areas is made completely desperate by the fact that the Government believe that the economy is the sounder inconsequence of these developments. They believe, as I said on a previous occasion, that the soundness of the economy increases pro rata with the increase in the unemployment figures. This theory, I suggest, presupposes that there must be periods in which the Tory Government will, as now, use unemployment in the same way as they use the Bank Rate—as an instrument of economic policy. We on this side of the Committee differ violently from them on this fundamental issue. To us economic policy is the instrument by which men and women are enabled to live a better and fuller life, not an instrument by which Governments spread misery and despondency among working people.
  On 3rd November, in the debate on the reply to the Address, I tried to make the point that the enormity of the offence against these unemployed people is not reduced qualitatively by arguing that we have refrained from doing the same thing to two or three million others. I recall that in his Halifax speech, speaking of
  1014
  unemployment, the Prime Minister said:
  "I am determined, as far as lies in human power, never to allow this shadow to fall again upon our country."
  In practically every one of the old depressed areas not only the shadow but the substance has returned, and emotional reflections of that sort bring very cold comfort to the victims of his policies.
  What is the position now? I have given the figures as I see them in respect of the worst areas of the country. I have suggested that the creation of vacancies is a very serious consideration for certain areas, but I am informed that although the Government refuse to de-schedule certain Development Areas, in the way that they are working the distribution of industry policy they have decided to ignore certain types of Development Area. In my constituency, which is largely a Development Area, I have in Haydock—in a Development Area—a firm which has been refused permission by the Treasury to expand under the terms and conditions which the President of the Board of Trade informed us would be considered favourably. If the Government are theoretically producing new Development Areas and at the same time doing nothing to improve the lot of the old areas, we shall not make much progress.
  The Parliamentary Secretary to the Board of Trade, in answering Questions a short time ago, gave some figures. I understood him to say that there were some 24 firm projects now arranged which would find jobs for about 2,000 people. Neither he nor the Government, and certainly not the Opposition, can look upon that as a startling improvement. Compared with the figures which the Minister of Labour has just given us, we do not think that they make a serious contribution.
  I should like to ask the hon. Member one or two questions about what is going on in those areas. A Sunday newspaper, Reynolds News, for instance, has asserted that much of this failure to get people to go into these areas is due to the high rents which are being charged for Government-owned factories. I should like to know what is the Government's attitude here. Does the hon. Member agree that that is a fact? If so, what do the Government propose to do to offer far more attractive terms for firms to go into these areas than are at present offered? As I

  1015
  have said, to create new Development Areas while doing so little in these matters is playing with the problem. I do not know whether the hon. Member is to speak in the debate, but we should like to know whether there is substance in this criticism and whether we are to see a change in the rentals charged. We should be grateful for any information.
  With the end of the credit squeeze we have seen the Government indulge in a great unplanned stimulus to industry in the form of hire-purchase incentives designed to get people to spend next year's income before they have earned it. We have seen the Government emasculate the Capital Issues Committee. If, this year, because the credit squeeze is no longer in force, the seasonal pattern emerges, what happens then?
  In that event, we shall see the cycle repeated and later in the year there will be the demand that inflation shall be stamped out. We shall see the return of restrictive measures such as the credit squeeze and high rates of interest, designed to create more unemployment as a means of bringing down prices. This phase, as now, will end with prices higher than they were when the Government began to create unemployment in order to bring prices down. Then, right hon. and hon. Members opposite will find that it is consistent with their loyalty to the Tory Party to mention the name of the right hon. Member for Monmouth (Mr. P. Thorneycroft), or even Lord Cohen. In other words, we shall be asked to agree to another Supplementary Estimate because there has been a rise in unemployment.
  I should like, even now, to try to bring home to the right hon. Gentleman and his colleagues the enormity of the wrong which they are perpetrating against individuals. How can we expect a response to appeals for increased productivity from those who are thrown on the scrap-heap when they dare to respond to those appeals?
  Mr. Cyril Osborne: Nonsense.
  Mr. Lee: It is no good the hon. Gentleman saying "Nonsense". I have been one of these people and I know what happens to them under these conditions. The Prime Minister has been to Newcastle and has said that the Tories honour their pledges. Newcastle is a city in which five people are chasing every available
  1016
  job, and yet we wonder that people become cynical under such conditions. The hon. Gentleman must face these facts.
  Mr. Osborne: I shall face them.
  Mr. Lee: Having generated fear, the nation is bound to reap the consequences. We produce a section of the community which has been humiliated. Under conditions of protracted unemployment, one gets to the stage, as one well remembers, of wondering whether one is quite as good as other people. One uses the back door for fear that people will see one and know that one is unemployed.
  If right hon. and hon. Members opposite do not understand that, then they do not know anything about the problems with which we are all dealing. Whereas, some time ago, there were no pre-war fears among our working people, now, because of the Government's policies, fear has returned. When, once more, we need rapid expansion a great deal will have to be done to get people on whom we have inflicted these grievous injuries to agree again that in the interests of the nation their job is to produce for all they are worth. Indeed, it could reach the point which we reached in prewar days, when we talked about the submerged tenth.
  A few weeks ago, I said to the Government that merely to try to get back now to the levels of production of a few years ago does not mean that one should get back to the unemployment levels of those days. I instanced the position of the United States, because in May of last year we were told that the recession was over for everybody except the 4,100,000 people who were still unemployed. Despite the claim that the recession was over, last month saw 700,000 more unemployed there with the drive for production going higher and unemployment approaching 5 million.
  Mr. Raymond Gower: I appreciate the sincerity with which the hon. Gentleman expressed his views, but I wish to ask him one question. When tracing the rise in unemployment, does he take no account of the fact that in this year we have been faced with smaller world trade? Does he take no account of the fact that, compared with almost any other comparable industrial country, we have proportionately the lowest rate of unemployment?
  Mr. Lee: If the hon. Gentleman wants to argue percentages of world trade he will find that he is on the wrong end of that argument. Our percentage of world trade was going down consistently during the last six years prior to last year, while our chief competitors were taking much of our share from us. There is not much in the hon. Gentleman's argument, I assure him. We are discussing the greatest single issue in our domestic affairs. I have argued that to the Tories unemployment is an essential instrument of economic policy.
  Mr. Gower: Nonsense.
  Mr. Lee: That is the proof of what we are arguing about. We, for our part, assert that a correct economic policy is designed to outlaw unemployment. That is our conviction and the nation must decide between us.
  4.15 p.m.
  Sir Alexander Spearman: The hon. Member for Newton (Mr. Lee) has spoken with very great sincerity. I want to try to answer what he has said. The gist of his speech was that it is the Government's economic policy which is to blame because the seasonal pattern has not emerged. If that was due to a fall in consumption there would be a good deal in his point, but consumption in this country is higher today than it has ever been. If it was due to lower investment there would be something in his point, but today private and public investment, taken together, are higher than they have ever been. It is largely due to international trade.
  When my hon. Friend the Member for Barry (Mr. Gower) made an interruption there was a certain amount of jeering. As I have not the figures with me I cannot argue about our proportion of international trade, but no one in the Committee will deny that there has been a falling off in international trade during the past year.
  Mr. Alfred Robens: Falling off in our proportion.
  Sir A. Spearman: The trade of the world has declined to some extent. What could the Government do about that? They have made a great many freer credits and loans. The falling off in our trade as a result of the set-back that occurred in America is infinitely less than was
  1018
  anticipated. We cannot initiate a world revival in trade, because our reserves are not enough. If the Government were possessed of the vast reserves of the United States they might be able to give such a stimulus to industry as to start a world revival, but that is impossible with reserves at their present level.
  Right hon. and hon. Gentlemen opposite must take some share of responsibility for the state of our reserves twelve years after the war. It would have been a very easy, popular and pleasant course if the Government had stimulated consumption to an enormous extent during the last few months. For the time being, they could have taken up the slack, but where would we then have been? We should have been producing more. Therefore, we should have had to import more. If we had switched over from making exports to making goods for the home market, how would we get those exports when world trade revives?
  Dr. J. Dickson Mabon: That is a contradiction.
  Sir A. Spearman: I hope that an hon. Member opposite will give some answer on that point, because the amount we can export is the bottleneck at present. We have to get the raw materials and we cannot get them without exporting. If we switch over our industries to home consumption, then there will not be an opportunity to sell abroad when demand revives. We in this country must face these facts. I see the hon. Gentleman the Member for Oldham, West (Mr. Hale) in his place. I am sure that he will not like what I am going to say now, but, then, he never does.
  Mr. Hale: I cannot agree with that. I like what the hon. Gentleman is saying rather well.
  Sir A. Spearman: We must face the fact that there are many places in the world where goods can be made much more cheaply than we make them here. About 200 years ago, we, by our new inventions, succeeded in displacing the East in the production of textile goods. Today, the people of the East, by lower labour costs, are displacing us. What can we do about it? In the short term, of course, we could put on tariffs and protections to protect our Lancashire industries. That would mean making the consumer pay more and forcing our colonial possessions

  1019
  to pay much more than they need. We could do it by subsidy, but we should soon reach the stage when we were ruining ourselves by subsidising everyone.
  The future of the country and of employment here depends, in the long run, upon our being prepared to undertake an enormous amount of switching about in what we produce, switching over to making more difficult articles, the things which have a small labour content but which depend upon skill for their manufacture.
  Mr. Hale: I was agreeing with the hon. Gentleman's last sentence, but I should like to go back two sentences, if I may. I always listen to the hon. Gentleman, whose approach is very sincere and earnest, with profound attention and certainly not with disagreement.
  This is a dilemma which faces us all. All of us want to see colonial development. We all want to see a rising standard of life overseas. If we do not plan it, if we adopt what I will call, for the sake of argument, the laissez-faire method, can we really contemplate a developing Colonial Empire making textiles, bicycles and consumer goods and sending them to this country without any limitation of any kind? If we do that, we lose the ability to help the Colonies altogether. Surely we must plan colonial development in terms of raw material producing and ore producing, which we finance by providing the consumer goods.
  Mr. Osborne: But we cannot make them buy our consumer goods.
  Sir A. Spearman: The sort of things on which we have depended in the past to build the wealth of our country are things which many people in various parts of the world are now able to produce better than we can. But there are other things which we can produce better than they. I believe that it is the job of the Government not to encourage contracting industries, but to accelerate the expansion of the expanding industries. To do that, and have those changes in industry, there must be some reserves of labour. Obviously, if there were no unemployment whatsoever, it would be quite impossible for any industry to expand.
  Mr. Robens: No, it would not.
  Sir A. Spearman: If the right hon. Gentleman is prepared to advocate the direction of labour—
  Mr. Robens: That has nothing to do with it. The hon. Gentleman is saying that, unless there is some unemployment, there can be no expansion of industry. We can have an enormous amount of expansion in industry by new techniques with the same labour force.
  Sir A. Spearman: If we are to build new industries, particularly those industries which depend to a greater extent on skill, then there must be labour for them. We cannot produce labour out of a hat. Is it suggested that we import labour, or direct it to go from one place to another?
  Going back to the right hon. Member for Blyth (Mr. Robens), I should like to quote something once said by someone whom we in this House all respect very much, Sir Stafford Cripps. He said that
  "To insist upon the rigid maintenance of the present pattern of employment would be to destroy all hope of full employment."—[OFFICIAL REPORT, 26th October, 1949; Vol. 468, c. 1341.]
  Mr. Robens: That, of course, is agreed. With respect, one does not require a pool of unemployment to do what the hon. Gentleman wants.
  Sir A. Spearman: But there must be some labour available to move from one place to another. How much there should be depends upon the mobility of labour. Few things are more important in the economic field than ensuring the mobility of labour, that is to say, producing a situation in which labour can be induced willingly to go from one place to another, so that we can have the necessary amount of unemployment reduced to the minimum, which will work.
  I should like the Government and the trade union leaders to devote themselves to this subject. On the last occasion I spoke in the House, I asked my right hon. Friend whether more could be done to provide training facilities for those in middle age to move from one industry to another. He replied that that was being done, that extra facilities were being made available, but that the demand was very small. Cannot something be done now, not only by the Government but by the trade union leaders, to encourage the demand for retraining for work in the expanding industries?

  1021
  What else can be done to take up unemployment in the areas where there is a high level now? Is it possible, by better communications, to induce industries to go there? I have a small example in my own constituency. There is a quite heavy percentage of unemployment in Whitby, but. 25 miles away, at the I.C.I. works at Wilton, there is a keen demand for labour. The only public transport service available is the railway, which takes one and a half hours to do the journey.
  The same thing may well apply in many other places. Another thing which may well help the mobility of labour is the Rent Act, because it will make it very much easier for people to leave one house and move to another. When the Rent Act becomes effective, and people can give up one house without the fear of not being able to find another, the mobility of labour will be facilitated.
  Mrs. Harriet Slater: Does the hon. Gentleman really believe in his heart that the Rent Act will make it easier because people will be able to find houses? That is just nonsense. The houses are not there to be had, and the Government's policy is to cut down the building of houses.
  Sir A. Spearman: If a man has been lucky enough to reach the top of the queue and have a house in one place, and he knows that he will not find another, he is very disinclined to move. On the other hand, if he can leave one house and another is available to rent, then he is more likely to move.
  Mrs. Slater: But the houses are not there.
  Sir A. Spearman: Returning to the controversy I had a few moments ago with the right hon. Member for Blyth, I do not believe that any sensible person wants unemployment for its own sake. On the other hand, I believe that, in a free State, where there is free negotiation of wages and free choice of work for the worker, it is necessary to cut down demand and to make sure that the national resources, in the light of that demand, are in balance with money incomes.
  This means that there will be an unfortunate effect in the temporary slowing down of industry and there will be
  1022
  some unemployment. Obviously, if there is a far greater demand for goods than can be met by the supply, any worker will know that he can demand more wages. Most employers will give them because they can push the cost on to the price. Then there follows the spiral, the end of which must be mass unemployment because we are not able to sell our products abroad.
  To prevent inflation, any Government in a free State must check demand, and the checking of demand may lead to a certain amount of temporary unemployment. If there is such unemployment, I agree that there will be hardship for the section of the community which happens to be in the, I hope, very small group concerned. The question I ask is this: is it not possible to do something more for such people as a temporary measure? It may be that any increase in unemployment pay would lead to such a discouragement to work that it would defeat its purpose, but it might be possible to offer higher unemployment pay for a short period to alleviate the hardship that those people are suffering through no fault of their own. I hope that the Government will consider the position.
  4.30 p.m.
  Miss Margaret Herbison: I have listened with interest to the speech of the hon. Member for Scarborough and Whitby (Sir A. Spearman). He has put his case in a most reasonable way and very sincerely, but I could not help thinking that he had become a victim of Tory propaganda, particularly when he spoke about the effects of the Rent Act. Rather than helping the housing situation in Scotland, the Rent Act has made it much more difficult.
  It would seem, from listening to the speeches of hon. Members opposite and to their propaganda outside—that the Government came to power in 1957. But they came to power in 1951. None of the Ministers seem to take any responsibility for what happened between 1951 and 1957. These were the years of free-for-all and the result is the serious unemployment with which we are faced today.
  We are told—and the hon. Member for Scarborough and Whitby has made it abundantly clear—that the policy from 1951 until 1957 could end in nothing but inflation and that the only way in which the Government could deal with

  1023
  inflation was for there to be a great number of unemployed people—in other words, the Government who do not believe in planning have certainly done very well in planning unemployment. No one who examines the facts as they are could come to any other conclusion.
  We are told that the Government have been, and are, out to beat inflation. I can remember the years between the wars. I came from a depressed area which is beginning to be almost as depressed as it was then. At that time we had no trouble about balance of payments, but there were between 2 and 3 million unemployed. It seems that the only way by which a Tory Government can solve their financial problems is by creating unemployment.
  We know very well what has been happening. I am sure that my hon. Friends will not complain if I deal with Scottish figures. The Minister of Labour today, in answer to a question of mine, made a very serious announcement. In July, 1958, we had a debate on industry and employment in Scotland. In comparing the unemployment figures of February with June, the Secretary of State for Scotland said that unemployment in Scotland had decreased while it had increased in England. He said, rather proudly:
  "…we have been moving against the trend of the South "—[OFFICIAL REPORT, 10th July, 1958; Vol. 591, c. 709.]
  The latest figures which I could get I obtained an hour or so ago from the Ministry of Labour Gazette for 8th December. Giving one comparison, between 17th November and 8th December, the trend was in the opposite direction in which it had been going for some time. Scottish unemployment figures were increasing much more rapidly than those of the United Kingdom. Our percentage on 8th December was 4·4. The figure given today by the Minister of Labour was 5·4.
  That is a very steep increase, but the figure which he gave today is for mid-January and those of us who know what has been happening in our constituencies are afraid that the figure is now higher than 5·4 per cent. All of us would be delighted to learn that that is not so. It means that between 8th December and the
  1024
  latest figure there has been an increase in Scottish unemployment of 19,460 people.
  In the debates that we have had the Government do not seem to take any responsibility for the fact that Scotland is suffering more than almost any other area in Britain, but a great deal of the responsibility must rest fairly and squarely on the shoulders of the Government.
  I should like to give a number of figures to support my contention. On 8th December, 1958, there were 65,551 men unemployed in Scotand, a percentage of 4·8. I wonder what the percentage of unemployment among men is today. At the same time, there were 27,989 women unemployed, a percentage of 3·7, making a total of 93,540, with an overall percentage of 4·4. I always like to see how other areas are faring compared with Scotland. I find that London, South-East England and the Midlands always have a much smaller proportion of unemployed than Scotland, Wales or the Northern Region of England. I found that for the same period ended 8th December the percentage of unemployed men in London and South-East England was 1·7 as against 4·8 in Scotland, and that the percentage of unemployed women was 1 as against 3·7. The overall percentage was 1·4 as against Scotland's 4·4.
  Sir A. Spearman: Can the hon. Lady say in what industries there is this heavy unemployment?
  Miss Herbison: I shall deal with that point later.
  I should now like to deal with those unemployed for more than 26 weeks—the long-term unemployed, the kind of people about whom my hon. Friend the Member for Newton (Mr. Lee) spoke. In Scotland, 17,170 men had been unemployed for more than 26 weeks at 8th December. At the same time, 5,501 women were unemployed for more than 26 weeks, making a total of 22,671. It is serious for a man or woman to go on week after week with no hope of getting work. I could not agree more with my hon. Friend the Member for Newton when he says that it does something to the very soul of these people. They begin to feel unwanted and that they are of no use in their community. Those feelings permeate the home, and the man and his family suffer great tragedy when unemployment continues for a long period.

  1025
  There are far more people in London and South-East England than there are in Scotland, but only half the number unemployed for more than 26 weeks and a very tiny percentage compared with the percentage in Scotland. There are even worse figures. In the case of the under-18s, or those leaving school, on 8th December we had 3,261 boys and 2,013 girls unemployed, making a total of 5,274. Mothers and fathers come to me every weekend when I am at home telling me that their son or daughter has been out of school since the end of June last year, but has not had a single day's work.
  That is a hopeless beginning for any child in life. Of all the figures I have quoted, this is the blackest and the most serious. If I were to give percentages, we would find that our percentage of unemployed boys and girls is much higher than in any other area of the United Kingdom. On 8th December, Scotland's percentage of the total of unemployed was 17·9, whereas our proportion of the population of the United Kingdom is only 10 per cent. There are other figures which serve to show how serious is the position in Scotland.
  I come from Lanarkshire, which is at present the most badly hit area in the whole of a badly hit Scotland. In July last year, the rate of unemployment in what is called North Lanarkshire, which is a very big part of the country, was 6·9 per cent. In December, it was 8·2 and I have no doubt that in view of the increase of which the Minister has told us the figure will be higher than 8·2 in Lanarkshire today.
  The hon. Member for Scarborough and Whitby asked in which sectors of industry people were unemployed. It is in the heavy industries that there is unemployment. We in Scotland have an unfair share of the lighter consuming industries. For years, I have been pressing upon the Government that unless we get a bigger share of the industries that produce consumer goods, if unemployment hit us Scotland would be worse hit than any other part of the country.
  Sir A. Spearman: Would the hon. Lady not agree that it is the heavy industries which depend upon international trade and, therefore, they are hit first and hardest by reductions in international
  1026
  trade? What does the hon. Lady suggest that the Government should do to counteract this?
  Miss Herbison: I accept what the hon. Member says. I began, however, by saying that the Government have been in power not since 1957, but since 1951. My case is that we need the extra money today because of the high rate of unemployment in Scotland. The blame must rest with the Government for not ensuring that there was a better diversity of industry in Scotland than we have today. This is one reason why, in what is happening in the international markets, Scotland has been worse hit than almost any other area.
  I could well have a gramophone record to recite the facts concerning industrial building, but the story does not seem to have made much impression on the Government since 1951. In the case of industrial buildings, at 31st March, 1958, the latest date for which figures are available from Government publications, we find that in London and the South-Eastern area 358 projects were under construction, covering 13,987,000 square feet. In the whole of Scotland, the number of projects was 117, covering 5,246,000 square feet.
  This means that London and the South-Eastern area, with only one-third the rate of unemployment that we have in Scotland, had under construction about three times the amount of factory space that we were having in Scotland. That seems to me to be a completely wrong balance in trying to bring a diversity of industry to those areas which are so dependent upon heavy industry.
  I turn next to the figures for approvals, tenders and factory construction. Subtracting the completions from the approvals, we find that in London and the South-Eastern area, on 30th September, 1958, over 60 million sq. ft. of factory space was either under construction or approved. In Scotland, the figure was 15 million sq. ft. Again. Scotland, in which only one-quarter of the factory space is being built, has three times the unemployment of the London and South-Eastern area. Over all these years, I have been trying to get the Government to realise what would happen to my county, Lanarkshire, and to Scotland if they did not use the Distribution of

  1027
  Industry Act and the industrial development certificates as they were used when we had a Labour Government. The Government have continually refused to do this.
  I mentioned that in North Lanarkshire the percentage of unemployment was over 8 per cent. In my own constituency, steel workers have been badly hit. A little over a year ago, the steelworks there was employing about 1,100 men. With the latest redundancies, however, the figure is now around 600. One refractory brickworks, supplying bricks to steelworks, has closed. An old established paper firm has paid off a great many workers and there is no chance of their being taken on because that part of the industry is completely finished.
  What about coal? I represent many thousands of miners in my constituency and I find that on 22nd November, 1958, there were 2,800 fewer workers on the colliery books in Scotland than a year before. On top of this, the National Coal Board has decided to close 36 pits in Britain, 20 of which are in Scotland. When the representatives of the National Union of Mineworkers went to discuss these 20 closures with the Coal Board in Scotland, they were told that that was not the whole story and that another 10 were to be closed. In the coming year, therefore, 30 collieries in Scotland will close, 20 because they are uneconomic and 10 because they are exhausted. Of the 20, two are in my constituency and one is on the border.
  Some of those who work in these collieries come from the constituency of my hon. Friend the Member for West Lothian (Mr. J. Taylor), but the majority come from mine. We have been told by the Coal Board that this is one of the three areas in Britain where the Board will not be able to find work in the industry for those who are now to lose their employment. What a picture that paints for Lanarkshire and for Scotland!
  The President of the Board of Trade has said, time and time again in the House of Commons, and I quote his words from a debate last July, that
  "Generally speaking, however, the new firm nowadays demands a tailor-made building."—[OFFICIAL REPORT, 10th July, 1958; Vol. 591, c. 608.]
  It is well known that the President of the Board of Trade is renowned for his
  1028
  own sartorial elegance. Everybody knows that he likes beautiful tailor-made suits, but we have proved in Scotland that when factories became vacant a number of reputable firms wanted those factories. They got them, and they did the tailoring work afterwards. They have settled down and have provided important work for some of our people.
  I expect that at the end of the debate we shall be told that the Minister of Pensions and National Insurance has no locus standi in the matters which we are now discussing. Therefore, I address myself to the President of the Board of Trade and the Minister of Labour and urge that there should be much more vigorous action in Scotland. The Parliamentary Secretary to the Board of Trade has met a deputation on the question of rents charged for factories. We are awaiting the result of that meeting and I understand that discussions are taking place. I would impress upon him that if the Government really want diversity of industry in Scotland, and particularly in those areas which are so badly hit by unemployment, his right hon. Friend should disabuse himself of the idea that all industrialists want tailor-made factories, and do what every responsible body in Scotland has been asking him for a long time to do, namely, build advance factories. Let the right hon. Gentleman also ensure that when our part of the proposed new steel strip mill is producing steel strip we shall have in Scotland firms which will use that steel.
  I do not suggest that all this can happen overnight, or that the things which I have suggested should be done would clear out unemployment next month. I have had the experience since 1952 of telling the Government what would happen to the mining industry in my constituency and of begging the Government to plan for the time when the pits would be closed. The Government did not accept my advice. The planning did not take place and the mines are now closing without other work having been provided for the men in my constituency. To ensure that this sort of thing does not happen when we have the steel strip mill, the cold-rolling part of which is to be built in my constituency, I beg the Government to plan ahead with factory space and make sure that there will be firms ready and willing to use that steel strip.
  4.54 p.m.
  Mr. R. P. Hornby: I am glad to be able to follow in her remarks the hon. Lady the Member for Lanarkshire, North (Miss Herbison). She has spoken strongly, with great conviction and with knowledge, on behalf of her own constituency and of the area which, as she has said, is very hard-hit at present.
  I represent an area in South-East England, to which the hon. Lady has referred, which is very much less hard-hit than hers. But I am sure that it would not be the wish of any hon. Member that this subject should be viewed simply from the point of view of one's own area. This problem is very much bigger than that, and it will certainly be no part of my speech to say that my area is all right and, therefore, I am not concerned with what anybody else says. I am certain, too, that that will be the viewpoint of all my hon. Friends.
  Before coming to unemployment, which has been the key point of most speeches so far, I should like to refer briefly to the£1½ million of the Supplementary Estimate which concerns family allowances. I believe that we should welcome that part of the Estimate unstintingly and immediately. My hon. Friend the Joint Parliamentary Secretary to the Ministry of Pensions and National Insurance said that the extra £1½ million are needed because of more live births and more staying-on at school. It seems to me that both these things are matters which we should warmly welcome as part of a Health Service which is growing in competence with every day that it exists. In particular, there has been a tremendous advance in the care of children born prematurely in a great many of our hospitals, and that one aspect of medical advance has had some influence on these figures.
  More children are staying on at school, though I grant that there is a problem of the school-leavers in many areas, including my own constituency. This trend to stay on is one which we should welcome. We shall need, over the years, more education of higher quality for everyone in the country. On these two grounds; we should welcome the £1½ million concerned with that part of the Estimate. I say nothing of the third reason for needing this extra money, namely, the provision for the third child
  1030
  since I have been a beneficiary in the last twelve months under that provision.
  I turn to the £25 million which is needed, in addition to the original Estimate of £14 million, because, as stated in the Supplementary Vote, of the impact of unemployment. We all recognise the sad emotions and sometimes the angry emotions which this subject is bound to stir in us. We also recognise that, however much we should like it, there is no simple, easy answer to the problem of full employment without inflation in this society or in any other society. Despite many differences on policy, both sides of the Committee realise that we have to grapple with this problem and that no one would pretend that he had the final and complete answer which would give us stable prices and a job for everybody without moving from the area in which they live at present.
  How should we be tackling this problem? One or two criticisms have been made in the course of the debate. First, there has been the criticism that unemployment is hitting the same old area. Lancashire and Scotland are the examples quoted. We have had the criticism that there is something rather forbidding and foreboding in the seasonal trends which are being established. There has also been the criticism that Government action has been too little and too slow.
  I should like to say a few words, first, about the seasonal trend. This is a matter which I find very difficult to say we can cure. There are jobs which are more difficult to do in winter than in the summer. These may be jobs concerned with seaside resorts or with the building trade. These are things which will have their effect on the seasonal figures and I find it difficult to see how it can be otherwise. It seems to me that where employment is seasonal that in itself is a very good reason for wages in that industry being higher for that employment than the wages elsewhere, partly to attract labour to the industries which have those special risks, and partly as some compensation for those risks.
  Secondly, on the problem of the same old areas getting into trouble again, there are two possible ways of tackling the situation. Are we really trying to attract industries to those areas, or are we trying to attract labour to other areas where

  1031
  prospects are better? Probably we are trying to do both. All I want to say to my right hon. Friends today is that if there is any feeling that it is more difficult than we had imagined, if it is taking longer than we had imagined, to attract new industries to, say, Lancashire, where it had been suspected for a long time that the prospects of the textile industry were contracting rather than expanding, how adequate an analysis have we got of the factors which are deterring new consumer goods industries from moving into those areas?
  Presumably it is not a matter of labour, because labour is not scarce in these difficult areas. Is it, then, a matter of markets nearby? Is it a matter of transport and of access to ports? Is it a matter of the type of buildings available? In our efforts to tackle these problems it would be valuable to have as much information as possible about the factors that may be deterring industries from moving into the difficult areas, so anything we can get on that subject would inform our debates and shape our future policies.
  The third point concerns the problem of attracting labour from those areas. The hon. Gentleman the Member for Newton (Mr. Lee) used the word "drift". This word has an ugly connotation; it arouses a feeling of aimlessness. If the movement away from those areas is of that kind, obviously it should concern us. Where, however, one can see labour moving purposefully away to an area which has foreseen better prospects, all of us should encourage that process.
  Mr. Hale: May I interrupt the hon. Gentleman? I want to deal with the point about Lancashire if I have the good fortune to catch the eye of the Chair. Surely the hon. Gentleman understands the vital problem of drift. Oldham has today a population of 118.000. It was once 140,000 and, in fact, has gone up slightly over the last few months, because we brought some new industries to Oldham. The tragedy is that, when there is drift, the older people remain, the younger people go, the poverty level grows, the general level of distress grows. The difficulty of paying the rent of large houses becomes greater. The social services run down. All those things have
  1032
  a steady, cumulative, eroding effect on the public life of the community and upon its vitality.
  Mr. Hornby: I am grateful to the hon. Gentleman for the picture that he has drawn. I lived for many years not far from his constituency and I saw some of the derelict buildings, which are a shocking sight, quite apart from the human picture painted by the hon. Gentleman. Nevertheless, we have to face the question whether it is always economically the wisest thing to do to move industries to areas which may not be best suited for them to produce economically and effectively.
  I am not minimising the need for doing this as much as we can, but we must recognise the dangers that may be apparent if we go too far in the direction of trying to compel industries to site themselves in areas which are known to be economically undesirable, and, therefore, likely to reduce their prospects of providing an adequate and safe livelihood in the long-term for the people they employ.
  There is a balance which must be recognised. On the one hand, we should visualise the factors which may be causing employers to move to new areas; on the other, we must see how much more we can do to encourage people to look further afield for employment. The Ministry of Labour has recently increased allowances in that respect. We must ask ourselves to what extent housing is making mobility difficult. We must ask ourselves to what extent existing pension schemes are a factor in immobility. We must ask ourselves how adequately we are tackling this problem.
  I have intervened briefly to make those points and I can assure the hon. Lady the Member for Lanarkshire, North that as one who represents an area which, by and large, has escaped lightly, I do not for a moment want to minimise, either to myself or to my constituents, the effects of unemployment elsewhere. This is a national problem. We cannot separate it from the dangers of inflation, something from which many of the older, retired people in my own constituency have suffered acutely.
  Inflation produces hardships which are almost equally poignant in many ways. We must try to find answers which do

  1033
  not merely mitigate the present hardship in any one area, but which will enable British industry to be sited in places which will give it its best prospects of competing with world industries and, through its own employment policies, to care as well as it can not only for those in its employment but for their dependants.
  Therefore, I am sure there is no quarrel with the Vote we are discussing.
  5.7 p.m.
  Mr. R. E. Prentice: I agree with the hon. Member for Tonbridge (Mr. Hornby) on at least one point, namely, that there is no simple and easy method of reconciling full employment with the avoidance of inflation. I cannot, however, avoid the comment that it does not sound the same thing as the Conservative candidates were saying at the last General Election, or at the election before that.
  In fact, the task of reconciling full employment with the avoidance of inflation depends on planning, and there are not two things which must be reconciled but three. Members of the party opposite profess to believe in three things which cannot be reconciled with each other: the prevention of inflation, full employment, and what they call Conservative freedom. I believe that the country can have any two of those things at once, but it cannot have all three at once, and we must choose which two of the three we will have.
  Mr. Gower: Is not the hon. Gentleman aware that Conservative freedom in the modern sense involves a large degree of central planning?
  Mr. Prentice: I do not agree with that statement. Conservative policy, as it has worked out in practice, has failed to plan, and by its failure has led to our alternating between periods of inflation and deflation, both of which are injurious to the welfare of this country.
  I have this comment to make on the opening speech. With great respect to the hon. Lady the Joint Parliamentary Secretary, it is deplorable that the debate should have been opened with a speech which made no reference to the causes of unemployment or to the plans of the Government for dealing with unemployment. It must have been known to the
  1034
  Government that this was to be an unemployment debate and that we should be challenging the Government on their policy.
  Miss Pitt: In that event, will the hon. Gentleman please tell me why his own party did not choose either the Vote of the Ministry of Labour or the Vote of the Board of Trade, but chose instead that of my Ministry, which is responsible for unemployment benefit?
  Mr. Lee: Is it not the point that we wanted to choose a Vote on which we could have the widest possible debate on unemployment, and is not this Vote of £25 million in respect of increased unemployment?
  Miss Pitt: The Supplementary Vote for the Ministry of Labour contains a specific item for increased administration due to the rise in unemployment. Why could not hon. Members opposite have taken that Vote?
  Mr. Prentice: I should have thought it was clear that in selecting this Vote from a whole volume we were looking for a problem of current importance, and the one thing of current importance on the National Insurance level, the one subject which would justify a long debate, is the increase in unemployment. That should have been perfectly clear. What the hon. Lady has said seems to be symptomatic of the rather casual attitude of the Government towards this social problem.
  I very much enjoyed the speech of my hon. Friend the Member for Lanarkshire, North (Miss Herbison), who referred to the problem in Scotland. She made many comparisons with the southeast of England. I represent a constituency in the south-east, and I want specifically to refer to the position there, not in order to contradict what my hon. Friend said, but to supplement it, since the Committee should recognise that unemployment is increasing all over the country.
  Of course, unemployment is worse in some areas than in others, but in those areas where there is a smaller percentage of unemployment than the average, there has nevertheless been a big increase. In the borough of East Ham, registered unemployed in November, 1957, numbered 390, while in the middle of January, 1959, the figure was 780, exactly double the figure of just over a year before.

  1035
  That is symptomatic of what is happening all over the country—an approximate doubling of unemployment.
  I emphasise that although the figure of 620,000 unemployed, which was given by the Minister of Labour, is very high, it does not tell the whole story. There is a good deal of unemployment which is not reflected in the figures of people registered at the employment exchanges because of the way in which we work out our statistics.
  The figure does not include, for example, married women who lose their jobs and decide to wait and have a look round on their own, who in any case would not qualify for unemployment benefit if they have opted out of the scheme. It does not include elderly people who retire prematurely and might be considered to be unemployed in the real sense but who do not register as such. It does not include very large numbers who postpone leaving school while seeking work. It does not include people who lose their jobs but who decide to look round on their own for a little instead of registering immediately at the employment exchanges. Many people prefer to do that because they know that if they register and then refuse a job which they are offered because they do not like it, they will be disqualified from receiving benefit for six weeks. It does not include large numbers of people at the docks who are merely attending and drawing the statutory minimum amount but who are not regularly employed in the docks.
  It does not include the large waste of effort due to under-employment because of lack of overtime and short-time working, which is apparent throughout industry. I have seen recent figures which suggest that in 1958 the cut in overtime in the manufacturing industries represented an increase in unemployment of more than 1 per cent. in those industries alone. That is all part of the price which we are paying for the Government's present policy.
  Mr. J. A. Leavey: Does the hon. Member regard the reduction in overtime as underemployment? In other words, is he suggesting that we should have extensive overtime with all its disadvantages, or that
  1036
  lack of overtime is definitely a symptom of under-employment?
  The Temporary Chairman (Sir James Duncan): That may be a very interesting speculation, but it does not arise under this Vote.
  Mr. Prentice: In that case, I will not answer the question, but reduced overtime is another indication of the extent and the way in which the resources of the country in manpower and capital are being under-employed.
  Unless the Government change their ways the figures are likely to get worse. The situation which we face is partly due to the fact that we live in an age when changes in industry are accelerated. One reason for that is the increasing pace of technical changes, all the changes included under the heading of automation and so on. Those changes would affect us under any kind of Government. They will mean people losing their present jobs.
  Another aspect is the change in the pattern of the defence programme. Among the badly hit areas are those relying on dockyards, Royal Ordnance factories, aircraft firms and similar organisations which have been the main source of local employment. We were told in the Defence White Paper of two years ago that 7 per cent. of the insured population worked in defence industries.
  Another change taking place even more quickly is that in the pattern of trade. The introduction of the Common Market in Europe is bound to mean the loss of some traditional exports. If the Free Trade Area is imposed on it there may be compensating advantages, but I cannot anticipate Thursday's debate.
  All those tendencies are creating a situation in which people will lose their existing jobs, whatever party is in power. The Government of the day must therefore have policies to meet that situation, and that is where the present Government have failed.
  There are two other things which are increasing the difficulties. Both sides of the House are pledged to end National Service, which will mean more young people looking for jobs. There is also the "bulge" coming through the schools, which will again mean more young people looking for jobs. I was rather sad when I read recently that the number of

  1037
  vacancies for boys being notified to the employment exchanges has fallen by 70 per cent. in the last year, whereas the general fall in the number of vacancies has been 60 per cent., so that the situation is even worse for the young people than for the older people.
  All those factors increase the need for a Government policy and strategy for maintaining full employment. In the absence of that strategy, the figures which we have heard today are likely to get worse in the next year or two. We should never underestimate the effects of unemployment. I agree with my hon. Friend the Member for Newton (Mr. Lee) about the human cost of this problem in terms of the unemployed man and his family. If there is one unnecessary case of unemployment anywhere in the country, it represents a tragedy for the family concerned, and we should always remember that.
  On top of that, we have the tremendous waste of productive effort from which the whole community could have benefited. I quote from a recent article by H. A. Turner of the Faculty of Economic and Social Studies at Manchester University. He said:
  "And since 1955 we have lost the equivalent of three months' total industrial output.
  Enough—for instance—to build a million new houses or establish a fund to nearly double old age pensions without raising contributions."
  That is a measure of the social loss which we have incurred through unemployment in the last few years.
  There is another aspect which has not yet been mentioned. Because our economy is undergoing changes, because we have to change the pattern of our trade, we have to have a flexible approach to our entire economic organisation. People must be willing to go from one job to another. If there is a psychology of fear, if people are afraid of losing their jobs, if they are afraid that if they do lose their jobs they will not have other jobs to which to go, or that they will have to wait twelve months to get another job, which may be inferior, they will be unwilling to consent to arrangements to bring industry up to date.
  There is always a psychological reluctance to change one's ways, a sort of inertia, an unwillingness to go into a new environment. If on top of that we impose unemployment, the economy will
  1038
  not be sufficiently flexible to stand up to the challenge which we will have to face in the coming years.
  Although we are going to have a reply from a Minister of the wrong Department, I hope that he can at least give us some indication of the policy of the Government for meeting this challenge. I want to remind him of the information which the House has been given recently about the working of the Distribution of Industry Act shows that the policy in itself is completely ineffective in dealing with this problem. We were told by the President of the Board of Trade recently that between 500 and 1,000 new jobs would result from the applications already approved for factories set up in special areas. That is between·1and ·2 of 1 per cent. of the total unemployed throughout the country.
  The fact is that this policy is completely ineffective unless it is carried out against the background of an expanding economy, and, on top of that, having got an expanding economy, we need a Government which will plan drastically in these areas of unemployment and be prepared, if necessary, to go in themselves, build factories and enter into competition in industries where private enterprise is not virile enough to do it itself. It means a Government prepared to give priority to public works in these areas of heavy unemployment on the building of roads, hospitals and other things which are so badly needed, but which have been so badly neglected.
  I seem to remember the late Lord Keynes saying that it was better to provide any work for the unemployed than to leave them in idleness. He said that rather than leave them to do nothing it would be better to set half the unemployed on digging holes and the other half to work on filling them in again. It is clear to anyone who looks at the social problems of this country that there are far more constructive things that we could do than that. [An HON. MEMBER: It sounds like the Preston by-pass.] Seriously, the point Lord Keynes was making was a good one. Anything is better than prolonged idleness. Even so, there are a lot of social projects waiting to be carried out, which need to be done.
  There is one other aspect of the problem to which I want to refer. I go back to the Estimates and to the figure of

  1039
  £25 million extra which is required for this purpose. The hon. Lady, in opening the debate, spoke with some pride about the level of unemployment benefits now being paid as a result of Government policy. I think that the country, and certainly those of us on this side of the Committee, will feel very tired of hearing hon. Members on the Government side boast of the high level of social payments. We have heard it too often in regard to retirement pensions, and we have heard it today again in regard to unemployment benefits. In fact, all these comparisons that are made with 1951 are based on the Official Index of Retail Prices and neglect the problem of people living on low incomes whose pattern of spending is different, and also neglect the fact that the prices of food and other necessities play a bigger part in their spending. The prices of these things have gone up more than price levels generally.
  Even allowing for that, there is nothing very much to boast about the fact that in 1959 we have a higher level of these benefits in real terms than there was in 1951, which was only three years after the scheme first came into effect. If the Government could boast of an advance in social services equivalent to the advance made under the Labour Government, which first introduced comprehensive social insurance, then they could make legitimate political points out of this, but, taken out of its context, this argument is artificial and convinces no one.
  These levels of benefit which are reflected in the figures are really very inadequate for anyone who is unemployed at present. If we had a full employment policy in this country, we on this side would have to face frankly, for the reasons which I mentioned earlier, the fact that many people would lose their existing jobs and would have to go to other jobs. A full employment policy means having other jobs available for them to go to. During that period of change, hardship cannot be avoided because of the fact that people will have built up standards of living based upon the wages to which they have been accustomed.
  These things are needed urgently. First, that the basic level of the unemployment benefit should be raised to at least £3 a week. Secondly, just as we on this side have said that retirement pensions should
  1040
  be reviewed at least once a year in relation to the cost of living, the same should apply to unemployment benefit, and that is something on which we should like to hear the views of the Government. Then, again, unemployment benefit should be on a more long-term basis. I do not want to speak too long and I think some of my hon. Friends may have something to say on Section 62 of the National Insurance Act, and the fact that, after a limited period, people can no longer get unemployment benefit, but have to rely on National Assistance.
  On this question, I believe that a firm for which a man has worked for some years should do something for him. When a man becomes unemployed, because of technical advances which have benefited the firm, a man who may have given long years of service to that firm can be dismissed on a week's notice, and have to rely on unemployment benefit. Some form of compensation, paid by the employer, ought to apply in these cases. I think that it is a matter for debate whether this is best dealt with by legislation or by agreement between the unions and the employers concerned.
  Mr. Osborne: I wonder whether the hon. Member would agree that most modern and humane firms give their workers the maximum amount—
  Dr. Dickson Mabon: That is begging the question.
  Mr. Osborne: The majority of modern firms—[HON. MEMBERS: "No."] I am speaking, as I hope the House will agree, with some experience, and I say that the majority of modern firms treat their work-people as fairly as their finances will allow. [HON. MEMBERS: "Oh."] They cannot spend what they have not got. They treat their people as fairly as their finances will allow, and the hon. Gentleman should admit that that is the modern method.
  Mr. Prentice: I think it is begging the question, and might lead to a discussion on how many employers are modern, how many are humane and how many can afford to do it. I suggest that the community as a whole should recognise this as a right, that people, after having given many years of service in a particular firm, should have something better than seven days' notice, followed by 50s. a week unemployment benefit. I agree that some

  1041
  people—I do not know what the figures are, but I should be grateful to hear some precise figures from the Minister—get more, but there were not sufficient who get it.
  In all these things, what we really require is a new strategy by the Government which plans not only to defeat unemployment but deals more humanely with the people affected by it. I believe that the attitude expressed from the Government benches this afternoon has been an entirely negative one and that in this situation in which they cannot themselves produce any policy to deal with this difficult human problem they ought to resign and make way for a Government who will tackle it.
  5.28 p.m.
  Mr. Raymond Gower: I think it is possible that hon. Members who have spoken from the other side of the House may be unduly apprehensive about future developments in the unemployment picture. I would be the last to deny the reality of unemployment or, indeed, the more unfortunate aspects of unemployment. Indeed, I was brought up in an area which suffered very heavily before the last war when most of the world was suffering very heavily from unemployment.
  I cannot help thinking that some hon. Members opposite are still in the state of mind of the right hon. Member for Blyth (Mr. Robens) when, in 1952, when steps had to be taken to deal with our financial difficulties at that time and unemployment rose somewhat, he prophesied a level of a million unemployed before Christmas. I am afraid that some hon. Members opposite may have got into that state of mind. I recognise that there are parts of the country where there are particular problems, and that these, of course, have been aggravated in some parts of the country by the difficulties of the older coal mines which the National Coal Board has decided to close down.
  Taking the national picture, I think it would be as dangerous to be unduly pessimistic as it would to be unduly optimistic. It is a problem that we must face, and it is one which I believe the Government are facing, but the steps which they have taken may take as long to be effective as the steps which they
  1042
  took to deal with inflation. Two years ago the Government took the first steps to meet the danger of inflation. I well remember, as the weeks and indeed the months went by, wondering whether those steps were adequate, so slow were the results, but in due course they had the effect that was desired. Whatever arguments there may have been between hon. Members on either side of the House about the policies and methods, I think it can be agreed by anyone who takes an objective view of the problem which then existed that there was a radical improvement in the situation and a solution of the inflationary problem in about a year.
  Dr. Dickson Mabon: Surely the hon. Gentleman is arguing that inflation began in 1957. According to the index of prices and the real value of money inflation has gone on since 1951, and this despite Conservative promises. But even if the hon. Gentleman is succeeding in making his point—I am willing to admit that prices have risen consistently since the end of the war under both Governments—he must admit that inflation has persisted since 1951 and not since 1957.
  Mr. Gower: I readily admit that of course there has been inflation since 1951, and inflation since 1945. I believe that there has been inflation since the Elizabethan age, if the hon. Gentleman wishes to go back as far as that.
  I was speaking particularly about the aggravated form of inflation which seemed to affect most of the free countries of the Western world in 1956 and 1957, and I think that the hon. Gentleman realises I was referring particularly to that period and the problems which then arose. Certain steps were taken by the Government to deal with those problems, and it seemed a long time before we saw any result from them.
  Similarly, steps to deal with the different problems of unemployment have been taken in recent months by the Government, and I can capitulate some of them. There was the lowering of the Bank Rate; the easing of credit; the decision taken by many Government Departments to increase expenditure and, in some cases, a decision to alter the form of expenditure.
  Mr. Hale: The hon. Gentleman is making an important point. I gather

  1043
  that he maintains that it helped the situation by reducing the Bank Rate which we put up; that it helped the situation by cutting a little of the credit we could have; that it helped the situation by increasing expenditure, when the retiring Chancellor of the Exchequer said that if expenditure were increased to £100 million, ruin and devastation would be brought on the country. The result is that if we had not had a Tory Government at all, and none of these things had been done, everything would have gone on perfectly well.
  Mr. Gower: The hon. Gentleman should realise that there is nothing strange about what I have said. Had he been eating large meals every day, it might do him good to go without for a day. There are variations in the affairs of nations just as in the affairs of individuals. Anyone who goes all out all the time finds that sometimes it is a good thing to stay in to have a rest. For those reasons, it is not strange to suggest that sometimes in the history of a nation steps have to be taken to deal with inflation; and at other times it is proper and pertinent to take steps to increase industrial activity. I see nothing strange in that theory. The hon. Gentleman may make fun of it, but I think it is consistent with the past history of this country and I believe that it will happen again in the future.
  I was suggesting that it will probably be some time before the steps taken by the Government show results. Certain Departments have increased their spending. Certain State-owned industries have announced plans for expansion. There will be an acceleration in the modernisation of the railways. My right hon. Friend the Minister of Transport and Civil Aviation has agreed to some increase in the road building programme. My right hon. Friend the Minister of Education has announced a substantial increase in school building. All these things will help to increase industrial activity.
  In the private sector of industry the easing of credit terms and the lessening of hire-purchase restrictions will also lead to increased activity, but I must reiterate what was said by my hon. Friend the Member for Scarborough and Whitby (Sir A. Spearman), that it would have been
  1044
  impossible for this nation, any more than for any other country, to have contracted out of the conditions of world trade as they existed in the last eighteen months or so. The astonishing thing is not that we have done so badly, but, in all the circumstances of world trade in the last eighteen months and despite a large American recession, that the effect on our industrial activities has, comparatively speaking, been so modest. That is the thing we should emphasise and, in that spirit of hopefulness, we should look to the future.
  In the last year or so it has been demonstrated that, contrary to the belief of many hon. Members on both sides of the Committee, we can suffer the consequences of a large inflation on the other side of the Atlantic without it having a fatal effect on our own economy. That is a most hopeful sign and something about which we should be glad.
  I wish to say something about the actual terms of the proposals regarding unemployment benefit. My hon. Friend the Joint Parliamentary Secretary suggested, and I agree, that the payments made to unemployed people are better than they have ever been before. But, with respect, I suggest that she and my right hon. Friend should view that against the setting in which the payments are made. I suggest that people have been earning better money in recent years than ever before, and, therefore, when a person becomes unemployed, surely it is a greater deprivation, when he loses good employment where he has been earning high wages, than would have been the case in the past. To that extent, there may well be a special problem in the special areas. My right hon. Friend the Minister of Pensions and National Insurance and my right hon. Friend the Minister of Labour and National Service should, in my opinion, regard this in a different fashion and make new assessments of the position.
  Here we have people earning higher wages than were contemplated in the past. In many cases, those people in the special areas have to go through a prolonged period of unemployment. Is not there a case in the special areas, where the unemployment figure is over 3 per cent., for a higher rate of unemployment benefit for people who have suffered from a prolonged period of unemployment through

  1045
  no fault of their own but because of the shortage of work in the locality? I know that my right hon. Friends the Minister of Pensions and National Insurance and the Minister of Labour and National Service have not closed their minds to this. My right hon. Friend the Minister of Labour and National Service, when dealing with Section 62 in the past, has indicated that he has an open mind about this problem.
  I suggest that there is a case for introducing some formula, in addition to the terms of unemployment benefit, which ends after a specified period, if this very high proportion of unemployment persists for a long time in the special areas. I throw out these ideas to my right hon. Friend. This matter should not be compared with the problem which faces the whole country because it is a special problem peculiar to particular localities. If there are these high rates of unemployment in particular areas, there may be a case for such a special formula to be applied to the areas. In other areas, where unemployment is lower and the number of jobs available is far larger, I do not think there would be the same need for such a formula to be applied.
  The hon. Lady the Member for Lanarkshire, North (Miss Herbison) mentioned one such area and there are two others in North-West Wales and South-West Wales. I hope that some special formula may be devised for them. I also suggest that there may be a case for better travelling facilities and for the payment of special grants for people who have to move from their home area to obtain work elsewhere. Surely that is not an unreasonable proposition, if we wish to encourage people to secure work. More generous grants should be made to them, not only for travelling but to meet the added expense of residing in other areas for a period.
  I hope that we shall hear something tonight from my right hon. Friend about the points which I have made about the payment of benefit. I am sure that my hon. Friends will have not hesitation in approving the payments and that hon. Gentleman opposite will agree to them.
  There is the danger that if all of us appeal for special treatment for our own areas—quite a natural and human thing to do—in an effort to have them designated as Development Areas, and if every area then becomes a Development Area, there will be no Development Areas at
  1046
  all. We should spread the treatment so thinly that there would be comparatively no benefit. Areas which have a threat of unemployment should receive the special benefits which were devised under the Distribution of Industry Acts and the Distribution of Industry (Industrial Finance) Act. I support the Motion.
  5.43 p.m.
  Mr. James H. Hoy: We should remind ourselves what the Vote is about. Surely, if what was said by the Parliamentary Secretary is correct, the Supplementary Estimate has nothing to do with increased benefits, but is necessary because of increased unemployment That is its sole purpose.
  I am sorry that the Joint Parliamentary Secretary to the Ministry of Pensions and National Insurance is not here at the moment. I found some of her remarks a little contradictory. The hon. Lady sought to convey to the Committee that she felt this to be a human problem, and then she went on to quibble whether the debate was taking place under Subhead A, B or C. I am sure that the Minister will agree that it does not matter which subhead it may be on; it gives us an opportunity to deal with a human problem. Nor does it matter to the unemployed man under which Vote the debate is taking place because—
  The Minister of Pensions and National Insurance (Mr. John Boyd-Carpenter): My hon. Friend the Joint Parliamentary Secretary is not here at the moment. She and I are anxious to accommodate the wishes of the Committee and we will try to deal with these matters on the basis that the Committee wishes. My hon. Friend made the first speech, before any other hon. or right hon. Gentleman had spoken, and I must say, in fairness to her, that she would have been subject to criticism if she had not confined her remarks to the Votes which hon. Gentlemen opposite tabled for debate. I hope that they will not hold it against her that she made speeches which were perfectly legitimate on that Vote.
  Mr. Hoy: I was saying that there should not be these quibbles about which Vote the debate was taking place under. This is a human problem which affects some parts of this country, but it concerns the whole country of Scotland.
  It was suggested by the hon. Member for Scarborough and Whitby (Sir A. Spearman) and the hon. Member for

  1047
  Tonbridge (Mr. Hornby), that one solution to the problem of unemployment might be mobility of labour, but that would not benefit us much in Scotland. It does not matter to which part of Scotland we move, we find unemployment. I heard that suggestion before when we were discussing the question of people drifting South. If there were sufficient transport there would have to be a good road, unlike the Preston by-pass, to carry the number of people who have been compelled in the last ten years to drift from Scotland to England.
  We have been losing, on an average, rather more than 24,000 people to England from Scotland in the past ten years. In 1957, we lost 32,500, which was the highest figure for the last thirty years. Despite this continuous drift from Scotland to England, we have an unemployment problem in Scotland of 150,000, or 20,000 more than the last figure published. On top of that, we have part-time working of 16,000. The figure is for the end of December. In other words, there are four people on short-time working for every person we had a year before. The problem is exceedingly great for us.
  I remember raising this matter when I had the privilege of opening a debate for my right hon. and hon. Friends in July last year, and when I sought to convey to the Government what the position would be in Scotland. I invited them to take action in time to prevent it happening. Some Government supporters criticised me for painting too black a picture. By the way, there is not a single back bencher representing Scotland sitting on the Government benches at present. My hon. Friend the Member for Lanarkshire, North (Miss Herbison), who addressed the Committee, came in for a great deal of criticism from Government supporters although she only said that unemployment would affect Scotland more than any other part of the country.
  That is what has happened. My hon. Friends who represent Welsh constituencies always think of Wales as a black spot, but Scotland has now usurped that position and is one of the blackest spots in Britain. Last December the male unemployment rate was greater
  1048
  than for any other section of Britain. Unemployment over the whole of Scotland has gone up to 5·4 per cent. In the Lanarkshire industrial belt we have an average rate of 8·3 per cent. I am surprised that there has been reticence about the figures, because the figures which the Minister announced in response to an interjection were given by the Department for Scotland on Sunday. The Minister only confirmed this afternoon that they were absolutely correct. They were given to people who were not in this House. It is difficult to understand, if the figures were available, why they were not disclosed to the House of Commons.
  Let me give comparative figures in the Lanarkshire area. The unemployment rate varies from 7·8 per cent. in Hamilton, to 10·9 per cent. in Belshill. Therefore, the best possible area is Hamilton, which is in the industrial belt of Scotland and upon which we depend very much for our economic prosperity. Faced with that position, we obviously cannot think the future is very bright.
  It has been suggested that one of the reasons why unemployment has gone up is that the Government have had to restrict exports. Various excuses have been made for Government policy. I read an interesting report made by a Conservative back bencher. He said that the reason why we had growing unemployment was Government policy. I support the hon. Gentleman. If my hon. Friends want to know who the hon. Gentleman was I will tell them. He was saying that the reason why we had increased unemployment was that the Government had to keep down the cost of living, and that the only way to do that was by increasing the number of unemployed. However, unemployment has not had that effect upon the cost of living, which is the highest it has ever been in our country. It is easy to keep it at the higher level.
  Let me quote what the hon. Member for Argyll (Mr. M. Noble) said, according to the Scotsman, on 2nd December, 1958:
  "In order to keep a stable cost of living the Government had to be prepared to have some degree of unemployment,… He told a meeting of women Unionists: 'If, by stabilising the cost of living we have done a good deal to help the country as a whole, it is equally

  1049
  true to say that we have caused the great misery of unemployment to an extra one and a half per cent.'
  If, continued Mr. Noble,"—
  the hon. Member for Argyll—
  "in order to benefit 981½ per cent. of the population, it was necessary—for a short time—that one and a half per cent. should suffer the misery and inconvenience of unemployment, surely that was right."
  That was the hon. Member's philosophy. He was saying to that meeting of women Unionists, in Glasgow, "Let us have a little more unemployment and the rest of us will live a much easier and more comfortable life." If that was true of 1½ per cent. we should now be living in luxury, because Scottish unemployment has gone up to 5½ per cent. It is an awful commentary that an hon. Member—from Scotland, of all places—should suggest that the one way in which we can have a better standard of living is to create unemployment in the rest of the community.
  Mr. Osborne: Has the hon. Member given my hon. Friend the Member for Argyll (Mr. M. Noble) notice that he would refer to his speech? I should think that it would have been fair to have done that, so that my hon. Friend could be here to reply.
  Mr. Hoy: This is a debate on unemployment, and unemployment in Scotland is 5½ per cent. Every hon. Member is free to come into this Committee or to stay away. I cannot be responsible for the fact that not a single Scottish Tory on the Government back benches is present. I should have to have given them all notice. Maybe they will get notice—notice to quit—because of their behaviour tonight.
  Even the hon. Member for Glasgow, Scotstoun (Sir J. Hutchison) said in our last debate on unemployment that we should not be worried if unemployment was about 2 per cent. Perhaps that is not a worry, but I should have thought that now it has gone up two and a half times that figure he might have been present to express his concern. I suggest that this is what we have to tackle.
  I was a little surprised to find that even the Chairman of the Scottish Unionist Employment in Industry Group is not present to express his concern. He made an attack on me in the debate last July,
  1050
  when he said that I had painted too black a picture. He said:
  "The position in Dundee and Greenock has been given undue publicity. The position there demands attention, but the worst position is that in the Development Areas. The figures for Scotland would he infinitely better but for those of the Development Areas."—[OFFICIAL REPORT, 10th July, 1958; Vol. 591, c. 668.]
  The hon. Member was suggesting that if only we could get rid of unemployment in Development Areas and in Dundee and Greenock we should have no problem. That does not seem a bright suggestion. Even so, it does not apply tonight, because in cities like Edinburgh and Aberdeen, and in other parts of Scotland, unemployment continues to increase.
  For a considerable period we have been suggesting to the Government that if they are to do anything worth while in Scotland they have to diversify Scottish industry. It has been said to us: what suggestion do you make? We suggested that advance factories should be built. We think that that would prove beneficial to Scotland and other unemployment areas. Should we reverse Government policy? I should say, yes. During the days of Sir Stafford Cripps and the Labour Government, for every 2 sq. ft. of factory space built in Scotland there was only 1 sq. ft. built in London and in the South. As a consequence, we attracted new industry to Scotland and tonight thousands of people are in employment as a result of the policy of the Labour Government, under Sir Stafford Cripps.
  Since this Government have taken power, the position has been reversed. In this so-called free-for-all for building, 2½ ft. of factory space is built in London and the South for only 1 ft. in Scotland. That is the task we have to tackle if we are to solve the problem, not only in Scotland, but in Wales and other parts of the country. We have to build advance factories. I am not carried away by stories about the Government bringing forward £3 million or £4 million worth of work. Even if the whole of that £3 million or £4 million was paid out without any cost of materials and profits, it would pay the unemployed in Scotland for only four or five weeks. So its impact could be nothing at all on the unemployment position in Scotland.
  We need to have greater schemes to deal with Scotland as a whole. If we are to solve the problem we not only

  1051
  need to have a short-term view of it, but a long-term view as well. If we are to be saved from recurring depressions we need a long-term plan. We have to have manufacturing industries producing the things which people are consuming. As my hon. Friend the Member for Lanarkshire, North said, if there is to be a strip mill there, although we are grateful for it, it will make no contribution unless we have factories in Scotland which will use the material it produces to manufacture consumer goods. The same applies with synethetics, rubbers and plastics. We attracted the production of chemicals to Grangemouth, but we have not set up a manufacturing industry to use what those great combines are producing. That is a job which has to be tackled to solve Scotland's unemployment problem.
  I very much regret that even at a time when unemployment is growing the Board of Trade has taken action to increase the rent of people engaged on the industrial estates in Scotland. That could not be in the least helpful. The only consequence of that action has been that certain people in those industries have written to the Board of Trade saying, "If that is all you can do we shall just close." I will give an example. The Board of Trade knows about this.
  During the Recess, the Industry and Employment Group of the Scottish Labour Party, of which I am Chairman, had meetings with the Scottish Development Council, the Scottish T.U.C., the Scottish Board for Industry and the Lord Provost of Glasgow. We came across many of these cases. One firm, not a big one, was employing 150 people on the Millington Estate, in Glasgow. The present rent is 1s. 6d. to 1s. 7d. a square foot. The Board of Trade has said that as from a certain date the rent will go up to 3s. 9d. per square foot. The gross profit of that firm is £7,000 and the Board of Trade has asked for an additional £4,000 in rent.
  Does the Board of Trade think that firms will keep going in that way? The managing director wrote to me and said that he would not be bothered with it, but would close the firm and put the 150 men off because he was not going to run a factory merely to pay rent to the Board of Trade. One would have thought this
  1052
  was the wrong time for that action to be taken. Many other firms have taken the same view. I have had a promise from the Board of Trade that it will take a speedy decision. I am told that it is in a position to do so now. We want to know whether it is going to take that action soon.
  The picture in Scotland is black. I do not want to overpaint it, because I know that in these figures there will be a certain amount of seasonal unemployment, but the position is very bad. Scotland looks to the Government to take action immediately to get us out of the morass in which we find ourselves.
  6.0 p.m.
  Mr. Anthony Kershaw: I am afraid that I enjoyed the speech of the hon. Member for Leith (Mr. Hoy) rather less than I usually enjoy his speeches. It seemed to me to have been manufactured largely for the local newspapers and to have been an attack on fellow Scottish hon. Members rather than an address to the Committee on this important question of unemployment.
  The fault which I find with the speeches from hon. Members opposite is that nowhere in them is the idea pursued sufficiently far to give an answer to the problem—which, after all, is surely the answer which the country has to look for—of what we are to do with the extra products and activities which we would produce if we had absolutely full employment all the time.
  That question arises in our country because we export 30 per cent. of all the things we make. It is quite idle to pretend that we can go on making them if foreigners will not buy them. As my hon. Friend the Member for Louth (Mr. Osborne) has said before in the House, there is no recipe for compelling foreigners to buy British goods if they do not happen to want them. Hon. Members opposite come up to this hurdle every time in their speeches and then turn away from it and refuse to say how we are to get over it.
  It is quite idle to stockpile or engage in activities which demand a large outpouring of capital which will add to the inflationary position over here and make it more difficult and not easier to compete with foreign trade and bring about a catastrophic fall in our economy which

  1053
  will be no help to unemployment in this country. What are the main measures which hon. Members opposite propose at the present time?
  Mr. Ernest Popplewell: From 1951 onwards when there was an expanding world market our share of the market constantly fell. Although world raw material prices fell considerably from 1951, we were still trying to export goods at a considerable increase on 1951 prices even though raw materials had fallen so rapidly.
  Mr. Osborne: May I remind the hon. Gentleman that if the under-developed countries are to be industrialised, as we all wish them to be industrialised, so as to increase their standard of living, our share of world trade must fall.
  Mr. Kershaw: I am obliged to my hon. Friend. Of course it would have been better if our total percentage of the expanding world trade had kept pace. But it must be remembered that some countries started from a very low backline. Japan and Germany and other less developed countries in starting up industrial development must increase their share of world trade if they are to utilise the new machinery and industry which they have. Our position vis-à-vis even Western Germany is a favourable one. We continue to export more than Western Germany does, although statistics show that the increase which Western Germany has made recently is so phenomenal that one can hardly expect anyone else to export anything. Nevertheless, we export more.
  Mr. Popplewell: The hon. Gentleman has not answered my question. The point I am trying to make is that from 1951 to 1958 there has been a fall in world raw material prices. During that period, instead of our export prices bearing comparison with the fall in import prices, our export prices have been consistently rising. Is there any wonder under such circumstances that we are losing our percentage of world trade?
  Mr. Kershaw: I have just said that we are losing a percentage of world trade but that is due to an entirely different cause which I do not wish to repeat.
  Moreover, raw materials have gone down between 15 and 20 per cent. but that represents only one part of the cost
  1054
  of goods and the reason our prices have not fallen by exactly the same amount as raw materials is that the cost of production, including wages and the cost of the Welfare State in this country, has gone up.
  Mr. Popplewell: So has the cost of living.
  Mr. Kershaw: That has gone up by only 2 per cent. in the last year. Moreover, our prices have not risen more than those in any other industrial country in fact we are still fully competitive. It is the object of the Government to make sure that that position continues so that we are able to continue to pay our way in the world.
  What are the measures which hon. Members opposite propose to cure the situation? The main measure which they propose is more nationalisation. Nationalisation as such has absolutely nothing to do with production. The question of the ownership of the business has nothing to do with the amount it produces. Even if it had, what could nationalisation do about exports, which represent the fundamental problem of this country? Our experience of every nationalised industry shows that the exporting industries are the last ones that ought to be nationalised, and nationalisation could not possibly cope with the development necessary to continue our export trade in order to stop unemployment.
  Mr. A. Woodburn: The hon. Gentleman is making a very interesting argument about the export trade. The export trade may go up or down. Is there any reason, if it is going down, why the Government should push industry further down in this country by the credit squeeze, especially when this prevents the nationalised industries from re-equipping themselves to make themselves efficient when production rises again? Surely we should be re-equipping our nationalised industries, but the Government, instead of doing that, pushed those industries down at the very time when a recession was taking place.
  Mr. Kershaw: That is exactly what the Government are doing by the modernisation of the railways and the increase of the amount of money available for the mines and so forth. That is exactly the policy which the right hon. Gentleman

  1055
  has been advocating. Because of the recession which has occurred in industry in this country, the Chancellor of the Exchequer is making more money available to the nationalised industries. I am glad to know that there is no difference between myself and the right hon. Gentleman on that.
  What are the proposals which the Labour Party have for dealing with the unemployment situation? Surely the only proposals they put before the country must have an inflationary effect. I do not think that that is seriously denied on either side of the Committee. They say that they will fight inflation in various ways; their proposals will have an inflationary effect in the first instance, but they will seek to overcome inflation as they go along by a system of controls. The measures they propose are not economic measures at all. Nationalisation is not an economic measure. It is a measure for political ends with which some people agree and some do not. It is a political and not an economic measure.
  It is sad that it should be so, because it will bring economic consequences in its train which will in the result mean a very great increase in unemployment. Further nationalisation will in fact increase unemployment in this country. I am sure that hon. Members opposite fail to appreciate that we are not a closed economy. We are not like Russia which can put up political barriers and operate entirely within its own frontiers without the pressure of public opinion. Nor are we like France which, due to a happy combination of national and natural resources, can afford to live of its own. We are dependent to the extent of 30 per cent. of the production of the country on the export trade.
  I ask again, what is proposed by the party opposite when we come to this bogy of unemployment which is so unfortunately with us? The only answer that we have had this afternoon is that something must be done; that we must have full employment. But how? I say again that if we are to go for full employment absolutely regardless of the consequences, stockpile goods which we cannot sell in the export market and invest in vast capital expenditure in order to undertake public work of one sort or another, it will mean in the end that inflation in this country will be so great that we shall not
  1056
  be able to compete in the world market and not be able to maintain our economy.
  We cannot do that kind of thing, with this great outpouring of money, in the present state of our reserves. It is impossible for us to finance the raw materials of the world. As my hon. Friend the Member for Scarborough and Whitby (Sir A. Spearman) said, it might be possible if we had reserves comparable with those of the United States. It is not possible at the moment and if we insist on adopting such a policy, we shall ruin ourselves and be unable to buy our imports, and that would be no service to the unemployed. In the long run our trading position must depend upon our reserves, and if we do not have the reserves necessary to finance our foreign trade and to maintain the confidence of the foreigner in the amount of business we shall do, I am certain that unemployment in this country will rise to a high figure.
  We have heard today about the desirability of diversification, and I am sure that the great industrial areas of this country would much appreciate greater diversification. In the Stroud area we are happy to have a large amount of diversification. Unemployment in Stroud is only 1·8 per cent. Next door, in Gloucester, a large Ministry of Supply factory previously on aircraft work has fallen vacant, but we have been fortunate to have Board of Trade intervention and to get British Nylon Spinners to come there. Eventually they will employ 2,000 people on that site.
  Dr. Dickson Mabon: This is very important. Is the hon. Member correct in saying that the Board of Trade offered this Ministry of Supply factory to this firm when people all over the country have been crying out for the firm to be sent elsewhere? Has it been directed to this area, where there is no heavy unemployment?
  Mr. Kershaw: No. If I gave a wrong impression I apologise. I did not mean to say that the Board of Trade had directed the firm there. This was one factory on the Board of Trade list, as all factories which fall vacant are on the list. Fortunately, British Nylon Spinners wanted to go there. That is an important factor in the Stroud area. I am certain that diversification would be of great help to any area of heavy industry which depends on only one type of work.

  1057
  I suggest that the Government's policy of making sure that our reserves are sufficient to sustain our foreign trade, and making sure that we do not suffer from inflation to such an extent that the prices of our exports rise so that we cannot continue to export, is in the long run the only policy which will bring benefit to the unemployed of this country. I hope that the Committee will approve this Supplementary Estimate.
  6.13 p.m.
  Mr. Leslie Hale: I speak today under some physical disability and I therefore intend to address the Committee more in the tempo of Handel's "Largo" than in that of the "Ride of the Valkyries". In any event, I take the view that our party controversies can be conducted on the hustings and that the question of unemployment is already too grave for it to become so much subject to party controversy or the sort of interchange and play of opinions which we have had from some limited points.
  Although I have said that, the Committee will not be surprised if I am still constrained to agree that I shall find that dictum extremely difficult to follow in view of two speeches which we have just heard. The hon. Member for Barry (Mr. Gower) is always entertaining. He recalled to me that a great friend of mine once wrote a book which attracted attention in distant Moscow and was asked whether he would allow it to be published there on a royalty basis. He agree, it was published—and published successfully and sold extensively.
  My friend wrote some time afterwards and asked, "How many roubles do I get for this?" They replied, "You have a very large number of roubles to your credit but we regret to inform you that it is the custom, under our credit arrangements, that roubles cannot be exported." He wrote back and asked, "What do I do?" They said, "A very simple solution would be for you to come and spend them here. Why not have a holiday over here, which you will thoroughly enjoy, and spend your roubles?" He said, "That will do me fine", and applied for a visa. And they refused the visa. That is the policy which the hon. Member for Barry commended to the Committee with great passion, power and eloquence and with balanced sincerity.
  1058
  So far as it applies to Oldham, I would tell him that three years ago we applied for leave to build six schools, which were extremely urgently needed in a desperate educational situation. The Ministry refused leave to build any of the six. We had deputations, and so on, but it still refused. Next year, the Ministry again refused permission to build any of the six. It has now granted permission to build two. The hon. Member for Barry says, "This is part of our social services. We are passionately interested in education. We are allowing you to build these two schools, and that will have a resultant effect on unemployment. That is part of the benefits which you reap from a Tory Government." This applies almost to everything else.
  Next, we had a speech from the hon. Member for Stroud (Mr. Kershaw). It was an excellent speech in its way, as it has always been for the last 120 years. It is the classic explanation from a Tory of why, if they are addicted to laissez-faire, there are some problems with which they cannot deal. No one has ever doubted that. The hon. Member asked, "How can we get foreigners to buy our goods?" One way, of course, is not to make them foreigners—and this is the kind of proposal which I, personally, have been advancing for a considerable time.
  The hon. Member for Scarborough and Whitby (Sir A. Spearman) raised, in a sense, much the same point. He said that we have control over only a limited area. This is not a new fact which has suddenly arisen in the course of this Tory Government. The map of England, Scotland and Wales has remained precisely the same over the centuries except for a little coast erosion, which was not dealt with until my right hon. Friend the Member for Ebbw Vale (Mr. Bevan) took charge. Subject to that, the problems are the same today.
  We came along in 1946 or 1947—not for the first time, but as post-war pioneers—and talked about a united Europe, the planning of production and the creation of an economic market which could hold its own and would be big enough to look both America and the U.S.S.R. in the face. In fact, we were quite prepared to look America and the U.S.S.R. in the face. The difficulty then was looking Transport House in the face.

  1059
  At any rate, these proposals were made and the Council of Europe came into existence. Hon. Members will find that at the Council of Europe we do not call the representatives who attend there foreigners; we call them allies. They are anxious to co-operate, and have long been anxious to co-operate, and it has been our neglect which has now faced us with the miserable situation of saying that either we have to opt into something about which we are not quite sure or else we have to run grave risks of opting out. Even now, instead of talking about planning an area we are talking about the difficulties of Morton's Fork, on either prong of which we might find ourselves economically the worse.
  That is the position. What is the good of getting up in 1959, having voted solidly for a Tory Government for seven years, and saying, "I have only just found this out and I want to explain this situation to the House"? When I came back from Canada, in 1945–46, I talked about an economic consultative Parliament for the Commonwealth. Why not? We have done it for Western Europe. There is no Tory who on the election platform does not boom out about the Commonwealth and the Empire and the Union Jack—and I agree; until he has been there no one can understand the sentimental and social ties which bind us to these distant lands. But for years Tory Governments have forced them to industrialise by declining to give them a fair price for their raw material products.
  Mr. Osborne: They wanted industrialisation.
  Mr. Hale: That is not true. The number of subjects which the hon. Member for Louth (Mr. Osborne) fails to understand expands almost day by day. There is a sort of Gresham's Law about the hon. Member.
  Mr. Osborne: The hon. Member knows full well that in India at present there is a steel mill being built by Russia, by America and by Britain at the urgent request of the Indian Government, who want to industrialise their country so as to be able to raise the living standards of their people. Surely we ought to encourage that.
  Mr. Hale: I did not think that even the hon. Member for Louth was capable
  1060
  of misunderstanding me. I am referring specifically to Australia and Canada, with their great under-populated areas. I did not think that even he would imagine that I was referring to the huge population of India. Obviously, these are diametrically opposite problems. The hon. Member shows that he appreciates this. I will credit him with thinking that he knows it perfectly well. In any event, I was talking about a suggestion which I made in 1946, when India was not even an independent Government within the Commonwealth.
  It is the problem of laissez-faire, which is amazingly put by Conservative Members today, who say, "We are always prepared to plan under-production, but never prepared to plan full production. We will help the cotton industry when it is facing ruin and give it compensation for the spindles we cannot use"—how many times have they done that?—"but we will do nothing to plan the production of cotton and to see that cotton has a sale"
  This dichotomy of ideas which separates the two sides of the Committee is exemplified in the concept of a market, because the hon. Gentleman on the other side thinks that a market is a place where people are willing to buy.
  Mr. Osborne: Yes.
  Mr. Hale: The hon. Member should apply his mind to the debate for a few minutes and start thinking instead of continually speaking. He does not understand that need provides the market and that goods should be made for use and not for profit. That is a scandal. The hon. Member should listen quietly for a moment.
  I lived in a village in Leicestershire where the miners were not allowed to dig coal for the mills of Oldham and the mills were not allowed to make shirts for the miners in Coalville who needed them. That was the old conception of Tory economy. Now we have mills all over Lancashire closing down, while people all over the world, particularly in the British Colonies, are short of shirts. Before we think of selling to the foreigner let us think of the Colonial Territories. If we are to develop them, let us not embark upon the sort of mad economy in which there is over-production of consumer needs and under-production of raw

  1061
  material needs. Right hon. and hon. Members on the other side of the Committee pay lip-service to that concept, but nothing ever happens in that connection.
  I said that I would speak temperately. The situation in Oldham today is quite astonishing and is quite different from that in any other part of Lancashire. We could see what was coming, at any rate, for some months. An hon. Member who is constantly in his constituency and hears the warnings of redundancy is often very well informed. I was criticised some months ago for slightly over-painting the picture, but I only did so a week or two in advance. Oldham has three times as many unemployed today as any other town of the same size in Lancashire. On 8th December, it had 7,414 unemployed. That is an unemployment area which takes in a small part of Failsworth and part of Chadderton, but these are all difficult areas to define in terms of population. In the course of the weeks during which I have been in Oldham every statement I have heard convinces me that the situation will become worse. I have no desire whatever to exaggerate that situation, which is a very grave one.
  Oldham has a wonderful industrial record. It has everything to offer to new industry, except very extensive areas of land. We have ample room on which we could develop new industry. We have a population second to none, a record in industry going back for 100 years—many of our present industries have been there for many years—and a progressive corporation with a first-class Development Area committee which has been working very sincerely and with an earnest desire to develop new industries. Indeed, we have started a few in these recent years. Unfortunately, though we welcome them very much, they are mostly industries which employ a predominance of unskilled or not highly skilled women labour. We have one of the finest provincial newspapers in England, an evening newspaper and a weekly newspaper. We have a genuine community life, with a complete and unified social life centred in the town. We have an excellent record in connection with strikes, disturbances and bad feeling between employers and men. We have some very good employers. That is the record.
  1062
  On 8th December last, 7,414 people were unemployed in Oldham. Each one of them is a human tragedy. Each one of them is a man who will soon wonder whether the television set goes first. Each one of them has to face a new problem which has arisen quite suddenly in the last few months in an area in which successive Governments have guaranteed employment. Less than ten years ago we were employing foreign labour in Oldham to supplement the existing workers, and they were made welcome. That creates a new problem with which I need not deal today.
  I want to be as fair as I can. Much of this unemployment is due directly to the policy of the Government. When my right hon. Friend the Member for Leeds, South (Mr. Gaitskell) and I went to Oldham in the autumn we heard a great deal more about the credit squeeze than about Hong Kong as one of the things which affected them. It is not the effect of the credit squeeze on the mill. It is the effect of the credit squeeze on the customer. Every shop selling cotton goods was reducing its stocks under the impact of the credit squeeze. When the tap of that squeeze is turned off there is not the same impetus to raise the stocks to the old level.
  The hon. Member for Stroud mentioned the vast sums which we are spending on the nationalised industries. They are largely replacements of the cuts which were made. The cuts hit certain sections of the textile industry very hard. Most people do not realise the amount of cotton which goes into making conveyor belts or tyres. Specialised firms were hit. One of the tragedies was that some of the best firms were hit first. We speak quite freely of re-equipment and capital development. When a tragedy comes as quick as that, it is very often the burden of capital investment, unpaid, which forces the mill to close. It is the extra burden of the instalments on the machinery.
  A crisis such as this in the textile industry always affects spinning and doubling first, and this time it has made a tremendous impact on them. Adding together yarn agreements, reduction of investment, the credit squeeze, foreign competition, and so on, no one is able to say why the impact has come with such force on that section and with rather less

  1063
  force on the weaving section. Once that situation has developed, it begins to hit this tightly compact area with unusual force. The next most important industry in Oldham is the manufacture of textile machines, and there is no home market today for textile machines.
  I beg right hon. and hon. Gentlemen opposite to think about these problems. If we are to have a cotton industry, we must have some measure of re-equipment. This industry had a very high export value in relation to its total product. Its total product was not enormous, but a high percentage of it was going to the export market. The maintenance of the home market is essential to the full maintenance of the export market. Unless there is a system, a plan and some ideas, matters will become worse. I suggest to the Government that something akin to what is done by the Board of Trade in the boot and shoe industry, having a system of leasing machines, would permit measures to be taken in times of adversity so that people were not pressed beyond the limit.
  Opening new industries in our complex society is an extremely difficult process. Our society has become very complex. I myself sometimes have great difficulty in knowing whether to address a Question to the Board of Trade, to the Ministry of Supply, or to whomever it might be, and I am not always clear about the dual responsibilities of the various Ministries. Whoever comes to bring a new industry to Oldham has to deal with the Post Office, the gas board, the electricity authority, the Ministry of Supply, the Board of Trade, the Ministry of Labour, and others.
  This is an urgent problem. I presume that the Board of Trade would be the Department concerned. Why can we not have a No. 1 urgency organisation to centralise information about all these things? It takes me a month to get a reply from the Ministry, and when I do receive it I write again and say that it is not quite what I wanted. There should be an emergency organisation which has in its files plans and information about every bit of available land in the area, which knows the rates, the amount of unemployment, the sort of skill available, and the needs of the community. Such an organisation should work with the local corporation or local planning authority and have all the data ready. All this information should be there.
  1064
  But we need more. As I say, we live in a complex society. One hon. Gentleman opposite said, perfectly fairly, that, in view of the complexity of our society, the expansion in production will itself cause unemployment. This is the old Luddite problem. Up to a point, the Luddites were right. No one ought to say to the workers, and, in the end, no one will dare to say to the workers, that they can have no share in it.
  It had better be said as soon as possible that, if there is to be a vast expansion in production as a result of what is generally called automation, as a result of all these new processes, new forms of power, new forms of work and so on, the benefit will be spread among the workers, not only that profits will be made out of it The workers will not permit the Government to create unemployment as a result of the increasing development of modern science. We are all heirs of the new age of science with its benefits and terrible fears. We who may be about to die are entitled also, if there is to be expansion, to share in life, to have life and have it more abundantly.
  This transitional problem presents itself in quite definite and acute forms. I could take hon. Members to a highly equipped engineering industry in Oldham which is having the greatest difficulty in carrying on. I could take them to another which is prepared, given the additional capital, to double itself straight away. Neither of them is a very big industry. The fashion and pattern of industry, of course, changes and there should be the maximum possible information available about it.
  Anyone knows that the man who bought a bus at the right time, on the hire-purchase system, in Coalville during the early days, and then acquired a second, became a great and prosperous industrial magnate. He happened to come in when buses were coming in. The man who bought at a different time might not. In the same way, there was in the light engineering industry, some years ago, tremendous prosperity among the smaller firms because there was work in connection with the aviation industry. Today, because of a dearth of orders from the Ministry of Supply, because of delays by the Ministry of Defence and because of arguments about aeroplanes, and so forth, the situation is very different. In

  1065
  the meantime, the small jig-making firms are almost closing down. This is an impossible situation.
  In the area I represent, there are four firms working in electronics. There is the Ferranti Company, one of the pioneers of the computer. These developments in themselves may even alter our local government boundaries, because the smaller local authorities will be too small to be able to furnish themselves with the scientific aids needed in our new society. In these developments—a subject about which I am wholly incompetent to speak—there is a variety of processes, some secret and some not, but all highly recondite, many of which promise great opportunities for expansion.
  It is the duty of the Ministry to be aware of trends, to be aware of possibilities, and to be prepared, if necessary with statutory powers, to give the necessary impulse to expansion in those firms which are maintaining full employment and developing a new form of power. Similar considerations, of course, apply to the development of atomic Rower, but I will not weary the Committee about that.
  We have here a very great problem. Men working in textile engineering are told that they will shortly be redundant. It really is impossible to refrain from saying that there appears to be a complete unawareness on the part of the Ministry of the tragedy which is occurring. One great factory, one of the best for employment in Oldham, belongs to the Ministry of Supply. The Department relet it on a 21-year lease only a few months ago to a private firm which, it is publicly said, is likely to close very soon, and it has an option to break. I asked whether it had not been made a condition that maintenance of employment should be secured in the course of agreeing a long lease like that. I was told, "No, that is against the usual custom."
  I do not know much about electronics, but I do know a bit about leases, and I was a member of the Leasehold Committee. I cannot understand why, in an ordinary lease, there should not be an ordinary clause to the effect that, "This is a factory, and you must not turn it into a fish and chip shop." Surely, the cost of the rent in these multiple firms is charged to tax, and the Government are
  1066
  not getting much out of it. At least, they should do something for the welfare of the community. These things go on all the time.
  I do not want to deal with individual cases, but recently an order which Oldham had had for many years was moved to Blackburn on the ground that Blackburn needed it because there was some unemployment there. This did not occur in my division and I did not know about it until afterwards. Oldham has three-and-a-half times as much unemployment as Blackburn. Somebody ought to have looked at that before people were just turned out of work.
  I recently put down a Question about the possibility of Oldham and the surrounding area becoming an assistance area within the meaning of the Government's Measure. The latest figures are so impressive that I cannot doubt but that we shall be able to come to some agreement with the President of the Board of Trade on those lines. It seems to me that the area might well include some part of Royton, which is adjacent to Oldham, and the urban district of Chadderton and the parish of Lees. I am not sure about Crompton. I think that some such area should be included.
  It shows a lack of understanding of the whole problem to talk about Manchester as a place which can receive Oldham's unemployment. Geographically, we are not many miles from Manchester, but Manchester itself has a large commercial area and has 9,000 unemployed of its own. That is not a large figure for a place of its size, but there are still those 9,000 people who will want work before an Oldham man can get in. In any case, he would have 40 minutes' travel from the centre of Oldham, by bus, twice a day, to do it. The problem cannot be solved in that way. I beg the right hon. Gentleman to do something positive about it.
  The state of the cotton industry is not something which I wish to labour in any way. Neither party can be permitted to say that this great industry has run down to a point where it must stay. There were 750,000 in the industry in 1913. There are 200,000 employed in it today. The loss of skill and of exports is a major disaster for the country and a still more serious disaster to Lancashire. Oldham, perhaps, feel the impact of it more than

  1067
  any other town in England. The situation is grave.
  I think that I can suggest a solution of the problem. It can be found, as I found it, in crossing from Kenya to Uganda and seeing how much of the extra prosperity of the young people of Uganda is spent on cotton cloth. In a primitive community what the African lad wants is a bicycle and what the African lass wants is a cotton dress. There is a market in this great area, with its vast population. I know that it can be said with truth that one of the first things which these places will do is to erect textile mills of their own and that they can grow and spin the stuff. But one is talking now in terms of an area which is so vast, with an ever-increasing standing of living, that a good deal of trade and custom would still come to this country. Some of the men in Oldham would willingly go out and help with the work.
  In the face of the magnitude of this tragedy in Oldham which impinges on every one of our activities—every club, every retail shopkeeper and every person in the town begins to share the growing burden of the poverty which is gradually increasing—we have not the right to stand aside and talk in cliches. What Oldham asks for is action, and action today. We ask the President of the Board of Trade, or the Minister of Pensions and National Insurance—I am not being discourteous to the right hon. Gentleman; I was merely accepting the fact that it is out of the ambit of his ordinary Ministerial activity—or whoever is to wind up the debate, to say that the Government are determined to give every assistance in rebuilding our industries and in re-creating full employment. If the Government do not do this, their fate will be determined at the hustings, and it will be fairly and justly determined.
  6.42 p.m.
  Mr. Cyril Osborne: I am delighted to have the opportunity to follow the hon. Member for Oldham, West (Mr. Hale) because, by a strange coincidence, I have been going regularly to Oldham ever since 1926. I shall be there this weekend, and one of the reasons for my going is to try to learn something about the difficulties of the cotton industry. Because of my thirty years'
  1068
  intimate knowledge of Oldham, I agree and sympathise with a great deal of what the hon. Member says. Oldham has a fine and industrious people who have done a fine job, but Oldham itself typifies the problem of our whole nation.
  The hon. Member said that the problem was too grave for narrow party controversy. That is true. This is the one issue at home which really matters, no matter which party is in power, but because I believe that the next General Election will be decided on this one issue internally I feel that it is our duty on both sides to discuss the matter as dispassionately as we can and to put the facts before the people so that they may judge fairly and with a full mind.
  I thought that the hon. Gentleman rather spoilt his speech by making a narrow party point. He said that the Government were asked to build six schools, but refused to do so. Now they are to build two. The problem of Oldham cannot be solved by building schools. The hon. Member said that employment in Oldham—and I have been round the engineering factories many times—depends upon their being able to sell their textile machines abroad, and he asked with great pathos, "Who will buy these textile machines?" That is the problem which faces the whole nation. Who will buy what we are producing? We must tell the people, and be honest about it, that it is useless to produce goods which we cannot sell. To do so will bring ruin to the whole nation and lower our standards in a way that will alarm us.
  The hon. Member went on to say that a united Europe was probably one cure. I think that that is true, but we cannot plan, even if we had the power, an economic Zollverein for a united Europe unless we have political unity, and at present we are miles away from that. President de Gaulle would not let us dictate to him what should happen to French industry.
  The hon. Member made another point. He said with deep feeling and great sincerity that what he had seen in Uganda typified a cure for Oldham's problem and the problem of places like Oldham. It is a shame on the white man that the coloured man has such a low standard of living, and our only hope is somehow to raise their standard of living nearer to ours. As a businessman who sold

  1069
  goods to Africa, what did I learn? I used to export to Africa. What happened? Immediately the Japanese produced cheaper goods the Africans did not buy my Leicestershire-made goods; they bought Japanese goods. One of my companies lost big orders in Africa some years ago because the Japanese came in and undersold us in such a way that we could not compete with them. This is the problem which faces the whole of our economy. In a free world, one cannot compel the people of Uganda to buy our textiles and cycles if they can get cheaper ones elsewhere.
  One hon. Member said that the unemployment figures do not give a full picture of the tragedy that faces us. That is true. The Committee ought to bear in mind that during the last twelve months or so most industries have gone through a difficult time, and we have learned when on short time that we can, through altering our organization, produce as much or perhaps more with less labour than we did before. Because of that, too, and because there is no shortage of labour, as there was before, we are no longer hugging the labour to ourselves and keeping it whether we can use it or not.
  I warn both sides of the Committee that in the coming months, through an increase in industrial efficiency resulting from the difficult times through which we are passing, there may well be an increase in national productivity without a comparable rise in employment. We must, therefore, face the situation.
  The hon. Lady the Member for Lanarkshire, North (Miss Herbison) repeated what has been said so many times by hon. Members opposite. I wish they would not say it, because it is so untrue. She said that the Tory Government have planned unemployment—that we wished unemployment. The Committee always likes to listen to personal experiences. Among many things in which I am interested is the manufacture of textiles. What on earth is the good of making goods that people cannot afford to buy? I want people to be fully employed, with plenty of money and high wages so that they can buy the things which I produce. What is the good to me of unemployment and low wages? I want prosperity if only for the selfish and narrow reason of being able to sell what I produce. I also have
  1070
  interests in the import and distribution of food.
  It is no good to me and my fellow businessmen—I talk now as a businessman rather than as a politician—to have people unemployed who cannot buy the things I am importing. Therefore, to say that we as Tory businessmen want unemployment is arrant nonsense and I hope that hon. Members opposite will not say it again.
  The hon. Lady said that we were deliberately creating unemployment. We are jolly bad businessmen if we do that. [HON. MEMBERS: "You are".] If hon. Members say that I am a poor businessman, there are few opposite who can equal my record.
  Mr. Goronwy Roberts Mr. Goronwy Roberts (Caernarvon)
  rose—
  Mr. Osborne: I wish to make my speech—
  Mr. Roberts: It was not in any way directed to the hon. Member.
  The Temporary Chairman (Mr. W. R. Williams): If the hon. Member for Louth (Mr. Osborne) does not give way, the hon. Member for Caernarvon (Mr. G. Roberts) must resume his seat.
  Mr. G. Roberts: On a point of order. The hon. Member expressly looked at me when he made that observation. I wish to explain that the amusement I showed was certainly not directed at the hon. Member, because I know nothing about him. I was merely amused by what he said.
  The Temporary Chairman: That is not a point of order.
  Mr. Osborne: The hon. Member should not flatter himself. I did not even know he was here.
  The hon. Member for Newton (Mr. Lee), who opened the debate, said that fear of unemployment had now returned. That is tragically true, even if only three out of every 100 are unemployed; but of the 97 who are still in employment, many are beginning to wonder whether and when it will be their turn. This is the greatest factor at home. We as Conservatives are fools if we run away from this challenge. We have got to meet it. It ought to be met and not evaded, and I want to face it

  1071
  Hon. Members opposite often say that we on this side do not understand unemployment. In my first job, when I was 14, I worked from 6 o'clock in the morning until 6 o'clock at night for 5s. a week and I know what unemployment is. Hon. Members opposite cannot say of me that I do not know what I am talking about. As I said at the Tory Party Conference at Blackpool in 1946, only those who have been unemployed know what it means to be out of work. Next to war, unemployment is the greatest scourge facing modern mankind. It is, therefore, an issue that must be faced squarely.
  The hon. Member for Newton blamed the Government, and the burden of the speeches from hon. Members opposite has been that it is the Government's fault that we have unemployment. Our position is simply this. Last week, I asked the Economic Secretary to the Treasury how much of our total manufacturing production had to be exported to pay for our imports of raw materials and foodstuffs. My hon. Friend gave the startling figure of 30 per cent. Let me remind hon. Members opposite that we grow enough food for only 30 million people and that there are 50 million of us. We have no raw materials at all except coal, and all our raw materials and 40 per cent. of our foodstuffs must be paid for by what we export.
  The problem facing us is how we can get people overseas to supply us with the foodstuffs and raw materials in order to buy our goods if they are offered goods that are slightly better in quality and/or slightly cheaper in price. I see the hon. Member for Ashton-under-Lyne (Mr. Rhodes) smiling at the point I am making. I remember his last speech, when he came back from Hong Kong. He talked about a good cotton shirt which he had bought out there for 5s. It had come from China.
  Those are the main things we want to talk about. I wish we could forget the General Election—
  Mr. Robens: I bet the hon. Member does.
  Mr. Osborne: We shall win. I am not frightened of General Election.
  Mr. Robens: Whistling in the dark.
  Mr. Osborne: The right hon. Gentleman should have read yesterday's
  1072
  editorial in The Times, which was specially written for him in his present mood. It was entitled "Froth".
  The problem is how we are to sell the 30 per cent. of our industrial production to pay for the raw materials and foodstuffs that we must have. It is made doubly difficult, first by the fact that as, with our help and with American good will and help, the under-developed countries are being industrialised, because their labour costs are anything from one-fifth to one-tenth of ours they are, other things being equal, able to undercut us. It is monstrous for hon. Members opposite to say in their party programme that they will give 1 per cent. of the national income to help the undeveloped nations and then to try to prevent the people of those countries from earning a living by selling what they produce.
  How are we to live against them? Let me give three examples. Take coal. I have great sympathy for the coal miners, who, because of the change, are finding themselves threatened with widespread unemployment. The whole world, however, is finding that oil is more convenient and, in some cases, cheaper and we cannot prevent the world from using oil instead of our coal. Our old markets in the Baltic and the Mediterranean have gone and for ever. No Government here can make the foreigner do what the National Union of Mineworkers has just done: that is, to tear out oil-burning equipment in its new offices and to install coal-burning equipment. We cannot make the foreigner do that in order to buy British coal. That is typical of the problem that we are facing.
  The other night, with some hon. Members opposite, I was in the Parliamentary and Scientific Committee, where we were talked to in a most learned way about the coming of nuclear power. That may take 10 or 15 years, but when it comes, if it is cheaper and more easily handled, it will put more men out of work in the coal mines. Not even the party opposite can stop it.
  I remind hon. Members opposite that certain of the coal mines in South Wales were producing coal at an average loss of £4 per ton. The nation could not keep all its old-fashioned industries going at that loss without reducing our standard of living to such a catastrophic level that we should all be shocked.
  Mr. Tom Brown: Will the hon. Member add that the miners in South Wales were not responsible for the loss of £4 a ton? It was due to the fact that the mines were ancient and their maintenance costs exceedingly high, thereby absorbing a tremendous amount of money simply because the mines were ancient and worked out. It was not the fault of the miners.
  Mr. Osborne: I never said that it was the miners' fault. The hon. Member has helped to make my case. In many respects, this country is old and worn out. No party can alter that. I did not blame the miners. It is due to the geological facts of our situation and the fact that we have 20 million too many mouths to fill.
  Then there is the question of shipbuilding and ship repairing, which has been raised so many times by hon. Members on both sides who represent Sunderland. Those industries face serious unemployment, and they will face a great deal more. It is something which we cannot control politically. It is because Germany and Japan can repair and produce ships at about 70 per cent. of our cost, and the men overseas who are buying them say, "We want the cheaper article and the better article."
  Mr. Popplewell: I am sure that the hon. Member does not want to mislead the Committee. Is he correct in saying that Japan and Germany are undercutting us in the price of shipbuilding? It is not on the price but on ability to give earlier delivery that the Germans and the Japanese have come into competition with us.
  Mr. Osborne: It is true that at one time earlier delivery dates played a great part.
  Mr. Popplewell: They still do.
  Mr. Osborne: The advice I have from people who should know what they are talking about is that on a rough average the Germans and the Japanese are doing the work at 70 per cent. of our charges.
  Mr. Popplewell: No.
  Mr. Osborne: Up on the Clyde there is likely to be a new strike between unions on who shall do this, that and the other job. This is the folly which we must bring home to our people. In shipbuilding we have dropped to third place in the
  1074
  world to Japan and Germany for the first time in our modern history.
  The hon. Member for Oldham, West spoke feelingly about the position in the cotton industry. I understand that it is not so much competition from Hong Kong, Pakistan and the Indian mills that we fear. It is the competition from Red China that is already bedevilling the position in the Far East. I am told by people in the trade that Chinese agents are saying in the Far East, "Whatever price rules in Bombay we will take 10 per cent. less." The Chinese, in order to get sterling of which they are very short at present, are prepared to sell at almost any price. How could a Socialist Government deal with that? How could that situation be dealt with so as to save the people of Oldham?
  In today's Times there is a picture of the first electric locomotive produced in China. I agree that it is only the first, but it is indicative of what is being done in China at present and what will be done there within a decade. Not only will our textiles feel that competition but so will our engineering industries. This is the problem facing us, and I do not see how any Government, by party politics, can possibly overcome it.
  Mr. Hale: I am not saying that this was the fault of the Tories. It started under a President of the Board of Trade who has now become a life Peer in another place. The policy, I understand, was the policy of Mr. Foster Dulles. China was very anxious for an expanding world trading policy. She had no great impetus to manufacture textile machinery for export, but she is exporting now to Indonesia. China's great need was the extension of the Yangtse River, a 60-year or 75-year programme in which she wanted our help. But for political reasons, under the dictates of Washington, we put an embargo upon Chinese trade which compelled the Chinese to make these things themselves. We had a similar system of embargo applied between the wars to Ireland which led her to build industries to make consumer goods that we hitherto supplied.
  Mr. Osborne: I believe that it is true that the Americans were wrong in refusing to trade with Red China. It has been a tragedy for us, but the Americans have not felt it. Whereas we have to export 30 per cent. of our goods, the Americans

  1075
  have to export only 3 per cent. Therefore, the same common policy hurts us ten times harder proportionately than it hurts the Americans.
  The Times gave prominence a few days ago to the position in India—and India will be an important factor in deciding whether the modern world goes all Communist or not. India could save from Communism that one-third of the world which is not committed to the West. The Times pointed out that three great steel mills are being erected in India, one by the British, one by the Americans and one by the Russians. The Russians are working "like steam." There is no letup, no amusements, no alcohol, no nothing—just work and work. They are determined to make their mill produce first, produce the most and produce the cheapest. But when these three mills are working, the present supply of steel from this country to India will largely cease, and that will cause unemployment in our steel industry. No political action can stop it.
  This is where I regret that hon. and right hon. Members opposite who know these facts still go on with the old story, for political purposes, that it is the Government's fault. Is the situation in Lancashire the Government's fault? The right hon. Member for Huyton (Mr. H. Wilson) spoke in this Chamber on 13th March, 1952, on the Budget proposals and dealt with the question whether Lancashire's ills could be cured by political methods. He differed entirely from his colleagues, because then he was dealing with the facts of life and not hoping to get votes at a coming election.
  This is what the right hon. Gentleman said:
  "At present we are facing a long-term crisis in our export trade. I think that that is what the Chancellor really meant when he referred to the 50-year development of the crisis. Many countries have developed their own industries now, and the leadership we had in the 19th century has disappeared. In many countries they have their own consumer goods industries, and we cannot export our textiles to them. We hear that even Pakistan, the hopeful new post-war market, will be self-sufficient in textiles by 1956. At any rate, that is the policy Pakistan proposes."
  It was an under-statement. Pakistan is exporting now and is competitive with us.
  The right hon. Member for Huyton added, and I commend this to hon. and right hon. Members opposite:
  1076
  "We have to direct ourselves now to a very different pattern in world exports. We can no longer look to exporting consumer goods on the scale that we have been doing in the past. When an export market reaches a certain stage of development it will provide its own consumer goods industries, and it will look to us for machinery with which to develop them. When a country starts like that, it will take piece-goods from us. Then it will make its own and we must be prepared to supply textile machinery. Then that country will start to make its own textile machinery."—
  this is what we face—
  "and we must adapt ourselves and export, perhaps, steel or machinery for making steel. We must keep up with the markets and with the changes in the markets in all these countries. We have to recognise that as these different countries develop, and at a different pace, we have to swing about our exports from one country to another and from one trade to another."—[OFFICIAL REPORT, 13th March, 1952; Vol. 497, c. 1626–7.]
  The tragedy of unemployment will not be solved by either side of the Committee blaming the other. It will be solved if we can put before everyone in the country, employer and employee alike, the immensely difficult problem which we face, and get from both sides that bit extra for the good of their country, for the survival of their country. This will enable us, in an increasingly competitive market, to sell the goods we must export so that we can live and be employed.
  7.11 p.m.
  Mr. Ernest Popplewell (Newcastle-upon-Tyne, West): The hon. Member for Louth (Mr. Osborne), like many more on his side of the Committee, refuses to face the facts about employment. Hon. Gentlemen opposite are content to follow the line that the Government have no responsibility in this matter and that they regret any development of unemployment. They are rather kind-hearted individually, but collectively they are devils, to say the least. By their lack of planning they allow laissez-faire methods to develop and they reject any controls, any priorities. They allow the money market and the criterion of profitability to decide what shall be produced. When there is a run on certain consumer commodities at home and we neglect our export market, which is so necessary if we are to survive, they come along, as did the hon. Member for Louth, and say, "This is not really due to Tory policy."
  The hon. Gentleman forgets what took place at the last election. He forgets the

  1077
  Three Wise Men of the Cohen Committee, set up by the party opposite. He forgets the Geddes Axe of the 'twenties. He forgets the May Committee of the 'thirties. All those committees were appointed to protect the Tory Government in following a certain line of policy calculated to keep profits at a reasonably high level irrespective of the human problems involved.
  Today we are having a sombre debate. It is history repeating itself. We can look through the pages of past HANSARDS and cast our minds back to pre-war years and remember many similar debates that took place in the years between the wars. We have been much perturbed, particularly in these last twelve months, because we have seen history repeating itself. We see a growing army of unemployed. This is the fifth occasion within a year that we have attempted to influence the Government to deal with the problem of unemployment instead of sitting on the fence and allowing it to develop.
  We have had today the alarming statement from the Minister of Labour that there are now 620,000 unemployed. The right hon. Gentleman forecast some few months ago that this figure would be reached. Now it has been reached, what are the Government doing to prevent it from rising? They are simply hoping that this is a seasonal increase which later may be reversed slightly. Events abroad, however, belie this hope. In America unemployment has increased this month by 700,000, and this fact deals a rather shattering blow to right hon. and hon. Gentlemen opposite, because a little while ago they pinned their hope to the belief that the American recession had ended and that increasing productivity in the United States would increase world trade. The present figures show, however, that instead the trend towards a recession continues.
  The figure of 620,000 unemployed here is not the whole of the story by a long way. The latest figures available indicate that in addition to the 620,000 actually unemployed there are 244,000 fewer people in employment. This means that the working population has fallen by 244,000 according to the figures published last November. I venture to suggest that when the latest figures are issued we shall find an increase in that number. Therefore, instead of the figure of unemployed
  1078
  being in the region of 620,000, the real figure is well over 900,000 and this is serious.
  In speaking tonight, I want to make certain constituency and North-Eastern area points. We in the North-East pride ourselves on our craftsmanship. With all due deference to our friends elsewhere, we say we can compete in craftsmanship with anyone in the world. What is the position today? According to the latest published figures we have in the region of 40,000 people unemployed. As my hon. Friend the Member for Newton (Mr. Lee) said, this means that there are five unemployed for every job advertised as vacant at the employment exchanges or in some other way.
  The alarming thing is not merely those figures of unemployment in the North-East but the considerable under-employment that is taking place in various factories. Many are not working to capacity. Many are having to adopt short-time working. I have here a statement given to me by responsible people engaged in heavy engineering in the North-East. I will not quote the names of the firms involved, although I have them. In one firm 50 workers were paid off in the ten days prior to 21st January, in another firm 20 workers were paid off, in another 28 were declared redundant and night work has been terminated. In another firm 15 fitters have been paid off, in another 17 fitters, in another 20 fitters. In a shipyard 15 fitters have been declared redundant. So I could go on with chapter and verse of heavy engineering projects in the North-East which are suffering material reductions of staff.
  We in the North-East know so well what this means. There was the unfortunate period in pre-war years when the majority of my constituents were unemployed because of the shortfall in the heavy engineering industry. By the Development of Industry Acts we were successful in attracting a large number of light engineering and other factories to the area until we reached the stage when we had practically as many people engaged in light engineering or similar factory work as there were engaged in heavy engineering.
  There is now a shortfall in production in many of those areas. Large numbers have already left the furnishing trades where short-time working began much

  1079
  earlier last year—in January instead of April, as is normal—and the seasonal spans of short-time working have been very much longer. It has been embarrassing to see the number of craftsmen who have had to leave that work.
  I shall be interested to see how the figures to be published on Thursday compare with those published on 8th December. I dread those figures, because I know the area so well. I attended a conference convened by the trade unionists in the area only a few Sundays ago because they were afraid that we were heading back to the conditions of before the war.
  A shocking story has to be told of the building trade. Between 1955 and 1958, there was a decrease of nearly 5,000 employees in that trade. Vacancies notified were reduced by 50 per cent. At least 500 bricklayers and masons have left the trade and there are 33 per cent. fewer apprentices. That is a shocking state of affairs, because it represents a major loss of new houses, new factories, new schools, new hospitals and so on. Brick production in the North-East in 1955 averaged about 33 million tons of bricks a month. By the end of 1958 it was down to 25 million tons, a shortfall of 8 million tons. Today, there are at least 6½ million tons of unsold stocks of bricks on hand. That is a tragic story and similar in content if not in degree to what we were told by my hon. Friend the Member for Lanarkshire, North (Miss Herbison) and my hon. Friend the Member for Newton. Wherever we turn, we find this gloomy picture. Hon. Members opposite say that we take far too gloomy a view of the situation. We are entitled to that gloomy view, for that gloom represents the facts of industrial life today.
  Forty-six local authorities in the North-East have been asked if they can help with continuity of employment. I regret that only 17 have replied saying that they propose to continue to maintain the same rate of house building, chiefly to deal with slum clearance. The other 29 have clearly indicated that they have considerably cut their housing programmes because of Government policy. One authority has gone so far as to cease building altogether, saying that costs are far too high.
  1080
  These are serious matters, and this is our only opportunity of raising them. The Supplementary Estimates for the Ministry of Labour deal only with matters such as salaries, incidental expenses, industrial disputes, training, rehabilitation, grants to local authorities, and so on. The scope of that Vote is not wide enough to allow these points to be made.
  We are very suspicious about the Government's policy for Development Areas, a policy which is not worth the breath being wasted on it. North, south, east and west the call is for the Government to introduce new industries into areas of heavy unemployment. That is a cry in the wilderness, and the Government know it. Under the legislation of last year, only 16 new ventures have been sanctioned and they will employ fewer than 2,000 people.
  Is that surprising? Government policy has been deliberately to bring about a fall in production. The iron and steel industry is working at only 75 per cent. of capacity. Because of that, the National Coal Board has had to close pits. Because of that we are not winning our way in world markets, nor taking our share in their expansion. World markets have not been static in recent years and the increased share of the Italians, Germans and Japanese has been at our expense
  That has been because Government policy has been concentrated on the soft consumer market at home. They have shirked the order of priorities which has been necessary for the economy to permit full employment. As a result, we have not got our fair share of the expansion of world markets.
  Sir A. Spearman: Will the hon. Member explain how the Government have shirked it? Does he not remember that investment is running at 65 per cent. more than it was in the last year of the Socialist Government?
  Mr. Popplewell: Because the Government have utilised only the cumbersome machinery of financial policy and juggling about with a Bank Rate, which affects everyone, instead of introducing priorities and fiscal controls and guiding industrial production into those channels necessary for the national well-being. They have neglected all that and have dismissed such things as mere controls.

  1081
  Let us have these controls if they will give us full employment and a decent standard of living. We have heard the arguments about inflation and the necessity to introduce a high Bank Rate in order to cut production and reduce inflationary tendencies, but at the same time we have seen profits going up by leaps and bounds. We have seen "takeover" bids going on and huge sums creating a tremendously inflationary situation. Then, it is the ordinary work-people who are asked to pay for this type of thing.
  To return to my theme, we hear arguments against the Government exercising controls and planning in order to give us the goods that are necessary. To take the case of machine tools, heaven knows what difficulties we were in during the war years because we had not planned our machine tool industry. We all know that when we wanted to expand our economy at the end of the war we had to go to America in order to import machine tools which we should have been capable of producing ourselves but had not made our plans accordingly.
  The machine tool industry is a vital sector of our economy, but we find that its orders have gone down from £98 million in 1956 to £58 million in October, 1958. This is the type of thing that is taking place, and it is the Government, and only the Government, who can keep an overall control on what is necessary in the nation's interest. It is the failure of the Government to do this which has brought us to this shocking position which causes us so very much alarm.
  During the last election, the party opposite told us on the hoardings that it would maintain a high level of employment, and this is the high level of employment that they have maintained. They admitted that they could do it, or at least, inferred that they could, but they made a good many other promises which they quickly discarded as soon as they came into office. This is the high level of employment which the Government said they would maintain—620,000, plus 244,000, fewer in the working population. If we bring these figures into relativity, we shall see that our figures are getting perilously near to the 900,000 or one million mark.
  This is a serious thing, and I suggest that, if the Government really want to
  1082
  do this nation a good service, they should get out as quickly as possible, let us have the General Election, and let the people decide whether they want this topsy-turvy type of policy or to go back to the days of full employment.
  7.33 p.m.
  The Parliamentary Secretary to the Board of Trade (Mr. John Rodgers): Although this debate takes place on a Supplementary Estimate of the Ministry of Pensions and National Insurance, the Committee has shown that it wished to debate the wider problem of the measures which the Government were taking for dealing with unemployment. Therefore, I think that it might be for the convenience of the Committee if I now intervene.
  Before dealing with one or two matters, such as the Government's policy on rents, which I will tackle in the course of my remarks, may I say that I should be grateful if the hon. Member for Newton (Mr. Lee) could furnish me with particulars of the firm at Haydock which, he alleges, has been frustrated in its desire to expand. If he will send me the details, I can assure him that I will look into it immediately.
  This is not the proper time to make a speech on the general theory of the trade cycle, or on the effects of the decline in international trade on our internal economy. Indeed, contrary to what was said during the course of this debate, and, I think, by the hon. Member for Newcastle-upon-Tyne, West (Mr. Popplewell), our share of world trade in recent months has risen, though admittedly after a period in which it had been falling. This, I believe, is in part due to the energetic measures which the Government have taken to deal with the problem of inflation.
  A debate on production is not properly balanced if it leaves out the problem of markets and the problem of exports. However, to deal with this adequately would be more suitable, I am sure, to the general economic debates which assuredly lie ahead of us in the next month or two. Nevertheless, I should like briefly to describe the two-pronged attack which the Government are making in tackling this problem of local unemployment, which is my own responsibility.
  First, there are the general measures which the Government are taking to

  1083
  stimulate the economy, and I will briefly list them. Hon. Members all know them. they include the reduction of the Bank Rate by stages between March and November last from 7 to 4 per cent., the ending of the credit squeeze, the raising of the initial allowance by 50 per cent., the abolition of restrictions on hire purchase, the raising of the ceiling on public investment expenditure, and the ending of restrictions on borrowing by individuals or companies resident in the United Kingdom.
  These are all matters of economic policy which concern the Government as a whole, and I believe that the steps which the Government have taken will expand the economy, will create more employment, and, at the same time, prevent a new bout of inflation or a weakness of the £, which are, of course, the real and great enemies of a policy of full employment.
  Turning to the areas where unemployment is a serious problem, we are tackling this both by trying to attract industry to the places where the unemployed are, and also by providing inducements for workers to transfer to places where there are jobs. These are two complementary processes going on at the same time, and I should like to deal now with the first of these—taking the work to the workers. This has been a consistent part of Government policy since the end of the war.
  The comparative prosperity which some parts of the old Development Areas now enjoy is proof of its effectiveness, for some of the old Development Areas are now relatively prosperous. The Distribution of Industry Act of last year is designed to extend the policy which we have been following, and that Act empowers the Treasury to give financial assistance in any place where there is high and persistent unemployment. Loans and grants can now be made outside as well as inside Development Areas, and to businesses as well as to industry proper.
  Mr. Goronwy Roberts: Could the hon. Gentleman give us any details of the efficacy of that so far? I went through the statements which were made in both Houses six or eight months ago, but could he give us any details of
  1084
  what the effect has been on unemployment?
  Mr. Rodgers: Obviously, in the course of my speech I will refer to that.
  I would be the first to admit that up to now industry has not made full use of the powers under this Act. In the visits which I have paid to the D.A.T.A.C. areas, as it is convenient to call them, I have been struck by the lack of knowledge that exists, even among leading citizens, of the facilities that are available to them. It was to combat this that I sent out last month, to the heads of 50,000 firms, a leaflet describing what the D.A.T.A.C. facilities mean. A further 50,000 I have sent out through other channels to bodies such as chartered accountants, banks and organisations of one sort or another.
  It is not without significance that the Board of Trade and the Treasury have had more inquiries in the last three weeks since that letter was sent than in the whole of the previous six months since the Act came into operation. It is too early to say how many of these inquiries will actually crystallise into firm applications, but at least the opportunities are becoming increasingly widely known and I can only hope, therefore, that the figures which I announced at a Press Conference three or four weeks ago will be improved over the next few months.
  I wish to stress upon right hon. and hon. Gentlemen on both side of the Committee that this is not all that is being done by the Government. Our other main instrument for steering industry to the places which need it is the granting of industrial development certificates which firms must obtain before they can build a factory or an extension of more than 5,000 square feet. By refusing the certificates in congested areas, and granting them where labour is available, we are doing our best to steer industry to the places where unemployment is high.
  The Committee may like to know that in 1958 we issued for the Development Areas 277 I.D.Cs. covering 8½ million square feet of factory space. The new employment which will result is estimated by the firms concerned at over 13,000 jobs. That number includes 4,000 in South Wales, 3,800 in the North-East, 3,200 in Scotland and 1,700 in Lancashire and on Merseyside. These figures take no account of the indirect employment, in

  1085
  shops, offices, and so on, that always follows in the wake of any industrial expansion.
  The hon. Lady the Member for Lanarkshire, North (Miss Herbison) mentioned that I.D.Cs. have been granted in large numbers in the Greater London area. A great part of these are for industries catering for the local market which is enormous in this area; for such purposes as bakeries, laundries and the like. Much of the rest which are not catering for local needs are for extensions which, if refused to these firms, would not be built anywhere. Whenever we think there is a project for expansion or development which could be hived off and encouraged to go to another place, we do our utmost through the regional controllers of the Board of Trade, and at headquarters, to bring about this policy. We are getting—
  Mr. William Hamilton: Will the hon. Gentleman state what principle was applied when British Nylon Spinners were allowed to go to Gloucester? He suggested the answer at Question Time this afternoon and I am wondering whether he would elaborate it still further?
  Mr. Rodgers: I will not mince my words. I was disappointed that B.N.S. did not go to one of the Development Areas. It went to Gloucester for these reasons. First, there was a Ministry of Supply factory available there and ready. B.N.S. was able to move in right away and it was estimated that it would be possible to get into production—and, therefore, provide jobs—from six to twelve months earlier than would have been the case had it been necessary to build a factory in another Development Area. That was of considerable importance because of the known run-down in the aircraft industry which is beginning in that area and accelerating, and also because of the closing of the pits in the Forest of Dean.
  Mr. Hamilton: What is the percentage of unemployment in Gloucester?
  Mr. Rodgers: I do not think that I should spend time in dealing with such a specific point, but I shall be happy to provide the hon. Gentleman with that information privately.
  Dr. Dickson Mabon: Will the Minister allow me to intervene?
  Mr. Rodgers: I would rather get on with my speech.
  In addition, the Board of Trade has been making use of its powers under the 1945 Distribution of Industry Act to extend existing factories in the Development Areas and to build new factories. In the last two months 63 extensions have been authorised to Government factories in the Development Areas. These will cost just over £2 million and will provide over 750,000 square feet of factory space. Work has already begun on these. The geographical distribution of these extensions and the estimated number of jobs which they will provide is as follows: in the North-East Development Area, 28 extensions to provide jobs for 2,580 people; in the North-West, two extensions for 160 people; in Wales, 24 extensions for 1,090 people; in Scotland, nine extensions for 680 people. This makes a total of 63 extensions and 4,510 people.
  Mr. Hale: This is very important. I understand that the hon. Gentleman says that the provision of I.D.Cs. in 1958 has provided work for 13.000 people, which is about 5,000 or 6.000 more in Development Areas. In the 1948 Act they provided for a total of fewer than 20,000 against an increase in unemployment of at least 350,000 over the same period. This is tinkering with the whole thing.
  Mr. Rodgers: If we are proposing to become statistical. I must correct the hon. Gentleman. The D.A.T.A.C. areas affect only 10 per cent. of the insured population. The figures of I.D.C.s I have given refer to the Development Areas, and to Government factories there. The D.A.T.A.C. figures which the hon. Gentleman failed to include and a great many other measures—
  Mr. Hale: This is what has been done to cure the problem.
  Mr. Rodgers: What the hon. Gentleman and many hon. Members opposite fail to understand is that we have no power to compel firms to go anywhere—
  Mr. Hale: Then why not take them?
  Mr. Rodgers: —any more than we have the power to compel labour to go anywhere. I think that the use of such powers would be repugnant in times of peace.
  Miss Herbison: Do I understand the Minister to say that the number of extensions for Scotland would provide jobs for just over 600 people, when the unemployment figure we were given today was 115,000?
  Mr. Rodgers: This is one part of what we are doing. Perhaps I should have collected all these figures together. These were the jobs to be provided by present factory extensions.
  The hon. Lady the Member for Lanarkshire, North asked me to consider making representations to my right hon. Friend about the building of speculative factories, particularly in her own constituency. I must remind the hon. Lady that already we have 28 factories—I admit that that is out of a total of 1,000—which are empty and that we cannot dispose of them. There are 11 of these factories in Scotland, so we do not feel that it would be a right policy to build speculative factories. However, in certain areas we are prepared to build factories at Government expense for firms who are willing to set up business in those areas.
  The three main new factories which are now being built are Pressed Steel, at Swansea, which will provide 2,000 jobs at the start and ultimately 4,000 jobs; Crawley Industrial Products, at Llanelly, which will provide 250 jobs soon after it is in production, with a possibility of further expansion in the future, and Astral Equipment, at Dundee, which is estimated to give about 1,200 to 1,500 new jobs.
  Finally, there is Colville's project, at Ravenscraig and Gartcosh, which will increase the output of Scottish sheet and light plate by about 500,000 tons when it is completed in four or five years time. These should provide jobs directly for 3,500 men, and we hope also to attract other industries which, in turn, will add to the employment in North Lanarkshire, where we realise that there are more than 11,000 people out of work.
  We are confident that our policy of encouraging industry to go where there is greatest need will, in time, bring the renewed prosperity which is needed by these parts of the country. I have, however, three specific announcements to make on points which have been raised during the debate. First, there is the question of the rentals of Board of Trade
  1088
  factories in the Development Areas, a point touched upon by the hon. Members for Newton and for Leith (Mr. Hoy).
  As I explained to a deputation which I received the other day, our policy is to let factories in Development Areas at current market value rentals which are assessed by the district valuer. I see no reason to depart in general from this policy, which accords with a recommendation of the Select Committee on Estimates which has been accepted by the Board of Trade. There are, however, two classes of case which gives rise to difficulties, and we are prepared to allow temporary abatements of the current market value rents to meet these difficulties.
  First, on leases expiring before 31st January next, which will be renewed at new—and generally much higher—rents, at current market values that is, the rent increases to sitting tenants will be spread over a five-year period so that the new rent will not be paid in full until the sixth year of the new lease. This will give tenants a breathing space in which to adjust themselves to having to pay the higher rents.
  Secondly, to encourage firms to take up quickly those factories which are, or may become vacant, we are prepared, during the next twelve months, to allow successful applicants for such factories a flat abatement of 25 per cent. on the current market value rent for a period of five years.
  Mr. Thomas Steele: Will this apply to Northern Ireland, as well?
  Mr. Rodgers: No, I do not think it will, for reasons which the hon. Gentleman well knows.
  My next point relates to the clearance of derelict sites. I can inform the committee that we are prepared to consider, under the provisions of Section 5 of the Distribution of Industry Act, 1945, applications from local authorities in the scheduled Development Areas for grants towards the clearance of derelict sites with a view to their subsequent industrial use, or to improve the amenities of the neighbourhood. I have in mind the suggestions made for Coatbridge and Lanark. I hope that the hon. Members concerned will find the suggestions helpful to these areas as to other areas.

  1089
  My right hon. Friends the Minister of Housing and Local Government and the Secretary of State for Scotland will shortly be informing local authorities in the Development Areas of the conditions on which grants will be available, and inviting them to submit schemes, which could be completed by March, 1960.
  Mr. F. H. Hayman: Will these facilities extend also to the areas scheduled under the 1958 Act, such as Camborne-Redruth, in my own constituency?
  Mr. Rodgers: I think I am right in saying "Yes", but I would like to check that.
  There is also the postponement, in two instances, of sales of Government surplus, where this might prevent an increase in unemployment in particular industries. The hon. Member for Newcastle-upon-Tyne, West mentioned the machine tool industry. I have every confidence in the future of the machine tool industry, but for some time it has been suffering a slackening in demand, especially for certain types of tool, from both the home and overseas markets. This situation has in particular affected the lighter end of the trade, which serves predominantly the light engineering and repetition industries. Manufacturers have represented to me that their difficulties would be greatly accentuated if certain machine tools now held by the Government, and surplus to requirements as the result of changes in the defence programme, were to be offered for sale.
  I am satisfied that most of the Government's surplus can be sold without danger to the interests of manufacturers and with real benefit to the community. There are, however, some types of machine produced by those sections of the industry which are at present in difficulties. The sale of these machines, if made now, might well reduce the number of men needed to make new tools. The Minister of Supply, at the request of the machine tool industry and after consultation with me, has arranged that the machines concerned should be withdrawn from the sales plan by the Ministry of Supply for this month and next. I have the assurance of the industry that this will remove the immediate difficulties arising from the disposal of surplus
  1090
  machine tools. My right hon. Friend's Department is considering with the Ministry of Supply and with the industry a disposal policy for the longer term.
  This postponement of sales of surplus machine tools is complementary to the announcement made yesterday by the Minister of Supply that the Government would seek to sell a surplus of Army boots on the export market, but not to allow them to go on to the home market. Here, again, we are seeking to avoid difficulties for a home industry. It is a small step, but it is in the direction of trying to preserve employment.
  Finally, a word about the cotton industry. Several references have been made to it in the course of the debate and not least by the hon. Member for Oldham, West (Mr. Hale). As I told the House last Tuesday, in answer to a Question by the hon. Member for Farnworth (Mr. Thornton), my right hon. Friend the President of the Board of Trade is keeping in close touch with the preparation of proposals for the reorganisation and re-equipment of the cotton textile industry. I explained that this work is being co-ordinated by the special development committee representing the main sections and both sides of the industry, which was set up by the Cotton Board in December.
  Since my statement last Tuesday, my right hon. Friend has sent Lord Rochdale a letter in which he has again emphasised that the Government are most anxious that full advantage should be taken of the period of stability in respect of imports of cotton textiles from the Asian Commonwealth countries, to which it should now be possible to look forward. The undertaking of the Hong Kong industry to limit its exports came into operation at the beginning of the month and we trust that the agreements with the industries of India and Pakistan will be confirmed in the near future. These arrangements provide the opportunity to tackle with speed the problem of reorganisation and re-equipment which face the industry.
  My right hon. Friend stressed the need for urgency and asked Lord Rochdale and his colleagues on the Cotton Board whether there was anything which the Government could do to help at this present stage, such as, for example, the appointment of a committee of inquiry, or possibly of an individual of the right

  1091
  status and qualifications, to draw up, or help in drawing up, plans for reorganisation. He repeated what the Prime Minister said at the Cotton Board's Conference at Harrogate, namely, that if the plan or plans produced by the industry involve a measure of direct Government help we should be prepared to give any such proposals the most careful and sympathetic attention.
  I am sure that it will be recognised in Lancashire that there is no question of unlimited Government help. The terms of any proposed scheme will have to be looked at with the greatest care. In offering assistance during the preparatory stage my right hon. Friend has made it clear that his only concern is that the job should be tackled as quickly as possible by whatever method would be the most effective.
  I understand that Lord Rochdale brought my right hon. Friend's letter before the Cotton Board this morning and that the Board has come to the conclusion that it would be quickest and most effective if it were to continue on the present lines. It fully shares the view of the Government about the urgency of these problems and it is confident that it will be ready with proposals sufficiently firm and comprehensive to justify discussion with Ministers in the course of the next few weeks. I think that the Committee will agree that this is very satisfactory. I can assure hon. Members that no time will be lost in considering the industry's proposals as soon as they are received.
  Mr. Hale: When the Minister talks about "proposals" is he talking about proposals for loss of trade or for increased productivity and increased employment? We have talked about compensation for spindles before. If he is talking of the Government assisting with financing proposals for the expansion of the industry and of employment, he is making a statement of great importance, which we would all welcome.
  Mr. Rodgers: I am referring to plans for reorganisation and rationalisation so that the textile industry will be able more effectively to meet competition from overseas.
  I can now give an answer to the hon. Member for Falmouth and Camborne (Mr. Hayman). I thought that
  1092
  the facilities to which he referred applied to areas listed under both the 1945 and 1958 Acts, but I was wrong. It is only under the 1945 Act that we have powers to do this.
  Mr. Hayman: Would not the Minister take powers to make some facilities available to the 1958 areas as to the 1945 areas?
  Mr. Rodgers: I will give consideration to that suggestion, but I cannot give any assurance, as the hon. Gentleman will quite understand.
  Mr. H. Rhodes: Surely we ought to be thinking a little hit more forward than this. What the Minister has in mind means that some areas will be even more handicapped than they are now. Ought we not to be making preparations to allow those areas, in conjunction with the Board of Trade, to dispose of old and derelict buildings for something new?
  Mr. Rodgers: That point will arise when we have considered the matter.
  We ought not to make any definite arrangements until I have heard the Cotton Board's plans for the future.
  I can assure hon. Members in all parts of the Committee that we at the Board of Trade want to do all we can to alleviate the anxieties of our unfortunate fellow citizens who find themselves unemployed today through no fault of their own. I assure hon. Members that we will consider most carefully any constructive suggestions which are put forward from whatever side of the House.
  In the four months that I have been at the Board of Trade I have become convinced that there is no one easy solution to unemployment and that, just as the causes in various areas are complex, so the solution will be complex. But, given good will and understanding and a cessation of party strife on this matter we will, I believe, make real progress.
  8.0 p.m.
  Mr. John McKay: Being restricted to about ten minutes, I do not want to go into political partisan points. The general discussion and the various points put forward in the debate have emphasised to me that the question of planning a great country with complex trades and giving a guarantee that we

  1093
  shall have full employment is one of the most difficult and intricate problems which exist for any Government.
  The weakness in this discussion has been that one of the main principles attaching to the unemployment problem has been touched upon only very lightly, yet to me it is as vital as the problem of finding employment for unemployed men. In the docks it is recognised that there are regular times when there is a great deal of unemployment for the pool of workers, but there is a guaranteed income provided for the men who are not employed.
  We have to recognise that the unemployed man is an economic unit of the nation. While we all admit that the chief part of the problem is to get men employed, there is a social obligation on us particularly in regard to the unemployed man because he is part of the active unit of the nation. We know that in practice unemployment will arise in various parts of the country to greater or lower levels, but all those unemployed people are needed to make for the economic health of the country. There is a national obligation, not only to find employment for the man who is out of work, but also to see to it that when he is unemployed he has a satisfactory income as a human being prepared to do work for the nation.
  The National Coal Board has indicated the principle I am trying to emphasise. By its policy it has given an example to the country. Arising out of the difficulty in the coal industry, the N.C.B. has decided to do something special and out of the usual for its unemployed. It has established a redundancy benefit. I shall not go into details, except to say that the Board pays to the surface worker £3 8s. more than he gets in unemployment benefit and, to the underground worker, about £4 1s. 8d. more than unemployment benefit. That has been extended for six months, and the National Union of Mineworkers is trying hard to get it extended to twelve months. That principle ought to be established in industry generally.
  I accept that the Labour Party as a Socialist Party, knowing the tragedy of unemployment and that it is an economic problem through which we all can suffer, should show a more sympathetic attitude
  1094
  to the unemployed. We can see a big problem in the country, but unless we have an active social conscience and use our mentality as well as our emotions in dealing with it we shall not solve the problem. If through great difficulties we cannot get the men employed, we should see to it that they get something reasonable in the shape of a special unemployment fund which would give them something like the unemployed miners get at the moment Would that be a tremendous thing to do? Would it cost the country a great deal? It would not do anything of the kind.
  In official Answers to Questions last December, it was said that 6d. on the standard rate of Income Tax and 3d. on lower rates would bring in £140 million. Of that, £90 million would come from the standard nate and £50 million from the lower rates. If we put 3d. on the standard and lower rates of Income Tax—that is a small sum—it would bring in £95 million. Divided by 6 million unemployed, that would give £3 a week each on an average. That could be divided to give £2 10s. for the single man and about £4 for the married man. If our consciences are touched by this matter and we feel it such a tragedy to have 600,000 men unemployed, can we not say that this is a national problem which is quite apart from the question of pensions? The incidence of unemployment cannot be forecast. As important as trying to get men employed is to treat them decently when they are unemployed and to show that our sympathy is substantial and practical.
  If the Labour Party put that in its programme it would show more intensity of interest on the subject than the Conservative Party. It would show that it is more determined than the Conservative Party to see that every man and woman in the country shall be employed so far as that lies in its power. Let it not forget, however, that in very serious circumstances it might fail to implement the policy of full employment. Let it go to the country and say, "If we do not solve the unemployment problem, by collective effort and just a small penalty we can provide a decent income for the unemployed and we shall do it."
  8.10 p.m.
  Mr. Charles Fletcher-Cooke: This debate has gone very wide and very deep. The speech of the hon. Member

  1095
  for Wallsend (Mr. McKay) was deeply sincere, even if I cannot agree with him that one of the helps which we might give to the employing capacity of the industry of our country at this time would be to increase its burden by more taxation.
  It was the hon. Member for East Ham, North (Mr. Prentice) who raised the debate from the merely provincial level to a national level by discussing what was the cure for this problem. I am afraid that subsequently it went back again to the provincial level with a great number of speeches of competition in gloom to try to show that the particular pocket or area in which the hon. Member was interested was much worse than that of his neighbours.
  The hon. Member for Leith (Mr. Hoy) did not perhaps delight in but certainly emphasised the fact that at last Scotland was blacker than Wales. I wondered what the purpose of these comparisons was. I supposed it was to try to induce the Government to switch into their area industries, and particularly light industries, which they thought might go elsewhere. I fear that I have a very limited view of the efficacy and the power to create employment by the Government switching light industry from one area, where it wants to go, to another area, where it does not particularly want to go.
  The Borough of Darwen, which is in the middle of the weaving belt of the cotton industry, has taken, publicly and loudly, through the voice of its civic head, the mayor, quite the opposite view in the last few days. It has said that it does not want any Government help, that it is able to paddle its own canoe and that it is doing very well by diversifying its own industries without this direction from the Government. That, let me remind hon. Members, is from the very centre of an area which has been painted in such gloomy colours by hon. Members this afternoon.
  I shall be interested to see whether that attitude—one of buoyancy and self-reliance and optimism—does not attract industry more readily than the opposite policy, which we have heard mostly today, of painting a gloomy picture of one's own area. If one does that, the industrialist or the undertaker, or whoever it may be who is thinking of setting
  1096
  up new business, is surely likely to say to himself, "There must be something wrong with folk in this place. They keep crying stinking fish. They must be in a terrible condition". Even if one is in a terrible condition one often does best not by presenting the gloomiest picture but by presenting a number of smiling faces, because the old adage, "Nothing succeeds like success", often pays a dividend.
  That has been the experience of the Borough of Darwen, which I have the great honour to represent. They have publicly gone on record in this bouyant vein in the last week, and I venture to believe that that will be much more successful than trying to pretend to the outside world that yours is the blackest of black spots, blacker even than your neighbour's black spot, because, human nature being what it is, people are not attracted to black spots, even though ethically they perhaps should be.
  If I do not believe very much in the efficacy of the Governmental switching of industry from one area to another, it behoves me, as it behoves everyone else, to say what we should hope to do to mitigate and cure this unemployment problem. For that purpose one needs to study the figures and to break them down carefully. I believe I am right in saying—and I am speaking in the broadest possible terms—that among skilled and semi-skilled persons there is still very little long-term unemployment. There is still a labour shortage for skilled and semi-skilled persons. That is nothing very surprising, but it is a fact. It is only among the unskilled that there is anything like chronic long-term unemployment, and in global terms there is not so much of that, although it exists.
  Does not that show where the solution of this problem must lie? We all know that in a world of competition, not merely from Europe and the United States but from Asia and Africa, we have to become a nation of high-skilled employees. The greatest single factor which could reduce this mass of unemployed is to look again at our apprenticeship systems from both the employers' and the trade union point of view, because if we could raise some of the unskilled in their twenties and thirties, to the level of semi-skilled—and there is no earthly reason against it—and at the

  1097
  same time raise some of the semi-skilled in their twenties, thirties and even forties to the level of the skilled, I believe that a lot of the chronic long-term unemployment would disappear.
  That means that employers, and particularly small employers, have to do a job which may not appear immediately very profitable to them. It also means that the trade unions have to raise their age limits for apprenticeship. I am convinced of that. I know that everybody thinks his own skilled trade is a trade which must be learned while in the teens, just as for many years the admirals thought it necessary for naval officers to start at fourteen. They honestly and sincerely believed that for many years, long after the invention of steam and the end of sail. We can all, from our own personal experience, find people who think that even in jobs which seem not perhaps unskilled but simple it is necessary to have a training while still under the age of twenty.
  I believe that with good will on bath sides we could aim at a system of apprenticeship and of raising the level of skill for people who are thrown out of work in their twenties, thirties and even forties. I appeal to the Government to see whether some of the rules against older apprentices, which were understandable many years ago but which are out of date in modern techniques, could not be looked at again as a matter of urgency. It would have to be done with the co-operation of the craft unions and by a great effort by many small employers, who are not particularly keen on taking apprentices because they show no immediate return. On the whole, the larger employers take a longer view.
  If that can be done, and if we can raise, not merely for the future but for the present, the level of skill in our community, then we shall meet all these fears which otherwise are very marked—the fears that automation and modern techniques will produce not more employment but more unemployment.
  Dr. Dickson Mabon: The hon. Member used the phrase "not merely for the future but for the present". I agree with him to a certain extent about his argument for the future, but surely it does not apply to the present. Surely at the moment a large number of boys leaving school are unemployed and cannot get
  1098
  apprenticeships. Is it not also the case—certainly it is in my area, although I will not go into any competition in gloom in the matter—that skilled vacancies are scarce? Surely this argument is a long-term and not a short-term argument to overcome our present difficulties.
  Mr. Fletcher-Cooke: I very much doubt whether, nationally, skilled vacancies are as scarce as the hon. Member says. I think that nationally there are a lot of skilled vacancies. I agree about the shortage of apprenticeships for school leavers, and that is why I was at pains to say that this is a matter where employers, and particularly small employers, have to be brought together and made to do a national job. It is a difficult thing for small employers to do because, by their nature, they are scattered, often not very well organised and often have not the forward vision of the large employer. I am sure that it has to be done and that if it is done now, not only for boys in their teens, but for unemployed in their twenties and thirties, there will be a general raising of the standard of skill from the semi-skilled to the skilled and from the unskilled to the semi-skilled.
  I hope that hon. and right hon. Members on the Front Bench, particularly the Minister of Labour and National Service, are treating this as urgent. That puts the unemployment position very much in its proper perspective. There are now and will continue to be many vacancies for skilled men all over the country. The situation is not the same as it was in the 'twenties and 'thirties. I am convinced that it is the same with semi-skilled men. There will be an increasing lack of demand for unskilled people as our nation becomes increasingly dependent upon the rapid change in modern inventions. In the unskilled business in the world we do not want to compete, and cannot compete, with the emerging nations of Africa and Asia. They are bound to undercut us and no amount of compromise or tariffs or quotas or any artificial arrangement of that sort is going to stop that flow. We have to become very soon a nation of highly skilled people, all of us.
  8.23 p.m.
  Mr. Goronwy Roberts: I hope that the hon. and learned Member for Darwen (Mr. Fletcher-Cooke) will not think that I am accusing him of provincialism when I say that I found his

  1099
  references to his constituency proper and attractive. He also said, which interested me greatly, that one of the problems was to raise the level of the unskilled to the semi-skilled and of the semi-skilled to the skilled. That is probably true of the traditional industrial conurbations of the country. The hon. Member for Oldham, West (Mr. Hale) referred to that in his own way when he was discussing the relationship between Oldham and Manchester. I can assure the hon. Member that in many areas in this country, particularly in the Principality of Wales—I am not being provincial now, but truly national—we have the semi-skilled and the skilled, but no work for them.
  It is easy to suggest that these workers should pick up their families and homes and move to areas where there is more, but in practice it is poignantly difficult. In my own constituency we have a 10 per cent. unemployment figure. Many of them have been unemployed for three, four or five years. Not one of those 3,500 unemployed workers—and I know many of them personally—has been averse to moving to areas where there are greater opportunities. Many have done that and have had to return because of human and domestic difficulties which arose in their absence and on which I will not dilate.
  Hon. Members on both sides of the Committee must appreciate that the problem is to get the work to the worker. A certain amount of mobility is necessary and essential, but let it be mobility within an area and not from one area to another. My hon. Friends from Scottish and Welsh constituencies will certainly agree with me when I say that we do not feel as regretful at seeing numbers of people moving from one part of Scotland to another or from one part of Wales to another as we are bound to feel when thousands every year leave Scotland for Kettering, the Midlands and this part of England and leave Wales for Rugby, Slough or London. The Scots and the Welsh have a double task in this matter, firstly to maintain full employment, and, secondly, to defend what we regard as the national fabric of our life. I hope that England never has to be obsessed, as some of us have had to be, with that side of the problem.
  Through the Parliamentary Secretary, who I am sure will assist me in this
  1100
  matter, I wish to put to the Parliamentary Secretary to the Board of Trade two points arising from his statement a few minutes ago which affect those areas which are not scheduled under the 1945 and 1950 Acts but are scheduled under the Distribution of Industry (Industrial Finance) Act, 1958. The first point relates to the clearing of derelict sites. I emphasise that this concession to the local authorities must apply to unemployment areas outside as well as within the traditional Development Areas.
  I represent a part of Wales which has for two or three centuries specialised in slate quarrying. The result has been magnificent roofs all over the world, but also a tremendous amount of debris and waste slate up and down Snowdonia. The problem is what to do with it. Those slate tips are in one of our major national parks. If this concession applies to clearing those slate tips, as well as the local slag tips in South Wales, we shall be doing two things. Firstly, we shall be adding to the amenities of a major national park, and secondly, we shall be providing work for some of the 3,500 unemployed of whom I am speaking. We shall also be preparing suitable sites for suitable industry in that area.
  The second point which I hope the Parliamentary Secretary will press home with her colleague relates to rental concessions. I have spoken frequently in the House about the Nantlle Valley in my constituency in which the chief town is Pen-y-groes. I am glad to say that an admirable firm from Manchester has taken over a factory which was built there under the auspices of the Development Commission.
  A second factory is on the verge of completion in that valley for the same firm. Will this rental concession apply in such a case as that? There cannot be many cases like it, and there certainly will not be any in future, because the new rule will overtake them. Here, we have a difficult area into which we have been able to attract a first-class firm, and it is a case in which the kind of concession mentioned by the Parliamentary Secretary to the Board of Trade will be of immense help.
  The hon. Gentleman mentioned last year's Distribution of Industry (Industrial Finance) Act, which is supposed to assist industries to set themselves up in the

  1101
  unemployment areas that lie outside the traditional Development Areas. So far, that little Act with the very long and high-sounding title has been a flop, a farce—and something of a fraud. What is happening is this.
  An industrialist applies to the Treasury Committee for a grant or loan to enable him to establish himself in, say, Caernarvonshire. He is told to apply to the banks, or to other normal sources of finance. He returns, and tells the Committee, "I have failed to obtain that finance from those sources," from which, apparently, the Treasury Committee then deduces that he is no good, in any case, and, for that reason, refuses him a grant or loan under the Act.
  The position is illustrated by the Answers to two Questions I put to the Chancellor of the Exchequer. On 9th December last, I asked him:
  "… how many applications for assistance under the Distribution of Industry (Industrial Finance) Act, 1958, have so far been received from Caernarvonshire; and how many have been rejected, accepted, and are still under consideration, respectively."
  He answered:
  "Three firm and eligible applications have so far been received from Caernarvonshire. All three are now under consideration."—(OFFICIAL REPORT, 9th December, 1958; Vol. 597, c. 193.]
  That was not very many, so we waited until this month and put the Question again. On 3rd February, I asked the same Question and got this Answer:
  "Four"—
  an increase of one in all that time—
  "firm and eligible applications have been received from Caernarvonshire of which two have been rejected and two are still under consideration."—[OFFICIAL REPORT, 3rd February, 1959; Vol. 599, c. 40.]
  We will not begin to tackle the problem of these unemployment areas in Scotland, in Wales—or, I suspect, in Cornwall—until they are scheduled. In North-West Wales we now have between 5,000 and 6,000 unemployed. Surely, that is a large enough number to entitle us to be scheduled under the full Distribution of Industry Act. We qualify for it. I am quite certain that until we are treated as a scheduled area under the parent Act our problem will not be solved. It certainly will not be solved by the little Act of 1958.
  8.34 p.m.
  Sir Eric Errington: I should have hesitated to intervene in this debate on behalf of my own constituency, which does not suffer from any degree of unemployment, but my excuse is that I was a member of the Sub-Committee of the Estimates Committee that considered the Development Areas, about two years ago. Incidentally, I live in Anglesey, and am well acquainted with the problems that arise there.
  At the time of which I speak, I well remember that the Sub-Committee had considerable discussion on the importance of extending the Development Areas. The hoped-for extension does not seem to have materialised, as many of us thought it should and would.
  I can confirm what the hon. Member for Caernarvon (Mr. G. Roberts) said about industrialists who seek to go to the areas to which the 1958 Act applies. It is extremely difficult for them to obtain financial assistance. That being so, the whole scheme for the extension of Development Areas is likely to fail. Some attraction must be provided under existing conditions, whether it be by way of the loan of cheap money or by other facilities. What struck me was the astonishing statement by the Parliamentary Secretary to the Board of Trade, in answer to a question, that these newly announced concessions applied only to the original Development Areas, and not to the 1958 extensions.
  Better conditions are essential if we really desire to attract industrialists to these areas, which are of special importance because they have never at any time provided sufficient employment for the population. A period of five years with a reduction in rent of 25 per cent. is not much of a carrot to place before industrialists, and I hope that this question will be reconsidered. I suggest that, first, the provision should be extended to the 1958 Act areas and, secondly, that the period during which help is given should be extended and finally the amount advanced in appropriate cases be made more substantial.
  Consideration ought to be given to the kind of work which can be done by the local unemployed people. It is easy to say, "We will build a factory which will employ so many people," and to consider that honour is satisfied by that building,

  1103
  but it is most important that the factory should be able to employ the kind of people who require employment in the area. If the area has many unskilled people who are unemployed, it is no use building a factory in which most of the employees require scientific degrees. It may help a little, but if this principle is extended to a large extent, as it sometimes is, a good deal of unhappiness and frustration is caused.
  It was only because of the statement made by the Parliamentary Secretary to the Board of Trade that I felt that I should intervene to express my views on this vital matter.
  8.40 p.m.
  Mr. William Ainsley: I hope that the hon. Gentleman the Member for Aldershot (Sir E. Errington) will forgive me if I do not follow him. I wish to refer to what the Parliamentary Secretary to the Board of Trade had to say in outlining the Government's proposals for what is to be done now and during the next four or five years. We shall have an election very soon. Moreover, when he referred to measures now being taken he omitted any reference to the stark fact that we have 624,000 unemployed now. That is the problem which we must face. That is why the Minister is asking in this Supplementary Estimate for £25 million.
  When I have put Questions to the Board of Trade, I have been amazed at the complacency of the replies I received. I have been told "It is not as black as the hon. Gentleman suggests", or that "Several new factories have been brought into the County of Durham in the postwar period". We are all aware of that. "We are doing all we can to bring industry into the area," yet that is the kind of reply which we receive time after time from the President of the Board of Trade.
  My mind goes back to the time when I read the first Cohen Report. I was alarmed then, on reading that Report, about what would happen in the vulnerable areas which we knew so well in the 'thirties. It is significant that Scotland, North-East England and Wales, plus Lancashire now, are again the areas to be affected. We on this side of the Committee know something of the "hungry 'thirties". There are still two nations within our one country. Hon. and right hon. Gentlemen opposite have not
  1104
  experienced the humiliation of joining the dole queue or the despair of not being wanted by society. These things come about as a result of deliberate Government fiscal policy in cutting down demand and reducing employment.
  There is an old adage about carrying coals to Newcastle, and it applied, too, to the coal mines of the County of Durham. The trend is now reversed. Now, one could speak of carrying oil from Newcastle. The old coal mines in the west of Durham are feeling the effect of the state of our economy, and for that the Government must accept responsibility. We miners have always felt that we were an economic unit within the nation's economy. Because of that, there was no desire to bring other industries into the mining areas. Years ago, for example, there were what were known as the "Bevin boys"; there was exemption from military service for those young men so that manpower in coal mining could be brought up to a proper level. Good care was taken that no other industry came into the mining areas to compete for manpower where coal mining was the principal industry. Now, we are left with the problem in Scotland, North-East England, and in Wales.
  The Government are now faced with the problem of redundancy in the coal industry because of their policy in seeking to withhold coal production. We lost our continental export market because of the Minister of Fuel and Power's policy to withhold supplies to meet the ever-expanding economy and industrial demand in this country. That is the problem which we have been facing in the mining industry.
  I come now to the problem in my own constituency, which covers 264 square miles. Let me outline what has happened recently. The New Branspeth colliery and by-product plant, Brandon C pit, and East Hedleyhope colliery have all closed down. Production of fluorspar in the Weardale area is practically nil. The limestone quarries in Stanhope have been closed down and the small steelworks in Wolsingham is working half time. Nothing has been done by the Government to replace those coal collieries or declining industry in this area.
  What has happened in the North-East? The Team Valley Trading Estate was set

  1105
  up to take the surplus in the Gateshead and Tyneside areas. The Aycliffe Trading Estate was set up to take the surplus population of Darlington. The West Auckland Trading Estate was introduced because in that area the whole of the coalfield was under water during private enterprise and before nationalisation. That came about under the Distribution of Industry Act which the Government have never sought to apply.
  We are doing all we can to persuade industrialists to come to these areas and that is why we are left with the growing problem of unemployment. Since 1951, we have 10,000 immigrants from West Durham. Many of them have come to the London area. Only last week the London Press stated that London could no longer cater for any more industry. Can we wonder that there is a traffic problem in and around London when industrialists have been allowed to expand, when conurbations have gone up with a lack of planning? That is the condemnation of this Government, and until they take steps to remedy the wrongs which they have committed we shall find ourselves in this dilemma, whether it be in Scotland, the North-East or Wales.
  I am governor of one of the secondary schools in my area which has 941 children on the roll. These are young people who are ready to come into the industrial employment market. Only today I revealed to the President of the Board of Trade that there is 8·3 per cent. juvenile unemployment, apart from the figures for adult unemployment which I gave a week or two ago, and there is no hope of their being absorbed in these areas, which problem is more critical. Where there is a diversity of industry it may be damped down by the present industrial recession, but where there is no other industry for the population it is a more acute problem.
  As I pointed out to the President of the Board of Trade earlier today, a factory of 75,000 sq. ft. is standing idle in the area. Will he not make use of it and absorb these unemployed and the talent of these young people, which otherwise is being neglected? The Secretary of State for the Home Department will be introducing measures to deal with juvenile delinquency because the talent of these young people is not directed into channels
  1106
  of useful service for the good of the community. Therefore, I plead with the Government to take heed of our warnings and to apply these measures in the areas where they are urgently needed to solve the problem.
  8.46 p.m.
  Mr. Ray Mawby: I had not intended to take part in the debate—
  Mr. Robens: I had.
  Mr. Mawby:—but I have heard little all afternoon about the Votes that were put down for discussion. In fact, the whole debate seems to have been upon the effect—[Interruption.] Does the right hon. Gentleman wish to intervene?
  Mr. Robens: I was not interrupting the hon. Member, but was merely observing to my colleague that I regarded the hon. Member's ignorance of procedure as lamentable in view of what he has just said. I was having a purely private conversation, but it is on the record now.
  Mr. Mawby: I apologise for my ignorance, as I always do. All I said was that, looking at the Votes, I would have expected the debate to take a different form.
  The suggestion has been made throughout the debate that we are suffering a high level of unemployment due to the policies of the Tory Government, which is deliberately trying to debase the currency to try to bring about a high level of unemployment. The suggestion was also made that this action was being taken by a group of people who knew nothing about unemployment and who were, therefore, not qualified to talk about it. It would be wrong for anybody to boast of what he knew about unemployment, but, certainly, I am not unaware of the conditions of unemployment, because I was brought up in a home which knew unemployment from time to time. Let me, therefore, declare my interest.
  We are tending to beat the air about the whole question of unemployment. The suggestion has been made that throughout the period from 1945 to 1951 full employment was not only the standard aimed at, but was the standard achieved. The suggestion now made, however, is that we are suffering from a high level of unemployment. I need do

  1107
  no more than draw the attention of hon. Members to a Written Answer given by the former Chancellor of the Exchequer, now the Leader of the Opposition, who, on 22nd March, 1951, was asked
  "to what extent the Government has adopted a full employment standard as proposed in the resolution of the Economic and Social Council of the United Nations in August last."
  The important point in the terms quoted in the right hon. Gentleman's reply was that
  "The experience of the last few years has shown a level of about 2 per cent."—
  that is, of unemployment—
  "at the seasonal peak."—[OFFICIAL REPORT, 22nd March, 1951; Vol. 485, c. 319.]
  Therefore, what we are arguing about now is 0·8 per cent. which is apparently the difference from a period when it was stated, and is still stated, that there was full employment, even though there was 2 per cent. unemployment at the seasonal peak. That was not an isolated case because, as the then Chancellor said, it was the experience of the last few years. Therefore, even in a period of full employment there was normally 2 per cent. unemployment at the seasonal peak.
  Earlier today we were given the latest figures which show that at present we have a peak of unemployment of 2·8 per cent. I believe that that can be considered as the peak, because normally, after this time of the year, the figure tends to fall as a number of tourist industries and other activities come into operation. We are, therefore, comparing a figure of 2 per cent., which was apparently regarded as the level under a policy of full employment, against 2·8 per cent. which we have at the moment. It appears that there is a world of difference between full employment guaranteed by controls, restrictions and rationing and a policy of hell-for-leather under the Tory Government which is alleged to have brought about a high level of unemployment. We should look at this very narrow difference between us before we start throwing stones at one another.
  The then Chancellor went on to quote the terms, as follows:
  "It applies, of course, to the United Kingdom as a whole and does not preclude the possibility that in particular areas the percentage of unemployment might exceed 3 per cent."
  1108
  It was, therefore, generally accepted even at that time that while the national average could be reasonably low, that is, 2 per cent. then, there could be areas in the country where unemployment could reach a far higher level. All actions aimed at the redistribution of industry were designed to try to take up those areas where the unemployment figure was a great deal higher than the national average. And that is exactly the line that we are trying to follow at present.
  It is important to remember, however, that in that Answer the right hon. Gentleman quoted further from the statement to say:
  "In the event of severe difficulties arising in the sphere of foreign trade it is possible that even a level of 3 per cent. unemployment might be exceeded for short periods; but the Government would make every effort to avoid falling short of the obligation it has imposed on itself."—[OFFICIAL REPORT, 22nd March, 1951; Vol. 485, c. 320.]
  That, again, was a statement which was true then and is still true now. We are not completely masters of our own house. It was pointed out earlier that unless we can find markets for the goods which we wish to export, whatever we do we cannot guarantee full employment. I point out again, therefore, that the difference between us is one of ·8 per cent., and all the remarks that have been made to the effect that the Government are deliberately trying to bring about a high level of unemployment show that the problem has not been properly looked at.
  One of the Votes which we have been discussing today contains a very large extra Supplementary Estimate for the Ministry of Transport and Civil Aviation, to enable it to try to pump extra money into the road programme. We know also that extra money has been pumped into the railways, and that other measures have been taken to make certain that we prime the pump and try to keep industries going.
  Let us not forget that while inflation is rampant we cannot guarantee full employment. There are enough statements on the record, made even by right hon. Gentlemen opposite when in office, that, if it were not for foreign trade, in time we should not have been able to purchase raw materials to keep our factories going, even in a planned and controlled State.

  1109
  Therefore, I believe we should look at this question in the right way by applying our minds to solving this problem. I agree with many other hon. Members that one man unnecessarily unemployed is completely wrong. I believe that there is a certain amount of wasted skill and I agree that it is a disaster when any man loses his job. At the same time, do not let us instil unnecessary fear into the minds of many men now working. If we do that, while continuing to enjoy full employment they will always be looking over their shoulders in fear, and it is not right that we in this Committee should cause fear to anyone.
  I believe that as long as we concentrate on the very narrow point of difference between us we can go forward together to find a solution of this problem. As the Leader of the Opposition has often said, and it has been repeated, it is the ambition of all parties to try to maintain as low a level of unemployment as possible consistent with preventing inflation.
  9.1 p.m.
  Mr. William Ross: One thing which will give the Minister a certain amount of confidence is that no one will vote tonight against the Supplementary Estimates. The Minister is answerable only for getting and administering £25 million and, of course, he has an additional £5 million for National Assistance. This is something about which more might have been said.
  If, today, there are unemployed people who cannot live on their unemployment benefit, and have to go to National Assistance, it raises the question whether or not those benefits are sufficiently high. One hon. Gentleman opposite, discussing this question outside the House, said that there was nothing to worry about because the unemployed have their unemployment benefits. I would not like to think that any hon. Gentlemen opposite were set to the business of living on unemployment benefit. If they were, they would not find it very pleasant.
  My speech will be very sketchy. Inevitably, we shall have a Minister, as well as the hon. Gentleman the Member for Totnes (Mr. Mawby), telling us to take unemployment out of politics. I am certain that before long we shall have a
  1110
  Minister at the Box opposite telling us, "Let us take unemployment out of party warfare." The Prime Minister is the very man to do it. He will tell us that with all due gravity and solemnity. We get it on foreign policy and on housing—"Let us take this out of party warfare."
  Despite everything said by the hon. Gentleman the Member for Louth (Mr. Osborne), I did not know why hon. Gentlemen opposite who support the Government are showing such concern about unemployment, since the policies they have supported in the Lobbies have been designed to create and to exaggerate it. The hon. Member for Totnes read the speech delivered by the right hon. Gentleman the Member for Monmouth (Mr. P. Thorneycroft) when he resigned his post as Chancellor of the Exchequer because the Government were not being tough enough. I advise him to read the speech of the present Chancellor, on his taking office. He thought that the Government were being tough enough, that their measures would do the job. Everything was designed to create unemployment. Now it has happened.
  One of the tragedies of this business is that, after giving certain areas in the country special aid and guidance, as soon as we get a recession in trade and some unemployment those areas come out worse than ever before. There are now 115,000 unemployed in Scotland. What we are arguing about is not 0·8 per cent., but the fact that a year ago there were only 40,000 or 50,000 unemployed in Scotland. Unemployment has doubled. What we are arguing about is that when the Labour Party went out of office there were only 400 unemployed in my constituency, and many more vacancies than there are today. Unemployment in Kilmarnock is now not 400, but 2,000.
  Those are the things about which we are concerned. The hon. Member for Totnes traced what he thought were the causes of unemployment. One of the first causes was the cuts in defence expenditure. If the cuts were to be made anywhere, they should have been made where their effects would have been felt least, and alternative employment should have been provided in the areas concerned. The credit squeeze also created unemployment, as did the financial restrictions imposed on the nationalised industries.

  1111
  All those things have had their effect. At the Wallacetown Engineering works, in Ayr, 87 men were laid off. That is a firm making electrical switchgear for mines. The laying off of those men was directly related to Government policy, in the same way as the manufacture of locomotives in my constituency was affected by unemployment in the transport industry. Unemployment creates unemployment.
  Another cause has been the muddle of the Government's Middle East policy. Hon. Members should consider the millions of pounds worth of trade which we have lost in Egypt and other parts of the Middle East. There are engineers in my constituency who were concerned with the maintenance of pipelines in the Middle East. Orders have fallen and we have lost millions of pounds worth of work as a result.
  Another factor has been changes in techniques. There are men who are being made unemployed who will never again get jobs in the same area. The Government have a terrible responsibility. They are in a mess and they cannot get out of it. Unemployment is like getting into the Second Division in the Football League. It is easier to get into it than to get out, and that is what is now causing concern.
  9.7 p.m.
  Mr. Harold Finch: Tonight, we are being asked to pass Supplementary Estimates of £26,496,000 for the National Insurance Fund, of which £25 million is in respect of unemployment. That is a considerable figure and it was only to be expected that hon. Members would express their deep concern that the expenditure is largely due to Government policy, which has resulted in this serious unemployment position.
  We are now becoming alarmed, especially when the right hon. Gentleman the Minister of Labour tells us that unemployment has increased since 8th December by another 89,000, bringing the present unemployment figure to 620,000. We are now well beyond the half million mark, and in those circumstances it was only to be expected that we should express our deep concern in the situation in which we now find ourselves.
  One cannot help but feel that we are here investing in misery. This is certainly
  1112
  not investing in expansion and prosperity. This is part of the heavy price we are paying for industrial stagnation. Apart from the £25 million for unemployment benefit, as we were reminded by the Joint Parliamentary Secretary to the Ministry of Pensions and National Insurance, there is the sum of £139 million, which includes the figure of £14 million as an additional contribution by the Exchequer under Section 2 (3, a) of the National Insurance Act, 1954. That provided for £325 million to be made available, if needed, for the five-year period beginning 1st April, 1955, to cover any deficits which might arise on the National Insurance Fund during that time. Until the current year, the Fund has shown the expected surplus, although on account of the growing number of elderly persons that surplus has been getting smaller. This is the first year in which the current expenditure of the National Insurance Fund will exceed the current income.
  A few weeks before the Report of the Government Actuary was issued the Chancellor of the Exchequer put up the Bank Rate to 7 per cent. and initiated a much tighter credit squeeze. Here I wish to quote from the Report of the Government Actuary on the financial provisions of the National Insurance Act:
  "… it has been assumed that unemployment will remain at its current level of about 1½ per cent. throughout the years 1957–58, 1958–59 and 1959–60, and will then rise to 3 per cent. in 1960–61 and reach the assumed long-term level of 4 per cent. in 1961–62."
  As I have said, a few weeks before the Chancellor had put up the Bank Rate to 7 per cent., and it was well known that the results of raising the Bank Rate would be that we would obviously have to face some degree of unemployment. I feel sure that if the Government Actuary had been told to take account of these facts he would not have put in a figure of 1½ per cent. but a figure of 3 per cent. This would have given him a slight margin to play with compared with the current rate of unemployment, which has now gone up to 2·8 per cent. for the whole of the country.
  I submit that if the Labour Party had made this miscalculation or had misjudged the situation great play would have been made about the position. Indeed, it is interesting to note that when the late Sir Stafford Cripps had to come

  1113
  before Parliament with large Supplementary Estimates in 1949 and 1950 a first-class propaganda row took place in this House. Every Tory newspaper in the country carried the story of Socialist mismanagement, but hardly any comment is now being made in the Press on the figures before Parliament at the present time. I say that this is certainly a miscalculation of the position and that had the Government at that time made an estimate of 3 per cent, instead of 1· per cent., knowing that the Bank Rate had gone up to 7 per cent. we should not now be asking the House for this Supplementary Estimate of £25 million.
  That is not the only consideration arising from this Supplementary Estimate. It has to be appreciated that unemployment benefit is not paid continuously to unemployed men. I do not know whether the Committee fully appreciates that situation, because the figures would be far worse than £25 million had it not been for the operation of the provisions of the National Insurance Act. After all, it was some years ago that we abolished Section 62, which was put into the National Insurance Act by the Labour Government, and it is unfortunate that that Section was not renewed by the present Government.
  I would point out that Section 62 worked very efficiently and very fairly for the unemployed of this country. What did it really do? At the expiration of a man's standard benefit, he was liable to be called before a tribunal, when the position was made perfectly clear. If the Ministry of Labour were not in a position to say that they had found work for him, he was entitled to continue to receive unemployment benefit indefinitely. He might be called before the tribunal in connection with extended benefits, but so long as the Ministry could not find him employment he would receive unemployment benefit. There were rare cases where work was offered and refused. A man who refused work could be questioned about his position and unemployment pay would be discontinued because he had refused the work which was offered to him. That was an efficient and a fair way to work the unemployment benefit system.
  This Government declined to renew that Section, with the result that although
  1114
  they put added days on to the extended benefit there was a limit imposed. The longest period for which a man can receive unemployment benefit is nineteen months. In many cases a man does not receive the benefit for as long as that; it depends on the contributions he has made. The unemployment benefit in many cases is terminated at the end of ten months or twelve months. We have the position, therefore, that a man who is faced with a prolonged period of unemployment automatically ceases to receive unemployment benefit after a certain period. Although these men are available for work, no work is provided for them. That is a serious state of affairs.
  A few days ago my attention was drawn to the case of a man whom I have known for many years. He lives in South-West Wales near Swansea and has been employed all his working life in the tinplate industry. He is 55 years of age. He had saved sufficient money to buy his own house and he is a respected citizen. He is unemployed and, at the age of 55, he ceases to receive unemployment benefit. That man is broken-hearted. All he can receive now is the National Assistance payment, which he has never drawn before and has never desired to. Some men abhor National Assistance. Men who have worked hard all their lives look upon National Assistance as the last straw. It is right that in this debate we should draw attention to cases of that kind and the poverty and hardship which has resulted for many people because of this situation.
  It is true that this additional sum of money is to pay unemployment benefit. Although the scales are inadequate, it must be paid for the maintenance of the unemployed and their families. It represents an appalling waste of human resources. Among those who receive unemployment benefit are many skilled men—craftsmen, engineers and miners—whose skill is now to be lost to the nation. All this is bad enough, but the figures which have been quoted represent men and women who are suffering hardship and will continue to be faced with insecurity.
  It is true that the global figure for unemployment is not nearly so great as in the inter-war years, but in many areas it is worse. The situation is worse for a person who is unemployed today than it

  1115
  was during the inter-war years when wages were low and the standard of living far lower than it is today. I remember living in a depressed area for a number of years, and in many trades there was little difference between the wages received by the lower-paid workers and the unemployment benefit which was paid then. Today men earn perhaps £12, £15 or £20 a week, and many are committed to hire purchase payments. The man who has been earning only £8 or £9 per week falls to £4 per week. Others fall from £12 or £15. He may get assistance by supplementary National Assistance, but his position is more acute than that which was suffered in the inter-war years.
  Unemployment not only results in poverty and misery, but it undermines morale and creates fear and frustration. I have been through it in the mining valleys of South Wales and I know what it means. It particularly hits the youth who cannot get work. Very serious issues arise when young men cannot get employment. It often engenders hatred. We remember the position in Europe in the inter-war years, when unemployment was one of the great issues and one of the factors which put Hitler into power. We are dealing with one of the most serious matters that can effect the people. It can have terrible effects; it can undermine democratic Government, in the last analysis. We desire to draw attention to the situation because so much evil is attached to it.
  It has been frequently said by Government spokesmen that unemployment will be brought down considerably in the coming months. I fervently hope that that will be the case. I hope that the right hon. Gentleman will be able to succeed in bringing down unemployment in the next few months. Nobody will be more pleased than we on this side of the Committee, but we see no signs of that at the moment. If unemployment continues for any length of time it will have a serious effect upon the country's economy.
  I do not want to repeat economic arguments which we have heard about unemployment. Such arguments have been expressed in this Chamber for the past twelve months. All I can say is that there is something wrong with an economic policy which fluctuates from inflation to unemployment and when a
  1116
  policy adopted deliberately by the Government creates unemployment in order to cure inflation. The Government do not seem to get upon an even keel. It has either to be inflation or unemployment. There can be no solution, as I think hon. Members on both sides of the Committee would agree, unless there is a steady flow of industrial expansion.
  Unemployment is far more acute in some areas than in others. It is chiefly for those black spots that the Supplementary Estimate of £25 million is required. In certain areas, unemployment is terribly acute. Perhaps the Committee will pardon me if I refer to a few figures. I have taken past unemployment in some of these areas as at 14th April last year, at about the time of the Budget, and compared it with the position at 8th December last year.
  In the West Riding of Yorkshire the figure in April of unemployment was 30,098, and it went up to 42,507. In the North-Western parts of the country the April figure was 73,193, which went up by December to 97,736. In the northern part of the country the April figure was 29,022, and it went up by December to 40,694. In Scotland, the April figure was 78,392 and it went up by December to 95,540. Now we are told that it has risen in Scotland to 115,000. That is a very serious matter. In Wales, the April figure was 36,815, and that has now gone up to about 39,463.
  Calculated on a percentage basis, the Scottish unemployment is by far the worst. I understand that the latest figure is 5·4 per cent. In Wales the figure is more than 4·1 per cent. In Northern Ireland the figure is 8·3 per cent.
  There is not only the problem of these areas, but of the pockets of unemployment in them. In North Lanarkshire, I understand, unemployment has reached 8·3 per cent. In North Wales it has gone to 10 per cent. and in South West Wales it is round about 7 per cent, or 8 per cent. These are serious pockets of unemployment. We are not dealing with amounts of 2·4 per cent. or 2·8 per cent., but with 10 per cent., 8 per cent. and 6 per cent., and to these serious pockets special attention has to be given.
  I know there is no proper solution except by an expansion of the economy, but the Government could have exercised more effectively in these areas the powers

  1117
  given them under the Distribution of Industry Act. This problem has been going on for a considerable time. Section 3 of the Act provides for grants or loans to be made to local authorities. That does not deal with the problem of getting industry to the locality, but with the Government giving loans to local authorities for improving basic services in the area That was withdrawn by the infamous Circular 52/54 in 1952, and it has never been renewed.
  The Government should at least have put it into operation as something which could have eased the situation. That would have brought down the amount of £25 million. It is better to have men at work on the roads than being paid unemployment benefit. In South Wales the roads are in a shocking state. They cannot hold the traffic resulting from industrial development in the valleys. What could we not have done with that £25 million in improving roads in Development Areas, or improving schools where classes have to be held in corridors, libraries or local chapels spread all over the district? We could have done something, with this £25 million to put men to work on the roads rather than paying them the dole. This is wasteful expenditure.
  I emphasise that if the Government would now exercise their powers under that Section they could call the local authorities together and have a bold policy for the Development Areas. They could make grants as provided under the Act and get on with the job. I remind the Committee that those areas suffered in the inter-war years and they have not the social amenities which exist in more prosperous areas. In the valleys of South Wales local authorities have never properly recovered from the inter-war years. They lack social facilities. Here was an excellent opportunity for work to be done in those areas.
  One happy feature I heard in the debate was when the Parliamentary Secretary to the Board of Trade, dealing with the powers of local authorities, informed us that the Government are now to exercise Section 5 of the Distribution of Industry Act whereby they will make grants for dealing with derelict land and buildings. I am very glad to hear that. In South Wales, as in other Development Areas, we have slag heaps and unsightly areas on
  1118
  which stood old buildings. I hope that the Government will co-operate with local authorities and give them every possible help, because here is a means of putting at least some men to work. Apart from work on the roads and these buildings, the other opportunities open under Section 3 of the Distribution of Industry Act could do a great deal to ease the situation and reduce the present unemployment.
  Mr. Geoffrey Wilson: Does the hon. Member appreciate that modern methods of road construction employ skilled men and that there is little scope for unskilled men? The days of the navvy have gone.
  Mr. Finch: There are plenty of skilled miners quite capable of doing the work. I do not want to enter into this aspect, after the debates we have had on the Preston by-pass. I think we had better leave that side of the argument alone.
  Another disturbing feature in connection with the present unemployment is the congestion which continually occurs in the Home Counties and the South of England. Yesterday the President of the Board of Trade replied to a Question which I had asked on Friday. I asked the amount of square feet of factory space which had been built in South Wales during 1958 compared with that built in the Home Counties. The President of the Board of Trade replied:
  "Industrial building schemes, of over 5,000 square feet, notified as completed in 1958 totalled 2·6 million square feet in the South Wales and Monmouthshire Development Area, and 8·8 million square feet in the Home Counties …"—[OFFICIAL REPORT, 9th February, 1959; Vol. 599, c. 155.]
  In South Wales we are still not getting a fair proportion of these new factories, and Scotland is getting far less.
  The position in 1957 was equally as had. No wonder there is congestion in the Home Counties. People are migrating from Wales to London and the Home Counties, which are becoming more and more congested. The whole balance of the population is being upset. As a result of the closing of the tinplate works and collieries, communities in South Wales are being isolated. There is no life left in some of the communities. Yet in the Home Counties we have a mass of population and congested areas.

  1119
  In South Wales in 1957, we were told, only 1,580,000 square feet of factory space was built, whereas the figure for the Home Counties was 9 million square feet. The Minister says that these are extensions. What does he mean by that? They do not mean only extensions of buildings. They mean extensions of industry. We are getting a lack of balance in the industrial situation which is affecting unemployment.
  There are one or two points I wanted to put to the Parliamentary Secretary to the Board of Trade. I am not clear about his statement on rentals. I was pleased to hear that at least the Government admit that these rentals have been too high and have prohibited industry from taking these premises. The Parliamentary Secretary has said that the Government intend to make some abatement in the rents, and we are glad to hear that, but I am not clear how it will work. Do I understand that the rentals will continue to be fixed by the Inland Revenue but that payments or allowances will be deferred for some years, although the amount will accumulate and in the end it will have to be paid.
  Mr. J. Rodgers: The value of the rental will be fixed by the district valuer but the new rents will come into operation only over a five-year period. In the first year they will be 20 per cent., the second year 40 per cent., the third year 60 per cent., the fourth year 80 per cent., and the fifth year 100 per cent. At the end of the fifth year they will be paying the rental on the current value.
  Mr. Finch: At the end of five years the full rent will be payable. Whilst we welcome anything that will assist the industrialists, I am not sure that that will be sufficient to meet the situation, but it is something which we shall have to consider.
  In conclusion, we rightly claim that we believe in freedom and democracy. Freedom does not mean only freedom of the Press, freedom of speech and a democratically-elected Government. The essence of freedom is the right to work and to enjoy the fruits of one's labour. That is one of the human freedoms. I have had the pleasure of being at the Council of Europe where we are framing a Charter on Human Rights. One of the first Clauses in the Charter is the right
  1120
  to work and to full employment. That must be our aim and our policy. The Government have failed in that direction, and therefore they are not worthy to be supported by the people.
  9.36 p.m.
  The Minister of Pensions and National Insurance (Mr. Boyd-Carpenter): The Supplementary Estimate which I presented to Parliament last week and which the Opposition, in the exercise of their rights, selected for discussion today, has given rise to an extremely wide and interesting debate. We have touched on economic policy, the trade cycle, policy in the Middle East and what Sir Hartley Shawcross, as he then was, did or did not do in connection with Far Eastern trade. We have also had a touch of theology from the hon. Member for Newcastle-upon-Tyne, West (Mr. Popplewell).
  A debate as wide as that, however, starting on so comparatively narrow a foundation is extraordinarily difficult to reply to at the end of the day. I make no complaint at all that within the rules of order the Supplementary Estimate has given rise to the debate, but it equally follows that hon. Members were perhaps less than generous to my hon. Friend the Parliamentary Secretary to the Ministry of Pensions and National Insurance when they criticised her, in introducing the Supplementary Estimate, for confining herself to the Estimate.
  It was not for us from this Bench to anticipate the course of the discussion of the Committee, but, in the light of that, we have gone out of our way to oblige the Committee and facilitate the discussion, both by way of the statement made at an early stage by my right hon. Friend the Minister of Labour and National Service as to current unemployment figures and of the intervention and important statement made by my hon. Friend the Parliamentary Secretary to the Board of Trade on the measures being taken to stimulate employment, particularly in the more difficult areas.
  Therefore, we can claim to have done our best to meet the point of view and wishes expressed on both sides of the Committee that the Supplementary Estimate should be used as a vehicle for the discussion of this immensely important problem.

  1121
  The right hon. Member for Blyth (Mr. Robens) was a little less than generous to my hon. Friend the Member for Totnes (Mr. Mawby) when he told him that he knew nothing about procedure, because my hon. Friend had been under the impression that we might be discussing the Estimate which the right hon. Gentleman and his right hon. Friends had selected. My hon. Friend was perfectly entitled to assume that, and should not have been subjected to the right hon. Gentleman's rebuke.
  Mr. Robens: The hon. Member for Totnes (Mr. Mawby) resumed his seat and invited me to repeat what I had been saying to my colleagues. That is all I did. I did not intervene in his Speech.
  Mr. Boyd-Carpenter: I was only saying that the right hon. Gentleman's criticism, whether made sotto voce, or while he was on his feet, was in either case really wholly unjustified. I make no great point of it, but it would have been more natural, if right hon. and hon. Gentlemen opposite had wished to discuss unemployment, for them to put down for discussion the Supplementary Estimate of my right hon. Friend the Minister of Labour which has a subhead dealing with the special arrangements which he is making in discharge of his responsibilities in dealing with this immense problem. However, as I say, we have, to the best of our ability, served the Committee on the wider as well as on the narrower theme.
  As the hon. Member for Bedwellty (Mr. Finch) made certain observations directly bearing on the Supplementary Estimate and did bring the debate back quite closely to it, I hope that the Committee will forgive me if I seek to deal first with some of the points he made. First, the hon. Gentleman asked why we should not, as a means of dealing with unemployment, increase expenditure on roads. He was reminded by one of my hon. Friends that roads are no longer what might be called the classical method, which they may have been in the old "pick and shovel" days, for providing additional work. That they do provide some valuable work I would not dispute.
  If the hon. Gentleman looks at the Order Paper, he will see that there is on it down for discussion, if time had permitted, a Supplementary Estimate on
  1122
  behalf of my right hon. Friend the Minister of Transport and Civil Aviation which itself gives a clear indication of the expansion of road building which my right hon. Friend's energetic approach to these problems has brought about. We have, I think, no quarrel with the hon. Gentleman the Member for Bedwellty on that point, because we are, in fact, doing something along the lines he suggested.
  I quarrel with the hon. Member for Bedwellty, however, over his remark about extensions in London and the Home Counties and in other areas of full employment. Where somebody wishes to extend an existing factory and it is plain that, if he is not allowed to do it, the extension will not be made at all, it does not seem to make sense to refuse him the certificate. Refusal will prevent the creation of industrial capacity which would otherwise be created. My right hon. Friend assures me that I.D.C.s for new work are not permitted in such areas as London and the Home Counties, but I cannot believe that it makes sense to refuse to allow existing industrial plant to have extensions which may well be judged necessary by those responsible for them in order to make for more efficient production.
  Mr. Finch: Extensions do not mean extensions of buildings only. They may be extensions of businesses connected with the original undertaking. That is quite a different matter from the mere extension of an existing building. These are extensions of businesses, also.
  Mr. Boyd-Carpenter: We would not quarrel about that, but the hon. Gentleman will accept that some of them are physical extensions of existing buildings Some are extensions of businesses, in the broader sense, I agree.
  This is really a matter of definition. Where they are extensions of buildings, then, in the nature of things, one can extend only in or near where the place already is. It is quite right—and this is our present practice—not to grant certificates for entirely new developments, but where they are bona fide extensions required for existing buildings which will be made in the place desired or not at all, it is really unsound, unwise, and working against the efficiency of our economy, to refuse a certificate.

  1123
  I agree with the hon. Member for Bedwellty that one must be satisfied that they are genuine extensions which do not disguise something new under the guise of an extension. That is a matter of fact in each case. He put the point of principle, and, on the principle of genuine extensions, I am quite satisfied that we are right.
  Mr. Popplewell: I was very interested by this Ministerial approach to the matter of extension. The right hon. Gentleman and his Government will remember that, under the Distribution of Industry Acts, when first introduced, countless extensions of factories were guided where the people were in residence. In the North-East, we had in our trading estates many extensions to existing premises instead of people being allowed to extend at what I might call the parent place they came into the areas where they would be doing the nation more good.
  Mr. S. O. Davies (Merthyr Tydvil)Mr. S. O. Davies (Merthyr Tydvil) rose—
  Mr. Boyd-Carpenter: I cannot give way twice. I hope that the hon. Member for Merthyr Tydvil (Mr. S. O. Davies) will forgive me.
  What the hon. Member for Newcastle-upon-Tyne, West has done has been to blur the distinction between genuine extensions and new developments associated with some existing business but physically separate and separable from it. What we are concerned with here—and we need not quarrel on this, because the common sense of the matter will commend itself to the Committee—is where there is a genuine extension which, if not permitted at that particular place, will not happen at all. There is no point in cutting off one's nose to spite one's face.
  Mr. Woodburn: We understand very clearly what the Minister has said. Is he giving an assurance that the 9 million square feet are all extensions of the kind he is describing?
  Mr. Boyd-Carpenter: I am not talking about a particular figure, but if they are described as "extensions" they are, in the judgment of the responsible Department, genuine extensions. No one has any desire to allow this matter to be improperly administered. We are dealing with the general principle of extensions.
  1124
  Let me deal with the question which was raised about assumptions as to unemployment made in respect of the main Estimate to which this one now before us is a supplementary. It has been rightly said that this is the first time that the 1954 Act, which authorises the Treasury to provide additional moneys over and above the fixed Exchequer contribution to National Insurance to meet deficiencies, has been used. It was used in our main Estimate for the current financial year, to which this is a supplementary, but I think that the hon. Member over-simplified the question of the assumption as to unemployment on which the Government Actuary works.
  These assumptions are generally made over substantial periods. For example, under the hon. Member's own Administration the assumption made for some time was a rate of unemployment of 4 per cent., not necessarily related to what was precisely expected in any particular year but as a broad outlook for what is, after all, a long-term scheme.
  We are dealing with the power to make deficiency payments. This is not quite like an ordinary Estimate, because this is expenditure which, if not met in this way, could be met by the accumulated balances of the Fund. The rules for Estimates which the hon. Member laid down do not apply entirely in the special circumstances of assumptions as to unemployment made on a long-term basis and in respect of deficiency payments which are only one of the means of meeting the expenditure. Looking back, I do not think that anybody was at fault in doing that.
  The hon. Member returned, as he often does—I know that he speaks with great experience on these subjects—to the question of Section 62 of the original Act and, as I understood him, once again suggested that it should be revived. We have discussed this point many times, and, of course, it is a fact that that Section is relevant only if one expects really longterm unemployment.
  Section 62 lapsed in 1953. It lapsed, as the Committee will remember under the original provisions of the 1946 Act and my noble Friend who is now Lord Ingleby did not extend it, but took no step to bring it to an end. It ended under the initial provisions of the 1946 Act but, at

  1125
  the same time, we provided for an increase in the added days which, in the case of the man with the best contribution record, runs up to 492 days. In those circumstances, it does not seem to me that Section 62, the resurrection of which hon. Members opposite urge again and again, is a particularly helpful solution unless one contemplates really long-term unemployment.
  That is the difference between us. If we had had an opportunity to discuss the next Estimate I would have dealt with the question—but I think that you, Sir Charles, would rule me out of order now—of the very limited number of people who have exhausted benefit coming on assistance as a result of unemployment. There will not, however, be time to discuss that matter. Our view—and I accept that the hon. Gentleman's view was put in equally good faith—is that Section 62 is not the answer in present circumstances.
  Miss Herbison Miss Herbison rose—
  Mr. Boyd-Carpenter: If I give way to the hon. Lady, I shall not be able to answer her hon. Friends who spoke earlier. I am sure that she will understand how I am placed.
  Miss Herbison: I wish to raise only one point—
  Mr. Boyd-Carpenter: I hope that the hon. Lady will not think me discourteous when I say that I was about to reply to her hon. Friend the Member for East Ham, North (Mr. Prentice), who referred to the figures given by my hon. Friend the Joint Parliamentary Secretary of the value in real terms of unemployment benefit now, compared with what it was in 1951.
  The hon. Member took the point that my hon. Friend had relied upon the Interim Index of Retail Prices. That is true, but, as my right hon. Friend the Minister of Labour pointed out on Second Reading of the National Insurance Bill, if one takes other indices, for example, the one associated with the hon. Member for Reading (Mr. Mikardo), although there is a difference in the result, the difference is not significant in the sense of undermining the argument that there has been a substantial increase in real terms in respect of these benefits.
  1126
  As my hon. Friend the Joint Parliamentary Secretary pointed out, that increase in real terms is more significant and larger in the case of unemployment and the other short-term benefits than in respect of retirement pensions, because the legislation for which right hon. Gentlemen opposite were responsible in 1951, although it increased many retirement pensions, left the original 26s. rate for unemployment benefit as it was. No one contends that even in those circumstances the level of benefit is lavish or anything of that sort, but it is, I am sure, a real help to those concerned. In the present situation it is encouraging to know that there had been this advance in values.
  The hon. Member for East Ham, North referred to payments made by enlightened employers in cases of redundancy. Like the hon. Member, I welcome those payments when they are made. It is the mark of enlightened employers—I trust that I am not transgressing any rule if in that connection I quote the example of Lord Chandos—that such arrangements should be made. I hope that the Committee will acquit me of any political bias if I look at the action by Lord Chandos with the more enthusiasm when I recall that he was associated with my right hon. Friend the Minister of Labour in the Industrial Charter, which advocated very much that line of approach. Certainly, we want to see these things encouraged.
  My hon. Friend the Member for Barry (Mr. Gower) made an interesting suggestion that there should be special rates of unemployment benefit in respect of long-term unemployment in certain special areas. There are difficulties about any such suggestion. In the first place, this is an insurance benefit and it would be difficult to allow different rates to be drawn by people, depending on the geographical area in which they happen to live. Secondly, long-term unemployment is just as hard on a man if he happens to be the only man in his village who is enduring it as if he is in an area where other people have the same misfortune. Although I understand the spirit behind my hon. Friend's suggestion, I do not feel that it is one we could adopt.
  I have only a few moments to refer to the broader issue, but I take serious issue

  1127
  with the hon. Member for Newton (Mr. Lee) and with the hon. Lady the Member for Lanarkshire, North (Miss Herbison) in their suggestion—indeed, their explicit statement—that my right hon. Friends and I regard unemployment as an instrument of economic policy.
  The hon. Lady went so far as to suggest that we seek deliberately to induce it for economic purposes. That is plainly not true. This is a live Committee and we can, of course, differ about the methods by which economic policy should be conducted and even the methods by which unemployment can be combated. But I do not believe that it helps debate on the subject to suggest that one side or the other of the Committee likes unemployment.
  Miss Herbison: I did not say that right hon. and hon. Members opposite like it.
  Mr. Boyd-Carpenter: I am obliged to the hon. Lady. It does not help any more than it helps for one side to call the other warmongers.
  Reference has been made today to a leading article in The Times of yesterday, entitled "Froth". I believe that froth of that sort, imputing motives of that sort, does a great deal of harm to those who impute it and no harm at all to those against whom it is imputed.
  My hon. Friend the Parliamentary Secretary to the Board of Trade gave a most interesting and powerful description of the variety of methods which the Government are using to deal with these problems of unemployment. My hon. Friend made some announcements of policy and development which I think are of very great interest to those who are closely concerned with this matter. The Committee will not expect me, in the few moments remaining, to attempt to go over that ground again. With respect, I would recommend those hon. Members who were not here at the hour when my hon. Friend rose to speak, to study the speech in the OFFICIAL REPORT tomorrow.
  Suffice for me to say that the measures which we are taking fall into three categories. They are the economic policies working towards expansion and easier credit, which we have discussed many times in the Committee and no doubt will discuss many times more; the arrangements for developing the special areas procedure, to which my hon. Friend
  1128
  made particular reference, and the expansions made possible by last year's Act; and the transfer arrangements for which the Minister of Labour is responsible to help where the other methods do not prove successful.
  These are three different classes of weapon in our armoury, and they are all designed to serve the same purpose. I resent a little the suggestion made once or twice in debate, though I hope not seriously, that we on this side of the Committee care less about this matter than hon. Members opposite. In the circumstances created by changing conditions of world trade, to which an island economy like ours, more dependent on international trade than any other economic society in the world, is particularly vulnerable, it is our aim and policy to secure that all efficient steps are taken to deal with this very real problem.
  This Supplementary Estimate, of course, is not one of these methods. It is simply a method of supplying our social services, in which both sides of the Committee take pride to give help to those who are the direct sufferers from this state of affairs. I was glad to hear from the other side of the Committee that, in these circumstances, there was no intention of voting against these provisions. They will serve a valuable part in our armoury of social service instruments for helping those who need our help. It is in that spirit that I commend the Supplementary Estimate to the Committee.
  Mr. S. O. Davies: The right hon. Gentleman dealt with extensions, in reply to my hon. Friend the Member for Bedwellty (Mr. Finch). It might interest the right hon. Gentleman to know, and I think that the Parliamentary Secretary to the Board of Trade will confirm it, that in areas in South Wales where the average unemployment has been from 4 per cent. to 5 per cent. in the last few years, extensions have been refused by the Board of Trade. I hope that the right hon. Gentleman will have a word with his right hon. Friend the President of the Board of Trade on the matter.
  Question put and agreed to.
  Resolved,
  That a Supplementary sum, not exceeding £26,496,000, be granted to Her Majesty, to to defray the charge which will come in course

  1129
  of payment during the year ending on the 31st day of March, 1959, for sums payable by the Exchequer to the National Insurance Fund and the Industrial Injuries Fund and for payments in respect of family allowances.
  To report Progress and ask leave to sit again.—[Mr. Bryan.]
  Report of Resolution to be received Tomorrow; Committee also report Progress; to sit again Tomorrow.

  SUGAR AND MOLASSES
  10.1 p.m.
  Mr. Frederick Willey: I beg to move,
  That an humble Address be presented to Her Majesty, praying that the Sugar and Molasses (Rates of Surcharge and Surcharge Repayments) Order, 1959 (S.I., 1959, No. 72), dated 17th January, 1959, a copy of which was laid before this House on 21st January, be annulled.
  It will probably meet the convenience of the House, Sir, if we take this and the following Prayer together, namely,
  "That an humble Address be presented to Her Majesty, praying that the Composite Sugar Products (Surcharge—Average Rates) Order, 1959 (S.I., 1959, No. 73), dated 15th January, 1959, a copy of which was laid before this House on 21st January, be annulled."
  Then, if necessary, we can divide on them separately.
  The purpose of this Order is to increase to the extent of about a halfpenny a pound the surcharge on refined sugar. The reason for the Order should now be well appreciated by the House as it is similar to previous Orders we have discussed, namely, that the Sugar Board is under an obligation to sell at world prices the 1½ million tons of Commonwealth sugar which they purchased at the price agreed under the Commonwealth Sugar Agreement. The Board is obliged to recover the loss by way of surcharge. I would remind the House that there is already a surcharge of 1¼d. and that this is adding to the existing surcharge a further ½d.
  When we last discussed a similar Order we were in some difficulty because we had not received the Annual Report of the Board. We now have it, and I will take this occasion to compliment the Board on producing a clear and concise Report. I want to make it clear again that we are not criticising the Commonwealth Agreement, and I am sure that the Joint Parliamentary Secretary will not
  1130
  wish to do so. Our criticism of the arrangements which make necessary Orders such as these is that they lead to some misapprehensions about the Agreement. It is unfortunate that such Orders should tend to prejudice the Agreement. That is why I have thought it fit to make it clear that there is no wish to criticise the Commonwealth Sugar Agreement in raising issues affecting the present Order.
  We believe that the burden is on the Government to demonstrate to the House that this Order is unavoidable because we know that the result of it invariably tends to be an increase in the retail price of sugar which, I am sure, the hon. Gentleman will concede at once is an important item in the family budget. This Order affects not only sugar but, indirectly, confectionery prices. The increase in the cost of food is now pressing hard on the cost of living. Indeed, the cost of food has gone up a point in the past month, and I presume it is going up at present. So we have to take every step we can to prevent increasing food prices forcing an increase in the cost of living.
  It is a fact, and it has been proved by the Orders we have had, that the procedure of which this Order is a part has followed a high price policy. We warned the Government about this in the discussions we had on the Bill.
  It is unfortunate, owing to this method of relying on surcharge, that the trade automatically follows the easiest course of increasing the retail price. What is the present stock position? It is strange that the increase in surcharge is invariably immediately followed by an increase in the retail price of sugar in the shops. We cannot avoid the conclusion that the temptation to make profits out of stocks is not resisted.
  To show the effect of the order on retail prices, I call in aid the Grocer. I know that if I refer to the Grocer the Parliamentary Secretary will quote some other publication. Nowadays, he generally refers to some mysterious market research which he undertakes, but he was good enough when we debated a similar Order about twelve months ago to mention the Grocer. The Grocer shows quite clearly that the effect of the Order has been a halfpenny increase in the retail price. Granulated loose, granulated packed in 1 lb. packets or in 2 lb. packets,

  1131
  whichever is the choice, the effect of the Order has been reflected in a price increase.
  I remind hon. Members opposite that that compares very unfavourably with the 6d. a lb. which was the retail price of sugar in the time of the Labour Government. The remarkable thing is that the world price of sugar was then 5·28 cents and the housewife was able to buy it at 6d. a lb., while it is now 3·40 cents but the housewife has to pay between 9d. and 10d. a lb. That is very difficult to explain. It is difficult to explain why we should pay an increase in the retail price when the world price has sharply fallen over twelve months and is now about half what it was a year ago.
  We are dealing with the equalisation of prices, the world price, the home-produced price, and the Commonwealth price. We are considering the impact of the increase in the Commonwealth price on the general price level. Trade figures show that imports over the past twelve months have fallen by 6 per cent. and that the cost of imported sugar has fallen by 36 per cent. However, in spite of that, the poor housewife has to pay halfpenny a lb. more. That is something which is extraordinarily difficult to explain.
  It is for that reason that we regret having to agree to an Order like this without having the safeguards for the consumer which we implored the Government to accept when we discussed the Sugar Act. However, there is one measure which places a direct obligation on the Government because—and hon. Members opposite who talk about abandoning controls may be surprised to hear this—the Government recently imposed drastic controls on the Sugar Board. The Government have powers to control the margins of the refiners. The Parliamentary Secretary knows as well as I do that the Government have reached an understanding with Messrs. Tate and Lyle. Has he made inquiries to satisfy himself that the margins are properly controlled, since the House ought not to accept the Order without being so satisfied?
  I appreciate very much the difficulties arising under this Order. I have given the general position in regard to sugar which is at present being imported into this country. I realise that the Parliamentary
  1132
  Secretary cannot tell us tonight, as he did on a previous occasion, that the consumption of sugar is rising. He said then that we had a very good Government and that we were consuming more sugar, but we are now eating substantially less. I do not know whether or not that has contributed to the fall in the Gallup Poll, but certainly it is something which one would have expected would have led to some fall in the price of sugar. What we regret is that the housewife and the domestic consumer in this country seems to be precluded by the formula set up by the Government from having any advantage of price falls which have taken place in the world.
  If we look forward, one of the arguments for the Order is that we can anticipate further falls in the world price of sugar, but here the world price falls and the housewife must pay more. It is for the Parliamentary Secretary to explain that. I have a reservation to put to the Parliamentary Secretary about this. I think this is probably as mistaken as the supply of arms to Batista. This decision was obviously taken when the British Government were expecting President Batista to remain in power for a very long time, no doubt because of the British arms he was receiving. That has not happened, and we have now got a new President—Castro. I should have thought that this might very well have changed the outlook for sugar. I should have thought that we have got to recognise that it might well be the policy of the Cubans now to take more vigorous action to try to hold the world price, but this is the unfortunate circumstance which happens under the present arrangements.
  I am not going to criticise the Sugar Board on the present occasion. I have criticised it on previous occasions with every justification, but I concede, now that we have had the Act in operation for some time, that the Sugar Board is precluded from exercising a commercial judgment. It would be unfair to criticise the Board for showing a lack of commercial judgment.
  The fact is that we get this forward view, this estimate of the likelihood of a further fall in the world price just at the moment when we probably ought to revise our estimate about this. In saying that, I criticise the Government. We have

  1133
  to realise that the Parliamentary Secretary disturbed the House the last time we discussed sugar, when he talked about the level of prices having been held at an artificially low level. He will remember that I interjected to say that it was very disturbing to feel that political considerations had been used to affect the price of sugar. If that be so, I think we can ask for some political guidance at the moment. If we cannot get a commercial discretion from the Board, because of the way it is set up, I should like the Government to exercise some guidance and to say why the estimates and forward view which was taken about sugar prices was so different from what they were at the time of this Order. The Government have the responsibility, if necessary, to intervene and hold the price of sugar. It is very disturbing that we have a Government responsible in part for failing to hold food prices, which are pressing on the cost of living, and now we have got sugar.
  I should have thought that if the Parliamentary Secretary could say twelve months ago that the Government took action to hold sugar prices at an artificially low level the surcharge here is larger than it otherwise may have been. He is under an obligation now, when we are finding things rather difficult in holding the cost of living, because of the pressure of some food prices, to say that it would be advantageous to hold sugar prices. I realise that a good deal of the criticism which I have made of this Order is unavoidable because of the Sugar Act which was brought in by the Government despite our protests. It is regrettable and no real consolation to be able to say that we told the Government that this would be the effect of the arrangements which they introduced then.
  I asked the Parliamentary Secretary to justify the necessity for the Order. We recognise that the Board is little more than an accounting body. If the calculating machines produce a particular figure, the Board has to act accordingly. But I think the Parliamentary Secretary should satisfy us that the Board has no alternative. The hon. Gentleman has to discharge the responsibility of showing that he is in earnest about holding the cost of living.
  10.15 p.m.
  Mr. James Johnson: I beg to second the Motion.
  1134
  Twelve months ago we had a similar discussion—I will not say pantomime. My hon. Friend the Member for Sunderland, North (Mr. Willey) made the same kind of thoughtful protest and advanced cogent arguments to which the Minister made an unsatisfactory reply. I do not propose to argue the merits or demerits of this Order, but I wish to comment on sugar prices. [Interruption.] The question is an exceedingly complex one and it is difficult to discuss it if I hear mutterings and "Exeter bellowings" from the benches opposite.
  This matter was discussed in the Standing Committee which dealt with the Sugar Bill, as it then was. Hon. Members on this side of the House were opposed to the Sugar Board and considered the Act a bad piece of legislation. But the Minister must implement the provisions of that Act and tonight he is responsible for explaining how, when in Cuba and from other parts of the world we are buying sugar at less than the price twelve months ago, we should be paying more in the shops in this country. He has to explain why my wife and the wives of other hon. Members must pay more when they buy sugar.
  In the Standing Committee an attempt was made by hon. Members on this side of the House to insert provisions into the legislation to safeguard the consumer, but we did not succeed. When we debated this matter last year we had not the benefit of the Report from the Sugar Board and we had no facts and figures to guide us. Even then, we were not satisfied with the explanation of the Minister. On this occasion, and now that we are less in the dark, we hope that the Minister will be able to tell us something satisfactory. We need the fullest information which we did not succeed in obtaining a year ago, when we said that it was a topsy-turvy situation with a topsy-turvy Government buying cheap sugar which costs more now in the shops.
  Our Colonial Territories are selling sugar to us much more cheaply and are being impoverished. We are buying cheap and the gap between the less developed territories of the world and the better-off people, particularly in Western Europe and North America, is widening. I cannot see how any Government worth their salt can fail to attempt in some way to pay more for sugar and by some means

  1135
  other than the present proposals to hold the price of sugar in our shops.
  The new President of Cuba, President Castro, has been referred to, but we cannot blame him for this—we cannot even blame Errol Flynn. I should like the Minister to tell us what we are paying in the world markets when we buy sugar in tens of millions of tons. In Mauritius, we may pay £2 10s. or £4 a ton for 1½ million tons of sugar. But we buy in other places, including Fiji and Barbados. I am almost sure that prices are falling and I should like the Minister to state what methods are employed by this stilted and artificial mechanism of the Sugar Board if the world price falls by 1d. or even ¼d., or if it goes up by a 1d. or ¼d. Is it a fact that we have the dearest sugar in Europe? I hope that the Minister will tell us.
  If the Government wish to maintain their stature and standing in the public esteem they will have to "come much cleaner." They must explain to the women in the shops how and why they are paying more to fill their shopping baskets. I emphasise that in no way do the Opposition attack the Commonwealth Sugar Agreement. We stand foursquare by it. We are attacking not the way in which the Government are buying their sugar, but this curious Commonwealth mechanism called the Commonwealth Sugar Board. We want to know how it is that the Government are buying sugar more cheaply year by year while my wife and other women are paying more for sugar in the shops. It is the most comical and foolish set-up imaginable.
  It is a good thing to stabilise buying conditions over the years, but we are not even doing that in some cases. We are buying more cheaply but we are charging more for sugar here. It is a very queer set-up. We spent 40 hours in Committee, two years ago, discussing the whole business, but we still need to have the whole matter explained to us. The cost of living is going up. The Minister will have to explain to us, the watchdogs of the public, exactly why this has happened. I hope that he will do that.
  10.22 p.m.
  The Joint Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. J. B. Godber): I have listened
  1136
  with interest to the comments of the hon. Member for Sunderland, North (Mr. Willey) and the hon. Member for Rugby (Mr. J. Johnson). I will try to deal with the points they have raised.
  I was very glad that at the outset of his remarks the hon. Member for Sunderland, North made it abundantly clear that he was not saying anything against the Commonwealth Sugar Agreement. His hon. Friend supported him in that. I will take up first the points raised by the hon. Member for Rugby. He seemed to have some misapprehensions about the operation of the arrangement. I am not saying that in any critical way, because the matter is extremely involved.
  The hon. Member said that we were buying cheaply from the least developed places for the benefit of those who were better off. I think that he was a little wrong there. I know the concern the hon. Gentleman has for the underdeveloped countries and I understand his views on that subject, but I can assure him that we are doing exactly the opposite. We are guaranteeing and maintaining the standard of the sugar producers in the Commonwealth. That is the purpose of the Commonwealth Sugar Agreement. We are not buying more cheaply from them.
  The hon. Gentleman asked about the price. Last year, I said that we were paying from £43 16s. 8d. per ton under the Commonwealth Sugar Agreement, Since then, in the code on which this is worked, we have agreed, as from 1st January this year, to increase that by another £1 5s. 4d., which represents an increased cost over the period. So, in fact, we are paying through the Sugar Agreement a higher price than we were paying last year. Most of the benefits of the increase will go to producers in the Commonwealth countries, but there are arrangements in relation to our home producers, too.
  I am sure that the hon. Gentleman will be happy to have that reassurance that the intention of the Commonwealth Sugar Agreement has been fully carried out and that this country's interest are being fully safeguarded. That is the purpose and the basis of all we are doing today. It is true that the world price has fallen, but we are protecting the producers from the effects of that fall. That is the exact reason why this increase

  1137
  in surcharge is being brought about. Since we debated this matter a year ago the world price has fallen by a considerable amount. The result has been that over the last twelve months the retail price has gradually dropped.
  Although he studies the Grocer, the hon. Member for Sunderland, North failed to make that point. I have the prices given in the Grocer during the whole of 1958 and up-to-date in 1959 before me and I notice how judiciously the hon. Member picked his prices. I do not blame him for that. It is a perfectly fair debating practice, but he will see that there was a gradual drop, representing about ld. on a 2-lb. packet, from the last surcharge to the present change.
  Mr. Willey: Will the hon. Gentleman make a very simple comparison of the price he quoted in the House when we last debated sugar and the price quoted in the Grocer now? He will see that it is ½d more.
  Mr. Godber: I am just coming to that; the hon. Member is too anxious. The price I quoted then was Is. 3½d. to 1s. 5½d. per 2-1b. packet. The price for similar grades of sugar on 9th February was 1s. 3d. to 1s. 6d., so the gap has widened between the minimum and maximum in that twelve months. If one takes the bottom range it is ½d. per 2 lb. cheaper and if one takes the top range it is ½d. per 2 lb. dearer and the average is exactly the same.
  Mr. Willey: Will the hon. Gentleman agree that 1s. 6d. is the price to which it has gone up? Will he look at the three figures I gave for granulated loose, which showed a clear increase of ½d. to 1d.? He will see that the relevant price in any case is 1s. 6d. because 1s. 3½d. is charged in shops which are still charging the old price. If he looks at the three figures the hon. Gentleman will see that it has gone up by Id. on the amount of the surcharge.
  Mr. Godber: We must get this right. I am quoting exactly comparable figures, as the hon. Member asked me, to those I quoted last year. Therefore, I am sticking to the simple bracket over the period.
  The prices in the Grocer of 9th February were 1s. 3d. to 1s. 6d. I do not accept the contention of the hon.
  1138
  Member that 1s. 6d. is the general price. It is the price for the top range. There is a substantial range of prices in different grocers' shops because, as the hon. Member knows, grocers use sugar as an incentive to people to come in and buy, and 1s. 3d. is the relevant price. The Grocer quoted these varied prices throughout last year of 1s. 3½d. to 1s. 5½d. and now 1s. 3d. to 1s. 6d., so I say that the average is exactly the same as last year.
  It is interesting to note that the drop over the last twelve months represented the comparative drop in world prices. That is exactly what the Commonwealth Sugar Agreement was intended to do. It is no use the hon. Member paying lip-service to the Agreement and then protesting at the price produced. That is what it was intended to do and it is perfectly right that that should happen if, as the Sugar Act imposes on us as a duty, we are to see that these costs are passed on to the consumer. It is perfectly fair and right and a very good example of the operation of the Sugar Act in practice that it has had exactly that effect.
  This additional surcharge of ½d. has restored the position to what it was a year ago, thereby safeguarding the position of the producers, with whom the hon. Member for Rugby is rightly concerned, in a condition of falling world prices. This is doing exactly what the hon. Member wants us to do and it is a vindication if one were needed of the operation of the Sugar Act and of the wisdom of the Government. I am sure that is something which hon. Members ought to be conceding to us gladly with both hands instead of making this rather niggardly approach at the present time.
  The hon. Member for Sunderland, North also asked me a question in relation to Tate & Lyle margins of profit. He chided us gently for the fact that there was this arrangement with Tate & Lyle. I think that it was a very right and proper arrangement, of which everybody is fully aware. The undertaking which was given by that firm to the Chancellor of the Exchequer in December, 1956, limits the margin to 9s. per cwt., based on the costs in August, 1953, and brought up to date by the movement of the Board of Trade indices. This is scrutinised by professional accountants, and, in fact, the limit of the refining margin limits that profit.

  1139
  Any extra profit can only be made by buying under the average price or by processing above average efficiency. The accountants have certified that the permitted margin has not been exceeded, and Tate and Lyle's profits have not risen as a result of that operation. I assure the hon. Gentleman that these margins are being properly controlled.
  The hon. Member mentioned that we were eating less sugar. We may be eating a little less, but that is because of the wonderful variety of food which is available to the consumer in this country under a Conservative Government. The housewife has such an abundance from which to choose that she has been adequately sweetened by the policies of the Government.
  Hon. Members have also referred to the changes that have occurred in the Cuban scene. Of course, they are matters which could have an effect on the sugar market. I readily concede that. It is because of the uncertainty here that no change has been brought in before.
  Mr. J. Johnson: Could the hon. Gentleman tell us the amount of Cuban sugar imported, in hundredweights or in millions of tons, as opposed to Commonwealth sugar, and also say what we are paying for Cuban sugar as opposed to Commonwealth sugar?
  Mr. Godber: We import just over 1½, million tons of price-guaranteed Commonwealth sugar a year. There is an additional usage which is not necessarily obtained from Cuba, amounting to half a million tons. Then there is home production which is at the moment running at a record level. It will be over 700,000 tons this year, which, I should think, will be a record. There is free world sugar, some of which is represented by Cuban sugar. Only a small proportion, certainly not more than 10 per cent., of our requirement is met by Cuba. Of course, it is Cuban sugar which dominates the world market and sets the world price.
  As to the price of Cuban sugar, it is at present at a low trough. Yesterday's price was 3·12 cents per lb. on New York, which is below the lowest price under the International Sugar Agreement.
  Mr. Johnson: Could the Parliamentary Secretary give that in pounds sterling per ton?
  Mr. Godber: Off the cuff I might give an unreliable figure, and I should not wish to do that. It would represent a price substantially lower than we are paying under the International Sugar Agreement. At a guess, it might be below £30 a ton, but that is pure conjecture.
  The importance of Cuban sugar, as I say, is the fact that it sets the world level of prices. Hon. Members will see the value of the Commonwealth Sugar Agreement to our producers in the light of these very low levels of prices which exist at the moment.
  I hope that I have said enough to show the value of what is being done, and the wisdom of the present move by the Board in imposing this further ½d. surcharge in the interests of the proper working of the scheme. Although one cannot cast one's mind too far ahead, I hope that we shall be able to continue this present level—providing there is no wild change in sugar prices—for a considerable period. We have to try to make alterations as seldom as possible, because they have a disturbing effect. It is for that reason that the Sugar Act says that there shall be six-month intervals.
  I trust that what I have said will make hon. Members realise that the Board has given proper consideration to this matter, and that my right hon. Friend has brought forward this Order on the Board's advice as being a proper implementation of its duties. I might add that I have just been able to work out my sums a little more closely. I gave a figure of something under £30 to ton. I have since been checking it in my head, and work it out as £28 2s. 6d. a ton—so I was not very far off the mark.
  I am grateful to hon. Members for what they have said in relation to this subject. It has enabled me to explain this very complicated Order. I can quite understand any hon. Member not fully understanding it, but, in view of what I have said, I hope that the hon. Member for Sunderland, North, may feel willing to withdraw his Motion.
  10.36 p.m.
  Mr. Willey: Like the Sugar Board, the Parliamentary Secretary seems to be a rather good calculating machine, and I congratulate him for getting his result before sitting down. He has not satisfied

  1141
  me, and I am sure that he would be very surprised if he thought that he had. The housewife still cannot explain—
  Mr. Speaker: I do not think that the hon. Member can make a second speech.
  Mr. Willey: No, Mr. Speaker. I was about to explain that in spite of the fact
  1142
  that he has failed to satisfy the housewife, we have to recognise that the Board has imposed on it under the Act an obligation. Recognising that, we do not think that it would be right to press this matter to a Division, and I therefore beg to ask leave to withdraw the Motion.
  Motion, by leave, withdrawn

  ROYAL NAVAL BARRACKS, DEVONPORT (BOOKSTALL)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Brooman-White.]
  10.37 p.m.
  Miss Joan Vickers (Plymouth, Devon-port): I am particularly pleased to see my hon. Friend the Parliamentary and Financial Secretary to the Admiralty here tonight to answer me, because when I last spoke on the Adjournment he answered on behalf of the Minister of Defence and I know that he is very sympathetic and understanding in these matters.
  I am glad to be able now to raise this subject, because it is one of great importance to a number of people in the Services, and also to my constituents. The change in the ownership of the Swiss bookstall not only affects the livelihood of several people but changes a tradition of over half a century.
  The history of the case is as follows. A Mr. Swiss, a Devonport man, was asked by Commodore Fisher in 1904 to establish a bookstall in the Royal Naval Barracks, Devonport, and, since that date, this stall has been run by the same family. The founder, Mr. Swiss, had two sons, Mr. W. W. R. Swiss and Mr. H. H. Swiss. The former worked for 40 years, and the latter died in March, 1958, at the age of 85 years, having worked there since he was a boy. The present owner, Mr. A. W. Swiss, has been employed since 1939. He served during the war in the Royal Army Service Corps, and on being demobilised took over control from his uncle.
  On the death of the later Mr. Swiss, the present Commodore wrote as follows:
  "It is difficult to think of the Bookstall in the Royal Naval Barracks without him and I feel sure there are many members of the Devonport Port Division, in all parts of the world, who would wish to be associated with me in this message of condolence."
  At this time, the Admiralty had given no notice to the executors. The will had divided the property between Mr. Swiss and a Mr. Mounford, who had been employed by the family for 24 years, and, as Mr. Swiss was a relative, being a nephew of the deceased man, the execu-
  1144
  tors—one of them, a Mr. L. M. Baxter, being also the chartered accountant of the firm—asked him to carry on. They had the right to do this, in view of the will.
  All this happened in March. On 10th September, it was decided to advertise for tenders. This was advertised on twelve occasions, six times in the evening newspapers and six times in the morning newspapers. According to the advertisement, there was no obligation on the Admiralty to accept the highest or any other tender resulting from the advertisement. It was not until 20th December—rather a long gap from 10th September—that Mr. Swiss received a letter from the Commodore stating that his tender, which had been dated 29th September, 1958, had not been accepted and that the N.A.A.F.I. would be taking over the bookstall. No mention was made of any compensation for the goodwill which had been created for over a half a century. It was not even stated that the tender offered by the N.A.A.F.I. was more advantageous. Furthermore, it was stated that the arrangements might not be completed in time to allow the N.A.A.F.I. to operate by 31st January, 1959, and the letter added.
  "If you apply to continue to run the bookstall until the date of transfer, which is to be no later than 28th February, 1959, there would be no objection."
  A cheque had already been paid for the rent up to June, 1959, and four months' rent was then returned to Mr. Swiss.
  I suggest to my hon. Friend that he should sympathetically reconsider this decision, for the following reasons. I understand that the tender placed by Mr. Swiss was £200 a year, £100 of which goes to the cashier in the Dockyard, which helps the taxpayers, and the other £100 of which goes direct to welfare funds. He also offered 5 per cent. of all turnover over £5,000 a year, which he estimates to be about £500 a year, to welfare. I understand that the N.A.A.F.I. offered 6 per cent. on all turnover to welfare, including 1½ per cent. to the Royal Naval Benevolent Trust and one-fifteenth of 1 per cent. to the Fleet Club. There does not therefore appear to be much difference in the overall offer, except that the taxpayer would gain a little from Mr. Swiss' offer because £100 would go direct to the cashier in the Dockyard.

  1145
  I think it is fair to say that the service given by the N.A.A.F.I. in this respect cannot quite compare with that of the Swiss bookstall, although it has a very good club in my constituency and does an excellent job there. Mr. Swiss is able to have a far larger range of goods, in addition to periodicals and newspapers. He has a car and a telephone and he can go out and buy various goods which are needed by Her Majesty's Services. He buys goods for the wives and children of the men. Indeed, he does a trade in a number of toys, for which he finds support and which I understand the N.A.A.F.I. does not wish to take over. He also obtains presents for the sailors' sweethearts. Apart from the periodicals and newspapers, he handles, in all, twenty different kinds of goods.
  Furthermore, he is able to cash cheques. He can accept the pools winnings, which I gather are often offered to him, and he can take naval pay allowances. He has means of cashing various tax rebates and naval allowances which are handed to him, and I understand that no one else at the Royal Naval Barracks offers this service. The Swiss bookstall is open on seven days a week and he delivers newspapers. Mr. Swiss employs a man at 25s. a week to deliver to the other Royal Naval Messes.
  I do not know the service offered by the N.A.A.F.I. in this respect, but if it is to be judged by the other organisations which the N.A.A.F.I. runs, then these are closed from noon on each Saturday until 7.30 a.m. on the Monday. Mr. Swiss is open for the sale of papers on a Sunday, and I think it is true to say that the N.A.A.F.I. does not have a Sunday service.
  I have two letters here from the National Federation of Retail Newsagents, Booksellers and Stationers. The Federation fully supports Mr. Swiss, and the letter says:
  "This National Federation, representing 30,000 retail newsagents throughout the British Isles, is fully behind Mr. Swiss."
  It goes on to say:
  "In the normal way, when a man establishes a retail business in leasehold premises and the lease expires, the business remains his property and he can transfer same to neighbouring premises, but in this instance, of course, there is no question of him being able to do this and the N.A.A.F.I. would, in
  1146
  effect, be handed a ready-made business 'on a plate'—a business which, in ordinary circumstances, they would have to a pay a considerable sum of money to obtain. No wonder they can be over-generous with their tender."
  It is not for me to say whether the N.A.A.F.I. has been over-generous with its tender, but that is a point which should be borne in mind.
  Devonport is an area with much unemployment where it is difficult for old people to find jobs. The loss of the business would mean that Mr. A. W. Swiss, at the age of 50, who has worked there for many years, Mr. Mumford, who is about the same age and has worked in the firm for 24 years, and the widow of Mr. H. H. Swiss, will be without livelihood. The widow receives some benefit from the stall, and her income would be reduced.
  I hope that I have, by putting the plain facts before him, given my hon. Friend an opportunity to consider this matter, as I am sure he will, in a sympathetic way. I know his great interest in these matters, and I am very grateful to him for going down to Devonport personally—I appreciate that he did not go just for this purpose—to see the Admiralty dockyard and the work of the Service there after so recently taking up his new office.
  10.48 p.m.
  Sir Henry Studholme: I intervene briefly in this debate because I live in and represent the neighbouring constituency of Tavistock, and I know something about this matter. It is really a case of hardship. My hon. Friend the Member for Plymouth, Devonport (Miss Vickers) has put the facts so well that I need say no more about them. I wish merely to put two questions.
  First, have there been complaints during the last 55 years about the way that this bookstall has been run? From the inquiries I have made, I understand that there have been none. Secondly, do the sailors like this bookstall, and does it provide a service which they appreciate? My information is that it is immensely appreciated by the sailors. If the answers to those two questions are as I have given them, why have these poor people been treated in this very arbitrary way? It does not make sense to me. As far as I can understand, no one on the spot wants them to lose their business. If the Swiss family lose their bookstall, as

  1147
  my hon. Friend said, three people will lose their livelihood and the business which they have built up over many years by hard work and enterprise. It is the sort of enterprise of which I thoroughly approve, and I hope that my hon. Friend will treat this case with the common sense and humanity which I know he possesses.
  10.49 p.m.
  The Parliamentary and Financial Secretary to the Admiralty (Mr. C. Ian Orr-Ewing): I am grateful to my hon. Friend the Member for Plymouth, Devonport (Miss Vickers) and to my hon. Friend the Member for Tavistock (Sir H. Studholme) for raising this matter, and I do not in any way dissociate myself from the broad history which my hon. Friend the Member for Devonport has sketched. It is a curious coincidence that I seem to move around the Ministries in order to be just in time to catch her Adjournment debates. The only such debate I ever had when I was at the Air Ministry came just before Christmas, and she originated that, and the only Adjournment debate that I have so far had in my new capacity is again hers.
  I will say straight away that, had the N.A.A.F.I. decided to take over this stall it would certainly provide the same service, the seven-day service and Sunday paper service which was provided previously. This matter has attracted a certain amount of publicity. I have had many Press cuttings from national and local papers about it. I think that this interest comes from a certain emotionalism about the theme of the big, tough Goliath trying to smash the small David. But this is a travesty of the true facts.
  It is true that the N.A.A.F.I. is large, but I hope to show that it is neither tough nor soulless. It is an immense organisation, employing about 25,000 people and having 1,700 trading establishments. It has a tremendous turnover. I was truly amazed to learn that the N.A.A.F.I. has a turnover of over £56 million each year. From this sum, however, the Services benefit from the rebate on the portion derived from trading with individual members of the Forces, and this rebate provides an annual sum for the services of £1·1 million, which also is substantial.
  I should like to outline the job of the N.A.A.F.I. This organization was
  1148
  created and is controlled by and for the Services. Its job is to provide service in any part of the world where British men are serving. Many of these places are, one must face it, totally uneconomic. Only a few months ago I was in Christmas Island where I saw the admirable arrangements which the N.A.A.F.I. had made there. I spent a whole evening in the N.A.A.F.I. Club. It was in every way admirable and it seemed to meet with a great deal of support.
  The N.A.A.F.I. has to open its doors in some unpleasant and very difficult places—in the Persian Gulf and Bahrein, for instance, where it is doing a first-rate job. It is to finance these difficult and uneconomic places that it becomes essential that the N.A.A.F.I. should have an opening in the more remunerative and more pleasant places. Therefore, it can be said broadly, that it must have the smooth in order to finance the rough.
  The Services derive substantial subsidiary advantages from the main job of the N.A.A.F.I. Because the N.A.A.F.I. was created for them, Service men and women derive considerable benefit. In the case of the Navy, we get from the rebate no less than £235,000 every year. All of this sum goes to the benefit of the sailors. One-fifth of this rebate goes to the Royal Naval Benevolent Trust, a charitable institution which does a variety of welfare work, largely amongst the dependants of past and present members of the lower deck. The remaining four-fifths of the rebate goes to ships' and establishments' welfare funds.
  One might well ask where all this vast sum goes and how it is controlled. Its allocation is broadly in the hands of an elected welfare committee on every ship and at every establishment. Each committee chooses on which of a large number of amenities it should spend the money. Some is spent on entertainment for ships' companies and dances and some on entertainment by providing television and radio sets and dart boards and the like. For outdoor recreation, a certain amount goes on gear for a wide variety of sports.
  We have had, both in this House and in another place, debates touching on the N.A.A.F.I. by virtue of the matter of the Malcolm Clubs. No one would suppose that any big or small organisation is perfect, but there is a proper

  1149
  way of remedying dissatisfaction, if there is any, with the N.A.A.F.I. In the first instance, action should be taken by the individual sailor registering a complaint or suggestion with the local N.A.A.F.I. manager. Secondly, there is an elected welfare committee with each ship and establishment of every command. In addition, each command has its own welfare committee drawn from the people in the lower stage welfare committees. Finally, a man from each command serves in direct liaison with N.A.A.F.I. headquarters, so that he can bring right to the centre complaints coming from the circumference. That is the sort of democratic control which should exist in an organisation created for the men.
  I was rather amused to find a most apt quotation which came from the lower deck from a C.P.O. at Plymouth elected by his colleagues to represent their interests at N.A.A.F.I. headquarters. He said:
  "I have looked for a thought to leave with the lower deck in the light of my 18 months' experience, and I should like to say this: A regular stone thrown at N.A.A.F.I. is that it is a monopoly. In this there is some truth, but even economists state a monopoly need not be a bad thing (and come to think of it, if N.A.A.F.I. belongs to us, then we are the monopolists)."
  The significant thing is, of course, that it belongs to them, and that should always be recognised.
  As to the future, with the run-down and reshaping of our smaller all-Regular Armed Forces, N.A.A.F.I. has an immense task. Its first job is to match for the Service man the ever-rising standards which he would get in civilian life. The second job is to replace the old type of N.A.A.F.I, institutes with more modern social clubs and replace with self-service shops, with a very wide variety of goods, the old, much simpler N.A.A.F.I. counter.
  During my two years at the Air Ministry I visited more than 100 R.A.F. units and, in most instances, saw the N.A.A.F.I. for myself. Invariably, I asked questions about it, and I think that hon. Members would agree that there are not a great many complaints. There are some, of course, but there is a certain broad satisfaction. I found that it is in every way matching up to the challenge of new requirements. In the three weeks in which I have been in my present job I have not had all that much time, but I have
  1150
  visited a certain number in the Plymouth and Portsmouth area and again I have been impressed by what I have seen.
  Last Saturday I went to a new type of N.A.A.F.I. at the Royal Naval Air Station at Yeovilton. I thought it first-class, and it is widely supported. If the hon. Lady has visited the N.A.A.F.I. Club in Plymouth she will have found it well-patronised not only by Service men hut by their families and girl friends. That is the way it should be. Despite its size, this large organisation of the N.A.A.F.I. is neither tough nor soulless.
  Tonight I received a copy of a letter from N.A.A.F.I., Plymouth, to the C.-in-C., Plymouth, part of which reads as follows:
  "N.A.A.F.I. is very conscious, however, of the strong emotions which are being aroused about this matter, through articles in the local and national press and otherwise, and it is concerned with the effect which this may have on public opinion, both towards the Royal Navy and N.A.A.F.I.
  N.A.A.F.I. in fact, is subject to two diametrically opposed considerations. On the one hand, it has to provide this sort of facility for the Royal Navy and to expand its trade with the Services; and on the other, it appreciates the embarrassment which may be caused by the impression—however ill-founded—that in so doing, it is in the nature of a juggernaut pushing out a small trader and depriving him of his livelihood.
  After careful consideration, therefore, and hearing in mind particularly the importance of preserving the best possible public relations, the Corporation has decided that it would prefer, with your agreement, to withdraw in favour of Mr. Swiss.
  The Corporation would hope that if this offer to withdraw is accepted, the new tenant should be held to a strict observance of the terms of the contract in relation to the range of goods in which he will be permitted to deal. The Corporation understands that this means newspapers, periodicals, books, stationery, ships' mementoes and a schedule of gift lines. Perhaps you would he good enough to let met know if, having regard to the circumstances, you wish to accept this offer of withdrawal.'
  The Commander-in-Chief tells me he has accepted this offer, and since Mr. Swiss's tender was the best the bookstall will, subject to contract, return to him.
  10.58 p.m.
  Mr. Dudley Williams: It had been my intention to intervene in the debate on behalf of the plea made by my hon. Friend the Member for Plymouth, Devonport (Miss Vickers) for Mr. Swiss and his bookstall. I think that on this

  1151
  occasion, as on most occasions on which I have been brought into touch with N.A.A.F.I., it has behaved in the most magnanimous manner.
  It is greatly to N.A.A.F.I.'s credit that it has decided not to proceed in the way originally indicated, and that it is to withdraw its offer so that Mr. Swiss can continue his business. The greatest credit is due to my hon. Friend the Member for Devonport for raising this subject. It is just another indication of the way in which she always fights in the interests of her constituents.
  11.0 p.m.
  Mr. I. J. Pitman: My hon. Friend the Parliamentary Secretary has very happy Swiss associations, and we all congratulate him on being the first man in our team against the Swiss M.P.s. Here again he has some very happy Swiss
  1152
  associations. As a publisher who is interested not in magazines or newspapers but in books, I know how wise and proper as well as generous is this decision.
  Newsagents selling periodicals have a very small margin on which to operate and any newsagent of this kind, serving a unit, is very dependent on the integrity of that unit to make the business worth while. It is admitted that this is a loss of profit to N.A.A.F.I., but it is in the interests not only of N.A.A.F.I. but of the community which, in a roundabout way, is able to be served by a good newsagent in the way in which it should be served. I thank the Minister and congratulate my hon. Friend the Member for Devonport (Miss Vickers).
  Question put and agreed to.
  Adjourned accordingly at one minute past Eleven o'clock.

SCOTLAND
  Unoccupied Houses
  Unoccupied Houses
  School Attendances (Illness)
  School Attendances (Illness)
  Weir Housing Corporation (Factory)
  Weir Housing Corporation (Factory)
  Schools, Lanarkshire
  Schools, Lanarkshire
  Royal College of Technology and Science, Glasgow
  Royal College of Technology and Science, Glasgow
  Marginal Agricultural Production Grants
  Marginal Agricultural Production Grants
TRADE AND COMMERCE
  Factory, Fforestfach Trading Estate
  Factory, Fforestfach Trading Estate
  Nylon Spinners Limited (Factory Site)
  Nylon Spinners Limited (Factory Site)
  Industrial Development, Kirkintilloch
  Industrial Development, Kirkintilloch
  Export Credits (Indonesia)
  Export Credits (Indonesia)
  Unemployment, Scotland
  Unemployment, Scotland
  Aberdeen Box-making Industry (Contracts)
  Aberdeen Box-making Industry (Contracts)
  Leaflet
  Leaflet
  Rhondda Valleys
  Rhondda Valleys
  Merseyside Development Area
  Merseyside Development Area
  Films
  Films
  Spitz-Hotter Hydrocephalic Valves
  Spitz-Hotter Hydrocephalic Valves
  WORLD PEACE
  WORLD PEACE
  MINISTER OF DEFENCE (SPEECH)
  MINISTER OF DEFENCE (SPEECH)
  THE PRIME MINISTER (VISIT TO SOVIET UNION)
  THE PRIME MINISTER (VISIT TO SOVIET UNION)
NATIONAL FINANCE
  Purchase Tax
  Purchase Tax
  Suez Operations
  Suez Operations
  Tax Collection (Cost)
  Tax Collection (Cost)
  Distribution of Industry (Aberdeen)
  Distribution of Industry (Aberdeen)
  Post-war Credits
  Post-war Credits
  Egypt (Claims)
  Egypt (Claims)
  Exports and Imports (Prices)
  Exports and Imports (Prices)
  Anglo-Egyptian Financial Agreement
  Anglo-Egyptian Financial Agreement
  Wireless and Television Licences
  Wireless and Television Licences
HOUSING
  Landlord and Tenant Act, 1958
  Landlord and Tenant Act, 1958
LOCAL GOVERNMENT
  Brecon Beacons National Park
  Brecon Beacons National Park
  Homeless Families
  Homeless Families
  Central Advisory Water Committee
  Central Advisory Water Committee
  Office Building, Central London
  Office Building, Central London
  Central Land Board (Claims)
  Central Land Board (Claims)
  COLONIAL DEVELOPMENT CORPORATION (FINANCE)
  COLONIAL DEVELOPMENT CORPORATION (FINANCE)
SEYCHELLES
  Airstrip
  Airstrip
ADEN PROTECTORATE
  Federation
  Federation
TANGANYIKA
  Education (Fees)
  Education (Fees)
KENYA
  Detained Persons
  Detained Persons
CYPRUS
  Operational Exercises
  Operational Exercises
NORTHERN RHODESIA
  Kariba Scheme (Displaced Africans)
  Kariba Scheme (Displaced Africans)
EDUCATION
  Local Libraries (Entrance Fees)
  Local Libraries (Entrance Fees)
  Bootle
  Bootle
  National College of Agricultural Engineering
  National College of Agricultural Engineering
ROADS
  Preston By-pass
  Preston By-pass
TRANSPORT
  Canals
  Canals
ROYAL NAVY
  Cruisers
  Cruisers
  Personnel
  Personnel
  Patrol Boats
  Patrol Boats
  Destroyers
  Destroyers
ROYAL AIR FORCE
  Fog Dispersal
  Fog Dispersal
  COUNCIL OF EUROPE (RECOMMENDATION 156)
  COUNCIL OF EUROPE (RECOMMENDATION 156)
  THE PRIME MINISTER (VISIT TO SOVIET UNION)
  THE PRIME MINISTER (VISIT TO SOVIET UNION)
HOSPITALS
  Midwives
  Midwives
  Ambulance Services
  Ambulance Services
  Patients (Rail Travel)
  Patients (Rail Travel)
  Hydrocephalic Children
  Hydrocephalic Children
MINISTRY OF HEALTH
  Motor Cars (Conversion Grants)
  Motor Cars (Conversion Grants)
POST OFFICE
  Premium Bonds (Unclaimed Prizes)
  Premium Bonds (Unclaimed Prizes)

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

DISPOSAL OF HERR KRUPP'S ASSETS
2.35 p.m.
VISCOUNT ELIBANK: My Lords, I beg to ask Her Majesty's Government the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government (1) whether, under a plan agreed with the allied authorities in Germany and promulgated on March 4, 1953, Herr Alfried Krupp von Bohlen und Halbach agreed to dispose of an estimated 74 per cent. of his property—steel, iron and coal-producing assets—through disposition trustees; (2) on what date the five-year period under the disposition procedure ended; (3) whether an extension of the period has been granted, and, if so, what is the wording of the "extension" statement communicated to Herr Krupp; and (4) whether the implementation of the 1953 deconcentration agreement will continue to be urged in accordance with Law 27.]
THE SECRETARY OF STATE FOR COMMONWEALTH RELATIONS (THE EARL OF HOME): My Lords, the answer to the first part of the question is Yes. As regards the second part, the
2
dates were different for each company to be sold. For those as yet unsold, the dates are February 1, 1959, and March 16, 1959. As the noble Viscount will have seen from the statement by the Parliamentary Under-Secretary of State for Foreign Affairs in another place on February 4, a Mixed Committee is to be set up under the provisions of the Bonn Settlement Convention to consider applications for an extension of time. Mean-while, Allied High Commission Law No. 27 remains in force.
VISCOUNT ELIBANK: My Lords, may I thank the noble Earl for his Answer, and take this opportunity to welcome him back on his return from his successful mission to Malaya? Then the House may take it that the efforts of Her Majesty's Government will be directed to seeing that the deconcentration agreement is carried out?
THE EARL OF HOME: Yes, my Lords.
LORD HENDERSON: May I pursue the noble Viscount's question, and ask whether it is still the agreed policy of the three Western Governments that Law 27 and the agreement under the Bonn Contract should be carried into effect?
THE EARL OF HOME: My Lords, I take it that that is so. Certain difficulties have arisen about timing, and I think that is the reason why, as I have said, this Joint Committee is to be set up. Perhaps we could wait to see what the Joint Committee's findings are, and if the noble Lord, or any other noble Lord, then wishes to pursue matters I will give the information.

KNIGHTSBRIDGE TRAFFIC
2.38 p.m.
EARL HOWE: My Lords, I beg to ask Her Majesty's Government the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government what are the reasons for keeping the Queen's Gate and Colebrookdale Gate of Hyde Park closed to traffic; and whether it would not be an assistance to traffic if the Queen's Gate could be opened and a spur road of 200–300 yards constructed to feed in to the road leading to the Victoria Gate.]
EARL ST. ALDWYN: My Lords, my right honourable friend the Minister of Works is advised by the Minister of Transport and the Commissioner of Police that the reopening of these gates, which are in Kensington Gardens, would not improve traffic conditions in this area, and that little improvement would result from the construction of the spur road suggested by the noble Earl. My right honourable friend does not consider that any small improvement would be sufficient to justify the loss of amenity that would result.
EARL HOWE: My Lords, may I ask the noble Earl whether he is aware that there is a severe bottleneck in the road running from Kensington High Street to Knightsbridge, and vice versa, and that the proposal suggested in my Question was designed in order to overcome that? In the meantime, the fact that the gates are shut provides a very useful car park. I do not know whether the Minister of Transport will be putting up parking meters there, or anything like that.
EARL ST. ALDWYN: I am not aware that there is any intention of putting up parking meters in the Royal Park.

THE HANDCROSS BY-PASS
LORD HAWKE: My Lords, I beg to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government when they expect to be finished—

(a) the Handcross by-pass;

4

(b) the dual carriageway connecting that by-pass to Pease Pottage.]

THE EARL OF GOSFORD: My Lords, as your Lordships no doubt know, both these schemes mentioned by my noble friend are on the London-Brighton trunk road, A.23. The Handcross by-pass is expected to be completed by July of this year. The dualling of A.23 northwards from the Handcross by-pass to Pease Pottage has been divided into two sections; the first from the Handcross bypass to Woodhurst, and the second from Woodhurst to north end of the Pease Pottage Diversion. The first of these sections is practically completed and, in fact, both carriageways are now open to traffic. Work on the second section did not start until last month, because of difficulties over land acquisition, and is expected to be completed by April, 1960.
EARL HOWE: My Lords, I understand that the Handcross by-pass itself was started in May, 1956.
LORD HAWKE: My Lords, while thanking my noble friend for his reply, may I say how disappointed the general public will be that the completion date for the Handcross by-pass, which was promised for last December, has now been postponed until next July. While not wishing to press my right honourable friend into any precipitate or unwise action, twenty years does seem a rather long time to take to build one mile of by-pass. Could he not arrange for it to to be ready in time for the Easter traffic?
THE EARL OF GOSFORD: I understand that difficulties over the Handcross by-pass itself (I am talking about that last section) are due to land acquisition, although we are hoping that these difficulties will be resolved in the very near future. However, until they are, there is no prospect or question of completing this section of the road.
LORD HAWKE: Do I understand, then, that the land for the Handcross by-pass itself was not acquired before the war, which was always thought locally to be the position?
THE EARL OF GOSFORD: I regret to say that I have not complete information on that point, and I should be grateful if the noble Lord would put down another Question for answer.
LORD LATHAM: My Lords, can the noble Earl assure the House that drainage will be properly attended to?
LORD DERWENT: My Lords, may I ask my noble friend why we have these repeated delays over land acquisition when land acquisition is carried out by Government Departments, whereas the same delays seldom occur when it is the duty of a local authority to carry out land acquisition? May I ask whether it is not time that the methods of land acquisition used by Government Departments should be radically overhauled?
THE EARL OF GOSFORD: My Lords, I think that that is the subject of quite another question.

PROCEDURE OF THE HOUSE
2.43 p.m.
Order of the Day read for the consideration of the First Report from the Select Committee.
The Committee reported as follows:
1.—DIVISIONS IN WHICH FEWER THAN THIRTY LORDS HAVE VOTED
The Committee have reconsidered the point raised in paragraph 2 of their Second Report of last session. They are of opinion that the amendment there proposed to Standing Order No. 50 does not take adequate account of the difficulty that would arise if a division were held on a procedural Motion and if less than thirty Lords voted in that division, because it is not possible for such procedural questions to remain undecided. The Committee therefore recommend to the House that Standing Order No. 50 should be amended so as to revert to the form in which it was before 1957, but with an amendment to make it apply to subordinate legislation as well as Bills. The Committee accordingly recommend that the Standing Order should be amended so as to read as follows (differences from the pre-1957 version being underlined):—
"If, on a division upon any stage of a Bill, or upon a question for the approving or disapproving of subordinate legislation, less than thirty Lords have voted, the Lord Speaker shall declare the question not decided, and the debate thereon shall stand adjourned to a subsequent sitting: and, if such division take place when the House is in Committee, the Chairman shall declare the question not decided, whereupon the House shall resume, and shall be again in Committee at a subsequent sitting".
2.—STARRED QUESTIONS
The Committee have considered whether the present limit of three starred questions a day gives sufficient opportunity to Peers to put down questions on matters which are of
6
immediate interest but not of sufficient importance to justify a private notice question. The Committee are of the opinion that the present practice does sometimes prevent Peers from putting such questions while they are still topical; and they accordingly recommend to the House that the present limit should be raised to four starred questions a day, and further that no Peer should be allowed to put down more than two such questions on any one day.
3.—DIVISION LISTS
The Committee have examined a suggestion that, in order to save time in the division lobbies, the division lists should be printed in alphabetical order throughout. The Committee agree with this proposal, and accordingly recommend that Standing Order No. 51 be amended by leaving out the words "of the same degree".
THE CHAIRMAN OF COMMITTEES (LORD MERTHYR): My Lords, I beg to move that this Report be now considered.
Moved accordingly, and, on Question, Motion agreed to.
LORD MERTHYR: My Lords, I beg to move that this Report be now agreed to. Your Lordships may expect what I hope will be a short explanation of the effects and meaning of the recommendation in the first paragraph of the Report. Before 1889, there was no quorum in this House for a Division—in other words, no matter how few voted in the Division Lobby a decision was reached. In consequence of representations which then were made, to the effect that some Bills which had been sent up from another place had been decided upon in your Lordships' House, either one way or another, with very few noble Lords voting, a Standing Order was made in that year providing that in the event of fewer than thirty noble Lords taking part in any Division on any stage of a Bill the Question should be declared by the Lord Chancellor or Lord Chairman as undecided and adjourned to a subsequent Sitting. The figure of thirty, your Lordships may like to know, was decided upon because in those days that was the proportion of the total number in this House which was equivalent to the figure of forty in another place. Nowadays, your Lordships will notice, the figures are somewhat different.
I pass to the year 1957. In that year, the Standing Order was altered by your Lordships' House, and since that date the Standing Order requiring a minimum of thirty was made to apply to any Division

7
on any Motion; and, as I have said before, the proceedings were adjourned to a subsequent Sitting. The Committee which now report to your Lordships have gone into this matter and are firmly of the opinion that an unsatisfactory state of affairs is now disclosed. Fortunately, nothing untoward has happened so far since 1957, but I must inform your Lordships of what might happen, though it may be unlikely, on any day from now, unless a further alteration is made.
May I be permitted to give two examples of what I mean? The new Standing Order applies to all Motions, and supposing (if I may put it in this way), the noble Lord, Lord Saltoun, were to get up at this present moment and move that I be no longer heard, if there were a Division, and if fewer than thirty voted, then the noble and learned Viscount on the Woolsack would be obliged (I apprehend without any marked enthusiasm) to declare that the Question of whether I should or should not be heard could not be decided and would be adjourned until to-morrow. I am not at all sure what would next happen. Just one more example. Suppose that at the end of the Sitting this evening, when most of your Lordships might possibly have gone home, the noble Earl the Government Whip were to move the Adjournment, and that there was a Division in which fewer than thirty voted, then the noble and learned Viscount the Lord Chancellor would have to declare that the Question of whether this House do now adjourn was not decided and would be deferred until to-morrow. To-morrow your Lordships would be asked to decide, as first Business on the Order Paper, whether or not the House do adjourn yesterday. I hope that I have said enough to show that there is something wrong here and that something ought to be done to put it right.
What the Committee propose is set out in the Report. I think it speaks for itself, if your Lordships will bear in mind the unfortunate possibility that might happen if this were not done. The Committee went into this matter very thoroughly and considered several different alternatives, but in the end they decided that the only safe course was to retreat from 1957 back to 1889, and to say that in future this rule should apply
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only to a Division on any stage of any Bill—with this one exception, which is new (and your Lordships will see that in the Report the words are underlined as something which has not been included before); that the Committee recommend Chat this Standing Order should be applied to subordinate legislation as well as to any stage of any Bill. The Committee think that that would be the safest course to adopt and recommend accordingly.
I think that I need not say anything on the second point in the Report, about Starred Questions, because I hope that it speaks for itself. But on the last point I should like to say that the effect of leaving out the words "of the same degree", is simply this: that when your Lordships pass through the Division Lobby, the clerk who takes the names of noble Lords, instead of having to think whether a noble Lord is a Duke, Baron, or of other rank, would have only one list, instead of four, to study. In other words, every Member of the House would be put on those lists in alphabetical order, no matter what degree in the Peerage he had attained. I hope that, with those few words, this point will also be clear. I shall, of course, be pleased to answer any questions. Meantime, I beg to move that this Report be now agreed to.
Moved, That the First Report from the Select Committee be agreed to.—(Lord Merthyr.)
2.50 p.m.
VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, I am sure we are all obliged to the Lord Chairman of Committees for the clear explanation he has given of this First Report from the Select Committees. It seems that the matter referred to in paragraph I has been carefully considered, and the only Amendment really to the existing position is the addition of the underlined words. I would say, on behalf of my noble friends, that we welcome this First Report, but I should like to add this comment. We in this House have not quite the strict rules that they have in another place, and we rely upon each other to be honourable in our dealings, so far as our political life will allow us so to do; and I think as a general rule we do that. The only possible question

9
that could arise over this point of Divisions in which fewer than thirty Peers vote would be if, even in fun or for a joke, there was an occasion when sufficient Peers could be found to abstain from a Division in order to secure that no decision was arrived at. So far as I know, there never has been a case like that in history, and I mention it only because it is the sort of thing in which each side of the House has to rely upon the other. Except for pointing out that fact, and assuming that we shall all endeavour to work the Standing Order for the benefit of the whole House whichever Party happens to be seeking the development of Public Business, I am quite satisfied with the revised Order as it stands.
VISCOUNT STANSGATE: My Lords, with the permission of my noble Leader, I should like to ask a question. I was, of course, a member of the Committee and am a party to the Report. One remark made by the Lord Chairman I did not understand. He said that the rule as to a quorum would not apply to subsidiary legislation.
THE LORD PRESIDENT OF THE COUNCIL (VISCOUNT HAILSHAM): Would apply.
VISCOUNT STANSGATE: Would apply. That means to say that a Statutory Rule that comes forward demands a quorum.
LORD MERTHYR: Yes.
LORD SALTOUN: My Lords, the noble Lord the Chairman of Committees referred to me exactly on that point, and I should like to say something about it. I know that I was on the Committee that approved these rules, but it seems to me that if any noble Lord were to move that the noble Lord who was speaking be no longer heard, and if that Motion were to lead to a Division, it ought to be decided by those noble Lords who were in the House hearing him speak. It is ridiculous for a lot of people to come from the Library and insist that the noble Lord be heard when they are not even listening.
LORD MERTHYR: My Lords, most surprising things happen, and I suppose that before long it will be possible for noble Lords speaking in the House to be heard by those in the Library. But that is beside the point. The only matter
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to which I want to refer is a remark made by the noble Viscount, Lord Alexander of Hillsborough. I rather think it was a slip, if I may so call it, but I think he said that by agreeing to this proposed Standing Order we were doing no more than agreeing to the addition of the words underlined. That is not so. If your Lordships agree to do this, we shall be going back to what the state of affairs was before 1957, not before this afternoon. I hope that is now clear. As I say, I think it was only a slip on the part of the noble Viscount, but I wanted to clear it up because other noble Lords were listening.
VISCOUNT STANSGATE: My Lords, is there any procedure in this House comparable with the Commons procedure of counting the House out?
LORD MERTHYR: To the best of my knowledge, there is not. I might say that the quorum for transacting Business in this House is three, and I have heard it said before that there must be a noble Lord on the Woolsack, and a noble Lord speaking, and if anyone else goes in to point out that there is not a quorum, there is a quorum.
On Question, Motion agreed to:
Ordered, That the Roll of the Standing Orders be amended as follows:
Standing Order No. 50, leave out the first line and insert ("If, on a division upon any stage of a Bill, or upon a question for the approving or disapproving of subordinate legislation, less")
Standing Order No. 51, leave out ("of the same degree")
The said Amendments to be printed.

EUROPEAN MONETARY AGREEMENT BILL
2.56 p.m.
Order of the Day for the Second Reading read.
VISCOUNT HAILSHAM: My Lords, I think I should be rather less than human if I did not feel a sense of satisfaction in moving on behalf of the Treasury the Second Reading of this important Bill. "Satisfaction" perhaps is too light a word; I think I might be forgiven in this particular field if I feel a modest sense of triumph. I find it difficult to remember that it is less than twelve months from those three difficult economic debates when we discussed the measures the

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Government were taking to control inflation and the various drains on our gold and dollar reserves. I am now proposing the Second Reading of a Bill which marks one important stage on the road to convertibility. It is, of course, a controversial Bill, and I cannot altogether avoid controversy. But there is one point which I should have thought is beyond controversy, whatever the merits of the policy which the Bill represents. It is probable that we could not have taken this step twelve months ago; and there was no point of time, I believe, when it could have been safely taken during the period of office of noble Lords opposite.
I remember incurring a great deal of criticism during those debates a year ago on claiming that the steps which we were taking were both apt and adequate. Noble Lords in front of me claimed that they were inappropriate; noble Lords behind me claimed that they were inadequate; cannon to the left of me, cannon to the right of me, volleyed and thundered. This Bill is, in my belief, the answer to all that criticism. We have restored confidence in the pound sterling without the controls demanded by the Labour Party and without the savage inroads on our defence and social services which were the inevitable implications of the demands in this House by the noble Lord, Lord Grantchester, on behalf of the Liberal Party. A policy of "Firm, but fair" has paid its dividend; and if, as I believe to be the case, the credit of the Government and not merely of the pound stands higher than a year ago, it is because we did what was necessary, without fear of unpopularity, and because we refused to be panicked into doing what was wrong, even at the expense of resignations from our own ranks.
It is not inconsistent with this attitude that I should say that technically this is a relatively small Bill. We have been accused by the Opposition, who are naturally very jealous of our achievement, of casting aside the substantial safeguards which underwrite the stability of the pound. This we believe to be simply untrue. Over the past five years, for reasons which later in my argument I shall endeavour to develop, experience has taught us that if we had to support a fixed official rate of the pound we had, in practice, to support in addition the
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unofficial rate, too, and our advisers told us that in practice it was easier to support one rate in London than two rates, one of which was spreadeagled between Zurich and New York. So it is not true that we have thrown anything very valuable away, but economics in this field being, as in part I suppose it is, a branch of applied psychology, it remains true that we could not have done it a year ago.
The possession of the weapons which have been abandoned by this Bill would not in fact have enabled us usefully to defend ourselves against a run on the pound. But, human suggestibility being what it is, in the timid atmosphere of a year ago to introduce a Bill like this might very well have provoked one. In any event, the Labour Party when they were in office proved unable to achieve it at all. I say "unable" and not "unwilling", in spite of their criticism of us since. I am willing to credit with sincerity the solemn assurance given to the American Government by Mr. Dalton when he was Chancellor of the Exchequer and said:
"The restrictions now contemplated"—
that was in 1947—
"should not be interpreted as in any degree indicating a modification of His Majesty's Government's oft-expressed view as to the desirability of maintaining full and free convertibility of sterling. As a long-run objective such convertibility is an indispensable aim in British financial policy. The steps presently being taken are to be regarded as purely emergency in character."
We can, therefore, assume that at that time the policy of the Labour Party was one of self-confessed emergency and self-confessed failure and not of any belief in an opposite system.
The Bill raises two closely connected but logically separate issues: first, the ending of the European Payments Union and the substitution for it of the European Monetary Agreement as agreed in 1955, and, secondly, the establishment of a convertible pound, a phrase which, with the permission of the House, I shall use in what I have to say not in the sense of full convertibility but of convertibility for non-residents on current, as distinct from on capital, account. On the face of it, the Bill is concerned only with the former of these two objectives. But the second is more fundamental, for it would not have been necessary to achieve the former unless the Governments of the principal

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currencies involved in the E.P.U. had desired to achieve a measure of convertibility, and, conversely, for various technical reasons which I should be prepared to explain if challenged, but which have not in fact been seriously contested either in another place or outside Parliament, if one once assumes that the time has become ripe to proceed to convertibility, a necessary corollary to the establishment of convertibility is the conversion of E.P.U. to E.M.A. For these reasons the essential question involved in this Bill is as to the desirability or otherwise of the policy of the European Governments, including our own, to proceed along the path of convertibility. It is to this question, therefore, that I shall principally address myself.
The aim of convertibility, absolute and unfettered, has been repeatedly stated by the representatives of both Parties ever since the war. I have already quoted the words of Mr. Dalton when he was Chancellor of the Exchequer by way of assurance to the American authorities in a context in which it was not merely authoritative as a statement of the policy of the Labour Party, but a solemn moral obligation incurred towards our closest ally. Moreover, I think it fair to record that at no time during the recent debate in another place has convertibility as an aim of policy been explicitly challenged on behalf of the Opposition. But my case will be that the argumentation addressed by Opposition critics against this Bill is in fact inconsistent with their lip-service to this long-term aim. The attitude of the Labour Party on this matter appears to be that adopted by St. Augustine of Hippo in his unregenerate days.
"Domine fac castum sed non modo."
("Lord make me chaste, but please not now.")
Mr. Gaitskell appears to admit that convertibility is good (if I may quote Mr. Dalton) as "a long-run objective": but "Do not make the pound convertible now", is his plea. "We cannot afford it", he claims—or at least a Labour Government would not be able to afford it, if there was likely to be one. If one looks at the terms of the official Labour Amendment in another place, one sees that in substance the view of the Party opposite is much more radical. Despite their solemn assurance to our allies and to the electorate, the Amendment was drafted in unqualified terms condemning
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convertibility as intrinsically deflationary and restrictive. For this was the proposition:
"This House declines to give a Second Reading to a Bill designed to implement policies which, through the ending of the European Payments Union and the acceptance by the Bank of England of an obligation to supply gold or dollars on demand to all foreign holders of sterling at a fixed rate of exchange, makes more difficult the achievement and maintenance in Great Britain and Western Europe of industrial expansion and full employment."
After all, St. Augustine, in his unregenerate days, was not really keen on chastity at all. I hope this afternoon to draw from noble Lords opposite an unequivocal repudiation of the terms of this Labour affirmation of unbelief and a return to the nobler doctrine of Mr. Dalton, as expressed to our American allies in terms of a solemn assurance.
In the meantime, it would not be altogether inappropriate if I rehearse in brief the reasons why, as a long-term aim of policy, convertibility is not merely a matter of obligation but of interest to this country. It is a truism that this country lives by its trade. This trade extends to all parts of the world, and if there are any parts of the world to which, for one reason or another, economic or political, that trade does not extend, it is still the interest and policy of this country to extend it there in the end. In terms of trade, the interest of this country is that the total volume of world trade should be as large as possible and that within that volume of trade as large a share as possible should be by, with, from or in (that takes the ablative) this country.
Since the area is widely outside the restricted and, to some extent, diminishing circle of our political sovereignty, the only condition which can fulfil our interests is great areas of multilateral trading with as little restriction or interference as possible. Since the war these conditions have not been fulfilled in Europe. Nor have they been fulfilled between Europe and Asia or between America and the rest of the world. The history of the postwar world has been largely one of gradual liberalisation, punctuated, I am sorry to say, by occasional but happily temporary relapses due to financial crises.
In another place my right honourable friend the Chancellor of the Exchequer rehearsed in detail the main steps which had been taken before by successive

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Administrations up to the present time. In your Lordships' House I may be forgiven for taking a broader sweep, which I hope is not less accurate. Our first postwar relations with Europe were based on bilateralism. Different currencies were categorised as possessing a different degree, in the jargon of the day, of "hardness" or "softness". Thus, French francs were not convertible to Belgian francs or Italian lire and so on. Gradually, however, the European currencies were gathered together in the European Payments Union. European currencies, the distinction between hard and soft at last happily forgotten, became largely inter-convertible, and as part of the arrangement a system of automatic revolving credits was designed to deal with temporary balance of payments difficulties.
My Lords, I am here to bury E.P.U. and not to praise it, but I cannot forbear to say that while it lasted it served a very useful purpose. Even, however, had it not been thought desirable to take a further forward step, I doubt whether E.P.U. could have lasted indefinitely. The temporary arrangements were already wearing thin. The whole system ultimately depended upon the willingness, which could not. at least in my view, have proved permanent, of the permanent creditors, with West Germany at their head, to inject fresh drafts of credit into the revolving drum to keep it on the move. But, even so, the real limitation, from our point of view, in the European Payments Union was the discrimination which the whole system presupposed against the dollar—Canadian no less than American. Our trade is world-wide, not limited to Europe. Our Commonwealth includes Canada but not, I must venture to say, West Germany. The distinction between "hard" and "soft" was abolished in Europe but it persisted in the so-called "two-world" theory which excludes the dollar.
This discrimination was justifiable and tolerable so long as the dollar was a scarce currency in European and sterling area hands. But this is no longer true. Despite several lapses, which we all regret, such as the wool tariff and the Greers Ferry Dam, American policy has ensured that there has been in recent years a continuing efflux of dollars into the rest of the world. In the face of this
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we cannot justify continuing discrimination, nor can we maintain a whole-hearted condemnation of American trading policy. Must I add that, if we wish to preserve the Commonwealth, we cannot rest content with a situation in which we discriminate in favour of the Deutschmark and against the Canadian dollar?
My Lords, I know it is said that by embracing convertibility, we are throwing away controls. But, as I have already indicated, experience has told us that this view is wrong. The controls which we are throwing away have proved by experience to be no real protection to the pound, and I think the House may be interested in the reason underlying our experience. It is inevitable that, whatever the controls which may exist, a market for sterling in time of peace must grow up outside Great Britain. It is no good complaining of such a market, or calling it a "black" market or "grey" market. It is legal in the countries where it is conducted. That means that it will take place. There therefore come into existence inevitably at least two rates, the free or transferable rate and the official rate, which is not free or transferable.
In dealing with this situation, which was not of our making, experience showed us first that if we allowed the transferable rate to sink, foreign traders could use the difference between it and the fixed rate to undercut our own exporters to, say, America by a process known as commodity-shunting, which could be used either for that purpose or for juggling with the two rates of exchange themselves. Experience showed us this could only be disastrous. It therefore taught us that we had to support the transferable rate as well as the official rate if we wished to avoid the evils of commodity-shunting.
But, my Lords, we then tried to work on a smaller margin. We tried to use the transferable rate as a sort of cushion. But again experience taught us that this was useless. We learned that a fall in the transferable rate, even on the smaller margin, inevitably produced a run on the official rate, and it was therefore necessary fully to support both rates within the narrowest of margins. The inevitable conclusion is, of course, that it is easier to combine both rates and to support one only in London than to keep them

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separate and to support two, one in London and one which operates both in New York and Zurich, if nowhere else. From the point of view of control, also, there is no doubt which is the better. This is the whole meaning of the change.
When I am asked why, if this is all that it means, we did not do it before, I reply in simple terms. I reply that our doing so is largely the fruit of the experience which I have been describing. I reply, secondly, that our timing had to coincide with the convenience of our other European partners. I reply, thirdly, that we had to choose a moment when our reserves were strong and our balance of payments favourable in order that we could carry out the change in an atmosphere of quietness and confidence. I reply, fourthly, that we had also to choose a time when the dollar was not unduly scarce; and fifthly, I reply that we were not ready to move on the exchange side until we had made greater progress in removing discrimination against dollar imports, as we did last summer by liberalising chemicals and most types of machinery. All those conditions have been fulfilled to-day and had not been fulfilled before we came to our decision.
My Lords, this has been a long explanation but I hope the House will not grudge me the time. Nevertheless, I feel that I must now draw a few plain blunt political morals. The Opposition have opposed this Bill, although, with a wisdom which we would accept and a convention in this House which we agree with, they probably will not press the matter to a Division here. But it is important to see why they have opposed it, and it is important to demonstrate in the eyes of the public the fallacy underlying their argument. The Party opposite appear to be under the illusion that it is possible to pursue a policy which undermines confidence in the pound without incurring the consequences of that loss of confidence, provided, of course, that nobody actually says in public that the policy is ruinous, and provided, of course, that financial control remains in the hands of the United Kingdom Government. It is important that people should realise in time that that doctrine is nonsense and should also realise why it is nonsense.
Controls are no defence to a currency like ours, if confidence be once undermined. If confidence is there, controls
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are unnecessary; if confidence is absent, they are, in the long run, useless. In 1949, there were all the controls in the world, but they did not avail to prevent devaluation of the pound. In 1951, there were all the controls in the world, but that did not stop a run on the pound, nor what would have been devaluation if the Labour Party had not been turned out of office. In 1957, despite the alleged weapon we are supposed to have thrown away, the ability to control did not restore confidence in the pound: other measures were required and were taken. The Party opposite appear to think that runs on the pound are caused by an identifiable group of wicked men who cause the run on the pound by speculation and can be, as they put it, controlled by controls or threats of imprisonment or penalties. This is pure mythology; it is absolute delusion which, so long as it persists, deprives Labour finance policy of all claim to realism or responsibility.
VISCOUNT ALEXANDER OF HILLSBOROUGH: What about Suez?
VISCOUNT HAILSHAM: My Lords, who are the holders of the pound whose money flies away at a loss of confidence? They are our suppliers to whom we owe money. They are our partners in the Commonwealth, for whom we act as bankers and whom, despite the noble Viscount who leads the Opposition, we cannot coerce. They are our exporters and importers who have to finance the trade by which alone we live, and who, if we control them, will be driven out of business by foreign competition. What is the place of their speculation? When the pound is controlled it is not within our jurisdiction, it is in Zurich or in New York. What is the subject matter of their speculation? In the last resort, it is the demand for the pound sterling to pay for British exports.
In the last resort you can control British currency by "controls" only if you are prepared to dissolve the free Commonwealth, wind up the sterling area and restrict export trade. This is the fallacy of so-called democratic Socialism. Britain is too narrow an area for economic planning, and yet, since the planning is to be based on the State, it is limited to the arbitrary territorial divisions constituting the territories of the State. This is why democratic Socialism has failed in every individual country in Europe. This is why it must also fail in Britain, whose

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interests are based on trade with the Commonwealth, Europe, Asia, Africa and America. There is no possibility of a Commonwealth of independent nations or of Europe accepting a single economic plan. Undermine the confidence of the Commonwealth or the sterling area now, and all the balances will go flying out of the window; and not all the controls in the world will bring them back.
VISCOUNT ALEXANDER OF HILLSBOROUGH: Mischievous!
VISCOUNT HAILSHAM: I know that it is sincerely thought by many simple-minded people, who apparently include some noble Lords opposite, that there are some people in the City of London who could stop all this. I beg them to learn the simple facts of life—the facts of international trade.
VISCOUNT ALEXANDER OF HILLSBOROUGH: You had better start.
VISCOUNT HAILSHAM: All international trade is carried on for credit and on credit. Let me give this House an example which was given in another place. Let us assume a buyer of American goods for which he has to pay in dollars. He has contracted in July and he has to pay before November. It is now, shall we say, August. Shall we mention a year? It is now August. 1949. What is that trader to do? Is he to pay now or in November, by which time the price of the goods will have risen by 40 per cent. and he will be ruined?
VISCOUNT ALEXANDER OF HILLSBOROUGH: Or in 1957?
VISCOUNT HAILSHAM: Or let us imagine a foreign customer of British goods in the same position. What is he to do? Is he to pay now or is he to be undercut in November by a competitor who pays 40 per cent. less? Perhaps the noble Viscount can answer that question?
VISCOUNT ALEXANDER OF HILLSBOROUGH: Elementary.
VISCOUNT HAILSHAM: I will tell the House that if you try to control these transactions you will only abolish the trade on which they are based.
The fact is, my Lords, that the future of this country is bound up with the confidence which it inspires. I personally know of no other mode of inspiring confidence than that of deserving it.
VISCOUNT ALEXANDER OF HILLSBOROUH: Or going to Suez.
VISCOUNT HAILSHAM: This is true of men, and I believe that it is also true of currencies. The pathetic fallacy that controls can defend a currency in time of peace appears to me to amount to the delusion that it is possible to secure the results of confidence without earning it or being worthy of it. Such a delusion is at best nonsense; in economics I believe it to be disastrous folly.
I have not rehearsed in detail all the figures of the reserves or our balance of payments which have satisfied Her Majesty's Government that the moment has now come for a forward move. Nor have I expounded at length the detailed provisions of the European Monetary Agreement which provide discretionary credits in place of the automatic credits of the European Payments Union. I do not share the view that the European Monetary Agreement is restrictionist: it is simply the necessary corollary of our expansionist policy which seeks to place European prosperity, like our own, on the sound foundation of multilateral trade on a world basis. The temporary inequalities which may be encountered from time to time will be ironed out under the agreement. More permanent inequalities must be redressed by international agreements more widely based on a world footing. Such institutions already exist in the International Monetary Fund and the International Bank, and the policies to implement them have already been explained. But to pursue the details of our policy here would be outside the range of this debate. I therefore beg to move that this Bill be now read a second time.
Moved, That the Bill be now read 2a.—(Viscount Hailsham.)
3.26 p.m.
LORD PETHICK-LAWRENCE: My Lords, anyone taking part in this debate must, I am sure, feel a deep sense of responsibility because any words said in mistake may easily be injurious to the prestige and prosperity of this country. Anyone who speaks for one of the great Parties of the State must feel an added responsibility lest by any chance word he misrepresents the situation or makes statements which are not recognised as they should be by the Party for which he

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proposes to speak. I fully share that responsibility. I may say that when this matter first arose I was in close consultation with the leader of the Labour Party and with his lieutenant, Mr. Harold Wilson, who is recognised as the financial expert in another place representing the Labour Party, and who no doubt at an appropriate time will take his place in high office in any Labour Government that may be formed.
Now I want to come down from the cloud-cuckoo rhetoric of the noble Viscount who opened this debate to some simple and plain facts. I am not going to follow his example in showering abuse upon political opponents. I do not think one gets anywhere by that sort of thing, not even in another place, and certainly not in this House. I have no intention of attempting to juggle with him, with his metaphysical arguments and his abuse. I am going to deal with the plain facts. And the plain fact, whether the noble Viscount likes it or not, is that this decision is a step of greater convertibility.
The question is not whether convertibility is a desirable thing—the noble Viscount was perfectly correct on that point, and all would agree: the question is whether the time and the place are appropriate for a further step in convertibility. When we have dealt with all the points which the noble Viscount raised, whether this was a step, or whether it was only doing something that had been obvious from the first but had never dawned on him before that it was the right thing to do, or whatever it may be, we come down to this fact—and it is a fact that everybody recognises: this is a first step in convertibility. And the point I wish to make is that this step is one which places a further strain on our liquidity.
I can go back in my mind to the events of 1925. That was the year in which Mr. Winston Churchill (as he then was) attempted to restore the gold standard in its old parity in this country. I am going to make only a brief reference to this matter. I was one of the very few people in the other House at that time—almost a lone voice—in pointing out the risks that were being taken by that restoration of the gold standard at the old parity. My arguments were, of course, swept aside, just as the noble and learned Viscount will sweep aside, with a mass
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of rhetoric, any argument I put forward to-day, and the gold standard was restored. The consequence of that was vast misery in this country which lasted for years; and finally, at great cost and with great loss of prestige and confidence, the whole thing had to be undone and the gold standard was abandoned.
I am going to say only two things arising from that situation. When that actually happened, in 1931, the leading members of the Party opposite—the Conservatives—claimed that it was all the fault of the wicked Labour Government; that it was due to the policy of that Government and what they had done. Of course it was nothing of the kind. It was the consequence of the wrongful timing of the restoration of convertibility. Another thing they claimed was that we had brought the country to the edge of bankruptcy and that the country was almost insolvent. Nothing of the kind. What had happened was that the country had lost its liquidity, an entirely different thing.
The one gravamen of my charge against Her Majesty's Government to-day is that what they are doing to-day is a gamble in liquidity. Those who know anything about financial questions know quite well the difference between insolvency and a failure in liquidity. They are both very important but they are quite different; and although a great mass of people ought to know those things it is my experience, in my political life, that even persons in the highest places in financial circles have been ignorant on that matter. I am going to give your Lordships one illustration. A man of great importance in his day—
he was then Governor of the Bank of England—the noble Lord, Lord Cunliffe, was going into the matter of German reparations after the First World War. He took the trouble to ascertain what were the total assets of the German nation—their houses, their lands, their docks, their ships and so on. He came to the conclusion that they were worth about £20,000 million, and on that he based his position that they could therefore pay in reparations a sum comparable with that amount. Great man as he was, he failed to see that there was all the difference in the world between assets and liquidity.
What is the position? A private individual may be exceedingly wealthy and may have great lands and estates and

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yet he may be hard pressed for cash. He may not have arranged his affairs so that he has money to meet some immediate liability. Such an individual can get over his difficulty by going to his bank. When the bank is satisfied that a man is quite solvent, and, more than solvent, is very wealthy, the bank will make him an advance to meet his immediate difficulty. So for a private individual who has great wealth, liquidity may not be of very great importance. When we come to the bank, on the other hand, the importance of liquidity becomes greater, because in times past there have been banks which have failed, not because they were not sound but because they had not arranged their liquidity properly. That does not happen to-day, first of all because the banks take a lot of trouble in the matter of liquidity, and, in the second place, because a bank which can show that it is perfectly solvent can go to the Bank of England who will allow it to draw cash. In the last resort, even if the Bank will not do so, the Government of the day will step in to protect any bank which is really solvent from coming to grief over liquidity. It is because the banks know that that the State has a corresponding right to dictate to the ordinary banks a great deal about how they should conduct their affairs.
When we go a step higher and come to the nation, the United Kingdom, the Commonwealth and the sterling area, it is true that there can be some little support by some international fund, limited in amount; and the fact that a nation has applied for that is itself a reflection on its credit and a danger to the confidence which people have in that country. So when we come to the nation, and particularly the sterling area, liquidity assumes an even greater importance. The question is not whether convertibility is in the long run a sound thing but whether the liquidity of this country at the present time is strong enough to bear this new step that Her Majesty's Government have taken. That is the real issue.
What has happened in this case? The Bank of England have pressed on the Chancellor of the Exchequer the desirability of taking a further step in convertibility. When the Chancellor of the Exchequer first came into his high office
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I warned him of the danger of listening exclusively to the Bank of England and to the Bank-of-England-minded officials in the Treasury. I pointed out then, and I say to-day, that it is perfectly right that those highly placed financial individuals should be concerned in matters of finance and should see a problem of this kind from the financial aspect alone; but that it is most desirable that the head of our financial system, who is a politician and a man in contact with human life, should take a human view which may sometimes be in conflict with the financial experts; and that therefore, while he listens to them and should bear in mind their great knowledge and experience, he should nevertheless be prepared to resist them if the time comes.
In my view and the view of the leaders of my Party, the Chancellor of the Exchequer has unwisely allowed the views of the Bank of England to override the human considerations, and in consequence he has, I believe, placed the country in some jeopardy. I am going to make it perfectly clear that I am not decrying the prosperity of this country. It has been built up over the last ten years and, just by way of digression, I would remind the noble and learned Viscount that the position immediately after the war was over was naturally very different from what it is at the present time, and that shortly following the war things had to be done which may or may not be necessary or desirable to-day. But let us put Party aside and say that, over the last ten years, owing to the inventiveness of the people of this country, owing to the business resources and capacity of our citizens, owing to the good work which the great mass of the workmen have put in and owing, if you like, to the wise guidance of, let us say, all Governments since that time—and in spite of our differences with noble Lords opposite there have been considerable measures carried out with the consent and acquiescence of all Parties of both Houses of Parliament, all of which have helped forward our prosperity—we have reached a very considerable degree of prosperity at the present time. That is reflected in our trade and in our balance of payments result. It has been reflected in all those things.
But what we have not got—and this is the whole issue here—is a very considerable reserve. I know that noble

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Lords opposite have said, and it has been said in high places of the Conservative Party, "What a marvellous reserve we have built up! For the first time for a long while it has been over £1,000 million." But we have to remember certain things about that. We have to remember that in some cases we have gone by—I will not say default, but there has been non-payment of amounts due in successive years. We have stood still and not paid those items. In the second place, we have borrowed quite a considerable income from international institutions, which we shall have to repay.
Therefore, when you say we are in a very strong position and have a stronger reserve than ever before, you must take all those factors into account, and also this factor: that while the figure stands fairly high, it is a small figure compared with the mass of world trade at the present time. I believe it is correct to say that the figure of our reserve, when it is reduced by the amounts we have to repay, is considerably less than one month's trade account with the sterling area. That is not a very large balance. I wonder what a bank would think if its liquid assets were such a very small part of the trade which it financed in the course of so short a time. That is the real point. Are the liquid assets adequate? I say they are not. I say that they may be all right, probably will be all right, for another month.
It must be remembered that in the course of the last few years (I am not saying this as any attack on the Party opposite) the Government have been favoured by certain windfalls which I do not think they can really, in their heart of hearts, claim to be due to their particular merits. I believe that even the Prime Minister and the Chancellor of the Exchequer, and I am sure Mr. Butler, have all acknowledged that they have been very lucky. Good luck to them! I do not mind that a bit. But they must remember that twice in the course of the last six, seven or eight years (or whatever it is) they have had two great windfalls in the shape of a complete change in the terms of trade, amounting to vast sums such as several hundred millions a year. Mr. Tuke, the Chairman of Barclays Bank, in the course of his speech went out of his way to call attention to that fact and said that the great prosperity of this
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country and what had enabled it to recover so quickly from its difficulty was due not to the high bank rate, which members of the Government think was their most marvellous discovery, but to the change in the terms of trade.
While the sun is shining like that, the reserves may be ample to meet any loan which at this stage may easily occur. But suppose things go a little wrong; suppose, as is quite likely, the balance of the terms of trade changes against us; suppose we have some foreign imbroglio. I do not want to introduce Party into the matter and remind noble Lords about the Suez crisis; but, quite apart from the merits of that and from whether the action taken was right or wrong or advanced our prestige abroad, it cost a very great deal of money. Suppose some other thing of that kind happened; or, to take a less controversial question, something such as the Korean war. Suppose a foreign country gets into a financial difficulty and at the time it does so it owes us a lot of money. Suppose, as happened in one of the Southern States of South America, a country decides, for a time at any rate, to refuse to take any more or to pay for any of our exports to it. Things of that sort create a great run on our reserves, and we want a very large reserve in order to be able to meet them without a ripple on the surface of our prestige and the confidence in the country.
I say that the sum which is now there, £1,000 million on paper, but considerably less when the debts have been paid, is not enough for that purpose, and therefore convertibility constitutes a strain on our liquidity. That is our case against the Government's action. On that I base my views that their step is unwise and is fraught with grave risk. I am not a Jeremiah; I am not saying that all these things are going to happen, but I am saying that there is a risk of their happening. Pray God, these dangers to our liquidity will not take place! But they may happen, and if they do happen, what is going to be the consequence?
This in essence is not a Party question at all. Whether a Conservative Government or a Labour Government is in power at the time, if there is a run on our reserves and it appears that our reserves are going to be insufficient, what will happen? There will be a great demand; there will be great pressure to take not

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only extraordinary steps but panic steps in order to protect the pound. This decision of the Government is in a sense irreversible. We cannot go back and take this convertibility away, because to do so would in itself show a frightful lack of confidence; therefore this step is practically irreversible. Whichever Government is in power at the time when things go a little to the bad side will be confronted with this issue. The question is, when they are confronted with this issue, will they be driven by the pressure of events and by the demand for panic steps to take action which will be injurious to the prosperity and advance of this country?
We have already seen during the last year that the action of the Government in putting up the bank rate to 7 per cent. has brought stagnation to our industry. It has brought unemployment on a very large scale. Same people will say that the Government deliberately wanted to produce unemployment. I am not saying that. What I am saying is that it has brought stagnation and unemployment. Anybody who knew what was the result of a high bank rate knew that that kind of thing was likely to happen, and the Government either did not believe in it or, if they did believe in it, they were willing to take the risk. I do not want any step that has been taken with regard to convertibility to run us into another risk when a danger of that kind comes.
I know from my knowledge of history and of my political life that there are some people in politics who have not very clean fingers. In remembering 1925, I remember the crisis which arose owing to the bankruptcy of the Kredit Anstaldt. That position was brought about because the City had borrowed short and lent long. The crisis arose and a certain number of politicians thought it a clever trick to charge that on the Labour Government. If evils such as I have described happened to this country owing to this action which has been taken to-day, I am quite sure that there will be some people—I am not charging noble Lords opposite—who will attempt to fob that off on to some wrong action by the Labour Government of the day when it may take place.
My Lords, as I say, I am not a Jeremiah. I am not saying that all this is going to
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happen: pray God it may not! What I do say is that it is a gamble with liquidity. It may come off; or it may not. It may be all right to-day; it may last, or it may not last. If a gambler risks his own money and loses, he pays for his folly; but if the Government gamble with the liquidity of this country and it does not come off, then it is not they who will pay the price—it is the people of our country.
3.51 p.m.
LORD GRANTCHESTER: My Lords, we can admire—as we always do—the detached method of approach of the noble Lord, Lord Pethick-Lawrence; but I am sure he will agree that it is impossible, when discussing a subject like the one with which we are dealing this afternoon, to avoid the implications and influence of the overall policy which a Party such as the Labour Party is advocating. The background of Labour Party policy cannot quite be kept out of the picture.
We support this Bill, my Lords, because of the part it plays in the wider context of moves toward convertibility. I do not find very much fault with the subject matter of the speech by the noble and learned Viscount, except for his reference to my last speech, to which I should like to refer a little later. Of course there are dangers in moving about the world to do business. You may get run over; but if you wrap yourself up and shut yourself up in isolation because you fear to go about in the world, you will surely die of poverty. This comparison is not far-fetched. In isolation, wrapped in by quotas and restrictions, this country, quicker than almost any other, would die a slow death. Members of the Labour Party seek to justify their threats against a removal of restrictions on sterling by stating that this removal would be detrimental to the livelihood of the workers. We feel that the very opposite is the truth. What can damage the livelihood of the workers is what I think the Leader of the Opposition in another place referred to as "rumours and personal judgments about the long-term prospects in this country."
Now, that raises a question not just of reserves, to which the noble Lord. Lord Pethick-Lawrence, has referred, and not even primarily of reserves, but of confidence. In the long run, no reserves

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can withstand the strain if confidence is lacking. My Lords, the Labour Party have only themselves to blame if their policies do not inspire confidence in many quarters abroad which wish this country well. We must have confidence in ourselves, first of all, if we are to hold the confidence of others. If we have not confidence in ourselves no one will have confidence in us. I notice that my noble Leader has put down a Question for Thursday about the travel allowance. I think that the travel allowance in its present very restricted form is a bad advertisement for this country, particularly when we are moving toward greater convertibility. I hope he will get a satisfactory Answer to his Question on Thursday.
Again, in an atmosphere of confidence, the problem of credits, which has been raised as one of the objections to the abolition of E.P.U. and its replacement by the European Monetary Fund, falls into its proper perspective. The limited move taken by Her Majesty's Government in December is a demonstration of reviving confidence in ourselves, and other countries seem to have caught the spirit of this move.
I think the most remarkable feature is that, in spite of all our difficulties since the war, sterling has remained the only really international currency, and it is still the medium in which over 50 per cent. of the trade of the world is done. It has not been replaced by the dollar—and that is a remarkable fact in itself. I think Americans are impressed by this fact, but they still can say: "With a dollar we can go anywhere and it is acceptable. You cannot deal freely with your pound." While this inferiority still exists, and while the German mark is doing better than the pound sterling in facing up to convertibility, this country is not back in the place where it should be with its experience and know-how. So we say that it is not a question of the interests of bankers, or of speculators, but in the interests of the expansion of the industry of this country, which the Labour Party talks so much about; that it is in the interests of every man, woman, and child who has a stake in the future of this country, that we want to see that the pound sterling comes back into the first-class category of currencies.
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What is necessary for this? What is it necessary still to do? I would suggest two things. First, an overhaul of our tax structure. It is necessary to give a forward look. That, I think, can be done only by permitting for taxation purposes adequate depreciation allowances on every form of structure or mechanism. The other matter that has to be dealt with in a revision of the tax structure, in my view, is to give the opportunity of greater personal reward for work. In spite of what the noble and learned Viscount has said, this cannot be done without a reduction in the level of expenditure of Her Majesty's Government. Her Majesty's Government are entitled to credit for some notable achievements, but the noble and learned Viscount will I think himself be ready to agree that there is still a lot to do.
LORD HAWKE: Before the noble Lord leaves that subject, which is an old and interesting study, would he tell us what major economies he would advocate? Up to date he has never told us what they are.
LORD GRANTCHESTER: I have answered that question several times before. The choice of items on which money is expended is entirely a matter for the Government of the day. What we are entitled to say is that the overall expenditure is too high for the proper opportunity to be given for greater personal reward for work. I therefore withdraw nothing of what I said on that subject in the debate to which the noble and learned Viscount referred.
The second matter with which I think it is necessary to deal is a psychological one. It is necessary to get rid of the propagation of envy, of envy of those who are doing better than others. This can be got rid of only when the people who are behind to-day feel that they can catch up by making greater effort to-morrow. In the United States great emphasis is placed on "work and money". Work and money do not fulfil every human aspiration. To-day everybody speaks much of one subject, "raising the standard of living." If we are going to talk of raising the standard of living, a policy of work and money seems the right way of achieving it. We want to create a climate in which every worker feels that he can save and get on without too many hampering restrictions on his enterprise or drain on

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his earnings. With such a spirit prevailing in this country—and the spirit of the country is all-important in this matter of convertibility—we can go out into the world with confidence and command the confidence of others. In such conditions, full convertibility is our right and will be our pride.
In a recent discussion in the United States with some eminent Americans, I said that the attainment of this end of full sterling convertibility was, I thought, of world importance. It is strange that it is considered permissible, even in the Labour Party, to advocate something that is beneficial to other people but that it is a sin in their eyes to advocate something which will do this country some good. The Americans were very blunt with me. They said, "You need not advocate full sterling convertibility for the reason that it will be for the good of the world. You can advocate it because it is in your country's interest." The sooner we can reach this end the better for us and for all. When this is possible we shall no longer need intermediate props, such as the European Monetary Fund, which we are setting up to-day.
4.3 p.m.
LORD LATHAM: My Lords, procedurally we are discussing a Bill to authorise the Government to carry out certain provisions of the European Monetary Agreement. With that, of course, we are discussing the move towards convertibility at the present time, having regard to the present situation of this country in connection with its international obligations. The movement towards convertibility has had one unsatisfactory and unfortunate consequence, in my submission: it has led to the scrapping of the European Payments Union. To-day we face a fait accompli in that respect. The European Payments Union died on December 27 and the European Monetary Agreement was born and came into operation on that date. The Bill before us asks us to give the Government authority to provide the means for carrying out the European Monetary Agreement, but, as I have said, the real subject is convertibility and whether the Government were wise in taking the step they have taken at the present time.
We take the view that the Government have been unwise and imprudent. We
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recognise, of course, that with the inauguration of de jure convertibility the functions of the European Payments Union come to an end. That is a pity, because the European Payments Union was one of the successful—one can almost say, one of the few successful—international financial and economic organisations, one which worked successfully from its very inception. It had the effect of being a clearing house for, as it were, the multilateral payers of Europe. Its essential merit and advantage was that it provided automatic credits to member countries in deficit with other members, and, conversely, member countries in credit with other countries or with a surplus in other countries were required to grant credits to the Union itself. As I understand the procedure, members, whether creditors or debtors, were required to bring the unbalance of payments between them into balance or equilibrium.
An outstanding benefit of this facility was that members could adjust accounts between themselves without having to build up a surplus against one another, any surplus held being automatically loaned to the Fund. This was a wide-ranging advantage in avoiding cut-throat competition with each country endeavouring to export its own unemployment. On the contrary, this facility promoted the liberalisation of trade. There was an absence of the fear, which otherwise would have been present, that a deficit would make for difficulties only to be met with gold. In a shrinking world, such as we live in, all nations need to promote and extend the liberalisation of trade and commerce, not to restrict it. Thus it is that, as a first consequence of convertibility, Europe loses a most valuable financial agency, which has worked successfully since its formation.
The European Monetary Agreement which replaces the European Payments Union is of quite a different character. Credits are available, but they are not automatically available. They can be granted only when the O.E.E.C. decide; and that Organisation is one of the international organisations in which there is a right of veto. So it means that credits can be granted only if there is a unanimous decision by the Council of the O.E.E.C. I think one is not taking too pessimistic a view if one doubts whether very many credits, in those circumstances.

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will be granted. Perhaps the noble Viscount, when he replies, will give some indication as to what it is apprehended may be the likely operation of the European Monetary Agreement, especially as to the facilities which will be granted to debtor countries.
This fundamental change, in our view, will raise all sorts of potential difficulties. The absence of automatic credits is the abandonment of a principle of requiring creditor countries to adjust their balance of payments without impeding recovery but, on the contrary, inducing the expansion of commerce and trade in Europe. So we on these Benches take the view that proceeding to convertibility is unwise for its own demerits, but additionally unwise for the fact that it has led to the scrapping of E.P.U.
I now come to the question of convertibility. I must confess that I was not much impressed by the exercises in dialectics in which the noble Viscount Lord Hailsham, indulged in submitting this Bill. I can recall the statement made by Mr. Hugh Dalton to which the noble Viscount referred. But, to be fair to Mr. Dalton, he made it perfectly clear that the inauguration of convertibility would be done only if the circumstances, both national and international, were propitious at the time. As my noble friend Lord Pethick-Lawrence has said, we are not opposed to convertibility itself; but it must be related, as he so graphically and impressively showed, to our internal and external economic position. Both must be propitious. We must be strong enough, both internally and externally, short term and long term, to ward off any attack that there might be on the pound. In the light of the facts which I shall indicate, it seems to me that no one can say that to-day is a propitious time for Inaugurating convertibility, thanks to, in great part, the inept policy, financial and economic, which has been followed by the Government since 1955. One of the most serious consequences of this decision is that it has left us almost defenceless in the face of any speculation against sterling which might occur.
What does this Government decision mean? On December 27 the Government gave non-residents the right to convert their pounds into dollars at the official rate. Since February, 1955, this has been possible for non-residents by the leave
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of the Bank of England, at an exchange rate which was slightly below the official rate—a difference of roughly 1 per cent. In short, there was optional permissive convertibility at 1 per cent. discount. Some may say that the change which has been brought about is not more than a change from de facto to de jure and de facto. But the change is much more than that. Prior to December there resided in the Bank of England a complete discretion; they could convert or they could refuse to do so. There was no obligation on the Bank of England; they had an absolute discretion. That has now all changed: it has changed into an absolute promise and obligation to convert at the official rate.
Convertibility does not necessarily mean that the pound is stronger; but it does mean that our liability to nonresident holders of sterling is much greater, for now they have an enforceable right. It has been said, in partial justification of this decision, that the City of London will benefit from a transfer to it of certain financial operations and activities. An outside estimate of the value of those, if in fact they are so transferred, is that they would amount to not more than £125,000 a year, which of course is a mere bagatelle. The noble Viscount said that holders of sterling abroad were our customers. That is not the case as regards most of this "hot" money. In the Economic Review published by the National Institute of Economic and Social Research it is stated that the increased reserves are due to the inflow of short-term funds. Mostly they are "return"; that is to say, the "hot" money has returned to the warmth of the higher rate of interest which it can earn in this country. When the rate of interest is not higher than can be obtained elsewhere, then "hot" money will be on the move again.
Let us for a moment look at our external position in relation to this obligation to convert. My noble friend Lord Pethick-Lawrence has dealt clearly and forcibly with this question of liquidity. At December last the reserves of gold and dollars amounted to £1,096 million; they are now £1,111 million. As I have said, the increase has been from the inflow of short-term funds. But that reserve includes, as my noble friend indicated, borrowings or postponement of repayments amounting to no less than £466 million.

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Without these loans and without these aids, the reserves would be down to £630 million, of which I understand nearly £300 million must be repaid within the next three years. So this song and dance by the Government and their supporters at the increase in reserves is quite un-justified—indeed, the increase is largely notional. I would say, in this connection, that in September, 1951, under a Labour Government the reserves were £1,167 million, and there was no debt to be set off against that sum. Now these reserves include balance of payments which have substantially increased largely due to the favourable terms of trade—namely, lower import prices.
We submit that our reserves are inadequate for meeting the liabilities of this country—for instance, the sterling debts, which amount to no less than £3,902 million. At the present time, sterling finances world trade which is equal in total to some fifteen times our reserves. We say, therefore, that, having regard to these liabilities, it is not safe or secure to return to convertibility on this basis. A sterling crisis may arise, not from any defects in the economy of the country but, as was the case in 1955, and again in 1957, because of international speculation against the pound. The Times said on December 29:
"In many ways it would have been preferable for this and other European countries to test the real strength of their currencies and balances of payments by giving more freedom for dollar imports before making their currencies convertible by overseas holders into dollars."
That is a pretty impressive condemnation.
Let me give further evidence of the imprudence of this decision, and here I quote again from the Economic Survey of the National Institute of Economic and Social Research. The Survey predicts that our balance of payments surplus will this year come back from the present high figure to a figure of between £200 million and £300 million—a very material reduction—which will seriously affect the volume of our reserves and our capacity to face external exchange pressures. Another serious consequence is that the move to convertibility will check and restrain industrial expansion and involve the danger of a deepening recession. Our industrial production has fallen during the first nine months of this year, and
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instead of having, as we should have, a pulsating, developing and expanding economy, this move to convertibility will result in restraint and contraction.
The Economic Survey to which I have referred says:
"It"—
meaning convertibility—
"may cause the authorities to be hesitant about expansion."
It certainly will, especially having in mind the lamentable results of the Government's past policy of the contraction of our economy, the proof of which can be seen in the mounting number of the unemployed and, what is not less important, the increase in under-employment; the unused industrial capacity, both of equipment and of labour; of school-leavers lining up in the unemployed queue, having their first taste, I suppose, of the "opportunity State" promised by the Prime Minister; of fewer new factories—the total is down by 28 per cent.; of steel production down by over 2 million tons as compared with 1957, and production down to 75 per cent. of the potential. Then in shipbuilding, new contracts in 1958 were for only 497,000 gross tons, as compared with 2½ million gross tons in 1956.
There is abundant admission of this tragedy of the gathering recession in trade. Almost every bank chairman has referred to it. The Chairman of Barclays said:
"The pendulum has swung towards deflation."
The Chairman of Lloyds:
"The contraction of world trade has something of the appearance of a deflationary spiral."
And the Chairman of the Midland:
"It would be very wrong to shut our eyes to the risk of positive recession."
Faced with this recessionary state of trade, the Government proceed to convertibility which, in my submission, cannot fail to check and slow down expansion which is so essential for the economic health and well-being of this country, based, as it should be, on full employment and prosperity. I should like again to quote The Times of January 28 this year, when it said that it would have been wiser
"if this country's ability to continue full employment with a strong sterling could have been proved before making the pound convertible."

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As I have said, the most serious result of convertibility is that it deprives us of practically all our defences against a sterling crisis in future, leaving only one, or practically only one, weapon or remedy—namely, deflation, with all its grim consequences, its stagnation, unemployment and misery. The Economic Survey, in considering the impact of convertibility, said this:
"The misgivings expressed about convertibility arise because it reduces the defences against speculative movements and against any persistent disequilibrium in international trade."
It goes on to say:
"Moreover, now that convertibility has been granted to foreigners there may be demands from the City and other sections of the public for the further relaxation of exchange control. Concessions of this kind would add to risks of expansion. There is a conflict between domestic expansion and greater freedom of foreign payments."
The Government have come down on the side of greater freedom for the (if I may use the term) pedlars of vagabond money—not all of whom are foreigners—and against domestic trade and its expansion, against full employment and the economic health of the nation.
The Government's decision to make sterling convertible was, in our view, unwise, unnecessary and imprudent. It involves, as I have said, the scrapping of E.P.U. It dismantles our defences against speculation. It will lead to a contraction rather than an expansion of business, national and international. As my Leader said in another place, when this responsibility faces a Labour Government they will do their best to make convertibility work. At the same time, if I may say so, I think they will be resolute in the intention that, in case of necessity, we shall take whatever measures may be proper and effective to defend the pound and to protect the employment and the welfare of our people. We cannot agree to giving this Bill a Second Reading.
4.31 p.m.
THE EARL OF SWINTON: My Lords, I shall be very brief, and if I am less dogmatic than some who have spoken perhaps it is because I was a member of the Government of 1924 with Mr. Churchill, when we returned to the gold standard, and a member of the Government of 1911 with Mr. Snowden, when we escaped from it. I do not know that I
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was ever very enthusiastic about returning to the gold standard—a very respectable thing, of course, to have done. I certainly am not sure that it rests with those who were colleagues of Dr. Dalton to accuse us of undue precipitation in that steady advance up the slope.
The noble Lord, Lord Pethick-Lawrence, whom we always hear with such interest, gave, I thought, a rather odd account of 1931. I do not think he was with us when Lord Snowden was. What is rather remarkable and to be remembered about 1931 is that although the value of the pound had descended to, I think, the lowest level it ever reached (it got down to something like two dollars), in a very short space of time, without drawing a single dollar from the 400 million dollar credit which we had in the United States, the pound had come back to parity; and it had come back to parity really for one reason only: because there was confidence in the pound and confidence in Britain and the Government of Britain at the time.
VISCOUNT ALEXANDER OF HILLSBOROUGH: You abandoned the gold standard.
THE EARL OF SWINTON: The noble Viscount should go, like his noble friend Lord Latham, to Dr. Balogh, at Balliol, and get a little instruction in these matters, and then he will realise that the exchange may come up to parity although you do not hold on to the gold standard.
If I were going to criticise the action of the Government at all, I think I should perhaps express a little doubt as to whether the fixed rate, as against the floating rate, was really a wise thing as they advance towards convertibility. I do not want to be dogmatic about this matter, and much wiser people than myself take the view that we ought to stick to the fixed exchange, 2·78 to 2·82. We have argued this matter very often, in Cabinet and outside it, and some of us have expressed rather contrary views. I am bound to say that I have always thought that the fixed rate was a little bit of encouragement to the speculator.
After all, suppose there is a run on the exchange and there is a real risk of the pound having to be devalued—I do not think there is the faintest chance at the present time. If you maintain a fixed rate of exchange, the speculator never

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stands to lose more than about half a cent or a cent, whereas if the exchange has been at a fixed rate and then there is a devaluation, !he makes a profit of thirty to forty cents. When we were operating exchange control with a floating rate, the speculator who was selling short could be allowed to go for a time and then you could come in with the whole weight of the Exchange Equalisation Fund behind you; he did not know how much money there was behind you. Instead of your being caught short and he being underwritten by the fixed rate, you caught him short, and he got such a shock that he would not be likely to do it again. However, that is a matter of opinion.
What I have no doubt at all about is that the Government were perfectly right to act when they did in this matter of a further advance towards convertibility. I would assure my noble friend, Lord Pethick-Lawrence, as a very old friend of the present Chancellor of the Exchequer, that he does not listen only to the Governor of the Bank of England—though he is quite a good person to listen to. I have never known anybody who took a wider range of consultation and advice, and who listened to more people and also had a pretty good common-sense view of his own which he is not at all inclined to give up to other people.
I understand that the noble Viscount the Leader of the Opposition is going to reply. I understand his anxieties. But what would he have done when four or five other countries in Europe were taking their steps towards partial or complete convertibility? The noble Lord, Lord Grantchester, said that one of the remarkable things is that no currency has yet been able to supplant sterling as the currency in which 50 per cent. of the trade of the world is done. That is very remarkable, but would sterling have held that position if we had not taken this further advance? By taking this further advance it is not a case of giving some benefit to a few bankers or financiers: it is bringing enormous benefit to this country—not only to the finance of this country, the insurance of this country, but to the whole trade of this country—when the trade of the world can be done in sterling, and readily convertible sterling.
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I do not know what would have happened. Certainly there could not have been a greater shock to sterling, and to confidence in sterling, than if other currencies had been prepared to make the advance and we in this country had not been. What we have done has given us enormous advantages—financial and commercial advantages and also the advantage of prestige.
On the other hand, I agree that at the same time it makes us more vulnerable. But there are always risks to be taken. If you never take any risk you never get anywhere. If we had not taken that risk (if it was a risk), at a time when certainly we were far more able to stand it than we had been for years, then I think we should have had the certainty of a grave depreciation in the value of the pound. Of course there are risks—it makes us more vulnerable. Here may I say how much I appreciated the tone of the speech of the noble Lord, Lord Pethick-Lawrence. As he said, whilst it makes us more vulnerable, it must make us all more responsible. After all, this is a responsibility in which we all share, in which all our interest is combined. I am quite sure of one thing. The interesting essay which the noble Lord, Lord Latham, read to us struck me as extraordinarily irrelevant, if he will forgive my saying so, because in the long run no form of control is going to save us. In the long run, what is going to save and preserve this country is not control or more control, but the sense of confidence in it in which we must all join.
4.42 p.m.
VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, earlier this afternoon I had no intention of speaking in this debate, but I feel that the manner in which the debate was opened by the Lord President of the Council does not fix an embargo upon me in that respect. I was content to trust completely the sagaciousness as well as the profound knowledge of finance of my noble friend Lord Pethick-Lawrence, and when I saw how few speakers were likely to take part originally I did not intend to speak; but the political oration that we received from the Lord President of the Council makes it inevitable that I make some reply to him. I do not know whether on matters like this he feels that he is speaking as the Chairman of the Conservative Party,

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organising for an Election, or whether he is that very senior Minister the Lord President of the Council in this House. Certainly his references to-day, and the manner in which he spoke about confidence and the like, seemed to me to indicate that he is much more fitted for the post of the Conservative Party Leader at an Election than he is to undertake the kind of task he had to undertake to-day.
I think that this Bill has been explained to the House much more clearly by my noble friend Lord Pethick-Lawrence than by any advocate from the Government Bench. It is not necessary either for the Lord President of the Council or for any Conservative Peer to address us from that side of the House as if he were beginning to teach us elementary facts about financial life. So often it is assumed that we do not know. If the noble Viscount the Lord President of the Council will read his speech to-morrow, when he is at home or somewhere—he read most of it to-day, so I expect it was supplied possibly with a Party headquarters' brief—then I think he will see that we have cause to complain about the manner in which he addressed us.
The real fact of the situation is that there is a realm of financial control which is not Government controlled but which can be very much affected by that lesson in speculating against the pound and margins which the noble Earl, Lord Swinton, gave us just now—a control that ultimately affects the standard of life of every worker in the country. It is no use the noble Lord, Lord Grantchester, or anybody in the House suggesting that it is always a question of a lack of confidence created by the working class in this country, or by the Labour Party representing the working class. We have had too many inquiries and too many facts brought to our notice to be fobbed off with that, either in this House or in regard to the course of the next Election campaign.
How far have we to go back to consider all the rumpus about the leakage which took place concerning a movement in the level of the bank rate? suppose noble Lords have read the whole of the minutes of evidence. I am sure most of them must have done. What do the working class think of that? The Lord President complained about the words in the Amendment moved
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recently in another place and made his attack upon them. Do you think the working class have not understood? Even after two great wars the City financier can still advise somebody in Hong Kong that, while it is anti-British to do it, it sounds sense to sell short, which could lead to a disastrous position for the main population of this country if it is allowed to proceed. I hope that noble Lords will understand that we have strong and deep feelings about it.
The next thing that I think I ought to remind your Lordships about is that it is not to be assumed by Conservative Peers that people on this side of the House have no knowledge of business, We have been much too accustomed to it. I always respect the arguments of the noble Earl, Lord Swinton. I have had much more trade controversy with him than with any of my old friends in the Conservative Party in another place We have fought many a long, wordy and fierce battle. He will not forget the four and a half months we spent in Standing Committee in 1929 on the Companies Bill.
THE EARL OF SWINTON: And a very good Bill it was!
VISCOUNT ALEXANDER OF HILLS-BOROUGH: He brought in some useful Amendments, but not nearly enough, as has been shown since by the numbers of company cases in the courts of law. We were lectured this afternoon by the Lord President of the Council. He might just as well save his time and trouble, because it is perfectly useless.
VISCOUNT HAILSHAM: I am afraid it is—quite useless.
VISCOUNT ALEXANDER OF HILL-SBOROUGH: Now I will come down to the real "brass tacks" on the convertibility situation. I envy my noble friend Lord Pethick-Lawrence, not merely his long years of knowledge of the principles of high finance, but the calm way he has of approaching the matter, which is something to which the noble Lord, Lord Grantchester, paid tribute. But it must not be assumed that because some of us are more explosive in our delivery we do not know just as much about it. The noble Earl, Lord Swinton, commented upon convertibility being more or less forced upon the Government by the fact

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that three or four other countries proceeded first with convertibility.
I draw his attention to the exchange which took place in another place between Mr. Gaitskell and the Chancellor of the Exchequer, reported at Column 1096 of Volume 598 (No. 45) of the OFFICIAL REPORT. Certainly it seems to me—and I accept my Leader's word that it was a matter of information given to him by a high authority in Paris—that it had already been talked about in conversations in Paris between the leader of those representing the Bank of England, and the Bank of France, that these things were to be done. That is a fact; and, reading that passage and the reply of the right honourable gentleman the Chancellor of the Exchequer, I am quite sure in my own mind that it was not absolutely essential to do it—certainly not without further negotiation with those people who were thinking of going in for convertibility. There was no real justification for the timing of this move in the fact mentioned by the noble Earl that certain other countries wanted to go in for convertibility; and, looking at the revelations which have been made in another place about the real state of our reserves, I should say that Her Majesty's Government have departed from the standards that should have been observed.
I was a member of the Cabinet in 1931 and I remember the scene in Downing Street when the Governor of the Bank of England was conveniently abroad and only his deputy was available. Colonel Harvey was called into consultation but was never allowed to speak to the Cabinet as a whole. There were telephone conversations across the Atlantic as to what could be done. As to what was really in the minds of people in the country, I would refer your Lordships to the columns of the London Times of the last week in August, 1931, when the noble Viscount, Lord Samuel (he can look it up for himself) spoke to his own Party in the club after the event. He said that there had been a deputation from Mr. Ramsay MacDonald and Mr. Snowden which had been received by, I believe, himself and Mr. Neville Chamberlain, because Mr. Baldwin was abroad, and that the proposals for dealing with the run on the pound were examined. What was the
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comment the noble Viscount made to his Party? He said that there had been many and courageous steps taken to deal with the situation but that it was imperative that there must be a further diminution in payments to the unemployed. Was there any greater support at all for the remark I made earlier that the manipulation of these high finances is what governs the life, the employment and the standard of life of the workers of this country?
THE EARL OF SWINTON: My Lords, as he is no longer here and was a colleague of both of us, I must say that I think that that is a terrible reflection on Lord Snowden.
VISCOUNT ALEXANDER of HILLSBOROUGH: My Lords, from what I knew of Lord Snowden—and I knew him very well indeed—I believe he would have been the first to say that, with all the things that were said and done, the reflection ought not to be upon Lord Snowden but, as I have just reported, on those who would not accept Lord Snowden's proposals to deal with the situation, as he proposed at that time, but who insisted on further diminutions of the kind I have mentioned. That is the real fact; and I am certain that the disgust of Lord Snowden (as he became) with the treatment that was meted out to him and the change of policy which led to the retirement from the Cabinet of both himself and the noble Viscount, Lord Samuel, speaks for itself, too.
Now what is the fact about the present situation? It has to be borne in mind that if the advice of bank leaders, and no doubt Treasury leaders, is to be taken into account, probably the Government work to certain reasonably, but not wholly, fixed standards. Noble Lords who have read the debate in another place on this Bill will have observed that Mr. Gaitskell said that my Party are not against convertibility, but that it is a question of having convertibility at the proper time, when it does not interfere with our expansion and our employment. He pointed out that when this question of convertibility was raised in 1950–51 he made it quite clear that, whilst we were not against convertibility, our view was that it was absolutely essential that it should not be approached until there was a reasonable amount of gold and dollar reserves with the liquidity of which

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my noble friend Lord Pethick-Lawrence has been speaking to-day. Mr. Gaitskell repeated in another place the other day what he had said in 1950–51. He said that this country had a total reserve of about 3,000 million dollars and he had been advised by the Treasury officials and the Bank that that was not sufficient for convertibility. Has their advice been different this time—and, if so, why? That is the first point.
Secondly, he said that it would not be reasonable, having regard to the things in which the noble and learned Viscount the Lord President has been trying to give us elementary instruction to-day, about the vastness of our world trade and the even wider activities covered by the sterling area, and not wise, in relation to the amount of trade and the exchange business to be done in the sterling area, to proceed to convertibility unless we had at least 5,000 million dollars—and it might be 6,000 million or 7,000 million dollars —if we are to be able to face up to any sudden emergency that may arise, such as my noble friend Lord Pethick-Lawrence mentioned this afternoon.
My noble friend Lord Latham has been taken to task for reading his speech to-night. I do not think it was all read, but I am certainly glad that he took care to prepare it and to examine what are the actual facts about the reserves to-day. They are rather frightening. If one brings the matter right up to the announcement of the last few weeks, the total stands at £1,111 million, from which we have to deduct what we have borrowed and other things of which we have specially to take account. We have to remember that that total has been boosted by getting £177 million for an asset of which this country should never have disposed—the Trinidad Oil interest —and that it includes £75 million in advance under what is now called, I believe, "Adenauer aid". Totalling it altogether, £466 million has to be deducted from the £1,111 million before we get the figure of net reserves as a basis for justification for convertibility.
Does the noble and learned Viscount the Lord President defend it? If so, will be give financial reasons for defending it, in view of the constant advice given to my Government, of which I know, when we were in office, by the Treasury and the Bank? To me there is something
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pretty wrong about this. Why are Her Majesty's Government adopting different standards? Why all this play about "confidence"? One would think, from the noble and learned Viscount, that the question of confidence was largely one of the Conservatives being in and the Socialists being out.
SEVERAL NOBLE LORDS: Yes.
VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, I am glad the noble and learned Viscount takes that point—and if there is any run on the pound it is because of the wicked Socialists. Who caused the run on the pound in 1955?
LORD BOOTHBY: Perhaps I may interrupt the noble Viscount. He is talking as if this Bill establishes convertibility. It does not. It only enables foreign residents to convert at an official rate instead of through Zurich—a difference of 1 per cent. That is not convertibility.
VISCOUNT ALEXANDER OF HILLS-BOROUGH: My Lords, I am glad to hear from a rather independent-minded Conservative Peer that what has been boosted up on behalf of the Government does not seem to exist.
VISCOUNT HAILSHAM: My Lords, I think the noble Viscount should know that. I said that in the first five minutes of my speech, in plain and unmistakable language.
VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, we know perfectly well what the Government want to get out of this. But I am also concerned with the noble Viscount's speech this afternoon. It is an attempt to Create the idea, not only here but abroad, that it is only in the Party of noble Lords opposite, and that Government, that there can be confidence in the defence of the pound. That is what the noble Viscount and his followers are after; one can see that easily. And that is not what we are going to stand for, and not what the people are going to be made to understand during the Election either. That is what was said. It would have been better if he had come down and explained the Bill in the ordinary way; then I should not have needed to speak. But I think it is an insult to the Opposition to introduce a Bill of this kind in he manner in which he introduced it this afternoon.

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The fact is that lack of confidence and a run on the pound do not come only when a particular Government are in office. Perhaps the noble Viscount, with all his great and superior knowledge, will explain what caused the run in 1955; perhaps he will explain the cause of the run in 1957, and how much the policy of the Government in both cases helped to aid that run on the pound. We shall be delighted to hear him explain himself. At any rate, there is one thing I feel, after listening to him this afternoon: I should never be worried about having to meet him in a political debate in any political atmosphere.
Now let me say this. There are those in my Party, and those throughout the country in my Party, who have no need to be ashamed of their love for their country. They have defended it in war, and they are defending it in trade and finance; and it will always be our purpose to do that. But we must form our own judgment as to what it is best to do in the circumstances. I agree entirely with my noble friend who has spoken that the Government have taken this very large step forward (if that description meets the noble Lord, Lord Boothby) towards convertibility—anyway, let us call it that. We do not want to upset things by sudden changes in a policy like that, but let it be perfectly clearly understood that when the Labour Government come in, as they shortly will do, they will, if necessary, take whatever steps are required to defend the pound and, in doing so, to defend the general standard of life and hopes of advance of the working-class people.
5.4 p.m.
VISCOUNT HAILSHAM: My Lords, the noble Viscount who leads for the Opposition has evolved a novel doctrine of intervening in debate. Hitherto our speeches have been designed as a contribution to the debate. The noble Viscount enunciated the thought that what he said was intended as a punishment to me for having offended him in my opening speech. I can assure him, on behalf of my noble friends and myself, that, as a punishment, it failed, because we are always glad to hear from the noble Viscount. Although his arguments are sometimes unconvincing we are always impressed with his unremitting
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zeal and sometimes with the wide range of his irrelevance.
The noble Viscount who leads for the Opposition worked himself up into a great fury and treated us to the bank rate inquiry, without telling us the result, the 1929 Companies Act and the 1931 financial crisis. There is, however, only one remark which I think I should like to make about the relevance of his speech, and that is that we on this side of the House also appreciate the vital importance of the stability of the pound upon the standard of life in this country. That is why we happen to stress the importance of securing confidence; that is why in my opening speech I tried to persuade the noble Viscount and his friends that it was a pure fallacy to suppose that you could secure confidence in our currency unless you deserved it. I did not say—it was the noble Viscount the Leader of the Opposition who said—that the inference to be drawn from that was that when the Labour Party were in they did not have confidence and when the Conservative Party were in they did.
It is of course true, if we are going to speak about the 1931 crisis, that what could be said about it—and many of my generation are really not quite so concerned with the inner history of it as the noble Viscount appears to be—is that the Labour Government of the time failed to secure anybody's confidence either abroad or at home; and this of course rankles with the noble Viscount; but it really is not my fault, so there is no reason why he should get so cross with me about it.
Let us return to the Bill from which the noble Viscount momentarily tempted me away. I am sorry that I appeared to the noble Viscount to be a little didactic, and, I thought, offended him by leading him to suggest that I was tending to cast reflections upon his ability as a businessman. I was not intending anything personal about the noble Viscount. But the failure of the Labour Party to face the moral and economic realities of this present situation has been only illustrated, and not disproved, by the violence and irrelevance of the noble Viscount's own tirade.
May I turn to the noble Lord, Lord Pethick-Lawrence, for whom, as always, I express great veneration? May I point out what, at any rate in my submission to

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the House, is really his complete failure to face the ultimate facts of this case? I began by quoting the words of Mr. Dalton in 1947, and those words included an unequivocal statement to our closest allies as to the desirability of maintaining full and free convertibility of sterling as a long-run objective. In fact, he went on to say that as a long-run objective it was an indispensable aim of British financial policy. What the noble Lord, Lord Pethick-Lawrence, in the course of his extremely temperate speech, if he will allow me to say so—and I quite understand why the noble Viscount the Leader of the Opposition envied his calmness and temperate mode of expression; if I were in the noble Viscount's position I think I should share his envy—did not face is this: those words were spoken twelve years ago. Free convertibility of the pound is a long-run objective. It was announced by the Labour Party twelve years ago. I know that the present Marquess of Salisbury's grandfather once described "the long run" as his eternal enemy; and it appears to me to be the eternal enemy of the noble Lord, Lord Pethick-Lawrence. When does "the long run" come to an end?
LORD PETHICK-LAWRENCE: My Lords, I will answer that: when the circumstances justify its coming to an end. The reserves are not adequate to enable the situation of twelve years ago to come to an end. When they are adequate the situation will be different.
VISCOUNT HAILSHAM: My Lords, I shall return to the question of the reserves in a moment. But the fact of the matter is that we know perfectly well from experience after twelve years that the Labour Party never will find it propitious; and, indeed, the truth of the matter is that almost every other argument presented by the noble Lord himself and by his various friends on the Front Bench would not have the smallest validity or relevance if what he was talking about was not the propitiousness of the moment but convertibility.
This could not have been better illustrated than by the noble Lord's own reminiscence, which immediately followed the passage to which I am referring, of 1925—the return to the gold standard. My noble friend the Earl of Swinton dealt with one aspect of that matter, and
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I am not going to be drawn into it. However, what I am going to say is this: that apparently, if the noble Lord's argument this afternoon has any weight at all, although the Labour Party has gone on record as describing convertibility as a long-term objective and as an indispensable aim of British policy, there never was one moment between the 1914–18 war and the present day, 1959, when it ought to have been put into effect.
This was the only inference that I could draw from the noble Lord's argument; and I am bound to tell the noble Lord—and I do so without any desire to disparage him, because he knows that I recognise, and always have recognised, his knowledge and authority in matters of this kind—that it is no longer morally respectable to go on talking about convertibility as an indispensable aim and objective of British policy and then to say "Not now", "Not now", "Not now". When one looks at the whole period and finds that it is said that, over a period of forty years, it ought never to have been brought into effect, one really must face the fact that the truth is that the Labour Party are afraid of convertibility, and will remain afraid, so far as one can see, in the future. It would be far more honourable of them if they frankly disavowed their solemn obligation of 1947 and said that they now realise that it is quite incompatible with the requirements of Labour policy.
My Lords, I would, in passing, say that, whereas I am not concerned to defend or explain the return to the gold standard in 1925, if the noble Lord, Lord Pethick-Lawrence, had been arguing that case at all I should have thought that he would have found it worth while to differentiate between the return to the gold standard at the then parity (which I think most experts at the present time would now concede to have been a mistake) and a return to the gold standard as a part of convertibility which, at any rate so far as I am aware, most responsible experts at the present time would have thought desirable, although I can see in the House some people who take a different view.
The noble Lord treated us to an admirable disquisition (I say "admirable disquisition" because, unlike the noble Viscount who leads the Opposition, I do not mind learning from the other side) on

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the difference between solvency and liquidity. The noble Lord's case really amounted to this: that the change to further convertibility involved risks to our liquidity. But the noble Lord failed to deal with either of the two main points upon which I rested my case. In the first place, I pointed out to him that, among other propitious conditions at the present time, there was the fact that, for a considerable number of years—in our own case for four consecutive years, but over the world for a considerable number of years—dollars have ceased to be a scarce currency. The strength or the weakness of our return to this degree of convertibility does not, of course, have the remotest relation fo liquidity in general: it has relation only to the availability of dollars, and it is precisely to this point that the noble Lord, Lord Pethick-Lawrence, did not. I think, adequately apply himself. At least, he did not seek to apply himself to the whole kernel of the argument which I was seeking to place before the House.
If the noble Lord will do me the courtesy of remembering it, he will recall that my second point was that, far from having thrown away a valuable "weapon" on this front in the way of controls, experience has shown us that the "weapons" which we have thrown away have, in experience, proved themselves useless to defend the pound. Now that may be right or it may be wrong, but I must say that it is absolutely astonishing that, with all this heat engendered by the Leader of the Opposition, and with all this display by the noble Lord, Lord Pethick-Lawrence, and the noble Lord, Lord Latham, they never once thought it appropriate to advert to this point. The noble Lord, Lord Latham, said that we were leaving ourselves defenceless: but if he had not composed his speech before listening to my argument I venture to say to him, with great respect, that he would at least have found it desirable to answer the point that the defences and the weapons have in fact proved themselves useless over a number of years.
I agree that there may in the future, as both noble Lords have said, be some run on the pound, since the pound depends on confidence. That of course may be so. I agree whole-heartedly with the speech which came from the Liberal Benches in
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that respect. But the point I was making on it was this: that be it so or be it not so, may it come soon or may it come at any particular time, the defences upon which the great pundits of the Labour Party place their reliance are nothing but dummy tanks filled with air, about to deflate themselves at the first sound of battle.
LORD PETHICK-LAWRENCE: My Lords, if the noble Viscount is prepared to give way for a moment, may I say that the reason why I did not answer his speech was because it was not a speech of argument but was a speech of abuse. I do not answer speeches of abuse, and I left him alone for that reason. The answer to his question is this: if he goes a little further in what he says, he will argue that the Government have done nothing at all in this new stop. I am perfectly aware that it is a much smaller measure of convertibility than was made previously. What I say is that it is claimed for it that it is a further step in the path of convertibility which leads to complete convertibility. It is because it is that that I say that it is an extra strain upon liquidity, and I stick to that, whatever the noble Viscount may say.
VISCOUNT HATLSHAM: As regards the noble Lord's first point, I do not consider that it is abusive to say that the weapons we are throwing away are useless: and if the noble Lord (who evidently did not listen to my argument carefully enough) will do me the courtesy to read it to-morrow morning, he will see, I think, that had he desired to make an impression on the House, he would have been well advised to pay attention to the serious propositions which were put against him—
LORD PETHICK-LAWRENCE: If the noble Viscount—
VISCOUNT HAILSHAM: Please allow me to finish, and then I will give way—notwithstanding the fact that they were distasteful to him.
LORD PETHICK-LAWRENCE: The noble Viscount really must allow me to make my speeches in my own way. If the noble Viscount expects me to treat his speeches seriously, he must make a speech which is based on argument, and not on abuse.
VISCOUNT HAILSHAM: If the noble Lord does me the courtesy of reading in Hansard to-morrow morning what I said, he will realise that he would have been well advised to answer that argument; and although I agree that many of my points must have been distasteful to the noble Lord's convictions, there was nothing in the words expressed which was either designed to do the noble Lord a discourtesy or which could be properly described as abuse.
Now, my Lords, I turn from that speech to the speech by the noble Lord, Lord Latham. The noble Lord. Lord Latham, devoted a very great deal of his time to the supposed disadvantage of what he called "scrapping E.P.U." The noble Lord is really under a delusion about the E.P.U. He appeared to think that E.P.U., which was negotiated in 1950, was some institution, as of the Medes and Persians, designed as a permanent clearing house between European nations. My Lords, that is not so. This is another piece of pure mythology. E.P.U. was an agreement designed for an emergency, expressed to be temporary, and a step towards convertibility. Its duration was from two years to two years, prolonged only by agreement; and if the noble Lord had only done me the courtesy of listening to me he would have heard me say that, in point of fact, that agreement was wearing thin and that it was getting out of date. It had degenerated into a situation in which the permanent creditor nations kept it alive by injecting new funds to sustain the credit of the permanent debtor nations.
How long does the noble Lord, Lord Latham, think that that would go on? What kind of respectability would there be in a Government of this country allowing that to go on indefinitely when they were not one of the creditor nations? How can the noble Lord give an account of the European Payments Union without saying in terms that we were under an obligation under E.P.U. to treat this as a step towards convertibility, and to create it into the European Monetary Agreement? These were the terms of the Agreement of 1955, nearly four years ago. The noble Lord is living in a world of his own when he delivers this kind of address to your Lordships.
But since he has asked me a question about its future operation, so far as it would be proper to do so let me tell the
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noble Lord that the likely operation of the Fund depends on the needs of countries in temporary unbalance of payments. The resources of the Fund are 600 million dollars. The noble Lord appeared to think that that was a negligible amount. That is not so. So far only two countries have asked for aid, Turkey and Greece, and both have been granted it. So much for the European Payments Union.
The noble Lord, Lord Latham, like the noble Lord, Lord Pethick-Lawrence, failed to deal with the ultimate proposition upon which this case is based. It is that the pound will be defended, not by these dummy tank defences of control, but by measures designed to support confidence in the pound. There really is no short cut to financial respectability in such a matter. Various rather wild statements have been made about our reserves. We have heard all that kind of thing before. The process is something as follows: you take the real figure of reserves and deduct from it various sums on one side of the account, which you say ought not to count at all because they are not really there, then fail to take into account a number of subsidiary items on the other side of the account which ought to countervail them. Then you say that the sum is much lower than it is.
Our total reserves were in the neighbourhood of £1,100 million at December,1958. At that time they had risen by £435 million from the low point of £661 million reached in September, 1957. It is true, of course, that in this period, the reserves have benefited from two special factors, the borrowing in October, 1957. of £89 million from the Export-Import Bank and the deferment in December, 1957, of service amounting to £63 million on the United States and Canadian loans, although I must remind your Lordships that in December, 1958, the loan service was paid in full. Even if the sum of these items, £152 million, be deducted, we are still left with an increase on the figure in September, 1957, of £283 million. This more than compensates for the heavy fall in the third quarter of 1957 of £189 million.
It is also true, of course, that the reserves have been strengthened by two sums of borrowed money which are repayable within the next seven years, the

55
International Monetary Fund drawing of £201 million made in December, 1956, and the sum I have already mentioned of £89 million from the Export-Import Bank. The reserves net of these would now amount to £806 million. In addition to the reserves discussed in this way, there is also a second line of reserves in the form of drawing rights on the standby credit of another £264 million arranged with the International Monetary Fund, giving for our first and second line together a total of £1,360 million, and not £1,100 million. And this is not the entire sum of our reserves, because those figures do not include the amounts of dollar securities in the hands of those despised creatures, the financiers of the City of London, who are so wicked as to invest in securities which stand us in good stead every time there is a war or an international financial crisis.
The other factor which noble Lords opposite fail to take into account—again I must ask them to forgive me if I appear to be a little didactic, but I really must put the record straight—is the sterling holdings of other countries, which have been reduced greatly during the period to which I have been referring. At the end of September, 1958, sterling holdings stood at £3,266 million, of which £2,580 million belonged to other members of the sterling area. Of course, these countries are entirely free to draw down their balances, but in general they use them only to meet deficits in their balances of payments. Between June, 1957, and September, 1958, the total of these sterling balances was reduced by £345 million, but as I have pointed out, during that time reserves were actually rising. It is a most extraordinary method of accountancy to say that you must disregard certain items of the known reserve and then not even mention the fact that on the other side certain liabilities have been reduced. In September, 1958, the total sterling holdings in non-sterling countries amounted to £686 million. That has been run down during the last twelve years from £1,243 million, so that during this period not only have the reserves been rising, but also we have been running down our liabilities.
Noble Lords opposite asked me what kind of advice my right honourable friend had. It would be a most irregular pro-
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ceeding if I were to yield to this temptation by telling your Lordships. So far as the financial and economic arguments are concerned, I have been at great pains to secure the best advice from all sources open and available to me. When I tell the House, as I have done, and as my right honourable friend told another place, that certain weapons upon which some noble Lords for some reason or another continue to place great reliance are only capable of doing permanent damage, I must say that this is a matter upon which our advice differs from that of noble Lords opposite.
VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, I do not think that the noble Viscount is answering my direct question, whether the time was right for convertibility and whether they had the same class of advice from the Treasury and the Bank as we had and on which my noble friend based his statement in 1950 and 1951.
VISCOUNT HAILSHAM: My Lords, the noble Viscount should know better than to ask what advice I have had from civil servants. He knows perfectly well that it is an improper question and that no Minister worthy of his salt or with any sense of honour would reply to it.
VISCOUNT ALEXANDER OF HILLSBOROUGH: Why do you not answer it?
VISCOUNT HAILSHAM: My Lords, what we do we do on our responsibility, but noble Lords must take it that in giving certain arguments in your Lordships' House I have drawn on resources both deeper and more varied than my own.
VISCOUNT ALEXANDER or HILLSBOROUGH: My Lords, should we be right in assuming that on this occasion the Government have adopted far lower standards than we were officially advised to adopt in 1951?
VISCOUNT HAILSHAM: My Lords, the noble Viscount would be quite wrong in making any unwarrantable assumption. When I do not give the answer he wants, it does not mean that the noble Viscount can invent some inference which does not follow from what I have said and then say that he is entitled to take the inference. That is neither logical nor in accordance with the terms of our

57
Constitution. The noble Lord, Lord Pethick-Lawrence, began his speech by saying that this was not a Party matter. I wish it were not.
LORD PETHICK-LAWRENCE: My Lords, I did not say that.
VISCOUNT HAILSHAM: My Lords. I thought I heard him to say it. I wish it were not. The fact is that it has become a Party matter. The Party opposite voted against this Bill on Second Reading in another place. I think that I am right in assuming—
LORD PETHICK-LAWRENCE: My Lords, I never said that it was not a Party matter. It is a Party matter because we differ from the Government on it. What I said was not a Party matter—and I was very careful to say it—was the fact that the prosperity of this country had increased that it was largely owing to the energy, inventiveness and courage of members of the public and that both Governments to a large extent had contributed to it. I said that that was not a Party matter.
VISCOUNT HAILSHAM: I accept, of course, what the noble Lord says as to what he said; I always do. I am only saying for myself that I wish it were not a Party matter. It was made a Party matter when the Party opposite voted against it in the other place; and although I imagine, for reasons which are under stood by all of us, that this is not a matter which is ordinarily the subject of a Division in this House, they have clearly made it a Party matter in this House. What I do not quite understand is that, having made it into a Party matter and one of acute political controversy, they should then complain when I set forth in blunt political terms what to my mind is the complete set of delusions under which they are dwelling. It reminds one of a little dog that starts biting one's ankles and when one turns and expostulates it lies on its back and wags its tail, saying that after all it is only a spaniel. The fact is that if they choose to make this a Party controversy they must expect this animal, at any rate, to defend itself.
On Question, Bill read 2a and committed to a Committee of the Whole House.

BRITISH AND CZECH JOURNALISTS' VISITS
5.32 p.m.
LORD BIRDWOOD LORD BIRDWOOD rose to ask Her Majesty's Government, in view of the extremely conflicting attitudes adopted by British and Czech journalists in reporting conditions after a recent exchange visit of journalists arranged through the Foreign Office, and bearing in mind that the result has been only to mislead the public in both countries, whether they will refrain from organising or encouraging such visits in the future. The noble Lord said: My Lords, I beg leave to ask the Question standing in my name. In doing so I have a rather difficult task, in that I have to ask the House to reorientate itself from the very stimulating and slightly acrimonious discussion on economics to a background which I think could be described as psychological. I chose the process of the Unstarred Question, because, as it seemed to me, this particular matter fell between two stools. It concerns a particular situation and as such your Lordships would not expect a full-scale debate on it. On the other hand, there is, in my view, such a lot behind these particular events, and certainly much more than can be brought out in the normal process of Question and Answer and supplementary.
The story, as I know it, runs something like this. In mid-November of last year four Czech journalists came to this country and three journalists simultaneously went from this country to Czechoslovakia. I do not know whether this was fortuitous or whether it was chance, Nevertheless it was an exchange, and it had the official stamp, in that a fortnight's programme was laid on for the Czechs in this country—an elaborate programme, including, of course, the usual excellent hospitality in Lancaster House and so on.. It is, I think, significant that the Czech invitation coincided roughly with a Czech National day, the fortieth anniversary of the establishment of the Republic of Czechoslovakia on October 28. It seems that perhaps the Czech Government wished to offset the criticism which normally would have come from the British Press in this country, of people who have spent much of their lives in defaming and falsifying the great work of men such as Benes, Masaryk and Stefanik. I will quote from certain of the resulting

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reports on return. The first example I wish to offer can be regarded merely as unfortunate. The representative of the Daily Telegraph interviewed a certain Father Plojhav, a so-called priest of a so-called church. The interview, so far as the priest was concerned, was devoted more or less the whole time to slandering his former Archbishop, Archbishop Beran. Archbishop Beran has for a long time been under permanent detention without trial; nobody knows exactly where he is. Six years ago the late Cardinal Griffin in this country paid him a great tribute. What I would ask your Lordships to note is that the British correspondent did not record that Plojhav, who was his sole informant, was himself suspended and excommunicated from the Catholic Church several years ago.
More significant, I think, is the general comment from British Pressmen on the general conditions in Czechoslovakia. If I may, I will read to your Lordships certain rather sharply-contrasting passages. The Daily Telegraph says:
"People have money in the savings banks and now a system of personal loans has been introduced to make it easier to buy the more expensive goods."
The Economist says:
"… an overcoat or a suit will make a much bigger hole in the average wage-packet—which is officially put at 1,300 crowns monthly—than it would in Britain. There must be a good many people earning about, or less than, the average wage who still do not find it too easy to make ends meet."
The Daily Telegraph says:
"In no other Communist country, not even in Russia, is it possible to see so much building both of industrial plants and of housing in such a small area."
The Economist says:
"… housing is short and prices are high… In Bratislava, money which some local Party members think might be better spent on housing is being spent on reconstructing the ruined royal palace that dominates the city from a hill above the Danube…"
The Daily Telegraph says:
"As far as I could judge, the B.B.C. news broadcasts beamed to Europe are used by provincial newspapers here as their main source of reliable and speedy news from the West."
The Economist says:
"Meanwhile the Communists in Czechoslovakia maintain their power through what seems to be an extremely efficient secret police, and protect it through the thorough exclusion of dangerous contacts and thoughts."
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Those are slightly conflicting views. I am not necessarily questioning the truth or otherwise of them; I merely draw attention to the fact that they represent different shades of opinion, the kind of conflicting comment which we in this country should expect. But I would emphasise that, since those are conflicting views, they represent individual views and are therefore typical of the democratic way in which we set about reporting conditions in a foreign country. In so far as the British public are concerned, I think they would come to the conclusion that the truth about Czechoslovakia is extremely elusive.
I would compare those views, where they happen to be eulogistic, with what the Czechs seemingly think about their own situation. At the end of January the newspaper Pravda published in Plzen, the great city of the Skoda works, quoted a reader who was commenting on living conditions in his own country and who, after describing his desperate search for a few household commodities around the town, concludes with this statement:
"Somehow I cannot understand this. There are huge turbines and an artificial satellite of the sun is in outer space. Such miracles come from the hands of the people. Are they not able to make such a simple thing as a switch, a rod, pipes for water and mains, saws and stockings? That I cannot believe. Where does the fault lie?"
It would seem that, where our journalists were impressed by what they saw, the Czechs themselves are not quite so satisfied with their own situation. I could elaborate that point by quoting Czech criticism of powerhouses, of "absenteeism" and so on.
What do the Czechs say about us as a result of this visit? I think it is agreed that our journalists are quoting freely, fairly and objectively. I should now like to quote from the first report which appeared on December 8 in the trade union daily paper Prace by Mr. Jan Stern. After protesting about a lack of knowledge of Czechoslovakia in this country, he concludes by paying a tribute to our great hospitality and the number of people who shook him by the hand as he said "Good-bye", and that sort of thing. He said:
"We could easily come to an understanding with these people, but these people have one great fault—they do not yet decide British policy."

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He repeats, rather ominously, the word, "yet". Apart from the fact that that extract displays a complete misunderstanding of democracy as we understand it in this country, I draw attention to the implication of the rather sinister hint in the word, "yet."
On December 21 the same writer took a far stronger line. After referring, rather patronisingly, to the fact that we did not slavishly imitate American motor cars in our designs, he said this:
"That does not mean that brutal American immorality is not seeping through the rotten shell of English Puritanism… There is also that England which dropped bombs on Port Said and which is madly and indiscriminately shooting in Cyprus; that is the England which rules. But where is the England which labours behind machines, goes down the pits, strikes, fears further sacking and demonstrates against war? Where is the England which is to rule in the future?"
He goes on to describe Speakers' Corner in Hyde Park. He says that he spoke to a Negro:
"'Explain to me a simple thing', insisted a Negro while talking to an adversary, how is it that when I come to Britain I get the worst job, and when a Briton goes to India he gets the best?"
Further, as regards the march on Swaffham the other day, he refers to the police. He says:
"On December 6 some 150 demonstrators protested against the construction of rocket bases in Norfolk. The police, together with soldiers, threw themselves on the demonstrators. They started to beat them up and knocked them down into the thick layers of fresh concrete. After such a free and democratic exchange of views at the building site, many beaten people remained lying on the ground."
That was the tone of his criticism. The same writer, in an article entitled "Picture of London", described his encounter with a beggar in the park. He says:
"In the evening, not far from glittering Piccadilly we saw sitting on a bench in a park a heavily breathing fellow with a beard. He was covered with a dirty tarpaulin and his feet were in a paper sack. We woke him up and he looked at us. 'What, do you sleep here?' Yes, I do sleep here. 'Are you unemployed?' I used to work. Now I am without a job. You can sleep quite well here.' Britain, however rich and technically advanced, cannot maintain for all her citizens work and roofs over their heads … To know for sure that to-morrow will be better than to-day and that then it will be better still—that is the path towards Socialism."
I suggest that the familiar substitute of the word "Socialism" for "Commun-
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ism" is a deliberate and fairly skilful confusion.
Finally, my Lords, I have one more quotation—that of another Czech journalist, called Oplustil, in Rude Pravo, in an article entitled "Fog over London". After expanding on the poverty of this country, on colonial oppression, on the brutal subjugation of India, on a college for coloured students from the subservient Commonwealth nations (as he calls them), on the exploitation of Kuwait and so on, he draws attention to a feature which will be familiar to some of your Lordships outside the entrance to this House—your Lordships' car park. He said this:
"English slogans should be the name for the various public notices, which would be worth compiling into an almanack. They tell more of Britain than its most eloquent M.P.'s about the class distinctions, which are not forgotten even in front of the building of the so-called national Parliament, which in its care for their Lordships goes so far as to reserve parking space 'For Peers only'."
Here he reinforces his argument with a photograph: there is a Humber Snipe parked in front of the offending words, "For Peers only."
It seems to me that you and I perhaps can afford to smile over this kind of reporting, but unfortunately the people in Czechoslovakia believe these things. When a journalist has to seek out a tramp in a park in order to prove that Great Britain cannot house or feed its people, the Czechs in fact believe that we are underfed and under-housed as a nation. The difference between the two systems of reporting is that our reporters report objectively and are probably even inclined to be generous. In contrast, the men from the other side know exactly what they have to report before they arrive here. That being so, I ask the question as to whether it is really worth while asking them. If they know the type of article, and we know the type of article they are going to publish after the visit, I cannot understand the value of their coming here.
There is, of course, the grave issue of ideology behind this. May I quote what a German Minister said to me the other day? He made the rather terrifying comment that a democracy, by virtue of its nature, by virtue of the fact that it will look at all sides of the question, by its mere tolerance, will always lay itself open to danger when it is up against an adversary which enjoys a totalitarian system: and that totalitarian system will

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always win merely because it will exploit that very inherent process within a democracy. The German Minister, in fact, used his illustration to indicate the grave danger that East and West Germany would have if ever the ring was cleared and they started on equal terms from scratch.
This is no time for a homily on ideological values; but I should hope that that kind of grave, sombre background will be borne in mind if and when such visits are ever contemplated again in the future. I have purposely worded the terms of my Question severely. I should not wish to insist that these visits should always and for ever be closed; but I hope to hear from the noble Earl the Leader of the House that next time there will be much more caution exercised, and that some indignation may be apparent at the misrepresentation of our people to a people whom in happier times we regarded as our friends, and whom we regarded as the fair flower of democracy in Europe before the war. That is the purpose behind my Question.
5.50 p.m.
THE EARL OF HOME: My Lords, as my noble friend has said, he adopted the device of an Unstarred Question because he wanted to say a number of things which he would not have been able to include in a supplementary, and I do not in any way complain of his procedure. On the contrary, I think it is a good example of what an Unstarred Question should be.
My Lords, a group of Czechoslovak journalists were, as he said, invited to this country in November as guests of Her Majesty's Government, and at about the same time a party of British journalists visited Czechoslovakia on the initiative of the Czechoslovak Government. Technically, for the noble Lord's information, this does not come under the heading of what is usually known as an exchange scheme. It so happened that the two invitations coincided, but it was not technically under the scheme for exchanging visits of journalists.
I do not think my noble friend would dispute the fact that our objective in bringing foreign journalists to Britain and in sending ours abroad is right, because the more we get to know about each other's countries, and the more journalists
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get to know, the better it must be, or should be, for public relations. I should think that the House would probably agree, too, that it is right that we should try to arrange visits by journalists from this country to the Communist countries, and vice versa; but, of course, in so doing we have to accept, I think, that there is a risk that a journalist from a Communist country, when he returns home, will toe the Party line and will produce the kind of misrepresentation of which the noble Lord has given us examples to-day. Certainly, I think that when in future we try to organise visits of this kind we should do our best to find journalists who have open minds and who will report objectively, as I think our people do.
Nevertheless, even though we were to do our best to vet people who come and select people who will report objectively, there is no doubt that we shall from time to time find people going home to their countries and reporting false information. I personally feel that this is a risk we have got to run. At present the chances of getting behind the Iron Curtain into countries in sympathy with Russia's point of view and Russia's policy are very limited, but there are some. Therefore, I should hope that, while this discussion has been useful to us—and we shall take note of what the noble Lord has said when arranging future visits—he will not go on to ask us to limit visits or to say in general that we think that they are not valuable.
I have inquired into this visit and there is no doubt that when the Czechoslovak visitors were here their visit created considerable interest in Czechoslovakia and stimulated people to want to go and see for themselves what is going on in Czechoslovakia. Some of the people who met the Czechoslovak journalists who came here said that in their opinion there was no doubt at all that the journalists had been impressed by what they saw in Britain. One must remember that in a totalitarian State it may be quite impossible for a journalist, whatever he feels, to write what he feels and immediately on his return to tell the truth as he sees it; but in the long run a visit to this country, we believe, cannot fail to influence the view of the individual, and we hope that, in the long run, he, as a journalist, will begin to tell at least some

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of the truth about conditions in our country. Therefore, I am sure the noble Lord will not press me to say that we would limit these exchanges. On the contrary, we want to expand them; and, while taking note of what he says, I hope that the House will support me and the Government in the belief that any way in which we can get contact with the Communist countries is valuable, although we admit that we take the risk of misrepresentation with our eyes open.
5.55 p.m.
LORD CHORLEY: My Lords, I should like to congratulate the noble Earl the Leader of the House on his very wise reply. I am sure that he is right in refusing to limit these exchanges of journalists and others in the way he has indicated. I think the noble Lord. Lord Birdwood, is wrong in first of all suggesting that this type of thing is completely characteristic of the result of these exchanges. I have not myself had much contact with the Czechoslovak situation, but I have seen some of the reports which have been taken back by journalists in the U.S.S.R. which, although they no doubt contain a certain amount of this routine "clap-trap" of the Suez type, and that kind of thing, have in other ways been very informative. If the noble Lord had the opportunity of seeing a film which was made by the Russians about two years ago and which I believe was very widely shown in the U.S.S.R., he must agree that it gave a very reasonable, objective view of life in this country at the present time and can only have done good to the masses of Russian people who saw it and who have not the opportunity of coming here.
On the only occasion I have been in Prague since the Communist coup d'état, the information I had was that there was a great deal of listening to the B.B.C. broadcasts, even at that time; and I have no doubt that to some extent that is still going on. The Czechs are an exceptionally intelligent people and have a long history of living, as it were, underground. I do not for a moment imagine that rather silly reports such as those which the noble Lord read out carry much conviction to a very large number of the Czech people. In fact, they may have exactly the reverse effect, and it may well be that, taken in conjunction with listening to the broadcasts, the effect will be to discredit
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the journalists and the newspapers in Czechoslovakia, rather than persuade the Czech and Slovak people that the sort of life which is going on in this country consists of large numbers of unemployed people sleeping out in the parks and that sort of thing. I should say that they would take this sort of thing with a very considerable grain of salt. I therefore feel that the Government policy in regard to this matter, not to clamp down on these visits, is a very wise one indeed, and I hope that they will maintain it.
5.59 p.m.
LORD SILKIN: My Lords, I am sure that the noble Lord, Lord Birdwood, did not seriously suggest that we should discontinue these mutual visits. I am sure the noble Earl, Lord Home, is perfectly right, and I am very glad that on his return—and we are very glad to see him back—his first speech should be one with which we can so cordially agree.
Does the noble Lord, Lord Birdwood, really imagine that the people in the countries behind the Iron Curtain think that their standard of living is in any way superior to ours? They cannot think that if they remember what Khrushchev himself has said: that he hopes that at the end of seven years, if his plan is successful, his people will have attained the standard of living of the people in the West to-day. That is a clear admission that their standard of living is nothing like the standard of living on this side of the Iron Curtain.
LORD BIRDWOOD: Perhaps I may interrupt the noble Lord. I was speaking of Czechoslovakia, which of course has always had a very high standard of living.
LORD SILKIN: I have no doubt. I do not know whether the standard of living in Czechoslovakia is materially higher than that in the Soviet Union. I thought that in his Question the noble Lord was rather generalising as to the value of these exchange visits, and that would apply equally well to exchanges with Soviet Union journalists as with Czechoslovakian journalists. I thought he was merely giving an illustration. As the noble Earl the Leader of the House said, I think that, whatever these journalists may say in their Press, their impressions cannot be suppressed: they are bound to return and to talk about what they really saw. And that, I think, is all to the good.
6.1 p.m.
LORD ST. OSWALD: My Lords, I have little to contribute to this discussion, but in a curious way I am qualified to say something. At first sight, as an old newspaperman myself, I am bound to feel a certain sense of resentment at any suggestion that newspapermen should be restricted from going anywhere where there is something of interest to report. On the other hand, from personal experience of having been behind the Iron Curtain as a Parliamentarian, and having spoken to various British journalists who have been behind the Iron Curtain. I know how difficult it is honestly to report what are the conditions. The trouble is that the régime shows a very plausible surface which is not the true nature of the country at all. In order to penetrate beneath this surface it is essential to have conversations which will not endanger you but will considerably endanger the people with whom you speak; and that immediately determines how accurately it is possible to report conditions in such a country.
As regards the visits of Iron Curtain country journalists here, I would say, also from some personal experience, that in a country where there is complete Press censorship the result tends to be that nobody believes anything he sees in print. However, if something should be written with a London or a British date-line, I think it carries more conviction. I therefore agree with my noble friend Lord Birdwood that care should be taken in the number of such journalists who visit this country.

THAMES CONSERVANCY BILL [H.L.] JOSEPH ROWNTREE MEMORIAL TRUST BILL [H.L.]
Committed to an Unopposed Bill Committee.
TEES CONSERVANCY BILL [H.L.] GLAMORGAN COUNTY COUNCIL BILL [H.L.] GLOUCESTERSHIRE COUNTY COUNCIL BILL [H.L.] MIDDLESEX COUNTY COUNCIL BILL [H.L.]
Committed to an Unopposed Bill Committee.

CITY OF LONDON (VARIOUS POWERS) BILL [H.L.] LONDON COUNTY COUNCIL (GENERAL POWERS) BILL [H.L.] BOOTLE CORPORATION BILL [H.L.] HALIFAX CORPORATION BILL [H.L.] LANCASTER CORPORATION BILL [H.L.] MILFORD HAVEN (TIDAL BARRAGE) BILL [H.L.]
Committed to a Select Committee.
House adjourned at three minutes past six o'clock.