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Orders Of The Day

Volume 411: debated on Wednesday 13 June 1945

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Consolidated Fund (Appropriation) Bill

Order for Second Reading read.

Motion made, and Question proposed, "That the Bill be now read a Second time."

Cartels And Monopolies

3.38 p.m.

Two Motions appear on the Order Paper, one in the name of some of my hon. Friends and one in the names of hon. Members of the Liberal Party. The first one to which I want to direct attention reads:

"That this House is of the opinion that His Majesty's Government should submit a White Paper to the House describing the scope and pre-war effects of monopolies, cartels, combines, proprietary concerns, trading associations"
and asks that investigation shall be made as soon as possible. We consider that the Consolidated Fund Bill provides us with an opportunity of asking for a full investigation into the ramifications and operations of these concerns, and whichever party is returned after the General Election we consider that, as a result of the evidence we shall furnish this afternoon, such a full public investigation should take place. We are asking that whoever carries out this investigation shall have the full authority of this House to send for persons, papers and documents. To show the need for this public inquiry we shall furnish some evidence this afternoon, quite a small proportion of the evidence that is available, and during this Election our party, in particular, will endeavour to focus the searchlight of public opinion upon the subject. A committee upon trusts which met in 1918 and issued its Report in 1919 reported:
"We are unanimously of the opinion that it would be desirable to institute in the United Kingdom machinery for the investigation of the operations of monopolies, trusts and combines."
It is 26 years since that Report was issued, but to this day no action has been taken upon it. I should like the House to compare the failure to take action on that matter with the action taken against the trade union movement in 1927, and with the attitude of the Conservative Party towards trade unions in the recent consultations over the Trades Union Act.

On a point of Order. I am not raising this because I am out of sympathy with the point which the hon. Member is putting, but he has drawn attention to action which was taken by the House in 1927. That was legislative action. I understand that to-day, on this Measure, we cannot discuss legislation but only administration, and I am raising this point at this early stage in order that others of us who may possibly catch your eye later on, Mr. Speaker, can have guidance as to how far we may go,

The purpose of this Bill is the allocation of money towards the public services in this year, and, therefore, it is really out of Order to go-back, except perhaps for purposes of illustration, to what has happened in years past—what Acts have been passed by this House. Also, it is out of Order to go into the future beyond the purposes for which the money this year has been voted and into matters requiring legislation. That somewhat limits the Debate as far as this subject is concerned.

Is not my hon. Friend entitled to give to the House and to the country his reasons why there should be an investigation into the workings of cartels and trusts? I would say, respectfully, that I cannot see how any person could make out a case on a vast subject like this unless the history and the background of it were placed before the House. As one Mem- ber I shall be pleased to get that information.

This is the sort of subject which really does not come within the terms of the Consolidated Fund Bill, because, as far as I know, we are not voting money nor is money being spent for the purpose of investigating cartels. We are dealing with matters for which money has been voted by this House, but, of course, the background can be referred to.

I am fairly familiar with the rules and spent a long time last night in familiarising myself with them in order that I might keep in Order to-day, but I feel that I should have been lacking in my duty had I not pointed out the contrast in treatment of the people I belong to with the treatment of monopolists. Having said that, I would go on to point out that in this Bill we are providing £10,000,000 for the Foreign Office for embassies throughout the world and for a grant towards the British Council, and I shall produce evidence to show that had those people been carrying out their duties as most people in this country have done their duty an investigation would have been made long before now. In order to show the need for this investigation I would quote this from "The Economist" of 13th January, 1945:

"It is undeniable that the extensive growth between the wars of restrictive and monopolistic practices has done incalculable harm to British industry by increasing its cost and lowering its output. Agreements to restrict output, to fix prices or to limit entry into a trade have been for the most part, informal, so that their full extent is unknown, but their effect can be felt only too well even though it cannot be measured."
That is a statement from an orthodox publication, which I think provides us with the basis of the evidence that we shall place before the House. This war has speeded up monopoly development in this country, and, from now onwards,, the fundamental issue which the people of this country will have to face is whether the country is to be run for the benefit of the nation and the people or for the benefit of monopolists. All other issues are mere side issues, compared with that fundamental point. During the war, many of us have had to humilitate and restrain ourselves in order to make our contribution to the maintenance of national unity, and no one can point a finger of scorn at the contribution which we have made. During the war, and particularly during the period when we stood alone, we had to carry out a policy of concentration of industry. This has resulted in the acceleration of the centralisation of capital, and all this has speeded up monopoly development, until we have now reached a situation when the pre war giants are now more gigantic than ever at any time in the past and are fundamentally challenging democracy. We are concerned to-day with the growth of monopolies, trusts, international cartels, trade associations, holding companies, nominee holdings—which covered up so much in this country before the war—inter-locking directorates—

I hear the hon. Member, and I will put the contribution which shop stewards have made in organising production against the record of any hon. Member sitting on that side. There are unified contract forms, quantity and quality production, restriction of output by all kinds of restraint, secret trade information, the watching of proposed changes in legislation, the stabilising of the economic position of certain trades at the expense of the national interest—these are the indictments we lay this afternoon against the monopolies of this country.

In 1932, there were 2,000 trade associations in the country. Let me remind the House of the relatively high dividends paid by light industry between the two wars. This had its effect upon the home market and prevented our people from obtaining the full benefits of mass production. At the same time, it resulted in a discouragement of trade, and high profit margins meant that labour had a low share in the products of industry, which must tend to restrict the demand for consumption goods, since wages are more fully and freely spent than other forms of income. The policy of trade associations between the wars was the policy that I have just briefly indicated. This, too, had a serious effect upon the home market. The inequality of the distribution of income and wealth, fixed prices above the economic necessity, restriction of output—all these, simultaneously, robbed the people of the benefits of modern industry, undermined the home market, guaranteed profit for the few and protected inefficiency at the cost of the nation.

We have now reached a position when this country is in the grip of the monopolies to a greater extent than any other country in the world, and the fundamental political issue will be whether they are to continue to run the State and influence the Government or whether the State is to be controlled by the representatives of the people, for monopoly organisation and the real national interests are incompatible and irreconcilable. Monopoly strikes at the roots of harmony between the peoples of our country. Those of us who passed through the industrial disputes, and are still smarting under the economic whipping we received, through no fault of our own, from 1920 to 1929, can never forget the bitter experience we had.

I do not mind these interruptions, but, if they are to be constantly made, they will be replied to. I want to make my contribution within a limited time in order to place the evidence before the House so that we can reason with one another to show that, in the national interest, it is necessary to have a full investigation, and, if I am to be constantly subject to this kind of thing, the responsibility for the length of my speech will not be on my shoulders. Monopoly practices not only strike at the roots of national harmony but also at those of international harmony, and, therefore, monopoly internal and international leads to strife, international rivalries, and, as sure as we are present here to-day, if Britain continues to go along the road of monopoly development, it is only a matter of time before we are involved in another war. The classic country, so far as monopoly development is concerned, was Germany. The number of cartels in Germany in 1896 was 250; in 1930, it had grown up to 2,100, and these are the people who gave rise to Hitlerism in Germany. It was the monopolists of Germany, and also others in many other countries, that brought Hitler into power. On page 258 of "I Paid Hitler," Thyssen, a man who ought to be in the dock with Joyce, Hitler and all the others, wrote:

"The I.G. Farbenindustrie helped the Nazis a great deal by paying for their propaganda abroad."
Thyssen, in his book, showed that Krupps, Siemens, Wulcke and the I.G. Farben- industrie directors supported Hitler since 1927, and, after 1933, through carrying out the economic policy laid down by this book, monopolists' profits increased to the extent of 48 per cent. This brings me to this question, and to-day it is my turn. Since 1936 I have been jeered at and sneered at by many hon. Members who sit on that side—

We never jeered at the hon. Member; we always liked him.

My hon. Friend will remember that, in the other House, I stood there a lone figure—[Interruption]—raising the serious issue of how Ribbentrop was carrying on in this country and put down Question after Question until November, 1943. These Questions were put because of the great concern of thousands of people living in the Manchester area. They had seen German Nazis brought to Trafford Park, Swinton and other places, and they knew the espionage that was taking place, but no action was taken at that time. In reply to a Question, the President of the Board of Trade admitted that the men involved in many of these transactions, by their company interests, damaged our country, and, therefore, there is further evidence to prove that the time has arrived when there should be a full investigation into this question. We are not asking the House only to accept our word for it. I propose to give an extract from a book written by the Assistant Attorney-General of the United States and issued only this year. The book is in the Library and can be read by any hon. Member. On page 243—

"A Challenge to a Free World," by Wendell Berge, and this is what he says:

"Cartels are trusts magnified to an international scale. In mobilising for wax, we discovered, almost too late, that they were responsible for shortage alter shortage of vital material. The facts are that they retarded technological advance in the introduction of important devices and products wherever such developments threatened their vested interests, despite the fact that national security would be jeopardised."
What took place in the United States also took place in this country, and every hon. Member who takes an interest in supply questions knows that we were in a very serious position in the first few years of the war in regard to supplies of manganese, aluminium and necessary machines to carry out the production of aircraft, and therefore, we said that the men who had been responsible for negotiating pre-war agreements ought also to be made to appear before a public inquiry in order that they might answer for what took place. International cartelisation is the logical development of monopoly development which is taking place in this country at the present time. They control most of our raw materials that are necessary for the supply of our Armed Forces, and here is one of the biggest indictments which it has been my privilege to pick up. The latest International Labour Office publication on food control states:
"The stimulus given to vertical, as well as horizontal, organisation in the food manufacturing and distributing industries, may, after this war, as it did after the last war, lead to a greater amount of amalgamation or cartelisation and an increased tendency for one, or a few large firms, to dominate a large branch of the industry to a greater extent than ever before. Additional measures may then be necessary after the war to control monopolistic practices."

Is not that the finest argument possible for individual enterprise?

Here is further evidence to show the serious position this country has to face. While our men in the Royal Navy, Mercantile Marine, Royal Air Force and the Army, and most other people, have been making their contribution during this war, firms have been making profits to this extent. The Unilever combine is a very complex association of firms in this country—and the hon. Member for South Bradford (Sir H. Holdsworth) will be interested in this. Unilever controls 14 grocery companies—that is free enterprise, private enterprise.

Unilever controls 24 soap companies, three oil cake companies, five fish companies, three African palm kernel companies and three canneries. And many hon. Members opposite have the audacity to talk about the small man when they themselves are responsible for the organisation of trusts of that kind. Monopolists of this kind have simply got the people by the throat with regard to the importation of food into this country.

The hon. Gentleman ought not to be too provocative because he has also some interest in these concerns.

Last week a Debate on housing took place in this House, and I have already heard it said among ordinary people in many parts of the country—and it is only they that I am concerned about—that the House of Commons is making a too complacent approach to the question of houses. Those of us who have wives—as good wives as ever lived—can never forget those 10 years after the last war, when and in spite of our contribution in that war, we were waiting for houses. My hon. Friends are determined to see that none of our men who served in this war shall have to wait for that length of time for a house after this war. Last week the right hon. Gentleman the Minister of Works stated, in reply to the hon. Member for The High Peak (Mr. Molson), that

"in practice, the actual exercise of compulsory powers will usually not be necessary."—[Official Report, 7th June, 1945; Vol. 411, c 1126.]
He knows that that is not according to the facts. Here is an extract from what was said in the "Financial Times," not by a Labour man or a trades unionist. This is what Sir Malcolm Stewart said in the "Financial Times" in regard to that matter.

There is little difference between Liberals and Tories nowadays. He stated:

"An important problem is that of building costs. It is essential they should be reduced, otherwise the financial burden of subsidies will become intolerable…I would temper this freedom with one control, and that is of the maximum price so as to protect the consumer against exploitation."
The last Government sent a mission to the United States of America to investigate the methods of building and the costs of material in the United States. This is their publication. I would advise every hon. Member to read it. It is entitled, "Methods of Building in the U.S.A. The Report of a Mission appointed by the Minister of Works." It shows that the standard of living of the building workers in America is far higher than it is in this country, that they are only working 40 hours a week, and yet the cost of building in the United States is far lower than it is here.

It is true that the output is greater. The hon. Member could not have assisted me better, even if he had desired, than by that interjection. Why is output greater? It is because they have adopted a scientific policy of mechanised industry in order to obtain the maximum production, whereas in this country the industrialists have preferred to develop parasitism and spend the profits on themselves rather than put them back into the industry in order to mechanise the industry. The biggest indictment against hon. Gentlemen who supported the between-the-two-wars policy is to be found in the young Tories' publication, "Tools for the next Job." That is the biggest indictment that could be built up of the policy between the two wars and the hon. Member reminded me of it by his interjection. They show here the serious effect of the price of materials, and as a result of seeing that I made some investigations and found that this was due in the main to every material that goes into the construction of a house being controlled by a trade association. If anyone doubts that, I have the material here to prove it and I will give the name, if necessary, of every trade and association in the building industry and of the people who in their groups put profit before houses for the people. I have gone into the rules adopted by some of these people. The rules of one organisation read as follow:

  • "(1) The object of the association is that of raising prices and keeping up the price to the buyer of goods and articles made or supplied by its members.
  • (2) This shall be done by means of pooling arrangements, so controlling production that prices will rise naturally and inevitably."
  • The Committee on Trusts reported as a result of their inquiry in 1919, and in spite of that these trading associations have been able for 25 years to exploit our fellow countrymen, and the result is that the people have not the houses that they should have had. Against this background the Conservatives still have the audacity to talk about free enterprise. The Prime Minister in his inner soul knows that things are different from those he talks about on the wireless. I would like hon. Members to ask themselves whether that great man, the late President Roosevelt, would have been a party to this kind of thing. That man, who died loved by the common people of the world, would have taken action to deal with this kind of thing. Since 1914 the industrialists of this country, with their allies the Conservative Party, have almost eliminated enterprise in this country, and at the same time they take steps to cripple public enterprise whenever suggestions are made for bringing about efficient public enterprise. Sir George Burt, a well known public-spirited man in the building industry, wrote:
    "I do not know of a material used in a house in which the selling price is not controlled by a combine or a ring."
    The same thing is taking place in front of our eyes now in spite of the patriotism of our people. Furniture combines and trusts are now being formed, particularly in the industrial areas, where they are getting a grip on furniture factories, and the result will be very serious unless steps are taken to deal with it. The same applies to the distribution of pottery, and well may many people ask, "Where is Britain going?" in view of the evidence that I am providing this afternoon.

    I am giving the evidence to the House and in regard to allegations, the hon. member can consider the matter in that light, but fortunately, they have all been statements from Government publications in the main. Just as this development is taking place, so the Foot proposals for the coalmining industry will equally lead to the monopolisation of the mining industry. The same applies to the cable industry, and to most industries in this country. If hon. Members opposite still have any doubt about the evidence, let them be good enough to turn up in the Library the indictment laid in America. It shows in the publication I have in my hand that Du Ponts, the I.C.I, of this country and the I.G. of Germany did not consider the interests of their countries at all, but were responsible for agreements which kept people by the throats in different parts of the world. I have no time to quote the indictment which can be made but, in my view, many of the people responsible for these operations ought to have been tried in court, or by a tribunal long before now.

    Is the hon. Member aware that he is talking as if the indictment to which he refers has been accepted by the court, and has been proved correct?

    As far as I am concerned, I accept most of the indictment, because I have taken careful steps to check it.

    If the hon. Gentleman is not prepared to accept it, then, all I would ask of him is to support us in our demand for a public inquiry so that these people can be brought before an inquiry.

    Does the hon. Gentleman suggest that every allegation in America should be accepted here and that this House should give its time to investigate everything which is alleged in America?

    Perhaps the hon. Member will be good enough to consider whether some of this evidence ought to go before a public inquiry. I am placing the evidence before the House for consideration, and if the personnel of the present House of Commons is not prepared to accept the evidence, perhaps the personnel we shall have in the new Parliament will be prepared to accept it. [An Hon. Member: "Never."] I have here a report of court proceedings in a case during which it transpired that as a result of an agreement between I.C.I. and other concerns in this country a pipe-line 27 miles long was constructed at a cost of £80,000 in order to carry caustic soda into the sea rather than distribute it to the people of this country. One could go on giving illustration after illustration of what has been done. There is one final point in regard to that matter. I shall never forget putting a Question to the Home Secretary on 23rd March, 1944. I asked him the nature of Mr. Howard's business while in this country. I do not want to trouble the House with the answer. I went on to ask:

    "Is it not a very serious state of affairs that the Home Secretary, who is responsible for giving permission for people to visit this country, is not aware of this man's business? Is it not a fact that this man was representing powerful world monopolies, including, indirectly, the I.G. of Germany?"
    As a result of that Question the hon. Member for Gravesend (Sir I. Albery) asked if it were not a breach of Privilege for Members to make imputations against private citizens. Mr. Speaker answered—and it affected me at that time because I did not like this kind of thing—as follows:
    "Every hon. Member must make himself responsible for his own statements."
    I went on:
    "May I say that I would he the very last person to make an imputation of this kind unless there was substance in it."

    Will the hon. Member read the Home Secretary's answer?

    I will give the answer. The right hon. Gentleman replied that Mr. Howard paid a number of brief visits to this country between February and September, 1939. Then, after Mr. Speaker had spoken, I said in regard to that:

    "I would be the very last person to make an imputation of this kind unless there was substance in it."—[Official Report, 23rd March, 1944; Vol. 398, c. 1048.]
    On the following day an article appeared in the "Daily Herald," the writer of which had acted as private secretary to this man. He showed what this man was doing in this country before the war and even during the war. If anyone has any doubts about this, let him read "How I Financed Hitler," "Hitler's Master-plan," and a number of other American publications. There he will find what was taking place in this country even up to the collapse of France.

    Therefore we say that international cartels are one of the main obstacles to the expansion of world trade; they are a danger to the future peace of the world; they provide a basis for aggression, and they hinder the development of the home market. The Government have already stated that they are prepared to agree to a tribunal. So far as we are concerned, we shall never be satisfied with a tribunal; what we want is a full investigation. The people responsible for these pre-war agreements ought to be brought before the bar of a public inquiry. At the present time, men belonging to us are being given time in Germany because they are seen drinking with other men. I am not taking objection to that, but we say that if it is right to give such men time, then these people responsible for negotiating those pre-war agreements which got us into the position they did should also be tried, in order that the people can see where they stand with regard to that.

    The right hon. Gentleman who is, I understand, to reply for the Government made a speech a few weeks ago in which he said that the Conservatives stood for free enterprise in the great bulk of business which was necessary for our prosperity. What a joke all this talk about free enterprise would be were it not such a tragedy. The facts of the matter are that the monopolies, cartels, and trade associations have now got our country by the throat. Our country has proved by its war record that it can become greater than ever.

    Just as we have made a great contribution to the world battle for freedom, so we can make a great contribution to the world development that will take place, but we shall never make that contribution to world affairs unless we approach our post-war problems in the same way that we have approached our war problems. Therefore, to-day we place this evidence before the House. We are asking for a full investigation and, so far as we are concerned, we have our constructive proposals to make for dealing with these problems but, owing to the Debate being limited by the Consolidated Fund, we are not able to make those constructive suggestions this afternoon. However, during the forthcoming General Election we shall put them before the country in the hope that they will use their intelligence in supporting scientific proposals for making this country greater than ever.

    4.18 p.m.

    I have listened with great interest to but have not been impressed as much as usual by the speech of the hon. Gentleman the Member for Stoke (Mr. Ellis Smith). He has spoken of evidence. I would ask him tomorrow to read his speech carefully, when he will see that anything in the nature of evidence could have been confined within the space of three minutes, and even then it was very incomplete. He quoted from a document called "Germany's Master Plan." He would never have seen it if I had not given it to him. [Hon. Members: "Oh."] Yes, certainly—two out of the three documents he has quoted on this subject. I knew his interest in this subject and I gave them to him.

    On a point of correction, Mr. Deputy-Speaker. What happened was that for many years, as my hon. Friend knows, I have put a series of questions on these issues. As a result I asked the Librarian to put these documents in the Library. It is true that the hon. Gentleman gave a number of hon. Members certain documents because of our growing interest in this matter.

    I presented the documents to the hon. Gentleman and one or two other hon. Members before a single document appeared in the Library, or the Librarian was asked to place them in the Library. I could easily check up my dates if I wanted to do so. It is just as well, because I have disapproved as much as anybody else of the regional agreements between firms in this country, firms in the United States, and firms in Germany which prevented us from exporting goods to those countries. That has been my main objection. But the hon. Member comes here with a very thin case, He belongs to the largest but one organised monopoly in this country—the Amalgamated Engineering Union, which exists, quite rightly, to maintain a minimum wage. What is the difference in morals between the man who wants to maintain a minimum wage and the man who wants to maintain a minimum price? I, fortunately, do not happen to belong to any organisation connected with any trade which has a system of price maintenance, but the hon. Member belongs to an organisation which exists primarily for price maintenance, so he must not come here and denounce other people's monopolies.

    I had the privilege in the years 1920 to 1922 to act as joint hon. secretary of a Committee set up by the engineering and shipbuilding trade employers and employees at the invitation of both sides. We inquired into many of these things. When we got to the Merseyside we found that on Merseyside, if they used the oxy-acetylene flame to cut out the damaged plates on the side of a ship, instead of cutting them out by a much slower method, the rule created by the organisation to which the hon. Member belongs, and the allied organisations, was that the oxy-acetylene flame must not be used unless there were at least 20 people on the job. So 18 people used to read their newspapers and smoke, while one man and a boy did the job. What is the use of talking about restrictive practice? Let him go down to Peckham—if they have not been bombed out—to the offices of the Amalgamated Engineering Union and he will find there a copy of the document compiled by members of his union, other unions, and myself as hon. secretary, reciting many of these restrictive practices. Really, the hon. Member must come here with a clean sheet before he throws mud at others.

    Do I understand from my hon. Friend that that is the way private enterprise runs industry?

    No, I was only discussing what the hon. Member did. The hon. Gentleman said that in the United States—according to the report for which my Conservative Friend the hon. Member for Maid stone (Mr. Bossom) was primarily responsible—the output is much higher than here because they have mechanised building. Even without mechanising, the hon. Member for Battersea, South (Sir H. Selley) has laid 210 bricks within the precincts of this building in an hour in the presence of—I still call him my hon. Friend the Member for East Woolwich (Mr. Hicks).

    I ought to explain that the hon. Member for South Battersea (Sir H. Selley) had some beer, and we gave him a bath afterwards.

    I have not the slightest objection to the hon. Gentleman the Member for East Woolwich or his friends having either beer or a bath, provided they lay the bricks. Now there are industries, for example, the iron and steel industry, where for years they have carried on successfully without any disputes. It is the most friendly industry in this country, even though it was denounced last week by the right hon. Gentleman the Member for Central Wandsworth (Mr. Ernest Bevin), and for years they have always related wages to the price of steel. Does the hon. Gentleman object to that? Does he object to joint arrangements between the Iron and Steel Trades Confederation—which I think is the employees'association—and the British Iron and Steel Federation—which I believe is the employers' organisation? For years they have run this arrangement whereby they have directly related wages, according to some formula, to steel prices.

    Is that the doctrine he is going to preach when he talks about the election, because there are branches of that industry in his constituency? He denounced amalgamations in the coalmining industry. I have never had any connection with that industry but, if he will turn up the Coal Mines Act of1930, which was supposed to be the last word in wisdom but I strongly objected to it, what did it do? It fixed quotas of output—restriction by a Labour Government. According to the election manifesto of 1929 the ideal was quotas for each pit—compulsory amalgamations—as the result of which a gentleman has been drawing £7,000 a year for doing nothing. All that was created under the Labour Party—compulsory amalgamation, restriction of output—the only party that ever made it statutory was the Labour Party in 1930. The hon. Gentleman has denounced all sorts of combines. I hate monopolies much more than the hon. Gentleman does.

    On that point about what the Labour Party did in that period, was it not because we had to act with tine Liberals to get their support?

    It is no good the hon. Member for Leigh (Mr. Tinker) saying that, because the terms of the Coal Mines Act accorded with the terms of the election manifesto. Surely the hon. Gentleman is not suggesting that they did a deal with the Liberal Party before they published their election manifesto? I am not assuming that they were quite as dishonest politically as all that, but as the Act was roughly in line with the election manifesto, I presume they were—

    Will my hon. Friend forgive me? We ought to leave romance aside; this is a serious Debate. You will get the facts before the end of this Debate. You will get a lot more—

    I hope the hon. Gentleman did not refer to me when he really meant to refer to the hon. Member for South Croydon (Sir H. Williams).

    I am sorry, Mr. Deputy-Speaker, it was a blunder. Hon. Members, I say, will get the facts and a great deal more before the end of this Debate. But the hon. Member for South Croydon (Sir H. Williams) is dealing with the question of the sale of quotas.

    Yes, the hon. Gentleman did. He has just spoken about quotas. I imagine my hon. Friend referred to the selling of quotas.

    That is exactly what he said. Did my hon. Friend make no reference at all to the selling of quotas under the 1930 Act?

    Hon. Members: No. Sir H. Williams: I did not say one word about that. I do not mind being interrupted; in fact I welcome interruption for it is an absolute godsend to be interrupted by most of the people who do the interrupting. What I said—[Interruption.] Hon. Members opposite have had three goes, it is time I had a go—was this, that the quota system of the 1930 Mines Act was a system of restriction of output. Mr. Shinwell: That is the point. The hon. Gentleman did refer to the selling of quotas. [Hon. Members: "No."] All right. He referred to quotas, and what he inferred was that the quotas led to restrictive practices.

    The system of establishing a quota under the Act, for which the hon. Gentleman had some responsibility, meant that the mines restricted were not permitted to produce more than a certain quantity. That, I said, was restriction made by Act of Parliament.

    My hon. Friend must bear this in mind, that as regards the restriction of coal production as a whole, there was none whatever. There was no actual reduction in the production of coal. I know something about it because I was responsible for the administration of the Act but not for the Act itself. The selling of certain coal quotas—because that is what he meant—the transfer of certain quotas from one mine to another, did not in fact lead to any restriction of coal production.

    All I am saying is this. The hon. Gentleman always rates intelligence high and he was once Secretary of the Mines Department—

    Twice. He also represents a coal district, therefore I should have thought he would be more familiar with the Act than he appears to be. All I was saying was this. The hon. Member for Stoke said that it is an evil thing to do anything which restricts output. I agreed with him. I then pointed out that by the Act of 1930 a limit was, in fact, put on the output of every pit in this country and it was called the quota scheme—[Hon. Members: "No."] Well, the Library is not very far away. Any Member can go there and pick up the Statutes for 1930, and turn up the Coal Mines Act. If he does he will verify whether what I am saying is true or not. It is all on record. As a sequel there were set up 17 districts, with their selling schemes. I, with the late Sir Arnold Wilson, was responsible for a Motion for the rejection of all these selling schemes, but we were overborne by the Labour Party. They were in alliance with all this restriction. There was a restriction of output under the terms of the Act passed in 1930 by the Labour Government, in accordance with their Election Manifesto of 1929.

    The hon. Member for Stoke seems to have read too many documents and mixed up his index and page numbers. He said there were 2,000 cartels in Germany. If you have 2,000 cartels it does not sound much like a monopoly. There must be several cartels in each trade, and that being so you have a reasonable degree of competition. I think he ought to look up his notes again before he makes his historic adoption speech on Saturday night in Stoke-on-Trent. The hon. Member made reference to the concentration of industry. I do not like the concentration of industry, and I have spoken in the House, not in this Chamber but in another, in opposition to it. I said it was a mistake, that it was better to allow factories to carry on and maintain their personnel, and not let the industry be destroyed. That speech is on record. But all the united wisdom sitting on the benches opposite and the then President of the Board of Trade did not agree with me. I was opposing monopolies, and I do not think the hon. Member was very active about the matter on that occasion.

    My hon. Friends and I agreed to anything within reason to enable us to win this war.

    Precisely, but this has nothing to do with winning the war. In those days, the hon. Member was willing to vote blind to anything the Cabinet said. I was not, and I used to be criticised for attacking the then Government, for the dreadful things I said about them, which were not so bad as what they are saying about one another now that the lid is off. What I said to them I think they deserved, but I do not think they deserve what they are now revealing to one another.

    Surely the hon. Member cannot complain about that. He is against monopolies and in favour of competition.

    We are getting it now, but it is oratorical competition of a rather low grade. I think the Party opposite might resume a little of the dignity which they have lost during the last few days.

    I did not; I have enough to do looking after my own sins. I am opposed to combines of all kinds. They should be watched, whether it is a combine of a State medical service, which we were talking about yesterday and which I do not like too much, or a number of capitalists trying to control entirely particular industries, or combines of people in a particular trade union. They are all bad if they are overdone. I am opposed to combines of multiple shops which, because they are making a lot of profit, undersell another fellow until he collapses and they buy him out.

    I am opposed to combines whether they belong to Unilevers or the "Co-ops." You have to look at this matter in the broadest possible way. I see that the Liberal Party are strongly represented to-day by the hon. Member for Dundee (Mr. Foot), who has abandoned economic warfare for another kind of warfare. It is curious to note that virtually every one of the real monopolies of this country has been organised by Liberals, for instance, the late Lord Leverhulme, the I.C.I. founders—many of whom I knew personally, and who form a remarkable body—and the cocoa combine. They are all Liberals. Therefore, I hope we shall have to-day a valuable contribution from the hon. Member for Dundee as to why his party, which stands for freedom, always joins the combines.

    4.36 p.m.

    So far we have had a very enjoyable Debate, the kind of Debate which reminds us, even if we could forget it, that the General Election is only a few days off. I shall do my best, before I conclude, to try to satisfy the curiosity of the hon. Member for South Croydon (Sir H. Williams), but first of all I would like to say that I think we are indebted to hon. Members above the Gangway for having raised this subject to-day. It is regrettable, and it is a rather curious fact, that this is the first discussion we have had on this topic, so far as I can recall, during the whole lifetime of this Parliament. It is also regrettable that we have not been given the opportunity which would have been provided if the party opposite had not been quite so hasty about the Election, to have the Restrictive Practices Bill brought before us.

    The fact that this subject has not been discussed earlier is certainly not the fault of the party which sits on these benches. I would like to quote the terms of a Motion which, both this Session and last Session, appeared on the Order Paper in the name of my right hon. Friend the Member for South West Bethnal Green (Sir P. Harris) and a number of other Liberal Members:
    "That this House takes note of the recent declaration of His Majesty's Government regarding combines and price-fixing agreements and urges His Majesty's Government to introduce legislation in the near future designed to protect the consumer against exploitation; to remove those defects in the law (such as those relating to the law of patents) which have encouraged the growth of monopolies; to convert into public utility companies such complete monopolies as are found to be necessary or desirable because of the character or commodity of the service provided; and to prevent trade associations from limiting the right of entry into their trades or industries."
    It may be remembered that the party to which I belong also tabled an Amendment to the Address this Session, in similar terms. I think everyone is vaguely aware of the prevailing tendency towards monopoly and combination. But I really do not think that the general public have even begun to realise the extent to which that tendency has developed in recent years, and the extent to which British industry is now dominated by comparatively few concerns. The hon. Member for South Croydon complained that there was a lack of evidence in the speech of the hon. Member for Stoke (Mr. Ellis Smith). I think the hon. Member himself probably read with care the speech made some months ago to the Royal Statistical Society by Mr. Leak, who is Chief Statistician to the Board of Trade. I do not intend to weary the House with a great number of quotations from that address, but I think it will be within the recollection of Members that that speech contained a great deal of solid evidence of the extent to which concentration and monopolistic practices have grown up in British industry.

    On a point of Order. Is it competent for us to discuss speeches made somewhere else by civil servants?

    I hardly see that a quotation of this sort offends against any Rule of the House.

    It would indeed be extraordinary if I could not quote from any speech except that made by a Minister.

    But civil servants are represented here by Ministers. We are debarred from either praising or criticising them. This is an important issue not because of the particular point being raised by the hon. Member but because we cannot discuss civil servants, only those who represent them.

    I understand that this quotation is from something which has already been published, and I cannot see why it should not be quoted.

    If I may now pursue my argument I would like to give just three facts from that address, which have a considerable bearing on the subject which is before us to-day. First, Mr. Leak pointed out that in 1935—the year with which he was dealing—there were 1,959 large businesses which produced no less than 58 per cent. of the net output of British industry, and employed 55 per cent. of all industrial workers, that is to say, rather less than 2,000 firms out of a total of about 53,000. He also said that among them were 939very large firms, each employing over 1,000 people, which supplied 49 per cent, of the industrial output and employed 45 per cent. of the total of industrial workers. Of the 1,959 firms there were 1,400 which were single firms—that is, in no sensemonopolistic—and they produced slightly less in that year than the 532 combines. Although the combines employed considerably fewer workers they produced, in fact, the majority of the output. Lastly, Mr. Leak gave a list of no fewer than 118 commodities, all of them articles in common use, which, in 1935, were either wholly or in effect the monopoly of one or, at the most, two firms.

    These things are due to a number of causes. A combination may, of course, be due to a desire for monopoly, and it may in certain cases be due to the inherent advantages of large-scale production. But when we look at the kind of evidence I have been quoting, and what has happened in succeeding years, I do not think any Member, not even the hon. Member for South Croydon, would seriously suggest that the tendencies we have seen have been due to technical factors alone. The remarkable thing is that we are almost the only great country which has made scarcely any attempt to stop the growth of monopolies. This growth has taken place almost if not quite with the approval of successive Governments between the wars.

    Yes. The hon. Member referred to the Coal Mines Act, the only part of his speech with which I agreed. He himself will recollect the history of the iron and steel industry since tariffs were introduced in 1930. I do not think you could have a more perfect example of the growth of monopolistic practices than that—

    I entirely disapproved. Tariffs were withheld from the industry until the industry agreed to a certain measure of amalgamation.

    Yes, and after that the tariff was considerably increased in order to meet their wishes.

    The industry was put in the position whereby it would determine not the size of the tariff, but the amount of steel which they should be permitted to import from abroad. During the years when that system prevailed, I think the hon. Member will agree with me that there was a very considerable rise in the price of steel.

    There has been not merely a failure to discourage this sort of thing, but in the legislation between 1930 and 1939 we have come very near to a system of statutory monopolies, in which monopolies are bolstered up by the provisions of Acts of Parliament. A perfect example of that is to be found in the Agricultural Marketing Act, 1933, in which there is a provision that the Ministry of Agriculture may approve a scheme under which new entrants may be debarred from coming into some branch of the agricultural industry. I remember that on one or two occasions before the war the House expressed itself strongly in opposition to the sugar marketing scheme and strongly criticised the hops scheme, because both of them embodied the principle of statutory monopoly.

    In this connection I think it is relevant to refer to a phrase that is bandied about from time to time—self-government in industry. That is one of the phrases which is used to cover the principle of statutory monopoly. I read with considerable interest the Report on the Organisation of British Industry issued some time ago by the Federation of British Industries. Hon. Member will recall some of the features of that scheme. I want to remind them only of two. It was not proposed that membership of a trade association should be legally compulsory, but it was proposed to apply indirect compulsion by making the trade association in each case the only permissible and official channel of communication between Government Depart- ments and various branches of the industry. Anyone who has any knowledge of the working of industry or of the working of Government Departments knows precisely what that would mean. Secondly, it was seriously proposed that the trade associations should be placed in a position to negotiate on behalf of their industries and be regarded as speaking for national units by industries similarly organised in other countries. In effect, this means that the authors of that report were in no way against controls. They did not join at all in the cry that controls should be swept away as soon as possible. They were entirely in favour of controls, but so long as, and only so long as, the controls were exercised, not by the Government, not by any public authority, but by the larger units in the industry itself. That is the form of corporate State which is being seriously suggested in many quarters, and we are invited by that kind of scheme—it is by no means the only example I could quote—to give general approval to the whole principle of monopoly and combination. It would be very interesting if whoever replies for the Government would care to give us the Government's views on proposals of that character.

    I shall only say a word or two more on the topic that was raised by the hon. Member for Stoke, namely, international cartels. I do not propose to pursue the allegations that have been made in the United States. No doubt they will be tried out and the results will be of the greatest interest. But whether or not the activities of international cartels are always as sinister as is sometimes suggested, there can, I think, be no doubt that cartels can and do sometimes take action without regard either to the national interest or to the prevailing policy of the Government of the day. I will give a single example. It is the case of the sale abroad of British fertilisers before the war. From 1930 to 1932 the Danish Government were making strenuous efforts to increase Danish purchases of British goods. They realised that Britain was at that time their best customer, and they wished to improve trade relations between the two countries. Denmark was, of course, a very considerable purchaser of fertilisers; in fact, they bought them to the extent of £3,000,000 a year. The Danish Government would have been quite prepared that the whole of that order should have been placed in the United Kingdom, but during that period an international cartel arrangement was reached by which the Danes were permitted to buy their fertilisers only in Germany. I remember going to Denmark in 1932 and discussing some of these questions with members of the Danish Government and an eminent Dane saying to me, with considerable bitterness, that they had been sold to the Germans. There you have a clear case of something which may have been justified from the narrow point of view of the concern itself, but which ran counter not only to the national interest but to the policy that was being pursued by His Majesty's Government at the time. When there is a division of that kind the position is absolutely intolerable.

    We are to-day all under the disability, to which reference has been made, that we cannot go in any detail into the remedies we would like to suggest, but as was indicated in the resolution which I read at the beginning of my speech, the party to which I belong has already brought forward a whole series of proposals to deal with and curb the tendency towards monopolistic practices. It is something of which we shall hear more both during the Election and afterwards.

    4.54 p.m.

    I am one of those who would like to see an inquiry into the operation of cartels and monopolies, but it must not be assumed by people who press for such an inquiry that the results will show that all cartel arrangements and all amalgamations are sinister. The hon. Member for Dundee (Mr. Foot) referred to the sale of British fertilisers abroad. What is the good of his talking to us about the prevention of the sale of fertilisers to Denmark unless he tells us what the agreement was and whether in other markets the United Kingdom obtained advantages which might have compensated for exclusion from the Danish market? It is no good bringing up cases of that sort.

    One of the things that has been impressed upon industrialists in this country by every party has been that they should get together and do what their American and German rivals were doing. That has been a commonplace of Labour and Socialist literature for years. Let me give some examples. For many years between the two wars practically every producer of wheat in the world, including those in the United States and Canada, was producing at a loss. Agriculture was in a terrible condition in every country in the world, and wheat was being thrown into the sea. If it had been possible to cartelise that industry and maintain wheat at a reasonable price level, it would have been far better for agricultural producers in this country and in every other country. There may be cartel arrangements which are evil; if so, let us bring them into the light of day; but do not believe every silly little allegation in the sensational American Press, allegations which are made for reasons of which the hon. Member for Stoke (Mr. Ellis Smith) has no idea. There are industrial and political rivalries there which lead to accusations of that sort. The law of libel is practically not operative in the United States, and statements and allegations are made which would lead to heavy punishment in this country. The hon. Member for Stoke must not be taken in by things of that kind. I want to refer to the coal industry. If there is one party that has pressed for amalgamation in the coal industry it is the party of hon. and right hon. Gentlemen opposite. Although the hon. Member for Seaham (Mr. Shinwell) has completely forgotten the 1930 Act—

    Nothing of the sort. I have the Act before me and will quote from it if I am called later.

    The hon. Member denied that it placed a maximum on the output of coal in this country.

    What I said was that the fact that provision was made for the transfer of quotas and allocations to certain pits did not in fact lead to restriction on coal production, taking the country as a whole.

    That is another point. It is clear that the 1930 Act places a definite maximum upon the total output of coal.

    The words of the Act are clear beyond the possibility of misinterpretation. It places a definite restriction on the maximum output of coal, and that maximum output is then to be allocated pit by pit. There is no ambiguity in the Act.

    No figure is given. The Act says that there shall be an allocation of a maximum output for the district and also of the total for the United Kingdom; the output is to be fixed by consultation, and there is machinery for changing the restricted output from period to period.

    I took a considerable part in the Debates in those years, and my recollection is that the obligation imposed upon the national coal authority was to make an assessment of the amount of coal likely to be sold, and to make an allocation to the various districts and inside the districts to allot a quota to the collieries concerned.

    I have worked under the Act. The pit in which I was interested, although I am no longer, was not permitted to produce more than a certain tonnage, and this did a great deal of economic harm; it could have produced a great deal more coal but it was prevented from doing so by the Act. Anybody who says it is not so is incapable of reading the Act. It was a restrictive Act. The party opposite pressed for years for restriction, and we were told that we were very foolish to have unrestricted production. They said to us, "Have restrictive production, it will help you to get the price up, and you can then pay the wages we want." If that is legitimate for the coal industry, it may very well be—and this is why we want an inquiry—that it is desirable in other industries. Let me now revert briefly to the question of the export markets in connection with the coal industry. In the coal industry one of the great facts which make it difficult to pay the wages that might have been paid, is the failure to have any international agreement. In the export market there are practically only three competitors—Poland, Germany and the United Kingdom. In normal times coal is imported into European countries from no others than those three. In the war years there was no agreement between the three countries, and the Polish Government subsidised to an incredible extent the sale of Polish coal. It was sold at one time for the mere cost of the transport and the shipping. Looking at it from the economic point of view, it was given away for nothing and the consumer only paid the cost of shipping and transport inside and outside Poland.

    I must join issue with the hon. Member. I was Secretary for Mines in the 1929–31 Government, and I had occasion to take a deputation of coalowners to Scandinavian countries to inquire into that subject. We discovered that it was not that Polish coal was being sold at a much lower price than British, but that the Polish coalowners saw to it that Polish coal for export was carefully cleaned and graded, whereas British coal was not subjected to those processes. The hon. Member can get a report of the delegation to Scandinavian countries and the conclusions that were reached, not by myself but by the coalowners who were there.

    I cannot agree with the hon. Gentleman. The facts are quite otherwise. In fact the subsidy on Polish coal was never less than 15s. a ton, which was about the pithead price. That is well known to many of his colleagues. In that case it would have been a very great advantage to this country, and to everyone concerned, had there been a cartel for the regulation and sale of coal at a proper price. In fact just before the war, when it was known that the Government were prepared to give their approval to such an arrangement, the whole coal situation was changed, to the material benefit of everyone concerned. Therefore if we have an inquiry, which I should strongly support, let it not be an inquiry into someone's allegations but something much more fundamental. Let us find out what cartels do, where they are beneficial and where they are legal and, if the inquiry is conducted in that way, I am sure we shall get results which will be of very great benefit not merely to British industry but to the whole of the European economy, which will be upset after this war to an extent that we have never seen before.

    5.4 p.m.

    I must intervene to reply to what the hon. Member has just said. I am astonished that the complaint came from him. I remember that, for many years, the Miners Federation of Great Britain attempted to persuade the coalowners to bring about such unification of the coal industry as would make international agreement possible, and the people who resisted that were the coalowners themselves. I remember taking part in writing pamphlet after pamphlet, trying to persuade the owners to nationalise their industry, so as to enable some national authority to speak authoritatively on behalf of the industry as a whole. In 1927, a small delegation, of which I was a member, visited the European coal areas. We went to France, Belgium, Germany, Poland, and more particularly Silesia. Our report fully confirmed what the hon. Member has said, that it would have been in the best interest of the coal industry of Great Britain if an international agreement could have been arranged, not for the purpose primarily of maintaining coal prices but for the purpose of bringing about an intelligent allocation of markets, because even in those years Europe was not producing more coal than it needed. What was really happening was that competition was taking place unnecessarily in certain markets. The fiercest competition was taking place in the Baltic market.

    The hon. Member is also correct in saying that the Polish Government subsidised Silesian coal to such an extent that it was under-selling our coal in the Baltic markets. But he has only told half the story. It was impossible for us to reach any agreement, because we had no one in Great Britain with whom to reach an agreement. [Interruption.] The hon. Member must submit to this because it has been documented to such an extent as to be beyond all question. There was not, there is not even to-day, any authority in the coal industry able to enter into an agreement with any international producer of coal.

    The hon. Member must know that the Export Committee in 1938 had already negotiated such an agreement.

    I know exactly what happened. As a matter of fact, a delegation of coalowners went to Poland and one of its leaders was an authority on the export market, a director of the Ebbw Vale Steel and Iron Company. I discussed it with him at the time. He came back and lamented the fact that no agreement was reached. The reason was that the British coalowners were at no time able to confer authority on any plenipotentiaries acting on their behalf, because they could not make the agreement good throughout the industry. Then, as now, the coal companies insisted on their own autonomy. That is why we could not get amalgamation, because no overriding authority could impose its will on these anarchic coalowners.

    I can confirm what I am saying by an illustration. I visited a new pit which was being sunk in Poland, in a very fertile coal measure. The seams there are anything from 15 to 30 feet thick. The Polish miners were paid 18s. a week. I inquired who financed the sinking of some of these new Polish mines, and I discovered that one of the chief financiers was the Prudential Assurance Company. We have just had a report from British mining engineers which shows that £200,000,000 to £300,000,000 of new capital is needed for the re-equipment of British industry. In 1930 this House presented the coalowners, under economic duress, with artificial control over coal prices. No one on this side has ever contended that that was a perfect measure. Its main purpose was to try to protect the coal industry from its own internecine warfare, which had brought coal prices to so low a level that the industry was unable to attract new capital for its re-equipment. I have not used this evidence before, but I am compelled to do it by the speech that has just been made. So that from 1930 onwards the coalowners have had effective control over prices. So far from the miners having benefited from this power which was conferred on the owners, by 1939 they had been so badly treated that 83 classes of wage earners were more highly paid than they were. So badly paid were the miners that the owners began to protest that they were leaving the pits in larger numbers. So you had a Gilbertian situation where the profits were guaranteed, so that they no longer had the need to spend any new money on re-equipment. This is one of the defects of cartels and trusts. The owners were presented with what any ordinary capitalist would regard as an ideal situation.

    There is no disputing the fact. The hon. Member himself said that in 1930 the House conferred on the coalowners the right to fix minimum output. That is an ideal situation for capitalists. In addition to that, it gave the owners the power of artificially fixing prices, which normally followed from the power to fix outputs, because you have the buyer by the throat. At the same time the colliery workers presented the coalowners with cheap labour. Here you have an ideal situation in which to attract new capital into the industry if you wished to reduce the cost of production and provide coal at a reasonable price.

    Is it not a fact that during that period there was an agreed basis of distribution of the proceeds of the output as between the owners and the miners?

    The hon. Gentleman must follow really the argument logically. Even supposing it was the case that this was an incidental feature of the agreement, it still, in 1939, left the miners 84 classes down among British wage-earners, so that no one can suggest that the miners exploited the consumer of coal in association with the coalowners.

    Then what happened? Did the coalowners take advantage of those circumstances to attract new capital? Some did, I agree, but, as a whole, did the coalowners say, "Now we have been provided by Parliament with an ideal framework within which we can work with some idea of predictability. We know what the situation will be from year to year and, in fact, in 10 and 15 years' time. Therefore, we can make our plans, plough back our dividends into the industry, and re-equip it"? On the contrary, they pocketed the money, distributed the dividends, and allowed the industry to fall into such a condition of dereliction that coalowners now say that it requires £200,000,000 to re-equip it.

    I really must interrupt the hon. Gentleman. The whole of his argument is based on a complete misstatement of fact. He said that the price was guaranteed to coalowners. It was not. What was agreed to was a price which, owing to the rising costs, made a large part of the industry unprofitable.

    The hon. Gentleman must not keep up perpetual interruptions. There has been a lot of interruption on all sides, and perhaps all sides should try to stop it.

    What I said was that the coalowners have been provided by Statute, according to the hon. Member's own speech just now, with a power to fix maximum output. That power is always accompanied, as every economist knows, by effective control over prices. Therefore, that is tantamount to a guaranteed price for their markets because they have the buyer at their mercy.

    We have now in 1945 a report from a man like Mr. Hann of the Powell Duffryn Company, who, to his credit as a mining engineer, condemns himself as a coalowner, because, as a mining engineer, he says the industry is inefficient in almost every respect and requires new capital to equip it. As a coalowner, he has been responsible for frustrating his genius as a mining engineer. That is the classic situation which every Socialist has always claimed. Under a system of cartelisation or trustification of this sort, it is no longer necessary for even the entrepreneur to use his skill because he can get his profits without using it. He can get them by manipulating price and rigging the market, and he need not confer upon the consumer the benefits of his technical genius. Instead of providing a political framework in which the coalowners could make an efficient coal industry, all that Parliament did was to preserve the profits of the owners at the expense of a technically obsolescent coalmining industry.

    I want to revert to my Polish analogy. What happens when you lend money to a comparatively undeveloped country like Poland? The Prudential Assurance Company was not finding money for the coal industry in Great Britain which so badly needed it. That is why we on this side of the House have always insisted upon the establishment of an investment board. If we had had an investment board which would have directed the savings of the British people into the channels of British industry, our savings would not have been used to go abroad at a time when our own industries suffered from the absence of new capital. Indeed, the City of London has always known more about the investment possibilities of Borneo than those of Bradford or the Rhondda So the Prudential Assurance Company lent money to the Polish coalowner. What then happened? Mines were sunk, and the Polish miner is paid 18s. a week. Why is he paid so little? Because the coalowners go to Geneva and frustrate the I.L.O. when it is trying to establish a uniform wage for miners throughout Europe. The Prudential Assurance Company and great aggregations of capital of that sort see to it that the Government goes to Geneva to prevent our raising the standard of Polish miners because that might jeopardise the interest on the money they invested in Poland. In other words, they are interested in keeping down the wages of Polish miners.

    What does the Polish Government do now? The Prudential Assurance Company will not take its interest in Polish currency; it has to take it in sterling. It lends money to a Polish colliery undertaking, but it wants its returns in our own currency. How are the Poles to get English currency into their possession unless they sell their products in the world market? Silesia is a long way from Danzig. So the Polish Government actually subsidised the transit of coal from Silesia to Danzig, the result of which was to reduce our markets in the Baltic areas by 50 per cent. In other words, British coalminers were put out of work in order to amortise the Prudential investment in Silesia. That is a story of cartelisation on the one side and undirected investment on the other. Even the Federation of British Industries, in 1937, were so upset by this anarchic misdirection of our capital resources that they asked for international control of investments. Here is a concrete illustration of what happens when you allow the unification of an industry to take place under private ownership.

    Let us try to make our position on this side clear. We are not against the unification of the basic industries. On the contrary, we are in favour of it. We do not want to maintain internecine competition in these industries, because we know very well what that means. We are in favour of a policy of international agreements, but we desire to see unification brought under public control because we know very well that, if these cartel agreements which are being made between this country and other countries are under private control, they will not be used for the public benefit. A perfect illustration of that was the South Wales tinplate trade. In my hon. Friend's constituency and round West Wales firms were kept in existence which had never produced any tin. They were paid their profits out of the cartel, out of the pool. The result was that we reached a situation in which the price of American tin boxes was being brought down below the figure arranged by the tin cartel, and soon we were in danger of having the whole industry of West Wales destroyed if the Americans broke the cartel as, indeed, they would as soon as they were able to produce enough tin on the market at the price at which they were able to produce it. That is the reason why Sir William Firth and other enlightened industrialists established strip mills in this country. They had their backs broken by the British steel cartel.

    The same thing is true about the steel industry as a whole. I said in the House the other day that the steel industry of this country has been petrified at an output of 12,000,000 tons of steel per annum. We were producing 14,500,000 tons of steel before the war. If this country were consuming steel at the same rate per head as America, we should be consuming 20,000,000 tons per annum. Every industrialist knows that the best single index of the industrial efficiency of a modern nation is its consumption of steel. Judged by that standard, we have, owing to the cartel, been reduced to the status of an inefficient country. That is why my right hon. Friend the Member for Central Wandsworth (Mr. E. Bevin) said the other day that we were being cramped in this steel combine and that English industry was being pressed into a condition of semi-death. That is why we want to break the cartel. Fortunes are being made in this country by people because they do not produce goods, and by refusing, on conditions, to produce goods. It is obvious to everybody and, as my hon. Friends opposite know, to every economist who studies this question, that there is no possibility of extending the standard of livelihood for the people of Great Britain until we break the cartels and trusts in which British industry is being destroyed.

    5.27 p.m.

    Most hon. Members on all sides of the House have a great admiration for the great oratorical gifts of my hon. Friend the Member for Ebbw Vale (Mr. A. Bevan) but when he makes one of his excursions into economics I cannot resist trying to catch the Speaker's eye. My hon. Friend introduced a certain confusion of thought which in his case I have noticed before when he referred to an investment board. I would like to point out to him that the decision as to whether money shall be invested on capital equipment is not by those who have saved, but by the owners of the business deciding whether it is profitable. In the case of the strip mills which he mentioned, he gave credit to Sir William Firth; this was an unfortunate case for my hon. Friend to take, because Sir William Firth, unfortunately under pressure from the authorities, decided, not because the investors wanted it, but because he thought it was worth while, to spend an enormous sum of money amounting to £2,000,000 in removing a mountain in order to place a steel works in an unsuitable place.

    Then how does the hon. Member know that Sir William Firth moved a mountain? My hon. Friend has been listening to the gossip of the Exchange.

    I have never been to Ebbw Vale. It is one of the places, of which I have not the first-hand knowledge which belongs to my hon. Friend, but does he assume that we can never talk about things unless we have seen them?

    Having seen them, I say that my hon. Friend is wrong, and he ought, therefore, to withdraw what he has said.

    If I find I am wrong, I will certainly withdraw, but I checked this up with the greatest care, and there may be other hon. Members who know about it and can confirm it. Will not my hon. Friend agree that Ebbw Vale was an unsuitable place in view of its remoteness from the mineral required?

    My hon. Friend has not yet shown the confusion of thought into which he said I had fallen, but he is showing lamentable ignorance of the elements of the problem. The Prime Minister has said that we had the exceeding good fortune during the wax that those steel works were situated in a place where German bombers could not discover them. In any event, they have coal and limestone, and, therefore, coke, and they have all the elements for making steel except iron ore and—

    The hon. Member has already protested against being interrupted. I have no objection to interruptions within reason, but they must not go on in the form of another speech.

    I was about to finish my sentence. The hon. Gentleman asked me a question and had given way. I said that all the elements for making steel were present in Ebbw Vale, and if the hon. Gentleman says "except iron ore" I would say that we get most of our iron ore from Bilbao.

    My only point in bringing up the illustration at all was to show, if I could, that the hon. Gentleman was in a confusion of thought when he considered that it was the investor who settled what was spent on capital equipment.

    I would like to refer to the speech made by the Junior Member for Dundee (Mr. Foot). I am sorry that neither he nor any other Member of his party is in his place, but perhaps what I am going to say does not need any apology because I am going to express agreement with a great deal of what he said. He made an attack on monopolies and cartels. I would like to assure him that on these benches he will find a great deal of support for the protection of the consumer by free competition, and in places where monopoly is inevitable that there should be a degree of Government supervision to check abuse. But while I can assure him there would be support on these benches, I would like to suggest to him that that support is not so unanimous in his own party as he would have us believe. He made many references to what other hon. Members in his party had done, and I would like to draw his attention to a statement of the hon. Member for Berwick-upon-Tweed (Sir William Beveridge) in his book on full employment published only a few months ago. He said this:
    "The whole trend of the argument on this Part of the Report is towards a management of international trade, in place of leaving it to unregulated competition. That is to say, it is towards that for which the cartels stand. To attempt to destroy or stop cartellisation would, therefore, be a contradiction of policy."
    I would like to stress to the Junior Member for Dundee that that does not show any unanimity in his party for free competition, or for protection of the consumer, as was shown by the Prime Minister in his speech on 4th June.

    5.33 p.m.

    My hon. Friend the Member for Stoke (Mr. Ellis Smith) in his interesting and well-documented speech made a proposition to the House. It was that this Government, or another Government which may follow it, should institute an inquiry into the operations and general activities of trusts and internal and international cartels. That proposition received a large measure of acceptance on this side of the House. At any rate, no hon. Member so far has rejected the proposition, and I would not be surprised if the representative of the Government, the right hon. Gentleman the President of the Board of Trade, did not demur. But let us be clear as to what is meant by an inquiry into the operations of trusts and cartels. We cannot afford to wait a long time. We know what inquiries mean. We know, moreover, what frequently happens to the recommendations of a committee of inquiry. We cannot wait a long time before deciding our attitude on this matter. If trusts and cartels are responsible for pernicious activities, and if that is demonstrated, they should be dealt with summarily and with speed. If, on the other hand, we discover that this country can afford the existence of such organisations, efficient or otherwise, small or large, without detriment to the general trade of the country, then the sooner we are made aware of that fact the better it will be. So my proposition, which is an addendum to the proposition of my hon. Friend the Member for Stoke, is that if the Government should institute an inquiry let it be expedited, let it be thorough and let us have the conclusions as rapidly as possible so that appropriate action may be taken.

    When this Debate was asked for we had in mind a discussion not merely on trusts and cartels, but one that dealt with the general trade position of the country and our future trade prospects. Of course, that is all linked up in a very intimate way with the nature of the industrial organisation. For example, if the industrial organisation in this country is disintegrated and, for that matter, inefficient and inadequate for our purpose, obviously it affects our future trade prospects. On the other hand, if it is integrated, highly efficient, competent and adapted to the public need, and can respond to the ever-changing conditions affecting world trade, then obviously it will have a beneficial effect on our trade and commerce. The two subjects are closely related. I am very much more concerned about the beneficial objective—I am repeating myself in making this statement because I have said it frequently—than I am about the machinery for reaching that objective. I go so far as to say that, if it can be demonstrated that the existing structure of British industry is capable of reaching the desirable trade objective we have in mind, so as to minister beneficially to the public need, I am content. In other words—I have no doubt my hon. Friends will agree with me—we on these benches are not troubling ourselves unduly about new machinery, if the old machinery can create for us the conditions we desire. In this discussion so far, an attempt has been made to search for the alleged culprits responsible for the creation of monopolies, trusts and cartels; responsible as is alleged—I put it no higher than that—for inefficiency and for restrictive practices that are detrimental to the public good.

    My hon. Friend the Member for Stoke, in his very interesting speech, in a most comprehensive fashion searched the world for these culprits. Undoubtedly he was right when he directed attention to their existence in the United States of America, in the former Germany and elsewhere. But I am not going to roam the world in my search for the culprits, when in fact we have them on our own doorstep. Indeed, we need go no further than the precincts of this House, in order to discover them. They exist even within the precincts of this House in a very narrow compass, for they are representing His Majesty's Government. The principal monopolists of this country, directly or indirectly, are in His Majesty's Government.

    The remarkable thing about it all is that there is one member of His Majesty's Government who, in his constant and frantic search for the monopolists, has never yet discovered that they are his intimate colleagues. I refer to Lord Beaverbrook, who is constantly cavilling at the monopolists. Incidentally, there is an allegation, for what it may be worth, that Lord Beaverbrook is himself an arch monopolist. A book was published in 1934—I hope I may be forgiven for quoting from notes, but I want to quote accurately and not rely entirely on my memory—by someone named Edgar Middleton. The title of the book was "The Statesman and the Man." Before I quote what appeared in that book, I would like to quote what the "Daily Express" said only last week on this subejct of monopolies, because it ought to be on the record. There never was a more appropriate time to have it on the record than now when we are on the eve of a General Eleciton, and when one of the principal topics of public interest will be this question of monopoly and how to deal with it. I quote:
    "The little men are the backbone of industry and commerce. If a trust with great resources in many hives of activity so conducts its business as to prejudice the chances of the little man or to crush him, injury is done to the State. Any general monopoly must be deprecated because it prevents free competition."
    That is a quotation from the "Daily Express." Now here is a quotation from the book entitled "The Statesman and the Man."
    "Strictly speaking he (Lord Beaverbrook) is not a financier. Industry is his line; his speciality the amalgamation and reorganisation of companies in the same industry. Already (before 1906) he has a score of such achievements to his credit. To name but a few, he has been responsible for and is now, (before 1906) a director of the West Canadian Power Company, the Canadian Car and Foundry Company, a £4,000,000 concern, and the immensely wealthy Steel Company of Canada, a merger of five great firms. And the number of these amalgamations is still growing. It reaches its climax with his reorganisation of the Canadian Cement Industry. This is his masterstroke. In carrying it through all his theories are to be exercised to the full, his philosophy strained to breaking-point. The cement deal is to result in the grimmest, most desperately fought battle of his career…the Canada Cement Corporation is floated with a capital of £7,500,000—Aitken makes a fortune."
    I am bound to say that when Lord Beaverbrook fulminates against the mono- polists—excuse the hackneyed language—it is a clear and demonstrable case of sin reproving sin. But, as I have remarked, he is not the only one.

    What about the right hon. Gentleman the President of the Board of Trade and Minister of Production? I wonder if he would care to disclose, not his existing interests, because, as we know—and it is quite proper—when a Member accepts office under the Crown he disposes—that is the word used—of his interests. In other words, he sets them aside, presumably with a view to resuming them at a later date. I make no complaint on that score. A man has to get his living, but my right hon. Friend might care, since we are discussing this subject of monopolies, as I have remarked, at an appropriate time, on the eve of a General Election when the subject is topical and people are excited about it, to disclose all his former associated interests—British Metal Corporation, Imperial Zincs, melting companies, and other activities savouring of the trust in its highest and most powerful form. Where is the little man now? And, may I ask, what did the great corporations do with whom my right hon. Friend was associated? I am making no complaint about it on personal grounds. I am sure he is as much entitled to associate himself with such concerns as anybody else. We are living under the capitalist system, and we expect the search for high profits. Would my right hon. Friend care to say what beneficial effect these great corporations, with which he was associated before he assumed office, have on the small people in industry and in commerce? Of course, if he can demonstrate that the monopolies are valuable to the small man, then I suggest to him that while he is demonstrating that fact to us, he might, at the same time, provide a demonstration for his colleague, Lord Beaverbrook. He can have it either way.

    But my right hon. Friend is not the only one. Hon. Members will understand that I am merely putting these points as a matter of good will. We can, if necessary, fight them out on the hustings, but, in view of this controversy that is raging, of the washing of dirty linen, and people knocking each other about, I thought, perhaps, that I might be allowed to join in this mix-up, this "free for all," and offer a few observations. But there are others, as I say. And where are the others? There is my right hon. Friend the Minister of Supply. I must say I dislike the subject in this case, because I like the Minister of Supply very much indeed, personally. He is a very likeable person and an old friend of mine, but he was the head and front of the British Iron and Steel Federation. What greater monopoly than that? But more than that, it is the monopolistic undertaking, the closely integrated form of industrial organisation, with its very clever, restrictive practices, that collected plenty of scrap iron before the war which was exported to Germany, and if some of our boys are lying in their graves in foreign lands, and if people suffered and were bereaved in this country because of German air attacks, it may well be that some of the scrap material exported from this country, and used by Germany, is to some extent responsible.

    That is not all. What about Lord Leathers, the great Minister of War Transport? One of these days we shall tell the whole story about that. Some of us have been waiting for a long time, but there is no time just now. [Hon, Members: "Tell us now."] Well, I will tell hon. Members some of the story if they like. I am not going to be out of Order because the only part I am going to tell is that bearing on the subject under Debate—the Noble Lord's association with monopolies, not his general shipping interests. The great Lord Leathers, the great Minister of War Transport, the big noise in William Cory and Sons, shippers and coal exporters, one of the greatest monopolist undertakings in this country. No small men about that. But there is another, the most interesting of all, because it is so closely linked up with Lord Beaverbrook's criticism in the sphere of retail trade. What about Lord Woolton, with multiple shop concerns all over the place, driving the small retailer out of business without a penny piece of compensation? Are these the people, I ask, who are likely to make this vicious and determined assault upon the monopolies, when they are so closely associated with these concerns themselves? Is it conceivable that the Wooltons, the Leathers, the Duncans, and the Lytteltons are likely in the post-war years—I was not out of Order because I was not referring to hon. Members but to their trade associations—to make such a determined assault on monopolies? I am sorry, Mr. Deputy- Speaker, that I should have referred to the persons concerned in the ordinary fashion as Members of this House—

    My right hon. Friend interpellates that he regards it as entirely rhetorical. Very well, let him answer the question about his own associations. Let us have a list of them and, at the same time, let us understand how it is possible for people linked up with these octopus trade organisations—big business—to come to the assistance of the retail trader, the small man. It is a sham, fantastic; it is hypocritical, and I say, quite frankly, it is humbug on the part of Beaverbrook and company to indulge in language of that kind. But that is not all. There are others—the lesser fry. They are all linked up in one way or another. For example, to take one of the firms, one of the large octopus firms, there is Armstrong-Whitworths. What is their association with this? The derivation that you have to begin with is the Investors General Fixed Trust. You have that, and there is a gentleman named Major-General Dawnay with a whole list of honours after his name, a director of Dawnay, Day and Company, merchant bankers. Hon. Members will see the link-up. Get the public's money, use it, build up your business, drive out the small man, fix prices, take advantage of the community, and then write letters to "The Times" deprecating the practice.

    I am addressing the Chair. Major Dawnay is also chairman of the Armstrong Whitworth Security Company. Notice the use of the term "security." Whenever they are after private gain they always use the term "security." It has a soothing effect on the public. He is also a director of Craven Brothers, Armstrong Engineers, and the Armstrong Power and Paper Company of Newfoundland. Look at the link-up. Well, that is nothing—they have got an association with the English Steel Corporation, and with the Armstrong Whitworth shipbuilding yard, which, by the way, was disposed of to National Shipbuilders Security Limited. That is where your restrictive practices come in. Get the business into your hands and close it down, and what do you care for the poor devils thrown out of work, except to offer them White Papers? That is not all. They go on and on, but the most interesting part of all is connected with colliery companies. Pearson and Knowles Coal and Iron Company, the Wigan Coal Corporation, the Lancashire Steel Corporation—and we had better have the rest. Who owns the Wigan Coal Corporation? It is controlled by the Lancashire Steel Corporation, a director of which is the Earl of Crawford. The company is a subsidiary of the Bank of England and Rylands Brothers. He is also chairman of the Wigan Coal and Iron Company. His son and heir, Lord Balniel, is also a director of these. He is father-in-law of Mr. Manningham-Buller who has just been requisitioned by the Government.

    If the hon. Member refers to another hon. Member, he must do so in the proper way.

    The hon. Member is not altogether correct, because that Earl of Crawford has been dead for some years.

    That may be, but the business still goes on in this integrated form, though I have not doubt the hon. Member to whom I have just referred, the hon. Member for Daventry, who has just beep requisitioned by the Government, and who does not conceal his hostility to Soviet Russia—

    On a point of Order. May I remind the hon. Member who is speaking about members of the Government, that the gentleman referred to in the paper from which he is reading, is the hon. Member's father?

    If hon. Members wish to deny that then, here is the hon. Member for Farnham (Mr. G. Nicholson). He is alive. I saw him in this House only the other day. They are all connected. In fact, it is a family connection They are all linked up—cousins, fathers-in-law, mothers-in-law, daughters-in-law and the rest of it. It is a family affair. British industry is in the hands of a Tory clique all linked up with each other, and when some of them get hard up they look around for the daughter of some wealthy person in order to replenish their coffers. It is ah old trick. They are trying to put it across us. Who do they think we are? [Interruption.] Of course, hon. Members do not like it but that is only the beginning. I will tell hon. Members what they like. They like to hold on to what they have got, and when the public in this country, as a result of certain investigations, have discovered what right hon. and hon. Members opposite possess in this country, the amount of wealth in their position—the largest amount of wealth in this country owned by a comparatively small section of the community—there will be a change in public opinion which will be quite sufficient to topple some right hon. and hon. Gentlemen off their perch.

    May I offer a few observations on the future trade prospects? It is assumed that these monopolistic undertakings are highly efficient. They are nothing of the sort. It is assumed that they are enterprising in character. That is not true. Take, for example, I.C.I. A speech delivered by Lord McGowan the other day was extensively quoted in "The Times," at advertising rates, paid for out of the profits that should have gone to the shareholders, or perhaps to the reduction of prices to consumers. In the course of that speech, he praised himself and bragged about the achievements of I.C.I. What are their great achievements? Most of the patents they use, have been derived from abroad when they could have been developed in this country if they had been enterprising. Take for example all the bragging about the production of hydrogen-heated oil at Billingham. Even now, after many years of agitation and pressure and encouragement, they have not developed the Fisher-Tropsch process.

    The hon. Member has referred to Lord McGowan's speech. I am not denying that I.C.I. is a monopoly but Lord McGowan did say:

    "Personally I have not the slightest objection to an impartial investigation into the whole matter."
    He went on to say:
    "It may not be inappropriate for me to suggest that similar steps should be taken in connection with trade unions with a view to determining the effect on industry resulting from any alleged restrictive practices in the use of labour."

    I am not for a moment suggesting that Lord McGowan would object to a commission of inquiry into the operations of cartels, but it depends on the nature of the inquiry. Will there be access to all the material, to their arrangements with foreign-owned firms, to all they did before the war, and to their technical processes and the like, in order to discover whether any technical skill is really being used by I.C.I. and similar undertakings? I was referring to this hydrogenation process. Who is responsible for encouraging this process but the State itself? It is heavily subsidised by the State. Where is the private capital that flows into new and developing industry? A great deal more could be said about the inefficiency of some of these monopolistic undertakings.

    I and my friends are as anxious about the future of British trade as hon. Members opposite, because despite a difference of opinion as to the method of approach, our people depend upon it so much, as indeed does everybody in the country. Whether one takes coal, iron, steel or textiles, or anything else, unless we can be sure of more happy prospects for British trade, it is a poor look-out for everybody. We want to build up to the maximum use of our resources. How often has that been said by myself and others in the House. There is general agreement on it in the House. I do not suggest that hon. Members opposite do not want to see a high standard of living in this country, but I think their method of approach is wrong. That is the difference between us. I think they are as well-intentioned as we are about raising the standard of life of the people of this country.

    The other week in the Budget Debate I remarked that there is a vested interest in obsolescence in this country so far as industry is concerned. Some figures have been presented to me, taken from official reports, which are most alarming. Taking the period of years before the war—the war years cannot be taken because there was a boosting-up during that period—one discovers that efficient production based on man-hours was far in excess, in the U.S.A. and in most foreign countries, particularly Germany and Russia, of this country. To take coal, some reference has been made to the Anglo-Polish coal situation in the course of this Debate. Even in Poland, which was regarded as backward, technically and mechanically, production before the war bounded up on the basis of man output, far ahead of that of this country. That was not due to the fact that the miners in this country did not want to work harder, but to the fact that they had not the organisation and facilities for producing coal.

    Take textiles. We need to do something about textiles, particularly cotton textiles, if we are to retain world markets, and hon. Members opposite are as anxious as we are to recapture and increase them. To do that, efficiency has to be improved, and we are very far behind. There is iron and steel; indeed, there is not a single item of production I can discover in these statistics in regard to which we have improved our position in comparison with other countries. It is a deplorable state of affairs, and we must do something about it.

    If I am asked the question, "Do you propose to nationalise all these industries, and do you think that they will gain in efficiency by nationalisation?" my reply is a very straight one. I am not suggesting nationalisation at the moment, Mr. Deputy-Speaker, so I am not raising the question of legislation. I am merely giving an illustration. I do not suggest that nationalisation in itself will promote efficiency any more than capitalism promotes efficiency. But I say that when a point is reached at which we have to face up to monopolies, and these monopolies cannot be broken up into small fractions or splinters—the trend is in the opposite direction and Lord Beaverbrook and his friends would do well to understand that—when, I say, we have to face monopolistic undertakings with restrictive practices, all raising prices, and with a lack of technical efficiency, because they have got into a monopolistic position, and when we have to consider whether the State should take over these monopolies, I say that whether you like it or not, the State must take a hand.

    The hon. Member for South Croydon (Sir H. Williams) referred to the trade unions and the restrictive practices of trade unions. I invite the right hon. Gentleman to make an attack on the trade unions if he wants to do so. I invite him to repeat the argument used by the hon. Member for South Croydon, that the purpose of trade unions is to raise prices and to protect their labour. In order to antici- pate what he may say, I express this opinion. When trade unions or workers combine in an industrial organisation in order to raise their wages, they are; not depriving the purchasing community of this country of anything they need. Indeed, the very fact that wages go up is of assistance to the community. That, indeed, is on all fours with the White Paper issued by the Government, in which they said that we had departed from the old policy of under-spending. Therefore, we have to spend. So when trade unions combine to keep up wages, they are assisting the Government to promote further trade. As regards the trade union practice of preventing would-be entrants from coming into an industry—it did not operate during the war—it was gradually being abolished before the war. If it is to be completely eliminated from trade union practices, an assurance must be given to workers in particular industries, who are organised in particular trade unions, that if other people come in, the conditions of those already in the industry will not be worsened. That is fair, that is the purpose of trade unionism. The cases are not analogous at all. The position of trade unions is quite unlike that of a monopolistic undertaking.

    I have spoken at length, but the arguments had to be advanced, and I have done so in view of the position that is likely to confront us in the post-war years and adversely affect the people of this country, as regards exports, the proper use of our resources, and keeping our end up in all the four corners of the world. Regarding it in that light, from a purely national point of view, just as much as Members opposite, I felt it essential to promote these views. If the right hon. Gentleman thinks I have been a little harsh on him, because I have referred to his associations with monopolistic undertakings, all he requires to do, and I shall apologise to him afterwards if he does it, is to declare that he will no longer associate himself, even if he is out of the Government, as he is likely to be before long, with any such interests again.

    6.15 p.m.

    I have always been an admirer of the speeches of the hon. Member for Stoke (Mr. Ellis Smith) on industrial subjects, and of the sincerity which he shows in dealing with them. I am also a great admirer of the Parliamentary performances of the hon. Member for Seaham (Mr. Shinwell). They are very fine. To-day, I confess, I was a little disappointed by the political extravaganza in which he has indulged, and at finding myself taking part in the hon. Member's Election campaign at Seaham. But, be that as it may, and although the facts which he advanced were nearly as bad as the taste in. which they were put forward, I feel that, as he has made a personal attack on me, I ought very shortly to rebut some of those charges. He went so far as to mention two companies with which I was connected, one of which I think, it would be said, I predominantly managed for 20 years, the British Metal Corporation. He made a lot of cheap points, and said that it was a monopoly. There are one or two Members who know that this firm had certainly 40 competitors engaged in exactly the same business. If that is the hon. Member's definition of monopoly, I suggest the purchase of "Cassell's Dictionary," which will put him in possession of the truth.

    He made a number of other points about these associations, and made a number of sneers. Is he aware that the British Metal Corporation was formed at the request of the Government, and that the Treasury now have the right to appoint a director to the board? Is that monopoly? He made the point, "Where does the small man come in with regard to these great conglomerations of capital?" We all know that the small man in the twentieth century is not likely to be able to find 20,000,000 dollars, which many people think is about the capital investment needed to develop a new copper-mining affair. All these points are simply dialectical fireworks and squibs. The hon. Member referred to things like cement works. Who is the small man engaged in making cement? What Lord Beaverbrook has been talking about is the small man in quite another connection—small retailers and so forth. On this topic, I might mention the remarks made by the right hon. Member for Central Wandsworth (Mr. Bevin) about tin. I daresay the House knows that I was one of the people who organised the International Tin Agreement. In those negotiations I represented the Government of Nigeria, and I signed the International Tin Agree- ment on behalf of that Government. It was signed by other Governments—the Government of Malaya, the Government of the Dutch East Indies, the Government of Siam, the Government of Bolivia, and so forth. It is a published document. The scheme may be a bad one—human beings make mistakes. If it is a bad one, it seems to me a poor argument for the State engaging in the tin business. If it is a good arrangement, why blame me? The right hon. Gentleman shot a lot of rather attractively painted arrows into the air. Unfortunately, like some of the enemy's bombs, they fell into an open field. There is no more competitive business than the metal business, in which I was engaged. To anybody who has the slightest knowledge of the trade, this suggestion of a monopoly is farcical.

    I do not want to emulate the hon. Member, and try to raise a great deal of prejudice on a very slender foundation, and make Election addresses to the House on the subject. I would like to make an entirely objective approach. Part of the case is complicated; the subject is full of difficulties. It has ramifications in many directions. I will deal with it in the most objective way. I think that everybody, in any part of the House, agrees that we want an expansionist economic policy. In fact, to expect the markets of 1938 to absorb the productivity which we have now reached, and which has been so greatly accelerated by war, partly under the stimulus of the need to survive, would be indulging in a counsel of despair. I would remind hon. Members that the national income of the United States has more than doubled in four years. There is no means of absorbing such a production if we look to markets of that size. We must look to expanding markets. I think there will be no difference between hon. Members in any part of the House and myself when I say that cartels, or trade rings, which are designed to create artificial scarcity, and especially to raise prices and make undue profits, are anti-social. By "anti-social" I mean something which, at the expense of the common good, serves sectional interests. I would look with the greatest suspicion at rings which seek to forbid new entrants into an industry, and I would require a lot of convincing that those are beneficial and not harmful. I would also require a lot of convincing that arrangements to force the consumer to buy all that he requires from a ring, and to put him under certain disabilities if he buys outside a ring, are not harmful. All those things are under the greatest suspicion.

    I would like to say how some of these things come about. We should not be too ready to impute blame to those who engage in some restrictive practices, whether on the capital side or on the labour side. You must recognise, in fairness, that some of these restrictions are the natural protection which, on the one side, the employer makes against bankruptcy, and, on the other side, the trade union, or the worker, makes against the incidence of unemployment. Everybody knows that there are restrictive practices connected with the employment, the re-engagement, and the demarcation of labour, which are sedulously, and in my opinion rightly, defended by the trade unions. The hon. Member for Seaham asked if I was going to attack the trade unions. That was a rhetorical point. Of course I am not. But it is a fact that the full product of a man's energies is sometimes withheld, jobs are prolonged, and full effort is not put into them, in order to maintain the level of employment. Is that surprising? Is it not the natural defence which each man makes against a disaster which it is found difficult to overcome? Of course it is. Complaints are made about difficulties of demarcation, of getting an electrician to connect a refrigerator with a water tap. That demarcation is designed to prevent the skilled man's wages from coming down. It is, in its nature, a very restrictive practice. The real cure, apart from the extravaganzas in which my hon. Friend has indulged, is to provide a high level of employment, with a high individual output, high wages, and reasonable profits. The positive thing is best.

    I am very anxious to set the thing out fairly, and I would like to turn to the less sinister aspects of restrictive practices. There is nothing to the public advantage, nothing that is pro-social, about producing things that are unwanted. In fact, under a competitive system of prices the effect of producing what is unwanted is merely to force down prices, very likely below any possible cost of production. In that event, a section of the industry will be bankrupt, and the labour employed in that section will be dispersed. Some people, who are not economists, and who are more fond of using the English language than economists usually are, describe the production of unwanted goods as "waste." They are not far wrong, because into that production have gone capital and labour, scientific developments perhaps, and raw materials. In fact, in every productive theory the element of restriction enters in, because everybody who is going to produce anything knows well that one of the first things he has to think about is, "How much will the market absorb at any price I am able to make it at?" That is just a fact.

    There are several other aspects of this matter of restrictive practices, which I would like to illustrate. Let us take the liquidation of stocks. It is undeniable that very large stocks have been created in the war in certain commodities and certain articles. I would like to bring out this point by an illustration. The Army will have at the end of the Japanese war, a great number of Army vehicles, whether lorries or passenger cars. They will be redundant. It is quite possible to say, "We will throw that stock on the market at once, and see what they will fetch." Most hon. Members would agree that such action would have a bad effect upon the producers of motor cars, upon their programme of production, and upon the possible employment which they will offer in that light industry. So I think we would all agree that it would be wrong to throw that stock on the market at the prices it will fetch. The stock should be liquidated in an orderly manner. But do not let us delude ourselves that that is not a restrictive practice. It withholds from the consumer something which is available and already made, which he wants. I would ask hon. Members to examine whether, in the desire to protect the consumer, which we all have, they are not, on the other side, paying less attention than they should to the interests of the producer, and of the worker, in particular, who produces the goods.

    My right hon. Friend is making a most interesting point. But surely there is a difference between the State surveying the position as a whole, and saying, "We are not going to liquidate all these stocks, because it is unsatisfactory to do so," and a private concern adopting that policy.

    I really must disagree with my hon. Friend. The illustration happens to be one in which the State owns the surplus stock. I could multiply these instances in regard to thousands of different things of which the stocks are not held by the State, and I am not making any controversial point. I am only trying to explain that, in the interests of current employment, it is sometimes not only necessary and beneficial, but absolutely essential to prevent stocks being thrown on the market, and thereby disrupting the course of present employment. Yet such an action is a restrictive practice. I go further. Let us take the case of the motor vehicles. Nobody has suggested, I hope, that the State should permanently remove them from the market, that taxpayers' money should be wasted or that the community should not, in an orderly manner, make use of these particular things. I say you want a plan by which the current production of automobiles is kept slightly under current demand, in order that the stock may be liquidated at a reasonable price and fill the gaps which current production cannot do. What is that? It is a restrictive practice. In other connections, the hon. Member would no doubt point the finger of scorn, if some unfortunate capitalist, who has had no notion of what the hon. Member was going to say and cannot defend himself, did it, and would say that that was highly naughty and indefensible.

    I would like now to refer to geographical arrangements, and, again, I want to be quite fair. I begin by referring to a geographical arrangement which does not appear to me to be sinister. Let us suppose—and it has happened many times—that a new process has been invented, worked out and developed in England and that a foreign country wants to manufacture that particular product within its own frontiers. The foreign company comes to the British company which has developed the process and says "I want, for a fee, to make this particular product in my own country." The British firm says "We will do that. You shall have the process and we will lend you the engineers and you can make the product, but, in making our patent available to you, we wish to make it a condition of the contract that you do not sell the result of our own process in competition with us in this country, or take from us, with our own process and our own product, some of the natural markets which we have always been accustomed to supply." That is put into the contract, and it seems to me to be only common sense. It is a geographical arrangement, and I would remind hon. Members that the free flow of scientific information in an industry is absolutely necessary. The finger of scorn has been pointed at these geographical arrangements, with regard to Germany, and I may say that there is no evidence whatever that any British firm has entered into an arrangement which restricted production of strategic materials. There is no evidence of that whatever but there are some allegations made, which have not yet been investigated, in America. There is not a shred or tittle of evidence in this country.

    No, not in aluminium. I was discussing a case where these arrangements existed. At any rate, I can speak from memory. I can remember three of these arrangements—optical instruments, magnesium and beryllium. It so happens that, in these industries, German research has always been in advance of the world, and we are faced with a great dilemma—the sort of dilemma to which the hon. Member has referred. It is this—Shall we try to work out another process and abandon this old form of production? It may well be that a war will break out and we may find our self short of this particular product. On the other hand, shall we allow a firm to make it and make an arrangement whereby we get from the foreign firm the advantage of their engineers, but, in doing so and thus providing employment in this country, we are obliged to enter into a restrictive practice which prohibits us from entering certain markets. I do not think that is very naughty: I think it is very sensible, but you are always faced with this dilemma. What I am trying to say is that the difference between a restrictive practice or cartel which is beneficial to the country, provides employment and interchanges information and increases scientific development, and those which strangle, stifle and get the industry by the throat, as my hon. Friend said, is a very fine line.

    I want to say one word more about patents, a subject which is very relevant to this kind of discussion. We all know that if an invention is made, and the owner of that invention seeks, by a series of protective measures, to prevent farther inventions in that field from fructifying that is anti-social. On the other hand, everybody knows, equally, the commercial maxim that it is "odds on the infringer." If you throw open the invention, and the patents to every infringer, you will have destroyed the value of the invention to the inventor and he will not be prepared to devote his whole life and his money to invention if, at the end of the day he knows that, owing to some implacable sentence, the whole of his work is to be infringed by others. There, again, you have an extremely difficult line to draw, as between the proper protection of the inventor and the exploitation of his process, and preventing the community as a whole being exploited by strangling new inventions coming into that field

    This, very shortly, is how I see the whole field of restrictive practices and cartels. I want now to add what I consider is a practical answer. I think it is extremely dangerous, in a doctrinaire and overcoat way, to attack the thousand and one questions, in all forms of production which enter into the problem. I go so far as to say that, without some form of restriction, you cannot have a policy of full employment and cannot attain full employment. There is nothing but disaster if you allow no restriction. On the other hand, we should prevent, by any means that are necessary, the creation of artificial scarcity merely for the sake of putting up profits. The hon. Member opposite rather annoyed me by using words which are entirely unjustified. He spoke about me and said it was all humbug and that I did not believe in any of these things. I can tell him that I would not stand at this Box and use arguments which I did not believe in.

    The right hon. Gentleman has misunderstood me. What I said, in reference to attacks on major monopolies by Lord Beaverbrook, was that, in view of the fact that so many colleagues of his were associated with monopolistic undertakings, it was all humbug for him to attack them.

    The hon. Gentleman will no doubt read his speech to-morrow but the general imputation was that right hon. Gentlemen on the Front Bench did engage in monopolistic practices.

    —and that it is mere humbug to say they wish to control monopolies and cartels. That is the tenor of his argument. It is an imputation of grave insincerity. I mean exactly what I say about this, but I differ very much from the method which the hon. Gentleman advocates and his manner of presenting it. I believe the first answer—and I do not say it is the last—to this problem is to let the light of publicity beat on these arrangements. You will find some quite startling results in the other direction. You will find some practices which are certainly bad practices, and which I would not attempt to defend, and which I think ought to be stamped out. You will also find a lot of restrictive practices which are highly beneficial to employment. I know that there are many, whose business has been assailed, who would welcome inquiry. It would do a great deal to remove the inflammation from a subject which cannot be dealt with by means of slogans, because you cannot do things by slogans, but must have an examination of the facts.

    In conclusion, let me say we must keep in front of our minds this very simple proposition—are we trying, at all costs, to protect the consumer? Are we doing that, or does there, somewhere in the back of the hon. Member's mind, enter the idea that it may be necessary to give some measure of protection to the producer and the workpeople whom he employs?

    6.41 p.m.

    Dealing first with the latter part of the right hon. Gentleman's speech, in which he made some remarks on the subject of patents, I may mention that I have probably taken out more patents than any other Member of the House, and have come to the conclusion that, on the whole, we can really do without patents altogether because the protection thus afforded to an inventor, if that inventor is not backed up by large sums of money, is largely illusory. It is extremely rarely that I have been held up by patents owned by competitors since owing to the immense bulk of technical publications, and patent specifications on the files, an anticipation can almost always be discovered after a search. With regard to the general question, I should like to hear what is the Government's position on one or two points. Of course, I do not agree with the speech of the hon. Member for Seaham (Mr. Shinwell), in which he laid down the law on things about which he obviously knows nothing. I am rather notoriously critical, not only of the big combines, but even of the right hon. Gentleman himself. The question which really concerns this House, in relation to combines, is the political reactions of their growth. So long as we get a fair deal from the Government of the country, so long as political advantage cannot be wangled by big combines, so long can we small independent concerns compete successfully with them.

    Apart from this danger of the misuse of political influence the combines are perfectly legitimate affairs. I do not like them, but there is nothing necessarily bad in them. I wish the hon. Member for Seaham were present, because I could tell him about some of those wicked people to whom he was referring. In the ordinary course of business, I am continually dealing with some of these so-called trusts. I am shocked to hear that, in dealing with the English Steel Corporation, for example, I was apparently lending myself to crime as a sort of accessory after the fact. I deal with them because I get what I want much better from them than from others. That is my sole reason for dealing with them. Again, the hon. Gentleman went out of his way to abuse, in his absence, a gentleman who is a Member of this House on the ground that he happens to be related to the Chairman of the Wigan Coal Corporation, which, added to its other sins apparently, is connected with the Lancashire Steel Corporation. Personally, all my prejudices are against this sort of thing. I think the trusts are liable to abuse but they are run by perfectly good people to deal with in business. The Wigan Coal Corporation are very good customers of mine, and as the Noble Lord has been abused behind his back by the hon. Member for Seaham, I can assure the House that Lord Crawford is not only chairman of the company but he is a real working chairman. The last time I met him, I was speaking to him about his pits, and found that he really knows his pits. He is no guineapig director. He knows his job and fully justifies his position. I merely mention that because of the vulgar abuse from the hon. Member for Seaham. Nor does the fact that a Member of this House happens to have married a sister of the nobleman in question justify the hon. Member for Seaham in attacking that Member.

    I have indicated the danger which I want the right hon. Gentleman to assure us will not arise. I hope he will see that these great combinations do not use their power to wangle political advantage which would enable them to crush us small men. I assure him that, if we are capable of conducting our own businesses, we can put up a good fight against the biggest concern in the world, provided there is not this wangle. In the case of one corporation—it has nothing to do with the right hon. Gentleman himself, and I will not mention its name—there has been, from its very inception, a sort of feeling in industry that everything was not quite fair; and that the number of eminent politicians who go on to the board of that concern seem to be totally unnecessary for the conduct of its business. A certain degree of suspicion arises, when we find not only an excessive number of ex-Ministers on the board, but also a certain excess of legislative action in the House of Commons that had helped to justify a capitalisation which seemed, in the first instance, altogether excessive. Almost at the same time and from the same stable there came along another combine which was an utter failure, and has been an utter failure ever since. I attribute—and perhaps I am entirely wrong—the failure of that second corporation to the fact that in Committee on a Bill I smashed a new Clause proposed by the promoter of the combine. I merely mention that second instance to show that we have some justification for our suspicions when, taking two promotions from the same stable, we find that one which had political advantages succeeded, while the other, which did not get political advantages, failed.

    There was another foolish thing which the hon. Member for Seaham said with regard to Imperial Chemical Industries when he declared that these great combines are extremely inefficient. I do not like Imperial Chemical Industries, but I buy things from them and sell things to them, and anyone who has dealings with them knows that it is utterly untrue to say that they are inefficient. I loathe them, but I do business with them because they are so efficient. I am giving the House some idea of the degree of knowledge of the hon. Member for Seaham in making all those allegations. Of every single thing he has spoken about he has shown himself totally ignorant. The more ignorant he was the more offensive he became. He had to turn his abuse on to people who were not here. It does not add to the dignity of this House or to its usefulness when that sort of thing takes place.

    Do he and his colleagues realise that the real danger is a political danger rather than an industrial and commercial danger? I want to be fair to the people concerned. If you find in your hands an immense concern with a capitalisation which is not justified, you know that an immense number of people—those whom you employ and small shareholders: —will have a very severe shock if you do not keep your concern running. Mistakes have been made and there are all these people affected by those mistakes. Are we not aware of the temptation, it may be, to a man if he thinks that he can push certain Bills through Parliament and thus save the situation? The temptation is very great. It does not need much imagination, in view of the trouble that would be caused if such a concern crashed, to see that a man might almost be excused for using political influence to prevent it. But the politician who helps him can never be excused. There is absolutely no justification whatsoever for him, and if the politician is subsequently found on the board of the concern, he should be regarded as an outcast.

    The danger of trusts and cartels is purely political. For do not think for a moment that we small people will be crushed by trusts. We will not. After the last war, when the great slump came, nearly all the big people in my industry crashed. They went bankrupt. They called in some celebrated chartered accountant, who solemnly sat down and informed the boards of what they knew perfectly well, namely, that they were "on the rocks." Meanwhile, we little people went on, quite prosperous, all through the bad slump. The reason was that if you are at sea and a storm breaks out unexpectedly it is well not to have too much top-hamper. We were always under-capitalised rather than over-capitalised and always weathered the storm.

    I hope that I have not been too discursive about this subject, but I have had to speak on the spur of the moment. Being in the position of a small industrialist myself, entirely independent, dealing with these great cartels, I wanted to point out that practically all of them are extremely efficient. The technical side of Imperial Chemical Industries is first rate, but Imperial Chemical Industries may become a political danger. Therefore, I hope that my right hon. Friend will give us an assurance that the danger is fully recognised by the Government and that every possible attempt will be made, if this Government is returned after the Election, to see that that danger is provided for, if necessary, by legislation.

    Question put, and agreed to.

    Bill accordingly read a Second time.

    Bill committed to a Committee of the Whole House, for To-morrow.—[ Major Sir James Edmondson.]



    "That this House do now adjourn."—[ Major Sir James Edmondson.]

    Adjourned accordingly at Four Minutes to Seven o'Clock.