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Clause 6—(Application Of Powers Of Ministry Of Supply)

Volume 414: debated on Monday 15 October 1945

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I beg to move, in page 5, line 1, leave out Sub-section (1).

My hon. Friend who moved his Amendment in connection with Clause 5 said that he thought it was dynamite, and certainly he went very vigorously into the whole question of his opposition to it. With regard to this Clause, I think its explosive power is really atomic, for it is, in my opinion—with the exception of one which we shall no doubt discuss later—quite the most menacing Clause in the whole of this very menacing Bill. As it stands it renews and confirms the powers of that already bloated Department the Ministry of Supply, which was set up during the war as a purely war-time Department by a purely war-time Measure, extends those powers and, so far as I can see, increases them—at any rate in no way diminishes them—and lets them go on for another five years. The 1939 Act which set up the Ministry of Supply, we all agreed, was definitely a war-time Measure, and it can be extended now for a year at a time, indefinitely if the House so desires, and I can well imagine that nobody at the moment wants to shut down the Ministry of Supply. We should be most disappointed to lose my right hon. Friend and to see him transferred to another quarter, or even perhaps to another place. But surely the present powers of the Minister and of his great, swollen Department can go on year by year with the will of the House. Why should we be asked suddenly to reverse the principal point of that 1939 Act? Why should we cancel the idea of extending it year by year, and carry it on for another five years without any further question and then, I presume, extend it year by year after that? It seems to me to be quite unnecessary to have included provision for such tremendous powers to be given to the Ministry of Supply for another five years.

The Clause makes the Minister a sort of Pooh-Bah, which in any case he has been throughout the war, but why should he be a Pooh-Bah in peace-time as well? He can do everything. This enables him, and the Ministry, to produce anything they want, to control the production of any article they want, and to compete, as a huge State-trading Department, with private enterprise in any way they decide—I thought that would please the other side—not reckoning all that private enterprise has done to make this country great and enable it to carry through two great wars. There is no doubt that the powers which the Ministry of Supply seek to continue will definitely upset the whole balance of our trading practice. There seems to be just nothing which the Ministry of Supply cannot do. If it wants to do so it can control, it can produce, and it can sell at any price it likes, whether it is an economic price or not does not matter, whether the taxpayer will lose by that uneconomic price or not does not matter. The Ministry of Supply is a law unto itself, and will continue to be so for another five years. It can dispose of any articles that it so desires, at any price it so desires, at the expense of the taxpayer.

What does a great Government Department really mind about what it is going to cost the taxpayer? This Department, which already, we thought, ought to be reduced now the war is over, will unquestionably save jobs for all its members, and, very probably, increase its personnel during the next five years. It has all these great powers. Therefore, how can it reduce its personnel because of the valuable work it is doing? It is just giving the Ministry of Supply a blank cheque, as, of course, the whole Bill is a blank cheque, and the party opposite know darned well it is a blank cheque. This is, of course, just the sort of thing we knew would come, just the sort of thing that Mr. Laski [Laughter.] It is nice to feel that my hon. Friends opposite can laugh about Mr. Laski now. As I was saying, it is just the kind of thing he advocated and said the Labour Government would do when it took office. It is just the sort of thing the President of the Board of Trade advocated in his book some time ago, that as soon as the Labour Government took office all these things and powers must be taken straight away. This particular Clause is unnecessary. We could have kept the Ministry of Supply, as at 1939, in being without including it in this Bill in any way whatever, and there is absolutely no necessity for the Clause at all. I suggest that it is, in fact, definitely endeavouring to enthrone bureaucracy at the expense of democracy, which is just the kind of thing I expected the other side to do directly they got the opportunity.

8.45 p.m.

I support the Amendment so ably moved by my hon. and gallant Friend and so hilariously listened to by the Benches supporting His Majesty's Government. I should like to suggest that this is no laughing matter. This is a very serious matter, because this Clause confers the most drastic powers upon the Ministry of Supply, powers which cover, as they potentially do, the whole of our national economic life. I would point out to hon. Members opposite that inevitably this Clause will have the most disastrous effects on all industry, industrial planning, and enterprise in this country. This Clause is a cruel threat; it is a threat of competition; secondly, it is a threat to supply; thirdly, it is an encumbrance to credit.

Our industrialists and our manufacturers have been encouraged to make plans for post-war developments, and the importance of our export trade has been particularly enjoined upon them. We, on this side of the Committee, know that unless we can rebuild our export trade and industries, our people in this country are in for very hard times and will suffer a great deal. When we discuss these matters, we should discuss them seriously and not in. a spirit of ribald laughter, which astonishingly is the attitude of hon. Members on the other side. These matters affect all sections of the community, and I am surprised that hon. Members opposite should find the prosperity of the poorer sections so directly affected by this Clause a matter and food for laughter. Our industrialists cannot plan for the future unless they are given some kind of a reasonably free hand; they cannot plan if they are in the position of the children of Israel, faced with Pharaoh's injunction to make bricks without straw.

I want to say a word, first, about the powers of competition in this Clause. Under it, in supplying articles required for the public service, the Minister of Supply is empowered to use all existing war factories, to acquire any factory belonging to anybody else, to build an unlimited number of factories in this country and to make, on any scale, anything whatever which a Government Department, anywhere, might conceivably consider, in any conceivable circumstances, that it might need. It would be true to say that the Minister of Supply has the power to make every tropical sun helmet for civil servants in the Seychelles. He can make every purchasable article falling within the vast and varied purview of the Crown Agents of the Colonies. This Clause empowers the Minister of Supply to manufacture anything, however uneconomically, on whatever scale, and at the expense of the taxpayer. That is what His Majesty's Government desire to do, and intend to do to-night. The public had better realise that to the full.

Let us say that I am exaggerating; let us say that the Minister of Supply—who is so very amiable and pleasant, and sits there smiling—will use these powers with discretion, because I am sure that will be his defence. Let us say that he will behave as a reasonable human being, and use these powers with moderation and circumspection. Nevertheless, the very existence of these powers constitutes a threat, a menace and a discouragement to every manufacturer, large or small, in this country. There is nothing whatever which some Ministry could not use except, perhaps, playing cards and babies' bottles, and the right hon. Gentleman will have the power to manufacture everything except, possibly, those articles. When I contemplate this Clause, and then look at the faces of His Majesty's Government opposite. I am driven to the irresistible conclusion that they have made a new discovery in the field of medical science, or should I say psychological medicine, because they have invented a new political mental malady, political folie de grandeur. Not the wildest dreams of a conquering Tamburlaine or Charlemagne extended to the manufacture and control of absolutely everything.

The Minister of Supply under this Clause has the power to control and manufacture absolutely everything. In a thousand fields of endeavour large industrialists and small will be helpless and hopeless when pitted against the Minister's monstrous and megalomaniac powers which this Government demand, and are to-night taking. After all, we are not in war-time conditions. We are dealing with peace-time regulations. In these circumstances, under this Clause industrialists cannot compete. It is too unfair. Perhaps the right hon. Gentleman, when he comes to reply, will say, in this connection, whether his factories, whether they be new or whether they be acquired, will be free from rates and taxes—whether his State-controlled factories will have this added advantage over normal traders.

If any industrialists, greatly daring, perhaps foolhardily, possibly desperately, should dream of competing against the State factories which, no doubt, the right hon. Gentleman has in mind, there is a phrase in Clause 6 which specifically extends the vast powers of the Minister of Supply so as to give an utterly unfair advantage to the Minister. Ordinary manufacturers have to depend on time and place, markets and seasons, for their raw materials. Not so with the Minister of Supply. He is specifically empowered to take any supplies and to buy them at any price. The Clause reads:
"the expression 'articles required for the public service' shall include any supplies which the Minister of Supply considers it necessary or expedient to maintain, control or regulate for any of the purposes specified in Sub-section (1) of Section one of this Act,"
That means this. It means that if the right hon. Gentleman decides to manufacture 10,000 units of any article, and if subsequently, at his personal discretion and without any check by anybody else whatsoever, he comes to the conclusion that he wants more of that article, no limit is set to the amount of raw materials for making that article which he is empowered to sequester and impound. The evil does not stop there. He may deprive rivals of raw materials on the supposition that some Government Department might conceivably find some use for articles he might manufacture out of these supplies. This extraordinary control contemplates that the Minister of Supply will have power to produce anything from match-heads to mammoth liners. The Clause recklessly reaches out to thwart and handicap all enterprise by impounding the sources of supply.

If the right hon. Gentleman gets these powers, the most sinister and far-reaching effects of all, which will inevitably arise whether the Government like it or not, will be in the realm of banking and credit. Every loan that will be advanced by any private bank to a manufacturer or by any joint stock bank to a farmer, shop keeper or firm, must, if sound banking practice is followed, carry some provision in its rate of interest, some insurance, if you like, against the unpredictable uncertainties introduced by this Clause into all our plans for economic post-war development. In war-time it is just possible, no doubt, to justify the introduction of such a Clause as this, if only for the reason that in war-time the larger reaches of its extravagant potentialities would not and could not come into play.

If the Government mean what this Clause implies, I suggest that this is an act of political lunacy. Do the Government really understand what they are doing? I very much doubt it. If they do, I invite them to take Parliament and the people of this country into their confidence. They have not done so yet. Do they intend to use these powers or not? If they do, to what extent do they intend to use them? Do they intend to use State trading powers to the limit or not? To what extent do the Government intend to use those powers? What industries are safe from their interference and depredations? How can we build up our export trade and recover our lost prosperity if all our industries have to live in a state of perpetual uncertainty, no industry knowing whether the Government are going to interfere with it or not, acquire it or not, compete with it or not? How is anybody to be expected to start a new industry in this country if at any time the supplies necessary to it may be impounded by the right hon. Gentleman?

In the Second Reading Debate last week the Home Secretary devoted two sentences only to a description of Clause 6, this Clause which gives greater power than Charlemagne ever possessed. As far as I remember, the speech of the Lord President of the Council did not contain a single sentence describing the intentions of this Clause. Why are we not told what the Government intend? Is it all a matter of taking powers which will never be used? Is it all ballyhoo? If it is, there is a word for it—a two-syllable word—humbug. If it is not humbug, what do the Government intend? Parliament and people have not been told. If the intention is unlimited State trading, why were we not told so in the Gracious Speech? To conclude, this Bill h a threat to competition, a threat to supplies and an encumbrance to credit. To use a military metaphor, this Bill is a bayonet pointed at the vitals of all industry and enterprise in this country, and if this Clause is passed I believe that poverty and suffering for our people will follow in its wake.

I did not intend to speak on this Clause, but after listening to the last two speeches I have come to the conclusion that it is about time hon. Members opposite were told that there are some new Members who fought the Election on this very Clause. This Clause was the main subject of my election fight. Anybody listening to the last speech and not knowing exactly what the Labour Party put before the people would have come to the conclusion that this particular Measure, and the powers asked for in it, show the action of a collection of madmen. What is the position with regard to the Minister of Supply? If the hon. and gallant Member for Basingstoke (Squadron-Leader Donner) had followed the development of the war carefully, he would have realised that the very system of which he is the champion, which landed us in the war, has completely broken down and cannot operate in the old way, and that it is no use making arguments of the sort he did in the hope of putting Humpty-Dumpty on the wall again. Consequently, what the Labour Party has to do it to concentrate on sound, scientific and reasoned methods of getting the industries of the nation to work properly in order to get us out of the mess we are in.

9.0 p.m.

What is the proper thing to do? Obviously the most important thing we have to consider is the setting up of our export trade. On that there is agreement on all sides of the Committee. If anybody says that this little island is able to maintain the population which it has without importing goods, I disagree.

Unfortunately, it cannot do that, and consequently we have to build up something to give to the other countries in exchange for the things we need. The hon. Member says the industrialist does not know where he is. If he had been in industry as long as I have been he would find that 90 per cent, of the industrialists never knew where they were. It is proposed that the Ministry of Supply shall direct the necessary materials into the proper channels and so put a stop to the "dog-fights" and black market in which they try to get things for their own selfish ends. If that is not clear to the hon. Member, I suggest that he should take a course under the National Council of Labour Colleges. If that is the particular thing he has against this proposal, then one can imagine what it would be like if there was no Ministry of Supply. How do the industrialists work under the present system? They have agents buying abroad and agents buying at home. They have an army of bureaucrats, though they say they do not believe in bureaucracy. They have an army of useless bureaucrats all entering into competition in order to get something for their own firms instead of having a sensible arrangement to direct raw material where it is most useful for the national need. I sincerely hope that any hon. Member opposite who rises will at least talk sense.

The hon. and gallant Member for Basingstoke (Squadron-Leader Donner) seemed to be so moved by his carefully prepared and eloquently delivered speech that I am very eager to relieve him from his distraught condition. This Clause, in spite of the horrifying picture he drew of its effects, is in fact almost word for word the same Clause which the Coalition Government put into the Bill.

The right hon. Gentleman cannot get away with that. I made it plain that it could be justified in war-time and gave reasons why. If he had listened to what I said he would have heard me say that. This is not a Bill for war-time conditions, and perhaps he has not noticed that peace has broken out.

The intention was that it should continue for the transition period, and it is still the intention of the Bill. The view the Government take is that it is necessary that the powers under the Clause should extend longer than the original two years previously proposed. It is a fact, as the hon. and gallant Member for East Renfrew (Major Lloyd) said when he moved the Amendment, that the substance of the Clause is what the Election was about. There is no Member of this House, on this side of the Committee, who did not go frankly to the electors in the constituency he now represents and say, "If my party is returned to power, we shall use the experience and, if necessary, the powers which have been used in the obtaining of munitions of war to secure the vital needs of the country in the period of transition."

That view was frankly put to the electorate. Conservative candidates on the other hand pointed out to the electors that this was to use in peace time powers hitherto used only in time of war. The electors well understood that when they voted for Labour candidates they were voting for the use of such powers to secure houses and essentials for the people and the men coming back from the war. The Government is now bringing to the House of Commons a Clause which will empower it to do the very thing that it has just been elected to do.

But that is not to say that the extravagant and alarming picture which the hon. and gallant Member for Basingstoke painted is anything more than a fantasy of his own imagination. That was no more a description of the use which the Ministry of Supply will make of these powers to secure vital necessities in the transition period than it is a description of the use of these powers which my predecessors made to secure the vital munitions of war. I would beg the hon. and gallant Member to comfort himself and reflect on the Government's management of its powers during war time, in which both private and public industry were harnessed to the purpose of securing what it was then necessary to obtain. It is necessary that this Clause should be passed, and I must resist the Amendment so ably moved by the hon. and gallant Member for East Renfrew, because the Ministry of Supply Act, 1939, limits the powers of the Minister to buy, manufacture and sell only those articles required by other Departments for the public service in the discharge of those Departments' functions, or things that were required for the war.

This Clause extends the powers of the Minister of Supply to do the things which are now authorised to be done under Clause 1 of this Bill. These things are not just as the hon. and gallant Member for Basingstoke says, but the things as listed in Clause 1—to secure a sufficiency of those things essential for the well-being of the community and their equitable distribution and availability at fair prices. It is for things that are essential to the life of the community, and I ask the hon. and gallant Member to reflect for a moment what would be the alternative to the Government's having these powers. There is an acute shortage of certain raw materials and of a large range of manufactured articles—things which we must have if the men coming back from the war are to be resettled in comfort and happiness in the country whose life they have saved. Industry is grappling with the task of providing these vast arrears of supplies in the shortest possible time, and at the same time as it is facing that task at home it has also to export goods in order that we may bring in the raw materials which we need.

Part of the purpose of these powers is to release private trade from some part of the burden of providing these things in order that it may the more energetically tackle the necessity of bridging the gap in the balance of our overseas payments. It is the intention of the Ministry that we should work during this transitional period hand in hand with industry, using such surplus capacity as we may have in the Royal Ordnance factories, whose primary job is to maintain the war potential of the Fighting Services, for filling in the gaps and providing the marginal requirements for goods—such as housing fittings, which arise out of the engineering industry and medical supplies which are needed for the relief of dread disease in Europe that is threatening us all.

These goods are desperately short, and it is the purpose of the Minister of Supply to obtain these things both from private and public industry, and to see that the raw materials which are in short supply, many of which have to be obtained from overseas with precious foreign currency, are available to private manufacturers as well as to the public for the purposes of their trade and are used for the most necessary things first and are not squandered upon luxury purposes for those who have the longest purses. It is because it is necessary at a time like this, when we have not enough to go round, to exercise some regulatory functions, however distasteful they may be, in order that we may see that necessities come before luxuries and that those whose need is greatest shall come before those who can pay the most, that this Clause is needed. I trust that, upon consideration of the desperate need for harnessing to this task of making good our shortages all the capacity that we can muster, and of using what we can get for the most vital purposes first, this Amendment may be withdrawn and that the Committee will enable us to have this Clause.

Before the right hon. Gentleman sits down may I point out that he has not answered the question which I put to him. I asked. Will the Government take Parliament and the people into their confidence? Will the right hon. Gentleman say how far it is proposed to go? What are the limits? Are there any industries which are safe from interference? Will the right hon. Gentleman say anything to remove uncertainty so that our industrialists and manufacturers can plan because, unless they can plan, there can be no hope of recovering the prosperity of this country?

I must confess that the right hon. Gentleman has been able to justify the continuance of his Department, but then the object of this Amendment was never to doubt that but to protest at its being included in this Bill at all because, under the Ministry of Supply Act, it could have been continued on from year to year. However, in view of the fact that time is getting on and we have important discussions still to come where vital principles are at stake, and in view of the fact that we do not want to take up undue time on this matter, I am willing to withdraw this Amendment. However, the right hon. Gentleman must not be surprised if we on this side of the House watch most carefully the fulfilment of his promise that he will not use these great powers unduly against the public interest and against the interests of the taxpayer. I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Clause ordered to stand part of the Bill.

Clause 7 ordered to stand part of the Bill.