My right hon. Friend the Member for Warwick and Leamington (Mr. Eden) indicated last Thursday that it was the desire of the Opposition to discuss today the recruitment, organisation and training of the Regular Army. It is difficult not to feel that this Debate is to some extent overshadowed by the rumours which appeared in the newspapers yesterday and today of impending large cuts in the Armed Forces, and in particular in the Army. I conceive that this is not the occasion on which to debate that question—with one qualification—except so far as those cuts may affect the permanent strength of the Regular Army. It may seem odd to Members of the Committee that my hon. and gallant Friend the Member for Carshalton (Brigadier Head) should initiate a debate upon the Territorial Army, he being a Regular officer of great distinction while I, whose sole experience of the Army before the war, was for a short time as a Territorial subaltern in a horse artillery regiment—which incidentally had neither horses nor artillery—should initiate a Debate upon the Regular Army.

That seeming paradox demonstrates the complete community of interest between the Regulars, the Territorials, the National Service men and ordinary members of the public with regard to the modern Army. Everyone has now the same interest to see that the Army should be properly recruited, properly trained and properly organised, all sections of it being so inter-dependent and inter-related.

When discussing the future of the Regular Army we must obviously have in mind its new task. The older tasks exist, although to some extent changed in name. First of all, the Army has to enable us to discharge our commitments to the United Nations organisation, to strengthen the hands of the Foreign Secretary and to carry out the occupational and operational roles overseas. Those really are the traditional tasks, but in the future the Army will have the new task of training the National Service men. The National Service scheme is absolutely dependent upon there being an efficient Regular Army. I had misgivings about the period of 18 months in the National Service Bill, and I have many more misgivings about the period of 12 months. I was very doubtful whether it would be possible to train men properly in that time because I thought that the Regular Army would never be given the men, the resources or the equipment to do that job. If we do not give the Regular Army adequate resources to train the National Service men, the National Service Act will be made completely futile and it will be a complete waste of manpower. We have on the one side the disadvantages of interfering with the industrial and professional careers of these men. It is not putting it too high to say that we cannot afford to waste a single day of the 12 months if we are to get value from the National Service Act. Everyone in the country is vitally concerned in this matter. To use current phraseology which finds favour in certain quarters, we can say that the Regular Army is now an integral part of a national plan for the proper use of manpower. It is the falsest of false economy to cut down the Regular Army so that it cannot carry out that task properly.

The first question I wish to ask the right hon. Gentleman is: What is the planned strength of the Regular Army on 1st January, 1950? It is true that certain figures have been given from time to time. On 13th March the right hon. Gentleman himself mentioned a figure of 250,000, and before that in another place reference was made to the same figure for the purpose of exposition. I ask the right hon. Gentleman whether that figure stands. If it has been altered, has it been increased or diminished? If so, why? I would stress in this connection the importance of continuity. When some minor administrative slip up is found out in the Army, usually we get a tremendous howl from members of the public, but they are apt to forget the enormous fluctuations and oscillations in the strength of the Regular Army. There is a period of semi-starvation and then a vast and enormous expanse. Then follows an equally vast and violent contraction. It is obvious that in that process some administrative mistakes must be made.

In another connection we hear about the rhythm of production. With regard to the Army, it is absolutely vital that once a figure has been planned, it should be adhered to. We cannot expect those who administer our Army to be able to do their job properly if their ceiling is constantly being changed. Somehow it always seems that the Army is the first target for cuts. It is easy meat for the gentleman who is proposing to use an axe. In view of the new task and the National Service Act, I hope the country and the Committee will realise the wastefulness of cutting the Regular Army beyond a certain figure. The right hon. Gentleman will be more convincing with regard to that planned figure if he will attempt to justify it to us to some extent. I may be met by the answer of secrecy. I do not think we would be entitled to ask him for order of battle details or for details by theatres, but he could give us a great deal more information than he has done in the past about the set up of the Regular element of the Army of the future.

What are the reasons why this figure of 250,000, if that be the correct figure, should be the irreducible minimum? First of all, take the task of training National Service men. I understand that there are to be about 100,000 of them under training each year. I should say that if we reduce the period to 12 months we shall probably have to have a ratio of four to 10 so far as the Regular element is concerned for training these men. When the whole problem is considered, a ratio of four to 10 will probably not be a serious over-estimate. That means 40,000 Regular soldiers absorbed in that one task straight away. Then there is the Regular element in the Territorial Army. The figure for the Territorial Army is, I understand. 600,000, and the Regular component is planned at two per cent. I make that calculation 12,500. I should be glad if the right hon. Gentleman would give us his opinion on both those figures. That is 52,500 straight away on those tasks. In connection with the Territorial Army, we must not forget that it has been promised that during the training season the Regular Army will, so to speak, be at the disposal of the Territorial Army.

That means a further call on the Regular Army's manpower. In certain cases that call will be quite abnormal because of the disproportion in arms between the Regular Army and the Territorial Army. For example, I imagine that anti-aircraft units of the Regular Army will be almost completely used up in assisting Territorial units during that time because relatively speaking there are so many more Territorial units of that branch. So obviously there is an important commitment for the manpower of the Regular Army in that respect. Then I assume that a proportion of the units of the Regular Army will be in the United Kingdom. That is already the case as far as anti-aircraft is concerned and certain other types of units which I will not mention. But I also imagine that, from the point of view of morale, it will be necessary that that shall be so for all arms as time goes on; if there are to be a certain number of Regular units in the United Kingdom, once again that will take a certain amount of the Regular Army's manpower. Again I ask the right hon. Gentleman, is that so?

Then there is the maintenance of certain special arms or services—airborne forces are a typical example, and certain special signals units and special engineer units which had strange and wonderful methods, of waging war towards the end of the last war. Are these being kept in being? I think most of us would feel it would be a serious thing if they were allowed to die out completely. What arrangements are being made in the Regular Army for keeping in being those special units and special branches of the Service? Then there are the education, welfare and catering services. How many men from the Regular Army will they absorb on 1st January, 1950? It would be of assistance to the Committee if the right hon. Gentleman would give some indication of the layout between these various elements competing for manpower within the Regular Army itself.

Then there is the maintenance of staff training. I hope it will not be considered offensive to the Regular Army to say that at the commencement of the last war staff training up to the divisional level had been extremely good, but, for a variety of reasons, beyond that level it was hot so good because there had not been the opportunity. That also applies to inter-service co-operation. After many years of, in some cases, painful work, the measure of co-operation became extremely good between the three Services. At the moment I understand that is being preserved by the Inter-Service Staff College, but we would like to hear about the future from the right hon. Gentleman, and to have an assurance that those institutions for preserving inter-Service staff cooperation will continue. The relevance of this question is that this kind of thing absorbs manpower and it is a demand upon the strength of the Regular Army.

Superimposed upon the strength of these competitive demands which I have listed, is the fact that the Regular Army has to carry out its operational duties overseas. No one can see those disappearing during the next few years. I am sure, if the right hon. Gentleman is prepared to give us these particulars, he will also welcome the argument from this side of the Committee that paper strengths are different from actual strengths, and when you are deciding whether or not a quarter of a million is too many, it should be borne in mind that a proportion of those men will be on leave, sick or travelling from one position to another. So paper figures are not the real figures by any means with which the man on the ground has to carry out his job. Again I think the right hon. Gentleman will agree that it is not only quantity he wants but quality because, if these various responsibilities under the National Service Act and for the Territorial Army are to be carried out, it will require a well educated and an intelligent type of man; accordingly I ask the right hon. Gentleman to answer these questions and to give not only some grounds for supporting the figure of 250,000, if that is correct, but also give us an idea of the picture he is building up of the future layout of the permanent element of the Regular Army.

That is the first part of what I want to say. The next part relates to the present position. The latest figures, which I understand were given to the House yesterday, were that there are at present 108,813 other ranks, 14,894 officers and 15,633 short service men. There has been some confusion about these statistics. Sometimes they appear to include officers, at other times without; sometimes with short service men, and at other times without them. I would be grateful if the right hon. Gentleman would make clear beyond doubt the present statistical position. If my figures are right, they add up to about 139,000, and that means that he is 111,000 short of his target for 1st January, 1950. That is an extremely serious shortage. I do not think we on this side of the Committee want to be alarmist about the matter because, particularly during last winter, the recruiting figures were quite good. Nevertheless, they have fallen somewhat substantially during the summer—I concede that they are to be expected to do this during that period—but even so they have fallen to a level which is pretty low. In December the total number of enlistments were 4,673, of which 2,790 were long service and 1,650 short service approximately. By May the long service figures had fallen from 2,790 to 1,980, and in the case of short service from 1,650 to 1,390. In June the long service figures were up by nearly 200 but the short service figures were down by about 300.

I suggest to the right hon. Gentleman, therefore, that he is really running month by month far short of the figure he really requires, because one also has to take into account the wastage figure. That has been given at something like 600 a month, but it is quite impossible to make further calculations upon that figure because, as the Regular element increases in size, the wastage figure will increase. There is the further point that I imagine it would not suit the right hon. Gentleman's purpose to get his 249,999th man on 31st December, 1949. If the Regular Army is to carry out its job, it must be recruited in time for it to be trained for the purpose, and I suggest there is no case at all for complacency over the present figures. What steps are the Government taking over the matter, not only about the numbers but about getting the right type of man?

I would suggest certain lines to the right hon. Gentleman along which action requires to be taken. First, over pay.

The most obvious and first step is to revise the rates of pay. Figures have been bandied about and, as is usual with figures, they seem to prove almost anything. I will not give another set to the Committee, but the opinion is widely held that many, individuals in the Army are worse off under the new rates of pay than they were under the old. Secondly, there is widespread dissatisfaction on that ground. Whether it is well-founded dissatisfaction or not is another matter—I believe it is—but it certainly exists to a substantial extent. Thirdly, in my view, the Army is not offering comparable rewards with industry.

I will give one set of figures to compare increases as between 1939 and March, 1946, between various types of soldiers and men in industry. The first case is of a sergeant with a wife and three children and with nine years' service; his net remuneration has increased by 46 per cent. A warrant officer, class 2, also with a wife and three children finds his net remuneration has gone up by 37 per cent.; and a major with a wife and three children has had an increase of 12 per cent. in his net remuneration. If one takes the figures in the "Ministry of Labour Gazette" for February, 1946, in regard to industrial workers, the figure for all operatives is an increase of 80 per cent., and for men of 21 years and over the increase is 76 per cent. That shows the disproportion between the increases. I concede at once to the right hon. Gentleman that my comparison is not quite a straight comparison, because I have selected individual soldiers and not individual operatives in the industrial field. But if I did that, I think the difference would be even more startling, and the tendency has increased since 1946. I think it applies particularly to skilled technicians. I would like the right hon. Gentleman to say what prospects there are of a revision in rates of pay.

Then there is the question of accommodation. In many cases at present married quarters are just not available and Regular soldiers coming back after perhaps six years of absence from their wives and families are finding it quite impossible to set up house again near their new stations. The right hon. Gentleman must get his share of new construction. I quite agree that that is very difficult at present, but I ask him what steps have been taken to see that at each station a certain amount of accommodation is earmarked for Regular personnel. Time and again a man has a house or a flat in which he lives with his wife and family and is then relieved; but he leaves before his replacement comes, and the house or flat gets into the open market, and when the replacement arrives he finds it impossible to get that accommodation. The War Office authorities should make it quite certain that that accommodation is kept earmarked for the replacement, if necessary paying the rent in the interim. Then there is the vexed question of jobs at the end of the period of service. I think we should know what is the War Office organisation for the placing of men when their period of service is over. That is one of the matters which worries a great many people who are considering enlistment in the Regular Army and we would be interested to know exactly what the War Office does or proposes to do about placing these men.

Barrack accommodation is obviously a matter which cannot be solved immediately, but old-fashioned barracks do lead to enormous waste of manpower. We have complaints of skilled men scrubbing floors, but that is inevitable as long as we have old-fashioned barracks in which a large number of men are needed merely to keep them clean and sanitary. Finally, over equipment, if there is a failure to provide up-to-date equipment a sense of futility will be induced which will do a great deal of damage to recruitment to the Regular Army. I hope that the right hon. Gentleman is in a position to say something and to do something about the questions of rates of pay, married quarters, a plan for modernisation of barracks, the organisation of placing men when their term of service is at an end and the question of up-to-date equipment. If he will give an indication of what he is prepared to do on those lines it will help recruiting. What action are the Government going to take, or are they going to allow matters to drift?

I wish to end on a personal note. Unfortunately, the Army has suffered very much in the past from the ease with which it can be caricatured. We have the conventional sergeant major, "Colonel Blimp," the "Whitehall Warrior" and the "Brass hat" with the red tabs. I think perhaps it would be better if senior officers could be distinguished in some other way than by way of red tabs and brass hats. When in September, 1939, I went to the Staff College, I confess I went imbued very much with some of those ideas about the Army, but I found that General Paget had gathered around him about as outstanding a staff of regular officers as it is possible to imagine, whose qualities of intellect and character were unrivalled. I also served during the war under various commanders and in association with many Regular officers. I am very proud to have this opportunity to pay tribute to them. I am perfectly certain the Committee and the country need have no fear about the capacity of these men to carry out their responsibilities, if they are given the proper material with which to do so. I am also certain that many of the officers and other ranks of the Regular Army are of the best that this country can produce.

The Army has not always had tan treatment in the past. We have expected too much from too few with too little, and I hope that is not going to happen again. I am quite convinced that if the right hon. Gentleman has a plan, and will tell the Committee about it; and that, if it is a good plan, and the right hon. Gentleman is prepared to stick to it through thick and thin, then, when it is successful, no one will be more ready to applaud his success than I and those who sit on this side of the Committee.

Like my hon. and learned Friend the Member for Wirral (Mr. Selwyn Lloyd) I think we are all very worried about the present position and the future. As he said, the question of possible reduction is not one to be discussed now, but I think it is a point on which the Minister should say what is in the mind of the Government. Nothing does the Regular Army, or any of the Services, more harm than to read these things in the Press but to see no Government pronouncement upon them. That is one of the things that puts young men off when they are considering enlisting. They do not like to commit themselves. My hon. and learned Friend very clearly pointed out the difficulties we face with the commitments we now have. Not only are those commitments more than we had before the war, but they are far more arduous and difficult. That makes it far more difficult for the small number of men, and the small number of units we have, to be and to remain in a complete state of readiness. They are so far flung that they can never get on with their main job. I, for one, am not seriously worried on that score, because from what I have seen of the soldier of the present day I think he is just as good as, if not better than the man of the past, and he will very quickly pick up what he is not being taught now, if the need ever arises.

I am worried about why we are not getting the men to join up. It does not matter what the Government say is to be the strength of the Army unless we can get the required number of men. The Government must decide on the figure they want, and that figure must be attained. We must get the Regular Army put in such a position that it is not just a question of getting the exact number we want, but one of being able to be a little more selective, so taking the young man with a little better brain. That is the aspect upon which I wish to speak, and to put to the Minister certain points which I feel tend to operate against recruitment.

What is in the mind of a young man now when he thinks, "Shall I join up or shall I not?" My first point is that he probably says, "The British Regular Army will be a foreign legion, and if I join I shall never serve at home." I believe that point is in the mind of many men. It must be cleared up, and a statement must be clearly made as to how much service the average soldier will have at home. I know that it is difficult to arrange, but surely it can be worked that, say, one year in every five each Regular unit is at home as a unit, not that it comes home and leaves all its young men abroad, as has been done in the past. In the case of the last joined recruits with only about five months' service abroad, they were told, "You have not done enough service over seas. Therefore, you will have to stay out with another unit." That does a great deal of harm. The whole regiment, the whole battalion, must come back. It should come back and do one year's complete service in every five at least.

The second point which I have heard spoken about quite a lot by some of the men now in the Services is this question of different types and different lengths of annual leave according to the area the troops are in. We were told at Question time yesterday that there are two periods of 19 days if they are nearer home, or one period of 30 days if the are further away. The period of leave ought to be exactly similar for every man in the Service. A man has no choice whether he serves near home or further away, and he should know that he will get the same amount of leave as his pal who is in some other part of the world, that is, leave in this country, not including all the time taken getting here and going back.

My third point concerns the reduction of units. Men and officers are very proud of their regiment and battalion. I have heard of first battalions with long and distinguished service being put into what is called "suspended animation" and of the second battalion being kept. We also hear that there are to be reductions in the Royal Armoured Corps. There is talk of some of its regiments, with extremely long and valiant service, having to go, while battalions or regiments formed quite recently are to stay. That is difficult for the average man to understand. We all know that in the war we had to train men in very little time compared with that taken in the old days of peace, and that it did not take a new unit long to master its job. Therefore, if we have to have a new type of unit now, I suggest that the oldest regiment be asked to adapt itself rather than that it should be said, "We will have a new regiment, and the old one must go." While I am speaking on the question of regiments and battalions, I would say that in recent years there has been rather too much talk of the spirit of the corps rather than the spirit of the battalion or regiment. The esprit de corps of a unit in a precious thing to a Regular soldier. In war it is difficult to maintain in view of the need for reinforcements, but now that the war is over let us try to rebuild our regimental spirit. The traditions of the unit are of vital importance to a Regular regiment.

I also wish to touch upon the question of pay and allowances. These were increased, but we know that the pay of other people has gone up more. That is a factor which influences the mind of a young man today. Some people will say that a boy who joins the Services is not looking to the future, but that is not true. He is looking carefully at the future, and he looks at the pay rates—what he will start with, what he will get if he becomes an N.C.O., and what he might get if he becomes an officer. He will ask his friends about it. Without question there are N.C.O's and senior officers, majors and lieutenant-colonels in particular, who are no better off now, and are in some cases worse off, than under the old rates. That is mainly due to the taxation of allowances. I would quote the case of one senior officer, who reckons that he is £10 a month worse off than he was before the new pay code was introduced. That sort of thing gets around to young men, and obviously it cannot help recruiting.

We would also like to know what are the opportunities for the soldier after he has finished his time. That is a point on which the Minister could easily give guidance—what opportunities will there be, and what jobs will be kept, or what percentage of jobs will be available for the Regular soldier when he has finished his time? I have a word to say about living conditions which I shall base upon my own unit. They came home a short time ago, having been abroad during the whole of the war. They were placed in a camp where there was not the slightest opportunity for any of them to bring their wives to live. There was another empty camp alongside it, but no effort was made to provide temporary dormitories or hutments of a suitable nature for married people. They have now been moved to a barracks. Their attitude was, "When we go to a barracks, there will anyhow be quarters there." But when they got there they found hardly any available, the majority being occupied by members of the staff and their families. These are the fighting regiments where the recruits started their Service career. The recruit enters the Service to join a regiment and not to join a staff. Accommodation of this nature should be made available for regiments. If it is not possible to provide the permanent buildings at present, surely it is possible to convert huts so that the families of members of these units can be together.

I also wish to refer to the purchase of discharge. Before the war it was possible to purchase discharge. Naturally, that system was dropped during the war. Is there any reason why it should not be re-introduced? The percentage of men we would lose would not be great, but the percentage of dissatisfied men which are held because they cannot purchase discharge is very great. In a regiment there may be one man who has a very difficult home situation which is not quite strong enough to enable him to obtain his discharge on compassionate grounds. He becomes a most dissatisfied man if he cannot buy himself out, especially when he is told that this was only stopped as a wartime measure. Here we are two years after the war, and the system has not yet been reintroduced. It would not cause a very big wastage and it would help a great deal to promote a better spirit and to stop a lot of grumbling.

Finally, is there any reason why there should be so much secrecy? Why cannot we be told where different units are serving? If certain units are in Palestine, details should be published in the Press. Why should it not be said what unit is concerned if there is an unfortunate incident? I cannot see that there is necessity for secrecy now. Everybody out there knows exactly which units are there. People at home like to see where their friends are serving. If there happens to be some good action, everybody likes to know the name of the regiment or battalion which has performed it. I ask the Minister to consider these points. If many of these complaints were given attention, I suggest that our recruiting figures would be improved.

I intervene in this Debate with some diffidence in view of the contributions which have been made from hon. Members with personal knowledge of the Army. I served in another branch of the Forces. Nevertheless, there is much in what they have said with which I agree. It is essential that the Army should consider further the question of making the pay of the Regular Army equal to the pay for service in industry. It is amply clear now that the new codes of pay have not achieved that object. In several cases men are worse off because of the new way in which allowances are regarded. Wages and salaries in civilian life have increased since the new code was introduced. It is essential that the War Office should look again at the system. A well-trained, well-Paid Regular Army is the essential basis of a good Army system, and a fair code of pay is bound up with that. I would also like to associate myself with the remarks made about guaranteeing jobs for soldiers at the end of their service. At the moment there is a lot of uncertainty on this subject. I think that a promise should be given to each man when he joins the Regular Army that at the end of his service a job will be provided for him in civilian life at a certain status taking into account the training which he will be given. Reference has been made to the regard in which the Army is held. The hon. and learned Member for Wirral (Mr. Selwyn Lloyd) referred to the ease with which it is possible to caricature the Army and said that very much of it was not justified. It might be equally true to say—and I may strike a discordant note here—that all too often much of it is justified.

I wish to deal, in particular, with the position as regards recruiting men from Wales for the Regular Army. I am afraid that we have not had from the War Office that understanding of our point of view to which we feel entitled. I will not refer to the Territorial Army in detail, because that would be out of Order on this Vote, but I cannot let the opportunity go by without putting on the record our problem in Wales regarding recruiting for the Army. We are a martial nation, willing and anxious to contribute our share to the voluntary Army. The Regular Army will never recruit a proper quota from Wales, unless those who rule the Army begin to understand the special point of view of the Welsh people, particularly those in the rural areas. There, the young men are brought up speaking the Welsh language and nourished by the culture of Wales. It is very important both in regard to the conscript and the volunteer, that they should be trained with and posted to Welsh units during every stage of their service career.

It is essential that the Secretary of State should make a declaration that it is the policy of the War Office to post Welsh recruits, National Service men and volunteers, to Welsh units, officered by men from Wales. Under the new system the officers themselves will come from the ranks. From my conversations with young men who joined the Army in wartime, and from correspondence I have had since then as a Member, I can assure the Minister that few things are more disturbing to a young Welshman than for him to join the Army which in itself is a rather alien institution to him, and to find himself among people who do not understand what he says, and with whom he finds difficulty in communicating freely. The laying down of that principle is vital for the National Service men and the Regular Army alike.

There is another thing which should also be laid down. In the past we have had disputes concerning the correspondence of Welshmen serving in the Army. Local commanding officers or officers have raised objections to men writing home in the Welsh language, but it is essential that the War Office should lay down—equally with the other principle I have mentioned—that men serving in the Army should be entitled, wherever they live and wherever they are serving, to write home in their own language. I assure the Committee that otherwise, a man is deprived of that most intimate of rights, the right to write his letters home to his family in a language they can understand. An Army Order to this effect in this very important matter should be published to end disputes once and for all.

The understanding by the War Office of these national considerations is really vital and we are disturbed by certain things which are happening. There was the 53rd Welsh Division, two battalions of which, in the Royal Welsh Fusiliers, went to form the 5th and 6th Battalions. These battalions, recruited men from Anglesey and Caernarvon, Merioneth and Montgomery, the most Welsh parts of Wales, but they have been disbanded by the War Office, although men from these parts are naturally good infantry men. That is done in the name of administrative neatness at the War Office and in Army Commands. These are important considerations, but it is even more important that rather than try to make men fit the machine an endeavour should be made to make the machine fit the factors of national life. I ask the Secretary of State for War to bear in mind that these mechanical arrangements, however difficult they may be or however important they may seem at a certain level, are after all only secondary matters, and that it is his duty so to build up the Army that there is scope in it for the characteristics of the men from Wales. There is great foreboding and dissatisfaction with the present position.

It is not only we Welsh Members on this Liberal bench who take this view, and not only Welsh Members in other parts of the House, but all over Wales representations have been made. They have been made to the War Office by the Honourable Society of Cymmrodorion, a society of non-political character covering all aspects of Welsh life. We are far from satisfied that our point of view is understood or accepted by the War Office and unless we have some assurance that it is appreciated and carried out we shall have to reconsider our attitude towards recruiting for the Regular Army and the Territorial Army in Wales. I do not wish to develop that point further. Negotiations are proceeding, but I did not think it right that this Debate should pass without putting on record the things that have mentioned.

I have considerable sympathy with the hon. Member for Merioneth (Mr. Emrys Roberts) concerning the difficulties of Welsh soldiers, and I can support him in one material particular, because, when raising my regiment in Ulster at the beginning of this war, I was fortunate enough to be able to borrow a corporal cook from that sound and tough regiment, the South Wales Borderers. He cooked food so highly flavoured and with so much Welsh pepper in it that we could hardly eat it, and this shows that for the Welsh our food would have seemed rather anaemic. It shows, too, the individual consideration because of which we must guard against treating the soldier as a mere unit or robot—private, trooper, gunner or whatever he may be.

There is another point—and here I would stress the sympathy of Ulster Members for Wales as compared with the lack of sympathy of Welsh Members for Ulster—which is the question of writing in the Welsh language. Welsh is the Welshman's native tongue and he can express himself in it, and when I was privileged to be in charge of the welfare in a very substantial military district, one of the great difficulties we were always up against between the soldier husband and his wife at home was the great difficulty they had in expressing themselves by letter. They were not, as a whole, very literate people, and they found estrangement arising through a complete lack of spiritual contact. I think it is very important in the case of Welsh-speaking troops that they should be able to use the tongue that comes most naturally to them when writing back to their relatives.

I hope that the hon. Gentleman is not assuming that these Welshmen were illiterate simply because they were not fluent in English. The two things do not go together at all.

On the contrary, I agree that they are positively bardic, and I hope that the hon. Gentleman will realise that I am doing my best to support his case.

Returning to the general Debate I wish to make one or two points, and to deal particularly with Northern Ireland which stands in a special relation as regards military affairs. First, there are the points which two of my hon. and gallant Friends have already made, and which can be summed up by saying that whatever size the Army is, it must be the best in quality that we can possibly obtain as regards material, training, prospects and equipment. There is an old agricultural adage that it is just as much trouble to raise a bad crop as a good one, and that very nearly applies to the Army. We entered the war in 1914 with about the best Army this country has ever gone to war with. That is, perhaps, not a very good standard because we are not as a rule very good at being ready to go to war, but any economy in quality is most dangerous. A bad Army and an Army that is not efficient, is more of a danger and disadvantage than an advantage. It has been said that we did more for the German Army in the Peace Treaty by making it a small, long service arm, and so providing an expert corps from which the Army could be expanded, than if we had let them go on with conscription. Even before the days of Hitler they did not make any mistake about letting the Army be other than a very good and expert body.

I should like now to emphasise one particular aspect—not on the question of pay generally, a point which was well and truly made by other hon. Members—namely, the fact that the proportionate rate is not enough. It should bear a relation to the normal rise of wages. The most important person in any unit is always the commanding officer, whether it be in any of the three Services, and this is certainly the case in the Army. In war he prevents unnecessary casualties, and in that respect he saves the lives of his men. In peace time he makes for a well disciplined and happy unit. An ill-disciplined unit, under the command of a bad commanding officer, is not, generally speaking, a happy or comfortable one to belong to. I think that more attention should be paid to the prospects of senior officers. I know full well that if I went to the country with the slogan, "More justice for major-generals," it would not have very wide support. But I think that the potential major-generals, on going into the Army, should be able to realise that, if they do well and distinguish themselves, they have a career before them in which there is not only a spiritual, but also a material satisfaction.

In that connection, I think that the worst thing that has recently been done is the taxation of officers' allowances. Hon. Members opposite have a very happy knack of using the word "reactionary," which they sling about in appropriate, semi-appropriate, and, some times, wholly inappropriate senses. But if ever there was a reactionary change, it was the taxing of allowances. Let us consider what are the allowances. A soldier, of whatever rank, was supposed to be fed, housed, and, where necessary, warmed by the Army which employs him. It was subsequently found that it was simpler to let him have a certain amount of money and to arrange these things for himself. Sometimes the amount of money was wholly inadequate, as in the case suggested, that, in London, for 2s. a day a man could supply himself with the almost wholetime service of a manservant. That was the basic idea.

Now we go back to positively feudal times. In feudal times, a man gave his service, and if he had a certain amount of land he was supposed to do without some of the pay he otherwise got. The taxation of allowances is like saying that people who are well off can warm, feed and house themselves on only 50 per cent., or thereabouts, of those allowances. It is a most distressing thing that the inducement given to potential commanding officers should have been lessened by a reduction not only in relation to the present standard of living, but, in some cases, to an absolute reduction of pay in the modern Army. Whenever there is an announcement of increased pay, every officer works out what he is likely to lose by it. They do not all lose by it, but a large number do. That is the impression that increases in pay make on that gallant, but not always fortunate, class of men who are prevented by their loyalty to the Service from making any effective political demonstration.

I will now come to the particular position of Northern Ireland. There we have an area which, before the National Service Acts were passed, was the best recruiting area in the United Kingdom. In 1938, it had the highest proportion of voluntary recruits in any area. I suggest to the right hon. Gentleman that it is a most valuable reservoir from which many good recruits should be enlisted. It should be recognised by the War Office that the conditions in an entirely voluntary area must be distinguishable from those of an area where service is compulsory, and that it requires some special branch, or some particular body of service officers or civil servants to study recruiting in such an area. I would ask the right hon. Gentleman to make a special study of recruiting in this voluntary area and to see that it has the material assistance which it requires.

I do not know whether the right hon. Gentleman can verify the rumour that the Victoria Barracks in Belfast were condemned at the time of the Crimean war, and that it was almost a relief for the men to go to the Crimea. It is probable that that is no more than a rumour. Although the Germans did their best to destroy those barracks, they were not wholly successful, and they are still being used. I suggest that, except for the new military establishment at Lisburn, the barrack situation in Northern Ireland is not as good as one would like it to be. One of the things which attracts the attention of voluntary recruits is to be able to see good barrack accommodation. That is specially important where we are wholly dependent on voluntary recruiting. I know the struggles which the right hon. Gentleman has to get his buildings, but I would particularly urge the necessity for these things. I hope that we shall hear more definite information than we have yet heard from the right hon. Gentleman about the position of the Regular Army. I think that the questions which my hon. and gallant Friends on this side have already asked are questions which could be readily answered, and that a certain amount of publicity will not do the Regular Army any harm.

I hope, that the hon. Member for Merioneth (Mr. Emrys Roberts), and the hon. Member for Londonderry (Sir R. Ross) will forgive me if I do not follow them in discussing Wales and Northern Ireland, and purely nationalistic problems. I wish to confine myself to the broader issues raised in the Debate, and particularly to the two issues which affect Army recruiting—pay and conditions in the Army itself, and the post-service prospects for the recruits. It has been suggested that one of the main reasons for the comparative slowness of Regular recruiting is the new pay code. While, in a sense, agreeing with that, I think it is a matter of rather broader economic issues than just the question of the pay code. There is all the difference in the world between conditions now and conditions before the war, because, then, as we all know, Regular Army recruiting varied according to the unemployment figures. The higher the figures of unemployment, the higher the figures of Regular recruiting tended to be. We no longer have unemployment as a recruiting sergeant. Therefore, quite different methods have been used to induce men to join the Regular Army.

The general aim as expressed in the White Paper, to make pay and conditions in the Services roughly equal to those in civilian life and industry generally, has been successful. There are exceptions and individual anomalies which might well be put right, but by and large I think the aim has been achieved. I am not sure, however, that the achievement in itself answers the problem because, as I see it, any young man faced with the alternatives of taking a job either in the Army or at home, both equally remunerative, will very often tend to choose the one at home, simply because there is no separation from wife, children or the family generally. I do not think it is sufficient to make the conditions comparable between the two. What is necessary is some special form of compensation—and I think it is inevitably bound to be financial—for the separation from home which overseas service inevitably involves. Much more could be, and must be, done with regard to overseas stations so that more and more families can be together when the husband is serving overseas. The other day I had an instance of a prewar Regular soldier who got married in 1939, and who has spent only a few weeks at home with his wife since that day. Now, two years after the war, it is still impossible to post the husband to a station where his wife and child can join him. He has expressed his willingness and eagerness to serve at any station in the world, providing his wife and child can be with him.

As regards the outlook for the Regular soldier after he has completed his military service, we ought to try to get away from the curious distinction there has always been between service to the State in uniform and service to the State out of uniform. There might well be some sort of continuity in the service of the Crown between service in uniform and service out of uniform afterwards. It is rather hard that a man should spend the best years of his life in the service of the Crown in uniform, and then when, because of his age, he is no longer physically capable of quite the amount of effort required from him in ordinary military service, he should have to look around for quite a different job. It should be possible for a man at the beginning of his life's career, if he enters in the service of the Crown in uniform, to feel sure that, as in most other forms of employment, it is possible to look forward to a lifetime's occupation, if he wishes, in that same direction. I think we might well examine possibilities of seeing that in the future our Regular Forces, which inevitably are bound to be comparatively small in number, have some sort of continuity to which they can look forward after their Regular service, so that a man joining the Army will not necessarily feel that after a certain number of years, before he reaches anything like civilian pensionable age, he will suddenly find himself looking for something else to do. If that question of providing continuity of employment for the Regular soldier after he gets out of uniform can be considered more thoroughly, his outlook will be much improved.

I am sure that the Committee are very interested in the suggestion which the hon. Member for Cambridge (Mr. Symonds) has made. I will not follow him directly in what he said, but I will later make a few comments on some of the points to which he referred. I would like to refer to the argument of my hon. and learned Friend the Member for Wirral (Mr. Selwyn Lloyd), who dealt with the importance of recruiting to the Regular Army. I think it is a matter of such importance that it warrants discussion, especially at a time when like today, all our discussions are overshadowed by a spirit of great urgency. My hon. Friends will agree—and I think the Secretary of State also will agree—that one must view the present recruiting situation with a certain amount, not of alarm, but of urgent concern, and I would remind the Committee that about ten months ago there was the same concern, both in Parliament and in the Press, about the way in which the recruiting to the Regular Army was proceeding. During the winter, recruiting got better, and now it has gone back slightly.

I would like to put to the right hon. Gentleman a few figures so that we may, perhaps, clear up this question. I have always believed—and I think Government spokesmen also have stated—that the target for the Regular Army is to be 250,000. I find at the moment that, including men on short service engagements, we have approximately 140,000 on Regular engagements, normal engagements, plus short service engagements. This leaves a shortfall of 110,000, ignoring wastage for the moment, if we are to reach the figure of 250,000 in two and a half years—and I do not suppose the right hon. Gentleman wants to take as long as that—we shall require every month a net increase of 3,700. We have been told that at the moment the wastage is approximately 600 a month.

It is quite clear that the wastage is bound to increase as the size of the Regular Army increases. It is bound to increase when the Secretary of State opens the door through which men who are now in the Regular Army may obtain their discharge, because that door is held fairly tightly closed at the present time. The Secretary of State will probably remember that when he presented the Estimates on 13th March, he said that once the figure of 250,000 had been reached, in order to maintain that figure and to cover wastage, he required 2,800 men a month. We are now getting only 3,400, including 1,000 short service men and we have not only to maintain the 250,000 when we get them, but we have got to get to that number. The matter is really urgent, because unless we have a Regular Army of the proper size, not only can we not carry out our peace time commitments properly, but the right hon. Gentleman will not be able to make full use of the 12 months' period of whole-time service.

It cannot be too often said that the whole purpose of the National Service Act will be defeated if we have not efficient instructors of high quality and character to guide these men during that period. I believe the right hon. Gentleman's chief shortage at the moment is of men of the right quality to become N.C.O's, warrant officers and officers. I hold the view that unemployment will not help him in that respect. Even if anybody in this Committee were so blind as to think that unemployment of that size would have any advantages at all, it would certainly not be of any advantage to the right hon. Gentleman. I believe he wants to go for men of the right quality, and it is for that reason that I lay rather more emphasis than I used to do on the pay conditions in operation.

We have in the past argued this for some time across the Floor of the House. We have always been told that the right hon. Gentleman is waiting to hear from all the theatres and the Home Commands what have been the reactions to the new pay code. I think most of us realised that we would not get adequate reaction until there had been some experience of the period in which allowances have become taxable. I suggest to the right hon. Gentleman that, although we have not had much experience of that, we have at any rate had a little. He certainly has had, as all of us have had, time to hear a little more of the reactions. I agree with my hon. Friends who have said that there is general dissatisfaction. It is very difficult, according to the procedure of the Committee, to argue figures. Any- body in the right hon. Gentleman's position starts with an advantage because he has all the figures available only a few yards from him, and he can shout us down; but I should like to put this point to the Committee.

One of the main objects of the new pay code, as was so rightly stated a little time ago, was to get some balance between civilian rates of pay and the rates of pay in the Army. The new code was fixed in the autumn of 1945. If hon. Members will turn to their digest of statistics, they will find that at that time the points rating for wages over-all in this country registered 51 above the 1939 civilian wage rates. At present, it has risen from 51 to 67. Therefore, any comparison that was made in the autumn of 1945 is, surely, quite out of date, if the right hon. Gentleman's purpose is still the same. I quite realise that we cannot shuffle rates of pay in the Army every time wages are put up or down. That would be administratively impossible. But the change of 16 points in the average over-all wage rates of the country is a very big one; it is something that we should have very much in mind. In the United States of America it has been found necessary to increase the pay of other ranks between 20 per cent. and 50 per cent. since 1945, and that of officers between 10 per cent. and 20 per cent. That is a matter to be taken into consideration. If we compare the rates of pay in the British Army of officers and other ranks today—the gross rates before deduction of tax—with those received in 1939, we shall find that in practically every case, there is, as there ought to be, an increase. If we compare the net emoluments they receive, that increase is not so general, but it is fairly general.

What I am arguing is that the increase has not been sufficient between 1939 and today. I further argue that, whereas civilian wages have gone up since the end of the war, the amount of net pay for many other ranks—privates, N.C.Os., warrant officers—and many officers has actually gone down. It has gone down for two reasons. First, because, particularly in the case of other ranks, certain war service increments have been lost. The right hon. Gentleman's own pay code shows 1½ per cent. fall between the rates in force in August, 1945, and the rates under the new pay code, and so, obviously, we may expect a fall. It has gone down—for officers mainly—because allowances have become taxable. My hon. and gallant Friend the Member for Carshalton (Brigadier Head) mentioned in the recent Debate on the Territorial Army that certain officers had lost a substantial sum. I think a lieutenant-colonel with two children has lost £180 a year as a result of the taxation of his allowances. The right hon. Gentleman may well say that there was a warning, and that officers should have accepted that. It is not only officers who lose, but warrant officers and N.C.Os. as well. My hon. and gallant Friend quoted the case of a staff sergeant who, I think, lost between £40 and £50 a year. These losses are substantial and they do matter.

To sum up my argument since the new pay code was based on a balance with civilian remuneration in August, 1945, and since civilian remuneration has gone up by 16 points; and since the new pay code was also based on the lowering of Income Tax in the near future, which has not taken place, there is a very good case for an immediate revision of this new pay code. I have gone into that argument somewhat fully because I believe it to be one of the most important matters.

There are certain other factors affecting recruiting which I want to mention. There is a common opinion—not as large as it used to be—that Army life is not a profession. Some people believe it is wrong to treat service in the Army as a profession. The hon. Gentleman the Member for East Coventry (Mr. Crossman), whose advice, I believe, does not appeal to the Secretary of State for War so much as it appeals to his colleague the Minister of Defence, thinks so. I hope that the Secretary of State for War disagrees with the hon. Member for East Coventry, and thinks that the Army is a profession, and a very noble profession.

The second point is the importance of information about the Army, about what is happening; and the importance of that information not being concentrated on bedside lamps. I think we want to know far more of what the Army is doing, and of the new things that the Army is doing. I believe that would be a great recruiting fillip. It would be a fillip to recruiting, for instance, to give information about new weapons. I think that the more information the right hon. Gentleman is able to give out—and, of course, there is an old conflict between the giving of information for propaganda and morale purposes and the security instincts of the G.S.I., as we all know—the better.

The third factor is home service. I hope that the right hon. Gentleman will bear in mind the importance of home service to a young man. I hope he realises that a young man does not want to sign on in a job that is going to take him out of the country and away from his family—and, perhaps, away from his wife and children in later years—for five, six, seven years without the prospect of some equivalent period at home. It is quite clear that at the moment, there is inadequate provision made for home service. I sympathise with the right hon. Gentleman's difficulties in regard to housing, barracks, and so on, but inadequate provision is made for stationing formations at home.

I believe that the importance of the Regular Army to the efficiency of the land forces of the future cannot be exaggerated. The chance of success of this country has always depended on quality, and not on quantity. In order to obtain that quality in the Army, we must have the right number of men in the Regular Army at the earliest possible moment. But in addition to the men we must have good and up-to-date equipment. General Fuller, who is a well-known writer on military matters, has said—and many people agree with him—that the right weapons contribute 99 per cent. towards victory. That may be an overstatement, but it is quite clear that at the moment, for reasons which the Secretary of State explained to us in the last Debate, he has not been able to get any new equipment or new weapons, and, therefore, no new techniques of a major character for the Army.

In the course of his reply to the Debate on 21st July, the right hon. Gentleman used what I thought were some peculiar words about the up-to-dateness of the equipment of the Regular and Territorial Armies at the present time. I will not quote his exact words, because I think the Committee, and certainly the right hon. Gentleman, will have them in mind. He told us that we had ended the war with a lot of equipment which was already out-of-date, and implied that such up-to-date equipment as we had was mostly American, and that we had not been able subsequently to keep that equipment in the Army because we could not get the spares. I hope he will give us some assurance that the position is not really as bad as that.

I am sure the Committee will feel that this Debate has served a useful purpose if the right hon. Gentleman can give us the assurances for which we have asked. Despite the absence of the ranks of Tuscany from behind him, I hope the Secretary of State will feel that the Committee as a whole is as interested as ever it was in the success of the Regular Army.

I think the Army must be going through a difficult period just now, and this Committee should give it any help we can. In the first place, the Army has, to a large extent, to meet a situation it has never had to meet before. There is the new weapon, the enormous effect of which we saw in Japan, whose ultimate effect cannot yet be gauged by anyone, and whose mark on training, tactics and, indeed, strategy, must be very largely a matter of conjecture. On top of that there is the inevitable fact that never again will the Regular Army have a time lag in which to train its reserves and the new Army coming to its support in time of war. It must be ready to kick off, as it were, with its full strength immediately war is declared, or even before that. This is a matter we have never had to face in this country, and I do not think any of us fully realise what it means to the people who are working on it at this moment in the War Office.

I believe that never again will this country—certainly in a European war—be a base for operations, because that would be too dangerous; the concentration of population would be too great for this country to be a base, and to provide the necessary industries to support and maintain an Army in the field. Then again, the Army is faced with limited manpower, and has but a limited amount of money at its disposal. It has to train a large National Service reserve coming in by dribs and drabs every week and every month, which must of itself impose a great strain upon the Regular training staff. Finally, it has great garrison commitments abroad.

All this means that the Army must cut its coat according to its cloth, and must be prepared to sacrifice ruthlessly anything which is not of immediate importance and vital necessity. Before the war it seemed to me, as an amateur soldier, a Territorial, that the Regular Army did not do that, and that the War Office did not do it either. One example sticks in my mind. In 1935, I remember going to a brigade headquarters of the Royal Horse Artillery. We called them "brigades" in those days; they are regiments today. I went around that brigade headquarters with the commandant, a lieutenant-colonel, and when we came to the gunnery training school in the establishment I found that it consisted of a shed containing a table. The gunnery training was conducted in this way. Before starting ranging a man with a lighted cigarette was seated underneath the table to register the supposed fall of shot; he puffed the cigarette, the smoke spiralled through holes in the table, and the fall of shot was registered.

Now, that was a crack brigade of the Royal Artillery; the Royal Horse Artillery, the right of the line and the pride of the British Army. When we consider the amount of money the Army was spending at that time on the Royal Artillery—on horses, equipment, and so on—it was obviously fantastic not to have the operative part, the gunnery, properly organised with an efficient system of training, such as the heavy guns had at Shoeburyness. But it goes further than that, because the cost of this amateurish apparatus had come out of the pocket of the commandant; it had not even been paid for by the Army. In those days, at all events, in spite of the enormous amount of money being spent on the Army year by year, the really vital things were lost sight of, and a great deal of money was spent on matters which were not of first importance. So I do beg my right hon. Friend and the Army Council to try to determine for themselves what are the matters of first importance upon which their limited amount of money must be spent, and to spend it on those matters and ruthlessly to cut out anything else.

Recruiting is the special subject for today, and affects what I have been saying. I am impressed—as I think we all must be—by the allegation that the new pay code is having an adverse effect on recruiting. I cannot say whether that is so or not; only the Secretary of State can say that. But it is fantastic to make a statement such as we heard from the hon. and gallant Member for Bury St. Edmunds (Lieut.-Colonel Clifton-Brown), that a young man is dissuaded from entering the Army because a lieutenant-colonel receives £10 a month less now than he did before the new pay code. That sort of argument is childish and detracts from the value of the case put forward on this pay code. We all know perfectly well that no young man entering the Army as a recruit would ever bother to compare the pay of a lieutenant-colonel—who, after all, is a being on a very high plane to the recruit—in 1946 and his pay in 1947.

To my mind, recruiting for the Regular Army before the war was bad. It depended very largely upon a Territorial Army permanent staff instructor, who had to cycle or walk round his area every week and clock in, as it was called, at the post offices to show that he had circled the area on that particular day. Those permanent staff instructors had no interest in it whatever; they were interested only in the Territorial Army; they got no extra pay for it, and the Regular Army was definitely handicapped by having to rely upon such an uncertain source for its recruits. When my right hon. Friend replies I hope he will give us some assurance that that old system of using the Territorial Army permanent staff instructors has gone, and will never be replaced in such a way, but that some more efficient system is employed at the present time.

We often hear it said from both sides of the Committee that it was unemployment which drove men into the Army in the old days. To some extent that may be true, but there was also a lot of keenness for the Army. There are people in this country who enjoy soldiering; they are natural soldiers, who join the Territorial Army or the Regular Army. I remember some years ago a young man who wanted to join the Welch Regiment. The standard of height was not very great, but he happened to be half an inch below what was necessary. All he had in the world was 10d. He went outside the Barracks and bribed a man to hit him on the head with a bottle to raise a swelling, and then went back to the medical officer, who accepted him because his height had been made up to the right standard. That man has served in the Army ever since, and he is serving today. He has been a fine soldier, and has brought up a family in the Army. I guarantee that there are very few Members in this Committee who would be prepared to go to that extent even to become Members of Parliament. It shows that there was keenness in the old days, and that it was not only unemployment which brought men into the Army.

We must face the fact that after every war recruiting is bad. We have to obviate this difficulty in some way. Speaking as an onlooker who has never been in the Regular Army, I have one or two suggestions to make. I agree that too much foreign service is detrimental to recruiting. It is difficult to avoid it, especially under present conditions, but I would ask my right hon. Friend what is the position in regard to Gurkha troops, of which there are, I believe, 10 battalions? Then there are the colonial troops. They do not like to serve outside the colony in which they live, but it seems to me that there is no reason why they should not serve within their own areas to release our Regular soldiers.

I believe that we shall have to pursue methods of this sort in order to economise in our manpower overseas, as I feel certain that this is one of the chief detriments to recruiting. Secondly, I would ask my right hon. Friend as far as possible to get rid of the petty, trifling, irritating restrictions which are so prevalent in some units. We all know the sort of thing which happens when there is a narrow, small-minded commanding officer or battery commander. Instead of overlooking tiny faults, he jumps on them, with the result that a happy unit soon becomes very unhappy. I would put a broad outlook on the part of the commanding officers even above welfare and matters of that kind. However good the welfare is, and however many sets of ludo there are in a unit, if the commanding officer is a little Napoleon, tyrant or dictator, there will be an unhappy unit.

Years ago, there was a battery commander of the Royal Horse Artillery who was known to have no interest in welfare. He used to spend most of his time hunting, but they always sent him a telegram when an inspecting general was about to arrive at his unit. On one occasion a general came to inspect the battery. The men were lined up for inspection in two ranks, and after inspecting the front rank, the general turned to this battery commander, and said, "I have never seen such a filthy lot of men in my life." The major replied," Ah, Sir, you wait until you get to the rear rank, that is where the lousy ones are." This is a true story, but the point of the story is that it was an extremely happy unit. The men loved their battery commander, and it is perhaps not surprising that they fought extraordinarily well at Omdurman, and they pulled the battery commander out of danger when he was badly wounded.

I hope that the War Office will take into account any recommendations which may be made in regard to summary punishments and courts-martial. I do not know what stage the Committee's findings have now reached, but in some units in the past there has been a great feeling of frustration on the part of the men because they thought they were not getting justice and a square deal. The Army Act gives tremendous power to commanding officers, and in many ways the powers given to commanding officers and to courts-martial are out of tune with modern ideas. That is why I ask my right hon. Friend to go into the question carefully, and to limit these excessive powers in accordance with the views of the times.

I am always very happy to follow the hon. Member for South Croydon (Mr. Rees-Williams) because of the very useful and constructive speeches he delivers on the Army. I can find nothing upon which to criticise him, except perhaps his last story which I find a little difficulty in swallowing. I shall have a word to say on the question of welfare in a moment. It is apparent that recruiting is not going as well as it should do, and that we are not making up for normal wastage. It would appear that we shall not have the numbers requisite by 1950. I suggest that this is due to the extremely inadequate propaganda, although I prefer to use the word "advertisement," and, to the question of pay, which I again wish to drive home to the right hon. Gentleman. As I have said before, I am convinced that were the conditions of service in the Army as they should be, we could raise a voluntary Army up to the strength required. I shall continue to say that, because I believe it is correct.

The basis of the new pay code, as has been stated, was that it should provide parity with industrial wages. I wish to produce one instance out of many to disprove that this has been achieved. If the right hon. Gentleman will look at the Ministry of Labour's Statistical Digest and compare the figures shown there with a soldier's pay, he will easily see where the discrepancy arises. Take the case of the average two-starred, well-trained soldier who is married. Taking into account his pay, his "home saving," in which is included his food, clothes and his roof, which are his "perks," and his marriage allowance, he receives 97s. a week. That is what the average highly-trained soldier receives in the Army. He is below the expert, and above the recruit. Let us compare his 97s. with the figure shown in the Statistical Digest for April. We find that the average for a man in industry over the age of 21 is 120s. 9d a week.

These figures cannot be denied, and until this discrepancy is overcome there will still be a feeling that the soldier is not being paid as well as his counterpart in civil life. I hope the Minister will not say that I should realise that these civilian figures include bonus and overtime, because I would point out that the soldier spends a great part of his Service life working overtime. He works on Sunday, and does not get double pay for it; he works all night on occasions; and when he goes out on divisional exercises he may get only two hours sleep a night for a fortnight. He does not get a bonus or overtime. There is, however, one part of the pay code with which I am in complete agreement—the abolition of specialist rates of pay. Towards the end of the war the position in this respect became farcical; commanding officers who tried to get a little more money for their men used to qualify all sorts of people for specialist rates of pay, until there was hardly a man in the Army who was not receiving some kind of specialist pay.

The whole idea of the one, two and three star basis is excellent up to a point, but it has one limiting factor. Whereas it has brought the ordinary fighting soldier up to the level of the man who drives a carrier, fires a machine gun, or works a wireless set, it has reduced the expert technician to that level. The expert technician should not be on the same basis. I refer specifically to the radar mechanic, the armament artificer, the instrument mechanic, and the wireless mechanic. When they go back to civil life they will be of great value to the community, and will receive high rates of pay. They should not now be on the same basis as the ordinary star soldier. The Minister will not attract the best brains into the Army to fill these posts unless men know that they will get a higher rate of pay than the ordinary skilled soldier. The excuse has been offered that we cannot afford this. I do not think that we can accept that excuse any longer. We see vast sums about to be spent on nationalisation and social security schemes, with which latter I am in entire agreement, but I suggest that it is very short-sighted not to pay a simple premium on an insurance policy which will ensure that the advantages of those schemes can continue to exist by reason of the fact that we shall not be invaded or conquered.

On the question of training, I assert—and I hope I shall be contradicted—that training of any sort in Germany has come to a complete standstill. I believe that units are dispersed over wide areas, and are split into small sub-units. They never see the rest of their regiment from one year's end to the other. They are on guard duties all day long, and there is virtually no training of any value going on at all. There is also no collective training. Without individual training the soldier is valueless, and without collective training individual training is also valueless. I hope that some new arrangement will be made, that some guard duties will be reduced, and possibly, taken over by the Germans. Are there no Germans who can be trusted to guard D.Ps., or see that the right sort of doctrine is taught in German schools? Our soldiers are standing over school children to see that they are not taught the Nazi doctrine. I should have thought that we would have got beyond that sort of thing by now.

I have one constructive point to make about relating the standard of living index to the rate of pay in the Army. I fully realise, as my hon. and gallant Friend the Member for North Blackpool (Brigadier Low) has said, that rates of pay in the Army cannot be altered as the index figure rises and falls. But I suggest that there might be a standard of living allowance, entirely separate from any other allowance, which should fluctuate with the rise and fall in the standard of living.

There is another point which creates dissatisfaction in units. It is a child of the war. I never thought that it was necessary in wartime, but it is even less necessary now. It has to do with commanding officers and brigade commanders leaving their commands, and new officers being appointed in their place. During the war, commanding officers used to arrive to take over a unit after the outgoing commander had left. I had to take over a brigade after only five minutes' conversation with the previous brigadier. That sort of thing is absolutely wrong. It is impossible for an incoming commanding officer to get to know the characters in his regiment in under three months, unless he is given some indication by the outgoing commanding officer. Unless this is done there are all sorts of cases of unfairness and anomalies in regard to pay, promotion, and leave. I hope that an A.C.I. will be issued laying down, categorically, a specific time during which commanding officers and brigade commanders must live alongside their outgoing opposite numbers, so that valuable information can be transferred.

We have heard a lot lately about welfare, both from Members opposite and Members on this side. The correct type of welfare is not provided by one officer—probably a junior officer, who is useless for anything else—who is given the job of running the ludo and darts games, and all the rest of it. Every officer and every N.C.O. in a unit is a welfare officer. Until officers see that their men are properly fed and bedded down before they have their own meals there will not be happy units. That is all I have to say, except this: We get criticisms of the "brass hats." The War Office is in exactly the same position as any other Ministry. The right hon. Gentleman is responsible; the whole of the responsibility rests fairly and squarely on his shoulders. It is up to him to apply the energy and the effort, with all the personality he possesses, to see that the Army gets a square deal—I go almost so far as to say for the first time in its history.

My remarks will be brief because I do not want to delay and thus incur the displeasure of the right hon. Gentleman who, I believe, will follow me. They are primarily directed to the subject of recruitment for the Regular Army. I am strongly of the opinion that one very useful factor which would help recruitment would be some form of guarantee, which is not impracticable in the circumstances, that soldiers who have completed their term of Army service in the Regular Army should be given an over-riding priority in connection with civilian appointments after they leave the Army. It should not be beyond the bounds of possibility, with the kind of Government which we have in office, and with the kind of social and economic developments which are going on in the country at the present time, to regard as impracticable some such form of guarantee. As it is, many men in the prime of life when they leave the Army find themselves completely at a loose end, and that, I am sure, has been a deterrent to recruitment in the past.

My next point links up with a suggestion made by the hon. Member for Worthing (Brigadier Prior-Palmer), and is a suggestion which I made a year or so ago, as to whether it is possible to form some kind of Foreign Legion which could work with the British Army and be officered by British officers. There are large numbers of people in this country and other parts of the world who were associated with the Allied war effort, and who might be glad of an opportunity to join some kind of Foreign Legion on terms and subject to such conditions as the War Office might consider desirable.

My next point is that, for some curious reason which I have not been able to understand, there appears to be discrimination as between recruitment for the Regular Army and recruitment under the National Service Acts. Under the National Service Acts, no questions are asked as regards parentage and matters of that sort. The recruit is called up, and so long as he is British born and does his service, no questions are asked, but when it comes to the Regular Army or the Territorial Army various difficulties are placed in the way of the man. For one reason or another, he may have one of his parents who is not of British birth. I have a case at the moment, which I am trying to get cleared up with the War Office. A young fellow in my constituency—like other hon. Members I do my best to encourage recruitment for the Regular Army—is 17½, and he desired to join the Regular Army before he was called up under the National Service Acts. His application was turned down. The only reason I can find for this refusal is that his father is Swiss, although his mother is British. His father became a naturalised British subject 30 years ago, and two brothers of this young man, also born in this country, served during the war. This young man is denied the opportunity of joining the Regular Army, and unless a favourable decision is made, he will have to wait until he is called up under the National Service Acts.

I know of another case affecting a constituent of mine which shows a curious mentality on the part of some one at the War Office. A Territorial officer, whose pedigree is unimpeachable, and who has been serving since the Territorial Army was embodied in 1939, applied for a Regular Army commission. His application was turned down, and he was offered a short service commission. I cannot understand why an officer who has been serving for so long, and who has earned a good report from his commanding officers, should be rejected for a Regular Army commission and offered a short service commission. The only explanation I can think of is that the War Office may save a few pounds in a few years' time. That does not appear to be an adequate reason for the peculiar form of treatment which they have handed out in this case, which is within my own personal knowledge, and which is possibly repeated in other cases. I think that in little things of that kind, concessions could be made, without detriment to the national interest, which would be to the advantage of recruitment for the Regular Army.

I have been glad to note as the Debate has proceeded that there is in no quarter of the Committee any feeling that the Opposition have done wrong in putting down this subject for discussion. It is certainly the duty of this Committee to examine these problems. I notice that until the intervention of the hon. Member for Cambridge (Mr. Symonds), the approach of the party opposite was what seemed to be an avowed Trappist silence in regard to this discussion. I was getting worried about it. I thought that they must be feeling so depressed by this morning's proceedings, that they were unable to say anything, but I must be very careful because I know that those proceedings are highly confidential, and I must not seek to penetrate the veil.

So the right hon. Gentleman will not tell us anything about them?

Unhappily we can neither of us do that. We are today discussing the Army's future role and the problems of recruitment for the Regular Army. We are not discussing the commitments which the Army is called upon to fulfil, nor are we discussing conscription under the Act which the House has already passed. I would be ruled out of Order if I attempted to do so. With regard to the part which the Army has to discharge, I would remind the Committee, especially in view of what has appeared in the newspapers in the last day or two, and of the repeated assurances given during the Debate on the conscription issue. As the right hon. Gentleman will remember, during the Debate on the limitation of the Forces to be raised under the scheme which the House finally approved—that is one year instead of 18 months—we were repeatedly assured that such limitation would not involve any reduction of our existing commitments. I do not wish to discuss that matter today, but merely to note that those assurances were given to me personally by several Members of the Government, including the Foreign Secretary, and that is where we still stand. Therefore, any departure from, or any diminution of, these commitments would be a matter of the gravest significance for all of us. In any circumstances I should hope, if I may say so, that this House would be unwilling to consider anything of that kind in an atmosphere of scare or scuttle.

Today, however, that is not our main concern. Our main concern is to try to save the Government, within the sphere of agreed decisions already taken, from a repetition of what is already a characteris- tic pattern in their behaviour. We are now dealing solely with the recruitment and organisation of the Regular Army. Time after time, as it seems to us on these benches in recent months, we have on other issues drawn the Government's attention to impending difficulties in various spheres, and we have had very little thanks for our pains. We have been scoffed at as panic mongers, only to find when the time arrived, that our fears and predictions had been only too well founded, that we had given the Government rather more credit than we should have done, and that the Government were planless in the grip of a situation which they had not foreseen or provided for.

I come to the position in respect of the Regular Army today. Our anxiety is to ensure, so far as this Committee can ensure, that that does not happen where the future of the standing Army of Great Britain is concerned. I cannot pass on to what I have to say about the Army of the future without making one reference—and here I am sure I have the sentiment of the whole Committee with me—to the present position of our troops in Palestine. I think that there ought to be on the occasion of this Debate some indication from the House that we understand and sympathise with the extremely harassing duties that all ranks in Palestine are now called upon to perform. Those are not the dangers and discomforts of active service under war conditions. They must, I feel, suffer severe distress in maintaining discipline and performing unpleasant duties under conditions of extreme provocation. I think also I would carry the Committee with me if I say that the bearing of our troops under these exceptional, arduous conditions, commands general admiration from us all. After this Debate, I hope that the right hon. Gentleman will send some message to that effect from the Members of the Committee.

I address myself now to this problem on which we want to focus the Government's attention, namely, the future of the Regular Army. It appears to us in the light of the information available, that the recruitment figures and the planned strength of the Army give serious cause for alarm. Might I briefly put the position as I see it? By the beginning of 1950—the right hon. Gentleman can correct me in a few minutes if I am wrong—unless the Government go back on the clear under- takings which they have given to the men in the Services, the only National Service men still serving will be those called up under the Act which the House passed two months ago. These one year conscripts will number, if we are to judge by the size of the annual intakes forecast, a little above 100,000. The remainder of our standing Army at the beginning of 1950 will consist of men serving on regular engagements.

The Government have repeatedly indicated that the permanent side of the Regular Army is intended to be approximately 250,000 men. What is the position at the moment? Against that figure of 250,000 there are, I think, rather fewer than 110,000 regular soldiers serving. That means that with the present wastage rates of regular soldiers the average monthly recruitment which we need in order to raise our Regular Forces to the Government's figure of 250,000 by 1950 is, I reckon, about 5,300 a month. The best figures we have seen were those towards the end of last year, which were about 4,500 a month and which were encouraging, but those figures included a large number of short service enlistments, which may or may not be converted in due course to normal Regular engagements. Whether they are converted depends on inducements, upon which I want to say a word in a minute or two.

Since last year the situation has become, if our information is correct, more and more alarming. Recruitment has fallen steadily in each successive month of the present year until in June last—the last figure we have—the figure was less than 3,250. In other words, we are now running at the rate of 2,000 recriuts a month less than the minimum monthly figure which we need to restore the Regular Army to the planned size at the required date. I ask whether these estimates are right, because if they are right they reveal a very serious situation, and I want to ask the right hon. Gentleman one or two questions on the position.

The first question I should like to ask is, are my figures and calculations approximately correct? If they are, have the Government realised the existence and the gravity of the problem which is now developing? Have they understood that on present indications they will find themselves at the beginning of 1950 with a most serious shortfall in the size of our Regular Army. If that position does develop they have also to bear in mind the warning given so well just now by the hon. Member for South Croydon (Mr. Rees-Williams) that no Army at the present time in this country can serve its defence purposes unless it be immediately ready, and with its present recruitment strength it could not be immediately ready. I asked the Government whether they have realised these things, and, if they have, I ask that the House and the country should be told of the measures which the Government propose to take.

What do the Government propose to do? Have they plans to reverse the present unfavourable trend in recruitment and, if so, what are they? If those plans do not succeed, how do they propose to achieve the minimum figures for the Regular Army which they themselves laid down? There is a matter which is not often realised in the reports one reads in the Press, and that is that the continuation of the National Service Acts will give us little help with this problem of recruits, if we are faced with a large deficiency in the Regular Forces. It is no solution, even if it were possible, which it hardly is, to retain conscripts with the Colours beyond their normal term. The functions which the Regular Army has to perform—and I know the right hon. Gentleman will agree with me—are very largely functions which under our system can only be performed by long-term Service men. In the first place, they have to provide the cadres to train the annual intake of conscripts. They have to provide further cadres for the new Territorial Army. These are both tasks which only Regular, experienced and highly trained Service men can discharge.

There is just this point. Would the right hon. Gentleman take into account the fact that those two groups may at the end of their service decide to go into the Regular Army and, therefore, the picture is not quite as black as the right hon. Gentleman is painting it at the moment? Am I not correct there?

The hon. Gentleman may or may not be correct. None of us can tell, but what I am obliged to base myself upon is the position as it stands at present. It may be that what he says is true, and that in those two groups some of the short-term Service men may prefer to stay longer; but I am bound to say that the figures of recruitment at present show very little indication of that, and unless the Army can be made more attractive—a subject on which I wish to speak in a moment or two—it seems to me that the trend is likely to be the other way and we are likely to find ourselves by 1950, by a series of shortfalls in the Regular Army, with nothing like the figures anticipated. If anything is wrong in those figures and calculations I shall be glad if the Minister would tell us.

I will give an estimate of what I think is required. There are two fields of activity, the training of the intake of conscripts and the training of the cadres for the Territorial Army. I suggest that those two groups of activity would employ something like 40,000 regular N.C.O.'s and men. Then there are our overseas garrisons and the provision of a high percentage of all the occupation duties, which will still fall to be performed in 1950. There again, though conscripts will help, there must be a large percentage of Regular Forces for occupation duties. These are tasks which must be done. I think I have said enough to show that the critical position which the Regular Army appears to be in with the falling off of recruitment is rapidly leading us to the possibility that when 1950 comes, it will not be able to discharge its task.

Hon. Members in this Debate—some of my hon. Friends on this side of the Committee and some hon. Members from the other side—have made a number of very valuable suggestions to the Government for improving recruitment and increasing the inducement to the volunteer. I want to say this in all seriousness to the Government before I pass on to the question of inducement. If the Government are decided that this is the Regular Army which is their minimum requirement to carry out the national and Imperial needs, they must go all out to get that figure and must start going all out now. Do not, please, leave it to the very last minute when you are approaching 1950 and find that it is too late to get the men.

May I tell the right hon. Gentleman what I think he should do above all. He is probably aware of all the suggestions that have been made with great frankness, but I think that he will admit that they have been put forward to help him in his task. They have come from all parts of the Committee, but I think that the most important of all are those dealing with the question of rates of army pay, especially, if I may single out one section, those for warrant officers and non-commissioned officers. Those rates of pay today do not bear any relation to the general level of wages which men of comparable intelligence, skill and training can command in civilian life, and until that discrepancy is met I fear that the right hon. Gentleman will not obtain the recruits for which he looks. If the Government allow this disparity to go on they are really placing an unjust strain upon the patriotism and sense of duty of the men who come forward to volunteer or who would wish so to come forward.

As I have said, I am not today arguing the general merits of the Government's defence plan, but whatever that Plan may be, the Government must take the necessary measures to put it into effect. The Government's present failure is that, having made a scheme and having budgeted for a Regular Army of a certain size, they are failing to recruit that Army. We are asking today, first, whether the Government have realised the extent and consequence of the failure which is developing, and, second, what measures they propose to take to remedy it before it becomes so serious as to threaten the collapse of their whole scheme.

I conclude with this warning to the right hon. Gentleman. This Debate was brought forward after we had carefully considered the figures because we are genuinely concerned at the situation which may confront us at the beginning of 1950. We want the right hon. Gentleman to understand that the warning which we are giving him of our anxieties, though intended to be constructive in spirit, is a very serious warning. If the Government have not remedied the position by the date to which I have referred—their own date of January, 1950—a very heavy responsibility will lie upon them, but at least they cannot say that they have not been warned by this Committee or that this Committee has not done its part both by warning them and by suggesting measures by which they can meet the risks we see ahead.

With the general tone of the Debate, and especially with the remarks made by the right hon. Gentleman the Member for Warwick and Leamington (Mr. Eden), I have no fault to find. Indeed, I have some commendation to express because the situation as the right hon. Gentleman has put it, is perhaps not quite so alarming as he appeared to suggest. The position is certainly serious. But if any matter may be said to be a non-party one it is the defence of this country. In the course of my remarks I shall suggest that it will not be possible for any one Minister, whether the Minister for War, the Minister of Defence or any Service Minister to solve this problem by himself for reasons which are obvious to the whole Committee at the present moment. Whether we increase the pay by 50 per cent. or not, the fact remains that there is serious and intensive competition from industry. We also have to overcome the weariness of six years of war. Men do not want to go into the Services but wish to be in civil life, although in certain circumstances this may be less beneficial to them even from a financial point of view than if they went into the Army.

Our principal anxieties at the moment are concerned with the lack of skilled soldiers—that is speaking for my own Service. But no doubt this affects the other two Services as well, to a greater or lesser degree and, perhaps, so far as concerns the Royal Air Force, to an even greater extent because they have such a large proportion of skilled tradesmen in that service. Our main anxiety is to maintain the forces that we have in existence at the present time, in the interim period before I950, with which most hon. Gentlemen have been dealing, and to carry out the commitments which are vital to us. In that respect it is very difficult to compete with industry, which is offering far better conditions—short-term perhaps—than the Army can hope to offer under present circumstances.

Before I come to the details of the speeches made by the right hon. Gentleman and hon. Gentlemen on both sides of the Committee, I would like to take up the remark made by the right hon. Gentleman in relation to our troops serving in Palestine. It was my intention, particularly after the news that we had heard today from Palestine in relation to two of our N.C.O.'s——

Has it been confirmed?

I have no more information than was given by my right hon. Friend the Colonial Secretary as I have been here all the time since he made his statement. Nevertheless, certain information was given and whether the news is confirmed or not that these two N.C.O.'s have lost their lives, the fact remains that their lives are in jeopardy. This applies not only to their lives but to those of other troops in Palestine, and it was therefore my intention to pay a tribute to the patience and forbearance of our troops there under most trying and serious conditions, and I am glad that the right hon. Gentleman has anticipated that. Those troops, who are only carrying out the policy of their Government and those set in authority over them, and who, in the main, bear no great antipathy towards the indigenous population, are jeered at, insulted, provoked and badly treated in every way by those who, to a certain extent, owe their safety to them. In view of this the Committee will I am sure share my view that we cannot render too much thanks to those troops on behalf not only of the House of Commons but of the rest of this country as well, for the forbearance and patience they have shown in very difficult circumstances. I am grateful for the right hon. Gentleman's suggestion that a message should be sent to them from the House as a result of today's Debate and I will certainly consider it.

Before I come to the composition and the recruitment of the Regular Army, perhaps the Committee will permit me to say one or two things which are related to this question and which arise from a remark made by the hon. and learned Gentleman the Member for Wirral (Mr. Selwyn Lloyd). He mentioned the scare headlines which we have seen to the effect that the C.I.G.S. has suddenly been ordered home or that he is coming home in order to make drastic cuts in the Army. This is all quite remote from the truth. The Chief of the Imperial General Staff was not ordered home. I gave him no instructions to come home and he is coming home on his own initiative. I understand that he will arrive in this country about 8th August, which I imagine will be after the date when the crisis referred to in those headlines is supposed to reach its height. So far as this House is concerned, this will certainly be so since the Debate will be next week. Decisions have been taken in relation to the reduction of the Armed Forces, but this does not apply to the Regular Army where our policy is the opposite one. We are doing all we can to increase the figures in relation to the forces now serving in the Army. We have taken decisions of which the Chief of the Imperial General Staff knows and approves, although they have been taken in his absence.

As a result of these decisions it was announced that part-group 63, so far as the Army was concerned, was to be released by the end of the year. This means that 48,000 more officers and men will be released in the last quarter of this year than we originally planned. In effect, we are planning to increase release in the last quarter of the year in the Army by nearly 100 per cent. over our original plan when we announced that part-group 61 would be released by the end of the year.

May I thank the right hon. Gentleman for giving us more information about this matter, to the great relief of the Committee? I would like to be clear that this great acceleration that is proposed is in no sense contrary to the fulfilment of the commitments which the Government have hitherto told us they stand for.

I am coming to that point in a moment. I am mentioning the figures because my right hon. Friend the Minister of Labour said that part-group 63 would be released by the end of the year. The effect of that statement is to expedite release to the extent of 48,000 officers and men over the target which we had originally set. Further than that, in the first quarter of next year we shall still further accelerate the rate of release. In regard to the question which the right hon. Gentleman has just put to me, I would say that it will be done without prejudice to the maintenance of those commitments which His Majesty's Government consider vital to the interests and peace of this country. It really means that we are pruning and streamlining the Army as much as we can, in the circumstances. On previous occasions when we have been discussing the Armed Forces, there has been, even if there is not today, an implied criticism that we are keeping in the Army a large number of men unnecessarily. Next year, as a result of the Government's release plans which they have already announced, we shall release something like 350,000 officers and men, who will be coming out of the Army in order to keep to the engagements we have entered into in the White Paper. As against that, there will be, as the right hon. Gentleman estimated, something like 100,000 National Service men coming into the Army next year; so we shall achieve a release of something like 250,000 officers and men. I mention that fact in order that the Committee may appreciate what we are doing and what will be done next year to help our industrial affairs.

In the course of this release programme next year—or I should say, not next year but the next financial year; the Committee knows that it runs from April to March—the number of troops serving overseas as compared with the current financial year will be cut by more than 50 per cent. I hope that some of my hon. Friends who have been inclined to criticise us for keeping too many men in the Army in relation to our industrial requirements will appreciate the significance of the figures which I have just given.

Now let me come to the main point of the Debate, namely, the future of the Regular Army. Perhaps the Committee will allow me to say a few words on the effect of reducing the period of National Service from 18 months to 12 months. That decrease in the period, to which the House has agreed recently, will result in the Army getting some 60,000 fewer National Service men than it would have got under the 18 months' programme. That has meant a complete recasting of our training programme and the allotment of the manpower which we shall be getting from 1949 onwards. It has resulted in a very careful review being instituted of the training organisation in order to minimise the loss of efficiency which the cutting down of the period from 18 months to 12 months might have entailed. We find that we cannot cut the primary training below six weeks. We are investigating that position, but we think it will be necessary to maintain the six weeks' period in order to give the men the elementary basic training for a soldier. The personnel selection procedure will then be applied to him and we shall be able to fit the square peg into the square hole, or, at any rate, not put the square peg into the round hole.

During the war, the primary training period was followed by a corps training period. We found that to be a most useful method of intensive training of men before sending them into their units, which probably were in the line. As a result of the reduction of the service period for National Service men we shall not be able to continue that corps training period. Therefore, men will be posted straight from the primary training centres to their units. At first sight it may appear that we shall lose the benefit that we have obtained by the intensive training of men, but on reflection that may turn out to be an advantage. It will mean that the National Service men for the remainder of their 12 months' service, after having done their primary training, will be posted to one unit. It will be an advantage to the men to be able to stay there for the remainder of their period of National Service.

Many of us would agree with those admirable sentiments, but can the right hon. Gentleman assure us that there is no question of training being curtailed and men being sent straight on to guard duties which would be very bad for them?

Yes, Sir, there are dangers, but I am thinking of the period when the National Service man is first called up under the new Act which will not be until 1st January, 1949. I sincerely hope that by that time we shall have got rid of some of our more pressing commitments which necessitate guard duties. There is a tremendous amount of valuable stores and equipment, and a good deal of time in the Army must be spent on work like guarding them. I hope that we shall be able to get some relief in the Army from those duties, although there is no doubt that as long as an Army exists there will always be certain guard duties and fatigues to be performed.

Is there not an alternative to doing away entirely with the corps training centre? Could not the primary training centre be given a little longer time to handle men? Although they make wonderful progress in six weeks, the recruit is still a very raw recruit at the end of six weeks. If he has three months, something could be done.

If the Committee will allow me to continue with my survey of the training organisation that we are proposing to put into effect as a result of this decision to reduce the period to 12 months, I think the hon. and gallant Member for Petersfield (Sir G. Jeffreys) will understand that what we have in mind is probably something better than he has suggested. Perhaps I ought to say that the corps training centre will not entirely disappear. For certain parts of the Army it will have to be kept in existence. For certain highly specialised arms of the Service it will obviously have to be kept going, for example, the Royal Engineers, the Regular Army part of which will have to be given a much more concentrated period of instruction in their duties than they can possibly hope to get in their units. But as a result of what I have just said, corps training except for certain specialist and highly skilled tradesmen will be carried out in active Army units in the following arms and services: The Royal Armoured Corps; the Royal Artillery; the Infantry; the Royal Engineers, with the exception of the Regular part of the Royal Engineers; and the R.A.S.C. In all other arms and services, corps training will be carried out much as it is at present—in corps training units in the United Kingdom. In all arms and services the training procedure will be exactly the same both for the National Service man and the Regular.

The right hon. Member for Warwick and Leamington and others have referred to the difficulty we shall have in manning our outstations, which can only be manned by the Regular Army. This consideration caused me some alarm taken in conjunction with our present recruiting figures. It is quite correct that we shall have to rely on the Regular Army for all stations abroad except for Europe proper and perhaps—we are looking into this at the moment—stations like Gibraltar. Malta and Trieste. It may be possible to send to those stations National Service men with 12 months to serve in the Army. It would be a very good thing that they should see those parts of the Commonwealth in which in the past Regular soldiers have had to do duty. But generally speaking with those exceptions—Germany, Austria, and the Mediterranean stations—we shall have to rely on Regular soldiers to carry out duties farther afield. They will have their training duties to perform, a large proportion of them to be performed in this country, particularly in relation to anti-aircraft. It is therefore clear that we have a considerable task to recruit our Regular Army up to the ceiling which we will have to set.

A figure of 250,000 has been mentioned in this Debate. It is based on some remarks of mine which I think I made in my Estimates speech earlier this year. I think I said then that the figure was of the order of 250,000, but my own feeling is that the actual target figure when finally approved will be something less than that—something perhaps like 20,000 to 30,000 less than that figure. If we can recruit to this figure it will provide satisfactorily as far as we can see at the moment for our garrison duties overseas and the training organisation needed to train the National Service man up to the stage that he is to achieve by the time he leave the colours and goes to the Territorial Army.

The right hon. Gentleman has given only two roles for the Regular Army. Does he not include the role of a striking force or a nucleus of that?

Yes, Sir. I am not going to say that that force will be composed as it was before the last war or the first world war—composed largely of a British expeditionary force. It is quite obvious that there will be certain formations—the Airborne Division as in Palestine at the moment and so forth—which would in emergency form the spearhead of the striking force, but we estimate that in any act of aggression against this country the whole impact of the aggressor will fall on this country or countries very near to us. Although my hon. Friend the Member for South Croydon (Mr. Rees-Williams) said it would never be possible for these islands to be used as a base again in any European war, I am rather inclined to doubt that. I know the difficulties. It means the dispersal of factories and of the Army and its equipment and stations and so forth, but nevertheless, until we have experience and knowledge of the form that aggression will take, we have to prepare in the way we know best, and that way is based on the experience we got from the last war, and particularly the closing stages of the last war. That obviously means that a large portion of the Army will have to be engaged in antiaircraft protective duties both with the static forces at home and with mobile forces overseas if they should be necessary there. A large portion of the Territorial Army will have to undertake those duties and therefore a large portion of the Regular Army will have to be engaged in instruction duties and, indeed, in manning duties.

Perhaps I ought to explain now to the hon. and gallant Member for Petersfield how we shall post these men to units when they come into the Army, as I said we should do, after a short primary training period. They will be allotted to their units by intakes varying according to the nature of the unit. For example, in the battalions of the Infantry there will be four intakes of these men in a year, roughly corresponding to the four sub units—the four rifle units—of the battalion. Therefore, the men will get in the unit to which they are posted four periods roughly of 11 weeks training, allowing for six weeks primary training and two weeks for drafting and leave before they are posted to their unit.

In the Royal Armoured Corps the periods will relate to the structure of the regiment, with three squadrons. There will be three annual intakes. This we think will enable the training to be carried out in stages which will equip the men, with the exception perhaps of the specialists and tradesmen, reasonably well to take their part in the Territorial Army when they leave the colours. The Committee must not forget that the whole purpose of the Regular Army is really to train men to take their place in the Territorial Army. The Territorial Army will be far larger than the Regular Army on which will fall the garrison duties and the instructional duties which I have already outlined. It follows, therefore, that the men will spend their time wherever their units are located. There will be some—certainly while we are in occupation of Germany—who will have to be sent to B.A.O.R. and will spend most of their 12 months in Germany. There will however, be others who will spend their time in this country because the units to which they are posted will have to be stationed in this country. These will serve their 40 odd weeks in this country, and to that extent there will be some difference between the National Service men called up. Some will be lucky—according to their point of view—by being retained in this country, and some by going overseas.

With regard to the technical training of these specialists, it is quite true as the hon. and learned Member for Wirral said, and as other hon. Members have reiterated, that we shall need to recruit quality before quantity, although obviously we must have quantity at some time if we are to recruit up to our ceiling. That will not be an easy matter. Indeed, I am not disguising it from the Committee, it will be very difficult to recruit those tradesmen. It is possible that we may be able to get a better response than we are getting at the moment if we improve rates of pay and this possibility has not been entirely overlooked, although the Committee will understand that now, under the new system, with the Minister and the Ministry of Defence to co-ordinate the three Services, it is not possible for each Service Minister to play his own hand in that respect. He has to do it in coordination with the other two Services. Therefore, those matters are considered on a Ministry of Defence level and then put up to the Treasury.

I view with some sympathy the points that have been put by both sides of the Committee as to anomalies which may have appeared in relation to senior N.C.O.'s and warrant officers and, perhaps, commanding officers. My own feeling is that, generally speaking, we have succeeded in the new code in relating the rates of pay of the Services to industry although, if there is any great inflation of industrial wages the relation would obviously be upset. However, the Committee has reason to hope that taxation will be reduced, and I know that is the intention of my right hon. Friend the Chancellor of the Exchequer to achieve that——

Oh.

The right hon. Gentleman may be cynical——

Sceptical.

He is cynical sometimes too—sceptical of the remarks of my right hon. Friend the Chancellor of the Exchequer, who told us in his last Budget speech that that was his intention, and I hope and believe he will achieve it in spite of what hon. Gentlemen opposite may say. If that is the case, then it is obvious that some of the arguments made by hon. Gentlemen this afternoon as to some officers being worse off than they were, will weaken. At any rate, I am prepared to look into any anomalies which hon. Gentlemen like to bring to my attention and, if possible, to try to rectify them, always of course in association with my colleagues in the other two Services.

I could go on to give the Committee more information about the training proposals but, in view of the time, I ought to get on to that other important matter raised today, recruitment. In stating those facts I have disclosed some of the difficulties with which I have to contend, and although some of the proposed solutions advanced by hon. and right hon. Gentlemen this afternoon may help me to solve them, my difficulties are much more difficult to solve than would appear from the suggestion made, that merely by improving pay, we can get all the recruits we want. I think the hon. and gallant Member for Worthing (Brigadier Prior-Palmer) said that if we would only put that right, we would have all the recruits we wanted for the Regular Army.

indicated dissent.

Perhaps I misunderstood him but, nevertheless, that was my impression. It will not be possible by increasing pay alone to get recruits for the Regular Army, for reasons to which some hon. Gentlemen have referred today. One said that it was so easy to caricature the British Army, and that it has been done extensively in the past. Why? What hon. Gentlemen are saying when they have attempted to criticise the Government this afternoon is that for years past, during which time they were in office, we have steadily neglected the Army's needs. That is absolutely true, particularly in relation to barrack accommodation, housing and so forth. That legacy, which was handed to me when I took office as Secretary of State for War, is a legacy which I cannot hope to dispose of by 1950 or any early date like that.

I am sorry that the right hon. Gentleman has introduced the party aspect into this reasonable Debate, but may I remind him of the by-election at Fulham?

The by-election at Fulham had nothing whatever to do with these bread-and-butter matters which affect the Army. I think it was in 1932 that we had the lowest Estimate for the Army between the two wars. However, I want to introduce no party note into this matter but to state facts. The facts are that in the matter of accommodation for our troops—and after all hon. Gentlemen have brought these matters forward this afternoon only too well, as well as I could have put it when I was a back bencher, if not better—I cannot hope to overcome those difficulties in two or three years. It will probably take us 15 years to rebuild and reform barrack accommodation for the Army, always assuming that we are given some better priority in building matters than we are given at the moment.

Therefore, I want the Committee to be under no illusion whatever that, in so far as better accommodation will help me to get recruits for the Regular Army, I cannot hope to do that in two or three years. I am, however, doing my best to meet that situation. Since we took office we have budgeted for 2,000 married quarters for other ranks, for 750 married quarters for officers, and 200 War Department constabulary married quarters. I am not satisfied with the rate of progress being achieved in the building of these quarters which have been approved in the Estimates, but in this matter the civil population can get greater priority than I can in the Army. Also, I have to rely on other agencies to build these married quarters for us. Nevertheless, those figures I have given are some indication that we are attacking this matter seriously, as the right hon. Gentleman suggested in his concluding remarks we ought to do.

Since the end of the war we have recovered many quarters that have been irregularly occupied, sometimes by civilians, with the result that we have increased the number from 5,000 at the end of the war to 9,000 now. Those figures may seem small in relation to the Army's needs, but these accretions, small though they may be, are of value to the Army, especially to those returning from overseas. On top of all our difficulties we have to make provision probably for a large number of Regular troops who will be leaving India and very shortly arriving in this country. Whether it be married men coming back from Palestine with their families, as they did a little time ago owing to circumstances out there, or the troops and their families coming home from India, the Army is looking after them as best it can, and on the whole we have had very few complaints from those for whom we have found temporary accommodation until they have become assimilated into the structure of the civil population here.

It is true that figures in regard to recruiting are not as satisfactory as we had hoped. I am bound to say, however, that they never are satisfactory during the summer months. It is very difficult to go to the seaside resorts and holiday camps to appeal for recruits during the summer. We would get a very short answer. During the summer time people do not want to come into the Army, but want to be doing something different.

It is very interesting to note that the right hon. Gentleman started recruiting for the Territorials on 1st May.

That may seem curious, but recruiting for the Territorial Army on a part-time basis is quite different from recruiting for the Regular Army on a full-time basis. Our whole experience goes to show that during the summer months the falling off of recruits for the Regular Army is constant, although to a lesser extent the same applies to recruiting for the Territorial Army. I hope that the hon. and gallant Member is not suggesting that we should have delayed the start of recruiting for the Territorial Army from May until the end of September. I thought the Debate was intended to urge the Government to get on with recruiting as speedily as possible, and recruiting for the Regular Army has its concomitant in the Territorial Army.

I wish to give some figures in regard to recruiting. After all, this problem is not entirely mine, although obviously I have to take responsibility for it, and I have to take any criticism if any is coming. Also I hope that if there is any credit, and if I am successful in recruiting for the Territorial Army—and I am not despondent of doing that—I hope I shall have some of that credit. In the first quarter of 1937 the monthly average intake of normal Regular engagements was 2,433. In the second quarter it has fallen to 2,181. That would bear out what I have said about the difficulty of recruiting in the summer months. The short service intake average fell from 1,753 to 1,213. In the technical corps the lack of volunteers does cause us some anxiety, but we are doing what we can, particularly by the recruitment of boy apprentices, which will give us a dividend in a few years time. The recruitment of boy apprentice tradesmen is itself not entirely satisfactory. On the last examination, in July, for 787 vacancies, only 396 boys competed. There is room for improvement there, but, generally speaking, as I look at my charts in the War Office, I am satisfied, not complacently so I hope, that in time as parents get to know of the valuable opportunities there are for boys to learn a trade in the Army, there will be more coming forward who will be the future specialists, tradesmen and N.C.Os. of the Regular Army.

Having given what appear to be, as indeed they are, not entirely satisfactory figures in relation to recruiting, perhaps the Committee would be interested to know that for Regular recruiting, including the short service man, the figure for the period 1st January to 30th June last year was 10,119. These are volunteers. In the first half of this year it has more than doubled and the figure is 22,815. That gives some indication that the situation is not yet lost by any means. It has to be considerably improved, I quite agree, but those figures give me hope that we shall be able to do better in the forthcoming months. The interesting thing is that we are now getting more National Service men volunteering for Regular engagements, and more men serving on Regular engagements are volunteering to re-engage. What does that indicate? It confirms a thought I have had in mind for some time, and which I have tried to impress on my recruiting people at the War Office. It is that the best field for recruitment to the Regular Army lies among the National Service men, a compact 100,000 of whom are coming up each year. Although we shall still appeal directly to the civil population to join the Army, I believe that so long as our propaganda is right, and conditions are right, and so long as we have the right commanding officers, we shall get a very good response for the Regular Army amongst the National Service men. At any rate, we are going to make special efforts to recruit amongst National Service men.

Has an estimate of percentage been made?

I can give my hon. Friend some figures, although not the percentage. In the first six months of the current year 8,890 men have accepted short term engagements. For the whole of last year the figure was less, 8,618, and throughout 1946, 4,299 National Service men volunteered to remain in the Army on Regular engagements. That is for the whole period of last year, but already during the first six months of this year 4,205 have so elected to become Regulars. I think the Committee will agree that those are very welcome signs that the National Service man is beginning to want to join the Regular Army.

In comparing the short service recruiting of this year with what the right hon. Gentleman calls the short service recruiting for the whole of last year, ought he not to have told the Committee that it was not brought into operation until the middle of May last year, and that the figure relates to only seven months, which is in fact a good comparison with the first six months of this year?

Whether it is a good comparison or not, I think that the figures in regard to the National Service men are an excellent comparison, because they were serving for the whole of the year, and these figures go to prove that we are getting a better response from National Service men to join the Regular Army.

Is the right hon. Gentleman going to make special arrangements in regard to Northern Ireland, which is a purely voluntary area?

Yes, Sir. I was coming to that. I am making a special visit to Northern Ireland, and hope to do a bit of recruiting there. I hope hon. Members who come from Northern Ireland will help in that respect. I believe we shall be able to get quite a number of recruits to join the Regular Army from Northern Ireland and perhaps from elsewhere in Ireland. In answer to the question of what special steps we are taking, we are now considering, in co-operation with the other two Services, whether we can have a special recruiting campaign led by Service Ministers, and perhaps other Ministers also. Owing to the cutting down of newsprint, I am afraid we shall get less space in the newspapers, and we can perhaps make up for it with speeches in the country, and broadcasts over the wireless. I hope that in that publicity right hon. and hon. Gentlemen in all parts of the Committee will help us.

We have to take advantage of every possible means of getting recruits. Although I believe that we shall get a good response from National Service men, we have to go round the country to persuade their relations that it is a worth while job for the men to join the Regular Army. As I say, recruiting figures are not satisfactory; they have got to be improved. There is no easy solution to this problem, but I am not disappointed about our finding that solution. Indeed, I go so far as to say, although it is very unwise to attempt to prophesy in this House, that I believe the time is not far distant when we shall have a waiting list for those who want commissions in the Regular Army. At Sandhurst, for three terms in the year, we are training our candidates for commissions. I believe that in two or three years' time we shall have got that matter satisfactorily settled, and that our main difficulty will be among the non-commissioned officers, who have to come from the Regular recruits.

I shall have to neglect to reply in detail to some of the interesting points put to my by different members, because there is another Debate to follow this one. I would particularly say to the hon. Member for Merioneth (Mr. Emrys Roberts) who spoke so feelingly about recruiting in Wales, that I hope that Welsh Members will give us every help to recruit men from Wales. We need them. It is not so easy to put them in Welsh speaking units or mainly Welsh speaking units——

Then we shall not give the right hon. Gentleman the help for which he asks.

This is a subject which Welsh Members have taken up with the War Office. I hope we shall be able to convince them that there is a satisfactory reason for not changing the composition of the 53rd Division because the role of some of the regiments forming that division has changed from infantry to artillery. I hope that I can appeal to hon. Members from Wales not to say that they will not help us unless we can give them every national point for which they have asked. Scotland has also asked for the same sort of thing. We have difficulties in giving them all they want, but I shall do all I can to concede the points which can be conceded, as I want the help of hon. Members from Wales.

I hope that if I have not given complete satisfaction to the Committee, and obviously I have not done so unless I can say I have got all the men I want in the Regular Army, I have shown something of our difficulties, which are not entirely of our own making. Some of them have been left over from the years which preceded the coming into office of this Government. As a final example, in the war there was no Regular recruiting whatever. I hope that I have shown to the satisfaction of the Committee what we are doing at the War Office to tackle these matters in a responsible, and, I hope will be shown, when 1950 comes, in a satisfactory manner.

I beg to ask leave to withdraw the Motion.

The Committee will remember that when I requested the President of the Board of Trade to have an independent inquiry into the matter of the allocation of the Grantham factories, he refused. We on this side of the Committee have, therefore, taken this opportunity to raise the matter, and I shall confine myself entirely to this subject. We propose to ask the right hon. and learned Gentleman, if he does us the courtesy of being present—and I must say, in passing, that this being a matter which concerns the administration of his Department, of which he has had plenty of notice, and I having received no notice from him, I think it is treating the Committee with great discourtesy not to be present—and in his absence I shall ask the hon. Gentleman, who probably has not got the power to do so, which makes it difficult for the Committee, to consent to a Select Committe being set up in this matter. If he does so, it will not be necessary for me to ask my hon. Friends to divide the Committee, but if he does not consent, we shall move a reduction in the Board of Trade Vote. I hope that nothing I have to say will impart the slightest prejudice into the consideration by the Committee of the facts which I feel it necessary to recite.

In order to understand the apprehension which Members on this side of the Committee, and indeed on the other side also, feel about the allocation of these Grantham factories in this year, it is necessary to go into the history of these transactions in some detail. I must begin at the beginning. The three factories in question have an area of about 250,000 square feet, so that we are not dealing with a very large proposition. During the war Factories 3 and 4, which I am chiefly talking about, were engaged with Factories 1 and 2, in the manufacture of Hispano-Suiza guns. Factories 3 and 4 had been built by the Government and leased to British M.A.R.C., which is the British Manufacture and Research Company. Subsequently Factory 2, which is not of such importance, was transferred to the Government.

When the Public Accounts Committee investigated certain matters in connection with production from Grantham, their inquiries were addressed to British M.A.R.C., of which the hon. Member for Grantham (Mr. Kendall) was at the time the managing director. Subsequent to that date, a company called Grantham Productions Limited, which had initially a small capital of, I think, £1,000, came into the picture. As far as I understand it, this company in some way or other entered into contracts with the Government for the supply of certain guns, not the original production, though in fact at that time it was British M.A.R.C., not Grantham Productions, which was the lessee of these two factories. The contractual relations between Grantham Productions, on the one hand, and British M.A.R.C. on the other, call for some investigation, because the facts cannot be ascertained unless access is had to the books of both companies, or at any rate of one of them. That is only preliminary.

After the end of the European war, proposals were made by Grantham Productions to the Board of Trade under which these factories were to be allocated, in peacetime, to Grantham Productions Limited for the manufacture of two products, first, a "people's car" which was intended to sell for £100, and secondly, agricultural tractors. At the time when this application was originally made, the present Chancellor of the Exchequer was President of the Board of Trade. After going carefully into the circumstances, he turned down the application of Grantham Productions, and allocated the premises to another company called Aveling-Barford, which had been established for over a hundred years in Grantham. They have a well-known name for road making machinery, such as steam rollers. They had a new development at the end of the war for small earth-shifting machinery.

The present Chancellor of the Exchequer, in his capacity at that time of President of the Board of Trade, considered that neither the people's car nor the tractor were what is called production propositions. He regarded them as, mere drawing board projects and, from my own knowledge, it was mainly on this ground that he allocated the factories to the rival claimants and not to Grantham Productions. If these two projects were in an advanced state of development, as was claimed by the company, some investigations are necessary about how a company which was entirely engaged upon Government contracts had been able to develop two such ambitious projects during the war and have them ready for exploitation on VE-Day.

Just about this time the Labour Ministers left the Coalition Government and the so-called Caretaker Government came into office. In that Government, I was President of the Board of Trade and Minister of Production. I combined both offices. When I got back to the Department over which I had previously presided in 1940, I was immediately given the facts about this case. I found that my predecessor the present Chancellor of the Exchequer had in fact only reached a decision the day before I returned to the Board of Trade. Therefore, I determined that I must make up my own mind, because the decision was so recent, and not shelter behind his. I would like to assure the Committee that my reason for re-opening the case was that I felt that the hon. Member for Grantham, who had been engaged successfully in the manufacture of Hispano-Suiza guns during the war, was entitled to more consideration in regard to these factories than any other firm who had not been manufacturing during the war.

I had a first interview with the hon. Gentleman and I so informed him. I may say that I considered the reasons why the present Chancellor of the Exchequer had turned down the application to be quite sufficient in themselves. Whether a particular product is a production proposition or a drawing board project is, after all, a matter of opinion which only events can prove to be right or wrong. I emphasise that I considered his reasons by themselves were enough. However, I investigated the whole matter in very great detail and I asked the hon. Member for Grantham if he could call upon me at the Board of Trade to discuss some other aspects of this proposition. I asked him in particular how the proposition was to be financed. Clearly, the Government in allocating a Government factory to an industrial concern must be satisfied that the proposed tenant has sufficient money behind him to develop projects such as this and to carry them through their various stages until they are proved and become commercial propositions.

The hon. Member for Grantham then informed me regarding finance that he himself was going to put up £70,000, that two of his friends, whom I am not going to name, because I do not know whether the statement was made with their authority—I am not making any criticism; I am not going to name them—were going to put up £10,000 each. The hon. Member for Grantham also said that the workpeople in the factory were going to put up £30,000 to £35,000, and the balance of the finance required would be by prepayment by the agents to whom the sale of the people's car was to be entrusted. I judged from this statement that the total finance proposed was to be of the order of £150,000 to £175,000, and that some of this finance was very far from firm. I was also apprehensive about the prepayments by the agents who were to sell the cars. I believe that in the United States it is a common practice for agents to make these prepayments and, as far as I know, they only make them against a prototype or a model which they can see, or else they make the prepayment with one, two or three very great automobile manufacturers behind the product. I did not think at the time it was suggested that finance should come from prepayment that either of those conditions really existed. There was no prototype to be seen and there was not an engineering firm, of great prestige in this particular field behind the projects.

However, I came to the conclusion, first, that the total finances which were to be provided for these two very ambitious projects were totally inadequate in amount; and, secondly, that even if that were not so, the methods by which these were to be obtained were not sound, or at least they were not firm enough. Therefore, after my own investigation, I confirmed the decision of the present Chancellor of the Exchequer, and I allocated the factories to the same firm to which he had allocated them, namely, Aveling-Barford. I trust the Committee will believe me when I say that I came to this decision very reluctantly. I hope also that they will acquit me of any smugness or complacency in making this statement. I am entitled to no praise whatever for making this decision. I am not saying, "I told you so" or anything of the kind. Any novice in industrial matters would have reached the same conclusion.

I would remind the Committee that some motor manufacturers in this country would regard £2,500,000 or £3 million as insufficient finance for a project of this kind, and others would put it at an even higher figure. To proceed with £175,000 of finance, which was only at the best a conditional promise, was to court certain failure. I came to the conclusion very reluctantly. I would remind the Committee that I was also Minister of Production and part of my duties were to try to stimulate production wherever I thought it could properly be done, and that this edifice was erected on insecure and insufficient foundations.

In this rather tangled story, another event occurred—agreeable to hon. Members opposite—when the Caretaker Government failed. The investigation which I have made into this project had, as sometimes happens in Government Departments, taken some time. It so happened that I reached the conclusion which I have described to the Committee only a few days before the fall of the Caretaker Government. I was succeeded by the right hon. and learned Gentleman the present President of the Board of Trade who, unfortunately, is absent. I apprised him of my decision in these matters in a memorandum. I have some reason to believe that the right hon. and learned Gentleman at first confirmed the decision of his two predecessors but subsequently, acting from motives of which, naturally, I had no knowledge, he consented to set up a Committee of Inquiry under the chairmanship of the hon. Gentleman the Member for Stoke (Mr. Ellis Smith). After this inquiry the right hon. and learned Gentleman proceeded to reverse the decision of his two predecessors—one, I would remind the Committee, a Labour Minister, and the other a Conservative Minister. He cancelled the promise of allocation which had been made to Aveling-Barford and allocated the factories to Grantham Productions.

In the case of the finance for this project, it was found in a different manner from that which the hon. Gentleman had contemplated originally. A sum of £265,000 was found. His Highness the Jam Sahib of Nawanagar, according to my examination of the registry, provided £245,000, and the hon. Member for Grantham provided £20,000. I do not know whether the latter holding was a beneficial holding. The agreement was that this £265,000 was to be put up in five per cent. non-cumulative non-participating preference shares. I understand from a statement which the Jam Sahib made at the time that, in return for this subscription of £245,000, he received 25 per cent., or 2,500 shares, in Grantham Productions. In other words, he risked over 90 per cent. of the money sunk in the project, and apart from the five per cent. which was non-cumulative be became entitled to only 25 per cent. of the profits or equity of the main company. It is not for me to comment upon these terms except to say that they were generous to the point of being quixotic.

No part of the failure of the company can be attributed in any way to the onerous terms which were imposed upon it by those who financed it. That sum of money, as I have said, is getting on for twice the amount which the hon. Member for Grantham had originally told me he contemplated raising for his project. The production of these two ambitious projects, even with this greater finance, never had a chance of success, and the company, in its new form and possessed of this new money, had a life of just over a year and went into liquidation on 15th November, 1946, and had unsecured creditors at that time of £247,116. Amongst the creditors were the Inland Revenue for P.A.Y.E. to the amount of £25,000, which appears to me to be quite out of line with the wages bill for which the company was liable at the time. This is a matter which alone requires to be investigated, because it is not the custom, so far as I know, for the Inland Revenue to finance industry by this means, but this was, apparently, an ex- ception. This was in addition to £25,000 to British M.A.R.C. Further, the hon. Member for Grantham paid out a liability which the company had incurred towards the hospital.

Had the company gone into compulsory liquidation, there would have been a different turn and its affairs would have been in the hands of the Official Receiver, but, actually, the company went into voluntary liquidation. During its life of slightly over a year, its total deficiency, according to the statement of affairs on 15th November, amounted to £445,000, or, in other words, the capital of £275,000—£265,000 in preference shares and £10,000 in ordinary shares—had been lost, and, in addition, there was a balance of £170,000 due to creditors, against which there were no assets. There were also liabilities to a number of creditors in respect of contract cancellation orders, which the directors of the company at that date estimated would not be less than £120,000.

When Granthams Productions, Ltd., went into voluntary liquidation one would have expected the Board of Trade to have done one of two things—either to have approached the previous applicants or to have sought some other substantial concern to take over the factory. They did neither. The Board of Trade never approached the previous unsuccessful applicants, Messrs. Aveling-Barford, and they received no reply to several letters sent to the Department until Mr. Edward Barford was asked to see a secretary on 5th June, 1947. At that time, he was informed by the second secretary that the factory would not be allocated to him, but to a financial syndicate headed by Mr. F. S. Cotton.

At this point, I must intervene with some comments. It is quite possible, as we all know, to make mistakes in these matters, and it is even possible to allow one's sympathies, and I share many of them, to turn one's judgment, and this must have been the fact over the original allocation to Grantham Productions. Any cursory examination by a competent businessman should have convinced the President of the Board of Trade that the finance on which these ambitious projects were to be launched was, to say the least of it, flimsy and inadequate, but it would also appear to the ordinary commonsense man that, having made such a mistake once, one would not enter into the same mistake again, once it had been proved conclusively by the failure of the company itself after 12 months or little more and without any substantial production having been made.

The ordinary commonsense man would have been at great pains to prevent a similar mistake happening again, and I do not think it possible to suppose that the second allocation was made from carelessness or ignorance of what had gone on before. Grave as are the responsibilities of the President of the Board of Trade in regard to the first allocation, they become much heavier and much graver over the second. I would not, of course, dream of imputing anything but the highest motives and disinterestedness to the right hon. and learned Gentleman, however much I differ from him politically, but I must say that this reallocation calls into question the trustworthiness of the whole Administration and particularly that part of it for which he is responsible. The main reason why I am anxious that the Parliamentary Secretary will give us, at least, an assurance that he will consent to a Select Committee being set up, is because I think that the right hon. and learned Gentleman has been let down, and I am very suspicious about the allocation of these factories, which, to say the least, requires independent investigation.

To resume the narrative, the re-allocation was made to a financial syndicate headed by Mr. F. S. Cotton. Let me at this point say that I think it very doubtful whether Government factories should ever be allocated to financial syndicates, and I think they never should be allocated where there is a reputable industrial firm of long experience who are applicants at the same time. In this particular instance, there was another such firm in Grantham, but I think the idea was that the factory should be allocated to an industrial concern. I think that the greatest care is necessary to ensure that a financial syndicate is not engaged in trying to make money by turning over the assets and reselling. At least, they should have at their disposal all the finance necessary, not only to buy the assets and to finance production, but to carry the project through to a successful issue.

By this time, the project of the people's car had been dropped, and, instead, the production contemplated at Grantham was the manufacture of agricultural tractors. The established manufacturers of agricultural tractors are now very well known, and some of them have many years of experience behind them in this type of manufacture. I have it on the authority of more than one that they could increase the output of tractors by up to 50 per cent. if they could obtain a greater quantity of steel. Therefore, it appears inexcusable to allot capacity to a financial syndicate, who, I suspect, and I cannot say more than that, had no experience in this type of production, and who were completely untried in this field, but, even if they had had the experience and had been successful, as the Board of Trade is no doubt aware, the only result would have been to cause a further shortage of steel for the established manufacturers. When the present capacity for making tractors is unfilled, the creation of further capacity with the same object appears, on the surface, to be undesirable. I have heard some suggestion that the tractors were to be made of cast iron, but iron castings constitute one of the bottlenecks of industry, and, at any rate, the tractors would probably have been out of date before they were designed.

It appears that Mr. F. S. Cotton had been declared bankrupt before the war, and that he had paid a last amount of 2s. 4d. in the £, making a total composition of 12S. in May, 1947, and that he had been, promised the allocation of these Grantham factories in June, 1947. I would like to say quite frankly that I consider it a very distasteful task to have to bring out circumstances of this description, but they are not intended, in any way, to cast aspersions on Mr. Cotton, who suffered these misfortunes. I do not know the reasons which led to them. I make no charges against the good intentions of Mr. Cotton; I do not know what they were. I confine myself to the simple proposition that a syndicate headed by a gentleman who had only the previous month paid the last composition of 2s. 4d. in the £ to his creditors, is an unsuitable type of syndicate, whoever the other members of it might be, to which to allot Government property.

I would remind the Committee that Government property is certainly the lesser of the interests involved. There are also the interests of the workpeople who had already suffered very seriously from the brief life of the previous venture. If they were to be collected and used in Grantham for the purpose of this production, surely, after the experience which the Board of Trade had had, most careful inquiry was necessary to ensure that the new company was one of substance, and had at its disposal all the necessary finance. I cannot believe that a syndicate headed by this gentleman, who was described as a West End financier, and with this particular record, fulfils those necessary conditions.

At the time that the allocation was made, the hon. Member for Grantham made it known through a paper in Grantham, which he himself controls, that the Cotton syndicate was, in reality, the hon. Member himself, and his interests in another form. I do not know whether the Board of Trade repudiate this suggestion or whether they support it. Be that as it may, running through all these transactions, there appears to be a positive intention, in the face of all the facts or experiences, by the Board of Trade to allot these factories to a concern in which the hon. Member for Grantham was engaged or had the controlling interest, irrespective of reason and irrespective of the distress brought about by their first allocation.

The Cotton syndicate could not find the necessary money with which to pay the purchase price of the assets which had been agreed with the liquidators. Much less could they find the finance necessary for production. I want to be perfectly fair, and it is, perhaps, fair to say that the publicity which surrounded these transactions, and which I regret, but which I cannot see could have been avoided, may actually have frightened off those who were originally prepared to back Mr. Cotton. But the fact remains that, so unstable was the backing of the financial syndicate, the moment the circumstances surrounding these two allocations were ventilated in the Press, the syndicate, so far from having the necessary money, were unable to find even the £110,000, which was the agreed figure at which the assets could be purchased.

It only became apparent that they could not pay after several delays granted, for reasons which I do not know, by the Board of Trade, and, in fact, to all intents and purposes, the activities of those factories were suspended while the Board of Trade tried to bolster up the syndicate. The blunders of the Government have sterilised a possible source of industry for 18 months, and this sort of thing sounds ill to those who are being exhorted about the urgency for greater production in the country. The right hon. and learned Gentleman, when questioned by me, refused to have an independent inquiry made into the circumstances. I must say that, at that time, I thought he might be doing that because he thought that he would cause some embarrassment to the hon. Member for Grantham. Such an attitude I should resent as being neither fair to the hon. Member nor to the House; nor did it pay any regard to the egregious blunders which the Government had already made in this direction. But if his refusal of an inquiry had been made because of a wish not to cause embarrassment to the hon. Member for Grantham, it was at least understandable, even if it was wrong. But now, I see, the hon. Member for Grantham has put his name to the Motion which I put on the Paper calling for the appointment of a Select Committee. It is quite clear from that—and I appreciate his motives—that he, too, wishes the whole of these circumstances to be fully investigated. Who, then, are the Government sheltering? What reason have they for denying an inquiry?

I can offer certain explanations, but they would be mere surmise. One explanation could be that the President of the Board of Trade has been badly let down somewhere, and finds himself in the position of having to defend actions which are indefensible, and that he wishes to protect those who have been guilty of giving him wrong advice. But, as I say, that is mere surmise. I suggest to the right hon. and learned Gentleman, through the Parliamentary Secretary—I cannot suggest it to him personally because he is not here—that it is in the interest, not only of the administration and its trustworthiness, but in the interest of the good name of the House of Commons, and in the interest of the good faith of the Department and the Government that he should now accede to the request which I make, and should set up a Select Committee to inquire into the matter, and to publish to the last detail the circumstances surround- ing the original allocation, the failure of the company after 12 months, and the re-allocation to a financial syndicate, headed by a man who could only pay the last composition to his creditors the month before, and the subsequent and inevitable failure of that syndicate to complete the deal. If he does not agree to the appointment of a Select Committee, everyone will have the impression that something reprehensible has been going on which the Government do not wish to bring to the light of day. I think it would be a great mistake to think that anything which was disclosed by the Select Committee would do more harm than leaving the matter unexplained and unresolved, thus giving to the ordinary man suspicions which nothing but the full disclosure of the facts can possibly allay.

On a point of Order. I am going to ask you, Mr. Beaumont, whether you will accept a Motion to report Progress and ask leave to sit again in the following circumstances? My right hon. Friend has just made a series of statements to the Committee which, I think, the Committee will probably agree raise a prima facie case for an inquiry. The statements relate in detail to matters which took place before the hon. Gentleman the Parliamentary Secretary was appointed to his present office, and which call for some explanation from the right hon. and learned Gentleman the President of the Board of Trade. Moreover, my right hon. Friend has asked the Government to reconsider their refusal to have an inquiry. In my submission, the continuance of this Debate in the absence of the right hon. and learned Gentleman, for whatever reason—not knowing the reasons, I can, of course, make no complaint—is nothing but a mockery, and, therefore, we must ask leave to sit again when the right hon. and learned Gentleman finds it possible to be among us.

I cannot accept the hon. Gentleman's Motion, because a representative of the Department concerned is present to reply to the Debate.

On that point of Order, Mr. Beaumont, is it not usual, when the personal position of a Minister is under discussion, for that Minister to be present? May I respectfully suggest that the Ruling which you have just given—although I am not quarrelling with it—may have a most calamitous result, because it means that any Minister whose personal conduct is under review could, without explanation, absent himself from this Chamber.

Further to that point of Order. Would it not have been more proper, Mr. Beaumont, to have raised the question of this Motion before the Debate started, and not after the speech by the right hon. Member for Aldershot (Mr. Lyttelton)? It seems to me to be unfair to raise the point now. Surely, on seeing that the right hon. and learned Gentleman the President of the Board of Trade was absent from the Front Bench, the objection to his absence could have been raised before, and not subsequent to, the speech of the right hon. Member for Aldershot.

I will first deal with the point of Order raised by the noble Lord. I cannot determine how far the right hon. and learned Gentleman the President of the Board of Trade was aware that his presence would be necessary. It is purely for the Chair to decide whether a Debate can continue if there is present an official representative of the Department concerned who can reply. In those circumstances, the Debate should continue.

Further to the point of Order raised by the hon. Member for Grantham (Mr. Kendall). In the first place, may I say that, of course, I could not raise the matter before the Debate commenced because I had naturally assumed, until a late stage in the speech of my right hon. Friend the Member for Aldershot (Mr. Lyttelton), that the President of the Board of Trade would have taken the trouble to come here. Further, I had no prior knowledge of what my right hon. Friend was going to say. Therefore, I waited to see whether the charges against the President of the Board of Trade were of such a nature that, in my judgment, he ought to answer them personally, and, in my submission to you, Mr. Beaumont, I took the only possible course of waiting until my right hon. Friend concluded his speech and until one had some opportunity of seeing what the situation was, before raising a point of Order. I submit that I should have acted prematurely and wrongly had I taken any other course.

I appreciate the point of view expressed by the hon. Member for Oxford (Mr. Hogg). The position is this: a statement has been made by the right hon. Gentleman the Member for Aldershot (Mr. Lyttelton), to which presumably there will be a reply, not necessarily, from any particular individual Minister but from a Minister representing the Department concerned. So far as I know, whether the right hon. and learned Gentleman the President of the Board of Trade is present or not, a reply will still be made. In those circumstances, the Debate should now continue.

In whatever section of the Committee hon. Members may sit, they cannot fail to be impressed and, indeed, profoundly shocked by the facts disclosed by my right hon. Friend the Member for Aldershot (Mr. Lyttelton). The whole story reads rather like some mysterious novel, with the Board of Trade, British M.A.R.C., Grantham Productions, Mr. F. S. Cotton and last, but not least, the hon. Member for Grantham (Mr. Kendall) playing the principal parts. What lies behind this mysterious and unhappy sequence of events which has led to two years' loss of production, an unfortunate Indian Maharajah losing about £250,000, the Inland Revenue being owed some £25,000 in unpaid taxes, and a lot of unhappy people being thrown out of work? I want to read an extract from a statement issued to the "Grantham Journal" by the hon. Member for Grantham on 17th June, 1945:

"We have an outstanding record of productive efficiency by the managers of these factories during the war. Nine months ago we made application for them to be allocated to us for postwar projects. These included a cheap motor car and a light tractor, and a number of other very interesting engineering products. They are all tested and proved to be first-class. We have orders which run into many thousands of them all over the world."

I understand that at that time the peoples' car project was intended to produce 50,000 cars and tractors a year, that production was to start within six weeks from V.E. Day and that the car was to sell for about £100. The question I want to ask is, whether the right hon. Gentleman the President of the Board of Trade took steps to ascertain how a company with a capital of £2 in 1939, increased to £10,000 in 1945, could have incurred the vast development cost of the Kendall-Beaumont car and the Kendall tractor.

On a point of Order. Would the hon. and gallant Member kindly explain whether he is still reading the statement or making his speech?

That is not a point of Order.

The hon. Gentleman is trying to make it difficult for me. That is the usual practice of some hon. Members. It is understood that the development cost of this car must have amounted to far more than £10,000, and possibly in the neighbourhood of £100,000. If so, how was it done? Where did all this money come from, in a company with only £10,000 capital? It could scarcely have been made during the war, with crippling taxation and with war profiteering quite properly made impossible. Surely, any reasonable man must know that for anybody to be able to produce 50,000 cars and tractors a year, starting within six weeks from V.E. Day or thereabouts, vast development costs must have been obtained and expended prior to 1945. If so, when and where did development take place and how was it paid? Did the development cost of these tractors as well as the "people's car" take place on British M.A.R.C. premises and by individuals on a British M.A.R.C. pay roll? But we want to know and the public want to know where this vast development cost came from, and when and where did development take place? I suggest that the only way in which a full and proper explanation can be found to all these questions put by my hon. Friends is by a Select Committee with the right to delve into all the evidence and, above all, to examine the books.

As regard the 1945 allocation, what did the right hon. and learned Gentleman the President of the Board of Trade consider to be adequate working capital before allocating these factories to Grantham Productions? How much capital did this firm actually have at the time of the 1945 allocation? In this connection, I have heard it said that the late Mr. Henry Ford, the late Lord Austin, Lord Nuffield and the Rootes Brothers all rolled into one, could not begin to produce 50,000 cars and tractors a year, without a capital possibly of at least £5 million. A capital of £10,000 is not sufficient for the mass production of people's roller skates or the rotating tooth brushes so admired by the hon. Member for Loughborough (Mr. Follick), let alone a people's car.

With regard to the 1947 allocation, I would like to quote from "The Times" of 15th July, 1947.

"The great criticism on the second allocation is whether it was proper to grant a lease of Government factories to tenants whose resources were unknown, who had no actual experience of manufacturing the intended product"—

and, as they say elsewhere in the article—

"who were closely associated with the previous tenant now in liquidation."

I understand that Mr. F. S. Cotton has now failed in his endeavours to dispose of the assets of Grantham Productions at an immense profit. We know that no more Indian gentlemen have come forward, and I must say I cannot blame them. Once bitten, twice shy. The allocation has now, therefore, been withdrawn by the Government, but the question I want to ask is: Why were the Grantham factories ever allocated to the Cotton group?

I would also like to know what is the result of the 1945 and 1947 allocations of the Grantham factories by the right hon. and learned Gentleman the President of the Board of Trade. It is apparent to everybody, whatever their political party, that we are once more back where we first started in 1945. An unfortunate Indian gentleman, as I say, has lost about £250,000; the Treasury, I understand, are still owed some £25,000 in taxes which have not been paid; the production of goods so badly needed for export has been held up for two years, and a lot of people have been thrown out of work. In consequence, therefore, everyone suffers.

If this is an example of the way the Government conduct the business of this country no wonder our people suffer. No wonder we are up against it. No wonder we must work or want. The Government, of course, know tonight that they can, with their huge majority, do anything they like. If they are nervous of the truth, if they are anxious about disclosures resulting from inquiry, they can make vague statements and draw red herrings across the trail by talking of the past iniquities of their political opponents and 20 years of Tory misrule, and that sort of poppycock. But that will deceive no one. They can order their supporters to troop obediently through the Division Lobbies en masse chattering with exultation at yet another victory. But they will know, we shall know, and the people of this country will know that an inquiry will not have been held because the Government are anxious about any possible disclosures that might be revealed by a Select Committee. If there is nothing to hide, let there be a court of inquiry. The Government have nothing to lose. But if there is not an inquiry, then it may well be that the Government are anxious of any possible disclosures and have a good deal to lose. Therefore, we ask the Government to appoint a Select Committee, and if they refuse, whatever they may say, the people of this country will know the reason why.

I should like to assume that the President of the Board of Trade in his unfortunate absence has authorised his Parliamentary Secretary, after hearing this Debate, in his discretion to agree to an appointment of a Select Committee. I do not think that that is necessarily a very optimistic assumption, because it is always the way with the President of the Board of Trade to entrust a very great measure of authority to his Parliamentary Secretaries. He did, indeed, entrust the decision of the allocation of these factories to his then Parliamentary Secretary, the hon. Member for Stoke (Mr. Ellis Smith), and it is on the correspondence that he made it quite clear that, to whatever decision the hon. Member for Stoke came, he would abide by that decision. In answer to a Question which I asked last December concerning the original allocation to Grantham Productions, Limited, the President of the Board of Trade referred to evidence of improved financial and productive resources. That evidence very much impressed the hon. Member for Stoke. I am rather wondering what that evidence included, because in less than 18 months from that date Grantham Productions Limited, had gone into liquidation.

Will the hon. Member excuse me? He is talking of the hon. Member for Stoke (Mr. Ellis Smith). Will he make it clear that even if the hon. Member for Stoke was mistaken, the hon. Member for Stoke was scrupulously honest in anything he said?

I really think that there is nothing that I have said that could possibly have suggested anything but complete confidence in the integrity of the hon. Member for Stoke. [HON. MEMBERS: "Hear, hear."] The question of his judgment is an entirely different matter. I was suggesting that he had been very much misled by the evidence put before him as to what was described as improved financial and productive resources, because, as I pointed out, within less than 18 months the company which was alleged to have those resources had gone into liquidation, and it had gone into liquidation causing a good deal of distress, not only to people in Grantham, but to people up and down the country.

My right hon. Friend the Member for Aldershot (Mr. Lyttelton) referred to the proposals in the financing of the production of the "people's car" as including prepayments from the distributors. But, unfortunately, those distribtuors and their customers who did make such prepayments are still out of their money. There is a sum, I understand, of £55,000 held in a banking account, but it has not so far been considered possible by the liquidators to return that money to the depositors, and that being so, I think it is very doubtful whether they will get it back at all. It may be they will only be able to rank as ordinary creditors claiming pari passu with the rest of the unsecured creditors to share in whatever assets there may be to distribute.

But this has caused a good deal of distress, and I would like to read one letter which I received from quite a humble person who is still out of his money. He wrote:

"We people who have put down our deposit money have not heard one word officially as to what is to become of our money, whether we shall ultimately get a car, or whether our money is lost. I have written to Mr. D. Kendall twice, enclosing stamped and addressed envelopes for a reply, but have had no answer. I have telephoned Grantham Factory and the only thing they could tell me was it was hoped things would straighten themselves out. Nothing more. There must be hundreds of working men like myself who desire to run a small, cheap car that we could manage to buy who deposited our money in good faith, and we can ill afford to lose £20. I think we are entitled by this time to know something of what is going to happen."

After the company went into liquidation six months passed. I think it singularly strange that immediately the company went into liquidation the Board of Trade did not publish a notice such as they published about a week ago saying that these factories were now available for re-allocation. I cannot understand how they hung on, and that is, I feel, what we want particularly to have explained by the Parliamentary Secretary when he replies—why they took no action, but just waited upon events such as might develop in connection with Grantham Productions Limited in liquidation. Then Mr. Cotton came upon the scene, and we were informed by the Parliamentary Secretary on 17th June as follows:

"The group in question have acquired the assets of Grantham Productions Limited, from the liquidators with the view to continuing the production of the tractors."—[OFFICIAL REPORT, 17th June, 1947; Vol. 438, c. 204.]

Was any condition made by the Board of Trade that, if the factories were allocated to this group, they would produce tractors? I do not think so, because we know that, within a few days of their acquiring the allocation of the factories, Mr. Cotton, on behalf of this group, was hawking the assets of Grantham Productions Limited, which they had acquired, round the City, hoping to dispose of them at a very substantial profit. At least the Board of Trade must have recognised that that was a very grave breach of faith. This group came to the Board of Trade saying, "We have acquired" the assets of Grantham Productions Limited in liquidation." That was not quite true. But, at least, they were committed to purchase them. On the strength of that, and because they assured the Board of Trade that they intended to carry on the production of tractors, they got the allocation of the factories.

Well, in no time they were trying to dispose of the assets at an enormous profit. Surely, that having been done, one would have thought that the Board of Trade would have broken off all negotiation with the group and said, "In no circumstances shall this group have the allocation of these factories." We also asked the Parliamentary Secretary what experience the Cotton group had of the production of tractors. Upon that point, however, he was entirely silent, and it is quite obvious that they had no experience whatsoever which would assist towards the production of tractors.

In the Debate on 26th June, the Parliamentary Secretary said, with regard to their financial resources:

"… we ascertained from the group's bankers … that Mr. Cotton and his group were well able to provide out of their existing resources the necessary capital both for the purchase and for the running of the business."

It may be that there was money in the bank to an impressive extent. I do not know whether that was true or not. But the fact that there was money in the bank does not necessarily mean that the proprietors of that money will be true to their obligations, and apparently the Board of Trade took no steps to discover whether these people could be relied upon or not. Indeed, a little later in the same speech the Parliamentary Secretary said, with reference to the acquisition of the assets of Grantham Productions Limited, by the Cotton group:

"A binding agreement had been reached, and only afterwards was it decided to continue the allocation in favour of the group."—[OFFICIAL REPORT, 26th June, 1947; Vol. 439. c. 807–9.]

A binding agreement had been reached by this group, and apparently, according to the information at the disposal of the Board of Trade, they had the money with which to implement that agreement. Except for Mr. Cotton they all preferred to remain anonymous, and the Board of Trade has protected them in that anonymity. Then, as soon as there was publicity, which made them feel a little nervous of their position, they fled from the field leaving only their broken undertakings behind them. Those are the people with whom the Board of Trade have been in close relationship, without taking the slightest trouble to find out whether they were reliable.

There is one other question I would particularly like to ask. It was stated on 20th June in the newspaper controlled by the hon. Member for Grantham, the "Grantham Guardian":

"Supplies of raw material have been assured by the only authority in a position to assure them."

I ask the Parliamentary Secretary whether that is a correct statement. If so, who gave that assurance, and what does it involve? Was any priority promised to the Cotton group if they went ahead with the production of tractors? Were they given any undertaking which would put them in a more favourable position than their competitors? This is a very important aspect of the matter, because there is only a sufficient amount of steel available in the country—I will not enter into the question whether cast iron is of any use in the production of tractors—for the production of a limited amount of tractors. Therefore, it is of supreme importance that such steel as is available for this purpose should be used only by firms of considerable experience and productive and financial resources, so that we can be quite sure that the country gets the best possible results.

This has been a long chapter of a most deplorable waste of time, money and productive resources. These factories could have been put to some useful purpose; two years have elapsed since they were originally allocated to Grantham Productions Limited, and they are still not allocated in firm hands—two years' wastage of valuable factory space. I think the President of the Board of Trade has a great deal for which to answer, and I only hope that the Parliamentary Secretary will be in a position to answer for him. The least we should be granted is our request for a Select Committee to investigate the whole matter.

In intervening in this Debate for a short time I would like the Committee to understand at the outset that I have no interest whatever in either of the parties who are concerned in this matter. I know nothing about the alternative firm who were anxious to secure these premises. Also, I know absolutely nothing about the business of the hon. Member for Grantham (Mr. Kendall), but I have every reason to believe that he is a most capable engineer, and no doubt we shall learn from him, in the course of the Debate, the story that he has to tell.

Few hon. Members in this Committee have heard the story unfolded to us by my right hon. Friend the Member for Aldershot (Mr. Lyttelton), before today. All we have heard up to now have been Questions and answers in the House, and a certain amount of newspaper comment upon them. But I think we would all be agreed upon this—indeed I should be extremely surprised if any hon. Member in any quarter of the Committee would dispute it—that we have heard from my right hon. Friend a case to which there must be an answer. For my part, I propose to suspend judgment—because I always like to hear both sides of a case—until we have heard what the hon. Member for Grantham may have to say, and what the Parliamentary Secretary may say in reply.

What concerns me this evening is that, in this Committee I speak in one sense or another, as I think everybody knows, as representing industry, and those of us who are concerned in industry are frequently attacked on the ground that we mismanage this, or misconduct that, or do not handle our employees properly, or that we are engaged in some doubtful transaction, and so on. I am very jealous for the reputation of industrialists, who include both good and not so good men—as is the case in all activities in life. Here, for the first time for some years in my Parliamentary experience, we have a Government Department which, rightly or wrongly—and I say "rightly or wrongly" advisedly up to now—is being charged with the very careless and incompetent handling of this matter. As I say, there may be a very good reply to it, and we would all be wise to wait until we have heard both sides of the case.

There are one or two observations I think it right to make to the Committee, which are based on my fairly long experience in the conduct of productive industry. I want to put this question very directly to the Parliamentary Secretary. I do not know whether Members are aware—a good many may be—that if you wish to develop new prototypes in these times, as some of my works are doing at the moment, and the materials out of which they are to be made are, or may be, in short supply, you have to apply either to the Board of Trade or to the Ministry of Supply for licence to manufacture. If there is a shortage of materials, no licence is granted until the prototypes have been produced and the Government Department concerned are satisfied that they will be advantageous to the national interest. If materials or allocation of materials can be provided for production, a licence to manufacture some limited quantity may be granted. I have been through this experience myself on three or four occasions during the last six months, and hon. Members on all sides can take it from me that that is the position. I do not think anyone representing a Government Department will dispute it for one moment.

That being so, this question seems to arise. The people who wanted to have these factories, with whom the Board of Trade apparently negotiated so long were to manufacture tractors and a "people's car." Therefore, were prototypes of these products ever produced, and were the Government Department concerned satisfied that they were what the nation wanted and must have, even in these times of shortage of steel and so on? If they were approved, were there sufficient materials available to put them into production in factories to enable them to be manufactured in sufficient quantities to cover overhead charges and be a really commercial proposition? I think that these are important questions to which answers are absolutely essential.

The next point, which was touched upon by my hon. and gallant Friend the Member for Knutsford (Lieut.-Colonel Bromley-Davenport), although he did not raise it in the same way as I should have raised it, is this. Those who have been engaged on producing prototypes, whether it is for motor cars, motor car engines, aeroplane engines, tractors or anything else, know perfectly well that invariably immense sums of money have to be spent on development expenditure before the prototype can be tested out when it has been produced, and the position has been reached when all the "bugs" which are found in anything entirely new nave been eradicated, and you are satisfied that it can safely be put into production. Having regard to what we are told about the lack of capital from which this firm suffered, where was that money found? The hon. Member for Grantham may have his answer, and it is a very, important question to have answered. We know that the factory was engaged on Government contracts for a long time, and I should think that a works which was fully occupied on such contracts would have had no time whatever to devote to producing something entirely new for postwar production and, far less, have any funds available for that particular purpose.

My next point is this: One of the newest and biggest factories in the country today for the production of tractors is, I believe, the one put down by the Standard Motor Company. I speak subject to correction, but I have seen it mentioned many times that a capital of £2 million was required to put that factory into production. What capital was to be involved in equipping, jigging and tooling, the factory at Grantham, not only for tractors, but also for cars on a mass production basis? I believe the Board of Trade may find it difficult to answer, if they were willing to allow this factory to be handed over without making certain, or getting expert advice, as to the amount of capital which would be required to establish and carry on a successful business. If the Government have a good case a committee of inquiry need not be feared because, presumably, the Government will have nothing to hide. But if the Government refuse a committee of inquiry it is only reasonable to suppose that they will themselves quite unnecessarily create suspicion that there is a good deal to hide. If there is not, what possible objection can there be to a committee of inquiry? I am sure that the hon. Member for Grantham feels that he has a good case, that if he himself is prepared to ask for an inquiry he will be willing to come out into the light of day and give all the facts. I beg of the Government, for the sake of their own reputation—unless they have something to tell us which will convince us that a committee of inquiry is not necessary—to assent to what we are asking today. It would be in their own interests.

I have been in this House for nearly six years, and I have participated in many Debates, including Debates on old age pensions, the Beveridge Plan, agriculture, and pay and allowances. Every once in a while I seem to be faced with having to make a personal explanation. I well remember that nearly the first speech I had to make in this House was in connection with a breach of Privilege, following an investigation by the Public Accounts Committee. I would not have referred to past history except that it was mentioned by the right hon. Gentleman the Member for Aldershot (Mr. Lyttelton). And I believe mat it is in the interests of the Committee to hear the whole story, just for a change. I still believe that the reason I was pulled up on that issue of the Public Accounts Committee was political and not factual; indeed, the final Debate in this House gave me a clean bill of health all the way through, and the Minister, now sitting in another place, gave many words of commendation, not only to me but to the workers, for doing a good job.

The war came to an end, and Government contracts came to an end. I was faced with either having to "fire" everyone in those factories or find additional work for them, when, to my great astonishment, I found that the factories had in fact been allocated to another firm. This was the first time, I believe, in the history of Government factories that those who were occupants were not to be allowed to occupy those factories for peace-time production. I know the reasons for that, too, and that is why my name went down on the Motion asking for a Select Committee of Inquiry. I thought that there was pressure against me and my firm and that there were people who should be pulled in front of that Select Committee to give evidence, because there were things that should be said and should come out that had never given this company of mine a chance of getting along. There has been pressure brought by a Member of another place, who lives a few hundred yards away from me, and who has done his very best locally and in Government Departments to have these factories removed from my firm. All we wanted to do was to work and to be given a chance of work; we deserved that opportunity. We were one of the few companies that never made a penny profit during the war, so we had not any capital to start out. We were not favourably placed like some of the other big firms in this country, who made huge fortunes out of their war time contracts. We were not in that category.

I will deal quickly with the very proper point raised by the hon. Member for Stockport (Sir A. Gridley). The money that was provided on prototype work was provided by me personally and not by the company, and the work was not done on the company's premises. It was entirely separate. I would like to go into that in full detail. I had been concerned in making automobiles all my life until I came to do this war work for the Government. That was the kind of engineering I knew and had been dealing with, and I had the designs and sketches of some years previously, and I still have them, for the prototypes, which the hon. Gentleman has just mentioned, on the final car that was decided upon. These prototypes had been built during the five previous years in France. They were a fine piece of engineering. It is quite true that I went to the right hon. Member for Aldershot on the allocation of the factories, when I found that they were being assigned to others. Why?

The hon. Member omitted to say that the factories were allocated to Aveling-Barford by the present Chancellor of the Exchequer.

I grant that and I thank the right hon. Gentleman for helping me. It is perfectly true I did see the right hon. Member for Aldershot because I was shocked to think that we were not going to be given a chance to run these factories. I had been fortunate enough to get hold of a Canadian contract for the repair of vehicles on behalf of the Canadian Government, and I was employing at that time 1,500 people. I consequently got hold of a Ministry of Supply contract for the repair of vehicles too. When the President of the Board of Trade was changed after the collapse of the Caretaker Government, I stated my case to the present President of the Board of Trade and he set up a committee of inquiry under the leadership of the hon. Member for Stoke (Mr. Ellis Smith). The basis of our case is not the basis of the Barford case.

I would like to deal with the Barford case and none of the hon. Gentlemen on this side of the Committee have dealt with it at all. They have not dealt with the case of whether or not the factories should have been allocated to Barfords. The things produced by Barford cannot be produced in Grantham Productions because there is no head room. There is only space of 10 feet 6 inches to the eaves, and road rollers cannot be built there. If now they are going suddenly to produce some kind of tractor where are they going to produce them and where are they going to get their materials to produce them?

The decision was come to in 1945 to allocate the premises to Grantham Productions, and in 1945 we all worked extremely hard on the Canadian contract and the Ministry of Supply contract. Further, we worked terribly hard on the preparatory work for the cars and the tractors, but we were always up against the difficulties of some suppliers stopping supplies. Certainly I want a full-blooded inquiry. Certainly I want evidence called as to whether some of the big ones applied pressure on some of the suppliers of accessories, telling them "If you supply Kendall we will cancel "our orders." I was up against that kind of thing.

I want to refer to the backing I had from India. It was genuine backing. We tried to do a good job and further backing was going to be given by the same people, who had travelled, I do not know how many miles, in connection with the matter. What happened there? I remember ever so well. At twenty minutes to 11 o'clock on a certain Friday morning everything was going fine and the additional capital was going to be placed in the business. We were off again. A visit was paid—again this is the reason for my name on the Order Paper—to a very big motor car manufacturer, who showed my principal, empty conveyor lines, bodies without door handles or without upholstery, and said to him as Barford said to him—a lot of this was used in the House in the last few weeks and also in the newspapers—"There is going to be a political row unless these factories are assigned to Barfords." This being perfectly true. I want a public inquiry. At twenty minutes to eight that night he came back and said, "I am sorry, I dare not touch it at all," and went back. He went on the promise, too, that if he wanted cars out there, they would be sent, but that England by now would be in a terrible financial emergency and that industry was going bust. Why should he be mixed up with this and blamed, and why should he be mixed up in local politics? He is a very fine, honourable man for whom we tried to do a fine and honourable job, but the pressure which has been applied to us from all kinds of sources is something disgraceful. All kinds of names should be used, and the best way to disclose them is through an inquiry.

I did not go hawking this thing around, but went to the Finance Corporation for Industry who put an investigation on the works. I never saw the full report, but this is briefly what they said. "Kendall, you are a good engineer; your works up there in Grantham are excellent; your products are first-class; but your finances are awful." I went to them because the finances were horrible, and if the first three points were good, I had every right to go to them. Surely, there is nothing wrong or criminal in somebody wanting to do a job of work? After all, I am private enterprise and have always been. I hope some hon. Members of the Tory Party will forgive me, but sometimes I doubt whether the Tory Party really are the champions of private enterprise unless private enterprise means a monopoly. I really mean this because when one gets into the City of London one is told, "Sure, it is fine. We will do this, that and the other." But then they bring up the political arguments and say, "Well, we are frightened of the politics of this business."

As far as concerns the allocation of 1947, if I may skip a few pages, the position is that F. S. Cotton, whom I never knew, came along and said that he believed he could find a group who would be interested in starting up that factory. Of course, I was interested. One hon. or right hon. Gentleman made a statement to the effect that I was the financial backer of the Cotton syndicate, but that is totally untrue.

Then why was it published?

The right hon. Gentleman does not read my excellent newspaper carefully.

rose——

If the right hon. Gentleman is ready to read it out I shall be perfectly happy to give way to him.

The hon. Gentleman has contradicted something which I said. I said that he stated himself in the newspaper which he controls that the Cotton syndicate was the same as the Kendall group and I will had him the newspaper now. [HON. MEMBERS: "Read it."] I will put it on the Table. [HON. MEMBERS: "Read it."] The heading is, "Assets Acquired by the Kendall Group." I will not go further, but this paper is printed and published by Grantham Publications of which the hon. Member and one other gentleman are directors. I will put it on the Table. [HON. MEMBERS: "Read it."]

I must correct the right hon. Gentleman, because I am sure that it does not say that. I do not know the particulars of the article to which he refers but I am sure that it cannot say that because it is totally untrue. [HON. MEMBERS: "Read it."]

If hon. Members want me to read it of course I will. I will read as far as is necessary—further if hon. Members like. This paper is called the "Grantham Guardian." It is printed and published by Grantham Publications Limited, of which the directors are the hon. Member for Grantham (Mr. Kendall) and another gentleman called Mr. Emmanuel. The main heading of the article—[HON. MEMBERS: "Read it."] This is the paper which is controlled by the hon. Member—[HON. MEMBERS: "Read, the article."] It says:

"Assets acquired by Kendall Group."

It was upon that that I said that the hon. Member's own newspaper said that the assets had been acquired by his Group. [HON. MEMBERS: "Read it."] I am reading it. If hon. Members want the whole article I will read it.

Hand it over here and I will read it to you.

The article reads as follows:

"'Any major alteration in the financial structure of a company occupying a Government factory involves reconsideration of the tenancy allocation.

'The future of the Government-owned factory in Grantham is being urgently reviewed and consideration is being given to allowing the present allocation to stand.'

This statement was given to the 'Guardian' yesterday evening by an official of the Board of Trade regarding the Springfield Road Factories, where it is hoped to manufacture agricultural tractors.

An offer to the liquidators was received and accepted earlier in the week for the purchase of the whole of the plant and stocks of Grantham Productions, Limited. A substantial deposit accompanied the offer.

The necessary financial support for the firm's continuation is thus assured, and engineers, on behalf of Mr. F. Sidney Cotton, of Seamore Place, London, have been busy at Springfield Road this week making an inspection in the event of the new company obtaining the lease.

The name of the company will be Grantham Productions (1947) Limited."

Go on.

Very well.

"Mr. Cotton himself is coming to Grantham in a few days. He told the 'Guardian' yesterday that details of Mr. Denis Kendall's capacity in the new firm had not yet been finalised.

As soon as the engineers' reports are complete a date can be set for production of tractors to begin.

It is anticipated that work will start in a few weeks' time, and the output is expected to be 50 a week at first.

Also dependent on the engineers' reports is the number of men who will be employed by the company, but it is anticipated that the figure will be in the region of several hundreds.

At Wednesday evening's meeting of Grantham Borough Council, Coun. H. Cant asked if the Chairman of the Town Planning Committee"—

[Interruption.] Well, hon. Members asked me to read all this. It goes on:

"had any further information about the future of the Springfield Road factory.

Coun. S. Foster replied: 'I have no further information. The factory has not been allocated to anybody.'"

On a point of Order. The right hon. Member said or implied that the hon. Member for Grantham (Mr. Kendall) had a controlling interest—[HON. MEMBERS: "Financial"]—and all we wanted him to do was to quote from the newspaper, and not to read it all out. We wanted him to quote anything that suggested that the hon. Member had a controlling interest.

It might be as well if the hon. Member for Grantham (Mr. Kendall) were now allowed to continue his speech. [HON. MEMBERS: "No." and "Withdraw."]

This matter has been called into question. I have read now, at the request of the Committee, the statement out of this paper. It begins.

"Assets acquired by Kendall Group."

If hon. Members require any proof that the "Grantham Guardian" was in fact controlled by the hon Member——

No.

rose——

Withdraw.

On a point of Order. Is it not customary in this House if an honourable Member—and everybody knows that the right hon. Gentleman opposite is an honourable Member, and a right honourable gentleman, a man of great integrity—makes a statement which he is asked to prove and to justify, and if he has not done so, that the right thing is for that Member to withdraw his statement?

That is not a point of Order. It is a matter for the Committee whether statements that have been made carry the weight which the right hon. Gentleman attaches to them.

I still wish to complete what I was saying when I was interrupted. The right hon. Gentleman the Member for Aldershot stated that I was supposed to be controlling the Cotton group. I tell him once again that I have no financial interest in any way, shape or form in the Cotton group and never have had under any circumstances. That statement from the right hon. Gentleman is totally untrue.

Withdraw.

I made my statement upon the information in this newspaper. [An HON. MEMBER: "On a headline."] Really, hon. Gentlemen opposite must learn to control themselves. The word of the hon. Member for Grantham is quite sufficient for me. If he says that he had no interest in the group and that the statement is incorrect, naturally I accept it.

On a point of Order, Mr. Butcher. I want to know if it is in Order for a right hon. Gentleman to impute a motive——

Take your hands out of your pockets.

You have had your hands in my pockets for a long time. Is it in Order, Mr. Butcher, for a right hon. Gentleman to impute an ulterior motive to an hon. Member and to fail to substantiate the motive which he attributes to him?

I understand that the right hon. Gentleman the Member for Aldershot has entirely withdrawn any suggestion that he made and that the hon. Member for Grantham is satisfied.

When Mr. Cotton came along and said that he had a group who were determined to get the factory started and on its feet again, specifically for the manufacture of tractors, every step was taken by myself to ensure that he had the proper financial backing. This was done by a personal visit to one of the banks here in London by a noble friend of mine in another place who was going to be connected with the new firm on the basis that it was in the interests of the workers of Grantham, in the way that I was interested. He went along and got the assurance from the bank manager. We had subsequent meetings with the Board of Trade. There were one or two names in the syndicate which I knew well by reputation and only slightly personally—good names and substantial names—and I thought we were on the road to success and prosperity once more and felt very happy about it.

But something transpired with Cotton and those with whom he was associated in the negotiations and deliberations of which I have no knowledge except one thing, that when the adverse publicity broke through in the "Daily Graphic" and the "Financial News"—this I believe to be true; I think the right hon. Gentleman the Member for Aldershot has already made a similar comment—at the particular moment when the deal was about to be completed, it was of such a character and nature that some of them withdrew from the group, and there we were left high and dry once more. The factories at Grantham have had approximately 100 key men working all these very many long months because key men were part of the assets of the company as a going concern. The place is tooled up for tractor manufacture. It is tooled up for car manufacture, but far more so for the manufacture of tractors that have been well proven and accepted by the Ministry of Agriculture. They serve a real purpose and are sold at a reasonable price.

I do not know what will happen after tonight's Debate. I do not know if there will be a public inquiry, or whether a Select Committee of Inquiry will be constituted through the officers of the Board of Trade, or if it will be refused. However, one thing I am absolutely certain of, and that is that had G.P. not become political but had remained industrial, we should have been at work a long time ago. And I want to say this: no matter what is the outcome of this Debate, so far as I am concerned, I will keep on fighting and travelling thousands more miles to get the company back on its feet again, provided they give full employment to the folks of Grantham. I am not interested in any kind of financial jiggery-pokery; I am not the slightest bit interested in somebody making capital appreciation.

I am not talking of politics, but I put my money into it and I will still sell everything I have to put it back there again if it will help. I shall keep fighting to get somebody to take over those factories, to produce the jobs there that are good, with the backing of many of the small suppliers who, in spite of what somebody said here about cast-iron not being required for tractors—the one who said it did not know what he was talking about because you use cast-iron to give weight, and weight gives pulling power—today have masses of cast-iron which will be scrap unless it is utilised. The workpeople are good and the products are good, and I wish anybody good will, and I will give them every help I can in getting that place restarted and getting re-allocation of those factories to those who mean business up there.

I think I shall have the assent of both sides of the Committee in paying a tribute—though naturally I do not agree with everything that has been said in it—to the speech of the hon. Member for Grantham (Mr. Kendall). He is in an obviously difficult position and, while he has made some controversial statements with which I am not in agreement and neither are my hon. Friends on this side of the Committee, he is fully entitled to put his case. After hearing it, any ground which the Government have had for refusing an inquiry must be completely eliminated; in fact, it would be nothing less than a scandal after the speech we have just heard, if the Government refuse an inquiry. I would also like to pay a sincere tribute—and I hope hon. Gentlemen opposite will not think I have my tongue in my cheek—to the attitude of the hon. and right hon. Gentlemen opposite when my right hon. Friend the Member for Aldershot (Mr. Lyttelton) was making his speech. I hope I am not saying anything controversial, and I hope I shall not be interrupted when I say it was quite obvious to me that those hon. Members who were in the Chamber were impressed by the fact that here was a serious state of affairs.

Because they have not been quite properly recited in the speech of the hon. Member for Grantham, I will recite some of the facts—perhaps I could have the attention of the Parliamentary Secretary to the Board of Trade? I can understand he wants to talk to his secretary; that is a perfectly reasonable thing to do. These are the facts which my right hon. Friend recited and, once again, I appeal to hon. Gentlemen opposite as one who, whatever my faults may be, has seniority in this Chamber that, even if they do not agree with the facts which I shall now state, the recital of those facts by my right hon. Friend demands an impartial committee of inquiry.

What are the facts? The first is this. The right hon. Gentleman the Chancellor of the Exchequer and my right hon. Friend refused the suggestion made by the hon. Member for Grantham. We never had a single word of explanation from the Government benches as to why an offer, which was refused by the Chancellor of the Exchequer, when he was in the position occupied by the right hon. and learned Gentleman, was accepted by the present President of the Board of Trade. That is the first point. The second point no one disputes. The hon. Member for Grantham has not dealt with it in his speech, and there is no reason why he should have done so. It is that the maximum amount of money available, something like £175,000, was a totally inadequate amount of capital, however able the hon. Member may be, and no one has attacked his ability or suggested that he has not done admirable work. However admirable he may be, the amount was totally inadequate. We have not had throughout these Debates one word of explanation from the Government benches on that point, and I believe it to be one of the reasons why the Chancellor of the Exchequer turned down the original offer.

The next point on which we say there is need for an impartial-committee of inquiry is the calamitous history of Grantham Productions. There is £23,000 owing to the Inland Revenue, and a total deficiency I understand—the hon. Member can correct me if I am wrong—of £445,000, which is some £170,000 more than its capital. Is this Committee to be asked by the hon. Gentleman when he replies to believe that a factory allocated by the Government to a business which shows such calamitous results, with such heavy sums of money owing to the Inland Revenue, is not a matter which should be inquired into? Is that- an ordinary thing which can happen? Surely no one is going to take up that attitude.

There is the question of the treatment of the firm of Aveling Barford. I think my right hon. Friend was extremely friendly to Mr. Cotton, but I am neither friendly nor unfriendly. Is the Committee to be told, and through the Committee the country, which takes a considerable interest in this matter, that the present Government allocated, one month after he had made his final composition, which I think was 12s. in the £, this factory to Mr. Cotton? I do not want to be too controversial, but if this is an instance of business management by a Socialist Government, God help Socialism.

Lastly, I would like to say that this is a point of investigation—Mr. Cotton, this wonderful financier whom the right hon. and learned Gentleman the President of the Board of Trade had selected was able to find only £110,000. It is only fair to say to the Committee, and I quite realise that feelings may be aroused over this matter, that there may be an answer to every one of these questions; but we have not had them yet in Debate. I wish to associate myself with my right hon. Friend the Member for Aldershot who says there is no charge made against the personal integrity of the hon. Member for Grantham. But a factual statement has been made by my right hon. Friend and many hon. Friends behind me, and never answered. In parenthesis, I would say that the President of the Board of Trade is abroad, and that is the reason that he cannot be here tonight. These questions have never been answered by him, nor by the Parliamentary Secretary, and they must involve a reflection on the administrative credit of the Minister, and indeed the credit and honour of the whole Government unless a satisfactory explanation which is signally absent up to now for reasons which on the face of it must be a most undesirable sequence of events for which the Board of Trade was responsible at every stage.

Some questions were asked on this matter a short time ago. The acting Leader of the Opposition asked a question and I asked questions to which I received an astonishing reply, which I hope we shall not have from the Government spokesman tonight, from the acting Leader of the House. I asked:

"May I put the question in a manner which the Lord President will not describe as ponderous? Is it not the duty of the Government to allow a Debate on a Motion which must, so long as it remains on the Order Paper and is not debated, be a reflection upon the conduct of the Minister?"

How can it be anything else but a reflection on the Minister, especially after what the hon. Member below the Gangway said tonight. I received this strange reply from the acting Leader of the House:

"So far as I know, my right hon. Friend does not mind the Motion remaining on the Paper, and I do not know that he feels that his honour is involved. Perhaps that will put the noble Lord's mind at rest about that aspect of the matter."—[OFFICIAL REPORT, 17th July, 1947; Vol. 440, c. 607.]

Hon. Gentlemen opposite thought that that was a very good joke. Is it really, when facts are brought out, as they have been brought out in three Debates, reflecting upon the Minister, and indirectly, if not directly, upon the hon. Member below the Gangway, as he admitted in his speech. He said that statements had been made reflecting upon him personally. Is that a matter for laughter? Is it the way to treat the House of Commons to take the attitude, "Of course the silly noble Lord wants an inquiry, ha, ha, ha." It may be that I or some other speaker on this side of the Committee excites the ridicule of hon. Gentlemen opposite. We do not object to that; they frequently excite ours. With all respect, because although I might not always show it, I have considerable respect for hon. Gentlemen opposite, I do not believe that any responsible Member opposite can deny, in his heart of hearts, after the recital of the facts tonight by my right hon. Friend, and the speech made by the hon. Gentleman below the Gangway, and the speeches made on three occasions in Debates, that these are matters which ought to form the basis of a proper inquiry.

We have had, on the whole, a very good-natured Debate. The Committee has shown itself alive to the importance of this matter, as is indicated by the crowded benches. I think everyone will agree that the fountain of public life is purer and cleaner in this country than in any other country in the world—that is a rather banal expression but it is true—and there should be no suspicion of a taint about it. I say that if the Government refuse an inquiry after this evening's Debate, there will be such a suspicion. Already there are ugly rumours, I hope that they are quite untrue, going around in the country about this matter. I will end on this note, and I hope that the Parliamentary Secretary will, in his reply, deny it and say that there is not a word of truth in it. I heard the other day from an eminent man who had nothing to do with any firm which has been mentioned in this case that: "Of course the real reason why the Government are refusing an inquiry is because if they have a proper inquiry such a scandal would be caused by the Government's handling of the matter that they might endanger their positon."

I intervene in this Debate because a number of my constituents have worked for Grantham Productions and, as a result of the redistribution of constituencies which is to take place, a number of the constituents of the hon. Member for Grantham (Mr. Kendall) will come into my constituency. I cannot see how this squabble between rival claimants will help the working people of Grantham. In this view I am supported by my trade union colleagues. In Grantham they feel that if this factory with its hundred key workers can be placed into early production, the obvious thing for the Government and for the Department concerned is to give the opportunity to the people who are there on the job to have a shot at it. I am not interested in the gentleman named Mr. Cotton. I do not know him. However, I do know that it is no new thing for financiers to wreck industries. It is no new thing for rival industrialists to stake claims of this character.

I want to impress upon my hon. Friend the Parliamentary Secretary to the Board of Trade that if a long drawn out inquiry means that these people who are anxious and willing to work in Grantham will be kept out of work, he should refuse it even though the hon. Member for Grantham asks for it himself. Surely, production is the first consideration. I want to reply to the point made by the right hon. Gentleman the Member for Aldershot (Mr. Lyttelton) when he asked, "Why should not industrialists have first claim to it?" That depends upon what use the industrialists are going to make of the work. In my constituency we had a great industrial firm, Babcock and Wilcox, who bought out Clayton Boilers. They said what they were going to do but the moment they got there they shut the firm down and transferred Clayton Boilers to Glasgow. We do not want that to happen in Grantham. I impress upon the Board of Trade the importance of seeing that, whatever the allocation is, it shall be made to the people who intend to produce goods and not the people who intend to close down factories. Let us have a guarantee that these factories will not become warehouses, and that they are not to be used in order to prevent the development of a new tractor firm because that would impinge upon the financial and economic interests of somebody who is already making tractors.

It is a singular fact that my friends on the regional board who advised the Parliamentary Secretary—and I refer particularly to the trade union representatives—are all in favour of the allocation being granted to Grantham Productions. Why? Because Grantham is a one employer town. They believe that two employers will give them greater security. It would mean that if workers get the sack from one monopoly, at least they have a chance of a job somewhere else, whereas if there is only one firm, the sack means that they must go out of the industry altogether. For that reason the people who represent the unions in Grantham, the people who have worked for Grantham Productions, insist that we should, not allow any inquiries to stop the possibility of getting men back to work in a place where the key men and the plant are available. I hope and trust that, whatever may be the private quarrels between financial and industrial firms, the Government will see that the right thing is done to the workpeople of Grantham.

I hope the Committee will believe that, in what I have to say on this matter, I am not seeking in any way to raise an issue between the parties in this House, because I do not think this is a question which does involve, or which ought to involve, party differences. I also hope that the hon. Member for Grantham (Mr. Kendall) will not consider that I am casting any reflections upon him, because, as he well knows, I have no reason to do so, and have only reason to bear him goodwill.

The question to which I wish to devote attention, and to which I think the Committee should devote its attention, is the question whether a case has been made out for a Select Committee of inquiry into the circumstances which have been revealed this evening. The hon. Member for Lincoln (Mr. Deer) said that his main interest, which one appreciates, was for the well-being of the workers in Grantham, but I do not think we should take too narrow a view of this matter. Quite obviously, what has happened up to the present, moment has not been in their interest, and, quite obviously—and I am sure the hon. Member for Lincoln will be the first to agree with me here—supposing that there is a prima facie case for inquiry, the very last thing which it is in the interests of the Grantham workers to have is the hushing-up of facts which demand inquiry. That cannot be in their interest, and, when the hon. Gentleman urged the Parliamentary Secretary, simply on the grounds of delay, to refuse an investigation, I could not help thinking that he was taking a wrong view of what the interests of those whom he genuinely desires to assist really are.

As it seems to me, there are two separate lines of complaint before the Committee, each of which separately demands an inquiry. There was the speech of my right hon. Friend the Member for Aldershot (Mr. Lyttelton), and the impressive speech of the hon. Member for Grantham. As I understood the speech of my right hon. Friend, it was not, on any material consideration, really inconsistent with the speech of the hon. Member for Grantham. Each proceeded on parallel lines and they made allegations which seem to me to demand some reply.

Dealing first with the speech of my right hon. Friend, the first point is that, for reasons which I think must be conceded to be adequate—at any rate, at first blush and in the absence of explanation—both the present Chancellor of the Exchequer and his Conservative successor, had, in fact, rejected the application of the hon. Member for Grantham. That, in fact, involves no reflection on the hon. Member for Grantham whatever. The hon. Member replied that he had been subjected to improper pressure for motives of an ulterior character, and had been prevented either from raising the necessary finance to support his venture, which was technically sound, or which he claimed to be technically sound, or even from retaining the advantages which he had properly secured by allocation from the Ministry. That demands an inquiry. Again, my right hon. Friend said—and it seems to me that the two cases are perfectly consistent with one another—that it is all very well for a technically sound project to be put before the Board of Trade, in which the hon. Member for Grantham honestly and honourably believes, but it is the duty of the Board of Trade, before they make an allocation, to satisfy themselves that the project is not merely technically sound, but that it has a sufficient financial backing in order to make it practically possible. I should like the Parliamentary Secretary to say whether or not he accepts that view?

The charge made by my right hon. Friend proceeds from that point. It is that, at no stage, was there ever in existence any financial backing which would make this project—which the hon. Member for Grantham claims to be technically sound—a practical possibility. That is the charge. Therefore, the first question which arises for inquiry is, what was it that led the present occupant of the office of President of the Board of Trade to change the decision arrived at, to reject an allocation, in respect of a project which, however technically sound it might be, did not prove to have sufficient financial backing? Nor am I impressed with the kind of reply which seems to be adumbrated from the benches opposite. It may have been a thoroughly unfortunate thing that the necessary financial backing for this venture was not forthcoming. It might even be suggested that Government money ought to have been produced to support it. It might have been that the hon. Gentleman was right, that the financial backing had been refused for improper reasons, and as the result of intrigue, but that only strengthens the case for an inquiry. What cannot be justified, at first sight, is what happened, namely, that the Board of Trade gave an allocation which had a financial backing which was admittedly insufficient.

The next thing which seems to me to demand an inquiry—and, again, no reflection is cast upon the hon. Member for Grantham—is that after, I think, 12 months of operation, this project failed for the reason that my right hon. Friend forsaw, not because it was technically unsound, but because it had not a financial backing. It may well be that the hon. Member for Lincoln is perfectly right in saying that the proper course then was to see to it that the Grantham productions, with further backing, should continue their allocation. But, if so, it was not done, and that is the next matter which arises for inquiry. What was done was something radically different, and something which, I think, demands an inquiry more than all the other circumstances. What was done was to accept at its face value, a syndicate of financiers whose assets did not prove anything like adequate for the project which they desired to finance.

I cannot believe that it does not demand an inquiry of the most stringent character. Whatever the technical merits of the project, and whatever the truth, which I accept, of the allegations made by the hon. Member for Grantham, I cannot accept that it does not demand an inquiry into how a group of financiers, headed by a man who, for whatever reason, happened to be a recent bankrupt, should have got a valuable Government contract, which, in fact, they sought to sell at a profit without carrying on any useful work. That, I think, de- mands an explanation. I do not think that the honour of this House, or the serious administration of public affairs, can be put off with anything short, either of a complete explanation of all these circumstances, which at first sight demand an inquiry, or else the inquiry which this Committee demands. After all, the Parliamentary Secretary has had the opportunity of listening to this Debate, and much has come out in the course of it which, perhaps, was not known to him before. It would involve no loss of status, or no admission of guilt on his part, if he has authority to yield to this request made from these benches and by the hon. Member for Grantham himself, who is rightly jealous of his own reputation and who properly desires to put on record the pressures to which he says he has been subject. I cannot think that any loss of prestige to the Government could possibly be involved by yielding to this request. I call upon hon. Members opposite, when they see an issue which does not involve deep differences of principle, to regard a question of this kind on its merits alone, to forget their party affiliations, and my own, and to consider whether or not here is a case where the demands of efficient administration require that the inquiry, which is all we ask for, should be granted by the Board of Trade.

I hope hon. Members will agree with me that the issue which has to be decided tonight is one which ought not to be regarded from a party point of view. I think it would be disastrous if a question of this kind was voted upon on that basis. One of the advantages, or, perhaps, I should say effects, of being an independent Member of this House is that, when any matter is before us, one has to acquire the habit of seeing how it is viewed not only from one side but from the other side too. I wish to ask hon. Members, and the Government in particular, in deciding what they should do in this matter, to consider what would be their attitude supposing the position had been somewhat different. Supposing it had been a Conservative President of the Board of Trade who had had the power to allocate a factory, and had allocated it twice over in circumstances similar to those which have been revealed to us tonight, with similar results, would hon. Members then have supported a demand for an in- quiry, or not? Before hon. Members vote on this matter—and I hope there will not be a vote, because I hope the Parliamentary Secretary will be able to accede to this request for an inquiry—they ought honestly to ask themselves what they would have done if the position had been reversed.

Surely, there is a corollary to that proposition?—Would hon. Members opposite have supported an inquiry in those circumstances?

If they had refused an inquiry in those circumstances, would the hon. Gentleman have thought it right to do so? If hon. Members opposite choose to follow the example of hon. Members on this side of the Committee, I suggest they might follow the example when they think it is right to do so, and not when they think it might be wrong. Powerful arguments have been advanced in favour of an inquiry. Not a single argument has been advanced against it. After all, the power of the Minister to allocate factories, at a time when factories are in short supply and in great demand, is very great. It is a power which ought to be exercised with the greatest possible care and discretion, and with regard to the national interest only. All that the inquiry would have to decide would be whether that was the principle on which this allocation was made. If this inquiry is refused, it is bound to leave a nasty impression. It cannot be in the interest of the Government that that should be so. The hon. Member for Grantham (Mr. Kendall) himself has asked for this inquiry. I submit, in view of his personal concern in this matter, that when he makes that request he has a right to expect it to be granted.

Therefore, I would say that it is in the national interest, it is in the interests of the proceedings of this Committee, that this perfectly reasonable request for an inquiry should be granted. In reply to my hon. Friend the Member for Lincoln (Mr. Deer) I would say that the inquiry would have no effect whatsoever on the date when this particular factory should go into production, because the Government have decided that now it shall not go to the particular concern to which it was proposed to hand it over; so that, whether there is an inquiry or not, that will not be affected. The inquiry will be about what happened in the past in the allocation of these factories. Therefore, I appeal to the Government, and I appeal to hon. Members who support them, to be willing to agree to this inquiry, because I am sure that the request for it is reasonable, and one that ought to be granted.

I rise only to raise two points which have not been mentioned as yet. We have recently in the House of Commons been considering the provisions of the Companies Bill in some detail. I think it has been with the agreement of both sides of the House that the powers of investigation by the Board of Trade into the affairs of companies have been very considerably widened. I do not think there has been any division of opinion about that. Well, now, when we come to an instance in which a strong case, in my submission, has been made out, first by my right hon. Friend the Member for Aldershot (Mr. Lyttelton) and then by the hon. Member for Grantham (Mr. Kendall) for an inquiry, it would seem to me extremely odd if that joint appeal were, in fact, resisted by the Board of Trade, to whom such wide powers of investigation are to be given by the Companies Bill. I hope that we shall hear that it will not be resisted, that it will be granted, whatever the results may be; because I do not believe that the Committee, whatever party may be in the majority, can really, consistently with its dignity, let a matter of this sort rest where it does now.

We have to bear in mind the Companies Bill and the provisions for investigation therein included. After all, in considering whether a case has been made out for an inquiry, I do suggest in all reasonableness to hon. Members opposite that the case for an inquiry into this matter is really far stronger than the case for a public inquiry into the Press. One does not know what the result of this inquiry may be. It may well be—I do not know—that the Board of Trade will be able to justify all their actions. I should have thought that the Board of Trade would have been only too glad to have had an opportunity of justifying their actions before a Committee of the House. Therefore, I do hope that, even at this late hour, the Government will decide to grant the inquiry which is sought by the hon. Member for Grantham and by my right hon. Friend. In fairness to the Board of Trade and to the hon. Member for Grantham I hope the request will be met.

I am very glad that we have had this Debate, not because I think it is a good thing that every time the Board of Trade allocates a factory the House of Commons or this Committee should debate it; but there has already been a more or less continuous debate both inside this Chamber and in the country over a period of many months about this particular allocation. I rather regret that there has been so much talk during the last few months outside the House of Commons, because I am quite certain that one of the principal reasons for the failure of people who at some stages have been associated with proposals for the utilisation of these factories—one of the principal reasons why they have fallen by the wayside, is that there have been far too much tittle-tattle and far too many suggestions that something was happening on this side or that side which should not have been happening. So far as I am aware—and I have an intimate knowledge of, at least, the later stages of the developments—so far as I know them, there is no reason at all why there should have been so much talk, and I think it is a very great pity that we have had it.

The right hon. Member for Aldershot (Mr. Lyttelton) was inclined, in his usual kindly fashion, to suggest that my right hon. and learned Friend may have been let down by somebody; that it was not because of his own personal decision, and therefore his own personal mistake, but that somebody else somewhere in the Board of Trade had let him down. I can assure the right hon. Member for Aldershot—and I hope he will accept my assurance—that this was, in every sense of the word, a personal decision of my right hon. and learned Friend and it was not a personal decision taken just on snap as a result of reading a brief about the subject. My right hon. and learned Friend has throughout kept himself closely informed of the various developments as they have taken place.

It was suggested by the hon. Baronet the Member for Sutton Coldfield (Sir J. Mellor) that Mr. F. S. Cotton had hawked the assets around. My information is that, in fact, no hawking took place, but that at a late stage in the proceedings there was an attempt to arrive at an agreement whereby the factory would be better utilised. I will deal with that point later on, but I want to pick up one or two of these questions before getting on to the main thread of my argument. The hon. Baronet asked: What experience had this group of this type of production? Well, there was the hon. Member for Grantham (Mr. Kendall) who, I think, is admitted by hon. Members on both sides of the Committee to be a production engineer of some quality. At the time the allocation was made there was associated with the group another gentleman, who subsequently withdrew after the allocation had been made, whose name stands very high as a production engineer in both Government and industrial circles in this country. There was a great deal of experience which, surely, would satisfy even the hon. Baronet. He also asked me: Was any undertaking given by anybody to put the new Grantham Productions Limited in a favoured position compared with other established firms who are producing tractors? No, there was no undertaking given that would put them in a more favoured position than anybody else. So far as I know, no Ministry gave them an undertaking that they would receive anything in particular. But, as I shall show when I come to the main story, their merits were recognised and they were, to some extent, supported by a Ministry which agreed that, so far as the quality of product was concerned, the project was a good one.

The hon. Member for Stockport (Sir A. Gridley)—to whom, as he knows, I always listen with very great respect on these matters because of his vast experience—asked me: Did the group possess the capital to build up plant, to tool up the factory? I think, to a very large extent, that question was answered by the hon. Member for Grantham. In fact, the plant was already there; the factory was tooled up for production; and, therefore, it was not necessary to acquire capital in order to build up and re-tool. The plant was there in the factory, and the tractors were actually being produced all the time, although at a very small rate.

I do not want to take the Parliamentary Secretary off his line of thought, but is not he aware that this financial group had not even the finance to buy assets of £110,000, much less to finance any production?

I expected that I should be allowed to deal with the points in a continuing narrative, and I shall come to that in a moment. We did not know at that time that the group would not be able to meet their undertaking to purchase the assets. When we made the allocation, we made it on the basis of an agreement which had been arrived at between the group and the liquidator. It was the liquidator's business to sell the assets, not the business of the Board of Trade. I must emphasise that the Board of Trade only come into this picture of allocating a factory before undertaking any financial arrangements with the group——

The Parliamentary Secretary said that these factories were tooled up for the production of cars and tractors in particular, and that all the machines were there. Is he telling the Committee that these factories were tooled up for the job, which is a very different thing? Were they tooled up for full production, or only for a trial run of production?

If the hon. Member had listened, he would have heard that not only were they tooled up—I do not know whether it was for full production, but certainly for production—but were, in fact, producing, and that one of the products was found to be entirely satisfactory from the point of view of the Government Department which examined it. The right hon. Gentleman began his story by referring to the early days when the Chancellor of the Exchequer was President of the Board of Trade and when the right hon. Gentleman opposite was President of the Board of Trade. It is true that under the presidency of the present Chancellor of the Exchequer the allocation of this factory was made to the firm of Aveling-Barford. That allocation was subsequently confirmed by the right hon. Gentleman, when he was for a short time President of the Board of Trade. Upon the allocation of this factory to Messrs. Aveling-Barford, the hon. Member for Grantham (Mr. Kendall) objected, and I suggest that he had a perfect right to object. It is the right of any applicant for a factory, or group of factories, on finding that it is awarded to someone else, to appeal against that decision, which is what he did. He appealed on what I would regard as rather sound grounds, namely, that he was the sitting tenant employing people in these factories, that he had his machinery there, and that the factories were not really suitable for the kind of production to be carried on by the other firm. That appeal was made to my right hon. and learned Friend, who asked my predecessor, my hon. Friend the Member for Stoke (Mr. Ellis Smith), to conduct an inquiry into the whole business with a view to seeing who should have the factory.

In anticipation of this Debate, I have taken the trouble to go through the files very carefully. It will be appreciated that I was not in office at that time, and that I have, therefore, had to look into the files to find out what happened. I find that the hon. Member for Stoke, when he was Parliamentary Secretary, conducted a thorough investigation. I know the reasons which persuaded him that the decision should be changed. Quite apart from the support from the workers, and petitions from the workers, people in Grantham, local trade union branches and trades councils, there was the important point that the other firm refused to guarantee that they would employ any specific number of people, and the report from the regional organisation—I hope the Committee will take note of this—that the firm of Aveling-Barford were not even employing to the full the plant and machinery which they then possessed. If I were to decide whether or not the allocation of a factory should be made to a particular firm who already possessed a factory in that town, and I found that they were not even employing the resources they had then to the full, I should regard it as being rather illogical to add to their existing resources.

Did the Chancellor of the Exchequer concur in that view?

I am now discussing the reasons which prompted my predecessor to recommend a change in the nature of allocation. I do not think that what entered into the mind of the right hon. Gentleman or his predecessor has anything to do with what actuated my predecessor when he came to conduct his inquiry.

Two further points were taken into consideration by my hon. Friend the Member for Stoke. One was that the additional finance required was shown at that time to be available and, subsequently, appeared and the firm went into production. The other was the Canadian Government contract to which the hon. Member for Grantham referred. Here was the situation. Two applicants for a factory. One of the applicants was not at that time, already employing to the full the resources at his disposal. The other applicant was in the factory, with plant and machinery, and a contract from the Canadian Government for the repair of vehicles. I suggest that there was nothing dishonourable or anything to be ashamed of in the action taken by my predecessor when he recommended to the President that the allocation should be changed as it was changed.

I can see the hon. Gentleman's argument so far as the reason why allocation should not have been made to one firm, but I am puzzled as to why he thinks that was a positive reason for allotting to the other firm.

I said that the other firm was occupying the factory.

Who was the lessee?

At that time it was Grantham Productions.

I think it was British M.A.R.C.

Production was being carried on in Factories No. 3 and No. 4 by the people who wanted to go on producing there. There was guaranteed continuity of production, in the sense that they had a contract from the Canadian Government. It is in the interests of the people of Grantham that if production is being carried on in these factories there should be continuity of production. What exercised the mind of the Board of Trade, as it does now, was to see continuous employment provided for the people of Grantham.

Could the hon. Gentleman say what is the precise association between Grantham Productions Limited and the people in occupation of the factory, who I understand were British M.A.R.C.?

It would take me a long time to go into all that; I did not think that the Committee would wish to go into the financial matters of two years' ago when what we are discussing is recent events, and the allocation of the factory to the people headed by Mr. Cotton. I do not see that the point made by the hon. Baronet affects the issue which we are discussing tonight.

The hon. Gentleman himself made the point.

I was making the point that production would continue in these factories if an allocation was made, as it was subsequently made. Towards the end of last year, the creditors of Grantham Productions forced the company into liquidation. It was represented to us by the hon. Member for Grantham that he would be able to find backers who would be prepared to supply the capital necessary to recommence production at the factories, and my right hon. and learned Friend agreed to postpone any action to re-allocate them until Easter, 1947. I do not know whether that will be criticised or not. Let me point this out: Had my right hon. and learned Friend not agreed to that deferment, and had Grantham Productions been forced to get out and take their plant with them, and had the factory been allocated to some other firm, the time taken in the installation of new plant and machinery would have taken until Easter. So there was no question of losing production or putting people out of work on the part of the Board of Trade. In the meantime, Aveling-Barford came into the picture again, and they applied for a reallocation to them. It is not true, although it has been claimed by or on behalf of Aveling-Barford, that the President of the Board of Trade gave them any undertaking that he would allocate the factories to them in the event of the withdrawal of Grantham Productions. That is not true The President merely said that their application would be considered on its merits.

On 27th May, the hon. Member for Grantham brought to the Board of Trade representatives of a new group who had made a binding offer of £110,000 to the liquidator for the assets of Grantham Productions. The offer had been accepted by the liquidator, and £20,000 had been paid in as a deposit. It was proposed to continue to manufacture tractors only and to drop the plan for the small car. A new company to be called Grantham Productions (1947) Limited was to be formed, and we were advised as to the names of-the parties interested. The bulk of the finance was to be provided by this group, headed by Mr. F. S. Cotton. In confidence, we were told who in fact was providing the money behind Mr. Cotton. We took the trouble to go to the bankers of the group, and the bank stated categorically that Mr. Cotton was an old customer of the bank and had never failed to meet his obligations.

Is the hon. Gentleman now denying an answer which the President of the Board of Trade gave to me in reply to a Question that this gentleman completed the last composition to his creditors a month before?

I rather hoped that the right hon. Gentleman would ask me that question, because I did not say anything of the kind. I am merely telling him what the bank told us, and the bank told us what was subsequently proved to be wrong, but he cannot blame the President of the Board of Trade if the bank makes a mistake. [Laughter.] The noble Lord is very amused at his own humour, and he makes the criticism that we apparently are not handling financial affairs properly. May I suggest to him that his laughter will recoil on himself when he realises that I am explaining that a private enterprise bank made a mistake and gave the wrong information to the Board of Trade. There was a subsequent statement made to us by the bank, that Mr. Cotton and his syndicate were well able to provide the sum prescribed, and, indeed, their total resources were known to amount to approximately £500,000. Within the knowledge of the bank, the Board of Trade could, therefore, rest assured that ample finance was available. I suggest to the House that if there is to be criticism of anybody on these financial grounds, it is certainly not criticism of the President of the Board of Trade.

Is the Parliamentary Secretary aware that in all transactions of this kind all traders look for references other than bankers' references, which merely relate the state of the credit of the particular customer at a particular moment, and must necessarily do so?

The right hon. Gentleman again does not appreciate the particular nature of the argument which is being put up, because he refers to a trader seeking references other than bank references before undertaking a deal. We are not a trader; we are an allocation Department. We are not trading with Grantham Productions. That is a job for the liquidators. They are the people who are selling the assets of Grantham Productions. All we are doing is to allocate a factory and we are not the people who bought the assets.

The hon. Member for Stockport asked me one or two quite pertinent questions about the existence of prototypes of both car and tractor. It has been explained by the hon. Member for Grantham that the car anyhow was produced in France, but the hon. Member will have heard that subsequently the idea of producing the car was dropped anyhow. As to the tractor, the Ministry of Agriculture were asked to investigate. They agreed with the view of the new group that the production of tractors could be quickly restarted on a substantial basis, and they urged the necessity for this production. They said that the technical organisation of the factory was still available, and on the question of supplies and essential material the Ministry of Agriculture, through their regional machinery officer, were able to make a report. I want to quote this from that report:

"There are one or two shortages but when these are closely examined they amount to very little, and I feel justified in saying that although Grantham Productions have been nominally out of production (producing perhaps only two or three tractors a week for seven months) their position on these shortages is far better than some of the Companies who have been in production continually."

As a result of that careful inspection they were satisfied that a substantial volume of production could be built up within the ensuing six months and thereafter maintained.

On nth June the proposed chairman of the new board came to the Board of Trade to discuss with us certain immediate possibilities. This, I hope, will meet the point which has been made by several hon. Members opposite both today and on previous occasions. It was certainly made by the hon. Member for Sutton Coldfield. (Sir J. Mellor). The chairman said, in view of certain inadequacies of technical equipment and on the understanding or belief that Messrs. Aveling-Barford would not be averse to an amicable settlement, his group had decided to approach Aveling-Barford with a view to an arrangement by which the two undertakings would join together to operate both factories, presumably believing that they would have more economic unity if, instead of endeavouring to produce in rivalry with one another in Grantham, they joined together for economic and efficient production.

The reply of the Board of Trade was that we would welcome any settlement of outstanding differences, but we made it quite clear that the Government could not be in any way associated with any approach of this kind at the present. In other words, these negotiations were purely and simply a matter between Grantham Productions and the group of Messrs. Aveling-Barford. We asked quite rightly—and I hope the right hon. Gentleman will applaud us for asking—and we received an assurance that no attempt would be made to use the allocations of the factories as a bargaining counter. We asked that that should not be the case and we were given a firm assurance that it would not. In fact, I do not believe that any one would suggest for one moment that the Board of Trade would ever be a party to any such proceeding. They came to us through their chairman, or the man they proposed to nominate as chairman, with this proposal that the group should approach Messrs. Aveling-Barford with a view to joint operation, and I imagine that it is from that approach that the story has arisen that the group endeavoured to hawk around the assets which they had purchased. There is all the difference in the world between trying to enter into an amicable arrangement with another firm working side by side with you and taking the items and that plant which you have bought from the liquidator out of the factory which you have been allocated and selling it to someone else in the City of London or elsewhere.

On 7th July, the time for the payment of the purchase price of the assets set by the liquidators lapsed, and because we could not be satisfied that there was a reasonable possibility of the group coming along with the money to purchase the assets we decided to withdraw the allocation. It was announced by my right hon. and learned Friend in the House about 10 days ago that we had in fact withdrawn the allocation. The situation now is that it is competent for any firm which is interested in these factories at Grantham to make an application for their use. In making the allocation we shall be guided by the nature of the proposed production and by all the other relevant factors which are taken into account—[An HON. MEMBER: "Including finance?] Yes, except that on this occasion perhaps we shall ask the nationalised Bank of England and not a private enterprise bank.

In conclusion, I would only say these few words. I have endeavoured during my speech to give a distinct, clear and frank recital of the facts as I know them. I do not consider that at any stage during the course of what I have had to say to the Committee this evening I have shown that there has been either negligence or undue partiality by officials of the Board of Trade or by the Ministers of that Department. It has been our anxiety, as it was that of my predecessor the hon. Gentleman the Member for Stoke (Mr. Ellis Smith); and as it is still that of the Board of Trade today, to see that all Government factories which become available are allocated with regard to the needs of the country for the production of certain types of commodities, and bearing in mind the needs of the particular locality for the employment possibilities for the people there. I regret very much that these factories, which during the war became famous for the quantity and quality of their production under the leadership of the hon. Member for Grantham, which was so helpful towards winning the war, have not been available to the nation during the past seven or eight months——

Whose fault is that?

while all this coming and going has been taking place. I only hope that it will be possible in the very near future to establish in these factories in Grantham a firm which will give to the people of that town an opportunity of returning to those factories and displaying in the national interest the very high degree of skill they displayed throughout the war years.

I beg to move to reduce the Vote by £100.

I do so because of the refusal of the Parliamentary Secretary to grant an inquiry and because of the fact that he has not made a single reference to the request, which came from all quarters of the Committee. May I tell the Government, and I include the Deputy Leader of the House, that this is by no means the last that they will hear of this question, either here or outside?

I have no wish to embarrass the Parliamentary Secretary to the Board of Trade, but would he tell the Committee whether very heavy pressure has recently been brought to bear upon the Board of Trade in relation to the allocation of these factories and in relation to today's Debate.

The answer is that ever since I first became aware of the existence

The hon. Gentleman is afraid.

I think that the case which I have placed so frankly before the Committee is one which would lead most hon. Members on both sides of the Committee to conclude that an inquiry of the nature suggested is not necessary.

I beg to move:

"That an humble Address be presented to His Majesty in pursuance of the provsions of Section 309 of the Government of India Act. 1935, praying that the Government of India (Governors' Allowances and Privileges) (Amendment) Order, 1947, be made in the form of the draft laid before Parliament."

The object of this Order is to provide for certain increases in the allowances for the Governors of the various Provinces of India. The reason is that the increased cost of living has necessitated an overall 25 per cent. increase in the amount laid down in the Order of 1937. When I say that this has received the approval of every one of the provincial governments, I think the House will readily accept it.

On behalf of this side of the House, I would say that seems to be a reasonable proposal, and we feel that these allowances should be paid. I understand that there has been an attempt to make it retroactive. Could the right hon. Gentleman, with the permission of the House, say whether they are retroactive, and explain when they start and when they will end?

They are retroactive to 1st April this year, and will continue in operation until 15th August and thereafter, unless and until they are repealed by the respective Governments of India and Pakistan.

I beg to move:

"That an humble Address be presented to His Majesty in pursuance of the provisions of Section 157 of the Government of Burma Act, 1935, praying that the Government of Burma (Governor's Salary, Allowances and Privileges) (Amendment) Order, 1947, be made in the form of the draft laid before Parliament."

This Order is similar to the one we have just discussed, and applies to Burma. It has received the approval of the Government of Burma, and is for the same reason, namely, increases in the cost of living which have necessitated these increases of allowances for the Governor.

The same considerations apply to this Order as to the last. Although perhaps it does not matter now very much as we shall not be having these Orders after 15th August, I would draw attention to the fact that it was impossible to obtain printed copies of the Order anywhere in the House, and they were only available later in the day. In view of the complicated character of such Orders, perhaps the right hon. and learned Gentleman will see in future that they are printed earlier?

I wish to apologise to the noble Lord, and to the House for this delay. I was only made aware of it a few moments ago.

May we have some indication of what the Order does? I have not seen it.

As regards the Governor of Burma, the same considerations apply as in the case of the Provincial Governors in India in regard to increases in the cost of living. The allowances for the Governor of Burma in the principal Order of 1937 had been found to be insufficient. The matter has been considered by the Government of Burma, who have decided that there is a case for giving these increases.

I beg to move:

"That an humble Address be presented to His Majesty in pursuance of the provisions of Section 157 of the Government of Burma Act, 1935, praying that the Government of Burma (High Court Judges) (Amendment) Order, 1947, be made in the form of the draft laid before Parliament."

This applies particularly to one judge, Mr. Justice Blagden, who, during the occupation of Burma by the Japanese forces, was given an appointment in the High Court of Calcutta. Unless this Order is made, he will be debarred from the allowances that are payable to judges of the High Court of Rangoon. It is to regularise the position that we seek approval of the House to this Order.

I beg to move:

"That the Electoral Registration Regulations, 1947, dated 2nd July, 1947, a copy of which was presented on 3rd July, be approved."

This Order is to secure that the names which appear on the civilian residents electors' lists, which form the basis of the Civilian Register which will be published on 15th October, shall be treated in a similar manner to the way in which the lists were compiled in prewar days, that is to say, that the persons who are newly qualified, and those who have ceased to be qualified, shall be listed separately. That is necessary in order to facilitate the compilation of the jurors' list for 1948. The House will no doubt be aware that the rating authorities must, for the purpose of compiling a jurors' list, mark off the names of the people who have the requisite qualifications to act as jurors. Last year, which was the first year since 1940 in which a jurors' list was prepared, it was necessary for the rating authority to go through the whole of the names in the civilians' list for the purpose of ascertaining who had the right qualifications. That has already been done. Under the proposal contained in the Motion now before the House, it will only be necessary for the list of newly qualified people to be provided to the local authorities, who will then be able to see whether the newly qualified electors have the necessary qualifications. By that means, a considerable amount of labour will be saved.

There is, in my view, a serious omission in this list. I do not know whether the House will recollect that about three weeks ago I presented a Petition on behalf of a large number of wives, daughters and sisters of serving men in Germany. I have since written to the Home Secretary upon the subject, and have not yet received his reply, but as that was only two or three days ago I could hardly have expected one. I would like to ask the Under-Secretary of State why it is when this Order, purporting to provide for electoral machinery over the course of the next few months or years, is brought before the House, no mention whatever is made of the position of those English people who are resident overseas, and who, during the General Election in 1945, were unable to vote? It is a serious problem, and the Government ought to give it consideration. I deplore the fact that it has not been found possible to include provision for these people in this Order. I ask that another Order be made to provide it for them.

In this Order provision is made for a Service electors' list, that is to say that every man of the requisite age is entitled to vote overseas. Since the end of the war, hundreds, perhaps thousands, of British women have gone overseas to join their husbands and their relatives. Are they not to be entitled to vote at any forthcoming by-election? We are told that there is a possibility of a General Election in the course of the year——

The noble Lord's proposal could not be carried out without amendment of the Act, and I am afraid that his speech is out of Order.

If it cannot be done by an Order, might I ask the Home Secretary for the amendment of the Act as soon as possible?

No, that is out of Order. We are discussing the Order: the Act cannot be discussed.

I understand that it is within the Act. If that is the case, can it be done by an Order?

I am afraid it is not. i gather that it is not within the Act, and unless the noble Lord can prove to me that I am wrong I am afraid he is out of Order.

I very much regret that I have not the necessary documents with me at the moment to prove that to you, Sir. Therefore, I accept your Ruling. I hope I have made my point and that the Government will consider it.

As I understand it, this provision seeks to continue for one year, with some modifications, the wartime practice whereby the Register of Electors is, in effect, prepared from the food cards instead of from a house to house canvass as was the prewar practice. I would ask the Under-Secretary or the Home Secretary whether he will give an assurance that this is the last time this wartime procedure will be adopted and that in the next Session of Parliament we shall have something different, perhaps on the lines of the recommendations of the Electoral Registration Committee.

I only wish to ask for an explanation of a point on which I am not clear; this is not a subject on which I can say much. On page 2 of this Order it is stated:

"Provided that where since the publication of the register in force the area of a registration unit has been altered, the area of that unit may for the purpose of the publication of the civilian residence electors list be deemed to be the area of the unit as constituted at the date of the publication of the register in force."

I have no particular wish to raise any point in regard to the last words, but I am not used to seeing the words describing the area of a registration unit. It may be that those words are always in these Orders. Is the area of a unit the area of a constituency or of a smaller portion, such as a parish or a polling district? If it is the area of a whole constituency, of a unit of electors, then a very much bigger and different question is raised. I think those words should be explained by a Government spokesman. If it merely means the area of a registration unit, such as a polling district, I think there is nothing really which we can say about it. Probably it is the ordinary alteration of a polling district which may take in rather more or less than before, but we ought to be perfectly clear that it is not referring to a wider area. If it does refer to the wider area of the constituency, I think there ought to be some further explanation. I do not see any great harm in having a new register. I think it is something we all want to have as soon as possible. I would like an explanation on the matter.

The area of a constituency can only be altered by Act of Parliament. Therefore, as there has been no Act of Parliament since the last Register was compiled which has altered the boundaries of constituencies, it is quite clear that this reference must be to some smaller unit, such as a parish, an urban district, a ward or one of those convenient units into which constituencies are sub-divided. I think the hon. Member for Torquay (Mr. C. Williams) considerably underrates his powers when he says that this is a subject on which he could not say very much. With regard to the point raised by the hon. Member for Twickenham (Mr. Keeling), it is not for me to anticipate the Gracious Speech which will be made from the Throne in the course of the next few weeks, but I should be disappointed if the present method of compiling the register and these orders were to continue for any undue length of time in the future. I will endeavour, so far as my powers will carry me, to see that we get a more satisfactory method of compiling the register at the earliest possible moment.

Has the right hon. Gentleman no word to say about the disfranchisement of those women to whom I referred?

Mr. Speaker ruled the noble Lord out of Order, and I do not want to get into bad company.