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War Materials (Export)

Volume 478: debated on Monday 18 September 1950

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Question again proposed, "That the words proposed to be left out stand part of the Question."

5.10 p.m.

As I was pointing out, the Prime Minister, in his speech last Tuesday, suggested to manufacturers that they should not hold stocks. I believe that is bad advice, and that manufacturers should be asked by His Majesty's Government to hold and to maintain a normal three months' stock of raw materials. That has the advantage from the security point of view of a very necessary dispersal of stocks; from the financial point of view, it relieves the Treasury and the taxpayer of carrying stocks which it is the normal duty of manufacturers to do, and it also creates that stabilising influence in commodity markets which is so necessary. I hope that whoever is to reply to the Debate will agree that that idea is one of the first and most necessary reforms.

On the question of raw materials, a vital factor must be the American attitude. America has taken considerable unilateral action in this matter. In the case of rubber they have limited civilian use, and they have taken the salutary action—which contains in it the corrective of the abnormally high prices we now see—of putting into gear the whole of the great synthetic plants which were created during the war, and which helped to save the Allied war effort. It makes one think that if we are to arrange—as undoubtedly we shall—priority of war materials for ourselves, Western Europe, our Allies and America, there will undoubtedly come a moment in the production of these materials when we shall have satisfied our current demand and created our stocks.

At that moment the problem will present itself that the palliative that we are to put into operation, of taking the first priority of these goods for ourselves, will have ceased, and to the problem of whether we wish to stop these supplies going to less desirable countries we shall have to find a new solution. As I believe in planning and in thinking ahead, I recommend to the Government that they begin to think a little now about what is to happen when we have created our stock-piles and are fulfilling our current obligations.

The actual figures of raw rubber going into Russia may be of some interest. They show that in 1947 the amount was 35,000 tons; in 1948, about 100,000 tons; in 1949, 105,000 tons—not all of it direct; 35,000 tons coming not direct from Malaya at all, but largely through Holland—and this year the rate of importation is almost exactly the same as last year's.

Could the hon. Gentleman give us some idea of how much profit has been made by British capitalist concerns from the supply of rubber to Russia during the last 12 months?

I am surprised that question has not been asked before by the hon. Gentleman because he has been asking it steadily in every Debate, whether it is relevant or not. The answer is that as 50 per cent. of rubber is produced in Malaya by natives, of whom he sometimes poses as the champion, at least 50 per cent. of any profit goes to them. Actually, the profit made cannot be computed for the simple reason that forward contracts have been made, and always are made, in an open market, and that deliveries are being made from prices ranging from 1s. 3d. to 3s. 8d. The total profit has nothing to do with this particular case at all.

Anyone can study what it is. The hon. Gentleman can get it if he studies the papers. What is important is that America, ourselves and Western Europe should start to co-ordinate our stock-piling and take such action as we may think fit between ourselves, to see that rubber and other vital raw materials do not reach destinations which we think undesirable. At the moment, there is not much sign of unity of thought and action such as took place when the Joint Raw Materials Board was working so extremely well. I believe that that is almost the first of the steps to be taken.

If we are really to achieve various objectives we must be very careful that precipitate and unilateral action does not harm too much the supply of dollars which we get from most of these raw materials. After all, we have been told by the Prime Minister and by other members of the Government that privations, hardships and sacrifices will have to be made. Those will be sharply accentuated and greatly increased if the Government show no more prescience and as much inertia as they have over the machine tools incident. We know quite well that if a severe drop takes place in our dollar earnings—and it must take place if within the sterling bloc, such dollar-earners as tin, wool, rubber, etc., cease to draw in the full crop of dollars—we shall find ourselves unable to buy the machine tools and other rearmament equipment which we have to get from America.

Parallel with the effort of seeing that raw materials are first of all obtained for ourselves and our friends, there must be a well thought out plan so as to ensure that, as other areas produce these things and as we are not the sole controllers and producers, we get the maximum in that direction. There was an incident before the war which showed how this could be done. That was the deal involving 100,000 tons of rubber willingly entered into at a low price by exactly that group attacked by the hon. Member for Ayrshire, South (Mr. Emrys Hughes)—the rubber growers—in exchange for cotton, which was very short at the time. I believe that that deal made in 1939 might well provide the pattern for the rather rapid action which we have to take. When questioned about stocks, the right hon. Gentleman always retires behind the smokescreen of its not being ill the public interest and security. If the truth comes out and insufficient stocks are revealed, then the public really will fall upon those who have used these arguments of "not in the public interest" as a smokescreen.

I believe that in many commodities the stocks are inordinately low. I can understand the difficulty when dollar earning was the only reason. But now that there is something even more important—our security and the proper running of our armament machine—let us have more action and less concealment. Let there be no waste of time, as we had the other day, by the Government simply agreeing that we were right about machine tools. Let us have a frank confession that new methods will be put into practice, and then we shall all feel a much greater sense of security. Further, as this Debate takes place on our initiative, the country will realise that an Opposition is, in its way, just as useful and often much less harmful than the Government.

5.20 p.m.

When I heard that the right hon. Gentleman the Member for Alder-shot (Mr. Lyttelton) was to open this Debate I was rather astonished. I could hardly believe that he could possibly associate himself with what appeared to be the attitude of the right hon. Gentleman the Leader of the Opposition, in his wireless broadcast, in favour of carrying on an economic blockade, as far as machine tools are concerned, of countries east of the Iron Curtain.

I was quite happy, therefore, to hear the right hon. Member for Aldershot confirm my anticipation of what he would do. He gave us his realistic experience and advice from his knowledge of these industries and production affairs. I must confess that my first impulse in taking part in the Debate was to reproach the Leader of the Opposition for his remarks on this subject in his wireless speech. One of our most essential needs today is that we should maintain good relations with the United States of America; and if there was one thing more calculated than any other to interfere with and injure those relations it was to suggest that there was any possibility of this country exporting war material to Russia while American soldiers were fighting in Korea.

My second thoughts were guided by the fact that the Leader of the Opposition came into power in 1940, in one of the most difficult times this country has ever gone through. He and his colleagues in the Coalition then faced a position in regard to machine tools which must have struck them all with horror, and which cannot be easily eradicated from their minds because, prior to the war, the machine tool industry in this country had been practically ruined. That was the result of the previous war, when it expanded to a tremendous extent. During that war the industry became so big that after the war there was no possibility of its finding a market for its tremendous output of machine tools. At that time there was no planning of how the industry was going to be rehabilitated. The Disposals Board disposed of machine tools in the country to various firms, I would not say recklessly, but as speedily as possible. The machine tool industry felt such a shock from this that it was left practically broken. Many of the machine tool manufacturers practically became agents for American, Swiss and German machine tools in this country.

When the last war broke out the machine tool industry was in almost a derelict position and, as my right hon. Friend the Member for Dunbartonshire, East (Mr. Kirkwood), knows—because he was one of the most highly skilled men in the industry—this country could not possibly carry on without tool makers, who are the basis of our productivity. Machine tool manufacturers went to garages and tramway depots and the like in an attempt to recover their displaced skilled engineers, who had left the industry because of its collapse after the First World War. Bribes were offered in public houses to get machine tool makers away from one firm to another.

At the beginning of the war, when the machine tool industry came before the Select Committee on National Expenditure, it was in the frame of mind that even though a war was going on the machine tool industry did not feel it could possibly risk another expansion, to be faced with collapse after the war was over. Indeed, the Select Committee—and the hon. Member for Croydon, East (Sir H. Williams), was chairman of an important sub-committee that was dealing with this—had to persuade machine tool makers that in the next period of peace the mistake made after the previous war would not be made again.

Is the right hon. Member really saying that at that period he is describing, the machine tool industry put their own private interests a long way ahead of the interests of the country?

Not at all. I said they were desperately afraid. They said so themselves, and if the hon. Member for Croydon, East, were here he would confirm what I am saying because he himself, as chairman of an important subcommittee, impressed upon the machine tool industry the necessity of expanding to help the country.

There was a tacit pledge given to the machine tool industry that when the war finished, that collapse would never be allowed to recur. If, as seemed to be implied on the wireless by the right hon. Member for Woodford, the British machine tool industry had been restricted only to markets in this country and the Colonies, and not to countries where machine tools might reach hands detrimental to this country, then the industry would have suffered the same fate after the recent war as it suffered after the First World War. The Labour Government kept faith with the machine tool industry.

May I remind the right hon. Member that the scheme concerning the disposal of machine tools was a plan put forward by the Coalition Government and, in fact, carried into force by myself?

I have said nothing to the contrary. I have simply pointed out that there was a tacit pledge which was carried out by the whole arrangement with regard to disposals. I simply pointed out that if these markets were closed to the tool industry, that industry could not survive after the recent war, any more than it could survive after the First World War.

The question of disposals was dealt with by a committee and the Board of Trade, during the period when the right hon. Member for Aldershot was Minister of Production and my right hon. Friend the Minister of Town and Country Planning was President of the Board of Trade. A scheme was drawn up so that the disposal of surplus machinery would not have the effect it had after the First World War. That was done in consultation with the machine tool industry. The Labour Government kept faith with the industry, and, since the war, every step taken with regard to the machine tool industry in this country has been taken in consultation with the trade.

The gentleman who misled the Leader of the Opposition by sending him those papers is not doing a service to the machine tool industry by trying to make a political issue of what is a very practical question. I was very much relieved to find the right hon. Gentleman the Member for Aldershot raise the matter today, not as a political stunt, as it was raised on the wireless, but as a practical issue to be faced by the whole House in the interests of the country as a whole.

I have a certain amount of sympathy with the right hon. Member for Woodford in his jumping to this issue, because of the experience he had in 1940, when he was desperately in need of everything the machine tools could offer. This country was handicapped for at least 18 months to three years by the position the industry was in. Anyone who was in the position occupied by the present Leader of the Opposition at that time must have been left with an impression with regard to machine tools that could never be eradicated.

There is one story—I cannot vouch for the truth of it—which illustrates the panic this country was in over machine tools. Lord Beaverbrook was Minister of Aircraft Production at one period. Everyone recognises that Lord Beaverbrook is a delightful pirate, who does not pay much attention to what is going on elsewhere when he has a job to do.

On a point of order. Is it in order for an hon. Member to describe a respected member of the other House as a pirate?

When I come to the story my hon. Friend will see the application of the word. The Minister of Supply of that period had managed, through his agencies, to secure some very valuable machine tools from France and he intimated to his colleagues that these machine tools were coming from France and would arrive in this country. He looked forward with delight to being able to solve some of his problems by obtaining them. Unfortunately for him, Lord Beaverbrook was listening; he said nothing, but before the Minister of Supply ever saw the tools Lord Beaverbrook's Department had sent down lorries, "pinched" them and taken them over for the Ministry of Aircraft Production. When even Ministries were fighting each other for machine tools, it is understandable that people who were in charge of the great responsibilities at that time can never forget the experience.

What I regret, however, is that the right hon. Gentleman the Member for Woodford did not even consult the Government Department before he made these statements on the wireless. We all feel a psychological reaction to the idea of supplying any arms to the enemy. That is not a new story; throughout the whole of his career the right hon. Gentleman must have experienced agitation against the supplying of arms to enemies. It is probably one of the most difficult problems ever to face a politician.

My first experience was as a lad in France during the Agadir crisis, when the cynical French told me it was simply another plan of the armament firms to get more orders. They said That Krupps, in Germany, used to inform Schneider's that they were going to make some new guns for the German Government in order that Schneider's could inform the French Government and get new orders for themselves. Since then there has been a Royal Commission on the Armaments Trade and the Americans have had an inquiry into the trade. After the First World War Rear-Admiral Consett explained that, even during the war, firms in this country were sending war material abroad. The very cement which made the pillboxes in France was being exported to Holland and then to Germany, and British soldiers saw the labels of British firms on the cement round the pillboxes from which they were being shot down.

Naturally, when anything of that kind is mentioned it arouses horror among the general population. The right hon. Member for Woodford still carries great weight in America, although he may not carry the same weight in political controversy in this country, and I suggest respectfully to him that when he speaks on the wireless he should weigh his words far more carefully than is necessary for ordinary people like myself. He is respected all over the world for his personification of the war purpose during the war. He is respected as a historian and a writer and, I believe, as an artist. We are, perhaps, alone in knowing his qualities in the histrionic field.

This world respect places upon the right hon. Gentleman an even greater responsibility. When he descends from this great pedestal which he occupies and begins to spatter political mud on his opponents he sometimes forgets that his words blacken the reputation of this country as well as the reputation of his opponents. Whether we like it or not, the Government of the country for the time being carries with it the reputation of the country, and when the right hon. Gentleman makes unfair or irresponsible allegations which arouse opposition and supplies our opponents in other countries with weapons to use against us, then I suggest to him that he makes a mistake.

Is the right hon. Gentleman not aware that the right hon. Member for Woodford (Mr. Churchill) has gained the respect of the country for bringing this matter to the notice of the House of Commons?

He could have gained the respect of this country had he raised it as a matter to be dealt with, instead of in a party broadcast in order to score points against the Labour Party. In other words, he did not raise it as a matter of statesmanship but as a point of party controversy, and I believe that, in that, he was misled and that he made a mistake.

Is the right hon. Gentleman not aware that for 2½ years the Government showed themselves utterly unable to make up their minds but that, within 2½ hours of my right hon. Friend hearing about the scandal, something was done?

That, of course, is quite an uninformed view and overlooks altogether the entire problem which I started to put before the House—that of the machine tool industry.

In the arrangements for the industry the question was whether we should satisfy our own needs at home whatever happened to the machine tool industry afterwards. The plain fact of the matter is that the customers of the machine tool industry all over the world had been deprived of British tools for nearly five years. If we were to forbid the export of machine tools from this country for another five years, then, at the end of that five years, the markets would have been lost for ever to British machine tools. That is very important to the long-term life of this country, not to the short-term programme.

I can give an example from my own experience. At one period after the First World War this country was lending money to Germany. We refused to allow Russia to buy paper mills in this country, but the Russians were able to go to Germany and buy the mills. The result was that, once these paper machines were established in Russia, the orders for replacements for the next 50 years would go automatically to Germany and not to this country. Thus, it is extremely important in engineering, if we wish to maintain an industry, that we should become the suppliers, the people to whom other countries are accustomed to turn for particular products. It was important that our machine tool industry should be allowed to establish itself in these markets.

The right hon. Member for Aldershot is the head of a great electrical machinery industry and he knows quite well that in the arrangements with that industry, we had to allocate a certain proportion of their products for export so that we could keep in touch with our customers abroad and keep supplying them. Had we not done that, America, Germany, Switzerland and other countries would have captured the markets, which would have been lost to us for ever. It is not quite so easy, therefore, to say that we should stop supplying machinery to other countries. After all, this country has to live in peace.

The whole purpose of the Opposition's Motion, as it first appeared—and I am glad that that impression has been corrected—seemed to be that we should declare economic war on Russia. [HON. MEMBERS: "No."] That was the impression we were given and I am very glad it has been corrected. But to declare economic war on Russia is a first step to some other kind of war. We cannot have economic war with fighting only on the one side. It is an awkward thing, I agree, but people are apt to fight back. Economic war, therefore, is two-sided and we must bear in mind that this country cannot live without trade with other countries. The Government had, therefore, to consider not only the present state of the machine tool industry but the future.

The Government proceeded along the lines that our business was to build for peace. One can prepare either for war or for peace. One can make provision in case there is war, but, quite clearly, one starts with the assumption that people intend to be reasonable and that eventually there will be peace. One cannot keep the country on a war basis for ever. The Government—and I am quite sure the House, too—still want to proceed on the basis that, with the establishment of the authority of the United Nations, we shall establish peace and shall be able to proceed on our peaceful ways.

Let us assume for a moment that we shall succeed, as I hope we shall. We still want to keep the markets in Russia because there is no country in the world where more development is required from an engineer's point of view. There is no greater market for our electrical industry; there is probably no greater market for the new hydro-electric engineering industry which we have been able to develop in this country. Although we must make it clear to Russia that we shall not help to make it possible for her to wage war on other countries, it is also important that she should realise that we desire to live at peace with her, to cooperate with her, and that we desire to trade with her as well as with the many other countries under her tutelage.

My purpose today is to plead with the Opposition, so far as that is necessary, not to make a political stunt out of something which is a very practical problem—out of something that may destroy one of our greatest industries. Of course, the right hon. Gentleman the Member for Aldershot was bound, with his knowledge of these industries, to take the view that the matter ought to be looked at in a practical way. He has done that, and, up to now, the Debate has been along practical lines. The hon. Member for Bury and Radcliffe (Mr. W. Fletcher) has a great deal of background knowledge of the subject, although he mixes it up a bit with political propaganda, but on many occasions he gives wise advice to the House.

In essentials this is a practical Debate, and I would appeal to the House to keep it on that level. If we were to go to the country at some time on the issue of the question of exports to other countries of goods which might possibly be of use in the event of war, a lot of history would be raked up that would not make the problem easier to debate. The long history of armaments trusts, of intrigues between the armaments firms of one country with those of another, and of the stimulation of demand for armaments, is a story that had better be left to lie on the shelf. In the situation in which this country is today we want to preserve unity of purpose. We ought to make it clear to America that this country is acting cleanly and fairly in regard to these matters, and repudiate any suggestion that we are doing anything detrimental to the well-being of the United Nations. We must make it clear that we stand for freedom in the world and that we still hope the world will move forward in peace.

5.42 p.m.

My original intention was to deal with the controversy that has arisen around Messrs. Craven Brothers who are constituents of mine, but the right hon. Gentleman the Member for East Stirling (Mr. Woodburn) has raised two issues with which I should first of all like to deal. First, he has said that the Motion which the Opposition has put down really means the economic blockade of the Soviet Union and the countries behind the Iron Curtain. We on this side of the House absolutely repudiate that. The second point he made was that the issue raised by my right hon. Friend the Leader of the Opposition was a political stunt. We repudiate that. My right hon. Friend raised the issue as a loyal subject of the Crown because information was given to him which had already been imparted to the Government and upon which they had failed to act.

I do not want to be unjust to the right hon. Gentleman the Leader of the Opposition. Can the hon. and gallant Gentleman say whether the matter was raised on the Floor of the House by the right hon. Gentleman, or with the Government Department concerned, before he raised it on the wireless?

Obviously, the House was not sitting, and the matter was not raised on the Floor of the House; but when the right hon. Gentleman the Leader of the Opposition says in public, over the radio system of this country and of the world, that he brought the matter to the notice of the Government, I believe him—[HON. MEMBERS: "He did not say that."]—and I believe that the mass of the people believe him.

I have the actual script of the right hon. Gentleman's radio broadcast here, and there is, in fact, no reference whatever to bringing it to the notice of the Government.

That is a matter the hon. Gentleman and I can join issue on, but I am certain my right hon. Friend did bring the matter to the notice of the Government.

This Debate has arisen largely owing to the broadcast of my right hon. Friend. It centres around Messrs. Craven Brothers, who are located in my constituency, and for that reason I intervene for a few moments. Hon. Gentlemen opposite and the Socialist Party have sought to reflect upon Messrs. Craven Brothers and upon their managing director. Now, the firm of Craven Brothers is no mushroom concern. It has been established almost a century, and during that time has carried out important armaments contracts not only for this country but for countries overseas and for our allies in two world wars. It has been suggested, in this House and outside, that the managing director is a Tory, or is a politician. Well, that gentleman is probably better known to me than to many other hon. Members here, and all I can say is that I have yet to find out whether or not he is a supporter of the Conservative Party. All I can say is that Mr. Greenwood with great regularity attends meetings of all political parties to find out what it is all about.

My right hon. Friend the Member for Aldershot (Mr. Lyttelton) has dealt in general terms with the vital issues involved in this controversy. I should like to refer to one or two matters he has touched upon. There are two points made in the radio speech of the Prime Minister—a speech remarkable for its lack of leadership for this country, and also remarkable for the personal attacks which it made upon the Leader of the Opposition, to whom the Prime Minister and many of his colleagues owe so much for what happened during the years from 1939 to 1945.

For the past 20 years Messrs. Craven Brothers, like many other great engineering concerns in this country, have carried out contracts for the Soviet Union. During that time Governments of every complexion have encouraged the heavy engineering industry in its export markets, and have encouraged it to export goods to the Soviet Union and to other countries. Today, however, conditions are very, very different. What would the Socialist Party have said if, in 1939, the aircraft industry of this country had been exporting aeroplanes and aero engines to Nazi Germany?

That is what the Government are doing today; they are permitting the export of essential war material to what is admitted on all sides to be the potential enemy of the Western democracies. Today, we all agree that the only possible aggressor is the Soviet Union and its satellites, and that has been proved in Korea in recent weeks. Not only this House but the whole country was amazed and incredulous at the naïve remark of the Prime Minister from which it appeared that he did not appreciate the difference between the Soviet Union today and the present Republic of Poland.

Will the hon. and gallant Gentleman excuse me a moment? I am sure he is not doing it deliberately, but that is a complete misrepresentation of what my right hon. Friend said last week. There were some jeers from the Opposition at his reference to the fact that these machine tools were going, not to Russia, but to Poland, and my right hon. Friend was making clear that there was a difference. The difference was a treaty obligation in respect of Poland which did not apply in the case of Russia, and which I have already explained to the House this afternoon.

When there is an aggressor in the world, it is time the Socialist Government paid more attention to realities than to treaties.

Under the principle which the hon. and gallant Gentleman is propounding, would he say to Craven Brothers that they should renounce this contract themselves?

In reply to the hon. Member, I say that it is the duty of the Government today to see that no war potential is exported to a possible enemy.

It is no use the Government saying that centre lathes, boring machines and all the rest are for civilian use. Anybody who has been in an engineering shop or has been engaged in engineering production is quite well aware that machines such as I have enumerated are just as useful, for war production as for civilian use, and even more useful. It is very much the same as saying that a civilian aircraft cannot be adapted quickly for bombing or military transport purposes. The immense amount of labour which is employed in building these machines for export to a possible aggressor behind the Iron Curtain would, I submit, be much better employed in producing our own defences, which have been so sadly ignored by the Government.

I also suggest that many of these heavy boring machines, centre lathes and all such machines are so badly needed here that the work which has been put in on them would have been better employed in our own home industry. The Prime Minister said:
"We are watching these matters with close attention, and shall not allow such exports to damage essential defence needs."
We of the Opposition welcome that statement, but I do say that, in the meantime, by the action of the Government, our defences are being seriously imperilled.

What must the Americans think? Quite recently, the Prime Minister said in this House that without American aid there could be no effective rearmament. Yet, at the same time and even up to the present moment, we are permitting the export from this country of vital war materials. Like so many things which the present Government do, it simply does not make sense.

The Prime Minister has suggested that these goods are transhipped to Russia under some kind of barter agreement, but I submit that that is really, and perhaps quite innocently, misleading the country, because these goods which are exported by the firm of Craven Brothers are in fact paid for in cash, and, likewise, any imports of foodstuffs, timber and the like are paid for in cash. There, I agree, some action is taken to maintain the necessary financial balance, but I do not think that, in the critical state of the country today, there is any excuse for the Government not breaking any agreement which might exist in regard to essential war materials.

I would point out in passing that after the war, Russia did break agreements with the British Government to the extent of some £30 million. They cancelled contracts for engineering equipment. [HON. MEMBERS: "When?"] In 1945 or 1946. At that time, Craven Brothers themselves had an order cancelled which approached £100,000. Today, Craven Brothers alone have orders with Russia amounting to about £500,000, and for Poland for a similar amount. In fact, when we compare these figures with their exports to Russia over the last 20 years, which amounted on the average to about £4 million, they were exporting more in pre-war days than today.

The hon. and gallant Gentleman says that was in 1945, when peace had been declared and Russia cancelled large orders in this country. Perhaps they were orders for war material which was no longer to be used, since peace had come. Would he have insisted on sending that material to Russia?

I am not suggesting that at all, but the right hon. Gentleman cannot say that, so far as this country, the Soviet Union and the whole United Nations are concerned, we are at peace today, and the sooner that Members on that side of the House begin to look after this country first, the better.

I only wish to refer to one other point, and that is the question of the Russian inspectors in our factories. Any works manager or any engineer knows that, if they have inspectors of a contractor in a factory, whether of a home contractor or a foreign one, it is virtually impossible to keep them in one section of the factory. [HON. MEMBERS: "Why?"] I will tell hon. Gentlemen why. This applies particularly in the production of heavy equipment running to many feet in length. If hon. Members opposite were to visit an engineering works, they would find that out very quickly.

I believe that the time has come when any mechanical engineering equipment which is a real war potential, which is being made in this country, and which could possibly be made specifically for the defence of the Western democracies, should be prevented from being exported to any possible aggressor. Finally, I think that the time has come when all engineering staff inspectors of the Soviet Union, of the present Polish Government or of any other country behind the Iron Curtain should be prohibited from entering any works which is making munitions of war for His Majesty's Government,

6.0 p.m.

I am grateful for being called immediately following the hon. and gallant Member for Stockport, North (Wing Commander Hulbert) whose constituency is that in which Craven Brothers have their works, because I want to deal with some of the points which he has raised.

I think that most hon. Members will be greatly struck by the mildness of the atmosphere engendered by the right hon. Member for Aldershot (Mr. Lyttelton), following the broadcast speech of the Leader of the Opposition and the general Press campaign which resulted in the country. I deny that anywhere in that broadcast is there an indication that the Leader of the Opposition had ever brought this matter to the notice of His Majesty's Government. I cannot find it in "The Times," which I have in my hands, and which I have been through since the hon. and gallant Gentleman spoke. I presume that he made that statement in all good faith, but he can take it from me that he is mistaken.

I want to refer particularly to what the Leader of the Opposition said about the men at Craven Brothers who make these machines. I think that I can speak with more authority than the hon. and gallant Gentleman who presumes to represent them. I have been a brother of their order for over 30 years, and they have written to me and asked me to put their case today. I am referring to certain words in the broadcast, and I do not rely upon a faulty memory but upon the record. The Leader of the Opposition, quoting Mr. Greenwood, said:
"He could not get clear guidance. He told me that his highly skilled craftsmen were seriously disturbed at doing work of this kind for Soviet Russia and satellite Poland, which they feared would weaken our country and strengthen its most likely assailant."
What authority was there for that statement? There was none. The convenor of shop stewards at Craven Brothers was furnished with a draft of the speech before the Leader of the Opposition made it, and they had plenty of time to consider this matter. I believe that they were confronted with it on the Saturday morning that he made it. On the following Monday—the earliest possible date—they unanimously passed this resolution:
"Regarding the statement made in Mr. Churchill's broadcast on Saturday night, the shop stewards' committee wish to dissociate themselves from the statement given relevant to the workers of Messrs. Craven Brothers. There is no resentment whatsoever by them regarding Russian orders or Russian inspectors being in the works and we, the workers, are prepared to carry out any work sanctioned by the Government."

Will the hon. Gentleman agree that the statement which he has just read was the result of a very unrepresentative meeting of some people of Craven Brothers, which was subsequently repudiated by the mass of the workers?

No. I hope that the House, in this matter, will at least treat me as a national representative of the Amalgamated Engineering Union, making a responsible statement.

No, I cannot give way, as I have not yet finished my answer. I will take my time on the matter. This was a properly convened meeting of the shop stewards of Craven Brothers. The resolution was passed unanimously by them, and I hope that it will not be suggested that there has been any Communist influence, because there is not a single member of the Communist Party on the shop stewards' committee of Craven Brothers.

Because I, in contradistinction to the Leader of the Opposition, verify my statements before I make them. I have asked for the closest inquiries to be made into this matter, and I am attempting to make out an official case on behalf of men who have been misrepresented by the Leader of the Opposition. That was a representative meeting and the resolution was unanimously passed on Monday, 28th August. It was a representative meeting of the shop stewards' committee.

I know that there is great difficulty in speaking to hon. Members who are not trade unionists and who know nothing about the inside of an engineering factory. I was a shop steward before I came here. It is, therefore, rather difficult to know where the Leader of the Opposition got his information, when he said that he was speaking on behalf of the men of Craven Brothers. [Interruption.] I think this type of interruption comes rather badly, bearing in mind the sort of thing said the other day in this House by the Leader of the Opposition when he spoke about the solid qualities of British trade unionism. He said:
"We rejoice with them that the Trade Union Congress should have so decisively ranged itself, as was only to be expected by those who understand the solid qualities of British trade unionism with the unaltering and unflinching defence of the free way of life."—[OFFICIAL REPORT, 12th September, 1950; Vol. 478, c. 974.]
These are the British representatives of trade unionism, and we cannot say in one breath that these people represent the solid core of British democracy—and the Leader of the Opposition would have remained in a trade union if the bricklayers had let him—and then repudiate constitutional trade unionism in the way in which the hon. and gallant Gentleman repudiated it. I think that he will have to take that statement from them. In case anyone thinks that that is a misstatement, I would point out that this matter was also brought before the Engineering and Kindred Trades Federation on a day last week of which I could give the date.

The hon. Gentleman said that he took great care to look into what actually took place. Does he know that the shop stewards met without contacting the representatives in the various shops of the rank and file workers, and that the workers resent very much the statement made in their name, when they had not been consulted?

The answer is that the inquiry that I have had made was by two full-time officials of the Amalgamated Engineering Union, representing that solid core of patriotism which hon. Members opposite were applauding last week, and they met as quickly as possible. I have that statement, and it says that there was an attempt by a certain individual—one person—to refute the shop stewards' decision but that this failed through lack of support. It is true to state that the overwhelming majority of our members fully endorsed the resolution of the stewards. That is the statement which was made, and I do not know from where the hon. Member for Peterborough (Mr. Nicholls) gets his information.

I would point this out to the House. I have also had it from the Secretary of the No. 9 Manchester District Committee of the Confederation of Engineering and Shipbuilding Unions, which embraces the 37 unions catering for the engineernig workers in Manchester, that at last night's quarterly meeting of shop stewards, which is a far wider meeting than Craven Brothers, it was unanimously agreed to support the resolution of the shop stewards of Messrs. Craven Brothers.

Perhaps when the hon. Member interrupts me he will tell me from where the Leader of the Opposition gets his information. Was it from some non-unionist, or are they really supporting our people, because, after all, Members opposit have been courting the trade union movement lately and it comes very ill from them if they are saying that a representative body of the trade unions cannot be trusted?

May I remind the hon. Member that the shop steward who was most active in convening this meeting was a Labour councillor and has a certain dual loyalty to face up to?

That, again, is a curious doctrine coming from the Opposition. Is the hon. Member trying to suggest that all trade union members are not members of the Socialist Party, when the Opposition are repeatedly telling us that among their ranks are hundreds of thousands of trade unionists? It so happens that it is a Labour councillor who is convenor at this factory but it does not necessarily follow, simply because one is a Labour councillor, that one necessarily distorts a resolution, any more than we have a guarantee that the Leader of the Opposition sticks strictly to the truth in his broadcasts.

I have been looking into this matter, and I asked the Amalgamated Engineering Union to make inquiries so that I could have something which could be vouched for in this House. Therefore, we are speaking of men of honour. I am honestly saying what I believe is right, coming from men who speak the truth who would not hand me information which I could not use. I am absolutely satisfied that it is true. I now come to my next point. It so happens that the Manchester district secretary—

On a point of order. The Motion and the Amendment deal with machine tools and strategic war materials. I have heard a discussion for the last 10 minutes about an engineering firm called Craven Brothers and the Amalgamated Engineering Union. Has this anything to do with this Debate?

I thought it was linked up with what we are debating.

The Manchester district organiser of the Amalgamated Engineering Union said that he discussed with the shop stewards and the Amalgamated Engineering Union secretary, Mr. Jones, the history of the work undertaken by this firm for the U.S.S.R. I must point out that the Manchester district secretary of the Amalgamated Engineering Union is past convenor of shops' stewards at Craven Brothers and may be presumed to know something about what goes on. Both agreed that 70 per cent. of the firm's output between 1932 and 1939 was for the U.S.S.R. Mr. Jones, who is now our Manchester district secretary, and the secretary of the works committee, Mr. Greenwood, stated that if it had not been for these orders in 1938, they were afraid that the firm would have had to close down. They also stated that they wished English firms would pay as regularly and as promptly as the U.S.S.R.

If we go back to-1938 we are certainly getting beyond the terms of the Motion and the Amendment.

With great respect, I think it is very relevant to the future of this industry, which is a highly skilled one, that we should prove that the goodwill built up between the wars should not be recklessly thrown away. Therefore, I am bound to make the point that the resolution I have read in regard to what was said of the people at Craven Brothers has a bearing on that. It will be seen that there was a time when these people depended for their livelihood on Russian orders alone. If they have passed a resolution which indicates they are willing to leave the matter to the Government rather than to the caprice of the Opposition, it merely indicates that they have memories of unemployment under the Tory Government.

I am sure that the hon. Member is perfectly sincere in what he is telling the House, but has he any connection with the machine tool industry?

I have worked in it all my life. I really thought, when the Minister of Defence used the phrase "jigging up for production" the other night, and Members on the other side laughed, that they thought it had something to do with my hon. Friend the Member for the Exchange Division of Liverpool (Mrs. Braddock). It merely indicates the abysmal ignorance of Members opposite. We are discussing today war potential equipment, but Messrs. Craven Brothers, from 1932 to 1939, were selling to the Soviet Union machine tools recognised to be war potential, including gun boring machines and rifling machines.

I really think that if we go back as far as that, we are getting beyond the terms of the Motion and the Amendment.

Is it not the whole point of the Opposition's Motion that the Government are exporting war potential material to some potential aggressor? Is it not in order, therefore, if we repudiate that by pointing out what the Opposition did when they were in office?

Further to that point of order. Is it not the case that in 1938 and 1939 we were hoping to have Russia as an ally?

I am very anxious not to get at variance with the House or Mr. Deputy-Speaker. It has been suggested here that Russia is obtaining our secrets because of visits by inspectors to these works. I was giving a catalogue of machine tools, including all the well-known ones associated with war potential, which are already in the Soviet Union, and in respect of which the Soviet Union is therefore in possession of all the requisite information. During the whole of the time of which I am speaking Russian inspectors also had free access to the factory, with full opportunity to view all these machine tools.

To turn to the question of Russian inspectors, my information is that there has been only one visit by a Russian inspector since the war; that was about eight weeks ago. The majority of people in the works did not know he was there.

I would ask the hon. and gallant Member to consult the hon. Member who interrupted me a few minutes ago as to whether an engineering super man could pick up in one day the whole of what is happening in the works of Craven Brothers.

I can answer the hon. Member by saying that I know very little about engineering. [HON. MEMBERS: "Hear, hear."] In spite of the jeers from hon. Gentlemen, I happen to be a director of a large engineering firm near Craven Brothers, about which I propose to speak later. The inspector to whom the hon. Member has referred was there for a whole day. I was there for two minutes and in that time I saw the most secret machine in the whole factory.

The fact that the hon. and gallant Member saw it, does not indicate that he understood it.

Since I am again challenged, I would say that the machine happens to be a highly secret one which we cannot mention in this House. I know exactly what it does and exactly how it works.

I can only express my surprise that the hon. and gallant Member was given any such information.

There was very little of this work between 1945 and 1949. I followed with great interest the list given by the right hon. Member for Aldershot of what is actually in Craven Brothers at present. Although the Leader of the Opposition did not say so, the Press magnified this aspect the next day and said that thousands of pounds' worth of machine tools were awaiting shipment from this firm. I suppose that is legitimate exaggeration of advocacy from the Conservative Press. The fact is that not one of those machines has yet been completed.

The people at Craven Brothers express some concern at the effect of any cancellation of orders because such an effect is very difficult to estimate. The firm claim that they would be able to dispose of these machine tools to other firms on their order list. Craven Brothers have at the present time something like £3,500,000 worth of orders, of which about £500,000 worth represent orders for the Soviet Union and, I believe, Poland.

I accept that. But even if it is so, I would seriously ask the House to consider the point made by my right hon. Friend the Member for East Stirling (Mr. Woodburn) about these industries—that these kinds of exports which are on our list in certain fields are not easily picked up again. Those who went through the depression in the engineering industry and know something about the unemployment there was, can verify the difficulties which we ran up against in those days.

I think it is appropriate to remind the House—because we are speaking not about defence only but about not conducting an economic blockade against Russia which may produce unemployment later—of a statement made by Sir Alfred Herbert, who was President of the Machine Tool Trades Association, in a letter to the "Manchester Guardian" as far back as 1932. It was of that period he was writing. He stated:
"Russia is the only country in the world which is engaged in a wide scheme of industrialisation and consequently it is from Russia alone that large scale orders for industrial plant are available."
That is still true in a peaceful economy. The point was made by my right hon. Friend the Member for East Stirling that it is no use keeping the whole of our economy on the basis of a war-time potential only to find afterwards that we have no market for our machine tools. I am mentioning what Sir Alfred Herbert stated then because it may be that in the future the same sort of considerations will apply. He wrote, and no one will accuse him of being anything but a Tory:
"The importance of her orders can be gauged from the fact that for a considerable period she has taken 80 per cent. of total exports of British machine tools."
That is the President of the Machine Tool Trades Association writing at that time.

The hon. Member is quoting Sir Alfred Herbert in 1932. Would he mind quoting a statement by Sir Alfred Herbert which appeared in the Midlands Press yesterday, recommending the complete banning of the export of all machine tools to Soviet Russia?

That is because, like a good Tory, he is speaking in terms of the present hysteria of the Conservative Party. I am quoting what Sir Alfred Herbert stated at a time of depression in this country. To continue with my quotation from that letter—

"and this is in spite of the fact that she is buying on an enormously greater scale in Germany and to some extent America, while Canada by contrast has been taking a minute fraction on the remaining 20 per cent."
I have made that quotation to underline the point made by my right hon. Friend the Member for East Stirling that we may still need this type of market in the future. It is a fact that when a recession from armaments comes about that can well be, as the period between the two wars showed us in the engineering trade, a time of depression and unemployment in the absence of markets in the East.

I suggest that the hon. Member is rather missing the point. We are not interested in our exports to Russia in 1922. What we are interested in today is whether Craven Brothers and other engineering firms of a like calibre and reputation should today export material to a potential enemy. That is the position now, not what happened 20 years ago.

It was due only to the shortsightedness of the Governments that never looked before their noses economically, that we ran into unemployment and recession. That is a relevant point to make. I support the Government in this matter. I would not have any war potential sent to Russia at present.

The type of argument that we hear put up at present completely ignores the position of Yugoslavia. Is it not a fact that we have said that Russia's policy is obviously warlike because she has declared an economic blockade of Yugoslavia? That is so. We have also said that Stalin's protestations about desiring peace and the peace policy for which he claims the Soviet Union stands cannot be taken at their face value and we have based that view on his economic policy towards Yugoslavia almost more than on anything else. I am asking the House to have some consideration for the history of the matter and not to proceed with the degree of haste that some people desire; to look very closely and cautiously indeed. But I rose mainly to repudiate the Leader of the Opposition who quoted the people who work at Craven Brothers in a way which never represented their point of view.

6.30 p.m.

I am very glad to have the opportunity of speaking in this Debate. Despite what the hon. Member for Leeds, West (Mr. Pannell) has just said, I am one of the very few people in this House who is actually engaged in the machine-tool industry. Some of us get a little mixed up when we talk about machine tools. Actually it is a very tiny industry for all its great importance; it is only a very tiny section of the great engineering industry, with which he has nothing to do.

If the hon. Member wishes to have my authority in this matter, it is that I started work in the Newall Engineering Company, so he will see that my title is as good as that of anyone in the House.

I am glad to hear that. The Newall Engineering Company, as the hon. Gentleman says, is a very well-known name in the machine-tool industry. I am glad he has cleared up that point.

My right hon. Friend the Member for Aldershot (Mr. Lyttelton) has today rendered this country a very great service in drawing attention to a very dangerous state of affairs. That he has rendered that service is made abundantly clear by the fact that the Government have given him all that he asked for. I suppose that is the reason hon. Members opposite appear rather to wish the Debate to turn on what my right hon. Friend the Member for Woodford (Mr. Churchill) said or did not say in his broadcast. We should remember that before that time the appropriate Ministry had in their possession a dossier dating back over 2½ years on this subject. Despite the fact that the Government have now given in entirely after the Opposition have shown them the right way, their history in this respect may lead to misconception as to their duty to the country. I have no confidence in a Government or the Members of a Government which has behaved as this Government has about the export of machine tools.

The matter does not necessarily turn on the immediate question of armaments. Obviously, once Korea started, this reconsideration was vitally necessary. The subject goes back to the date when many of the orders we are discussing were first placed, and that is probably three or four years ago. My information is that the Russian machine-tool industry is very much more advanced than many hon. Members would wish to believe. The Russian industry is using transfer machines whereby the work pieces are transferred from machine to machine automatically. When we tried to introduce these machines in this country, as in Austin's, there was some immediate hostility by the trade unions. It is an interesting commentary that they are used in Russia and yet we sometimes find the greatest difficulty in employing them here because of the hostility of the trade unions whose case has just been put by the hon. Member for Leeds, West. I notice that he does not disagree.

Is the hon. Gentleman stating that there are machine tools in existence in Britain which employers cannot utilise because of the hostility of the union concerned?

No, Sir. I was referring to a specific case, that of the Austin Motor Car Company where the difficulty will, I hope, in due course be satisfactorily overcome. I was saying that the Russian machine-tool industry is in many ways very advanced, but it is not in a position to produce work of the standard that we can attain with our high tradition of workmanship. It is all right when making lorries or gun carriages to accept a fairly low tolerance, but in the case of jet engines and the other finer weapons of war we have to strive for a much higher standard of craftsmanship, and in that respect this country stands supreme. This should have been known to the appropriate Ministries for five or even 10 years and it was a very serious decision to take at any time, quite apart form the immediate situation, for this country to supply the vital deficiencies in the Russian machine-tool production.

The total volume of our exports is probably about 5 per cent. of Russian machine-tool production; thus it would be nonsense if we stopped sending small centre lathes to Russia in the ordinary way, for there is a two-way trade here and we are importing certain types of machine tools from behind the Iron Curtain. We should trade with the Iron Curtain countries to the greatest possible extent consistent with certain safeguards, but we should satisfy ourselves that we are not building up trouble for ourselves in the ordinary trading sphere by equipping our competitors too well.

In that respect the Government have failed lamentably in the past. They should have considered that by exporting certain high precision machine tools to Russia they were probably filling a vital gap in Russia's production. Surely it would have been commonsense to assume that we were building up a competitive power in Russia which might at some later date affect our policy of full employment by making Russia too important a competitor. That is why I say that this Debate is much more far-reaching than the immediate problem on which the Government have met us by agreeing that certain machine tools should not be exported until very full inquiries have been made.

The whole policy of the Government with specialised machine tools has been wrong from the very beginning. The Government bear a very grave responsibility. I do not wish to bring acute party political controversy into the Debate after it has been put on such a factual basis by my right hon. Friend the Member for Aldershot, yet we cannot but conclude that if the Government had spent more time looking into our world trading position instead of being obsessed with bringing into being the new Socialist Utopia, we might not now be experiencing this problem.

I gather that the hon. Gentleman thinks that we should not have exported high precision machine tools. That industry was not very well developed in this country compared with America. We had so many of these high precision tools to dispose of after the war that we practically flooded our market with them. If we do not export them, how are we to develop an industry which would be of vital use in producing these tools if war came?

I thank the right hon. Gentleman. His intervention enables me to refer to his speech. Having listened to it very carefully, I am not surprised that he and I do not agree about the machine-tool industry. I am afraid that I could not agree in any degree with anything that he said in his speech. I specifically said that I believed it was wise and proper that the general trade between the machine-tool industry of this country and Russia had gone on in what I would call the "bread-and-butter lines." What I was referring to was the type of machine about which we are talking today, the type of high precision machine tool which only this country can produce.

I do not hold the view which some hon. Members opposite seem to hold that the American machine-tool industry is superior to our own. It is not. Our own small machine-tool industry for craftsmanship and special machines is the finest in the world and that is why it is very dangerous for us not to subject these exports to an inquiry, not only on the ground of armaments but almost entirely on the sensible ground of why we should export capital goods with which to equip our competitors.

Does the hon. Gentleman imply that we should cease exporting machine tools not only to Russia but to every other country? If so, what will become of our machine tools?

The hon. Member means that we should cease exporting them? Perhaps I may answer his interruption by saying that on 27th June I asked the Parliamentary Secretary to the Ministry of Supply whether it would not be wiser to reconsider that very point. Let us get this matter straight, as there seems to be much misconception in this Chamber about the machine-tool industry. I am not referring to the vast mass of the production of smaller firms, or even of the general purpose machine-tool firms in this country. They do not enter into this Debate at all and it is not my intention to bring them in. The more export trade those firms do, the better it will be for the trade of this country.

I asked the Ministry of Supply on 27th June whether it would not be wiser to retain a larger proportion of the machine tools here at home, and his answer was:
"The Government consider that present arrangements afford the best balance between the needs of home industry and the need that the machine-tool industry should make the maximum contribution to exports, particularly to hard currency areas."—[OFFICIAL REPORT. 27th June, 1950; Vol. 476, c. 214.]

Only for these special purpose machines. I say that this particular problem should have been looked into at an earlier date.

Now may I say a word about the present position? The Government have now given us everything we asked for, but I very seriously question whether this action would have been taken but for the speech of my right hon. Friend the Member for Woodford. Many hon. Members have almost wasted our time in calling that speech to account. I wonder whether anything would have been done if my right hon. Friend had not made that broadcast.

Is the hon. Member making the point that the Government might not have done anything but for the broadcast by the Leader of the Opposition? He must be aware that 18 months ago much war potential was put on licence and that the list has been added to from time to time.

I quite agree. The hon. Member is now referring to the export of various items that are on the prohibited list or for which an export licence is required. For all his history in the Newall Engineering Company, I think he does not quite realise what kind of machine tools we are talking about.

I do not want to delay the House, especially after some of the lengthy speeches which we have had. I have dealt with the point that I think the Government are very seriously to blame for not realising the general importance of these special tools from the trading point of view. Now I will refer briefly to the point that the Government should also be held very seriously to account for their failure to take action from the war potential point of view until the necessity was so thoroughly rubbed into them, first by my right hon. Friend the Member for Woodford, and secondly by my right hon. Friend the Member for Aldershot so ably today.

The machine-tool industry, as the right hon. Member for Clackmannan and East Stirlingshire truly said, pays tribute to my right hon. Friend the Member for Aldershot for the disposal scheme, which undoubtedly did much to save the machine-tool industry from difficult times after the war. That scheme was produced by the National Government under the driving force of my right hon. Friend, although I thought that the right hon. Member for Clackmannan and East Stirlingshire wanted to pinch the credit for his party. I do not think that it lies on that side of the House.

I did not even mention that for the first two years of the war I was responsible, under the Government, for the scheme. The present Minister of Town and Country Planning was at the Board of Trade when the Board of Trade drew up the scheme. I am not denying any credit to the right hon. Member for Aldershot, but he seemed to be claiming the whole credit for himself.

I am sorry if I misconceived the purpose of the speech made by the right hon. Member, but I do remember his saying that the Socialist Party had kept faith with the machine-tool industry.

Perhaps I may come to my second point, so that I may sit down and let some other hon. Member have a chance to speak. I just wonder whether the Government now realise the importance and the scope of this problem. I think that their reluctance to give us any answer about whether, for instance, large planers would be put on the list, is a sign that even at this stage they have not thought round the whole problem. My only purpose is to ask the Parliamentary Secretary—I am not quite sure who is in charge on the Government Front Bench at the moment—to note that if this scheme is to work, it is very necessary that what I call the "specials" in the machine-tool industry should all be reconsidered.

I do not think that by removing these special tools from our trade with Russia we shall affect the volume a great deal. I do not think, therefore, that any question of not sending enough to Russia to keep reciprocal trade going arises in any way, but I think that we are entirely justified in this country at the moment—I personally think we were justified all along—in holding back special machine tools of this kind. After all, the Russians know that this is a type of tool into which we put our very highest standard of craftsmanship. This country produces the very highest type of machine tool, and is ahead of any other country. Therefore, it is only right and proper that we should keep them at home when our need for them is great. I do not see how that affects trade with Russia in any way, or that it is anything that the Russians should grumble at.

There are two further small points to put to the Parliamentary Secretary. I have a telegram in my hand from one of the works in my constituency. The people there are watching this Debate, and they raise a practical point. They ask if the Minister will consider, in this matter of stopping the export of machine tools, whether we should also look at the question of the export of technical drawings. I do not necessarily mean the drawings themselves being exported, but their publication in technical journals in this country. I refer to particular items of drawings which we would not wish to be put into circulation. I hope that we shall be told that this point also will be looked into.

We are all saying, and rightly so, as I think the House is united on this point, that we do not want our soldiers or American soldiers to be killed in Korea knowing that we have had some responsibility for making the armaments that brought about those casualties. I therefore ask the Parliamentary Secretary to watch one other point. The German machine-tool industry in the West is already leading the machine-tool industry in Europe. It has already overtaken our position. It is producing very large quantities of machine tools, including many of the heavy items that we are talking about.

Would it be very sensible to tighten loopholes here and still allow an unrestricted flow of this type of machine tool from Western Germany to the Eastern zone? For all I know, this point may have been checked up. I know that the Western German Government follow in step with the Americans and ourselves in regard to restrictions on reports. I hope we may be told that the Government will look into the position in Western Germany, in order to see that we are not plugging a leak here and leaving another leak wide open somewhere else.

6.49 p.m.

The right hon. Member for Aldershot (Mr. Lyttelton) indicated in the course of his speech that there might not be a Division at the end of the Debate. That was a wise course. On the wording of the Motion and the Amendment there appears to be nothing contradictory between them, and if there were a Division, my hon. Friends and I would have to support the Government's Amendment as being more comprehensive.

In this matter it is very important that we should look to the future rather than to the past. It would be a great mistake to concentrate most of our attention during this Debate upon what has been happening over the past few months or years. The important thing is to develop a consistent policy for the future. It is clear—and I am glad—that all parties in this House are against any action which might be interpreted as a general economic blockade of Russia and her satellites. That is a good thing because it would be disastrous if we tried to set in motion an economic blockade. It would only be one step nearer war.

The supplies we have obtained from Russia have been of great value to this country, particularly grain and timber. Moreover, while there is still trade between east and west there is hope for peace. Trade with the satellite countries is particularly valuable because trade contracts may be the only friendly contacts between us and those countries for many years. It would be a great mistake to suppose that countries with a strong national consciousness of their own, such as Poland, have forever passed behind the Iron Curtain. So I feel strongly that we should maintain the contact of trade.

Now I come to the question of what should be prohibited. The first thing to bear in mind is that it is an extraordinarily difficult question. In the present state of the world, it would be wrong to supply armaments or machine tools used exclusively for making armaments to potential aggressors, but difficulty arises in the case of tools which can be used for other purposes as well. In dealing with manufactured articles, the President of the Board of Trade said that we would not allow these to go out of Britain if we or our friends wanted them. Would the Parliamentary Secretary to the Ministry of Supply deal with the following point? There might be manufactured articles which we and our friends do not require but which might be capable of being used for manufacturing armaments. In such a case, would it be Government policy to permit the export of those articles to Russia? I think that was a gap in the speech of the President of the Board of Trade.

Next, there is the question of raw materials. There, the main principles on which the Government are acting are right, that we must not let raw materials go out of our possession or be sold if we need them ourselves, either for our civilian needs or for the re-armament programme. It is important, however, that as regards manufactured articles, machine tools, and raw materials, such as wool and rubber, we should act in the closest co-operation with our friends in the Western world. It is no use our prohibiting an export from Britain if another country can supply it.

There must be more than periodical consultation. This question is closely bound up with the general Defence arrangements of the West. I should like to see an economic organisation set up in connection with the North Atlantic Treaty which would survey the whole raw material and manufactured article position. Such an organisation should not deal merely with the prohibition of exports, although it would have to deal with that, bearing in mind the need for all countries which are in the Atlantic Pact to have a common policy. Such an organisation should pay heed to the position as regards supply of raw materials as well.

The question of raw materials is bound up with that of stock-piling. Indeed that was apparent from the speech of the right hon. Member for Aldershot (Mr. Lyttelton). That brings me to the suggestion which was made at the Council of Europe by the hon. Member for Coventry, North (Mr. Edelman) that we should consider the setting up of joint purchasing agencies which would prevent competition between members of the Atlantic Pact who are all bent on stockpiling essential raw materials. Prohibition of the export of finished articles and raw materials to Russia and her satellites and the building up of our stocks are all part of one large question which should be dealt with at an early date by an international organisation, and I should like an assurance from the Government that such an organisation is being considered with some urgency.

It is not an easy problem because, while such an organisation would function more easily in connection with the Atlantic Pact countries, we have to consider the position of friendly countries not in that Pact, such as Sweden, Turkey, Greece, Ireland and a potentially friendly country, Yugoslavia. There must obviously be some liaison all the time with those countries to prevent leakages of essential articles and also to prevent competition in the purchase of materials. I hope that this international aspect of the matter is being studied now. Whether we like it or not, there will have to be a great deal of planning on this matter in the next few months. That planning must be international and I hope the Government have already set it in motion.>

6.57 p.m.

The hon. Member for Merioneth (Mr. Emrys Roberts) was good enough to refer to a proposal which I made at Strasbourg for a joint purchasing board for stock-piling and pre-emption. I want to develop that point in connection particularly with the speech made by the hon. Member for Bury and Radcliffe (Mr. W. Fletcher), who, having shot his bolt, has disappeared.

I must confess that, as I listened to the speech of the hon. Member for Bury and Radcliffe, my feeling of distaste for the sanctimoniousness with which he defended the rubber producers steadily increased. As he tried to indicate how the extravagant increase in the price of rubber was, in his view, due to the operation of the natural causes of supply and demand, I could not help feeling that he was excluding entirely the fact that rubber on the Singapore free exchange has increased in price two-fold since the Korean war broke out, standing today at 4s. compared with the already high price of 1s. some months ago.

Because there is this lack of control over the price of this essential commodity, it is natural that the speculation which has taken place should be used by the Communists to distract attention from the fact that it is speculation brought about by aggression which the Communists have provoked. But although that is the case, it is no consolation to men who are fighting and dying in the Malayan jungle or in the Korean mountains to think the war is resulting in vast and uncontrolled profits reaching people who perhaps have never caught sight of the commodity itself.

What is true of rubber is also true of wool and tin. In the case of tin we have the figure published in "The Times" today which shows that this commodity rose in price to £850 per ton by the middle of August—a rise of £200 on its pre-Korean level. If I were in the Services today, I should feel nauseated by the company reports of those firms now engaged in trading in the basic materials of war. Day after day we read in those reports that "the position is brighter" because, owing to the war demands of various countries throughout the world, the price of the commodity in which they deal has gone up. This is a state of affairs which must be brought to an end as soon as possible if the morale, not only of the fighting Services, but also of the workers at home, is to be maintained.

The question is: How can this be done? The hon. Member for Bury and Radcliffe suggested that there are no practical means of controlling the natural operation of supply and demand.

That view is echoed from the other side. Surely, however, we have succeeded in controlling those forces at home. We have succeeded in the past in taking much of the profit out of war, and it would be shameful if on an international scale we continued to allow the speculation in commodities which is now going on and which is inflating prices, not only for our allies, but also for ourselves.

Would the hon. Member suggest how we can effectively prevent, for instance, the Russians from buying in a free commodity market for tin, which is the very cause of the steep rise in price to which the hon. Member referred?

That is precisely the suggestion I was about to make. The rise in the price of rubber, for example, is due to the fact that not only ourselves, but the Americans and Russians, are stockpiling. If we look at the Russian stockpiling, we really have cause for alarm. Whereas in 1938 the Russians imported only 26,000 tons of crude rubber, last year they imported 105,000 tons, a great deal of it from the very rubber producers against whom they have instigated the rebellion in Malaya. The question, therefore, which faces us is what machinery can we devise in order to bring some control into the present chaotic commodity market.

The hon. Member for Merioneth referred to my suggestion that we should as speedily as possible, in conjunction with our allies within the Atlantic Pact and with any others who are prepared to associate themselves with us, revive the Combined Purchasing Board, which would enable us both to stockpile and to buy ahead of the Russians and so prevent them, without an embargo or a blockade, from getting essential war materials. That, surely, could be done very quickly, and I recommend the suggestion to my right hon. Friend on the Front Bench.

I was glad to observe that the right hon. Member for Aldershot (Mr. Lyttelton) spoke in extremely moderate terms about our trade with Russia. The right hon. Gentleman has had great experience of that trade. The companies with which he has been associated have themselves done a great deal to build up Soviet industrial power. Indeed, although the right hon. Gentleman may today be a little shy about the fact, it should perhaps be widely known that he bears the Order of Suvarov, 1st Class, U.S.S.R.

Not for building up trade with Russia, but for being the Minister nominally in charge of the northern convoys.

I do not wish to draw fine distinctions in the contributions which the right hon. Gentleman has made towards Russian security. I mention that simply to indicate that all people of goodwill want to see a bridge retained as long as possible across the chasm which now divides Europe. Most of us believe that that can be done by means of trade.

Quite obviously, there are certain machines and machine tools which could not, and should not, be exported, because of the grave damage which they might bring if they were to fall into the hands of an aggressor, actual or potential, but it is precisely because the Government recognised that, not when the Leader of the Opposition made his broadcast, but 18 months ago when the Order was made—[HON. MEMBERS: "Oh!"]—forbidding the export of such machinery, that they drew up the Order which has created a steadily lengthening list of machine tools whose export is controlled or prohibited according to the changes in the international situation.

I detected a tendency on the part of hon. Gentlemen opposite to denounce contracts which were entered into with the Soviet Union with our eyes wide open. We entered into those contracts because we expected to receive reciprocal benefits from Russia. In fact, we have done so; we have had timber sufficient to build over 300,000 houses. Most of that timber has gone into those houses, and had we not had it, the timber situation in Britain today, which is precarious, might well have been disastrous.

It would be dishonourable if, having enjoyed the benefits of a contract which we entered into with either the Soviet Union or her associated countries, we were now to withdraw from the obligations of that contract merely because today it might be more convenient not to discharge it.

In the case of two vertical lathes manufactured in Coventry—machine tools which have been the subject of discussion with the Ministry of Supply for some months—I observe that one of the arguments advanced against completing the contract was that, in order to replace that particular machine tool, we would have to pay twice as much in dollars from America. I do not know whether there is any support for that argument from the benches opposite, but surely if we endeavour to break a contract merely because, during its currency, we find that it would be more convenient or profitable not to fulfil it, then I cannot help feeling that we would not be acting honourably nor following the best British commercial traditions.

I fail to see why we should reserve for any country, whether it be the Soviet Union, Bulgaria, Poland or any of the satellites, treatment in which British industrial and commercial firms would not engage if the the firms contracted with were British companies. For these reasons, I feel that it is our duty to persevere as far as possible, subject to the reservations that we do not export machinery or materials of war, in discharging the contracts which we have entered into.

The hon. Member for Woking (Mr. Watkinson) has suggested that it is wrong to export any heavy machine tools at all to any country whatsoever. Everyone knows that our machine-tool industry, both before and since the war, has built up a great deal of its prosperity on the export trade. In Coventry, before the war, there would have been mass unemployment among machine-tool makers but for orders from Russia. They were of great value, not only to our manufac- turers but to the workers also. The effect of the 1936 trade agreement with Russia, when we gave her a credit of £10 million, was really to build up the machine-tool industry in this country so that when war broke out the industry was expanded and prepared to meet its new obligations. I believe that if in future we try to limit the extent of our machine-tool industry only to the capacity of our domestic industry to absorb its products, we will be sterilising the industry and will prevent it from having the virility which it has shown in the past and will I am sure, show in the future.

I want to say a few words about the case of those machine-tool manufacturers who have had Russian orders and who have them today. It is extraordinary that manufacturers like Mr. Greenwood, of Craven Brothers, seem to have had their attack of conscience only when they were caught red-handed by the Leader of the Opposition engaged in the discharge of Russian orders. Everyone knows that for years before the war this company, like many other machine-tool companies, did a very profitable business in the export of machinery to Russia. They were quite satisfied to do it, and the pattern of our exports of machine tools to Russia before the war was in effect little different from what it is today.

I have figures showing approximately how the £10 million credit which we gave to the Russians in 1936 was eventually allocated through our various industries. Nearly half was spent on machine tools; 20 per cent. on ships' machinery, turbines and generators; another 20 per cent. on presses and metallurgical equipment, and the rest on precision instruments. That particular pattern has not altered very much since 1945. As I said, it is right that we should restrict our sales to Russia to machines which cannot be used to our detriment. At the same time, my view is that we should as far as possible continue to engage in the export of machine tools to Russia.

In 1945, when we thought we could look forward to a period of trade, if not of complete amity, with Russia, we welcomed the fact that in the political division of Europe, at a time when the machine-tool industries of Western Germany, France and Belgium were all reviving and tending to direct their exports into the western hemisphere, we had the prospect of sending our mechanical products, machines and machine tools into the natural markets of Eastern and South Eastern Europe from which we could hope to receive the raw materials, the basic products, which we needed so badly in this country. When eventually, as I hope will be the case, we reach a modus vivendi with the Soviet Union, when we have averted the perils of war, I believe the trade which exists today in embryo may be the means by which, even if we never reach a final political understanding with Russia, we will have the means of living together in understanding for our mutual benefit.

7.14 p.m.

I wish to say one thing to the hon. Member for Coventry, North (Mr. Edelman). He said that my right hon. Friend the Leader of the Opposition had caught Craven Brothers red-handed in sending orders to Russia. Surely he is quite mistaken. Is it not quite clear that this came to the notice of my right hon. Friend because they sent all the correspondence, a full dossier, to him, and there is no question of catching them red-handed?

I cannot follow the hon. Member in regard to the rubber planters in Malaya because I do not know enough about that matter, but surely he is being a little ungracious to them because they are trying to carry on their business, which is an extremely helpful one to us in view of the dollars they earn us, in the face of a full-scale war in the middle of the territory where they are trying to work. We should remember that and recognise it.

I agree with the hon. Member on one point. I think the suggestion he postulated of a purchasing commission of ourselves, the Atlantic Pact countries, our allies and the Dominions for these raw materials is a very good one. Did the hon. Member use the word "preemption," or did I misunderstand him?

The hon. Member did. That smacks a little of the famous canard of the economic blockade of which hon. Members have been accusing us.

The point I was making is that pre-emption is in fact going on in an unorganised way. The Russians are the leaders in these acts of pre-emption and it is about time we caught up.

I agree, but there is a difference between unorganised and organised pre-emption. Organised preemption was the main weapon of the Ministry of Economic Warfare and the purpose was an economic blockade.

I want to take the hon. Member up on another matter, not so much connected with the positive side of the question of heavy machine tools and raw materials, but rather the other side of the coin. I should like to allay a certain anxiety which I know exists among many people about the possible effects which the stopping of these things may have on our housing programme, as a result of retaliatory action on the part of the Russians. I have to declare an interest in this because, for the whole of my adult life except the war years, I have been engaged in the softwood timber trade. I think I am almost the only Member of this House with a direct interest in it. Although I would not presume or claim to speak with authority, I know a certain amount about it.

I know that an impression exists among a great many people, a certain uneasiness, that if we are to stop the exports of heavy machinery, our housing programme may be seriously affected, prejudiced and greatly retarded by any action Russia may take in retaliation by stopping supplies of softwood timber, for which we have contracts with them. This impression is fairly widely held, and this afternoon the President of the Board of Trade, in his remarks about trade with Eastern Europe, made some reference to the question of timber.

I am all in favour, as I am sure we all are, of what I would call safe trade with all those countries as much as possible, and we certainly need all the timber we can get. This is not the moment to express my views on bulk or centralised buying in general, or on that sort of buying of timber in particular. I am glad that the President of the Board of Trade has now come into the Chamber. I hope he will forgive me if I say I cannot quite follow him in some of his calculations and I must also disagree with the hon. Member for Coventry, North.

The facts in regard to the timber from the Soviet Union should be clearly stated. I think that then it will be found that this anxiety, which I know exists, is to a great extent ill-founded, and the possible effects on our housing programme have been very much exaggerated. It is no doubt quite possible that in certain circumstances Russia may decide to withhold certain supplies of softwood timber. I would very greatly regret any reduction in our timber imports, in this year of all years when our supplies are so deplorably low, but if this action were taken I do not think it would have the effect on housing which is feared by so many people and which has been suggested. I submit to the House that neither our Government nor the feelings of the people in the country as to the advisability in the interests of national safety of stopping the exports of materials and machinery should be swayed by this consideration.

I am deeply aware, as is every hon. Member, of the extreme seriousness of the housing situation. Indeed, in my own constituency it is very grave and very harassing, but I do not think it is right to make it appear worse than it is. It is only causing uneasiness amongst people. There is a great deal of loose uninformed talk about Russian softwood timber in connection with housing. Someone has made the calculation by a feat of arithmetical legerdemain that as there are 1.6 standards of timber in a house, and as the recent Russian contract was for 153,000 standards, it will supply us with enough timber for 100,000 houses; that if that is cut off the number of houses built will be reduced by that number, which is roughly half the total programme for the year. That is the story which is put about. I have heard it and the people in the country are getting that impression. I do not wonder that they are greatly worried about it. It is not true. It is only right and proper that the facts should be stated.

I do not want to bore the House with technicalities but the facts are quite simple. The production of Russian saw-mills does not run heavily to the sizes of timber we can use in house building. We have to rely on Canada and other countries for that. We get only a comparatively small proportion of sizes for building houses from Russia. Recently a parcel of .350 standards was landed in this country. Out of it less than 10 per cent. could be used for building houses. I should be very surprised if out of the whole of the Russian contract, timber could be produced to build more than 30,000 houses at the very outside. Perhaps it was misleading of the right hon. Gentleman the President of the Board of Trade to say that as we have 500,000 standards from Eastern Europe we can build 340,000 houses. I doubt it very much.

I know that the hon. Member is well versed in these timber statistics from his connection with the trade, but would he not agree that while a considerable volume of the Russian timber is not used for housing, as I readily admit, it may be used in substitution, which enables other timber to be used for housing which would otherwise be required for essential purposes.

I partly agree with the right hon. Gentleman, but my purpose in bringing up the matter is to dispel the very widely held impression that any reduction in the amount of timber we get from Russia, although it is greatly to be deplored, will seriously reduce our housing programme.

There is another thing to be remembered. The Russians could not hold up the whole quantity of the timber whatever happens, because a substantial amount of it has arrived here already. Any reduction that might take place might be serious, but it is a different thing from suggesting, as is suggested, that the whole of our housing programme would be cut in half this year. People should not be led to believe that if we stop the sale of this heavy machinery and these raw materials and the Russians retaliate by withdrawing our softwood supplies, our housing programme will be seriously affected. It is not true and it is quite wrong to cause further uneasiness on a subject already very grave. It is only distracting attention from the real aim, which is that we should not send to the aggressors, machinery that can be used in the manufacture of armaments which might well be turned against our own forces.

7.25 p.m.

I should like, firstly, to make some observations upon a statement of the hon. and gallant Member for Stockport, North (Wing Commander Hulbert), who is unfortunately no longer in the House, but which I think was one of the most politically immoral and cynical ever made in the history of the House. I refer to it because I think it is important that it should not be left unchallenged, and because the hon. Member for Bebington (Mr. Oakshott) reflected that same view in the part of his speech where he said that, as the Russian timber had been landed here, we should not worry about our part of the bargain.

I should not like to give that impression, and I am sorry if I did. What I think I said was that the Russians could not cut off the whole of the amount for which we have contracted, because a great deal of it had already arrived here. There is no innuendo or implication about it.

I am glad that the doctrine of the freedom to repudiate contracts when they become inconvenient is not one held by the hon. Member. To return to the statement of the hon. and gallant Member for Stockport, North; he said, "We should now pay more attention to realities than to treaties." If there is one thing that this world needs now, it is to observe the sanctity and binding force of treaties undertaken and entered into.

I am not surprised that my right hon. Friend the President of the Board of Trade did not display his usual confidence when making his announcement to the House today of the repudiation by the Government of part of their solemn undertaking to the Government of Poland. I am not surprised that the words rather stuck in his gullet, because they did not become him very prettily. I am referring to the decision to prevent the export to Poland of goods which were not the subject of export prohibition when they were ordered, and when the contract in regard to them was entered into. It is an unhappy decision for many reasons. It only relates in the case of Poland to two machines.

My view is that the harm that this repudiation will do to the name of Britain and to our tradition of maintaining our contracts will be far worse than any disadvantage we might suffer in the immediate field of military potential by the export of these two machines. The word of the Englishman, as my hon. Friend the Member for Coventry, North (Mr. Edelman) said just now, has throughout history been his bond, and I am astonished at the levity with which this breach of a solemn undertaking has been regarded by hon. Members on the other side of the House. I deeply regret that in this matter of the two machines a breach of contract has been condoned, nay, instigated, by the Government so far as the companies responsible for performing those contracts are concerned.

It is particularly regrettable that this has been done because of the country to which it relates, namely Poland. The amount of machinery that Poland has taken from this country since the war has gone to help to reconstruct her shattered land. After the war we generously contributed through U.N.R.R.A. to the immediate rehabilitation of Poland. The millions we gave, helped to save the Polish people from mass starvation. These machines which we had to send would help in the same process of reconstruction. I have had the privilege of visiting Poland on Government missions on two occasions since the war. The first was in 1946. I was very shocked when I saw shattered Warsaw, which had been destroyed systematically, building by building. I can hardly speak of it without emotion. In 1949 I had the privilege of revisiting the city again. The great desolate area of the Warsaw ghetto, where hundreds of thousands of people were murdered was being rebuilt and a fine city was rising out of the ashes. Poland is rebuilding its land.

What is going to be the effect upon the Polish people of this announcement that we are repudiating our solemn undertaking to deliver two machines? How is that going to win us the friendship of the peoples of Eastern Europe? Poland during the war lost about one-third of its people. Millions of them were scientifically put to death in gas chambers. Her industries were deliberately destroyed, her machinery stolen. There was a determination that Poland should no longer be a free nation.

We owe a great debt to Poland. This is no way of honouring it. Let us look at the terms of the Anglo-Polish Agreement. In March last year, we gave a pledge to Poland that there would be no discrimination against her in carrying out orders placed under the terms of that agreement. What are we doing now? Is not this discrimination? Of course, it was right that in March, 1949, we should produce a list of materials the export of which thereafter we would prohibit. But is it right to make that decision retrospective when we have given a contrary undertaking in an international agreement?

On their side, the Polish Government guaranteed to export specific quantities of various foodstuffs over the five-year period covered by the Anglo-Polish Agreement. Poland has kept her word. The Polish people are raising their standard of living more and more. I saw it myself between 1946 and 1949. But we must remember that they cannot easily spare these foodstuffs. They are making sacrifices to send them to us. In 1949, they sent us 13 million eggs. After the war, Polish children were suffering from malnutrition and there was an enormous incidence of tuberculosis. They needed those eggs, but the sacrifice had to be made. The same applies to Poland's export of bacon, of which she sent us 20,000 tons in 1949. The Poles have taken special steps through their farms to provide for the special needs of the British market in the matter of bacon. For instance, they are concentrating on breeding pigs that produce the kind of bacon which the Englishman likes for breakfast.

The Polish people have gone far to try to meet our requirements, and, in view of those circumstances, this treatment of the Polish nation and of the Polish Government is churlish. Again, they have made further sacrifices to expand very substantially their exports of timber to this country. In 1949, they exported to this country £3,308,000 worth of timber. No doubt the hon. Gentleman opposite may tell us that it was not all used for housing, but, presumably, it was needed for some important purpose and if it had not been obtained from Poland it would have had to be obtained from elsewhere. However, a good deal of it obviously did go into housing, and the Polish people need houses more than we do. Here, again, there is sacrifice on their part. What are we sacrificing? Let us make a sacrifice; let us take a risk on this occasion, and not go down this cynical road of repudiation of our contracts.

It is no use rendering lip service to the advantages of Eastern and Western trade. There must be give and take, and there must even be the taking of certain risks. The trade between East and West should be promoted to the mutual advantage of both. The economies of these areas are complementary. One of the difficulties of the post-war world is that the volume of East-West trade has greatly diminished. It ought to be increased. It will not hurt anybody, but will advantage all of us. I do not deny that the present difficulties that confront us are very real, and I fully appreciate that the decision which the Government have come to must have been very distasteful to them. But, nevertheless, we must beware of shutting down the lines of communication between the two parts of the world. Those lines must be kept open as much as possible.

I implore the Government to give attention to one of the two agencies in Europe where the United Nations are still operating harmoniously together. The first is the prison in Spandau where the Four-Power guard is detaining the war criminals condemned at Nuremberg. I will say nothing about those gentlemen as I had a little part in the process which resulted in their getting there. The second agency is the Economic Commission for Europe. If there is any chance of increasing the volume of trade instead of rushing to the alternative of entering into a period of economic blockade, I would ask that every opportunity be taken of using that agency to increase the volume of trade between East and West. At any rate there is no sabotage of that by the Eastern countries. They welcome it, and they require it. I hope that there may still be the possibility of a joint economic-contribution by the members of the United Nations through that economic agency for the development of the backward areas of Eastern Europe and of Russia itself.

Separately, the nations of the world are making great efforts to deal with what Lord Boyd Orr has called the major challenge of our time, namely, the rapid increase in the population of the world at a time when the quantity of food the world is producing is on the decrease. It is a combination of circumstances which may well result in overwhelming catastrophe for the world. We have to face these problems. Re-armament does not solve them; bitter words pronounced in East or West do not solve them. Ultimately, the two worlds must come to terms to make one world, and trade is now about the last instrument to make that possible. Hard words, even battles are now dividing the political world, but I implore those concerned to make another effort in the economic field to keep open the possibility of reconciliation through trade, because the great problem of world hunger is one that will and does beset us all.

So far as this country is concerned, rationed as we are, it is only right that we should remember that we are getting more than our share of world supplies. We can make our contribution by helping the backward areas with tractors, electrical equipment, and the machinery needed to turn deserts into fertile plains, to cultivate the wilderness, and to develop the ill-equipped lands. Some time ago I ventured to emphasise that these are the ways to deal with the problem and the challenge of Communism. We shall not deal with it by hysteria or by the repudiation of contracts solemnly entered into.

7.38 p.m.

The hon. Member for West Ham, South (Mr. Frederick Elwyn Jones), has extended in the Debate his reference to the sanctity of contracts without considering the circumstances at which we have now arrived, and he has applied it to the two machines which, we have been told, are used primarily for making guns with which to destroy people. I do not think that any one of us feels that this argument should carry great weight at the present time. It has been said from this side of the House that we are not suggesting that restrictions should be applied to ordinary things such as tractors, and so on. But when it comes to these particular machines, all I can say is that I wish hon. Members opposite would apply the same tenderness towards the broken contracts which have recently taken place in the Canadian newsprint industry.

In continuing this Debate I am not speaking as an expert in the engineering industry. I make no pretence to do so, but I feel I am voicing an opinion very widely held that the revelations made concerning the supply of these large boring machines have come as a distinct shock to the country. No useful purpose is served by trying to allot blame for what has happened in the past. We are far more concerned with making sure, and getting a categorical assurance, that this matter is going to be firmly attended to in the future.

I listened with great attention to the statement made by the President of the Board of Trade and I am a little uncertain whether we have had the categorical assurance we should like to have. I rather took him to say that, in fact, such machine tools would be exported to countries behind the Iron Curtain unless they were required by this country or by our Allies. I should like the Government to extend their assurance and to say that we shall not export these instruments of war to countries who are potentially hostile to us, even if they are not required by us.

The main evidence has been given in some detail already by my right hon. Friend the Member for Aldershot (Mr. Lyttelton) and others. I do not wish to cover the same ground. If, indeed, the Government have been sending our men, some young and some untrained soldiers, to Korea to the back door and, at the same time, have been supplying not the weapons of war, but, even worse, the means for mass-producing those weapons, by the front door, I feel they have a very serious charge to answer. They have a very serious charge to answer if, indeed, that has been going on and if they have been caught red-handed.

When we on this side of the House raise this matter I do not think we should be put off by counter-charges that we are seeking an economic blockade of the Soviet Union. It has been quite clearly stated that that is not what we seek. We are sticking quite firmly to specific, precise matters of war potential. If, for example, one caught a man climbing through the scullery window and took his revolver off him, one would not expect to be charged with theft. There is a very similar state of affairs now. I hope we shall have a clear statement by the Government and that they will not try to draw the wool over our eyes by any carefully worded Amendment or by any counter-charges, such as I have mentioned.

Far more serious than the export of these machines to countries behind the Iron Curtain is the fact that, apparently, we are allowing Russian experts to go round visiting our factories and making their notes, perhaps looking at our blue prints and then being able to report back through their Embassy, on matters which may be confidential, secret or vital to this country. One would have thought that after the case of Dr. Fuchs we should have taken steps already to prevent this possible leakage of vital secrets. But, if I recall aright, when the Prime Minister made his announcement about the Fuchs case, he implied that one could not very well stop that sort of thing happening without recourse to police methods which would be reprobated in this country.

Here is a clear case where vital secrets might be taken away easily, and all the Prime Minister had to say the other day in the Defence Debate was:
"We are anxious to do all we can to prevent the export of such goods as are likely to reach North Korea."—[OFFICIAL REPORT, 12th September, 1950; Vol. 478, c. 972.]
I should have thought that some far greater assurance was needed in this matter than a mere expression of anxiety. These Russians, each an expert in his own way, are sent over here to find out and spy out the land and report back to their country. I look upon their presence as the most serious aspect of the whole business that has yet been mentioned.

It has been mentioned in the American newspapers that we are exporting molybdenum to countries behind the Iron Curtain. Are we or are we not sending molybdenum to the Soviet Union and her friends? Is this charge against us justified? I understand the United States Senate has passed a resolution prohibiting the export of molybdenum to those countries that pass it on behind the Iron Curtain. Could we have a statement from the Government whether this charge applies to this country or not? Surely, if it does not, we are entitled to have it repudiated officially without delay. As far as I know, that has not yet been done.

I understand that molybdenum is a metal in great scarcity which is not only used for hardening cutting tools but has a particular application to jet engines. We have already supplied the Soviet Union with the jet engine. Are we now supplying the missing link which will enable the Russians to have a lot more? We have also been accused in the American newspapers and by a member of the House of Representatives, of not co-operating in atomic control. We have been accused of passing atomic control "gadgets" to the Netherlands. Is there any objection to passing these to the Netherlands? What is behind this charge? If we are being charged by America, can we be told exactly what lies behind it and have the charge repudiated, so that the matter does not give rise to a spirit of acrimony between ourselves and our Allies?

Let me turn now to the question of our trade policy, in general, with the Soviet Union. Great play has been made, and with justification, that we must carry on this trade with the Soviet Union because there is no other country from which we can buy the timber and coarse grain we require. Surely, if that is so, then at the same time as we face the immediate problem, we should set in train measures to supply these deficiencies from countries within the Commonwealth. What are we doing, as a long-term policy, in respect of coarse grain?

Is not the hon. and gallant Gentleman aware that every step has been taken to obtain timber and other materials from the Commonwealth, that we are getting from them all they are able to supply and that we are forced to look elsewhere in order to supplement those supplies?

I understand that we made a proper mess of the purchase of timber and that, because we were not satisfied with the price the Canadians were offering, we turned it down so that, naturally, they sold it to the United States of America.

Yes. That brings me to the next point. If, instead of sending these important machine tools to Russia, we sold them to Canada, we should have had the dollars with which to purchase timber from Canada. If, now, as the Government seem to suggest, we are to cut down the exports of these important machine tools to Russia, what steps are the Government taking to find an alternative market for them? If we look ahead that is a question to which attention should be given.

We should also consider the long-term consequences of supplying to the Soviet Union the special machine tools to which my right hon. Friend referred. It would be well to recall the enormous advantages which this country had as a result of being first in the field in the industrial revolution and the enormous effect which the industrial revolution in this small country had on the whole of the world. The Soviet Union, a vast country with a population over four times as great as our own, with enormous resources, is now starting her own industrial revolution and, as regards her expansion she is probably 100 years behind us. In 1950 it has reached the relative state of expansion which this country had reached about 1850.

In building up the efficiency of the Russian factories to the high state of efficiency of our own factories, we are, of course, greatly accelerating the industrial expansion of Soviet Russia. We should ask ourselves whether we wish to accelerate the growth of a trade rival of such extent. It is a matter which requires very careful consideration. After all, we have inherited a great wealth of talent, technical skill, scientific knowledge and knowledge of metallurgy which has given us a great start and a great advantage over our trade competitors, but we have learnt some hard lessons from Japanese competition. Here we face another potentially great rival. Our heritage was our skill. If we pass this skill over the Iron Curtain by allowing Russian inspectors to go round our factories, are we not selling our heritage for a mess of pottage—coarse grain?

In conclusion, I would ask the Government not to try to pass this matter off with any of the staff phrases such as "The matter will be under constant review." I have always been distrustful of these staff phrases. I once served on the staff of a very distinguished army commander where these phrases were in common use and I remember asking for a definition of some of them. For instance, there was "Referred to higher authority." That mean that an extensive search had failed to reveal the papers on that subject. "Under active consideration" was another; and that, I was told, meant that there was some recollection of the subject and that it would be looked into. There was "Under consideration," which I think is the same as "Under review"; that meant that the subject was far too controversial to give a direct answer on it.

I ask the Government not to give the answer "Referred to higher authority," nor "Under active consideration," nor "Under review," but that we should have a very much clearer and more categorical announcement on the question of the export of military materials to Russia.

7.57 p.m.

The hon. and gallant Member for Merton and Morden (Captain Ryder) was good enough to say at the beginning of his speech that he knew very little about the problem of machine-tool production. By the end of his speech I quite agreed with him. I do not know why we are worrying about the export of one or two machines to Poland, or even to Russia, if they are 100 years behind us in their industrial development, as the hon. and gallant Member says. The words he used were that in 1950 they are only at the stage that we had reached in 1850.

Perhaps I may put the hon. Gentleman wise on that. It was a relative comparison; whereas we have been expanding for 100 years, they are now beginning, with an enormous expansion ahead of them.

I appreciate that interruption, but the hon. and gallant Gentleman said they are 100 years behind us; in other words, they are now, in 1950, where we were in 1850.

Order. The hon. Member for Southall (Mr. Pargiter) does not give way.

I gave way immediately to the hon. and gallant Gentleman in order that he might clarify his position but he did not in any sense alter the terms of his remarks that the Russians are now where we were in 1850.

I cannot give way again. If, in 1950, they are where we were in 1850, then I do not think we should worry about their war potential.

The most interesting thing about the Debate has been its changed character. After the blood and thunder of the right hon. Member for Woodford (Mr. Churchill) and his recent broadcast about banning all war potential and war materials, machinery and so on, this Debate seems to have descended considerably. I suppose that hon. Members opposite have been doing a little thinking since the broadcast. It is rather interesting to consider what we could export which would not be in some respect war potential, certainly as far as capital goods are concerned. There is no machine used for the fabrication of metal or of wood, or even for the fabrication of fabrics, which cannot be regarded as war potential. We might as well be quite clear about where we are.

It is fairly obvious that before this Debate the intention of hon. Members opposite was an economic blockade. [HON. MEMBERS: "No."] It is no good hon. Members opposite saying "No" at this stage when all the statements they have made have urged a ban on the export of any potential war material either to Russia or to her satellites. I stand by the statement that there is no question that there is no machinery that we produce here, or that can be produced by any of the machinery-producing countries, that cannot be war potential. The character of war has changed; and I thought that we had learned something in the last war about the destruction of the enemy's civilian morale, which is a part of the war potential. Anything that goes to production must have some bearing on war potential, and there is no possible way in which this can be avoided.

We have now come to the cases of certain specific things which the right hon. Member for Aldershot (Mr. Lyttelton) mentioned. It seems to me that here we come to the particular question of the contracts into which we have entered. How far are we entitled to abrogate a contract? It is no good saying, "Well, we have thought again about it." The answer is that if we think again about it, we have to return the goods we have received against the contract, and I would say that we are in no sort of condition to do that. It seems to me that in these circumstances, with the best intentions in the world, we ought to try our best to honour our contracts.

There may be one loophole in this connection. I do not know whether it is one or not, and I should be glad to hear from whoever replies to the Debate tonight. It lies in the question whether or not in the terms of a contract, we are bound to any specific date for the completion of the contract. It is one thing to say we will not honour a contract but it is quite another to say, "We are sorry, but we have to postpone the date of execution of this contract." That would not be repudiation, but it would enable us for a period to use the factories which are now turning out machines for Russia or her satellites for the production of machinery for ourselves.

There appears to be a good deal of misconception about boring machines. I want to make it clear that I am not talking about those boring machines that make boring speeches in this House. I am talking about those which are used in engineering production. It is interesting to note that while a very large type of boring machine may be used in the manufacture of turn-tables for turning certain types of guns, and so on, it may also be used—and is used—for turning large steel blanks for used gear generating. These machines are properly utilised not only for turning blanks for that type of gear but for cutting a helical for power generation. It may be said that power generators are war potential. I dare say they are. There is nothing that is not.

If the Prime Minister could receive from Russia an undertaking that these machines would be used only for the production of civilian commodities, the situation might be helped, but I suggest that unless such an undertaking can be received, and unless the Government can expect it to be kept, we should not be doing right to supply them to Russia at this stage.

That is another matter which perhaps the hon. and gallant Gentleman may pursue in his speech, but it is not part of my speech. I am dealing now with machines of which it has been said that they can be used only for specific purposes, whereas they can be used for war or peace-time purposes.

There are those who say that we should not at any time export types of machinery which would help the productive capacity of other nations. If they studied the industrial history of England, they would see how many of the large undertakings made a lot of money and established very considerable vested interests in other countries by work not unconnected with the production of machine tools, and also textile machinery, and things of that kind, in which we are pre-eminent. It would certainly be quite impossible in these days to think that we could keep to ourselves machines of this sort on the ground that if we exported them, we would enable other countries to compete with us in the production of certain types of goods. I thought that that was an outworn theory, and that it had been found impossible to operate. In the modern world, if we keep things to ourselves we may find ourselves left with them, and eventually somebody elsewhere will devise an advance on what we have.

It seems to me curious that that theory should exist today in this modern world when we are hoping to create a co-operative world—a world in which each country is going to add as much as it can to the general well-being. In such a world it is a doubtful proposition to suggest that we should not export certain types of machines in which we are pre-eminent, because some other country might be able to compete with us in finished articles produced from those machines.

One of the things that worries me is this. It will be known to many hon. Members here that one of the tactics of the Communist Party in going round the various works—engineering works, in particular—is to say that neither the employers nor the Government have been quick or helpful in operating our side of the contracts which they have made with Russia. The Communists have been saying that we have been neglectful and do not really want to fulfil the contracts. What worries me is that some of the things said in this House today are going to add very considerably to that Communist stock-in-trade. I hope it will not go out from here that we are not, in the main, honouring our contracts. I hope it will be made clear that we are honouring our contracts even if, for some limited period, we may delay completion of certain contracts because we require the benefit of that production for ourselves. I hope that that will be clearly stated, and I hope that we shall be given figures which will show that we are honouring our contracts. Our good name depends upon it.

There is a point on the other side of the picture. While we may have decided that certain machinery should be placed on prohibited list, I understand that planing machines are to be looked at again. Big planing machines are not on the prohibited list. They are useful for many things, including planing the beds of submarine engines, and in that respect they are as much war potential as are boring machines. There is no question about that. I hope we can be given some convincing reason about the decision not to place them on the prohibited list.

In this Debate we have departed far from the original broadcast of the Leader of the Opposition, and we have got the subject down now to some practical dimensions with the discussion of what may reasonably be done in good faith. I hope that this consideration will be maintained in the House for the rest of the Debate.

8.10 p.m.

I intervene quite briefl because there has come to me during the past few days some information which I regard as most disquieting and which has a direct bearing upon the question that is before the House.

Before I come to the point, I should like to refer to what the hon. Member for West Ham, South (Mr. Frederick Elwyn Jones) said in regard to the doctrine of repudiation of contracts. I want to remind the hon. Gentleman that that doctrine did not begin on this side of the House; at any rate, so far as our friends are concerned. The other point, also made by the hon. Member for West Ham, North, concerns the question of shipments to Poland of material of one kind and another. I want to suggest that, if Poland is really free and intends to remain free, she should be very thankful that some of this material may not be sent, if it is ultimately to be turned against her.

In regard to the information which has come to my notice, I say at once that I have no means of checking it, and I cannot say if it is true. I want to put the matter to the Minister in the form of questions. If there is any truth in it, then it is most serious; if there is not, it can be denied. It will be unfair, I think, to name the firm concerned, but I am quite prepared to reveal the name to the Minister and to tell him how the information came to me.

I am informed that a large firm in this country is under contract to ship to Russia what are known as bomb moulds, and that deliveries against that contract are already in process, some of the machines passing through the port which I have the privilege to represent. Whether that is true or not, I cannot say, but I want to put it to the Minister so that he may have an opportunity of either confirming or denying that very serious suggestion. What has been said by the hon. Member for Leeds, West (Mr. Pannell), and the right hon. Member for East Stirling (Mr. Woodburn), about trade virility and the need for keeping the wheels turning in the export market, certainly cannot be said about an item like bomb moulds.

I emphasise that I am merely asking the Minister whether he knows if this is true, and, if he does not, whether he will find out; and, if it is true, what are the Government doing to stop the shipment of such important war materials. I think we are entitled to a categorical answer on that point.

8.13 p.m.

I think everybody in this House will agree that this Debate has been in the nature of an anti-climax. The storm created by the Leader of the Opposition in his broadcast and followed up by the Press has now abated. It came in as a Woodford lion and went out as an Alder-shot lamb.

I wonder why it is that the Opposition are now adopting such a different attitude? For instance, I notice that, as far as half of their Motion is concerned—that referring to strategic war materials—it has hardly been mentioned in the Debate. Apparently, the Opposition have beaten a strategic retreat from strategic war materials, and it transpires that the whole of this fuss and excitement relates exclusively and entirely to about 20 machine tools—a matter of comparative insignificance, because, even assuming that the whole of these machines, when they reach their destination, would be used exclusively for war material purposes and no other—which is very far from being proved—it is very obvious that the effect on the military potential of Russia or of any of the other countries would be comparatively insignificant.

Surely, if they are machine tools which can be used to forge one bomb or one gun to fire on the United Nations troops, or one shell to fall on a British soldier in Korea, that is sufficient cause.

That may be so; I am not arguing that—[HON. MEMBERS: "It is so."]—we do not know. These are multi-purpose tools which can be used for a great variety of purposes, and, like so many other things, can be used possibly for war materials.

All tools, and a large number of other things, are war potential. If we get pit-props from the Soviet Union, they are used to produce coal, which is a war potential. It stands to reason. Similarly, the great majority of things which form the basis of trade intercourse can be used as war potential. I am not arguing whether this or that tool should be banned; I am saying, in substance, that the whole of this campaign from the outset was a major political scare, designed entirely for the political field and nothing else.

Now, they have retreated from it, and shrink from the words "economic blockade." I do not know why. In 1933, the then Conservative Government in fact imposed as a weapon of policy an economic blockade on the Soviet Union. That was one of the irresponsible actions committed by the party opposite when in power, and it helped to create that barrier of suspicion between East and West which is responsible for the present unfortunate situation. [Laughter.] No one is more responsible than the Leader of the Opposition for that situation. It is all very well for hon. Members opposite to laugh, but there is a sorry story to be told from 1919 and 1920, when £100 million of the British taxpayers' money was used to foment and carry out a senseless war of intervention, which has to a large extent produced the bitterness which has existed between this country and the Soviet Union ever since, and which, perhaps to no small extent, has helped to—

On a point of order. Is this germane to the subject under discussion?

I have already stopped one hon. Member who was going back to 1933, and now the hon. Gentleman is going back to 1919, which is a very long time ago.

I am simply carrying on from where the hon. Gentleman who interrupted left off; otherwise, I should not have taken the point so far.

An economic blockade is not something fresh to hon. Members opposite. There is this further point. One hon. Gentleman opposite let the cat out of the bag and showed why the Conservative Party altered their attitude. Perhaps they felt that this argument was something of a political boomerang, because the hon. Gentleman said that people were becoming scared as to the effect it would have upon our housing programme. Is that why the Tory Party have retreated from the policy which clearly meant an economic blockade and nothing else?

I am not dealing with this or that particular machine tool. I think that only the Government are in a position to assess the importance and danger of selling any particular machine tool. It is largely a question of balance of probabilities, but I want now to emphasise the extremely great importance of East-West trade. It is not just a small matter; it can become an extremely important matter, as I hope all hon. Members will agree. We have been faced with the problem of the dollar gap since the war. I think I can say that probably the greatest single cause of that dollar gap was the cessation of East-West trade which took place after the war. It ceased for the main reason that the countries of the East, on account of the devastation of their agriculture and their timber trade, had nothing to sell, and the consequence was that this trade for some time largely came to an end.

This had two effects. It meant to us that trade done between Europe and the East—I am not talking merely in terms of Anglo-Russian trade, but trade done by Germany, France and other countries of the West with the East—was not resumed after the war. The consequence was that first we had to divert our purchases of food, timber and grain from non-dollar to dollar sources, and, in addition, on account of world scarcity which resulted and on account of these nondollar commodities going off the market, the price of the dollar commodities went up, and we found ourselves having to buy more from dollar sources, and also having to pay more for what we bought. There is no doubt whatever that that is the most serious single cause which has led to our dollar position at the present time.

That has been recognised by O.E.E.C., and it has been pointed out that it is an important problem to be solved, and that one means of closing the dollar gap is to extend as widely as possible East-West trade. It is quite true that there are some people who do not like this trade to be extended. There are some people in America who do not like it to be extended. One hon. Member opposite referred to the clamour which is taking place in the American Press. I think that it will be a very bad thing for this country if we take our policy from the clamour which occurs in certain sections of the American Press. In an election year, we always get attacks on this country, either on the basis of imperialist Britain, Socialist Britain or non-co-operative Britain. There has recently been quite a clamour for the virtual cessation of trade between this country and the Soviet Union. I cannot but think that some of that has been inspired by some of the usual dollar sources—some of the people who are financially interested. For instance, I am not justifying the high price which is being paid for rubber at the present time, but I have no doubt that some of the people in America buying rubber are not very pleased about it.

Surely the increases in commodity prices affecting our sales from the sterling area to the dollar area is a direct contribution towards our balance of payments? We ought to welcome it.

I did not say that we ought not to. In spite of that, I would point out that, while it is a direct contribution, it is only a direct contribution if it can go on, and I do not believe that prices at their present inflated rate can possibly go on. We shall get a reaction. But I am not complaining about this. I am pointing out the obvious fact that people who have to pay these prices do not like it, and that people in America who have to pay higher prices for wool do not like it. They want to exclude, if possible, a competitive purchaser from the market. Similarly, the dollar timber producers do not like the fact that Russia is on the timber market. Again, the dollar people who produce grain do not like the fact that Russian grain is on the market.

To illustrate my point, I would remind hon. Members of something which occurred in February, 1949, when Russia suddenly came on to the market with 100 million bushels of wheat. It was interesting to see the reaction. I am quoting from the "Daily Express." It said:
"Russia has rocked the International Wheat Conference by tossing into the wheat pool 100 million bushels. This equals two-thirds of Britain's last year imports. The big wheat exporting countries, America, Canada and Australia, are amazed … As to the likely affect on prices, a British official said tonight that the move will have one of two results. The more likely is that Britain, already pressing for a price under 10s. per bushel because of coming world surpluses, will now drive to an easy victory with prices as low as 7s. 6d. per bushel."

I think that the hon. Member is going wide of the Motion and the Amendment. There is nothing about prices; it is only materials.

On a point of order. Surely this matter is vital. We are discussing the question of what we sell to Russia and it is intimately connected with what we buy from Russia. I am dealing with the purchase of wheat or grain from Russia, and the effect that is going to have on the economy of this country.

I want to say, in conclusion, that it ought to be the policy of this country to put our eggs in as many baskets as possible, and to have as many people as possible and as many nations as possible clamouring to buy our goods and endeavouring to sell us goods. That seems to me to be good business, sound economics, and the correct road to peace.

8.28 p.m.

I hope that the hon. Member for Erdington (Mr. J. Silverman) will forgive me for not following his argument, because many other hon. Members on this side of the House wish to take part in the Debate, and as time is getting on, I promise to be very brief.

I should like to refer to the attacks made by the right hon. Member for East Sterling (Mr. Woodburn) and others on the benches opposite upon the Leader of the Opposition. When the right hon. Member for Woodford (Mr. Churchill) first raised this subject in his broadcast, the nation and the whole free world was shaken and impressed by the revelations he then made. [HON. MEMBERS: "NO."] They were. The Government, who have so often been forced by events, reluctantly and belatedly, to acknowledge his prescience and adopt his policies afterwards, have done very well on this occasion to put down their Amendment, which gives us the substance of what we asked for. They have done well to ponder his words and warnings and wisdom, because they have realised, as the country realises that he has seldom been wrong in great affairs either before, during or since the war.

Commenting on the broadcast, the Secretary for Overseas Trade is reported in the national Press, on 28th August, as having said:
"What is happening is that we have had to buy supplies of grain and timber from Russia, and in return we have had to make payment."
But why did we buy the grain and timber from Russia in the first place? Could we not have bought it from the U.S.A.? I know that the answer is always dollars. It is always the snap unthinking answer to anything. It is always the Socialist excuse for anything and everything in these days. In the present precarious international situation, would it not have been possible to persuade the United States to take payment in sterling, if that was the only way of preventing these machine tools from going to Soviet Russia? It is all very well for hon. Members to laugh, but did the Government even try—

Does not the hon. Member know that if we had not bought coarse grain from Russia, we should have had to buy from the Argentine and pay the prices they demanded?

If I may be allowed to develop my argument, I will come to an alternative suggestion later on. Did the Government even try to make such an arrangement with the United States? Have they ever approached the United States Government to discuss this possibility?

I think these alternatives are worth considering in a matter of this sort. Taking up the point which has just been made, could we not have sold machine tools to Canada in return for grain and timber from her? We read recently reports in the Press that the exports of machine tools to Russia were actually increased in the first six months of this year, and yet we must need many of these tools for our own purposes at home. If we have to sell them in order to pay for something else, which I believe is the argument of the Secretary for Overseas Trade, then let us at least sell them to our friends and Empire instead of to our only potential enemy.

On the question of timber, to which the President of the Board of Trade and the hon. Member for Coventry, North (Mr. Edelman) specifically referred, there was a third alternative. We could have bought that timber in Scandinavia where the dollar difficulty does not apply, and I do not know why we did not do so. The usual time for timber negotiations is in November. Why were the Scandinavian negotiations dragged out until May and June this year, when these negotiations should have been concluded at the end of last year? We could have had up to 250,000 standards of timber from Scandinavia, which would have been of more suitable dimensions for housing purposes and would have been at a lower cost than the 150,000 standards we subsequently obtained from Soviet Russia.

Is it not a fact, when we come down to it, that it is Government buying of timber, with all its delays and indecisions, inseparably connected with bulk buying, which has led us to buy very late in the Russian market what we could have obtained earlier and more cheaply in Scandinavia, and for which, we are told, we have to export machine tools? Even in May, 1950, late as that was, when most of the timber was already sold elsewhere, we could have bought more cheaply in Scandinavia, when we have regard to the higher freight charges payable on Russian timber. Moreover, as has already been pointed out, only a proportion of the Russian timber can be used for housing purposes in view of its size.

The hon. Member realises, of course, that the machine tools he is talking about were almost without exception ordered before the end of 1948, and certainly before 14th January, 1949. Up to that time, and for a long time after, we bought every stick of timber from Scandinavia and everywhere else in the non-dollar area. It was not a question of shipping these machine tools this year to pay for Russian timber.

I was merely speaking on the assumption that the quotation I read from the statement of the Secretary for Overseas Trade represented what was, in fact, correct, when he said that what has happened is that we have had essential supplies of grain and timber from Russia and have had to make payment in return. On the question of the suitability of the timber from Russia for housing purposes, I fully appreciate, of course, the right hon. Gentleman's point that other timber is thereby being released for housing purposes, but it would be interesting to have in this connection the estimated percentage of timber under the Russian contract which conforms to the most suitable dimensions for housing purposes.

I want to turn now to another and quite different point. Despite the terms of the Government Amendment, the sale to Sweden of 80 jet aeroplanes was announced in the Press only a few days ago. Admittedly that is a good deal better than selling them to Russia, but the fact remains that we desperately need them for our own auxiliary squadrons. We hope that machines of this kind will be confined in future to our own friends and allies in the North Atlantic Pact and to our Empire. Sweden had already bought 500 Vampires when I was there last Whit-sun, and I assume that these 80 jets are additional? Are there any conditions attaching to their sale; and are the planes likely to be as effective in the hands of Sweden as in the hands of our own air crews or the air crews of allied Powers?

I am myself pro-Swedish because I have many friends there and know the country well, but we have to face the fact that there is very little chance of Sweden becoming allied to us in the North Atlantic Pact, because if there is one question on which the visitor to Sweden is left in no doubt, it is this question of neutrality. There is no political opinion in any party which favours joining the Atlantic Pact. Although she is taking her own defence extremely seriously and spending anything up to one-fifth of her taxation income on defence, we must nevertheless appreciate that she has no regular army and only nine months' conscript service, that she is a very small Power and would, alas, obviously be speedily overwhelmed by Russia in the event of an attack. What, then, would become of our jet aircraft? Either she will be successful in maintaining her neutrality, in which case the planes will not be necessary, or she will be overrun, in which case they will be wasted.

This is a most serious matter, because we know that a few Spitfires saved Britain and the world in 1940, and a few extra jet planes may well save civilisation in 1952, or at whatever time you like to put it, if they are in the right place. I am very glad to see by the terms of the Government's Amendment that they are thinking again on this whole question. I hope they will, as the phrase now is, "keep it under constant review," and will confine our sales of both jet planes and important machine tools to our friends in the North Atlantic Pact and to our Empire, or, better still, that they will keep them here at home.

8.38 p.m.

We have heard some remarkable speeches from the Oppositon benches in this Debate. They have been remarkable in more than one sense. My mind has gone back to 1939 and before in relation to the vile international trade in armaments, which was almost an accepted feature of the international scene.

My speech is not based on Moscow but on facts. I think it is sometimes wise to have regard to the mote in one's own eye before completely eradicating your potential opponent. The armaments industry was one of the widest international traffics in the history of the world. For instance, it was stated in connection with the 1914–18 war that a certain French industrial area, which was occupied by the German forces and was in a part where some of the most severe fighting took place, was actually owned by French armaments interests. They did what they could—and they succeeded—to prevent destruction of their own factories, which produced armaments for the international market although it meant inevitably the sacrifice of—

On a point of order. Is the hon. Member in order in taking us back to 1914?

On a point of order. Earlier, Mr. Deputy-Speaker, you ruled in this Debate that 1932 was much too far back to remain in order. The hon. Member is talking about 1914.

I have tried several times to avoid going back too far. I think we might get nearer to the present situation.

I quite understand the tenderness of Opposition Members about going too far back in the history of the armament race, which ultimately led to war, but this has relevance in bringing out the true position of the interests between the fighting soldier on the French side and the armaments interest in French industry. There is a remarkable quotation here, which I will ask the House to listen to. It comes from the evidence given by M. Albert Thomas to the Commission of Inquiry referring to happenings around this particular industrial area in France during the years of the war. The statement reads:

"At the end of 1916 during the second Briand Ministry, when General Lyautey was Minister of War, I repeatedly intervened to demand the bombardment of Briey, and the Council of Ministers was "—

I cannot see how this has any connection either with the Motion or with the Amendment.

I defer to your wishes, Mr. Deputy-Speaker, but this quotation brings out in bold relief the true cynicism of the armaments industry when their interests were threatened, even to the extent of sacrificing the lives of their own people in order that their own interests would be preserved. Anyway, I will go on a few years. On 4th July, 1934—

On a point of order. Mr. Deputy-Speaker, you ruled that 1932 was too far back. May I ask for your guidance in regard to 1934? Can there be any possible relevance in this quotation from 1934, which is 16 years ago?

The Motion and the Amendment do not deal with armament firms but with the export of armaments.

I think the quotation I am about to give is relevant to the present set up in European affairs. It deals with the Tiger Moth, which was an armament in 1934. This is the quotation:

"On 4th July, 1934, the De Havilland Aircraft Company inserted in 'The Aeroplane' a double page advertisement of the 'Tiger Moth.' The text of the advertisement read as follows:
' Tiger Moth for naval and military flying training supplied to the British Royal Air Force and the Governments of Norway, Sweden, Denmark, China, Japan, Persia, Poland, Spain, Portugal and Germany.' "
Then of course, there was the case of the armaments industry continuing their operations in connection with the changes which took place in revolutionary Spain.

Is the hon. Member aware that the Opposition Motion is to ban the exportation of heavy machine tools for armament purposes?

I am performing the charitable, indeed, I think, the necessary duty of enabling hon. Members opposite to search their own consciences. The Tiger Moth was more than a machine tool; it was an actual weapon of war.

I cannot see how Tiger Moths, which are quite out of date, can possibly influence the Motion.

It would be fatal for this country and the countries associated with it in the Atlantic Pact to rush into a position which would make war practically inevitable. In other words, we might as well preserve a sense of balance, and when we place a duty upon the Members of His Majesty's Government to draw a line between goods that are necessary or may be useful for war purposes and those on the other side of the line, it is giving them a task not easy to perform. After all, if machine tools and these big machines are ordered by Eastern European countries and other nations throughout the world it does not necessarily mean that those machines are potentially war weapons.

My memory goes back to a week ago, when the Australian wool market was held in the presence of buyers from all parts of the world, who were competing for the limited Australian wool supply. They included buyers from Russia. While certain machine making tools form a war potential, is it argued that wool is not also a war potential? Unless a country can get wool to make clothes for its inhabitants it cannot make uniforms for its soldiers. The same principle applies throughout the whole gamut of modern necessities, whether for war or for peace.

The fact of the matter is that when a country enters war, the whole of its economy is transformed from purposes of peace to those of war. If we push this matter too far it may lead us to a condition of affairs in which we shall be steadily cutting down the flow of trade between the East and West and ultimately reach a condition not very much different from a state of war, which prevents all trade. This appears to be the prevention of trade upon the instalment plan. I agree with the attitude of the Government in co-operating against potential aggression that may, and certainly does, exist in the world, but it is absolutely essential to build up existing exchange relationships between the Western countries and the Eastern countries of Europe. That trade during peace is more likely to lead to understanding than discriminatory measures which leave behind little or nothing of normal world trade relationships.

Therefore I suggest that the Government should deal with this matter very carefully and have in mind the overriding purpose of preserving peace as long as possible and of furthering as far as possible the understanding that still might be achieved between Western and Eastern European countries. It is quite possible for a Government to be urged into such a state of confusion by circumstances which arise that they take too much at their face value propositions which emanate from the Opposition benches. I am confident that in the Motion with which we are dealing this evening, and against which the Government have tabled an Amendment, there is as much electioneering propaganda as there is of real concern for the interest of this country or even for the future peace of the world.

I am confident that such proposals are put forward at what may be considered by those who are responsible for them, the most appropriate moment from a strategic political viewpoint. The more far-seeing, realistic and cool-minded people of the country will not be urged into taking steps which, instead of conducing to the preservation of the peace of the world, might make the already strained conditions worse and lead ultimately to misunderstanding which would degenerate into war.

What we ought to seek even at this late hour is the greatest measure of cooperation. By trial and, perhaps, error, we might find that there is a response from the other side of the so-called "Iron Curtain." The tragedy at present is not so much the fundamental enmity between peoples as the ignorance and misunderstanding which exists between them. If we could break down the Iron Curtain, not in the sense that it is a hostile barrier, but in the sense that it is a barrier of ignorance and misunderstanding, we could go much further along the road to the cooperation, mutual confidence and understanding which must form the basis of a peaceful settlement of the problems of the world.

I appeal to the Government to go very carefully along this road and not to create difficulties which need not exist but to seek the greatest measure of agreement for the general benefit of all. I urge the Government not to take any steps to fan into flame the supposedly dormant fires, which might result in open warfare. That is the last thing we want. What we want is security and peace. Peace and security must replace fear as a result of common understanding and agreement.

In making any further proposals about trade restrictions between East and West the Government must not forget that it is to the benefit of Russia and her satellites as well as ourselves that the standard of life and prosperity of all of us should rapidly improve. What a potential market there is in Eastern Europe for the things our industry can produce if we can remove the clouds of fear and misunderstanding. I hope that the Debate will enable the House and the public more clearly to realise the issues involved in the problem and that they will not be rushed into taking action which they will sincerely and tragically regret in the immediatediate future.

I see no alternative to our taking certain safeguarding steps for the time being, but they should be taken with due regard to the consequences involved, and I hope that in the very near future we shall have a response from the other side of the Iron Curtain to justify our efforts and even our sacrifices.

8.59 p.m.

During the Defence Debate, I promised the Minister of Defence that he could look to these benches for support in carrying out rearmament. I believe that I spoke for all hon. Members on this side of the House on that date. It seems to me that today, in imposing the necessary restrictions on certain materials going to Russia, the Government will look more to these benches for support than they will to their own if we are to judge from some of the speeches made by hon. Members.

I was amazed at the statement of the hon. Member for Leeds, West (Mr. Pannell) that the shop stewards of Craven Brothers had shown no resentment at the export of some of the machine tools that could forge the weapons of war. The hon. Member did not deny that many of the workers might have shown resentment, but I submit that if the shop stewards did not do so, then the public of this country are far in advance of the opinion of the shop stewards, and it is about time that some of those shop stewards, knowing the purposes for which those machine tools could be used, showed some resentment themselves.

Then we get the old red herring about my party wishing to carry out an economic blockade of Russia. Nothing of the sort. It is hon. Gentlemen opposite who have been in favour of carrying out economic blockades. In fact, hon. Gentlemen opposite made it perfectly clear at the time when Germany was a potential aggressor, that they were in favour of carrying out economic blockade to the full. If today Russia is a potential aggressor, if we are to rearm—and we are told that Russia is the only danger—then they should equally support any measures that may be necessary to stop Russia being an actual aggressor.

I have taken one or two quotations from the speeches of hon. Members opposite. For instance, the hon. Member for Nelson and Colne (Mr. S. Silverman) in his election address of 1945, speaking of my party and referring to Hitler, said:
"They sold him the materials for rearmaments; they helped him to build submarines."
The hon. Member for Wednesbury (Mr. S. N. Evans) said:
"Did they not ship British aero-engines, precious cargoes of rubber, aluminium scrap and other vital war material to feed the Nazi war machine?"
Other hon. Members opposite spoke and wrote in similar terms. If they were honest in what they wrote in 1945, they should support today every measure taken by the Government and recommended from these Opposition benches to ensure that Russia does not become an aggressor.

Of course, it completely refutes their suggestion that my party would advocate a policy of complete economic blockade. We do not do that. We say that great care should be taken in deciding whether certain potentials that might be turned into active weapons should be sent to Russia or not. The hollow character of their accusations against these benches in regard to shipments to Germany was made evident in this House by the present Minister of Town and Country Planning when, in answering a Question on 27th March, 1945, he showed that the total exports of iron and steel scrap to Germany in the year 1939 amounted to 30,000 tons.

How hollow, then, are the accusations from the benches opposite against the character of this party when today most of them quibble about what should be supplied to Russia. I say to hon. Members opposite, particularly to those who are pacifist in their inclination, that they should give this party and the Government every support in denying to Russia any materials that might be turned to aggressive purposes. The Government have long accepted that Russia is the potential aggressor. We have this vast expenditure on arms because she is a potential aggressor. We know the technique—we learnt it from Russia—and we know what are the possibilities. Now is the time to test the sincerity of the criticisms that were levelled against this party in 1945 by hon. and right hon. Members opposite. What we object to is the sending to Russia of war potentials which are of much more use for aggressive than for civilian purposes.

The question of the jet engines which were sent is a comparatively old story, and I do not wish at this point to belabour the Government on it, but there is a lesson to be learnt. Why did the Russians buy those jet engines? The Minister of Defence has told us that Russia possesses jet aircraft and in great numbers. We have learnt that they were flying them over Germany at the end of the war. I suggest that they bought those engines so that the German and Russian scientists could examine them and turn many of the technical lessons of our own experts to the advantage of the Russians. When I visited Farnborough and saw the wonderful examples of British engineering, I was prompted to wonder whether, as a result of the jet engines being sent to Russia, that country possessed jet aircraft as fast and efficient as those on show at Farnborough.

In all these questions of the high technical skill which is embodied in weapons and potential weapons, the Government should pause to consider very seriously before sending them abroad. Has not the Minister of Defence made it clear—and hon. Members opposite have said the same—that the Russians possess a great number of armaments, far greater numerically than our own? If that is so, there is far more need for us to retain the advantages of our technical efficiency so that those greater numbers can be counterbalanced by the superior technical qualities of our own arms.

Can the Government say that the valuable technical lessons we have learnt and have put into many of the goods we have sent abroad, particularly the jet engines, have not been used by the Russians? This great test should always be applied when the Government are sending to a potential aggressor many of the high-quality engineering components and commodities that we possess. If such goods are likely to improve and increase the war potential of an enemy, then I suggest that at this stage in our international relations there is a very sound case for denying him that chance. It is the same with machine tools, and I hope the Government will look into this matter much more closely than they have done in the past. Not only hon. Members of this House, but the public throughout the whole country and in the democratic nations throughout the world, will welcome the assurance that the President of the Board of Trade gave to the Opposition today.

We have heard a lot today from hon. Members opposite about our need for obtaining from Russia timber with which to build houses and grain with which to feed our cattle. I say that this House and the country are convinced that the only reason we should deny to Russia at this stage any of the things she may desire from us, is to preserve the peace, in order that Russia shall not make war, for if there is war the whole of the arguments of hon. Members opposite fall to the ground, because then there will be no imports from Russia, no timber and no coarse grains.

For that reason alone, they should support the Government in their action in restricting the export of machine tools and other components. I believe that if we cut those dangerous exports, we can still maintain a reasonable export trade with Russia and her satellites, but I believe that the people of this country do demand that not one British soldier in Korea and not one United Nations man shall be destroyed by any bomb or weapon forged from any machine tools or exports which have gone from this country.

9.10 p.m.

My contribution tonight will be very brief because I do not wish to encroach on the time of the right hon. Gentleman who will wind up for the Opposition. As one who has had some connection with the engineering industry in this country I think one thing must be borne in mind in taking steps, which are evidently going to be taken by the" Government, respecting the export of machine tools to Russia.

It is rather peculiar to me that we hear so little of our machine tool industry except when the threat of war, or war, is upon us. I served an apprenticeship in the engineering industry and I can assure right hon. and hon. Members opposite that in Lancashire it was considered something of a luxury for an engineer to work on a machine tool less than 30 years old. Is it surprising, therefore, that many manufacturers of machine tools are only too eager to export machine tools to anyone who will buy them? During the late war we had to import a large number of machine tools from the United States of America and I heard men in the workshops say when those machine tools were erected, "Take care of these, lads. They will have to last until the next war."

While the obligation is on the Government not to allow machine tools to go to potential enemies, responsibility is also placed on manufacturers in this country to replace their capital plant at such a rate as to keep a healthy machine tool industry in this country. The American machine tool industry has been built up because of the great internal market America has for such commodities. We know well that America is not prepared to buy machine tools in this country and has quite enough of her own. It is equally certain that Europe is quite unable to absorb the whole of the export surplus of machine tools from this country.

Where are we to sell them? [An HON. MEMBER: "Canada."] We cannot allow our already small machine tool industry to shrink. It seems to be agreed on both sides of the House that there is more than a possibility of hostilities. An hon. Member opposite mentions Canada, but is Canada prepared to take the export surplus of machine tools from this country? We cannot divide the world into two and expect the industries of all countries to flourish. Someone has to suffer if someone else suffers and it is up to the rest of the free nations of the world to compensate for that loss.

The right hon. Member for Aldershot (Mr. Lyttelton) opened the Debate in tones which augered well, but it reminded me of the story we read in "Sketches by Boz" about the election of the village beadle. No one would say anything against him, but they said they knew someone who was a wife beater and someone who watered the soup and the other side started retaliation. I ask the Government to take great care that no machines or raw materials go to a potential enemy. I hate to hear repeated the stories that have been told from these benches of British lives having suffered as a result of the use of British materials.

I also want the Government to impress upon the other free Governments of the world that this country cannot simply be penalised for having a surplus of highly specialised tools on their hands which everyone else seems reluctant to take. It may mean the making of some arrangement in the American markets. We have markets for our commodities in most of our Dominions. Instead of bandying about across this Chamber what previous Governments did and what the present Government have done, let us recognise that we are universally agreed that none of us wants to see a repetition of unhappy things that happened in the past. Let us also not forget that this industry must survive if this country is to have a peace potential, let alone a war potential.

9.16 p.m.

We will all agree with the sentiments of the hon. Member for Rochdale (Mr. J. Hale) that the Government should take extreme care not to export any more of these valuable tools. We on this side of the House trust that that will be the result of this Debate, and if that be so it will have been extremely valuable not only to the country but also in meeting the point of view put forward by the Opposition and the House as a whole. But it is imperative for me, in winding up this Debate for the Opposition, briefly—I hope that some hon. Members on the back benches will realise that Front Bench speakers often try to allow them as much time as possible—to put one or two points to the hon. Gentleman who is to wind up the Debate for the Government with a view to ascertaining what the President of the Board of Trade did say.

Listening to the right hon. Gentleman's speech I was reminded of an episode in the life of Gladstone. One of his Ministers approached him and said, "Prime Minister, I have a very difficult if not an impossible case to put. How shall I put it?" The worthy Gladstone replied "Do it in 55 minutes, not 15." That is precisely what was done by the right hon. Gentleman. So far as; we could ascertain from the 55 minutes of his speech he made one important remark, namely, that the export of machine tools and important war potential would be prohibited pending a general review of vital war potential in company with the North Atlantic Powers and the U.S.A.

If that simple statement was the result of the magnificent mountain of words which the right hon. Gentleman produced, the position is satisfactory, the Debate has been valuable, and it would be unreasonable to divide against the Amendment put forward by the Government. But we shall want that statement confirmed in shorter and crisper language by the hon. Gentleman who is to wind up the Debate. In order to make quite certain that he will not speak for too long I am prepared to conduct my speech up to a very late moment so as to give him a very short time in which to make that observation. If so, we may get from him something crisp and definite such as we are looking forward to hearing.

What did the right hon. Gentleman say in the mass of language he presented to us? He seemed to me to attempt to meet the arguments put forward, I think the whole House will agree, in the most moderate and clear manner by my right hon. Friend the Member for Aldershot (Mr. Lyttelton), who introduced this Debate in a way which was recognised in all quarters of the House as of a first class order. The right hon. Gentleman seemed to me to accept the case that we should not export war potential and in particular machine tools that we need ourselves for our own war effort or the war effort of what I may describe as the Allies and of the U.S.A. Secondly, he seemed to accept the case that we should not export war potential that could be used against us by any potential aggressor, to which the right hon. Gentleman referred under the general terms of the security argument.

Thirdly, that irrespective of the date—this is an important point because on this matter I am not clear that the right hon. Gentleman used language which it was possible to comprehend—I want to be quite explicit that we on this side of the House feel that no war potential should be exported at whatever date it was ordered. That I believe to be correct, but the right hon. Gentleman so wrapped up that argument that he used language to imply that there was a differentiation between war potential which was ordered before the date of the Polish Agreement and war potential which was ordered after the date of the signature of that agreement.

I want to put to the hon. Gentleman who is replying and to the Government that our view on this side of the House is that if this war potential were ordered before, for example, February, 1949, when the Government list of prohibited exports was first drawn up, that should be prohibited equally with any material which was ordered before the Polish Agreement was drawn up. I wish to put to the right hon. Gentleman and to the hon. Gentleman who is replying this point. Would the hon. Gentleman, when replying explain what the President of the Board of Trade had in mind? Was he referring to the article in the Polish Agreement which said that notwithstanding the fact that machine tools or war potential were ordered before the agreement was signed, yet that potential should come under the agreement? If that was his intention, it was far from explicit or clear in his lengthy address. Perhaps the hon. Gentleman, who is now nodding his head, will confirm that such war material is prohibited in the general answer of the Government given earlier today.

I put those points clearly and definitely to the Government in order that we may ascertain what their view is and what, in fact, the right hon. Gentleman did say in his lengthy oration. That I have put in six minutes, and perhaps, in two minutes, the Parliamentary Secretary to the Ministry of Supply will reply quite clearly so that the country and we of the Opposition in particular may be clear that we have had some definite result from this Debate.

I want to pass from these specific points to the general international angle. I read in the "Manchester Guardian" of last Saturday a statement that a Bill had been passed by the Senate of the United States authorising the spending of 17,192 million dollars for the defence of the United States:
"In a solemn and united mood the Senate added to this Bill a rider offered by Senator Kenneth Wherry of Nebraska that would give the Secretary of Defence a veto power above the heads of the E.C.A. to stop all shipments under the Marshall Plan to countries that sent arms or military material to the Soviet Union or its satellites."
I read further in this article that this was done and meant as a dig and a warning to Britain. I should like to say quite categorically as a member of His Majesty's Opposition that I do not stand for receiving digs or warnings from the United States of America, and that it is no part of the object of the Opposition this evening so to divide the House on this vital issue that we expose any surface to any country in the world.

That is why I look to the Government in replying to this Debate to make quite explicit the statement made by the President of the Board of Trade so that the purpose of Britain in this vital matter may be clear to the whole world, namely, that we are not prepared either to export or, by trans-shipment from the U.S.A., to re-export—and I should like an answer on that point as well—material which is vital to our own defence effort, or which is valuable to the war potential of a possible aggressor.

There is another point before I come to one or two main issues, and that was raised by the hon. Member for Leeds, West (Mr. Pannell). The hon. Member discussed the attitude of the workers at Messrs. Craven Brothers. I hope I have never in my political career been in the pockets of anybody or any firm or any particular interest, and I certainly do not propose to start being so tonight. All I can say, on the information in my possession, is that the meeting to which he referred was about a baker's dozen of shop stewards, no doubt very honourable and eminent men, who came to certain conclusions that my right hon. Friend the Leader of the Opposition did not exactly represent them. But surely this is quite beside the point, because the hon. Member, in concluding his speech, made it quite clear that he was against the export of these machine tools to potential aggressors. That is the sole point in which the House should be interested this evening.

There were 25 shop stewards representing 25 departments. Surely that is an example of trade union democracy which is the same as 600-odd hon. Members who are representatives in this House. I think that is perfectly fair. The House can take it from me that I went to considerable trouble to ensure that they were a representative body.

The hon. Gentleman, who appears to be speaking on behalf of these gentlemen, is himself against the export of this war material, and it appears that this meeting was in no way widely representative of the workers concerned. Therefore that leaves the argument of the Leader of the Opposition absolutely valid and endorsed by the hon. Member himself.

Having discussed the international angle from the point of view of the United States, and the workers' angle from the point of view of the hon. Member for Leeds, West, let me examine it from the angle of the Prime Minister himself. I ask the Prime Minister why, in answer to my right hon. Friend the Member for Woodford (Mr. Churchill), in his broadcast, he could not give the straight answer that has been attempted to be given by the President of the Board of Trade today, and why, if the Government were going to come to the House and put the Amendment on the Paper, the Prime Minister, in his broadcast, did not give us a clear answer and clear this matter out of the whole political arena and make it clear to the country that the Government was against this export of war potential?

If he had done so, he would have saved us a great deal of trouble. I say quite definitely that hon. and right hon. Members opposite are always trying to make out that we are playing party politics on this side of the House. I maintain that my right hon. Friend, the Leader of the Opposition had in his possession facts which have proved to be worthy of the attention of His Majety's Government and which have resulted in an alteration or an improvement in the policy of His Majesty's Government. That is a legitimate, and, in fact, absolutely necessary move on the part of my right hon. Friend. The people who have tried to make party politics out of this are right hon. and hon. Gentlemen opposite. If the Prime Minister wanted to clear the table on this subject he could have done that in two minutes in the broadcast by a generous and honourable admission to my right hon. Friend.

The Prime Minister, in the same broadcast, asked why neither my right hon. Friend the Leader of the Opposition nor his colleagues had made any protest at the time when these agreements were made. I should like to remind the House—and in this I can really stand before the House in a white sheet of absolute purity—that my right hon. Friend the Member for Bromley (Mr. H. MacMillan) and I, in a debate on Foreign Affairs on 23rd March, 1949, specifically referred to this subject. In answer to the Minister of State, who is now Secretary of State for Scotland, we deliberately referred to these lists which were being drawn up by the President of the Board of Trade. I said on that occasion:
"It really is a preposterous situation that when, in the terms of the Government's own statement by the Minister of State, the situation is being treated with contumely by the Governments of Eastern Europe, we should go on deliberately encouraging trade with them in articles which may be used for war production and for the purpose of war."
I went on to say at that time, which was around the time when the lists were first drawn up:
"We should have a definite undertaking from the Government that trade in war potential will stop."
That is the answer to the Prime Minister's broadcast. I want to make a further point on this subject. I said, at the same time, in the same column and in the same paragraph:
"I do not ask that all trade between East and West shall be stopped."—[OFFICIAL REPORT, 23rd March, 1949; Vol. 463, c. 477.]
I proceeded in the same speech to draw attention to the importance of East-West trade.

We on this side of the House are quite clear about the advantages of maintaining open the channels of East-West trade. In answer to several hon. Members opposite, and to some on this side of the House, representing the machine tool industry, I would say that we quite understand the importance of maintaining open the markets for our machine tool industry, in the interests of the workers, in the interests of employment and in the interests of production. We also understand that the nature of this East-West trade is a very particular one. For example, if it were an earlier hour I could detain the House by illustrating from statistics borrowed from learned journals the nature of this trade, and the nature of the trade is that we get in very much more than we send out. In fact, the extent of the export of our machine tools to Russia amounts to approximately some £5 million, in machines altogether, in the first half of this year as compared with some £11½ million imports of grain. If one takes the figures as a whole, one finds that the imports are in a relationship of about two to one of the exports.

I mention these figures because they were mentioned by my right hon. Friend the Member for Aldershot and because they indicate quite clearly, in the nature of this trade, that we are not indulging in this trade simply as depending upon our exports in order to obtain the timber, grain and other commodities which are available to us. Therefore, by stopping the export of war potential in the shape of valuable tools, I maintain that we are not in any way prejudicing the import of timber, grain or other commodities which are vital to our building programme and to our agriculture. [HON. MEMBERS: "Oh!"] If hon. Members scoff I could produce these arguments quite clearly from the issue of "The Statist" of September—page 318—to which I refer, but I have promised the hon. Gentleman that I will give him an opportunity to reply.

The fact is that those arguments from hon. Members opposite are "phoney." They know perfectly well that in matters of timber or grain we are as keen to obtain as large a quantity of these commodities from foreign sources as we can for our own agriculture or building. But had we used the Scandinavian markets for the purchase of timber in the way we ought to have done, or the Canadian market, we should have not been up against this problem as we are today.

Before the hon. Gentleman replies I want to sum up the questions I put at the beginning, and to sum them up by further reference in more detail to the machine tools mentioned by the right hon. Member for Aldershot; to discuss raw materials, to which there is a vague reference in this Amendment; and to deal with the general question of war potential. I will take, first, the 27 machine tools, including the lathe, which I am sure gave us a rather Philips Oppenheim feeling, which is about the size of this building and would make it impossible for us to sit in a Chamber of this sort. Can the hon. Gentleman give us an undertaking, quite categorically, that the 27 tools referred to in the speech of my right hon. Friend will not be exported, subject to the review which is to be undertaken with the North Atlantic Powers and the United States of America? If he can give us that undertaking then we shall be satisfied with the result of this Debate.

My right hon. Friend has phrased my argument more beautifully even than I could—will not be exported except subject to any agreement by the nations I have mentioned, and subject to our own consideration of our own defence needs.

Second, in regard to raw materials the President of the Board of Trade was extremely vague. He did not give us as clear an assurance as is given in this Amendment. The Amendment says:
"… approves the policy of His Majesty's Government in stopping, in all appropriate cases, the export of equipment and materials likely to be required for the defence programmes of this country, of the rest of the Commonwealth, and of North Atlantic Treaty Powers. …"
Can the hon. Gentleman give us an assurance that this will cover the necessary raw materials, so that we and the United States and the other North Atlantic Powers can make the stock-piles which we ought to be making at this vital time? This Amendment is the reason why we are not considering it necessary, as at present advised, to vote for the Motion. We were not however satisfied by the statement made by the President of the Board of Trade on the subject of raw materials.

Lastly, let me sum up by asking: Can we have an assurance that this review will take place expeditiously, and that suitable machinery will be established between the countries concerned, so that this review of raw materials and war potential is satisfactorily conducted; and may we be assured that what my hon and gallant Friend the Member for Gillingham (Squadron Leader Burden), said will be a fact, that we may go to bed tonight, after this Debate, feeling that we have Struck a blow to save those of our men who are fighting abroad, and to prevent any raw materials of the type I have described being applied by or supplied to potential aggressors?

9.37 p.m.

I will endeavour, in the very short time available, to give full answers to the questions which the right hon. Gentleman has put to me and also to deal with one or two other points of somewhat less importance which have come up during the Debate. I should like to say, first of all—I am sure the right hon. Gentleman will allow me to do so—that we on this side of the House are very grateful to the right hon. Member for Aldershot (Mr. Lyttelton) for the way in which he opened this Debate. He made a speech which we on the Government Front Bench thought was helpful, and no one on this side has had any desire to criticise his approach to this problem. I do not think all other hon. Members followed that example, but I desire, in the few minutes at my disposal, to confine myself as much as possible to the more important issues that have been raised.

Let me refer, first, to one or two minor matters which I should like to get out of the way. The hon. Member for Woking (Mr. Watkinson), to whom we all listened with great respect on this subject because of his great knowledge of the machine-tool trade, raised at considerable length the point of the commercial expediency of a general policy of exporting this sort of machine tool to Eastern Europe and the Soviet Union. I will say to him only two things. First, there is a division of opinion on that and the machine-tool trade itself is by no means unanimous; secondly, although one listened to what he had to say with respect, it was not strictly relevant to the Motion or the Amendment which we are debating tonight. On the subject of technical drawings, I should like to have a further discussion with him outside this House, because I think that this may be a point where he could be of assistance to the Government.

I should like to refer also to a point which one or two hon. Members have made, notably the hon. Member for Merioneth (Mr. Emrys Roberts), on the subject of joint purchasing agencies and stock-piling. All I want to say on this is that the Minister of State, speaking in the Defence Debate last week, made a statement on this subject and refused to be drawn further at that time than the words he used; and I do not propose to be drawn further tonight than was my right hon. Friend last week.

The hon. Member for Hull, North (Mr. W. R. Hudson), when, I regret, I was temporarily out of the House, raised a point, which may have been of some importance, about the alleged export of some bomb moulds from this country. As at present advised, I cannot trace that incident at all and if it took place in the form in which he has been informed, it must have been a case of something slipping through the control by either inaccurate or inadequate description. If he will furnish us with the information which he has, we will look into the matter and endeavour to stop that gap.

May I also refer, before turning to the major issues put by the right hon. Gentleman opposite, to a remarkable speech—I think everybody who heard it will agree with that description—made by my hon. Friend the Member for West Ham, South (Mr. Frederick Elwyn Jones). Obviously, not very many people in the Chamber agreed with the point of view that he put forward. He took the line that the greatest crime we could commit in this matter at this moment would be to break our agreements. I think the value of his speech, with which I did not entirely agree, was that he did bring home to everybody who heard him the fact that there are very much two sides to this question and that it is a very serious thing to take any step which interferes, or which seems likely to interfere—because that is the truth in this case—with any agreement that has been made. My hon. Friend indeed used words to suggest that we should not interfere "for our own convenience" with an agreement which has been made; but any interference which may take place now is not for our convenience, but for our safety and I believe that the House, as a whole, though it treated with respect the argument which he brought forward, will disagree with him.

After all, very few of the tools, to take machine tools as an example, that have been discussed in the House this afternoon are going to be ready for delivery and shipment in the very near future. In many cases a decision which is announced now may not actually take effect on an individual tool for a year or more. During that year the Soviet Union, the Government of Poland or any of these countries has every opportunity to reassure us as to the doubts we feel at the moment about our own safety owing to the international situation. It is, of course, for the House to decide, but I feel certain that the House will agree that the line of the Government's Amendment to the Motion is approximately right.

Coming now to the major issues which were put from the Opposition Front Bench, may I say, in passing, that I think the criticisms, implied or explicit, from the Opposition Front Bench of my right hon. Friend's speech were a little churlish, in view of the number of times he was interrupted. I think that right hon. Gentlemen opposite will find when they read HANSARD tomorrow that his statement was perfectly clear, and if it seemed that it was not perfectly clear on that side of the House, I am not altogether surprised; but I do not think it was the fault of my right hon. Friend.

There are two problems which we are facing. First, there is that which the right hon. Member for Aldershot put to us, namely, what sort of tools ought to be on the list of controlled exports? Secondly, there is the problem, which is not quite the same, of the tools which are by type already on these lists but which for some reason or other, either because the orders were placed before the control came into force or because they are special cases in some way as a result of trade agreements, have not up to now been caught up in the control system. I ask for the forbearance of hon. Members opposite in interrupting as little as possible at this stage, and I will endeavour to give a reply in the crispest language I can command.

Since April, 1949, control lists have existed of some types of war material, either raw materials or machine tools or whatever it may be, which are the subject of a complete embargo, and also of other types which are not subject to an embargo but which are subject to quantitative restrictions in order to prevent the supply going to a potential aggressor being more than is required for normal civilian use. At the time these controls were brought into force, there were some orders which had already been placed, and it was, I think, accepted by the House—and certainly there was no criticism that I can trace at the time—that these controls should not then be retrospective. That is the policy we had been following up to the time of the Korean war.

What my right hon. Friend said this afternoon was this. Where there is a machine on order or being manufactured which would have been on the control list but for the fact either that it was ordered before the control came into being or that it was covered by some specific provision in a trade agreement, that would be caught up by the announcement that he made this afternoon. What he said this afternoon—and this I think will be clear when it is read in HANSARD in the morning—was in effect—if I may not quote his words but summarise them—that our own defence needs and those of the Commonwealth and North Atlantic Treaty organisation came first.

The right hon. Gentleman is now helping me in exactly the same way as he helped his right hon. Friend. I have no quarrel with him at all over his choice of words—superseded all other needs. What we have said is that we will immediately carry out a review of our own needs, the needs of the Commonwealth and the needs of the North Atlantic Treaty Powers to try to ascertain, as accurately as we can, which of these strategic materials or products now on order either are wanted or are likely to be wanted to meet those needs, and where we find such goods are needed we will take them to meet our own needs. I do not think that I can make a more specific statement on that point.

My right hon. Friend went on to say that he could not give an undertaking at this stage that where we found that something which was on order was of no use either to ourselves or to our allies, it would be prohibited. He did not—I draw the attention of hon. Members opposite to this—refuse to prohibit it. What he said was that he would not give an undertaking on this occasion that it would be prohibited, but that each case, as it came to light, would be judged in the light of the nature of the machine and the international situation as it existed at the time against the sort of principles which both he and I have enunciated to the House.

I cannot forecast at this moment—and I am pretty certain that no one else in the House can do so with any accuracy—how many of these tools are infact likely to be needed, but if I may offer an observation to the Opposition with the desire to be helpful, I would suggest to them that in fact they will find their point has been very substantially met, and I think that they would probably not wish to divide the House on what is a very narrow issue.

May I turn now to a point which, I think, is of equal importance, and which was put to me by the right hon. Member for Aldershot in the course of his opening speech? This is a matter of some complexity, and I confess to not being a technical expert; I very much doubt whether the right hon. Gentleman himself is an expert on these matters, and therefore I hope we shall manage to understand one another. He suggested that, whereas the Government had included in their list of controlled tools certain types which are obviously of prime strategic importance, they had omitted certain other types which were, according to his brief, of equal importance.

Perhaps the right hon. Gentleman will allow me to say that he was extremely well briefed this afternoon. The reason I did not interrupt him while he was speaking to give the answer to his question was that there are very complicated points of technical definition involved, and I was not prepared to intervene on the subject until I had the chance of further discussion with the technical people who advised me. He mentioned particularly vertical borers, large centre lathes and the largest kind of planing machines. Let me say, to begin with, that vertical borers are already on the list. There is no doubt about that, and some—I believe seven—machines which are likely to be ready for delivery by Craven Brothers in the quite near future will be requisitioned by the Government, either for Ministry of Supply or Admiralty purposes.

As regards the other two types of machine he mentioned—large planing machines and large centre lathes—I am sorry that I cannot give the categorical answer for which he asked, but to some extent, of course, the matter has been overtaken by the announcement of policy by my right hon. Friend. The position is that there is a further list of exports to be controlled which is at present, as my right hon. Friend told the House, under consideration as to its final details. I am not prepared tonight to give the House the full list of the items contained, which is obviously lengthy, but I can say that certain types of large planers and large centre lathes are comprised in that list as it exists at the moment, which means that they will probably be included in it. There are certain difficulties of definition. On the whole, we have tended to define these large tools by the end uses to which they are put, and not merely by size. There are certain types of these tools which have specific munition application that have been embargoed for a long time.

Before I go further, I would wish to have fuller technical consultation than has been possible during the course of the Debate, but if the right hon. Gentleman has any further doubts about it, I can reassure him by saying that, pending a final decision on these points of detail, we will include any of the sort of machines referred to by the right hon. Gentleman and not yet under control in the review which my right hon. Friend announced of our own and allied defence needs. Moreover, we will examine the position put to us by the right hon. Gentleman with sympathy and a desire to meet his point as fully as we reasonably can.

I hope Members opposite will agree that I have done my best to use the crispest language possible to answer the questions put to me. I do not think there can be much doubt where the Government stand on this matter.

Before sitting down, I should like to refer to one or two other matters which the right hon. Gentleman mentioned in passing. First, he referred to the question of transhipments. Right hon. Gentlemen opposite who have had experience of these matters will realise that this is one of the most difficult of all controls to administer effectively without damaging our own legitimate commercial interests. It has been accepted between ourselves, the United States and the other countries involved that the only way to deal effectively with this matter is for the prime source of the material concerned to be responsible for its ultimate destination. We are all aware of the fact that there was a case quoted in the Press recently where this system broke down. It would be undesirable in the House this evening that I should be pressed to say more than that I do not think the responsibility for that was the responsibility of His Majesty's Government. But I do think that steps are being taken by the people concerned to try to stop that sort of thing happening again.

The right hon. Gentleman also mentioned, a little to my surprise, the question of the action which had been taken recently by the United States Senate. I want to say only one thing on that. It has become fashionable amongst hon. Members opposite to suggest that there is a kind of perpetual conflict going on between the British Government and the United States Administration on these matters. This is not a subject about which there ought to be party controversy, nor is it a subject that ought to be laughed off. The fact is that the pattern of trade in this country is different from the pattern of trade in the United States, and it is not surprising that we should sometimes approach these problems on a slightly different basis; but, step by step, we have been in company with the United States in the action we have taken. On any further discussion of steps we are going to take in the future, my right hon. Friend the Foreign Secretary is in Washington and it is more appropriate that any discussions on this subject should be taken there than across the Floor of this House in Debate.

Finally, may I say that it is, of course, entirely up to the Opposition whether in the end they choose to divide the House on this or not, but I hope they will not, because I think the answers I have given to the questions put to me have been explicit and have substantially, if not entirely, met the points which were put to us. Some of us feel—and I say this with great respect to the Leader of the Opposition—that the right hon. Gentleman presented this matter in his broadcast in a way which, whatever the motives may have been, was not conducive to the sort of calm discussion which has been given to it this evening.

What has been perfectly clear is that there is a very great consensus of opinion on both sides of the House as to the sort of measures we ought to be taking. All of us are determined to do anything we can reasonably do to avoid our young men in the Armed Forces being subject to greater discomforts and dangers than they need be by virtue of any commercial policies which we may follow in this country. That is utterly rejected by all of us and most of all by those hon. Members of the House who have seen their own comrades fall in battle.

That is a subject about which this House should not divide. It is essentially an extension of the Defence Debate last week, in which we managed to achieve a high degree of unanimity. Even if there is a difference of opinion between the two sides on what has been done in the past—I have not the slightest hesitation in defending the steps we have taken and the time at which we have taken them—it is still not relevant to the Motion and Amendment we are discussing this evening. What we are asking the House to do now is to support the policy of the Government as expounded this afternoon by the President of the Board of Trade and by myself; and I would respectfully suggest to hon. Members on both sides of the House that it would be consonant with the dignity and honour of this House that we should do so without a Division.

Question, "That the words proposed to be left out stand part of the Question," put, and negatived.

Proposed words there added.

Main Question, as amended, put and agreed to.


"That this House approves the policy of His Majesty's Government in stopping, in all appropriate cases, the export of equipment and materials likely to be required for the defence programmes of this country, of the rest of the Commonwealth, and of North Atlantic Treaty Powers, and, in consultation with those countries in continuing and, where necessary, extending the controls on the export of equipment and materials of military value, while at the same time maintaining, to our mutual benefit, trade between the United Kingdom and Eastern Europe."