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Commons Chamber

Volume 486: debated on Tuesday 10 April 1951

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House Of Commons

Tuesday, 10th April, 1951

The House met at Half past Two o'Clock


[Mr. SPEAKER in the Chair]

Oral Answers To Questions

National Service

Territorial Army (Embodiment)


asked the Minister of Labour what percentage of the volunteer strength of the Territorial Army is estimated by him to be available for embodiment in their present unit; and what percentage is estimated to be not available to any unit.

82 and 13 respectively.

Is the Minister aware that this figure of 13 per cent. of men not available on embodiment will cause great disorganisation in the Territorial Army and is a strong argument for publishing now the schedule of reserved occupations?

I do not think that we should take that figure as being uniform throughout the country. It will, of course, vary in many localities. It would be misleading to assume that there will be a mean 13 per cent.

If the figure is not uniform throughout the country, the Minister must mean that in some places the figure is even worse. Does not that make nonsense of the embodiment scheme of the Territorial Army?

Interrupted Apprenticeship Scheme


asked the Minister of Labour why Mr. F. P. Medway, employed by Messrs. Sherren & Son, Limited, Weymouth, has had his application for reinstatement under the Interrupted Apprenticeship Scheme rejected.

This is not a question of reinstatement rights, as Mr. Medway is, in fact, in the employment of his pre-Service employer. The point is whether an application for the payment to that employer of a State allowance under the Interrupted Apprenticeship Scheme should be accepted 10 months after Mr. Medway's release from His Majesty's Forces. Since the inception of the scheme in 1945, this limit has always been six months, except for a delay due to causes outside the control of the applicant. As that does not apply in this case, I see no reason to alter the decision, of which the hon. Member has already been informed.

Is the Minister aware that nine months—not 10 months—have elapsed and that it is by no means too long for a young apprentice whose life and plans were dislocated by the war to concentrate upon a return to the profession of his original choice? Why has this administrative decision of six months been made, of which there is no notification whatever in the scheme to employers and men concerned? Would it not be much better to treat individual cases on their merits?

I am assured that 10 months have elapsed? We believe that the six months period is fair. In fact, if we were to give way upon instances of this type, it would mean that many thousands of cases which have been passed on the six-month period would have to be reopened.


Dispute, Electrical Industry


asked the Minister of Labour whether he is aware of the dispute between the British Electricity Authority and the Electrical Trades Union over the appointment by the former of an employee who is not a member of that union; and what steps he is taking towards a settlement.


asked the Minister of Labour what steps he is taking to end the dispute which exists under the London Electricity Board and the Eastern Electricity Board and which started some nine weeks ago.

I would refer the hon. Members to the answer which I gave on 20th March to the hon. Member for Hackney, South (Mr. H. Butler) in which I explained that although a meeting of the interested parties was called by the Department for 16th March, it had proved impossible to find an acceptable basis for joint discussions embracing all the parties. My right hon. Friend has, however, emphasised that the stoppage of work should not be allowed to drag on, and a meeting of all the interested parties has now been arranged for tomorrow afternoon with officers of the Department.

Is the Minister aware that about 2,000 men are now involved in this dispute and that despite the fact that they have offered to do emergency work free very great inconvenience is being caused to the public?

Oh, yes, and it is precisely because of that inconvenience to the public that we are trying to bring the dispute to an end.

Will the Minister be in a position to make a statement to the House tomorrow or the next day on the outcome of these negotiations?

So much depends upon what happens in the negotiations. We are hoping for finality, but I think the hon. Gentleman will agree that if we cannot achieve finality tomorrow it would be a great mistake to say anything which might put the matter back.

Weekly Earnings


asked the Minister of Labour to state the percentage increase since 1938 in the average weekly earnings of the industrial workers of Great Britain to the nearest date for which statistics are available with the increase in the cost of living since 1938 to the same date.

Figures showing the percentage increase between October, 1938, and October, 1950, in the average weekly earnings of manual wage-earners in the manufacturing industries and in some of the principal non-manufacturing industries were published in the Ministry of Labour Gazette for March, 1951, copies of which are available in the Library. No official index of the change, between 1938 and the present time, in the average level of retail prices for working-class households is available.

Is the Minister aware that most wage earners consider that the cost of living index grossly under-states the real rise in the cost of living? Can he state when a new and real cost of living index will be produced?

I am more aware that hon. Gentlemen opposite tend to do that rather than people in industry. As the hon. Gentleman knows, the Committee are sitting again, and as soon as they come to finality on the point, the House will be told.

Since the hon. Member does not know what the increase in the cost of living is, how is it that the Chancellor of the Exchequer has been able to work out changes in the value of the pound over the same period?

The retail index in use is a temporary one on an entirely different basis from the previous one.

Miners, Lanarkshire


asked the Minister of Labour how many miners were registered as unemployed in Lanarkshire on 2nd March, 1951, or nearest convenient date.

The number of men whose last employment was in the coalmining industry registered as unemployed in Lanarkshire on 12th March was 165. This figure does not include ex-miners who have been found to be unfit for further employment in the coalmining industry.

Will the hon. Gentleman draw the attention of the Minister of Fuel and Power to the fact that for family reasons unemployed miners in Lanarkshire do not want to leave that area and that the Minister of Fuel and Power might see that work is provided in the district?

The figure of 165 which I have given does not necessarily pre-sup-pose that those men are continually unemployed. I will bring the second point to the notice of my right hon. Friend.

Factory Inspectors (Salaries)


asked the Minister of Labour by what percentage the present maximum salary of each grade, men, in His Majesty's Inspectorate of Factories is higher than the 1939 maximum for the same grade, disregarding inspectors who have received the Chorley increases and specialist inspectors.

The percentage increases (London) are: Superintending Inspector, 31.8; Deputy Superintending Inspector, 32.8; Inspector, Class I A, 32.6; Inspector, Class I B, 28.6; Inspector, Class II, 31.9. Inspectors serving outside the London postal area have been subject to provincial differentiation since 1946. The percentage increase in their case varies from an average of 25 per cent. to 28 per cent.

Bearing in mind the shortage of recruits for this important inspectorate and in view of the inadequacy of the margin—round about 30 per cent.—between pre-war and current remuneration, will the Minister re-examine the scales of remuneration for this service, if only to secure an adequate flow of recruits?

We are, of course, extremely concerned that we are not up to full strength in the service. I cannot give the hon. Member the undertaking for which he asks. On the other hand, I will see that the point is looked at again.

Will my hon. Friend take notice that there is some apprehension on this subject on these benches? Will he take notice also that our view—whether there is anything in the belief—is that the salary is not sufficiently attractive to the young graduate coming from the universities and for suitable men in industry in their early 20's?

When the hon. Gentleman talks about provincial areas outside London, does he include Scotland? If so, would he say of what Scotland is a province?

Will the hon. Member bear in mind that pressure of this kind has been brought forward from these benches over a very long period? Is the hon. Gentleman in a position to say what action will be taken?

It is a remarkable thing how pressure can now be brought to bear by people who could have done so much when they had the opportunity.

Transferred Workers (Accommodation, Midlands)


asked the Minister of Labour if he is able to estimate the number of additional workers likely to be transferred to the Midlands, and to Birmingham in particular, in connection with the re-armament programme; and what provision he is making for the necessary housing or hostel accommodation for such workers.

No, Sir. Until it is known how far the labour requirements of the re-armament programme will be met by the switch of workers within the same factory and the transfer of others from local firms, I am unable to estimate what additional numbers may have to be brought into the Midlands region from other parts of the country.

Is the Minister aware that a considerable number of working men in Birmingham are unable to obtain adequate accommodation because of the high charge of 50s. to 55s. a week? In view of the number of men at present without beds and walking the streets, and as the hostels are full and men are being turned away, will he take some steps to see that no further influx of workers occurs or that adequate accommodation is provided?

We will do everything we can to ensure that there is no necessity for a great number of workers to be brought in. I cannot guarantee just how this will work out ultimately, but I know what a great shortage of housing accommodation there is in the Birmingham area.

As a great many men are brought in from outside to do defence work in a city such as Coventry will the Parliamentary Secretary ask his right hon. Friend to consult the Minister of Defence to see if priority can be given to such cities, as their industrial expansion over recent years has prevented them from catching up with their housing deficiencies of the past?


Deer (Killing And Wounding)


asked the Secretary of State for Scotland if he is aware of the depredations during the past winter of gangs of unauthorised men armed with rifles who fire at night-time upon herds of deer from cars whose headlights illuminate and dazzle the animals; that considerable numbers of deer are thus wounded and die on the hillside; that doubt exists as to whether either the rifles or the lorries and cars used are licensed; what reports he has had on the matter from the police; and what action he proposes to take.

Police reports which I have obtained from the Highland areas show that in some places there is some killing and wounding of deer in the manner described by the hon. Member, but information as to the numbers killed or wounded is not available.

Is the right hon. Gentleman aware of the considerable anxiety on the part of public opinion in Scotland about this? Is there not a case for an inquiry into this somewhat revolting form of commercial poaching?

As the hon. Gentleman knows, a Committee is inquiring just now into cruelty to wild animals. This is part of their remit, and their Report is expected shortly.

Is the right hon. Gentleman aware that very often on these expeditions sheep are killed or wounded, and that this causes a great deal of worry in the Highland areas?

I am aware of that, and the police are similarly aware of it. The police use mobile forces to try to cope with it.

Will the right hon. Gentleman make inquiries of local owners of deer forests and from the police force to find out exactly what has happened? Damage and cruelty are not confined merely to the Highland areas but are far more widespread.

As I have already indicated, I have called for the fullest reports from the police. While I do not want to minimise the distressing extent of this practice, it is possible to exaggerate it.

Hospital Accommodation, Fife


asked the Secretary of State for Scotland if he is aware of the increasing shortage of hospital accommodation in Fife and of the anxiety caused to patients, medical practitioners and the East Fife Hospital Board on account of the delay in proceeding with the building of the new general hospital at Cameronbridge; and what steps he is taking to deal with this matter.

I am fully aware of the need for additional hospital accommodation in this area, and I have already given the hon. Member particulars of the steps that are being taken towards the erection of the new hospital.

Is not the right hon. Gentleman aware that the particulars to which he refers have not been considered by the authorities in Fife and are not regarded as satisfactory? Does he realise that for a population approaching 250,000, no more than 200 beds are available for acute cases.

I am not certain about the figures, but the hon. Gentleman must appreciate that when one proposes to erect a hospital of 500 beds, most careful planning must take place. I am in the closest consultation with the local people concerned.

Houses (Allocation)


asked the Secretary of State for Scotland to what extent guidance is issued by him to local authorities as to the methods they may adopt in allocating State-subsidised houses.

Local authorities are responsible for the letting of their own houses. I have, however, drawn their attention to the Scottish Housing Advisory Committee's report on "Choosing Council Tenants," and from time to time I have asked local authorities to give special consideration in the public interest to the claims of certain groups such as miners, agricultural workers, key workers and tuberculous families.

Is the form of guidance which the right hon. Gentleman has given merely to direct attention to certain published documents?

I have drawn their attention to a published document which is available also to the hon. Gentleman.

Will the right hon. Gentleman issue some guidance to local authorities about the allocation of hats?

Will my right hon. Friend bear in mind that local authorities in Scotland are very jealous of the central Government impinging on their duties?

I will, Sir. I take the greatest care to ensure that I give no cause for alarm.

Will the right hon. Gentleman impress on the local authorities the importance of facilitating the transfer of people from houses larger than they require to smaller houses?

I very much sympathise with that point. I know that the larger authorities do exert themselves in this direction.

Development Plans


asked the Secretary of State for Scotland what are the names of the planning authorities in Scotland which have submitted development plans in accordance with the Town and Country Planning Act.

One Scottish local planning authority, Clydebank Town Council, has so far submitted a development plan under the Town and Country Planning (Scotland) Act, 1947.

Can the right hon. Gentleman say why there is this diffidence to submit the plans to him for inspection?

The hon. Gentleman is drawing an unwarranted conclusion. There is still a considerable time to go before the plans need to be presented.

Will the Secretary of State consider in what way he can make public to Members of Parliament and others those particular cases in which, under the Act, he has allowed an extension of time after 1st July next, and how long is the extension?

Speaking from memory, my recollection is that I have only indicated one authority which has asked for the necessary extension. I shall be glad to give extensions wherever there is reasonable cause.

School Meals (Price)


asked the Secretary of State for Scotland if he has considered the objections of the Fife County Council, transmitted to him by the hon. Member for Fife, East, to the recent decision of the Government to make a further increase in the price of school meals of 1d.; and what action he proposes to take, in view of the likelihood that if parents of the children are required to meet the extra charge the numbers of children benefiting by school meals will seriously decline.

The recent decision was taken because of the need for economy in the Votes for public education. The Government are anxious that no serious decline in the number of children benefiting by school meals should result from the increased charge, and I am sure that education authorities will endeavour to prevent any such decline by making the advantages of the School Meals Service to children and parents fully known in their areas.

Does the right hon. Gentleman recollect that on the last occasion when a similar regulation to this was passed, the number of children benefiting fell by six per cent. in Scotland? Surely he does not want a repetition of that?

It was a very unusual pattern. Some places showed a decrease and some showed an increase. I am sure that the hon. Gentleman will use his influence in the area to see that no drop takes place.

In view of the amount of money which will probably be saved by this economy, will my right hon. Friend undertake to look at it again, because the amount of money is out of all proportion to the probable hardship which might be involved?

Freight Charges


asked the Secretary of State for Scotland how far the proposed increases in transport costs were taken into account in the recent review of agricultural prices; and whether he will discuss with the Minister of Food the possibility of bearing the freight charges from the outer islands of Orkney and Shetland to Kirkwall and Lerwick.

The proposed increases were not taken into account at the recent price review because a review cannot deal with cost increases which are both prospective and unascertained. The question of freight charges from the outer islands of Orkney and Shetland to Kirkwall and Lerwick could not be dealt with by itself. As the hon. Member is aware, the whole question of transport and freight charges in the Highlands and Islands is one which is constantly under examination, but it is not one, I fear, that lends itself to easy solution.

While this matter is constantly under examination, will the Secretary of State bear in mind that these additional charges will bear heavily and unequally on farmers? Can he see whether he cannot get some help given to farmers in remote areas who will be seriously affected by these charges?

Has my right hon. Friend considered the representations which were made by the Aberdeen Chamber of Commerce as to the prejudicial effect which the increase in freight charges will have on industry generally, and will he consult with the Minister of Transport on this matter?

Is the right hon. Gentleman not aware that the case in the Highlands and Islands was for a reduction in freight charges before the rise last year? Is the recommendation of the Cameron Committee to be taken into consideration in the near future, and must any revision always be upwards?

As my right hon. Friend indicated yesterday, the submission of the Cameron Committee is one of the primary submissions of which account must be taken.

When the Secretary of State says that freight charges are constantly under review, does he mean that the grant towards the subsidy for freight charges for the Highlands and Islands is liable to be changed at anytime?

No, I meant no more than I said, which was exclusively that this question of freight charges in relation to the Highlands and Islands constantly concerned us and was constantly examined.

Peat (Sulphur Content)


asked the Secretary of State for Scotland whether he will in vestigate the sulphur deposited in peat bogs, especially in Shetland, to see if it could be economically worked.

I am advised that the sulphur content of peat bogs is very low and I do not think, therefore, that an inquiry such as the hon. Member proposes would be likely to yield useful results.

Although in normal times, no doubt, sulphur deposits in peat bogs are not economically workable, since we are so short of sulphur would not the Minister think it worth while to hold a further examination now?

I am fairly satisfied that the sulphur content of dried peat is as low as 0.5 per cent. We are making inquiries into scientific methods of using peat for other purposes.

Could the Minister say when the report will be issued regarding these deposits and the inquiries that are being made?

I could not do so with any exactness. One half of the experiment is well advanced. I do not mean that the other is unduly delayed, but I could not say precisely.

Swedish Houses (Windows)


asked the Secretary of State for Scotland what would be the cost of supplying double windows in Swedish houses.

The construction of the outer wall in Swedish houses makes it impracticable to substitute double hung sash and case windows for the casement type at present fitted. The additional cost of installation in a new house is calculated to be about £20.

Can the Secretary of State say whether he has discovered any other methods of curing the faults in these windows which he admits exist?

I shall be glad to let the hon. Gentleman have the technical report on the subject.

Livestock (Statistics)


asked the Secretary of State for Scotland what increase has taken place in our livestock numbers in Scotland since the commencement of the agriculture expansion programme in June, 1947.

There has been an increase of 157,786 cattle; 1,312,581 sheep; 102,542 pigs and 2,156,304 fowls in the period referred to.

Is my right hon. Friend aware that the huge success of the expansion scheme has created undoubted satisfaction throughout Scotland, and that in the rural areas, in particular, there is a new sense of security and well-being and complete happiness, which is in direct contradiction to what hon. Members opposite are promulgating throughout the country?

Will the Minister ensure that these additional animals are furnished with liver, kidneys and other accessories which are markedly and strangely deficient in all present animals?

Is the Secretary of State aware that, although the figures for cattle have risen by 25 per cent. since before the war, the production of beef is still 14 per cent. less?

Milk And Egg Production


asked the Secretary of State for Scotland the extent of milk and egg production increase in Scotland since the commencement of the expansion programme.

Compared with 1946–47 it is estimated that milk production in Scotland in 1950–51 will have increased by 53 million gallons and egg production by 291 million eggs.

In view of this tremendous increase in milk yield, could my right hon. Friend—[Interruption.] Mr. Speaker, on a point of order, if the noble Lord the Father of the House could contain himself, I could go on with my supplementary question. I was asking my right hon. Friend if he could inform me, in view of the tremendous increase in the milk yield, what proportion of that milk is now being used for—[HON. MEMBERS: "Cheese."]—food aids such as powdered and evaporated milk?

I could not give the exact figure. The processing of milk is at the limit of our capacity and is substantially higher than it was before the war.

Agriculture (Subsidies)


asked the Secretary of State for Scotland to state, to the nearest convenient date, the total amount of subsidy paid in the Highland counties in respect of sheep rearing and cattle rearing, respectively; and the amount of subsidy which has been paid in the above areas in connection with hill farms and which is outwith the ambit of the sheep and cattle subsidies.

As the answer is necessarily long, I will, with permission, circulate it in the OFFICIAL REPORT.

Following is the reply:

The total amounts of hill sheep and hill cattle subsidies paid to hill and upland farmers in the seven crofting counties of Scotland from the inception of the subsidy schemes until 31st March, 1951, were £3,964,000 and £2,650,000 respectively. I append a table giving this information in detail.

In addition, £559,000, £1,050,000 and £580,500 were paid to farmers in these counties up to 31st March, 1951, in marginal production assistance, ploughing-up and calf rearing subsidies, respectively. Most, though not all, of these payments would go to hill and upland farmers in the area; I regret, however, that records do not show separate figures for these categories.

With regard to certain other forms of assistance, e.g., the lime subsidy, the information for which the hon. Member

Scheme YearGrassland Ploughing SchemeHill Sheep SubsidyHill Cattle SubsidyMarginal Agricultural ProductionCalf Rearing Subsidy
194142,507113,000Say 2/3rds of 28,600*
Grand Total of payments shown above, £8,791,608.

* Separate figures for various counties not available.

Agricultural Land (Conservation)


asked the Secretary of State for Scotland what steps he has taken or is proposing to take to conserve good agricultural land in Scotland.

Every proposal to divert agricultural land to another use which comes before me is thoroughly examined in order to avoid any unnecessary loss.

Can my right hon. Friend tell us the outcome of his discussions with Kilmarnock County Council with reference to agricultural land on the outskirts of Kilmarnock?

Tuberculosis (Swiss Treatment)


asked the Secretary of State for Scotland whether he can yet make a further statement about the use of Swiss sanatoria for patients from Scotland.

Parliament will shortly be invited to consider legislation enabling arrangements to be made under the National Health Service for giving treatment outside Great Britain to persons suffering from respiratory tuberculosis. For this year, from 150 to 200 beds in

asks could not be extracted without a disproportionate amount of work.

Swiss sanatoria will be made available for patients from Scotland, with the necessary transport facilities.

To minimise the travelling involved, the selected patients will normally be persons in need of at least six months' sanatorium care, but unlikely to require any major surgical operation. Treatment in Switzerland will be offered to persons recommended for sanatorium treatment in the ordinary way, where on medical grounds this is considered appropriate by the responsible tuberculosis physicians.

My right hon. Friend the Minister of Health asks me to say that he is making similar arrangements for patients from England and Wales.

Radiology Service, Kilmarnock


asked the Secretary of State for Scotland what changes have recently been made in the radiology service at Kilmarnock Infirmary; and what has been the effect of these changes.

To secure improvement, the radiology services in Ayrshire are being reorganised. The reorganisation provides for a consultant radiologist stationed at in place of the senior hospital medical officer formerly employed there.

Does my right hon. Friend think that his reorganisation is very successful when it takes away from Kilmarnock a full-time radiologist and leaves a part-time one? In further considering this matter, will my right hon. Friend realise that he proposes to open a new radiology service station there shortly?

The number of first-class radiologists is limited and I must exert myself to see that they are employed to the maximum. I will watch the situation carefully, but I assure my hon. Friend that I think everyone in the area will benefit from the change.

Can I take it that my right hon. Friend's reorganisation is not complete or final?

Dogs (Sheep-Worrying)


asked the Secretary of State for Scotland whether, in view of the large number of cases of sheep-worrying by dogs, he will consider increasing the penalties for infringements of the law.

The suggestion that the penalties for infringements of the law in these cases might be increased has already been considered, along with various other suggestions as to measures that might be taken to reduce the incidence of sheep-worrying by dogs. The penalties that may be imposed are already substantial and I do not consider that merely to increase them would have the effect desired by the hon. Gentleman.

Is the Minister aware that last year in Inverness-shire alone 132 sheep were killed and 53 injured by dogs, and does he not think that something urgent ought to be done to prevent these severe depredations?

I shall be very anxious to look at any practical consideration, but I do not think that an increase of the maximum penalty would achieve the purpose desired.

Has the right hon. Gentleman conferred with the Home Secretary in this matter, in view of the fact that English Members have complained that this matter is becoming a national scandal of the greatest magnitude?

I know the interest on the benches opposite in this subject, and my right hon. Friend and I have had consultations.

Development Charge (Personal Case)


asked the Secretary of State for Scotland why was Mr. I. C. Macrae, Eilean Donan, Cradle Hall, Inverness, required to pay a development charge of £130 for a house he has built on scrub land of no agricultural value.

I regret I cannot undertake to answer Questions about individual cases involving payment of development charge. This is a subject within the day-to-day administration of the Central Land Board and I have asked the Board to communicate with the noble Lord.

Does the Minister not think that the position in this case is monstrous? Is it not in the interests of the country for the right hon. Gentleman to encourage all the house building he can? The house in question is built on land which is of no agricultural value.

Perhaps the noble Lord will discuss the matter with the Central Land Board when he is on the spot.

Will the Minister do his best to ensure that anything which hinders development in Scotland is put right?

Is the Minister aware that, instead of being charged development value, a builder who wants to build on scrub land should be paid for building on it instead of using agricultural land?

Spey Valley (Survey)


asked the Secretary of State for Scotland whether he will make a statement in regard to the proposal for an up-to-date survey of parts of the Spey Valley, with a view to reclaiming land from flooding for agricultural or other purposes.

The general purpose of the survey is to determine the best utilisation of all the land in the Spey Valley. Particular attention will be given to the possibility of reclaiming flooded areas and to the effect of such reclamation on the land utilisation problem.

Does the Minister realise that this road proposal is causing very great interest in the area, and will he ensure that all the interests in that area are fully consulted?

I think that that will be taken care of. In the three units already affected, we have done that on the site, and I am hoping for quick and good results from the south.

Ministry Of Pensions

Disabled Persons (Motor Cars)


asked the Minister of Pensions how many motor cars have been supplied to disabled men and women in Scotland; and how many approved applications are still unfulfilled.

One hundred and fifty-one cars have been supplied and 15 applicants in the eligible classes are on the waiting list.

Leaflet (Cost)


asked the Minister of Pensions to whom the leaflet entitled "The Open Door" has been circulated; what was the cost of its publication; and what is the estimated cost of publishing the same information in plain leaflet form without the pictorial design.

The leaflets have been sent to over 50 voluntary organisations and to local authority and Government officers who have contacts with war pensioners. I also sent a copy to every Member of this House as a matter of interest. The cost was £63. A plain leaflet without pictorial design would have cost about £20.

Although the extra cost may be comparatively small, what were the practical advantages which the Minister expected from it?

The practical advantage of submitting leaflets or pamphlets of any kind which are attractive in appearance is that they are more likely to get attention than are pieces of what we call "winkle bags."

Is my right hon. Friend aware of the welcome given by disabled men to the information he has given? Will he make the country aware also of the draconic treatment meted out to the disabled between the wars—[Interruption]—and furthermore, will he see that the country knows these penetrating figures: that out of every 100 disabled men who applied for pensions between the wars, 60 were turned down, whilst under the present Government—

The hon. Member appears to be making a statement and giving information, and not asking a question. At Question time one must ask questions and not give information.

I was merely asking my right hon. Friend if it is not true that 69 out of every 100 men who applied for pensions under a Conservative Government were turned down. Is it not true that 70 out of every 100 receive them under the Labour Government?

Pensioner, Co Down (Address)


asked the Minister of Pensions why pension book No. H/8990329 issued to Mr. Richard Walker on 5th February, 1951, gave as office of payment the address Downpatrick, Co. Down, Irish Republic, when, in fact, Downpatrick is situated in the United Kingdom and not in the Irish Republic; and if he will ensure that the official responsible apologises to Mr. Walker for giving him a fictitious address at which to obtain payment of his pension.

I am very sorry for this mistake and have directed that a fresh pension order book and a letter expressing regret be sent to Mr. Walker.

Can the Minister say whether such foolish mistakes were made under a previous Conservative Government?

Very heavy weather has been made of an obvious mistake on the part of one of the staff. He has been admonished; he ought to have been more careful. Surely it is no real crime to say that a man lives in Southern Ireland.

Will the right hon. Gentleman post up in his Department a map of Northern Ireland? Does he not realise how intensely irritating it is to myself, for instance, to receive from Whitehall letters addressed "Belfast, Eire"?

No hon. Member would willingly do anything to irritate the hon. Member; but these mistakes do happen and surely a simple thing of this kind is not worth a House of Commons Question.

May I ask the Minister whether this accident on the part of the official concerned was a case of wishful thinking on his part?

British Army

Prisoners Of War, Korea


asked the Secretary of State for War if he is aware that Mrs. Taylor, 45, Paterson Street, Glasgow, C.5, had a letter from his Department which she had sent to her son in Korea returned marked, "deceased"; and why this was done, in view of the fact that nothing has been heard of Private Taylor since 9th September last despite repeated inquiries by the hon. Member for Trades-ton.

I would refer my hon. Friend to the letter sent to him by my hon. Friend on 16th February.

In view of the fact that the letter was quite unsatisfactory and that since the Question was tabled by me Mrs. Taylor has received word that she can get information about her son by writing to the China Peace Council, Peking, China, if this source of information is available, what attempt has my right hon. Friend made to get in touch with this source through our diplomatic representative? If he has made no attempt, why is he not doing so?

We very much hope that my hon. Friend's information is correct and that this soldier is a prisoner and not, as was erroneously thought, deceased. As to getting in touch with prisoners of war in North Korea, I have already answered Questions on that subject and full information as to numbers has been given. When I say full information, I mean all the information we have.

Further to that reply, is my right hon. Friend aware that, unofficially, lists of missing soldiers are being published in this country?


asked the Secretary of State for War if he will now make an official statement on the whereabouts of British Service men, formerly reported missing in Korea and subsequently reported to be prisoners of war.

I regret that there is still no official news regarding the whereabouts of British Service men believed to be prisoners of war in Korea.

Has my right hon. Friend any news yet from the Red Cross? Are they still trying to establish contact?

Yes, attempts are being made, and as is shown in "The Times" this morning, Dr. Ruegger, the President of the International Red Cross, has just returned from Peking, and he states that he found the Chinese Red Cross authorities "very understanding."

Troops, Korea

30 and 31.

asked the Secretary of State for War (1) what arrangements exist for leave in Japan for British Commonwealth officers and other ranks serving in Korea;

(2) to what extent British officers on leave from Korea are allowed to use the British Commonwealth Occupation Forces Leave Hotel at Ito, Japan.

To the extent of the available transport, front line officers and other ranks of the British Commonwealth Forces in Korea are being given five clear days' leave respectively in a hotel and a hostel in Tokyo, where amenities equivalent to those of a first-class hotel are provided. The leave hostel at Ito is not available for officers from Korea as it is fully occupied with the normal leave of the occupation personnel for whom it was established. The establishment of a much larger scheme to provide for all British Commonwealth forces in Japan as well as in Korea is being planned.

Does that answer mean that exactly the same facilities are available for troops who have been fighting in battle as for those engaged in peaceful occupation in Japan? Do those from Korea get fully equivalent facilities for leave as occupation forces in Japan?

Yes, Sir, equivalent, but not the same. They do not go to Ito but they go to these hostels, which I am assured are first-class accommodation.


asked the Secretary of State for War if, in his communication to the Commander of the British Forces in Korea on the subject of a local overseas allowance, he made specific reference to the fact that the prices of some Navy, Army and Air Force Institutes' goods are related to their prices in Hong Kong; and what reasons were advanced by the Commander for his opinion that there was no case for a local overseas allowance.


asked the Secretary of State for War what communications he has had with the Commander of British troops in Korea about local overseas allowances in Korea; what increases in the allowances have been made; and from what date.

I would refer the hon. and gallant Member for Blackpool, North (Mr. Low), to my reply on 3rd April. N.A.A.F.I. prices were specifically taken into consideration by the Commander of the British Commonwealth troops in Korea in arriving at the opinion that the overall cost of living for troops in Korea is definitely not higher than that in the United Kingdom, and that there is, therefore, no case for a local overseas allowance.

Is the right hon. Gentleman quite satisfied that in getting the advice of the Commander of the British troops in Korea he did not so phrase his questionnaire letter that the Commander's advice was open to misunderstanding, because from his own statement N.A.A.F.I. prices are clearly higher than those in other parts of the world?

No, Sir. I should have thought that we rather went the other way in soliciting from the Commander an application, if he could make any case, for a local overseas allowance. We really invited him to make such a case. I have no doubt that he would have done that if he could have possibly done so.

Is the Minister aware that one of the reasons advanced for the high prices of N.A.A.F.I. goods in Korea is that they are based on Hong Kong prices and that, if the right hon. Gentleman intends to deal with the matter on a square basis, there are two alternatives—to reduce N.A.A.F.I. prices or put the troops on the Hong Kong allowance? As neither has been done, it seems to the House very anomalous that the hardship should be borne by the troops.

N.A.A.F.I. prices in Hong Kong are only one, and a comparatively small, element in the general cost of living. I should like to see made out a case which we could sustain to the Treasury for some allowance in Korea. It is disappointing, to say the least, that the Commander in the field cannot furnish us with such a case.

When my right hon. Friend says that the N.A.A.F.I. prices are only one, and a comparatively small, item in the general cost of living, can he say what else the troops in Korea can spend their money on?


asked the Secretary of State for War if he will make a full statement on the breakdown of the group system in providing officers and other ranks for units now in action in Korea; and what modifications he proposes to this system.

The speed with which it was necessary to despatch 27th Infantry Brigade to Korea made it necessary to attach officers and men from other battalions in Hong Kong, regardless of the group system. In order to provide the necessary reinforcements for Korea it has been necessary to draw on shadow groups, which are groups with a close territorial affinity to the groups directly concerned. Such arrangements, however, are an integral part of the group system and are designed to cater for just such a situation as that in Korea.

Is it not a fact that some units in Korea have had to draw reinforcements from as many as 10 or 12 or even more regiments. Whatever the right hon. Gentleman says about "shadow groups," how can he, in those circumstances, say that the group system is working?

I do not say that in the case of the troops drawn from Hong Kong, which I think is a special case, but in the reinforcements drawn from this country that procedure was envisaged under the group system.

Will the right hon. Gentleman make quite certain that this group arrangement will work under the stress of war? Will he see that there is no risk of a breakdown in regard to reinforcements occurring on the scale on which it occurred in the last war?


asked the Secretary of State for War what report he has received from Korea regarding the fitness of reservists for the strenuous type of fighting they have to undertake; why infantry other ranks over 30 years of age were sent at a time when the numbers in the Army are large and few are committed on active service; and if he will now take steps to replace all infantrymen who by reason of their age are not suited to active service Korean infantry operations.

Reports from Korea indicate that reservists have stood up to the conditions as well as men of other categories. The suitability of infantry soldiers for active service is determined by their medical fitness rather than their age and many men over 30 years of age have given excellent service both in the 1939–45 war and in Korea. If any man serving in Korea is found unfit, on account of his age or for any other reason, he is brought before a medical board, down-graded as necessary and posted in accordance with his revised medical category.

Dependants Pensions (Claims)


asked the Secretary of State for War if he is aware that there is some lack of knowledge as to the procedure of claiming war pensions when soldiers are killed during active service; and if he will take steps to ensure that when cases of this kind occur the dependants are advised by the authorities of the method of procedure for claiming the pension.

The widow of a soldier who dies while serving is sent a form of application for widow's pension, which has to be completed and sent to the Ministry of Pensions. Other dependants who were receiving allotments or other payments through Army channels are advised to apply to the Ministry of Pensions when they are notified of the impending cessation of these payments. No notification is made to dependants who are receiving no Army payments, but I think it is generally known that the Ministry of Pensions is the Department to which applications should be addressed.

In view of the state of mind in which a great many people are put when they receive just a form, would the Minister consider that some personal contact should be made, because there have been a great many cases in which the present method has not produced the desired result?

Is my right hon. Friend aware that only three or four Questions ago the Opposition were objecting to spending money on informing pensioners and others how to get information?

Soldier's Death, Austria


asked the Secretary of State for War whether he will make a statement about the circumstances of the death of 14444957 Corporal Dennis Marsden, King's Own Yorkshire Light Infantry, who was found drowned at Klagenfurt, Austria, on 24th March.

I have called for a very full report on this matter and will write to my hon. Friend immediately it is received. Meanwhile, I should like to offer my deep sympathy to the soldier's relatives.

Is the Minister aware that this man was missing for six weeks without any information being given to the relatives at all, and that they were not consulted as to the manner or matter of his death; and is it not a fact that a great deal of gruesome detail was circulated in the Yorkshire Press at a time when the relatives were completely in ignorance of the details of the case? Will my right hon. Friend undertake to see that in future, in matters of tragedy such as this, his Department act with a little more humanity?

I think the overseas command concerned would say that it was as usual, the difficulty of being sure that any information was correct before they gave it, because this was a mysterious case of disappearance. I have written to them and taken up several matters with them on which there may have been some fault.

Married Quarters, Canal Zone


asked the Secretary of State for War what new married quarters in the Canal Zone for officers and other ranks, respectively, were started in the year 1950–51; how many have been finished; and how many he plans to start in each of the next six-month periods.

During the financial year 1950–51 new married quarters in the Canal Zone were started for 54 officers and 125 other ranks and, with the exception of five officers' quarters, all of these were finished. In the next six months period it is planned to start quarters for 25 officers and 27 other ranks. Plans for the construction of further married quarters for 20 officers and 100 other ranks during this six months period and for 30 officers and 100 other ranks in the following six months period are under consideration.

Does the right hon. Gentleman recollect making a statement in this House on 16th May last year in which he said that 220 extra married quarters would be started during the last financial year? Is he satisfied that the short-fall of about 50 was really necessary? Will he give an undertaking that while the reported negotiations are going on in Egypt, he will ensure that proper accommodation arrangements continue to be made for British troops in the Canal Zone?

Oh, yes. Building is going on there and, as I have said in this answer, there is no question of interrupting it.

Does the right hon. Gentleman expect that these buildings are ever going to be occupied by the British, or are they being built for the Egyptian Army?

Is the cost of this accommodation being borne by the British Government or by the Egyptian Government? Am I not right in saying that under the original terms of the treaty the Egyptian Government were to provide alternative accommodation in the Canal Zone?

I think the accommodation is being built at the expense of the British Government. The other part of the hon. and gallant Member's question should be addressed to the Secretary of State for Foreign Affairs.

Can the right hon. Gentleman answer the question put to him, namely, do these plans for future building in the Canal Zone imply—as I hope they do—that British troops are to remain in Egypt?

Duty-Free Parcels


asked the Secretary of State for War what representations he has had from overseas commands, where active operations are in progress, regarding the present system of duty-free con cessions on parcels sent by troops to their relatives and friends at home.

Except for a request for a special Christmas concession, no such representations have been received.

Is the right hon. Gentleman aware that there is a widespread feeling amongst all ranks on active service that the present arrangements are ungenerous? Is there any reason why they should not be as generous as they were at the end of the war for British troops serving in Europe?

I imagine that the cost of such a concession in far distant stations would be very much greater.

Court-Martial (Rejected Petition)


asked the Secretary of State for War why he has refused to give reasons for the rejection by the Army Council of the petition against his conviction by court-martial lodged by Mr. R. E. Sutherby, formerly an officer of the Indian Army; and whether he will now give such reasons.

My hon. Friend refused to comply with the hon. Member's request to give point by point the reasons for the rejection by the Army Council of this petition. The general reason why the petition failed is that it disclosed no legal grounds for interference with the conviction.

Does the right hon. Gentleman realise that the old policy of not giving detailed reasons no longer applies since this House has disapproved of that policy by setting up court-martial appeal procedure where reasons will be given? Does he not think he should adopt that principle and give specific reasons?

I should not have thought that followed. After all, the setting up of an appeal court, which I welcome very much indeed, will not interfere at all with the right of petition.

Would my right hon. Friend explain what are the reasons of policy which make it undesirable for the reviewing officer to give his reasons for either rejecting or admitting a petition in circumstances in which a petition is the only available right of appeal, and where to give reasons would only be equivalent to a judgment admitting or rejecting an appeal in a court of criminal appeal?

That again is a different point. My hon. Friend has in mind confirmation. This is a question of petition at a much later date.

I had not only confirmation in mind. What I had in mind was that this right of petition acts as a very valuable substitute for the non-available right of appeal, and the reasons for accepting or rejecting it are in many cases equivalent to a judgment in a court of appeal. Therefore, what are the reasons of policy which make it undesirable to give them?

I should have thought that that applied much more to the question of confirmation, and would be met by the setting up of an appeal court rather than by a petition.

Private Fargie (Court-Martial)


asked the Secretary of State for War upon what grounds the confirming authority withheld confirmation of the conviction by court-martial of Private Fargie; and in what respects the confirming authority disagreed with the summing-up of the trial Judge Advocate as to the duties and responsibilities of armed sentries.

Lieut.-General Sir Horace Robertson decided to refuse confirmation of the finding of manslaughter after receiving the advice of the Deputy Judge Advocate General, Far East. The opinion of the Deputy Judge Advocate General was that whereas the Judge Advocate at the trial correctly directed the court that a sentry is only entitled to fire upon a person in self defence or in defence of the property which it was his duty to guard, he failed to direct the court upon the legal implications which arise when a sentry fires over the head of a person who after being challenged three times fails to halt and runs away.

Artillery Practice Camp, Weybourne


asked the Secretary of State for War if he will reconsider the proposed extension to the Royal Artillery practice camp at Weybourne, Norfolk, and revert to the original scheme of development between the village and the railway station rather than along the coast, as requested by the Erpingham District Council.

This proposal is in the early stages of consideration in the War Department and before any decision is reached there will be consultation with the local planning authorities under the normal procedure.

Is my right hon. Friend aware that while the council are not opposed to defence measures, they feel that the development could take place on the alternative site, and give the same efficiency, while at the same time preserving a very beautiful stretch of country?

I have given my hon. Friend an undertaking that consultation with the authorities will be undertaken.

Defence Shipping Authority

45 and 46.

asked the Prime Minister (1) whether any consultations took place with British and British Dominion shipping interests prior to the conferences held in Washington in November, 1950, and March, 1951, when representatives of the British Government considered with other countries of the North Atlantic Treaty Organisation the pooling of merchant shipping in war and the passing of control to the United States chairman of the international pool;

(2) whether Admiralty representatives, as well as officials of the Ministry of Transport, took part in the meetings in Washington in November, 1950, and March, 1951, concerning the terms of the legislation to be passed through Congress under which control of British merchant shipping would pass to the United States representative in charge of the shipping pool of the North Atlantic Treaty Organisation in time of war.

I have been asked to reply, I would refer the hon. Member to the answer given to him yesterday by my right hon. Friend the Minister of Transport from which it will be seen that both sides of the British shipping industry were consulted. There is no basis for the suggestion in the last part of Question 45. The allocation of the tonnage placed in the pool would be undertaken by an international body representative of all the countries concerned.

With regard to the points raised in Question 46 the meetings in question were meetings of the North Atlantic Planning Board for Ocean Shipping and no Admiralty representatives were present.

My right hon. Friend the Prime Minister knows of no proposed United States legislation affecting the control of British merchant shipping in war, nor of any proposal for the control of British shipping to pass to any United States representative.

Can the right hon. Gentleman say whether the planning board will remain under the Council of Ministers and not be transferred to any other body?

I think so. I do not want to be too dogmatic, but I think so. It is part of the North Atlantic Treaty Organisation, and we shall be represented.

In his reply just now, the right hon. Gentleman said that he thought that the planning board would still remain under the Council of Foreign Ministers. May I ask if he realises that it is extremely important to Britain's interests that the planning board for shipping should remain directly responsible to the Council of Foreign Ministers and should not pass under any other body; and if there is any question of that, may we ask that this House should be consulted before it happens?

I think the hon. Gentleman is wrong in his nomenclature when he refers to the Council of Foreign Ministers. That is a body of four Foreign Ministers, which would be too restricted. But this is related to the North Atlantic Treaty Organisation, and it certainly is not our intention that British shipping should pass under the direction or control of another individual country.

Would the right hon. Gentleman say what international body will control this merchant shipping pool and what British representation there will be on that body?

I have stated that it will be the North Atlantic Planning Board for Ocean Shipping.

Colliery Accident, Ripley

(by Private Notice) asked the Minister of Fuel and Power whether he has any further information regarding the accident which occurred yesterday at the Denby Hall Colliery, Ripley, resulting in five miners being entombed?

Yes, Sir. Yesterday morning at 10 o'clock, a fall of roof occurred at Denby Hall pit at one end of the double unit long wall face of the silkstone seam where a Meco-Moore cutting and power-loading machine was in use. During the three years for which this face had been worked, this was the first mishap from a fall of ground. It occurred suddenly and without any warning signs.

Of the men working there, who were seven in number, five were completely buried; two others were partly buried. The two partly buried men were soon released, and were taken to hospital in Derby, suffering from minor injuries and shock; I am sure that hon. Members will be glad to know that they are doing well.

The dangerous condition of the roof hampered the efforts to extricate the other men, but the rescue squads have so far recovered the bodies of two of the remaining five, one at 4.30 and the other at 7.30 this morning.

The rescue work is going on, but to my deep regret there now seems to be little hope that any of the other three men can be alive. I am sure the House would wish me to express their gratitude to the rescue squads, who have been working in perilous conditions, and their deep sympathy with the families and friends of the miners who have lost their lives.

Orders Of The Day

Ways And Means

Considered in Committee.

[Major MILNER in the Chair]

Budget Proposals And Economic Survey

3.35 p.m.

The debate on which we shall be engaged for the next few days is about the Economic Survey as well as the Budget; and if I were to follow recent precedents I should have to deal in this speech not only with the traditional fiscal and financial issues, but also with the whole of our economic prospect, with exports and imports, sterling balances and dollar reserves, productivity and manpower, prices and wages and lots of other things besides. But there is a real difficulty, especially this year, to find the time to say it all.

Having no desire to introduce into our proceedings this afternoon an element of physical endurance—which may become very prominent in the next few weeks—I have come to the conclusion that in this respect I must depart from the example of my predecessor and say little myself in detail about the Economic Survey or the other recent Treasury White Papers. I plead in excuse not only that even so I am afraid my speech will be rather long, because the purely financial issues will take up much more time this year than in the last year or two, but also that I did cover a good deal of what must be omitted today during the defence debate last February.

Economic Background

I must, however, give the Committee some sketch of the economic background, so that we can appreciate the framework in which the Budget has to be considered, and the objectives at which it must aim. In this background it will be generally agreed that three features stand out. First, the massive defence programme with the new call it makes on our resources. Second, there is the way in which the prices we have to pay for our imports have gone up so much more than the prices we get for our exports. This is just as real a burden upon us as the defence programme itself, for it means that to buy the same volume of imports we have to send out more exports and so keep less for ourselves at home. Third, shortages of materials, with the check they impose on higher production which could otherwise do so much to help us carry both burdens.

Our objectives in this situation have been stated several times—most recently in the Economic Survey. They are to carry through the defence programme as swiftly and smoothly as possible, and to maintain a level of exports sufficient, with the expected surplus on invisibles, to pay for our current import needs, excluding strategic stockpiles. Because the direct impact of the defence programme falls mainly on the engineering industries, we must I fear accept some check to home investment and also some interference with the exports of these industries. But we must keep the former within bounds so as to shield future productivity, and we must try to balance the latter by greater exports of consumer goods; to make this possible, we have to limit consumption at home.

The prospect that faces us may, I suggest, in the main, be summarised as follows. To meet these two new burdens, defence and the adverse terms of trade, we can count on some increase in our production. But given the physical difficulties of obtaining enough raw materials, the probable increase in production will certainly not be enough to meet these extra burdens. Last year our exports were sufficient, with our invisible earnings, not only to pay for our imports but to provide a surplus to build up our reserves and to help in the development of other countries.

This year we have come reluctantly to the conclusion that we shall not be able to manufacture and sell a bigger volume of exports than will, after allowing for our invisible earnings, just pay for our current imports. To this extent our burden is lightened, and what would otherwise have been a severe curtailment in living standards is modified. But even after taking this alleviation into account as well as that provided by some fall in civil investment, we have to recognise that there must be some reduction in our standard of living.

The task of the Budget in this situation is to ensure as far as possible that the necessary transfer of resources from producing for consumption to producing for defence and exports takes place swiftly and smoothly. As I pointed out in my speech during the defence debate, fiscal and monetary policy alone is not sufficient to achieve this transfer, and physical controls are also needed. But these physical controls will not be nearly so effective if they are working against the tide, and they must therefore be accompanied by a strict fiscal and monetary policy to restrain civilian expenditure.

In more precise terms the Budget must ensure, after taking into account any rise in money incomes, including that automatically generated by the rise in production, that what is spent at home is enough, but no more than enough, to buy, at prices which cover their costs, the goods and services we can afford to consume at home. What we can afford for public and private consumption is, of course, what is left over from our total production after adding what is to be imported, and taking away what is required for exports, home investment and defence.

If the Budget fails to limit expenditure accordingly, it will be a case of too much money chasing too few goods; excessive demand will either just lead to higher prices or it will pull more goods into the home market, but at the expense of exports or of defence or of investment. In either case we would have an inflationary Budget. But it is possible to go too far the other way. If home spending is deflated too much, the effect may be not just to speed up defence output, or get more investment or a higher level of exports.

In the case of exports at least, we must have regard, and this is particularly true of consumer goods, not only to our ability to supply, but also to the capacity of overseas markets to absorb—a difficulty which was in part responsible for our decision not to attempt to maintain a surplus in our overseas balance. Thus a too severe Budget might give us losses, unemployment and austerity at home without any substantial benefit to our external position. We do not want deflation of this kind any more than we want inflation.

This leads me to emphasise that while a sufficiently tough Budget, by its effect on total expenditure, will prevent prices being pushed up by excessive demand, it cannot, by being even tougher, do much to prevent a rise in prices when these are caused by a higher level of costs. In this respect the limitations of the Budget are much the same as those of price control.

Now at the moment it is a costs inflation which is affecting us. Higher prices for imported raw materials, and to some extent foodstuffs as well, are pushing up our cost of living more and more. A tough Budget can only give limited help here. It can exercise some check; it can, and should, ensure that excessive demand does not add its influence to that of high costs. But it cannot directly reduce a generally high level of costs to any material extent—except through a policy which deliberately creates losses and unemployment.

I have already pointed out that the rise in import prices beyond the rise in export prices imposes a very real burden upon us. As a nation we cannot evade this burden, but we have a choice as to how it is borne within the community. If the higher prices of imported raw materials and food are passed on to consumers, the burden is then spread on everyone according to the extra they have to pay; and sacrifice in consumption comes about through higher prices.

On the other hand, the Government could try to protect consumers from these higher prices by increasing the subsidies on food still further and introducing them again for clothing and many other things. But it would then be essential to raise more money in taxation to pay for these extra subsidies, and the burden would be shifted and have to be paid through higher taxes rather than higher prices.

A decision on this important matter should clearly not be taken on its own. It must be looked at in the light of the Budget as a whole and of any other measures that may be necessary or burdens that may have to be imposed. Equally, whatever decision is reached on the question of increasing subsidies or not doing so, must be taken into account in settling the other details of the Budget.

There is another feature of the situation which is not to be overlooked, though I readily admit that its exact significance to some extent depends on the decision taken on subsidies. The way in which the burden falls on different groups is also affected by changes in money incomes; in recent months the incomes of some groups and individuals have been going up, in some cases without any special action or efforts on their part, in others because not unnaturally they have used their bargaining power to try and protect their standard of living.

Such increases in incomes push up costs and therefore lead to still higher prices. To some extent higher export prices may bring us some benefit by checking the worsening of the terms of trade. But there are certainly limits to the rise in export prices which can take place without serious danger to our competitive power. Moreover, in so far as particular groups do improve their position in this way—and the improvement often tends to be only temporary or partial—it is primarily at the expense of those whose incomes are relatively stable or completely fixed—and who have now to pay still higher prices with no extra income to help them. We shall have to consider later how far we should, and can, take this development also into account. But can we, and should we, try to interfere with the process itself?

I shall return to the subject of profits later, but what of wages and salaries? During the past few years of labour scarcity and the sellers' market the workers have been in a position of unexampled strength and bargaining power; had they considered only their own immediate interest, they could have pressed their advantage home. On the other hand, there was little compulsion on employers to resist claims for improvement in wages and conditions when they knew that they could recoup themselves out of prices. Between these pressures and the menace of runaway inflation stood only the joint bargaining machinery—voluntary for the most part, statutory in certain trades—which has been built up and developed into part of the industrial relations system of this country.

It is not surprising that there should have been proposals from many quarters for minimising the potential dangers; that, for example, wages should be controlled by some central, independent authority: or that wages should only be allowed to vary in accordance with movements in the cost of living or by reference to some index of production or productivity. Some of these ideas have their attractions; and some their merits. We have spent a good deal of time and thought upon them. But I am bound to tell the Committee that, in my view, they involve far-reaching risks and difficulties—some economic, some psychological. They would imply greater changes than either side of industry is at present willing to contemplate. The Government therefore decided to trust the established system of industrial wage regulating machinery, and to have faith in that sense of responsibility—

I only venture to assure the right hon. Gentleman that, if he wants more time, it will be gladly accorded by the House, but if he would speak a little slower it would be for the convenience of everybody in understanding these complicated matters.

I am much obliged to the right hon. Gentleman, and I will proceed accordingly.

I was saying that the Government decided to trust the established system of industrial wage regulating machinery, and to have faith in the sense of responsibility which we believe has been engendered in both sides of industry as the result of the free development during a century or more of voluntary collective bargaining. No one can say that our faith has been misplaced or that guidance which the Government were able to give from time to time was not heeded.

What kind of guidance does the present situation demand? It is assuredly not a moment when we can afford to cast aside the restraints of the last few years. On the other hand, I do not think we should advocate a return to a complete wages freeze. For one thing, most of us would not wish to see the wages of the low paid workers held down rigidly while prices were going up. But we must beware of going too far. A large proportion of wage earners has recently secured advances. Moreover, increases in wages and salaries beyond what is justified by the growth of productivity are not usually at the expense of profits but push up prices still further and the real losers from general increases are those with fixed incomes, some of them, like old age pensioners, with very low fixed incomes.

Finally and more generally, I must draw the attention of the Committee and of the country to a real danger which, because we in this country have in the past successfully avoided it, is often ignored; the danger that, if incomes and prices rise swiftly and continuously, there may be a progressive loss of confidence in the value of money. Were such confidence to be lost we should be plunged into inflation of the most violent kind, which in other countries has on more than one occasion brought the whole fabric of their social and political life to the edge of disaster.

All these risks and dangers must therefore be borne in mind by those concerned in industry. We have, nevertheless, decided that we can continue to trust the established system of wage negotiation to avoid a rapid and damaging upward spiral of incomes, costs and prices. I am convinced that there is today a far wider understanding, by the leaders of both sides of industry and by the nation as a whole, of the part they must play in preserving a healthy economy, than at any time in our history.

Now let me summarise, for the Budget itself, the implications of this brief survey of the economic background.

First, it must clearly be our object, even if, as I have argued, we cannot prevent a cost-inflation by a strict budget, to make sure that there is no aggravation on the demand side, no further impetus to higher prices.

Secondly, the Budget must help to direct production towards defence and exports, which are the physical tasks before us. It must discourage the use, for consumption at home and for less essential investment, of those resources of labour and materials required for defence and exports.

Finally, we should take account—so far as budgetary policy can—of the facts that the rise in prices bears most hardly on all lower income groups and that those with fixed incomes will tend to be more severely hit than those whose money incomes are rising.

Out-Turn For 1950–51

After that introduction, I now propose to turn, following the traditional pattern of the Budget Speech, to last year's results. I will, for the moment, deal with them in terms of the "above the line," as we call it, out-turn on the conventional basis.

The results of 1950–51 are, at first sight, somewhat remarkable. My predecessor budgeted for a surplus of £443 million; in fact the surplus was £720 million. This surplus, after meeting "below the line" items amounting to £473 million, has been used in redemption of debt. We must be careful not to conclude from this apparently cheerful out-turn of last year that the prospect for this year is correspondingly brighter. We must examine the reasons for it first. The difference of £277 million between the estimate and out-turn is explained by an excess of revenue of £80 million and lower net expenditure of £197 million.

The £80 million increase in revenue as between an estimate of £3,898 million and a yield of £3,978 million, is largely accounted for by an excess of receipts from Customs and Excise duties of £46 million. Most of this was due to increased clearances towards the end of the financial year, in anticipation, whether rightly or wrongly, of higher duties to be imposed today. For the rest, there was an excess of £16 million on Income Tax, due to a better rate of collection than had been expected, an excess of £10 million from sales of surplus stores and a further excess of £11 million on miscellaneous receipts. Not much encouragement here, the Committee will agree, for the current year.

The net saving of £197 million on expenditure is entirely in the field of Supply services, since Consolidated Fund services actually exceeded the estimate by £8 million. The gross saving on Supply was even greater. During the year, there were, as the Committee will recall, Supplementary Estimates of £67 million, largely for defence, which, when added to the original Estimates, gives a figure of £2,985 million in comparison with an out-turn of £2,713 million, so that the saving was £272 million.

How is this to be explained? How far is it a genuine saving and how far merely fortuitous and temporary or even a postponement which actually increases expenditure in the future? Savings of this kind cannot, of course, be itemised with final precision until Departments' Appropriation Accounts are available some time hence; but of the total figure of £272 million, there is no doubt that the largest single item, probably about £115 million on the Ministry of Food Vote, was due mainly to a shortfall in the purchases of various food and feedingstuffs, with a consequent fall, instead of an increase, in trading stocks. This does not mean that the actual expenditure on food subsidies was less than the £410 million which was provided for last year, but simply that it was financed differently out of the lower level of stocks.

Continuing with the explanation of this shortfall in expenditure, a saving of £19 million on the Ministry of Supply Vote resulted principally from the fact that some payments in respect of production orders happened not to fall due as soon as was originally expected. The payments will, of course, have to be made good this year. The same is true of a good deal of a saving of about £14 million on Colonial services generally, together with about £5 million on Foreign Office grants and services. Yet another fortuitous saving of £13 million occurred on educational services, partly because the balance of the grant due to local education authorities for the previous year was less than had been estimated.

Some of the smaller Votes, too, show savings which are non-recurrent. For example, about £4 million on civil aviation due, in the main, to the delay of works services resulting from the bad weather, and about £3 million on the Vote of the Ministry of Fuel and Power attributable, in part, to a smaller expenditure this year than was expected in connection with coal compensation. The balance of savings is spread over a very large number of other Votes. Some of it undoubtedly represents the results of the economies of 1949 which realised, in the event, more than was expected at the time, and are, of course, reflected also in the Estimates for the current year; but some of it was also either non-recurrent, or merely a postponement of expenditure into the current year. I think the Committee will agree, if they have followed this brief analysis I have given, that, taking the divergence from Estimates on both revenue and expenditure, it would be decidedly imprudent to assume that what happened last year should give us much encouragement for the future.

Prospects For 1951–52

Having thus, I trust, dispersed any vague optimism which these last year's figures may possibly have engendered about the future, I must now ask the Committee to study this prospect more closely—again, for the moment, on the basis of the "above the line" figures in the conventional form of accounts. On the expenditure side, at any rate for a Chancellor, it is indeed a chilling prospect. Against Exchequer issues for the year 1950–51 of £3,258 million, I estimate total expenditure for 1951–52 at no less than £4,197 million, an increase of £939 million.

How is this to be explained? First, there is an increase of £40 million in the Consolidated Fund services, representing the first payments of interest in December next on the United States and Canadian post-war loans. There is an obligation on us to make these payments unless we request, and the request is granted, the waiver of interest payments which is possible under the loan agreements in certain circumstances. Since we cannot obviously say at the moment whether circumstances later in the year would justify us in requesting the waiver, I think the Committee will agree it is clearly necessary for us to make provision now for the payment.

Next comes defence. The published Estimates, which provide £1,114 million, show an increase of £337 million over last year's out-turn. Civil Estimates also provide for other defence preparations outside the strictly military sphere—nearly £20 million for Civil Defence against only a few millions spent last year; about £50 million as against £5 million or so last year for capital expenditure on industrial capacity for defence production; and £143 million as against £13 million last year on the stockpiling of food, raw materials and strategic supplies. I must also allow for the additional cost in 1951 of the accelerated defence programme announced in January. I put this additional cost at about £160 million. The details, of course, will emerge later in the year, as and when Supplementary Estimates for the services concerned come forward.

The result is that the estimated cost in 1951 of defence and Civil Defence is about £1,295 million, which accords, of course, with the preliminary figure of £1,300 million given to the House by my right hon. Friend the Prime Minister last February. Adding the other items that I have mentioned—£50 million for capital expenditure for defence production, and £143 million for stockpiling, I arrive at a total estimate for defence preparations of about £1,490 million, an increase of about £690 million over last year's expenditure in the same field. Since the total excess of this year's Estimates over last year's out-turn is £939 million, and about £690 million is due to defence and another £40 million for Consolidated Fund services, there remains about £210 million as the increase in the remainder of the so-called Civil Estimates.

This increase over last year's out-turn is, of course, due largely to the special factors of 1950–51, including the change in stocks to which I have already referred. It is interesting to note that the Estimate for this year in respect of the items which make up this residue of expenditure, that is, after taking out defence and the Consolidated Fund services, is no greater than the figure for the corresponding services in last year's original Estimate. Moreover, in making this comparison between a group of what are broadly called Civil Estimates and another similar group, we must remember that even this residue includes items which are certainly quasi-military in character, and that some of these show increases this year; for example, an additional £10 million for relief and rehabilitation in Korea, our contribution to the United Nations' Fund. I shall have more to say later about the level of civil expenditure this year—especially that portion of it which is in no way related to defence.

But, for the moment, what is the prospect on the revenue side on the existing basis of taxation, that is, what we have to set against the expected expenditure on the other side? I estimate the total tax revenue for this year as £3,877 million, an increase of £147 million over the actual tax revenue received last year. In some cases we face a reduction. For example, I put Customs and Excise at £1,590 million, compared with £1,630 million, because, as I have already explained, the yield last year was, to some extent, inflated by abnormal clearances before the Budget. Beer, and other alcoholic drinks in particular, are expected to bring in £368 million only, as against £398 million last year, a drop of £30 million.

While Customs and Excise are down by £40 million, Inland Revenue duties are estimated to be up by £187 million—£2,225 million in comparison with £2,038 million last year. This big increase is a reflection both of higher profits made in 1950 coming under charge to tax this year, and of a higher total wage and salary bill in the current year. Motor licences I expect to yield £62 million, approximately the same amount as last year. On the other hand, we have to allow for some decline in non-tax revenue, which I expect to bring in £221 million as against £248 million last year.

When we include this, the total estimate of revenue for 1951–52 on the existing basis of taxation amounts to £4,098 million as against last year's out-turn of £3,978 million—an increase of £120 million to be set against the increased expenditure of £939 million. The result, when estimated revenue of £4,098 million is subtracted from estimated expenditure of £4,197 million, is a Budget deficit, "above the line" on the conventional basis, of £99 million. This deficit of £99 million may be compared with a surplus of £720 million last year of revenue over expenditure, so that we are faced in total with a deterioration of £819 million.

Required Budget Surplus

The question is, should we seek this year to make up the whole of this £819 million and so earn as big a surplus as last year? If not, what surplus should we aim at?

The answer to these questions cannot be given from a study of the Government Revenue and Expenditure accounts alone. It depends, after all, on how far we judge, after taking all other economic developments into account, that the net extra Government spending will be inflationary. I apologise to the Committee for bringing in economics again but it is, after all fundamental to this whole study. It depends, that is, upon how far the extra expenditure which is not balanced by extra revenue—that is £819 million—will bring the nation's total expenditure at home above the value of the output we can afford to consume at home. Or, to put the same thing in another somewhat technical and, in a sense, more familiar way, it depends upon how large a Budget surplus we need this year to bring the level of the nation's total savings—personal and private, public and corporate—up to what is required to finance the total investment by the Government and industry in buildings and plant and machinery and higher stocks.

In applying these general principles—now pretty familiar to the Committee—to our present problem, the first step must be to separate the Government's capital expenditure from its current expenditure. Apart from strategic stockpiling, which I will deal with in a moment, the capital expenditure of the Government is included in the estimates of total national investment which I will bring into the picture later. As the Committee are aware, this distinction between current and capital expenditure cannot easily be made on the basis of the Exchequer accounts in their conventional form. These, after all, are drawn up, as we all know, to meet Parliamentary and statutory requirements, and do not distinguish satisfactorily between capital and current items.

In order to arrive at a truer measure of the Government's current expenditure, obviously we must first take out expenditure on strategic stockpiling, which shows an increase of £130 million. Since it is proposed to pay for these purchases by accepting a deficit in our balance of overseas payments, which we announced some time ago, in other words by a deterioration in the external capital account, they will have no further repercussions on our economy and need not be taken into account any more this afternoon. Secondly, we must take out other items of capital expenditure, partly of a defence nature—to which I referred a little while ago—where the increase is £40 million. This expenditure, as I have implied, is included in the estimate of total national investment. Thirdly, we must exclude net expenditure on trading departments stocks and other assets, on which the increase is £111 million, and which is also reckoned in the estimates of total investment.

There are few other details of less importance. We must take out payments to sinking funds since these are only an internal transfer; these rise by £1 million. Finally, we must take out certain receipts—from the sale of surplus stores and so forth—which are of a capital nature. Here again the Government disinvestment from which they arise is included in the estimate of total national investment. They are expected to fall by £62 million this year and I have allowed for this in the total investment.

The total of these changes in capital items is £344 million, so that the result of excluding them is to reduce the excess of additional expenditure over additional revenue from the very high figure of £819 million, but still to leave it at a figure of £475 million. This is the decline in the so-called "above the line" surplus on the alternative classification which my predecessor introduced three years ago. I have repeated this alternative classification in the Financial Statement which will shortly be available to hon. Members, and those who are interested in these rather technical questions will no doubt study it in detail at leisure.

There is one other thing of a more general character I should like to say at this stage. In the last two years, it so happened that the net effect of all the inflationary and deflationary factors in our economy was such that the aim of the Budget could rightly be expressed as to achieve an overall balance—that is to produce a surplus on current account sufficient to cover the net cost of that part of investment which was financed through Government channels. This need not of course be the case, because that part of total investment—which incidentally is purely dependent on Parliamentary and statutory factors I mentioned earlier—is only one of the factors to be taken into account in determining what the size of the current surplus should be.

What matters is the current surplus, because this is the Governmen