My Lords, I beg to move that the House approve of these Orders.

My Lords, I beg to move that this Order be approved.

My Lords, I beg to move that this Bill be now read a second time. For some years past there has been wide-spread dissatisfaction with the law relating to workmen's compensation. The principal Act dealing with it dates back to 1925 and under that law the maximum payment in case of total incapacity, no matter what wages the man had been earning previous to incapacity, is 30s. a week. For some years past it has been strongly pressed that the position of workmen disabled by industrial accidents or industrial disease should be improved and numerous Bills have been introduced in the other House, none of which however have passed. Last December the then Government appointed a Royal Commission to undertake a comprehensive review of the position. This Commission, under the Chairmanship of Sir Hector Hetherington, has made considerable progress with its investigations, but war conditions have made it difficult for the Commission to carry on and it is impossible at present to forecast when the report will be available. In any case it would be difficult during war-time for the Government to initiate comprehensive legislation on this very difficult and involved subject.

Meanwhile the claim for increased benefits has continued to be urged and, after a debate which took place in the other House on January 30 this year, the Government undertook to enter into discussions with representatives of industry with a view to formulating temporary legislation to relieve the cases of hardship which existed. Certain conditions were then laid down. They were that the Bill should be of a simple character, that it should be capable of being brought into rapid operation in the existing circumstances of the war; that it should involve no vexatious inquiries into means, and that it should not impose upon industry a burden which industry could not bear. As a result of these discussions the late Government introduced a Bill which provided for a scheme of family allowances, consisting of 5s. a week for a wife and 3s. for each child under fifteen years of age. The principle of family allowances is one which is quite new to workmen's compensation. Up to now compensation has been based, broadly speaking, on the wages which the workman concerned was earning and not upon his family needs. The Bill received a Second Reading in another place but did not meet with general acceptance. The Labour Party objected to a Bill which was limited to family allowances and did not give an all-round flat rate increase, which they felt was necessary.

The Government felt that it was un-desirable that there should be division of opinion and possibly acrimonious debate on the later stages of the Bill, and the new Government, which had by that time replaced the Government which introduced the Bill, decided to withdraw it and to suspend progress pending further discussions with the representatives of all concerned—that is to say, the employers, the employees, the Trades Union Congress and the representatives of insurance interests which are vitally concerned—with a view to arriving at an agreed solution. The present Bill is the result of those discussions and I am able to present it to your Lordships as an agreed measure. Its main difference from the Bill about which there was division of opinion is that it retains the children's allowances but the 5s. a week to be paid to a wife is replaced by an all-round flat 5s. for all disabled men. All parties have informed the Government that they are prepared to co-operate in making this measure work, but I should make it clear that it is a temporary measure only and that employers have made it plain to the Government that they do not accept the principle of family allowances in workmen's compensation. Their view is that if such allowances are introduced they should be a charge upon the State and not upon industry. The representatives of the Trades Union Congress have intimated that they are prepared to accept the proposals embodied in the Bill as a temporary measure to meet cases of hardship but that they hope that when the Royal Commission has reported a more comprehensive measure will be introduced.

The provisions in this Bill apply not only to accidents arising after it comes into operation but to all cases where the accident in respect of which compensation is payable occurred after January 1, 1924. The proposals will therefore throw an additional burden upon industrial employers for, as your Lordships will be aware, there is no State subvention towards the employer's liability for workmen's compensation nor do the employees themselves contribute. It is impossible to work out accurate figures of what the cost will be, but it is estimated that the increase in the total amount of compensation payable will be about 30 per cent, of what is paid now. The total amount paid now is about £9,000,000 a year, though that does not represent the whole cost of workmen's compensation to the industry. It is quite clear that this Bill will involve an increase in premium rates paid by those employers who insure, and I think I can be safe in saying the Bill will throw a burden upon industry in excess of £3,000,000 a year.

The Bill explains itself. Clause 1 provides for the increased rate of 5s, a week to which I have referred, and allowances for children. Clause 2 gives greater power to Registrars of County Courts to refuse to record agreements for lump sum payments in lieu of weekly compensation. At present Registrars have only power to refuse to record these agreements on the ground that the payment is insufficient. This provision will give them further grounds, and I think your Lordships will agree that they are equitable grounds, for refusing to record such agreements. Clauses 3 to 7 are purely machinery, and Clause 8 provides that the Bill comes into operation on August 19 next. The Bill does not pretend to be a comprehensive measure, but the necessity of improving the lot of people who are in receipt of workmen's compensation is urgent, and I hope that as a temporary measure pending the Report of the Royal Commission the Bill will commend itself to your Lordships. I beg to move.

My Lords, as the noble Duke has said, this is an agreed measure as it reaches your Lordships' House. I understand that there was one loose end left over the question of partially-disabled men, which has been the subject of negotiation since the Bill passed through its last stage in another place, between honourable friends of mine representing the mining industry and my honourable friend Mr. Peake, the Under-Secretary for the Home Office. I understand that it is desirable that the matter should be a little further explained on the Committee stage, and that the Department will be prepared to authorise the noble Duke to make the necessary representations about it.

That is so.

My Lords, the object of this Bill is to provide a remedy for a hardship of long standing: the inadequacy of the allowances to injured workmen. It is a pity that it does not deal also with the hospital question, for this is of great importance not only to the injured workman but also to the finance of the workmen's compensation system as a whole. Here also there is a hardship of long standing, in that the hospitals which provide the treatment, at a cost estimated at £400,000 per annum, get little; or no payment for so doing. They do not wish to make direct claims on workmen who have suffered accidents and financial loss. In the old days the voluntary hospitals treated injured workmen without thought of payment, just like any other class of patients who could not afford to pay and for whom no third party had any direct financial responsibility. But with the introduction of workmen's compensation the position was altered; for this meant that the principle was recognised that industry had a financial responsibility for accidents and should bear at least part of the cost. The appointment of the Royal Commission was evidence that the time had come for a further extension, and an extension is actually made by the present Bill. And the greater the responsibility of industry for its accidents, the greater the benefit which it derives from the hospital treatment for the injured.

For nearly twenty years, in fact ever since the time of Lord Cave's Committee in 1921, it has been a recognised principle of voluntary hospital finance that, where there is any such direct financial responsibility for patients and any such direct financial benefit from their treatment, the hospital should receive payment for the service which it renders. This principle has received statutory recognition in the payments made by health authorities for tuberculosis, maternity and various other classes of patient, and also in the clauses of the Road Traffic Acts which provide payment for the treatment of patients injured in motor accidents.

I understand that there are two reasons why it is suggested that this question cannot be dealt with by any Amendment to the present Bill. The first reason is that the scope of the Bill is limited to the increase of the direct benefit to injured workmen. The other reason is that all questions not dealt with in the Bill are under the consideration of the Royal Commission and must await the report of the Commission, to which the hospitals have already submitted their case in evidence given by the King Edward's Hospital Fund for London and the British Hospitals Association. But it will probably be a long time before the Commission presents its report. In the meantime the treatment of the injured workmen has still to be carried on at the expense of the voluntary funds, which are so urgently needed for the service of the ordinary patients, the sick poor. I trust, therefore, that even though the question does not come within the scope of the Bill, I may be allowed to express the hope that this claim of the hospitals for payment out of workmen's compensation funds will be generally felt to be justified, and that on some occasion in the not too distant future a method may be found by which this hardship also may be remedied.

had the following Notice on the Paper: To ask His Majesty's Government whether they are aware of the grave dissatisfaction among farmers, especially hill farmers, over the 1940 wool clip prices; and whether they are aware that the Wool Advisory Committee was not consulted, as definitely promised, before the prices were fixed; and to move for Papers.

My Lords, I really must interrupt the noble Duke, because he is saying something which I thought that he might say, but I have referred to the speech which I made on April 3, and what I said then was that the farmers would be consulted. While I do not wish to anticipate the speech which my noble friend (Lord Alness) will make later on, I think that when he comes to make that speech the noble Duke will find that the farmers were consulted on April 12, nine days after I made my speech.

My Lords, I certainly took the words used to mean that the Advisory Committee would be consulted. The noble Lord said:

"The noble Duke asked me during the last part of his speech whether fanners were going to be consulted before prices were fixed for 1940. As I have already told him, the answer is Yes."

All that I can say is that the Advisory Committee have not been consulted. What I think that the noble Lord has in mind is that there was a deputation which went to see the Secretary of State for Scotland, and on that deputation the farming interests were represented. That deputation came not from the Advisory Committee but from the Farmers' Union and the Chamber of Agriculture. There were on it two or three members of the Advisory Committee. A number of matters connected with agriculture was discussed. There was some mention of wool by members of the Advisory Committee, but, as your Lordships know, what is said when a deputation is received is a very different thing from what is said round a table with an Advisory Committee. That deputation was given a hearing, as all deputations are when they are received by Ministers, and there the matter ended. That, as I say, is a very different thing from a discussion round a table with an Advisory Committee specifically appointed to deal with the price of wool; by no stretch of the imagination can a deputation be called a substitute for discussion with the Wool Advisory Committee.

I was astonished, therefore, when the Secretary of State for Scotland announced that the prices of wool were fixed by him after consultation with his Departments. What has it to do with the Departments? They are not producers of wool. It should have been done in consultation with the Advisory Committee. We feel very strongly that, in spite of the assurances which were given to us, we have been badly let down. I have to admit that the prices of wool have advanced in some degree. Last autumn the price for black-faced wool was 10d. per lb., and to-day it is 1S. 0½d. Cheviot was 1S. 0¼d. per lb., and to-day it is 1S. 3½d. The Secretary of State for Scotland says that there has been an advance over prewar prices of 64 per cent, in the case of black-faced and 45 per cent, in the case of Cheviot, but where does that advance begin? The pre-war prices were 4½d. per lb. for black-faced and 7½d. per lb. for Cheviot, so that advances of 64 per cent, and 45 per cent, respectively do not make the prices economic. In the last war, black-faced wool started at 7½d. per lb., 3d. per lb. higher than it started in this war, and the price, which was regulated by the Government, was advanced until it was IS 1½d. per lb., a penny more than it is; now. To-day the costs of sheep farming have risen, and wages are 54s, as against 30s. during the last war. Surely there must be something wrong with to-day's prices, when the prices in the last war were higher in the beginning and higher at the end, and when wages were lower. Everything is against the fanner to-day as compared with the position at the beginning of the last war, and there must be something wrong.

The fact remains that the prices fixed by the Wool Controller are not economic as they stand, and they require reconsideration. The Wool Controller will say, of course, that the present conditions of the wool trade do not permit higher prices to be paid, but I do not see why that should be so. The Wool Controller makes a very big profit indeed, as will be seen by comparing the prices at which he requisitioned the wool in October with the prices in March at which he handed over the very same wool to the manufacturer. There is a difference of 6d. per lb. between the two, which means 2s. 6d. to 3s. for handling a single fleece. That is a ridiculous price difference, especially in view of the fact that the fleeces are put free on rail by the farmers and sent to whatever destination the Wool Controller selects. The Wool Controller does not handle the fleeces at all; a 2½d. stamp covers all that he does, yet he charges 6d. for every lb. of wool or 3s. for a fleece. Out of the enormous profits which he makes he could very well afford to advance the price to the producers by 2d. per lb. at least.

Moreover, the Wool Controller asks the farmers to keep all the wool on our premises for him. Space on our premises, however, is exceedingly valuable and is wanted for other things; nevertheless we have to give it up. We have to insure the wool while it remains on our premises against war risks, fire and so on, and we have to pay the insurance premium. We have to deliver the wool to where we are told to deliver it by the Wool Controller, on the railway or anywhere else, and we farmers pay for the freight and transport. We say that all the expenses in connection with the wool should begin where the control begins. The Wool Controller takes control of the wool immediately it leaves the sheep's back, and all the expenses connected with insurance and freight should be borne by the Wool Controller. If that were done it would be equivalent to giving us 1d. or 1½d. per lb. on the price of wool. I do think, therefore, that the Wool Controller could very well afford to give us a better price.

I said last April that if I was disappointed in the price of wool I, like many others in the same position, would have to give up sheep farming. What does that mean? I said that I had two farms that I should have to clear. I have balance sheets, audited by chartered accountants, for those two farms for four years past. The figures are submitted to the Inland Revenue authorities for reclaiming Income Tax and are accepted, so that there can be no question about them. They show that I have lost money for four years on those sheep farms, up to £900 at least. There are many other sheep farmers who could show the same thing. If I clear the sheep, it means that 3,500 sheep will be driven off the hills. They are the potential breeders of succeeding generations of sheep, yet they are being driven off the hills to the butcher now. The hills are left derelict—derelict absolutely for the deer to come down on. It seems wicked and wasteful to carry on a policy in which we are going to clear away the sheep for deer, simply because we cannot make sheep farming pay.

And another point has arisen now. A new lot of minimum wages has come out, published on July 12. I am not sure whether those new minimum wages were considered when fixing the price of wool. The Advisory Committee ought to know but the Advisory Committee, as I said, were not consulted, and we do not know. Were the new minimum wages considered when fixing the price of wool? They are now to be 54s. for shepherds. That is an advance of 10s. a week or £26 a year additional charge on a farmer. With that great increase of wages we simply cannot carry on this business. I would like your Lordships to know, however, that none of us farmers in the least grudge the advance of wages to shepherds of 10s. a week. We approve of it. They are the finest men in the country, and they thoroughly deserve the increase, especially when we see the munition workers, who used to get £3, getting today £10, £12 or £15 a week. All that we farmers ask is that we should be given prices which will cover the cost of production, including these new wages.

I am sorry to say that, as a result of all that has happened, we sheep farmers have absolutely lost confidence in the system of Wool Control. We have heard over and over again that the one thing farming has suffered from is a lack of confidence. Well, we have lost all confidence in the Wool Control, because the assurances given to us have not been kept. And the system is wrong. It is quite right that we should have an Advisory Committee. After all, we are now setting up an Advisory Committee for poultry to discuss the question with the Food Controller. On that Committee we have representatives of the retailers, the wholesalers, the auctioneers and the consumers, and he sits day by day with that Advisory Committee before he fixes the price of the eggs and the poultry. If that principle is right for poultry and eggs it is surely right in the matter of wool. We disagree with the whole present system. I will say nothing whatever against the personality of the Wool Controller—far from it; I believe he is a most estimable gentleman in every way. But I think it was my noble friend Lord Elibank who told us here in April that unfortunately the Wool Controller was a Bradford wool merchant. There is no harm in being a Bradford wool merchant, but what we do feel is wrong is that the Wool Controller should have any connection with wool. He is judge and jury in the case, and what we feel is that the Wool Controller should be an absolutely independent business man, supported by an Advisory Committee representing all the different connections with wool—the producers, the merchants, the manufacturers, the exporters and so on.

I think that idea is supported by what I saw in The Times this morning. Speaking in another place in reference to homegrown timber, the Minister of Supply said he did not think it was desirable that a person actively connected with the trade should be appointed to the Timber Control Board, and that it was proposed to invite the home-grown timber people to set up a Committee to consult with an absolutely independent Timber Controller. If that principle is right for the Minister of Supply in respect of the Timber Control, it is right for wool. We should have a completely independent Wool Controller. If we have that, I believe the Government will regain the confidence of the wool and sheep farmers. If we do not get an independent Control, all I can say is that we shall have no further confidence; which is regrettable in these days when you depend upon us to produce sheep and wool in a war emergency. I beg to move for Papers.

My Lords, the noble Duke has raised a subject which is of the first importance and interest to the whole agricultural community, and he has supported his view, if I may say so, with his usual force and eloquence. The subject concerns not only Scotland but England and Wales as well, though my noble friend chiefly stressed the Scottish aspect of the question. This is not surprising because, after all, the sheep farming industry in Scotland, having regard to the population of the two countries, is relatively much more important on the other side of the border than it is in England. Moreover, a third of the sheep in Great Britain are to be found located in that country, and of these sheep I am informed that 80 per cent, are either Cheviots or black-faced sheep such as the noble Duke has referred to, and they are mainly found upon the hillsides, of Scotland. In these circumstances I have been asked by the Secretary of State for Scotland to reply to my noble friend; and while I cannot profess to have the practical knowledge and experience which the noble Duke possesses, I may perhaps be allowed to remind him that during the six years when I had the honour of being Secretary for Scotland I also was head of the Board of Agriculture in that country. Therefore I am not entirely unacquainted with the various problems of agriculture, problems ranging from braxy and grass sickness on the one hand to hill farming on the other.

The problems are infinite, and one has had to deal with this particular problem in past years, when the industry was subject to some of the difficulties which still continue to-day. To the hill farmer un-questionably the price of wool is of cardinal importance. That I at once admit. His return from wool may amount, so I am informed, to some 20 or even 30 per cent, of his total income. The proportion is variable, depending upon a number of variable factors, but at any rate it is an important source of income, and I want to say at once that that is fully realised by His Majesty's Government. Now the noble Duke's question falls into two distinct parts. Perhaps I may be allowed to deal first with the second part. In the second part he asks why "the Wool Advisory Committee was not consulted, as definitely promised, before the prices were fixed" Let me say at once that I am quite unaware of any such promise having been given. The promise given by my noble friend Lord Templemore in this House, when the matter was debated on April 3, was in the following terms, as my noble friend Lord Templemore has pointed out:

"The noble Duke asked me during the last part of his speech whether farmers were going to be consulted before prices were fixed for 1940. As I have already told him, the answer is Yes."

In giving that undertaking my noble friend Lord Templemore was reiterating an undertaking which had already been given in another place by the Minister of Supply in answer to a Parliamentary question in December of last year What my right honourable friend said at the time was this. He undertook to meet the farmers in the spring and discuss with them "the principles on which the 1940 clip should be dealt with."

These are the only two undertakings of which I know—one given by the Minister of Supply, the other given by my noble friend Lord Templemore. The terms of the undertaking were perfectly specific—an undertaking to consult, not with the Advisory Committees, but with the farming industry before the prices were fixed. What followed? In pursuance of that promise, my right honourable friend the Minister of Supply met the farmers of England, Wales, and Scotland on April 12 of this year. I am not aware that that was in the form of a deputation; I would rather term it a conference. I have before me the names of those present, and all I can say is that a more representative company of persons representing all farming interests in both countries could scarcely be conceived. That deputation, as my noble friend has called it, or conference, was attended by representatives of the National Farmers' Union in England and the National Farmers' Union and the Chamber of Agriculture in Scotland, and by a variety of other bodies connected with agriculture. At that conference they fully set out their arguments for an increase in the price of wool for 1940.

It is true that in the course of that conference, the Minister of Supply undertook that the British Wool Central Advisory Committees, which are the Committees to which the noble Duke referred, should be convened, but at the same time he made it perfectly clear that on the question of price what he proposed to do was to discuss that matter with the Minister of Agriculture for England and the Secretary of State for Scotland, and then to consult with the Treasury. I cannot find any trace of any undertaking given by the. Minister of Supply or by any responsible person at any time to consult with the Advisory Committees on the question of price. A moment's reflection would convince the noble Duke, I think, that any such proceeding would in the circumstances have been supererogatory and indeed otiose. After all, a meeting had been held representing agricultural interests in all the countries concerned whereas the Advisory Committee is a small body—an important body no doubt; but why it should be thought necessary or desirable to consult that body when the larger body of all the farmers concerned had been already consulted, I fail to see. There is this further consideration. It was quite clear that in the price to be fixed there was an element of subsidy, and it appears to me—at least I so apprehend—that it would have been inappropriate that the Advisory Committees should share in what, after all, was a decision involving matters of broad agricultural policy. Accordingly, I reach the conclusion that any undertaking given by a responsible person has been fully honoured and implemented, and with that I pass to the other part of the noble Duke's Motion which relates to the prices themselves.

The Motion refers—and now I quote—"to grave dissatisfaction among farmers, especially hill farmers, with the 1940 wool clip prices." The Ministers concerned, I may say, are under no illusion with regard to the existence of that dissatisfaction, but in that regard there are several considerations which must be carefully and studiously borne in mind. In the first place, the markets for wool have, for years, been notoriously unstable. No recent period of years could be found which could reasonably be regarded as normal for the purpose of assessing, from an agricultural point of view, the needs of the situation. The farmers themselves proposed to go back—they found it necessary to go back in support of their case—to a period prior to the last war. The Government felt that to go so far back for the purposes of comparison was really not practical politics. The Government's efforts were directed to finding a price which would ensure for sheep farmers adequate returns, substantially better than those received during the depressed conditions of recent years to which the noble Duke has referred. The prices which have been fixed were fixed in view of all the existing relevant considerations and circumstances. In particular, the noble Duke asked me whether the projected increase of wages was taken into account in fixing wool prices. It certainly was, and it was taken into account in fixing sheep prices as well. Accordingly, it is vain to suggest that this decision, whether it be regarded as a good decision or a bad decision, was not taken in the light of all relevant circumstances, including those which the noble Duke insisted were material.

I pass to the prices themselves. I apologise to your Lordships for the length of my reply, but the speech which has been made was a comprehensive one, and I do not propose to detain your Lordships more than a few minutes more in endeavouring to reply to it. The prices which have been fixed represent a very substantial increase upon the prices that prevailed before the war. The increase, as the noble Duke indicated, in some cases is 65 per cent, and in other cases 45 per cent. In announcing his decision, the Minister made it clear that these prices included, as they must, an element of subsidy. Let me develop this for a moment, if I may, because it is not fully understood in certain quarters outside your Lordships' House. British wool constitutes only a small part of the total wool used in the United Kingdom. The price of wool issued by the Wool Control has to be determined mainly with reference to the cost to the United Kingdom of imported wool. Any prices which are fixed above that limit and in excess of the economic price must be regarded as a subsidy, and the justification for that subsidy must rest on the shoulders of the Ministers of Agriculture, who must accept responsibility for it.

Just let me add this. Important as wool is, especially to the hill man, nevertheless he has other sources of income which, I venture to think, are even more important, and the action which has been taken by the Government with regard to prices for fat sheep and cast ewes, as my noble friend knows so well—prices have advanced by 2d. a lb. in the one case and 3d. in the other—should certainly bring a firmer tone into the hill sheep farming industry. The first lamb sales in Scotland, I am informed, show a promising upward trend, and if, with the prices for sheep and wool at their present figure, the hill farmer cannot make a start towards greater prosperity, then I fear there is something fundamentally wrong—something which cannot be adjusted or cured by any artificial manipulation of the prices of wool in what we all hope will be the short period of wool control. It may be necessary to examine the position from the broad standpoint of the whole agricultural industry and the improvement of pastures. But these questions lie outside the range of the debate to-day, and I abstain from further comment upon them. My noble friend the Duke of Montrose referred to the Wool Controller. I do not understand that he made any attack upon the Wool Controller as an individual, nor an attack upon his impartiality in the discharge of his duties. After all, the question of control seems to me to be one not only for the Wool Controller, but perhaps even more for His Majesty's Government, who are responsible for policy in the matter.

Therefore, my Lords, without detaining you further, I would sum up by saying this. The only promise to consult the farmers has been amply and rigidly fulfilled. A promise to consult the Advisory Committee on the fixing of wool prices was never given. As regards the prices themselves, I do not desire to repeat what I have already said. They seem to me to be not only reasonable but, in the circumstances, generous, being eked out by a very substantial Government subsidy. I want finally to assure the noble Duke and the House, and, if I may, the country outside, that the Secretary of State for Scotland is fully alive to the importance of the whole sheep farming industry, which the noble Duke has so properly stressed, and that he will neglect no practical means which are open to him to assist that industry in the difficult time through which undoubtedly it is now passing.

Would the noble Lord who has replied for the Government refer to the point made by the noble Duke about the cost of transport of the wool? The procedure in regard to this is quite different from that adopted in the case of Australian wool, which is put free on board.

My Lords, if I did not deal in terms with that particular point it was not that I had forgotten it. I think one must admit that expenses have mounted in wages and transport in every department of industry. Not only this industry but other industries as well have experienced those increases, and it was while keeping in view the amount and the increases of those expenses that the prices were fixed. This and other relevant considerations were certainly borne in mind before the decision was reached. That is all I can say to the noble Lord.

My Lords, when I came to your Lordships' House this afternoon I had no intention whatever of inflicting a speech upon you, but having heard the speech of my noble friend the Duke of Montrose and the Government reply, I feel impelled to lift my voice in protest against the very unsatisfactory nature of the reply which has been given. The noble and learned Lord gave a defence from what, without offence, I might call a Departmental brief. He showed great sympathy. He said the Secretary of State for Scotland was fully alive to the importance of the sheep farming industry and so on, and sympathy was offered to a very considerable extent; but I must say, having heard what the noble Duke said, that sympathy is. I think, rather less than the occasion quires. In particular, the point made by my noble friend below me (Lord Hutchison) does seem to require more attention. The noble Duke said that the Control takes the wool from the moment it leaves the sheep's back and spends nothing upon it. The fanner has to pay the transport, insurance, and all incidental expenses, and the Control is taking, according to the noble Duke, 6d. a lb. profit for which the Control does not seem to be doing anything adequate. The noble and learned Lord who replied said that the price was fixed having regard to all these considerations, but that does not meet the criticism, and if it is the best that the noble and learned Lord can offer us, then I think my noble friend ought to take an early opportunity of returning to the subject.

My Lords, I thank the noble and learned Lord very much for his interesting and informative reply. I do not think it will give satisfaction to the farming community, but I do not propose to occupy any more time just now, and for the moment I will withdraw my Motion.

My Lords, as your Lordships know, a Royal Commission is arranged for five o'clock, and it will probably be convenient to adjourn at this point in order to allow the Commission to be called.

My Lords, I beg to ask the first question that stands in my name.

My Lords, in answer to the noble Lord, it has been one of the main functions of the Ministry of Information since its inception to discourage foolish gossip which may give any kind of information to the enemy. That applies also to the repetition of false rumour, which may stir up apprehension and panic; and to gloomy and defeatist talk calculated to lower the morale of the public. After the collapse of France, and reports received concerning the extent to which the intentional spreading of rumour had contributed to the German success, it was decided to intensify the campaign in this country against rumour. One of the methods adopted in this campaign was the use of advertisements of the phrase "The Silent Column." It certainly did not have the desired effect, and, as announced by the Prime Minister, the phrase will no longer be made use of; but it will, of course, remain one of the duties of the Ministry to do all in its power to discourage the spreading of rumour. I regret that it is impossible to state the actual amount spent on the advertisements which concerned the phrase "The Silent Column," as they were only part of the general campaign. The space which had been hired for that particular purpose was afterwards put to other uses. The phrase "The Silent Column" will no longer be used, but there is nothing to disband. I regret that my right honourable friend the Minister of Information is unable to accept the noble Lord's final suggestion.

My Lords, arising out of the last part of the answer, may I ask what steps the Government propose to take to prevent the squandering of public money upon some of these fantastic appeals which emanate from the Ministry of Information?

My Lords, I hope the Government will always have an eye to economy, and I have faith that Parliament will put a critical eye upon expenditure.

My Lords, I beg to ask the second question standing in my name.

My Lords, I am aware that railings and gates have been erected at the new building of the Milk Marketing Board at Thames Ditton. I understand that these form part of a prewar contract and were made some months ago, being regarded as desirable on security grounds. All Departments are now very much alive to the necessity of conserving materials which are in short supply, or are required for war purposes, and strict instructions on this head have been issued.

My Lords, I beg to ask the third question standing in my name.

My Lords, the reasons for withholding the news of the bombing and sinking of s.s. "Lancastria" were the following: This ship was engaged on a military operation, and it was evident from the German wireless announcement that the enemy were totally unaware of the identity of the ship which had been sunk. Further, it is contrary to the general policy of His Majesty's Government to announce the loss of individual merchant ships. The number and total tonnage of merchant ships lost are given in a weekly statement. The tonnage of s.s. "Lancastria" was included in the statement issued on July 2. The policy of His Majesty's Government in this matter is decided primarily by considerations of security. Moreover, the withholding of this particular item of news is not considered to have had a bad effect either upon morale at home or upon prestige abroad.

Arising out of that answer, may I ask the noble Lord whether in his view the brutality displayed by the enemy on that occasion and the wonderful heroism displayed by our troops and sailors should nor have been broadcast to the world, although there may have been some need for regulation, as the noble Lord has explained?

The question of precisely when an announcement can be made must always be a matter for the discretion of His Majesty's Government. There were also other influences which weighed with them in not detailing the story at that particular time.

had given Notice that he would ask His Majesty's Government whether they will consider the advisability of dropping leaflets over the islands of Jersey and Guernsey giving information of the progress of the war and the safety and welfare of relatives of the inhabitants of those islands now in this country; and move for Papers.

My Lords, I am sure your Lordships must have been very much impressed by the eloquent speech of the noble Lord, and my only regret is that more members of His Majesty's Government have not seen fit to be present here to listen to the speech made by my noble friend on a matter about which he must feel very deeply. I rise to assure him that those of us who have no connection with the Channel Islands feel just as deeply and just as sympathetically for the people of these ancient possessions of the Crown as any inhabitants of Jersey, Guernsey, Alderney or the other islands. This matter was debated in your Lordships' House before, and the official answer then was made—I am sure with great discomfort—by my noble and learned friend on the Woolsack. I understand that the noble Duke, the Duke of Devonshire, is in charge of the Government reply on this occasion, and I do not envy him his task either.

Since that debate I and, I dare say, other noble Lords who took part in it, have been inundated with correspondence from Channel Islanders complaining of the extraordinary muddle, the vacillations, the contradictory instructions given, and the plight in which they now find themselves. I have asked many of the correspondents to communicate with my noble and learned friend on the Woolsack, and I hope they have done so. I pointed out that my noble and learned friend had the duty of defending the Government's action and they ought to communicate with him. The other letters I have sent on to the Home Secretary and I have asked him to advise me how to reply to those people. I have had a very courteous answer saying he will inform me what to say to these correspondents. They are all unknown to me; they only wrote to me because I supported the noble Lord, Lord Portsea, on the last occasion when this was debated.

The only reason why I have risen to support my noble friend, apart from the reason I have already given, is that I think this is an occasion when what we call recriminations can serve a most useful purpose. This whole episode of the abandonment of the Channel Islands, and the treatment of the inhabitants in the course of it, is so bad that it is necessary to assail, as I now do, His Majesty's Government for their part in it, in order that they may be warned that this sort of conduct will not, I hope, be tolerated in future. The noble Lord, Lord Portsea, quoted the statement of a Minister on another occasion, that the British Empire was not for sale or barter. We have neither sold nor bartered these possessions: we gave them away. I will give your Lordships the facts. I had not got all the facts when your Lordships discussed this subject before. There is no dispute about them; in fact, they have been admitted in another place. On that occasion the Government thought fit to put up an Under-Secretary to reply. It was in the other House; it is not for us to complain. But he was speaking for his chief, who did not see fit to be present, and these were briefly the facts.

The War Cabinet decided—this is on the authority of the Government spokesman—on June 19 that the islands should be demilitarised. Actually the German occupation took place on June 30 and July 1. The first air raid on the islands, which the inhabitants were told they were going to escape by this extraordinary action, was on June 28. Between June 19 and June 28 contradictory instructions were given from London and from the authorities in the islands. There was an encouragement given to evacuate certain of the inhabitants. Most of the school children were taken to safety. Ships were sent, and in many cases came away half empty. The sinister thing is this, that the local authorities, the local Bailiffs, or certain of them, actually discouraged the people from evacuating, and I think that matter is a fit subject for inquiry. It looks to me very much as if Count Blucher, or the German party who were in possession of the leased island, exercised a good deal of influence on these people.

I must intervene. Count Blücher is a very gallant officer in my own regiment, now serving.

I do not see what that has got to do with it. Is he serving in the British Army now?

In the Yeomanry.

I mixed him up with his family who are of German descent. The noble Duke did not correct my noble friend Lord Portsea, but if Count Blücher is serving in the British Army I say nothing whatever against him. I shall leave his name right out of my argument. But it looks very much, from the facts admitted and disclosed, as if German influence was at work in the islands, otherwise what explanation can we have of these local Bailiffs, after the Military Governor had obeyed his instructions to withdraw, advising the people not to take advantage of the facilities provided? The result is that out of a total of 93,000 inhabitants or thereabouts in the three principal islands, only 25,000 left. I should like to ask the noble Duke, if I have not offended him too much by my unfortunate slip about Count Blücher, through pure ignorance, whether all the able-bodied men were taken away. That is very important indeed. We know what the German custom is. When it suits them, these able-bodied men will be shipped off to Germany for forced labour. It has been done in Holland and Belgium, and it will be done in the Channel Islands. As for these people who have been told not to leave their homes which they have occupied for centuries, not to abandon them, if there is a set-back in German fortunes, as we trust there may be soon, they may take the whole of the inhabitants away and colonise the islands with peasants from East Prussia or elsewhere. That is their policy. It is absurd to suggest that these people who have lived there for centuries will be left undisturbed by these Prussian tyrants.

That is my first question. The second—and it is all very relevant to this question of dropping leaflets—is whether we shall take every means we can by broadcasting in the patois and in English and French, and in other ways, to give them accurate information. I hope leaf-lets will be used and, for myself, if I am furnished with the means, I guarantee to get messages into the islands, and so would anyone else who knows the navigation of the Channel, in order to keep up the courage of these people and let them know that while a blunder has been made, it will be put right as soon as possible. What guidance was given by the British Government to the Channel Islands, and were these local, magistrates justified in openly discouraging the people from taking advantage of evacuation? The suggestion made—I do not know what Lord Portsea's authority is, and I did not hear it said myself—that the islands are of little military value, is an astonishing statement. It is absurd. These islands, with their magnificent anchorages, their aerodromes, and their easily defended position, are on the flank of any German advance by sea, or by air for that matter, on these islands from the Brittany coast. They are of the greatest strategic value. Whoever advised any member of the Government to say such a thing is not worthy of holding any position as an expert to advise the Government. Of course they are of the greatest military value. No naval officer who has studied the problem would say otherwise for one moment.

The truth of the matter is this. During those days when the French Government collapsed—we may as well face it—either the members of the War Cabinet or their professional advisers at the time, some of whom I am glad to say have been changed, or both, lost their heads. We may as well face up to that. As my noble friend Lord Portsea said, on the Thursday they poured troops and guns into the islands, and on the Friday they evacuated them again. They decided to evacuate all the inhabitants first of all, and then apparently they allowed this discouragement to be given. There was confusion of counsel, and I am afraid it is not the only example during those hectic days of mistakes of this kind being made. People who cannot keep their heads when an unexpected reverse occurs in war fail in the great test of statesmanship. That is the time when the clearest counsel should prevail, and when the coollest judgment should be shown. By that test the action with regard to the Channel Islands will not bear too much investigation.

As I say, there is a use in recriminations. I have only a very small influence in the political life of this country or with my Party, but I believe I am speaking for a great many of my colleagues in both Houses of Parliament, with whom I have discussed this matter and who have been very disturbed by this whole episode of the Channel Islands, when I give the members of the Government present the most solemn warning that they will reap great trouble if this sort of conduct is repeated. These islands should have been prepared for military defence immediately. The helpless and the sick should have been taken out. It is absurd to say you cannot evacuate people compulsorily. We are doing it from our own coasts. You must do it in time of war. The men for the defence should have been left there, and reinforced. This argument that the islands would have suffered from intense aerial bombardment is no more valid than if it were used in the case of any village or town in most of the British Isles. The fact that the nearest island is fourteen miles from France, in these days of aeroplanes flying at 350 miles an hour, makes it no more vulnerable to air attack than are the majority of towns in the south of England. There is no real difference between fourteen miles and one hundred miles when modern aeroplanes come to attack in masses. If we are going to abandon any more of His Majesty's possessions, I warn the Government they are going to create a position which will lead to their downfall. I think we should do everything we can to let these unfortunate victims of our mistake know the truth about the war and tell them that their deliverance will not be long delayed.

My noble friend Lord Portsea had on the Paper a quite definite question, which was whether the Government would consider the advisability of dropping leaflets over the islands of Jersey and Guernsey. That matter falls within the Department of the Home Office, on behalf of which I answer in this House, and I can answer it, but the noble Lord to some extent, and the noble Lord opposite to a much greater extent, has enlarged the question to very much wider issues in- volving all kinds of military and naval questions of which I have had no warning, and about which I am unable to speak. I hope my noble friend will forgive me, therefore, if I only answer the question he put on the Paper. It is the policy of the Government to give all possible information to the inhabitants of the Channel Islands both as to the progress of the war and with regard to the safety and welfare of their relatives who have been evacuated to this country. My noble friend's suggestion about doing this by means of pamphlets dropped from aeroplanes will be borne in mind and will be carefully considered, but he obviously will not expect me to give an answer of any kind to the suggestion. It would clearly be undesirable to warn the Germans either that we are going to send pamphlets to the Channel Islands or to absolve them from the necessity of making preparations against them.

As announced in the other House yesterday, the question of whether communication with the islands could be established through the Red Cross has been taken up with that body, and I can assure my noble friend that whatever can be done in this connection, and generally, for the relief of the islanders is being done. It was announced on the wireless last night that the Post Office is prepared to accept letters for the Channel Islands by arrangement with Messrs. Cook and Son, who, I believe, dispatch the letters to the Channel Islands, but I can, of course, give no guarantee that the letters will arrive. My noble friend can rest assured that the Government are conscious of the very hard position of the islanders, and that they are most anxious to do anything they can to alleviate it.

My Lords, I thank the noble Duke for his answer and I beg leave to withdraw the Motion.