When I addressed the Committee on the occasion of the last Vote of Credit in July, I said I expected to have to ask for a further grant about this time. According to the latest estimates, the present Vote will be exhausted during the first week in November, and I have, therefore, now to ask the Committee for a further Vote to provide for war expenditure during the next few months. The Committee will notice, from the Estimate that has been circulated, that I am asking on this occasion for a grant of £1,250,000,000 instead of the more usual £1,000,000,000, and hon. Members may recall that a similar course was found necessary on the occasion of the corresponding Vote last year. The reason, as I explained then, is simply to avoid the inconvenience that would arise from a smaller sum becoming exhausted, as it very probably would, during the Christmas Recess.

During the last few months the average daily rate of expenditure from the Vote of Credit has fluctuated considerably, with a general tendency to rise. The average for the three months ended 30th June, for example, was a little over £13,250,000 a day, whereas in the succeeding three months to 30th September, it was nearly £14,000,000 a day. Taking a more limited recent average, for the eight weeks ended last Saturday, the expenditure has been at an average rate of £13,750,000 a day, of which £12,000,000 was on the fighting and supply Services. This rise, to which I call the attention of the Committee, has been attributable almost entirely to expenditure on the fighting and supply Services where, as I have said, £12,000,000 a day has been spent, comparing with an average of a little over £11,250,000 for the first quarter of the financial year. So that practically the whole of the increase is due to the greater intensity of our direct war effort.

In the light of these figures I hope the Committee will be willing now to agree to the Vote of £1,250,000,000 which, so far as can be judged from past experience and from present information, will carry us through till about the end of January. Of course, if any unforeseen developments should occur to necessitate an increase in the rate of expenditure, I should have to come again to the Committee with proposals.

It is not necessary for me to commend the Vote of Credit to the Committee. Most of us have proved by our record during the war that whatever is required for the war must be provided. We emphasise this morning that we look to the Chancellor of the Exchequer to ensure that the £1,250,000,000 is wisely and economically spent. We appreciate that some of this credit will be used to increase the pay of our men. There is some concern, however, on certain aspects of Government policy about which our people are, rightly, getting uneasy.

The first question I want to ask is: Shall we be given an assurance that it is the intention of the United Nations to act in co-operation on post-war economic policy? A few weeks ago my hon. Friend the Member for Gorton (Mr. Oldfield) and I were travelling home in the train, and seated opposite us were two American nurses. They offered us chocolate and we got talking. My hon. Friend and I, purposely, did not say a word to indicate our connection with public life. These two girls told us how they admired the British people, especially the English people whom they had met. [Interruption.] I think it is time someone spoke up for England. We hear so much about Scotland and Wales. Sometimes in this House listening to certain speeches one would not think that England had made a great contribution—abut we do not want to get involved in that discussion. These girls as I say paid a great tribute to the contribution which the British people had made. They referred to the fact that they had been in Liverpool and a number of other places and had been subject, along with our fellow-countrymen, to bombing and the black-out. They went on to say that when they wrote home they found that most of their people did not realise what the British people had gone through.

11.15 a.m.

There is no doubt that our people have passed through a terrible strain in this war, and I often think that some relatively well-placed people in London do not realise what the ordinary people in industrial centres have endured. I do not want to make too much of that, but I think it is time that it was recognised more widely in other parts of the world where they have not had to contend with the same difficulties. The President of the Board of Trade was one of the first in public life, along with a small number of others, to face the problem of the worsening international situation and accept the logical conclusion, which was to agree to an increase in our armed forces and armaments. I want to ask him and other responsible Members of the Government to approach post-war problems and the switch-over from the European war to the Far Eastern war in the same big way. Speaking on Tuesday, the President of the Board of Trade said:

"I have every hope that we shall find it possible to make a smooth and effective switch-over from war to peace production."—[OFFICIAL REPORT, 17th October, 1944; Vol. 403, c. 2320.]

All sections of industry, in view of their war record, are entitled to expect the Government to plan an efficient and smooth change-over the situation that exists now, to that which will exist when we have to prosecute the Far Eastern war, and also when the war has completely finished. The Government are expected to plan to a greater degree than they are doing now. In the industrial centres we see no sign yet of preparation for this smooth change-over.

On a point of Order. Is it in Order, on this Vote, to discuss something that is going to happen after the war?

It will not be in Order to discuss legislation which may be necessary, but it is obvious, from what we have been doing in the last few days, that some of this money must be used by the Government in dealing with problems that will arise in the transition from the war to the peace period. Therefore, the hon. Member's speech, up to the present, has been in Order.

I thank you for that interpretation of the position, Mr. Williams, and I will carefully choose my words in view of your Ruling. In the industrial centres, I would emphasise, we see no sign of this smoothness yet. What we do see is the old method of discharge, after all that our men and women have done in the war. Since 1940, we have had to plan the maximum production for war, and all sections of our people have responded to every appeal made by the Government. We think the time has arrived when the Government should respond more readily to the difficulties that are arising through no fault of individuals, and that individuals ought not to suffer in the way that they are doing. We say that at this stage in the war there should be no wholesale discharges from industry, and that there ought to be a planned switch-over from the situation prevailing during the European war, to that which will prevail during the Far Eastern war. I have before me the White Paper dealing with the re-allocation of man-power between the armed Forces and civil employment. May I be allowed to read an extract:

"It is governed by the paramount consideration that there can be no break in the war effort after hostilities cease in Europe and that, in association with other Allied Powers at war with Japan, there must be the maximum deployment of the forces needed to bring complete and final victory at the earliest possible moment. It follows that in the interim period the problem will not be one of demobilisation, but of re-allocation of man-power between the

Forces and industry in order best to provide for the requirements of the changed situation." We accept that and I believe that practically the whole Committee will support it. We consider that it is time we began to plan how to avoid discharges. The President of the Board of Trade, speaking on Tuesday, said:

"Tell us the sites, then the other things shall be duly considered."—[OFFICIAL REPORT, 17th October, 1944; Vol. 403, c. 2324.]

That is an indication of the lack of national planning—

That was a special reference to the tinplate industry, and was part of my account of the tinplate situation.

I thank the right hon. Gentleman for that explanation, but I did think it was an indication, to a certain extent, of lack of national planning.

Quite the contrary; the exact opposite was intended.

I accept that. Between the two wars, we saw local authorities bidding against one another for sites of this kind, and we see signs in the White Paper that that is still likely to happen. We see one area after another offering inducements. This only leads to chaos. The time has arrived when all this bidding and offering of inducements should be cut out. We ought to have real national planning, with area or regional planning carried out in accordance with a national plan. If we are to continue to approach our problems in the way we have done in the past, this country will not hold its own and will not carry out the reforms that are so urgently needed. We want to maintain our economic position and to improve and build upon it so as to enable this country to be even greater in the future than it has been in the past.

While carrying out my duties at the beginning of the war, I met several representatives of the General Staff. I came away from meeting them feeling very disheartened, because, having followed modern warfare closely from the books that were published in Germany, Russia and other countries, I was convinced that a number of them had the Maginot Line outlook and that we were suffering accordingly. Later on, I met other members of the General Staff who had meantime been promoted to that rank, and I came away feeling that if our affairs were in the hands of men like that, I should have complete confidence in the way the war would be prosecuted. These new virile younger men on the General Staff, with their invasion courage, have been responsible for planning and executing the greatest military feat ever carried out in the world's history. Throughout the world now, and particularly in places like the Soviet Union and America, there is great admiration for the way we carried through that great military feat.

We heard the announcement the other evening on the wireless about the prefabricated invasion ports, with which I was previously familiar, owing to the fact that some of my friends were engaged on them. That work was a real tribute to the thinking that had taken place. It showed that the men responsible had thought big, planned big and built big. That is the way we must approach our post-war problems. This prefabrication of the invasion ports was a magnificent example of British public enterprise and was the result of the maximum co-operation between the big men employed in the National Physical Laboratory, the War Office, the Ministry of Supply, the Ministry of Transport, and the Royal Navy. I hope that we shall learn the lessons of that feat, and cut out the petty quibblings and our rather haphazard approach to legislation, which has always in the main been based upon expediency. We should learn the lesson of the magnificent contribution that Britain has made towards winning the battle for world freedom.

Hon. Members have been making a series of suggestions for the setting up of new Ministries—even those who belong to various organisations supposed to be against the growth of bureaucracy. We find on the Order Paper, and in their public speeches, suggestions for the creation of further Government Departments. Let me make one point quite clear. Speaking for the party and the movement to which I belong, I say that we will join with anyone in the elimination of bureaucracy, wherever it is to be found. No-one has suffered more in the past from bureaucracy than those who have had to apply for public assistance and for benefits of various kinds and when other hon. Members talk about bureaucracy we will join with them. We consider that the time has arrived when the Government should review some of these war-time Ministries and see whether we are getting the best results for our expenditure. I would like the Government to give special consideration to one aspect of the matter, although I do not expect immediate action. We set up the Ministry of Supply, the Ministry of Aircraft Production and the Ministry of Production. Has not the time arrived or will it not have arrived soon after the termination of hostilities when those Ministries should be merged into a Ministry of Economic Development and Resources? I see there is a proposal to hand over these important responsibilities to the Board of Trade, but I think the Board already have their hands full. If we are to approach post-war economic development in the way that we have dealt with our war problems, those matters should not be put into the hands of the Board of Trade, but entrusted to a new Ministry of Economic Development and Resources and that new Ministry should be given an adequate general economic staff, to plan our economic development.

I see, by the Government's White Paper on full employment, that steps are being taken in that direction, but, unfortunately, the Government seem to approach the problem in too narrow and too small a way. For example, they talk about a small staff to prepare statistics, and to look forward, with a view to directing and advising the Government. I come from big-scale industry, and I will never forget how certain people used to be critical because it was necessary to have a large staff. In modern life, if we are to plan and work efficiently, we must have adequate staff. That is the direction from which we ought to be considering this problem. I find on the Table in the Library of the House of Commons seven reports issued by the National Resources Planning Board of the United States. We have a great deal to learn and to profit by from reading those reports. The Government should be considering action of some kind along those lines. We all have great regard for the achievements of the Soviet Union, but too many people fail to remember that military achievements could never have been carried out, had it not been for the industrial development that took place, upon the Five Year Plan. If we are to approach our problems in the way that the United States and Russia have done, we have to determine our policy upon a similar basis. Whatever happens, I hope that the Committee will not stand for going back to the 1939 conceptions of life.

11.30 a.m.

Here is an example of what we could do in this country if we were so minded. I have here a book the reading of which made me remember what we went through between the two wars. I thought of what we have achieved in this war. When I look at these photographs of what has been done in the United States and remember our prefabricated ports, I realise the kind of development that could have taken place, if we had not been held back. Here are a number of chapter-headings which indicate what I mean. "River is made to work for the people." "New life from the land." "The people's dividend." "A new way with an old task." "The unity of land, water and milk." "A common purpose." "For the people, and by the people." "The release of human energies." "Regional pillars of decentralisation." "It can be done." And then I read about John Winant, that great public-spirited man. He said:

"In spite of the fact that private enterprise had never envisaged this project nor was implemented to carry it through, vested interests in the United States fought it with a bitterness that has seldom been equalled in any country."

I am afraid that what happens in the United States or Russia must be regarded as outside the scope of this Vote, except for the matter that we may have given them actual help with our money or goods.

The White Paper on the Vote of Credit refers to

"services essential to the life of the community."

I am giving a concrete example of what has been done when we have been working in this country in unity with the United Nations. I am giving a concrete example of how we should apply this expenditure to prepare and build—

I am sorry to interrupt again, but the hon. Gentleman has already given a very long list relating to one country, and I suggest that he should return to his main argument.

Before the hon. Member leaves that point, will he briefly tell the Committee what is the book to which he has been referring?

The book is about the Tennessee Valley Authority. It has been published in several forms. It is in the Library, and is well worth reading.

The hon. Member was also, I gather, referring to a speech made at Wallasey, in my constituency, a fortnight ago to-day, by the American Ambassador.

The point I was making, Mr. Williams, was that when we carry out the policy contained in the White Paper, it is along those lines that we ought to be thinking. It is five months since the White Paper on full employment was published, and, in our view, the time has arrived when we ought to get more information on how that White Paper is to be applied. In July this year we had a Debate upon surplus Government stores, and plans for their disposal, and we found, according to the Press of 11th October, 1944, that Sir Philip Warter—and let me make it clear that I am not speaking critically of the Civil Service, because I do not believe in doing that; I believe in speaking critically only when men have an opportunity to reply—made a statement that, in my view, should have been made in this House, by a responsible Minister. Could we be told more about that to-day, and could we be given more examples of how the policy outlined by Sir Philip Warter is to be applied? The President of the Board of Trade informed us he had been in touch with Dominion and Colonial representatives.

Could the hon. Member tell us what was this statement to which he refers?

It was something like this, if I recollect aright. He was outlining the Government's proposals for dealing with national factories, and also those factories which have been subsidised by the Government, such as shadow factories. He said that firms should be applying to the Board of Trade in order that they could, after the war, or when necessary, change over from war-time to peacetime production. His statement revolved round those main principles. The President of the Board of Trade said in that Debate that he was in touch with Dominion and Colonial representatives. I think the time has arrived when we should be told by the President some of the results of those consultations.

Will my hon. Friend give the quotation to which he refers?

I have not HANSARD with me, but it was the Debate that took place on this White Paper in July. We have had the full employment policy published, but I do not see how that can be implemented fully unless we allow full development to take place in the countries for which we are responsible. Many Debates have been devoted to the position in India and a great responsibility rests on every one of us in that connection. I am therefore hoping that the Government will give consideration to that matter.

During the war the Board of Trade have carried out what in my view has been a very successful policy, namely, the provision and organising of utility goods. This has had great economic value. It has helped to avoid inflation, and it has been a contribution to the welfare of the people. The people recognise that in the main they have got good value, that in regard to most commodities indeed they have had better value than they have ever had in the past. It has been a contribution to the stabilisation of prices. If this is good in war it is also good in peace, and if we are to avoid that inflation, of which some of us live in dread because of the experience we had in the Army of Occupation after the last war, I think a certain amount of this policy should be carried on after the war, in order that we can provide our people, especially the young people when they come home, with furniture and household utensils of good quality, at minimum prices. Have the Government considered setting up a Government public utility company in order to carry out in peace time what we have so successfully done in war-time?

The Government are giving consideration to the serious problem of housing. These houses will have to be provided with furniture, and I hope the people who need this furniture will not be subject to what my generation was subject to after the last war. People want guaranteed supplies of the best quality and the best value, and they ought to get the benefit of mass production, instead of those who run chain stores and places of that kind. It is unhealthy that chain stores merely by handing commodities over a counter, and having little responsibility in production, should be able to pay dividends of from 20 to 50 per cent., while people in industry with great responsibilities, whether managerial or administrative, or engaged in manual work, can pay a dividend of only six, eight or ten per cent. at the very most. If we are to have a healthy economy after the war the Government should give consideration to that question.

As far as we are concerned we are very optimistic with regard to Britain's future, if the problems are approached in the way in which war questions have been approached. I see that Dean Inge has made several statements, supported by pre-war appeasers, who are now very pessimistic, that we shall be poor after the war. No one is readier to say that we shall be poorer after the war than I am. We shall be poorer in the loss of many of the most noble sons of this country. We all have responsibility towards them. They have not fought for a little England or with a narrow outlook. They have fought with a world outlook, fighting the world battle for freedom. It is in that way we ought to approach our problems. Having said that we shall be poorer to that extent, I say that in another sense after this war Britain should be richer than ever. Our man-power was never better organised than it is at the present time. Our industrial capacity was never greater than it is at the present time. The skill of our people was never more developed than it is. In all parts of the world it is admitted that the British people are more highly-skilled and developed than the people in any other part of the world. We shall be richer in experience. Therefore the accumulated assets of this kind, provided we are worthy of them, can make Britain greater than ever.

In 1939 I found that the stock of the British people was lower than it had ever been in our history. We had sunk to the lowest possible depths. Now, the stock of the British people is higher than ever it has been in our history, because throughout the world there is a realisation of what is owed to Britain for the period when we stood alone for 12 months, and held at bay the mightiest military machine that had ever been built. It was a tremendous strain but we were able to do it. Our stock is higher than ever it was, as our responsibility is greater. We, on this side, are prepared to accept responsibility when the people give us the power. We intend to work and fight for that power. If Britain maintains that new standing throughout the world, we ought not to be poorer, as the pessimists are saying, but richer than ever we have been in British history.

In conclusion I would remind the Committee that a Polish General recently telegraphed, under great difficulties, from Poland, to the Polish Government in Britain saying, "My men are demanding Socialism and the nationalisation of the land." The same thing is happening in Belgium. We find that General de Gaulle is making speeches of a similar tone. France, Belgium and Poland are being liberated as the result of the great sacrifices of our people. Countries in Europe which, as the result of liberation by our men, are being freed from those economic forces that have wrought such havoc in the past. I believe we shall win complete and overwhelming military victory. But that will not be enough for British democracy. We have voted millions and millions during this war, without any quibbling from these Benches. We say that, while we are going to secure overwhelming military victory, we also want liberation from the economic forces that give rise to poverty, Fascism, and war.

I think that no more striking comment could be made on the times in which we are living than the fact that my right hon. Friend is going to get this Vote of £1,250,000,000 after a comparatively short Debate and with very much greater ease than £1,000,000 Was obtained in happier times. I think the time has come to remind hon. Members that the primary function of the House of Commons remains the scrutiny of expenditure. I know that we have come in these times to read and talk and think of millions with such facility, that the noughts at the end have come to mean little or nothing—so little that they were referred to once by a right hon. Gentleman opposite as "meaningless symbols." But may I give hon. Members a measuring rod to use next time they are discussing millions of pounds, or millions of tons, or millions of anything else? The war has now lasted nearly five years and two months—I do not know what other Members feel, but to me it seems a mighty sight longer since that Sunday when it all began. Do hon. Members realise that the war has lasted not quite 2,750,000 minutes? Any hon. Member who does not believe me can perhaps accept that as a little homework during the week-end, It is a solemn fact that this long and exhausting war has not yet lasted 2,750,000 minutes; yet that in some 20 minutes' time we are going to vote £1,250,000,000, and every day the war lasts we are going to spend another £14,000,000.

I do not want to contradict myself— and I do not think I am doing so—but, having said that we ought to scrutinise our expenditure, I welcome one item today. I am one of those who have harassed and criticised the Government on the question of Service pay. I would support the hon. Member for Stoke (Mr. E. Smith) by saying how much I welcome the fact that, at long last, these rates of Service pay have reached a level at which they are not—as they were—a disgrace to this House of Commons. It is some little consolation to me, as one who took part in the revolt against the Government on the subject in March, when the Government arrived at the winning post in a bruised and bleeding condition, by a majority of 23. [Interruption.]—I do not think that is a mixed metaphor: it is quite possible to arrive at the winning post in a bruised and bleeding condition. I was saying that it is some consolation to those of us who voted in the other Lobby, and who were told that such a step would lead to inflation, to find that it is now an accomplished fact; and that the country is no worse off, but, in fact, very much happier as a result.

That brings me to my chief point. I believe that we can discriminate. The hon. Member for Stoke made much the same point. It is quite possible to support a Vote of Credit, and yet to discriminate to this extent. I believe that hon. Members in this House, like their constituents who have to find the money, do not grudge a single penny that is necessary for the waging of this war to a successful issue. But the time has come when we Should grudge—and say so— every penny voted for interference with the waging of the war. A great deal of this Vote, I am afraid, will go in that direction. We are voting to-day not only for shot and shell, and pay for the fighting men, but for a multiplicity of Ministries and officials, who are jostling and jumbling one another to the detriment of the prosecution of the war. Action and administration are hamstrung over and over again by departmental overlapping. I was going to say that the Government's left hand does not know what their right hand is doing, but that would be an oversimplification: the first finger of their right hand does not know what the second finger of their right hand is doing.

Their left wing does not know what their right wing is doing.

That may be true; but I do not want to revive yesterday's Debate. When we are voting a war credit, it would be a pity to allow party controversy to spring up again. I hope that I can carry hon. Members opposite with me when I say this: It takes a clever man in this House, when dealing with certain problems of his constituents, to hit the target first time, and find out the right Department to approach. It is a grandiose game of finding-the-lady. If hon. Members have a housing problem, affecting their constituents, how many have got hopelessly lost in the maze of the Ministries of Health, Town and Country Planning, and Works? I have never yet approached the right Minister at the first attempt. I have always got passed on to somebody else.

May I say how delighted I was to hear the hon. Gentleman opposite, with whom I have crossed swords before, deal with the subject which is my next note? He said for me what I want to say about the Ministries of Production and Supply and Aircraft Production. Surely, the time has come when we could have a merger of these Departments. What a labyrinth it is. Only the other day a carpenter in my constituency, with quite a small business, was given the job of repairing the black- out in a military base hospital. To do that, he had to get some timber some 200 yards down the road. It has taken some three months' correspondence to have that done. The Ministry of Health and the Ministry of Supply played pingpong with that matter, with the War Office intervening, as they say in the divorce courts, before it could be done.

May I give another example? I see opposite the hon. Lady the Member for Wallsend (Miss Ward). Last Friday, on the Adjournment Motion, she raised a matter which brought two Ministers down to the Front Bench. It was a question of an ex-Service man getting permission to drive a taxi somewhere in the Newcastle area. Apparently, the Minister of Labour and the Minister of Fuel and Power have been having a grand time over that. There was no decision and no satisfaction. Then there was the matter the other day of the disgraceful incident, as I call it, of the occupation of houses, which should be occupied by bombed-out Londoners, by Italian prisoners. I like to call them by their right name and not call them collaborators, because they are men who have been taken in the attempt to slaughter our own kith and kin. That was due to a hopeless muddle between various officials and Ministers. I believe it was eventually pinned on to the unhappy Ministry of Works, whose Parliamentary Secretary must have been delighted when the Question was not reached at Question time. Otherwise the OFFICIAL REPORT would have shown him bombarded with supplementaries.

When we have correspondence with Government Departments — and our letters get priority, do not forget—how long does it take to get replies to simple questions? I never do better than a month. I hope other hon. Members do better than that. What is the position of the ordinary factory manager, or anybody concerned with getting on with the war effort? Never was the Circumlocution Office, so admirably described by Charles Dickens, so active as it is to-day. Never were the Tite Barnacles more firmly fixed in position than now, and that is a sort of thing that is by no means confined to Civil Service temporary officials. It is rife in the Armed Forces. Plenty of people wearing uniform are engaged in the same thing.

Last week, I came across a couple of Commanders, R.N., doing work which could easily have been done by one of them. For two years now, these two gentlemen have been enjoying themselves. One likes golf and the other likes American films and each takes every other day, knocking off at lunch time. They are drawing the full pay of their rank plus 25 per cent.

Absenteeism.

Yes, but absenteeism with the approval of those who are in charge of them. I could not agree with the hon. Gentleman more. I agree with the miners and everybody else being asked to put forth greater efforts, but, when one comes across that sort of thing—and I think other hon. Members of the Committee have had experiences similar to my own—surely one must realise why this war has lasted five years, and why the Income Tax is 10s. in the £. Officialdom is perched, like a fearful Old Man of the Sea, on the shoulders of our export trade. I am not going to follow the hon. Member opposite into the post-war picture further than to say that officialdom is, at this moment, handicapping our export trade.

There are other consequences of unnecessary expenditure which I should like to mention, and which do not affect the big industrialists. Hon. Members opposite are inclined to get impatient sometimes when speeches are made on the problems of the great industrialists. Well, it is not about them I want to talk, but about the consequences of unnecessary expenditure upon the workers—War Savings Certificates. The Chancellor has said, over and over again, that it is his intentio to see that savings, when they are cashed, have the same purchasing value, or as near to it as he can make it, as the money had when it was lent to the Government. A very worthy objective. What is the chance of that happening? Every day the war goes on, we are piling up a debt service to meet the interest and sinking fund charges on these Savings Certificates. Does not that place upon the shoulders of every hon. Member the gravest responsibility to see that every penny we have is spent on something that is going to produce in order to bring us nearer victory? Pay-as-you-earn Income Tax is now working, as far as I can make out, smoothly, among the workers in the factories. I have not heard a word of complaint, and I have done a three months' tour for the Admiralty. The workers accept the situation; they realise that they have to pay their "whack," but for how long are they going to be patient under what is after all; a very heavy burden, when they realise that an enormous amount of the taxation which is taken from their wages is not being spent on the waging of the war at all? It is being spent to maintain in position a great many people who are redundant, and that goes for those in uniform, and out of it. To get promotion, you have got to get around you a sufficiently impressive establishment of people, and, if you do, you get promotion and your second-in-command goes up at the same time. That happens right through the whole Government organisation.

12 noon.

The tentacles of the State-control octopus are already gripping the workers in the factories. We are now facing, or appear to be facing, yet another winter of war. Six months from now, as I calculate it—and I have no Treasury officials to help me—the interest and sinking fund charges on our debt services will have reached an annual figure almost exactly the same as our total Budget expenditure in 1935—about £700,000,000. That is merely to finance the loan, and that brings me to the last point I wish to make. The hon. Gentleman opposite spoke of hyper-pessimists. I do not know whether my hon. Friend includes me in that category or not, but I think there is something worse than even hyper-pessimism or full-blooded pessimism. I think there is something very much worse. I think that to raise hopes, in the minds of the men who are fighting, that are not going to be fulfilled is infinitely worse than making pessimistic speeches. Pessimism is not a crime, if it is true, any more than is wishful thinking.

Before my hon. and gallant Friend leaves that point, would he allow me to say that one who has been brought up in industry, and has come through what we have come through between the two wars, makes a realistic approach and not a pessimistic approach?

I could not quarrel with that. I have been, like my hon. Friend, in two wars, and I know exactly what he means. But I think he will agree with this. After the last war, the men came back to a land of unfulfilled promises. How much better if those promises had never been made! "Homes for heroes" is not a slogan which any of us would condemn. "Homes for heroes" is a magnificent objective. All that went wrong was that the heroes did not get the homes. I never blamed the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) for saying that that was his object. He was voicing the views of everybody in the country at the time. With every day that passes, with the war debt piling up at the rate of £14,000,000 a day and with the cost of its service, we are jeopardising the prospect of a sound scheme of social security when all is over. With every day that passes, we pile up our National Debt higher. I favour the Government's objective of a sound scheme of social insurance. I am not going to impinge on the subject of the Debate which is to take place in a fortnight's time, but I do say that all of us, who believe in it, should be firmly behind the country in the demand for the most rigid cutting down of waste in the fighting Forces and in the Government Departments.

I know that I am speaking to the converted on the Front Bench. In fact I would commend to Members of the Committee who have not yet read it, the wise speech made by the Financial Secretary to the Treasury on the Motion for the Adjournment on 29th September—not all the speeches from the Front Bench are worth reading, but this one is—in which he said that when people said the Treasury should find the money for this or that, they really meant the taxpayer. And the taxpayer is everybody in the country who pays taxes, directly or indirectly. It is so easy to say that the State should find the money for this or that. Yesterday, during a heated discussion on the Town and Country Planning Bill, the hon. Member for Walsall (Sir G. Schuster), in an extremely able speech, made a suggestion to bridge the gap between the two sides but I was disheartened to hear him say that the cost should be met by the Central Exchequer. That is the quintessence of self-deception. We are all taxpayers. We are the guardians in this Committee of every taxpayer, and I suggest a motto for all of us in the country, whether we sit in this House, work in factories or serve in the Forces, to take unto ourselves, the slogan of an extremely egotistical French king. I think it was Louis XIV. Whoever it was, he had an exaggerated idea of his own importance. He was a budding totalitarian, who said "L' é tat c'est moi"—"I am the State," or "The State is me." Surely we could adopt that very excellent slogan when we are considering expenditure, because the taxpayer is the State, and the State is the taxpayer.

We have had a quotation from a French king and perhaps I may give another, in view of the fact that we are discussing expenditure and waste. Another French king once said—I will quote it in English—"After me, the flood." When we are considering vast sums of expenditure we might bear that in mind. The hon. Member for Stoke-on-Trent (Mr. E. Smith) told us that after the war, this country will be richer than ever it has been before. I hope that he is right. Only the future can show. I suggest that what he meant was that we shall be potentially richer, if we make better use of our natural resources than we did before. We are concerned now with the present. We have to remember to-day when we are asked to vote another £1,250,000,000 of credit, that in this war already we have spent all our overseas investments, that we have also very largely mortgaged our future, and therefore the need for very careful examination of our expenditure is vital.

My hon Friend said he had faith that the Chancellor would see that the money that was being voted would be wisely and economically spent. I hope he is right, but the public would like a little more evidence upon which to build that faith. We have been given some examples in the very witty and able speech of the hon. and gallant Member for Holderness (Lieut.-Commander Braithwaite) that there is still a good deal of wasteful expenditure going on. It may, perhaps, be in small matters, but it is our duty to those who are providing the money, and those who want our financial future to be as sound as it can be made, to see that no wasteful expenditure occurs.

Therefore, I would ask the Financial Secretary to the Treasury, when he replies, if he can give us a little more information. Will he tell us what has been the financial cost of the war to this country so far? We ought continually to be reminded what the war is costing, and not only the Committee, but the country also ought to realise—we cannot too often have it brought home to us— what an expensive business the folly of war really is, and the fact that, for wars, the public in every country, must accept some measure of responsibility. These figures should bring it home to people that, economically, it would be much wiser to take whatever measures they can to prevent future wars and to show an active interest in such measures when they are taken.

We have been reminded that the increase in war expenditure in the last few weeks has been due to the operations which have been taking place overseas. It is only fitting that somebody should say that our fighting men are making very good use of the materials which have been supplied to them as a result of the expenditure voted by Parliament. If there are, however, some forms of war expenditure that must, inevitably, increase for operational reasons, there are others which one would expect, at this stage of the war, to begin to run down. The plea has been made that certain war-time Ministries might either be closed down or merged. I am not able to say whether that is practicable or possible, but I am on perfectly safe ground in saying that there are certainly some Ministries where a good deal of pruning could take place. I would like the Financial Secretary to tell us what the Treasury is doing to effect such pruning. What steps has it taken to bring home to certain Ministries that the war has reached a new stage, and that in view of that fact their commitments ought to be considerably revised and reviewed?

The public would be relieved if they knew that the Treasury was active in this matter. The public regard the Chancellor of the Exchequer as the watchdog of the public purse and it is only right he should do everything he can to fortify them in that conviction. It is impossible for Parliament to scrutinise all the details of expenditure, but they want an assurance, from time to time, that certain steps are being taken, that certain sound financial principles are being followed, and that it is not being taken as a matter of course that we should go on voting and spending these very large sums of money, without deciding whether they are necessary. Those of us who want to see a better Britain after the war realise that it is going to be extremely difficult to secure it, if wasteful expenditure is allowed now. We shall have it thrown at us as a reason why expenditure which we think legitimate cannot be made, that we have been pursuing a rake's progress and are not financially able to do it.

12.15 p.m.

I think that the whole Committee was pleased that the hon. Member for Stoke paid a tribute to the part the British people have played in this war. I would like to ask the Financial Secretary to the Treasury if he can assure us that the financial burdens which have fallen on the British people as their share of the war are not greater than they might reasonably be expected to be. Huge as are the sums which we in this country have had to spend on this war we are well aware that but for Lend-Lease we should be spending very much more. I hope that hon. Members will remember this when at times they get up in this House to criticise certain aspects of America's economic policy so far as it affects us. We are under a very great debt to the United States, a great debt financially as well as a great debt in other ways, and we ought to remember that and not just forget it or take what they have done to help us for granted. I hope we shall be much more generous in our consideration of the policies which America is pursuing, and not indulge in what, if I may say so, is not only somewhat carping criticism but very short-sighted criticism, in view of the necessity for the closest economic and political co-operation between our countries after the war. We shall never get that political unity which is essential for the maintenance of peace after the war if we are going to pursue an economic war with the United States.

Does not my hon. Friend think that the United States are also under some obligation to us?

Of course I do, and I think that the great majority of the people of the United States recognise that, but it is not for me to remind them of it. I am concerned only with the attitude which should be taken by this House, which carries a tremendous weight in the United States and indeed throughout the world, in its approach to what appear to be differences of view between the two countries. To come to the point I wish to make regarding the relieving of the economic burden upon this country, I would therefore ask whether Lend-Lease might not, even at this stage of the war, be more widely extended. We owe a great deal to the United States of America, and I think it is to her credit that she has adopted this policy of Lend-Lease, but I think I am right in saying that Lend-Lease does not apply between India, our Dominions and ourselves. This is a common struggle. The defence of India is our concern but is also India's concern, and I believe that we in this country have incurred in respect of that defence an expenditure which is out of proportion to what we might reasonably have been expected to bear, and I ask the Chancellor whether it is too late to see that our financial relations with India and with our Dominions are placed on at least as generous a footing, in as fair a position, as they are with the United States of America and that Lend-Lease should be extended between them and us.

I join with other Members of the Committee in saying that I would gladly vote whatever is necessary for the prosecution of the war, but I think I am only doing what I conceive to be my duty to those whom I represent in insisting that there should be the closest scrutiny of that expenditure. I do not want to pursue the question which has been raised of the advisability of raising in the people hopes for after the war which cannot be realised. We were told by the hon. and gallant Member for Holderness that it would have been better if those promises at the end of the last war had never been made. That seems to be a new variation of the theme that it is better to have loved and lost than never to have loved at all. Personally I have great faith in the value of hope as a stimulant to endeavour, and I trust we shall have learned this lesson, too, from the failure last time—that those promises were rightly made, but that what was wrong was that they were not carried out, and that we shall avoid making the same mistake this time.

It might be for the convenience of the Committee if I intervened at this stage to reply to some of the points of my hon. Friend the Member for Stoke (Mr. E. Smith), in particular, before the Debate moves on to other subjects for which other Ministers are responsible. I welcome my hon. Friend's speech and I hope that he is now quite recovered. I know that he has not been very well. When I was in Manchester the other day I heard that he was then in bed and we are glad to see him here to-day.

The same to you.

I do not think that my hon. Friend was here when we had the Debate upon Welsh affairs the other day, but evidently he has read the account of that Debate. Some of the questions which he asked me to-day I sought to answer briefly on that occasion, but I will say something more on the subject now. I answered those questions then in a Welsh setting. He has put them in the broader setting of to-day's Debate. My hon. Friend, in a personal reminiscence, said something about the views that I held on certain matters before the war. I was very glad that I held those views about not being prepared for the tragedy which burst upon us, and I was glad to have the support of my stalwart friend, who was always a realist on disarmament.

What about all these bouquets?

My hon. Friend was not always so stalwart in support of that view. After these bouquets, as my hon. Friend calls them, I would like to give a brief explanation of the way in which planning is proceeding from day to day and week to week in relation to what is called the "switchover." My hon. Friend said that it was time that we made plans about this and I should like to give some illustrations of the way things are going, the way in which the plan is being worked out and implemented from day to day in consultation between the Departments concerned. My right hon. Friend the Minister of Labour is very deeply concerned with these matters, and I am in constant touch with him and with my right hon. Friend the Minister of Produc- tion, who also occupies a very central place in regard to the switchover from war work to peace work. Ministers are constantly in touch, and, in addition, our officials are constantly in communication over the details of these matters. They are not only in touch here in London but regionally. In all the regions there are representatives of the principal Departments, and a great deal of this planning work is done in the regions among the regional officers concerned.

From my own point of view I have two principal concerns. One is that the civilian population shall, as soon as possible, get larger supplies of necessary goods. I only wish that I could take steps to increase those supplies very much more quickly than is possible. The reason why it is not possible to do so is extremely simple. It is because it is the deliberate policy of the Government, with the support of this House, to make in 1944 the maximum impact upon the enemy and to go all out to win the war, if not this year then as soon as we can next year. If our people are engaged upon war work they cannot be doing all the things which, from the point of view of the Board of Trade and the point of view of the House, we would like them to do—to increase supplies of pots and pans or bedding or clothing or other necessities of civilian life. But I constantly keep in front of my right hon. Friends, and in particular, the Ministers of Labour and Production, the various needs of the civilian population, and also the importance of reviving our exports as soon as possible. But vital as the export trade is, it is no good saying to the civilian population, "All the alleviations we can get by switching over from war to peace work have to go in providing exports, while you are still struggling with your present rations of clothing, furniture, pots and pans and the like." It is a necessary condition for getting an export drive that we should give the civilians a bit of a lift-up, so that they may realise that something is coming to them right now and not in the sweet by and by. Subject to that the export drive comes before anything else in the economic field so far as our post-war prosperity is concerned.

My right hon. Friend the Minister of Production, for example, will ascertain that in some industrial areas some capacity can be released owing to a reduction of war contracts. I have put before my two right hon. Friends and any others whom it may concern, a list of the requirements of the civilian population. These are very simple; the Committee would be able to compose a list for me. They principally relate to the supply of clothing, footwear, household textiles, including sheets and blankets, furniture— and so it goes down a list which is fairly obvious to any hon. Member. Whenever there is a release of workers from war production we always consider how far the requirements of the civil population can be assisted by a transfer of labour or by the switchover of some particular factory or plant from war to peace work.

I will give an illustration from a, subject to which reference was made in the House last week. I gave an answer to a Question in which I explained that, owing to the policy of making the maximum impact upon the enemy this year large numbers of workers from the clothing industry had been taken into the Armed Forces and some into munitions, and that, in addition, the Ministry of Supply were going forward, as the House would wish, with the provision of suitable clothing for demobilised men, and that this had meant considerable pressure upon the resources of the clothing industry. I also said that I had strongly represented to my colleagues that they should give a very high priority indeed in returning workers to civilian production to clothing workers, particularly skilled workers, who would be of immediate value in stepping up production in the clothing factories. I am glad to say that I have had a very good response from my right hon. Friends. Some transfers are taking place at the present time, and in certain areas of special importance to the clothing industry particular attention is being given to this matter. I mention that as one illustration of many which I could give that this work of planning is going forward from day to day, and that it is not something which will need to be started in some elaborate fashion in the future. I hope that we shall see good results from it, as the war situation permits, in the gradual re-allocation of resources, which are now devoted directly to the war effort, to the benefit of the civilian population, and, as soon as the goods required for the civilian population have been built up to a reason- ably high level, to an all-out development of our external trade.

12.30 p.m.

My hon. Friend spoke also of the disposal of factories and referred to a statement in the Press by Sir Philip Warter. That statement was made with my authority. He is a member of my staff and is an exceedingly able public servant. He was a business man in time of peace, but that does not make him any less good a public servant in time of war. He is my Controller General of Factory and Storage Premises and is an outstanding man. He has had a lot of ungrateful work to do in acquiring premises from different people in order to meet the requirements of the Departments that want space for war production and storage. He has done the work extremely well.

The statement he made with my authority was not a statement of new principles. My hon. Friend suggested that it should have been made in the House but, in fact, the speech of my own on 25th July, to which my hon. Friend referred, covered the same ground, and all the main points in the statement made by Sir Philip Warter were made by me several months ago. But he was able to add a few minor details which have since been agreed and which, quite frankly, I do not think would have been worth a special statement in the House. Hon. Members might have resented my seeking, for example after Questions, to make a further statement on this, because there was nothing new in it beyond what has been said several times before by me, except that with regard to the leasing of these factories the Valuation Office of the Inland Revenue will be brought in to fix an initial rent on a 1939 basis, and that, within three or five years, that will be reviewed in the light of the current values, and so on. That kind of detail might usefully be known by those who are interested in these factories, but it does not add materially to what I have said previously.

I do not think my hon. Friend would wish me to go over that ground again. I will merely repeat very briefly that much attention has been given to this matter, and the final decision of the Government is that these Government factories are not, except in very exceptional cases, to be sold. They are to be retained; the Government will remain the owner of the factory, and will be the landlord in relation to whoever may be the tenant. When these factories are not required any further for the production of munitions or, for any other Government purpose, they will be allocated not in accordance with any competitive bidding for rent but in accordance with the contribution that can be made to employment in the area where the factory is situated, having regard, in particular, to the need for a diversified and balanced industry. A preference would be given, therefore, other things being equal, to someone bringing a new industry into an area rather than merely wishing to add one more unit to an existing industry. Account would also be taken of the importance of the industry from the point of view of the export trade. Regard would be had to war potential in the future; that is to say, in some cases consideration would have to be given to whether an arrangement could be made which would permit, if need should arise, of the switching back of the factory without undue difficulty to munitions production. Regard would be paid to certain other considerations, such as getting a quick start with peace production and giving preference, again other things being equal, to an applicant who was able to get on with the production that was desired to be carried on in the factory without a long process of structural changes and semi-rebuilding which would take time.

Does that mean that before a factory coming out of war production can be let to a prospective occupier who is prepared to employ people, all these considerations have to be borne in mind? If so, it seems to be that, however good that may be as a long-term policy, obstacles are being put in the way of people immediately taking advantage of the fact that the factory is no longer used for war time purposes and can be devoted to peace time purposes.

I am glad my hon. Friend has raised that point because I think I can dispose of his apprehensions. These are matters which have to be borne in mind in determining who, among a number of applicants, should be given the use of the factory, but it does not take very long to bear them in mind. If I may say so again, these considerations have been in our mind for a long time. They are all very familiar to us and have been set out frequently. As soon as a particular factory is declared by the Supply Department concerned to be no longer required—and very often this can be said in advance of the time when actual war production stops; indeed, I am urging my right hon. Friends at the Supply Departments to let me have as early notice as possible of factories which are no longer to be needed beyond a certain time for war production—we survey the list of applicants for that factory or for similar factories, and it is not difficult to make a choice between them.

I would like to make it clear that there is nothing new about this. As long ago as November of last year an invitation was given to industrialists to send in applications to the Board of Trade, if they were interested in any particular Government factory for peace-time purposes or in a general class of factory, and we have since had a very large number of applications. As I said to my hon. Friend the Member for Llanelly (Mr. James Griffiths) last Tuesday in the Welsh Debate, there will be no difficulty in finding good tenants for these factories. Very often it will be the person who has been doing war work in that factory. It will often be most convenient to allow him to switch over to peace work in the premises in which he is now working and to employ in many cases, a considerable proportion of the same staff.

I am sorry to interrupt, but this is a rather important point. A lot of these factories are on what was formerly extremely good agricultural land. As my right hon. Friend will be aware, in many cases, for certain reasons, a large area of land round these factories is withheld from agricultural production. If these factories are being held for disposal under the circumstances he mentioned, for perhaps a year or so, will he consider handing the land over temporarily to the War Agricultural Committee so that there may be a short-term policy for production of food, and thus avoid the feeling in many country districts that good land is not being used?

I should have to consider that point with my right hon. Fried the Minister of Agriculture, who is never backward in putting claims on behalf of the cultivation of land. It may very likely be possible in certain cases. For my own part I would have no objection whatever to that. I am only concerned to see that there is the least possible gap in the changeover from war production to peace production, and that all our administrative and other arrangements are made in advance so as to get quick decisions in order to minimise the gap and to ensure that the work undertaken in the factories is suitable in the national interest in the light of the various criteria I have given—in particular that it affords as much employment as possible of the right type, having regard to the area where the factory is situated, and that the products made are such that they will have high utility, whether for the home market or for export trade.

My right hon. Friend is making a statement of very considerable interest and it is perhaps unfortunate that a statement on that subject—which I agree is not new, but nevertheless puts emphasis upon different aspects of the matter—should be made on a Friday when there is such very poor attendance. May I ask, if his plans are so far advanced as they apparently are, and it is very agreeable to hear that, why it is that discharges are taking place on such a scale? The point has been made in the House—indeed I think it is a part of the demobilisation plans—that men ought not to be released too hastily from the Forces in advance of the capacity to absorb them into civil employment. Ought that not to apply in the same way to people who are in employment on munition works, and so on? Great civil disturbance is being created now by discharges on a large scale, and a very angry feeling is being aroused in some parts of the country, particularly on account of the huge difference between the rates of wages and the unemployment benefit which they receive when they are discharged.

I quite appreciate my hon. Friend's point. I think he will agree with me, however, that it is a very difficult problem. We all want the maximum production of munitions in order to beat the enemy; on the other hand, we do not want to go on piling up munitions just to keep people in work. What we must seek to do is to get a rapid switchover from war production to peace production as soon as the war programme permits. As to when the war programme will permit, that, of course, is the primary responsibility of the Supply Ministers, my right hon. Friend the Minister of Production, the Ministers of Supply and Aircraft Production and the First Lord of the Admiralty. It would be very wrong for me to have a view on that. It is a skilled and very technical matter. All I am entitled to say, and this I have already told the Committee, is that I am doing my utmost to secure that, when the labour becomes available, or when premises become available in whole or in part, then as quickly as possible this labour and these premises will be transferred to peace-time employment of a suitable character, whether for the home market or for export trade. Beyond that it is very difficult for me to go. But I will do my utmost to help to minimise the evil consequences of the switchover, which is bound, in any event, to be a troublesome process.

I hope that I have said enough on the question of the disposal of factories. I am very optimistic that we shall get a very substantial addition, when the war is over and we return to our peace time life, to the up-to-date economic equipment of the country. A number of these factories are as modern and as light and as good in every way as any factories in the world. They are models of construction, and I look forward to seeing these used after victory for carrying forward the task of supplying the needs both of our own people and of customers beyond the seas with whom we may be engaged in trade. I shall seek, so long as I have responsibility in this matter, to secure that we get good tenants who will make good use of these factories. I repeat that they will be tenants of the Government in the great majority of cases, and I hope that the arrangement will work out harmoniously. It is perhaps not a bad compromise, arrived at by a Government containing members of a number of different parties, that the thing should be approached from that basis. Other views, both to the one side and to the other side, have, of course, been ventilated in Debate, but we have chosen a course which will, I think, commend itself to the majority as being a commonsense and practical one at the present time. I want to turn to another matter which my hon. Friend mentioned. I was very glad to hear what he said about utility production, in which there are great advantages. It was begun in various lines before I became President of the Board of Trade. I have carried it further, and I am a very great believer in this policy, partly because you put your limited quantity of material to the best use, and partly because, unless you have a definitely specified and recognisable article, you cannot make a complete success of price control. You cannot fix a maximum price for an article unless you can define it and identify it, and as an aid to effective price control, utility production has been of the very greatest value.

The hon. and gallant Member for Holderness (Lieut.-Commander Braithwaite) and my hon. Friend the Member for Stoke referred to inflation and the dangers that would arise from it. I judge that one of the best means of fighting inflation is to continue an effective system of price control through a post-war period which we cannot now exactly measure, but which can be defined as a period when shortages will continue due to the effect of the war and what follows after—a period when, if we did not have price control, demand would be very much greater than supply, and prices would be forced up sky-high. Out of that would grow all the inflationary chaos and misery of which we had so much experience at the end of the last war. One of the most effective means of preventing this is price control, particularly when applied over a range of the necessaries of life under standardised utility production. Therefore, I welcome my hon. Friend's support of this. I am convinced that we must continue utility production, though possibly with many changes—we may extend the range of utility goods. I will speak of furniture in a minute as that will illustrate it. With regard to a number of the necessaries of life, these things can best be produced under a scheme of utility production—this does not mean bad products at all, but good and shapely, useful and durable products.

Will my right hon. Friend look into the question of utility shoes for children, and see that in future they are made to keep out the rain?

Shoes are a sore subject.

They are a wet subject.

As my hon. Friend knows, because he has had conversations about it with me, no one is more anxious than I am to see that the population is well shod, but there are two difficulties. One is that we still have a tremendous demand for footwear for the Forces, and, important though it is that our civilians should be well shod, it is even more important that our fighting men should be well shod, because they have to go through far greater difficulties—which I need not detail— whether it be in Flanders, Holland or Italy. Therefore, the best leather must still go to the Services. Further, leather is in short supply, although we are doing our best to make it go as far as we can, and it is better to use leather of lower quality than in peace-time rather than not use it at all. We are doing our best to see that the standard is kept up, and I have instituted a plan, since I have been at the Board of Trade, whereby a manufacturer of footwear has now to put a stamp inside the boot or shoe he makes so that we can identify the maker and, if necssary, take steps to prevent him from turning out poor stuff, and, in the last resort, stop his leather supplies and give them to someone else. I hope that is having—as indeed it is—a salutary effect.

With regard to utility furniture, the present scheme is not only giving us cheap and shapely furniture, but a great deal better stuff than a lot of that which was turned out before the war. I am now in touch with the furniture industry, both manufacturers and trade unions, and I am hoping soon to announce the setting up of a committee for the furniture industry, on which there will be representatives of the manufacturers and workers and a certain number of independent people, who can contribute in one way or another to the deliberations of the committee. I hope that committee will be a valuable channel for advising the Government, will encourage the trade itself to raise its standards as compared with what was done before the war, and will give us a furniture industry of which we may be pround. There are good people in that industry, both on the manufacturing and trade union sides, and I want to encourage them to come along and give a lead to others, so that we can build up a higher standard than that which prevailed before the war.

Has my right hon. Friend's attention been called to the portion of the Trades Union Congress Report on post-war industry, which makes the most valuable suggestion that not only should the Government provide factories for rent but should also provide appliances for rent, and that where patents are necessary for utility production they should be made universally available, under Government control? Is it his intention to try to extend that aspect of the Government's reconstruction plans?

I am much obliged to my hon. Friend for raising that point. The Trade Union Congress Report is an extremely interesting one. I am going into it carefully, and it is my intention to have a talk with some of those concerned at an early date to see how far we can take advantage of some of their suggestions. I would not, however, like to commit myself in detail at this moment.

We have been struggling up to now with a great scarcity of materials for furniture and other things, owing to the claims of the war. But we are now coming to a point where, in some directions, there will be a slightly more plentiful supply of some metals. I am anxious to see that these supplies are put to good use. Whether it is for furniture, such as metal bedsteads, or whether it is for other lines of civilian production, I shall do my best to make full use of any metal which now becomes available. I hope that this will illustrate that the process of planning is going on all the time. We are constantly adjusting our demands, our sights, so to speak, from day to day, in the light of the war situation. I hope we shall have the continued support of this House for any suggestions designed to make planning for the future switchover as smooth and as efficient as possible.

I would like to congratulate my hon. Friend the Member for Stoke (Mr. E. Smith) on his excellent speech, and upon his having drawn from the President of the Board of Trade an illuminating and informative statement on matters of outstanding public interest. My hon. Friend's speech was picturesque in that he started on terra firma and ended up in fairy land. He certainly took a rosier view of the future than I take, and I prefer to take my stand alongside the hon. and gallant Gentleman the Member for Holderness (Lieut.-Commander Braithwaite), who issued a serious warning about the result of the colossal expenditure which is going on day and night. There is a serious danger that familiarity with the present astronomical figures of finance is breeding a contempt for national expenditure. We are getting used to the Chancellor playing the role of Oliver Twist every two or three months, formally asking for £1,000,000,000 to carry on the war for a month or two. Now he is asking for £1,250,000,000, and if the war is prolonged—and it will be longer than some optimists thought six or eight weeks ago— we shall see the Chancellor coming here again before long to ask for another £1,500,000,000. There is a danger in all this that the people of this country will feel that there is a bottomless pit from which money can be drawn in future.

I am a realist and I think it is far better to be so than an optimist who is constantly telling the people what a wonderful time they will have when the war is over. Look what happened after the last war. We had comparatively insignificant expenditure during that war, but there came a day of reckoning, and it is my firm belief that there will be a day of reckoning again unless the Government face the position and satisfy themselves whether there is or not wasteful expenditure on a big scale. Personally I can see no safety-catch on expenditure. I see ample evidence of waste in the country, and no one can dispute it. Although we have no alternative to-day but to agree to this Vote of Credit we should demand that there should be an an impartial inquiry into national expenditure.

A Select Commitee.

Well, I would like to see some fruits of the efforts of past Select Committees. Some of this Vote of Credit will go to meet increased pay for the Services, but it is only a small proportion, an almost insignificant proportion, which is for that purpose. Most of the money will go to keep an unwieldy bureaucracy on its feet. From that angle I appeal to the Committee to tell the Government, in straight and plain language, that now that we have reached this colossal expen- diture it is time they faced up to the situation. I wish we could vote against this Vote of Credit, but we cannot. I do not think it is right to place the Committee in this position of having to take "Hobson's Choice" every few months. I congratulate the Chancellor on his courage. Thirty years ago I do not think any one would have visualised a man coming here and asking for £1,250,000,000 for a couple of months' expenditure, to be agreed to by 40 or 50 Members. [An HON. MEMBER: "There is not even a quorum."]That is so; it is another side-light on the days through which we are passing. It shows where we have drifted to in this country when such a thing can happen, and I am glad that the hon. and gallant Member for Holderness has given a lead, which I very gladly follow.

I desire to say only a very few words to the Committee. I have listened to several Debates on Votes of Credit for many years, and I think this is almost the first occasion since the outbreak of war when I have heard anyone suggesting that the time has arrived when we ought to be critical of how much money we are spending on the conflict. That is a healthy sign indeed. The hon. Member for Wallasey (Mr. Reakes) talked about waste of expenditure; I regard all money spent on war as sheer waste; and if I had any company here to-day I would vote against this Vote of Credit in the Division Lobby. I am happy to believe that there is a growing number of people in this country who agree with the point of view I have just mentioned. The time has come at last when our people ought to be told what the total debt and the interest on that National Debt will be when the war ends.

How can anyone tell that?

We can surely get estimates. The hon. and gallant Member himself gave a figure of £700,000,000 as the annual interest. Does he mean to imply that he is more intelligent than Treasury officials?

I am within the recollection of the Committee in that I said that if we had another winter campaign, by next April the interest on the Sinking Fund, as I had calculated it, would be £700,000,000. I did not predict the date when the war would end; I leave that to the astrologers of Fleet-street.

The Prime Minister said that the war would probably go into 1945, so that on the hon. and gallant Member's own showing he is not far from correct. I could not, however, understand his point about the Civil Service and the way they reply, or do not attend to his letters. He has been in this House long enough to know that if he cannot stir up a Government Department by letter he has only to put a Question on the Order Paper to move it to action.

It would never be reached.

As I have said our people must face up to the economic consequences of the war, and the state of our finances when it ends. The expenditure that we are passing to-day is of course simply mortgaging the future labour power of the people of the country. It cannot be otherwise.

The hon. Member's party do not agree with that view.

That is my own view. The House of Commons is a place designed for people to speak their own minds. If we all said the same thing we would not need a Parliament at all. The House of Commons is always tolerant on this issue. What annoys me is the easy way Members of Parliament grant these huge sums of money to the Government. The last war destroyed one-half of our coal industry, never to recover, and it destroyed also one-half of the Lancashire textile industry, never to recover. This war, I am told, has sent 50 per cent. of our merchant shipping to the bottom of the sea. Then we are told we cannot secure the same standard of life after the war as we enjoyed in 1938 unless we export 50 per cent. more than we did in 1938. I think therefore that those who make glowing promises about a higher standard of life after the war are deceiving themselves and the people as well, and are living in a fool's paradise.

Incidentally, the question has often been put to me: How comes it that the Prime Minister goes twice to America and twice to Russia, when Great Britain is half-way between the two countries? That question is asked by many people. Why do not Stalin and Roosevelt come here for a change?

Let me say what I think will happen at the end of the war. The assumption is that we shall march into Berlin; occupy Germany and keep all the Germans in submission for a decade at least. For what it is worth my view is that what Great Britain and America are doing from now onwards is to make Europe safe for Communism. It does not matter how much money we spend unless we change our attitude of Mind towards the war. We ought to give some hope to the people of Germany who are opposed to Hitler and tell them to rise above the din of battle and help to make peace between the nations of Europe. The mere spending of money on war is not in itself enough; we ought to use our reason, intelligence and diplomacy to assist in bringing this infernal war to an end as soon as possible, and thereby avoid any Chancellor of the Exchequer having to ask for more money for war purposes in future.

I thought it might be quite a good idea if someone made some reference to the financial position of the country, which, perhaps, is more affected by the Vote of Credit that we are asked to pass than any other aspect of our affairs. We are getting into a financial position which is quite serious; and some of us will soon have to begin to think about how we are going to get out of it. Everyone agrees that our internal financial policy has been extremely well handled by the Government. There has been a good balance between borrowing and taxation direct and indirect. Savings have been achieved on a voluntary basis which amount, in the aggregate, to a truly remarkable sum. I do not think we praise ourselves enough for what the savings movement has achieved and for the work of Lord Kindersley and his organisation. Disparaging remarks are sometimes made by the hon. Member for Ipswich (Mr. Stokes)—who has left us for a short period, and with whom I do not always agree— and remarks are also made in the Press about savings days and savings weeks. But in fact it was necessary that the ordinary people should save a great deal of money during this war; and at the beginning of the war Lord Keynes actually produced a scheme for compulsory saving. He has since admitted that what he thought would have to be done by compulsion has been achieved on a voluntary basis, and it is a very remarkable achievement. Finally, I think we can say that expenditure on consumer goods has been beautifully controlled by the Government Departments concerned.

But there is another side to the picture; and we must now begin to face up to it. We are piling up a colossal external debt. I heard the hon. Member for Stoke (Mr. E. Smith) say how much richer we were going to be at the end of the war. I agree that we shall have better equipment, better-trained workers, a healthier, population and, what is most important, our land under cultivation instead of derelict. But at the same time we have to face the fact that if this war lasts through the winter, as now appears probable, we shall have an external debt amounting to something of the order of £4,000,000,000.

How are we to deal with this situation? Our political position is very strong, because we have been in this business from the very beginning, with all we have got; and most of this debt that we have incurred overseas has been incurred on behalf of other people. Certainly the whole of it has been piled up for the sole purpose of winning the war. For a long time we stood quite alone against Germany—and, when I hear the hon. Member for Cheltenham saying what a tremendous debt we owe to the United States, I agree that they have been most generous, but I say that they also owe us a pretty good debt for what we did for them in 1940–1. The fact has to be faced that at the end of the war, our external international financial position will not be strong.

I want now to direct the attention of the Financial Secretary to the master agreement—Clause 7 of the Lend-Lease Agreement—under which many of our obligations have been incurred. The Chancellor of the Exchequer, at the Mansion House the other day, said we had an obligation under that agreement, to work for the elimination of discrimination in all forms, with a saving clause about Imperial preference. But there was another point in the agreement which has been largely overlooked, and that is that we were also pledged to work for full employment. This is absolutely essential. Our produc- tive capacity must be used 100 per cent. But I want to put this question. Suppose the two things, non-discrimination and full employment, are incompatible, at which of them are we going to aim? My belief is that they are incompatible, for two reasons. First, I think that in the modern world, unless you have some kind of purposeful direction of trade as a whole, it is impossible to prevent depression in one country spreading to another. If we go in for non-discrimination and the United States goes into a depression, as is not impossible, and if we have no means of protecting ourselves against the consequences of that depression in the United States, then the same thing will happen as happened after the last war, in 1929. We shall also be dragged down; and we shall be unable to pay our way, or to achieve full employment, social security, or anything else. It is important to get our minds clear on the subject.

There is a second reason why I think these two things, non-discrimination and full employment, are incompatible. It is because the policy of non-discrimination involves treating national political States as being on an equal footing from an economic point of view. I think that this is a ridiculous proposition in the modem world. It is no good telling me that Monaco and the United States have the same economic position and power, because they are both sovereign political States. That is what non-discrimination ultimately means. Most States and nations have sprung up from political causes; some are very large, like the United States and Russia; some medium, like ourselves and France; and some smaller, going right down to Guatemala. Are all to be treated on an equal footing as far as economic policy is concerned, although political independence has nothing whatever to do with economic realities? We must face this issue. What is the implication? It is that the poorer political States have to get together, in some form of regional organisation if they are to hold their own; and this involves discrimination in one form or another.

Does my hon. Friend mean throughout the world, or only in certain areas?

I mean in certain areas. Frankly, I think our only hope lies in rebuilding the sterling area, which will then be in a position to come to good terms with the dollar area, and the rouble area. If we go into some international arrangement country by country, we shall not be sufficiently powerful to do a deal at all. On 10th May the Chancellor of the Exchequer made a speech from which I am about to make two quotations.

I do not see the relation between the hon. Member's present observations and the Vote of Credit.

My observations are addressed to this point—that we are now asking for a very large sum, which will put us still further in debt. We are in consequence getting into a very difficult financial position. Your predecessor in the Chair, Major Milner, ruled very definitely that anything that had a direct bearing on the question of our financial position after the war, was in order. I am addressing myself to the proposition that the construction of the sterling area is the one way in which we can hope to get out of the mess.

The Chancellor said on 10th May:

"I have said more than once that the Government would not be disposed to favour any plan which was likely to interfere in any way with the relationship between the different States which have been in association with one another under what we understand by the sterling area arrangement. We adhere quite firmly to that."

In a further passage he said:

"always provided that there is nothing in the plan which will prevent us from entering into reciprocal trade agreements with other countries or groups of countries, either in the monetary or in the economic field."—[OFFICIAL REPORT, 10th May, 1944; Vol. 399, c. 2045.]

That encouraged me, and think encouraged many hon. Members; but the other day at the Mansion House the right hon. Gentleman seemed to me to go back completely on those two statements, because he said we were pledged, as an act of good faith, to work for the gradual elimination of discrimination in every shape and form, under the terms of the Lend-Lease Agreement. I do not think the House of Commons was ever committed to that; and I do not think the House is very happy about it. Here we are being asked, in a small House, every three months, to add another £1,500,000,000 or so to the Bill. We are entitled to ask in return have the Government any plans for getting us out of the financial difficulties that we are getting into so far as external debt is concerned? 1.15 p.m.

May I also say a word or two about this question of reconstructing the sterling area? It is a vital matter. The Chancellor of the Exchequer admitted the other day that it was. I am not going to ask my right hon. Friend for a definite statement of policy to-day about how we are to deal with the vast and growing sterling balances in the City of London; but I want some assurance that the Government are giving consideration to the matter.

There are three possible ways of dealing with the problem of these sterling balances, which exist entirely as the result of our expenditure on the war effort. The first way is, you can fund them and pay. The effect of that on our balance of payments is bound to be very great, because it at once means that we shall have to export at least 50 per cent. more than we did before the war, in order to pay our way. The second way is, you can block them altogether in this country. That would affect our credit adversely, and would lead to the immediate withdrawal of all other balances held in London. The third way is to reconstruct the sterling area.

At the end of the war the countries of the sterling area will have large sterling credits in London. I instance India, which already has a colossal sterling balance, and will also have many urgent requirements. These countries cannot buy everything here; but, so far as both they and we satisfy our import requirements within the sterling area, that is to say, the British Empire and Western Europe, then our imports simply become a set-off against our exports, leaving only the difference in terms of uncompensated export. We cannot possibly do this unless the existing limited convertibility of sterling within the sterling area is maintained.

As long as sterling countries are able to use their sterling reserves in London for any purpose they like within the sterling area, they will keep them in London. But if non-discrimination is to be applied to all countries, then exchange control is bound to be introduced for all intra-sterling "bloc" payments. The conclusion of the matter is that the prohibition of limited convertibility within the sterling area must ultimately lead to the total blocking of all these sterling balances in London; and that will place us in an impossible position. Before the war Dr. Schacht used the economic pulling power of Germany, by means of bilateral agreements, to force the other countries of Europe to buy goods which they did not want. We are in a much better position than that. We could use our trading and financial position as the centre of the sterling area to enable countries to export to us; and, at the same time, to import in exchange from all the other countries in the sterling area, with a very wide range of choice. It seems to me that that is our best hope for the future.

We come back to the doctrine of nondiscrimination This is a vital issue; and we shall have many discussions on it in this House before the next six months are out. I think myself that it is based on two false assumptions. The first is that all sovereign States are of equal economic status; and, therefore, that the size of national protected markets is of no consequence. The second is that prices absolutely determine all social advantages. If we are to go on spending money like this, and create new debt at this rate, we shall have to face this issue, and thrash it out; and get non-discrimination clearly defined, and then see where we stand with the United States. At present, it would appear to mean total discrimination in favour of the creditor nations with a high capacity to build up an export surplus, as against those countries, like ourselves, which have nothing but their productive capacity and import market to offer. If we go in for a policy of non-discrimination, we put the entire responsibility for the conduct of world trade in the hands of creditor nations like the United States; and leave ourselves defenceless in the face of their economic power.

We shall not have the power to use our greatest asset after the war, which is our manufacturing capacity, and our capacity to absorb raw materials from other countries all over the world. My fear is that if we allow this issue to drift, if we have the Chancellor of the Exchequer making one kind of speech on 10th May and another kind of speech at the Mansion House shortly afterwards on the subject of discrimination, no one knowing what our real objective is, there must in the end be complete confusion as between the United States and this country; and we shall get into the same sort of mess with them as we got into after the last war, over the repayment of debt. We shall find in the end that we cannot carry out our obligations to the United States; and we shall get much unnecessary bitterness as a result. We have a good cause, and a good case, and we have every right to state it. My appeal is for the Government not to go on quibbling and hedging on this business. I do not think that they have yet made up their minds. They must. It really is necessary to face this issue now with the United States. I believe that we can come to a good agreement; but we shall never do it by dodging the facts, and refusing to face the issue of non-discrimination, which is by far the most important economic issue confronting this country to-day.

The subject that was raised by my hon. Friend the Member for East Aberdeen (Mr. Boothby) is of first-class importance. It is, no doubt, due to the arrangement of Business that there is a small House. Unfortunately, it is a subject which the layman supposes to be beyond his comprehension. It is not beyond his comprehension. Anything is understandable, provided it is intelligently explained. This subject is one which is very much in the hands of experts, and I sometimes think that a great deal of the jargon they use is for the express purpose of mystifying the layman. It is a subject which is of vital importance to every person in the country and to the whole world. I want to detain the Committee for only a few minutes while I make a few comments, almost by way of footnotes, to some of the remarks which fell from my hon. Friend the Member for East Aberdeen. I do not disagree with him in a big way, although I think that he has omitted certain considerations in the case that he put, considerations which we should keep in our minds. As he rightly said, the main subject which he felt to be of importance at the moment was whether the policy of full employment and the policy of non-discrimination are or are not incompatible. There is no disagreement anywhere on the need for full employment. I agree with what he said that, if the productive capacity of this country is not functioning to 100 per cent. capacity and, incidentally, with a great deal more efficiency than it was pre- war, then we are going to be in a bad way.

I need not labour the statistical background of our overseas debts, and the loss of our overseas investments, and so forth. While agreeing with what my hon. Friend said, that, if you are linked up with other people you cannot possibly avoid suffering from their economic troubles, I would also say that you can also benefit from their economic prosperity. When he points out that one of the advantages of discrimination is that you may be able to do something to isolate the sterling area from some other area, such as the United States, which may be undergoing a depression—and frankly, I think the United States may well be in a very severe depression after the hectic boom they will have after the war—it is also arguable that the world has reached a state of economic unity in which, instead of trying to isolate ourselves from countries that have a depression we should try to go to their rescue. I would ask my right hon. Friend the Financial Secretary and the Committee to cast their minds back to what happened in 1931. There was then an economic blizzard, starting in the centre of Europe. What happened? Among other things, the governor of the Central Bank of Germany was flying round Europe in a very second-rate aircraft trying to get £20,000,000 in gold to pay his civil servants. Broadly speaking, there was a general sauve qui peut. Everybody fled back behind their tariff barriers. We went and made the Ottawa Agreements, and there was a general attempt to wrap a kind of cloak round oneself and to isolate oneself from the economic blizzard which was sweeping through the world and causing such distress and misery. The London Economic Conference—

I do not see how this past history has any relation to the present Vote of Credit. I thought the hon. and gallant Gentleman was drawing an analogy.

I was relating my remarks to the fact that my hon. Friend has advocated that it is impossible to have a policy of non-discrimination and at the same time have full employment. I am arguing that we have to be careful how far we go in pursuing the policy of creating the sterling block and thereby isolating ourselves. I was giving an example of a previous occasion on which the policy of isolation was attempted, with results not altogether satisfactory to the world economy.

I would remind my hon. and gallant Friend that once we got going we had a substantial recovery in 1937.

We can talk about the present and the future, but not about the past, except in passing.

I will not be drawn into pursuing that subject. I would also put this point. My hon. Friend obviously hoped for a sterling area which will have a bargaining value. I take it he will agree with me that he has in mind the Argentine and certain South American primary producing countries as part of the sterling area. He must not forget that there is a tendency in those countries to deprecate the notion that their future consists in being an overseas farm linked up with Great Britain as an industrial centre. I commend to his attention a speech recently made by the Minister of Agriculture for the Argentine which shows that this notion of self-sufficiency and of a balanced economy is also growing up in those sections of the sterling area. I am not sure that my hon. Friend's view of the sterling area which might have existed in 1931–32 is the sterling area of the future.

It is of the greatest importance that the Committee should remember that we cannot divorce political matters from these great economic questions. We have to be careful for the highest political reasons that we do nothing to harm Anglo-American relations upon which the future of the world depends. I do not disagree with my hon. Friend when he reminds us that America owes us a great debt but I think we have to be careful, particularly in view of what I should venture to say is the less well-informed public opinion of America on monetary matters as compared with opinion in this country, of allowing notions to grow up in the United States which would foster a kind of power politics atmosphere arising, in which a sterling bloc will be competing or in a position to bargain hard with an American bloc. I do not think it would be to the interests of this country to get the United States into the kind of atmosphere which existed when the question of naval power cropped up between the two countries, and some people in this country thought that we should start a race. That would be very unfortunate and the same misfortune would arise if the notion got abroad that after this war, Anglo-American co-operation, which, politically and economically, is essential to the welfare of the world, was to start by some hard talking across the table in the course of which we were to be the centre of a sterling bloc trying to mobilise our forces in opposition to the United States.

I started my remarks by emphasising that this was not a mysterious subject but it is a very important subject. I have said this before to the Financial Secretary, and I say again now, that it is the duty of the Treasury, who have shown during the war what they can do to improve knowledge and statistical information, to make a serious attempt to get across to the lay but thoughtful public what is really involved in the kind of subject which we are skirting round the fringe of to-day. In the last resort, what happens in this House will be linked up with what public opinion thinks on these matters, and the nonsense which is now being put out, very often for suspicious reasons in the cheap newspapers, on this subject is simply nauseating.

Perhaps it might be convenient for the Committee if I were to intervene for a few minutes at this stage of the Debate. We have already had a reply from the President of the Board of Trade, which has covered a good many of the speeches made in the earlier part of the Debate. I understand that certain hon. Members wish to raise matters to which they expect the Under-Secretary of State for Air to give them a reply. I will, therefore, deal with some of the more recent speeches which were made particularly on financial topics.

I understand what my hon. and gallant Friend the Member for Ormskirk (Commander King-Hall) means, of course, when he says that the public need greater education in these financial matters. He knows as well as I do how difficult it is to bring that about. There is not a Member of this House who has ever taken the opportunity of addressing his constituents on financial matters, who does not realise how extremely difficult it is to bring home to the ordinary man and woman, however intelligent he or she may be, the full complexities of these financial problems. My right hon. Friend the Chancellor of the Exchequer does what he can in public speeches, and he will bear in mind what my hon. and gallant Friend has said.

My hon. Friend the Member for East Aberdeen (Mr. Boothby) has asked me to do something which he knows it is not possible for me to do, to give him a full answer on a large number of questions in relation to our post-war economic policy. He certainly knows, and I believe the rest of the Committee know very well, that we are to have a Debate in this House on the Bretton Woods proposal, and I regard my hon. Friend's speech more as a preliminary shot in the campaign which perhaps is to come, and may already be in evidence, than a speech expecting from me a full reply at this present time. He knows that these matters are not only having the consideration of the Government, but having the very closest consideration of the Government at the very highest level, and he must be patient and wait for the replies which he will, one day, get from those who may be much more qualified to give them.

I am bound to tell the Committee that I was very pleased to see a healthy increase of interest in our expenditure. We have brought many Votes of Credit before this Committee, involving incredible thousands of millions and this Committee has given us these Votes from time to time without great Debate. No one speaking on behalf of the Treasury can possibly Object to any criticism on these matters, whether it be criticism in this House or in the Select Committee of National Expenditure. It is the duty of the Chancellor of the Exchequer and the Treasury to listen to all criticisms upon these matters, because the control of spending is one of the most difficult duties that anyone can have to carry out, and all the help my right hon. Friend gets he is very grateful for. My right hon. and gallant Friend the Member for Holderness (Lieut.-Commander Braithwaite)—

I am not "right hon." yet.

Not yet. I was a little premature. He asked the Committee to remember how necessary it was for us to scrutinise expenditure, and so on. He complained of the over-lapping of Ministries and of the size of the Civil Service, and of what he called the bureaucracy. I know well enough that in time of war there are a great many Ministries and sometimes it is very difficult to prevent over-lapping. On the other hand, the pace at which the machinery of Government has to be built up in war makes it extraordinarily difficult to get it to work as perfectly as we should like it to work. All the same, the Treasury are all the time doing their best to cut out waste and to see that the taxpayers' money is looked after and carefully spent. My hon. Friend the Member for Cheltenham (Mr. Lipson) also touched upon this subject. He suggested that there was wasteful expenditure. In a vast expenditure such as ours is, £5,000,000,000 or £6,000,000,000 in a year, who can deny that there is some waste of expenditure? It is our effort to limit it to the lowest possible figure. My hon. Friend asked me what has been the cost of the war up to date. I ask the Committee to steel itself while I give it the figures. Our total expenditure during the first five years of war up to 2nd September, 1944, was £23,893,000,000. That is what we spent in those five years—just on £24,000,000,000. It is very difficult to understand what those figures really mean.

Have the Treasury ever attempted to make an estimate of what one might describe as the real cost of the war; that is, the actual value of things that cannot be replaced?

No, I am afraid we have been too busy on other matters to make such an estimate.

Otherwise the figures might be rather misleading.

It would undoubtedly be a very difficult task. My hon. Friend also asked me whether I could assure him that the financial burden is no greater than it need be. That depends upon the control that we are able to keep upon expenditure. I have already told the Committee that we do all we can to keep that control. In the Treasury, there are officers whose duty is entirely concerned with criticising the expenditure of the Departments, yet in this House we are constantly being told from all quarters, that we are restraining some expenditure that ought to be allowed. The Treasury are always between the devil and the deep blue sea, and we are, therefore, glad to have the support of hon. Members who have economy at heart.

I must mention the speech of the hon. Member for Westhoughton (Mr. Rhys Davies). He said some things which were wise and sensible, and some things with which this Committee cannot agree. He said that the whole of the expenditure on this war is waste. That is a proposition which this Committee cannot accept. If this money had not been spent on this war, we should be now under the domination of Germany, and that is the defence for its expenditure.

I do not apologise for introducing a Debate on Civil Aviation. It is very important. There have been, I think, seven Debates in another place of reasonable length, and we have had four of much shorter duration. I have asked the Leader of the House or the Deputy Prime Minister whether we could not have a Debate before the Chicago Conference opens on 1st November, and even as recently as yesterday the Deputy Prime Minister said "No." We have spent a great deal of time on the Town and Country Planning Bill, which is relatively unimportant in comparison with what I think are the tremendous issues involved in the question of whether the world is to organise Civil Aviation so that it will be a boon to mankind and not the cause of another war. Feeling strongly, as I do, I am obliged to take advantage of this first opportunity afforded by the Vote of Credit, to put forward views which are shared by a substantial number of hon. Members on this side of the Committee and also, I find, by a growing number of people outside who are very interested— not financially—in what is happening. They are interested to see the amount of space that the Press devotes to the future of Civil Aviation, the speeches that are made in various places by Ministers and others and the letters that appear from time to time in the Press. There is undoubtedly great public interest in this question and possibly it is wider outside than is appreciated by certain hon. Gentlemen in this House.

I propose, with the permission of the Committee, to go over, fairly quickly, the history and the experience of this country and the world from 1919 to 1939. There are two main aspects to which I wish to refer because, as far as I can see, they will be repeated, judging from the White Paper which the Government have issued and which is now, I imagine, their policy on the matter. One of them is referred to in these words:

"His Majesty's Government propose that a new Convention should be drawn up to take the place of both the Paris Convention of 1919 and of the Havana Convention of 1928, and to make provision for the regulation of international air transport. This Convention would

(1) re-affirm the principle of national sovereignty of the air and define what should for this purpose constitute the territory of a State."

Further on, there are provisions dealing with the elimination of uneconomic competition and for the general reduction and control of subsidies that may be paid. I submit that as both those factors are likely to arise again in the future if the Government maintain their present policy, based on the terms of the Convention of 1919, a policy of paying subsidies by this country and other Governments, I take it that there will be no question of my being out of Order.

The hon. Gentleman refers to a matter of Order. As far as those two dates are concerned they relate to conferences, and quite obviously the hon. Member could not discuss what happened at those conferences, because they are not included in this Estimate. It would not be wrong to say as an illustration that at this or that conference such and such a matter was arranged and that it proved wrong, and that therefore it would be better to remedy it under the terms of the White Paper.

I am very much obliged to you, Mr. Williams; that is what I should like to do and I hope I shall be in Order. First, I want to refer to the policy of this country on subsidies. In 1920 the present Prime Minister, who was then Secretary of State for War and for Air, stated:

"Civil aviation must fly by itself; the Government cannot possibly hold it up in the air."—[OFFICIAL REPORT, 11th March, 1920; Vol. 126, c. 1622.]

That view did not prevail for very long for it was perhaps the next year or the year after that this country agreed to pay Imperial Airways £1,000,000, spread over the following 10 years. I do not want to go into details, but I would just mention that from 1919 to 1939, either on the recommendation of the Hambling Committee or on the recommendation of earlier ones, we paid subsidies in one form or another to Imperial Airways, and later on to British Airways, on certain Scandinavian routes and the Berlin route. That policy seems likely to be perpetuated in the future. The Government's proposals seem to visualise the probability that the Government will try in some way or another either to subsidise chosen instruments or, alternatively, to subsidise by the indirect subsidy of mail contracts.

1.45 p.m.

I would like to put before the Committee and the Minister a first consideration. I am sure that he is aware that the competition did not last very long. It soon became obvious that it would be foolish for K.L.M. and Air France to fly from Amsterdam to Paris at the same time. Therefore, they came to an agreement that that kind of silly throat cutting should not take place, that they should at least organise their schedules. There was an arrangement reached, but more important to my mind was that not only did they arrange, as it were, a pooling of their schedules, but also a pooling of their receipts. We had the position that the total of European Governmental expenditure in subsidies, apart from the U.S.S.R.—I think it was in 1938–39—was between £6,000,000 and £7,000,000. What actually happened was that these subsidies and receipts were pooled and shared between the various operating companies at that time. On this question of subsidies I wish to quote Mr. Michael Young, who wrote a book "Target for To-morrow No. 7 Civil Aviation." He wrote:

"Civil aviation was in one sense in a topsyturvy state before the war. In every part of the world there were aeroplanes flying from one spot on the earth's surface to the other, irrespective of whether the flights were economically justified or not. On many of the most important world routes, especially in Europe, there were, as a consequence of the handsome and regularly paid subsidies, half empty or even completely empty planes flying between the main air centres."

I should warn the Committee that what is now becoming a considerably lengthy history of what happened in aviation before the war, and relates to other countries as well, is really outside this Vote of Credit. An illustration in respect of the past, within reasonable limits of brevity, might be regarded as a method of dealing with this White Paper, but I do not think we can really go deeply into the history of the past in aviation.

I naturally do not wish to find myself outside the Ruling of the Chair, but our representatives are going to a conference with 54 other nations in ten days' time. One of the things they are to discuss is

"to eliminate wasteful competitive practices and in particular to control subsidies";

"to ensure equitable participation by the various countries engaged in international air transport"; and

"to maintain broad equilibrium between the world's air transport capacity and the traffic offering";

and so on. All I am trying to argue is this. Lord Swinton, if he arrives back from West Africa in time, or whoever is to represent this Government, is to meet the representatives of some 54 other nations. They are to discuss matters which are bound to cover the whole of the earth's surface. In these circumstances I submit with respect that the experience even of Europe before the war is a relevant matter so far as the two aspects with which I wish to deal. One of these is subsidies and the other is national sovereignty of the air, which seem to me to bring about the most fatal consequences. Therefore what I am trying to do is to persuade the Government not to repeat the bloomer—perhaps mistake would be better—that, as the past shows, was made. I think even the Government might be able to learn from experience, and it is my duty, as far as I can this afternoon, to say, "You have had the experience, every country engaged in air transport before the war has had an experience like it. Do not repeat the mistakes which I submit were made—

I have no objection to that; I think it is reasonable to call the Government's mind to what has happened in the past. But that is very different from giving a longish history of the past. I say, give it as an illustration but do not argue it. Certainly hon. Members cannot go into the whole of the world position of aviation before the war.

Then I can go into the whole of the world position in the future? The position of subsidies before the war was ridiculous. I hope that when the Government realise that something like 200,000,000 French francs went in one year from the taxpayers of Europe on almost infinitesimal traffic they will not do it again.

On the question of the international convention the Government intend to try to have re-enacted a principle which I remember quite well, and which I am sure my right hon. and gallant Friend who has taken an active part in using air traffic as I have, will know well, the really foolish obstacles mainly dictated by nationalism, which were put up by the Governments of various States against other countries' air lines flying over certain territory at all. When I flew to Kenya I was not allowed to fly over Italy. I had to take a train from Paris to Brindisi, a journey of 36 hours, because the Italian Government exercised the right, recognised in 1929, saying that any country had the right to prohibit alien— I think that is the word—or foreign aircraft from flying over its territory. We also know perfectly well that when it came to a question of trying to fly over Turkey to India the Turkish Government prohibited that from taking place, with the result that a serious diversion had to take place in this very important air line to the Middle East and the Far East.

Surely two things which should not be repeated are subsidies and going back to this national sovereign conception of the air. If there is one thing that has broken down national frontiers surely it is air transport. I can understand that coast lines provided natural frontiers to shipping. I can also understand that rivers and high mountains provided natural frontiers between one inland country and another, but aircraft can fly over at anything from 100 feet to 30,000 or 40,000 feet, and none of these natural features, whether the Channel, oceans or high mountains, really affords any rational frontier any longer. I am very glad to see my right hon. and gallant Friend here, and I hope he will tell us, when he comes to reply, why it was that the British Government embodied in this White Paper on the future of air transport, the old fashioned conception that this country and every country should have complete territorial rights, complete sovereign rights, in the air over their territory and territorial waters, or as may be defined at the conference in Chicago. That surely is an anachronism. Are we to continue to live in this world and have it artificially broken up by language, and currency differences, and each country having national sovereignty of the air above its territory? I put it to the right hon. and gallant Gentleman, and through him to the Government, and I imagine that hon. Members on both sides will agree, that that kind of consideration should not be perpetuated any longer.

The hon. Member has first assumed that the Government can learn by experience. He is now assuming that we shall live in a world where national barriers and individual languages are to be wiped away. What has he had for lunch, to make him such a super-optimist?

I think the hon. Lady is one of the most rude women in the House. I have not left this Chamber since 11 a.m. —I have had no lunch; I have been waiting to take part in this important Debate. I am very surprised that the hon. Lady should have interrupted as she did. Perhaps I had better leave her to think over what she has said, and on this or some later occasion, she may decide to withdraw what I think was an offensive remark.

I really did not mean to be offensive. I was really congratulating the hon. Member on his wonderfully optimistic nature. If he did it on no lunch, I congratulate him even more.

I do not think there is any point in butting in like that. I was saying that we should try to get away from old conceptions and learn from experience. We should try to build a new world with modern conceptions. One of the things we have heard in the early part of this interesting Debate was how this world is almost one unit. The hon. Member for East Aberdeen (Mr. Boothby) was talking about how if one country becomes poor it immediately affects the standard of living of other countries. The whole force of the last three hours' Debate is that the world is a unity, and is not to be regarded as a lot of different nations which can really and truly live in isolation one from the other. I put the view to my right hon. and gallant Friend that we must not allow these nations which are to meet at Chicago to perpetuate these very old fashioned, and if I may say so very dangerous, ideas in the future.

I might also be allowed to say what I find is happening now. Now that the war appears to be coming to an end a large number of people who did not in the past take very much interest in the future of Civil Aviation are now preparing to jump in and help themselves. The railway companies have produced plans.

That has definitely nothing to do with the White Paper. Railway companies or private companies are outside the White Paper. It is purely an international White Paper.

With all respect, Mr. Williams, it is not. It is a framework within which private interests can work.

The hon. Member cannot discuss under this White Paper the provision of flying services by the railways.

This is a very important aspect to which I know you will; Mr. Williams, give your usual fair consideration. Here we have in this White Paper the framework, or the skeleton on which the details may be built up. Within this framework is being laid down, not operational control—it does not suggest chosen instruments or private enterprise at all, no proposal to say how it is to be run. It says that if air services are to be run we must see that this happens, that this or that country gets a fair share, we control subsidies, and so on. Within that framework there are naturally growing up people who say, "Very well, within this framework we can run a very good air line to South America, or inside this country." All I was saying, and I would submit that I am in Order, is that it is true that at the present time—even before the issue of the White Paper—in view of the approaching peace, people were wondering how they can assist air transport in the country and the world. Some of them happen to be railway companies, others shipping companies. They have met representatives—

Yes; but I must make it quite clear that this is a matter of international air trans- port. The White Paper itself does come within the Rules of Order for this Debate, but the question of rail transport or shipping services is out of Order.

Very well; but may I say without mentioning anybody at all, that there are interests, which will become vested interests in the future of Civil Aviation in this country, which are making approaches and trying to bring pressure to bear on the Government. That is quite well known; it is not secret information that I have got; it has been discussed in the public Press and elsewhere, and I know that various people are doing exactly what I think is fatal. They are beginning to pull the coat tails of the Government in this country, and they would do the same thing in other countries, in order to forward their own private interests. I am against private interests, whether they are shipping companies, railway companies, or what not, running private air lines. I am against chosen instruments, because I think that they are a fatal risk. I am not asking for the repeal of that policy. The British Government are supporting British Overseas Airways Corporation, on the one hand—it is their way of contribution to the world air lines—and Pan-American Airways is the mainly-recognised instrument of the American Government. I visualise that kind of thing spreading.

Civil Aviation may be fascinating, but it is very dangerous indeed. One of the things that frighten me, and frighten many people outside, is the fear that we are going to have pressure groups growing up, in this country and elsewhere, who are going to use their political influence. There is no vested interest in aviation in Europe —British Overseas Airways Corporation does not count. The railway companies and the shipping companies are not yet vested interests, but they want to vest their interest as soon as they can, and we must prevent that.

That is the point where we must stop. It would involve legislation.

Perhaps I might raise the question on the Report stage. Would that be all right? At any rate, I do not want to argue that. There is in the "Sunday Times" a weekly feature called "Post-War Forum," and on 10th Sep- tember the question of Civil Aviation was discussed. Somebody who was anonymous contributed, and I wrote a letter, which perhaps it would not be unbecoming if I read to the Committee, because it gives my case better than I could make it in a speech:

"Discussions about the future of Civil Aviation often seem to imply that there are only two choices open to us, namely, free private enterprise and the Government's single 'Chosen Instrument,' i.e., British Overseas Airways Corporation. Perhaps I may be permitted to point out that there is a third and not unsubstantially supported policy, that all commercial flying in the world should be run by one international authority, which might be called World Airways Ltd."

That would not need legislation, because it would not have to be passed through this House; so I hope it is in Order.

"Undoubtedly post-war flying is international dynamite, and its proper organisation will prevent it becoming the cause of another world war. We believe that regard must be had to the best possible service to the user"—

Note that, please—

"and that questions of national prestige and the manufacture and use of the products of particular firms should not enter into the matter at all. Let World Airways Ltd. buy the best aircraft and employ the best personnel to provide the best service. No one who can read between the lines has any doubt that already fierce struggles have been going on here and at Washington between Lord Beaverbrook and Dr. Adolf Berle, American Under-Secretary of State. There is not much doubt about the American Government's policy, but there is a great deal as to whether our Government has a policy at all. The Coalition Government after the last war was often pictured in cartoons as a double-headed mule, than which it is hard to think of any animal more sterile. Whether we keep the 'Chosen Instrument' policy or abandon it in favour of private enterprise will not keep the British Government out of international trouble, for it will either fight for its own instrument or be forced by private interests to fight for them. World Airways Ltd. may sound idealistic, but often the ideal is also the only real solution. In any case, it has been advanced by Labour speakers in the House of Commons, for it is Labour's policy, and it is also the policy of the Dominions of Australia and New Zealand. I think if it could be clearly told to the people of the world it would be their policy as well."

The world, thanks largely to transport, and particularly to air transport, has become a very much smaller place. We know that aircraft fly all over the world. Why on earth not go the whole hog straightaway and organise, by a world airways authority, the running of a service of airways to China and right across to California. There is no reason why private interests should get their teeth into this. I saw a most interesting statement, that certain interests—we will not name them—were saying, "We can visualise, if we are allowed to do it, a loss for a certain number of years out of our resources, a period during which we shall be breaking even, and then a period when we can obtain the profits that we deserve." People say that they will accept the expenditure and the risk involved if they think there is any risk attached to it—which they do not.

I think this is one of the most important subjects that face us at the present time. Unless we organise the problem right from the beginning, unless the British Government can go to the conference and advocate a policy which the Labour Ministers and every Member on this side stand for, that world airways must be organised by a world authority, there is no solution. I think it is important that there should be this body, which can obtain capital from wherever it is wanted at a fixed rate of interest, whether governments, banks or individuals subscribe. You can make it trustee stock, and fix a rate of interest which will make it possible to attract as much money as you want. You will not give the shareholders the right to nominate directors: they will merely have their money in it, without any such rights. As I have said before, the Governments of the small countries, such as Sweden, Denmark and Switzerland, should nominate men who are, first, internationally minded, and, second, believe in providing the world with a decent air service and, third, are capable of selecting people—in other words, to use the old phrase, they should appoint men on the appropriate grounds of ability. Let nobody say that there are not 10 or 12 men in this world who can be trusted and who have the ability to devise, organise, and direct a world airways authority. They would then be able to appoint their working personnel, who would enjoy extra-territorial rights, and would have to run, control and operate all the air services of the world. We do not want any half-way method. It is just as fatal to visualise America being run by Pan-American Airways as Europe being run by Pan-European Airways, or Africa by Pan-African Airways; and so on. In such a system you would have the next world war in embryo, with inter- continental wars before you knew where you were.

Let us realise that this question of Civil Aviation is the touchstone, the testing question of whether the people who have been brought so close together during this war can take this new thing, and develop it in the interests of men, in order that the best service possible can be supplied, and that then we can go on from there. But if we fail, in the first years after this war, to bring about the beginning of world organisation and world government, many millions will have been wounded and will have died in vain during this war.

I would first like to congratulate the hon. Member for Nuneaton (Mr. Bowles) on having raised this subject to-day. He told us that he felt that no apology was necessary. Far from feeling that any apology is necessary, I think it is vitally important that the subjeot should be raised. Every Member who is interested in the subject has been greatly handicapped by the sudden change of Parliamentary Business, and by having no realisation until the very last moment that it was possible to raise the subject to-day. In my opinion, we should have had a day's Debate on Civil Aviation. I pressed for that last week, and had a very curt reply. It should have taken the form of the Government's policy embodied in the White Paper, which would have given this House had it so wished an opportunity of attempting to amend that positively incredible document.

I agree with every word that the hon. Member for Nuneaton said about the vital importance of Civil Aviation to the world, I am interested for that reason in its importance to the Empire, and to this country, after the war. I disagree more wholeheartedly than I can possible say with all his theories except one. I hope that the House will realise that I have had, owing to the change of Business, to make this speech without any preparation whatever, that I speak only because I regard it as a matter of such vital importance and because we have been given no other opportunity of raising this matter before a conference which may mean that we are pledged to a policy which none of us has had any real opportunity of discussing. I hope that the hon. Member will not consider me offensive if I, feeling as deeply on this subject as he does, criticise his ideas, which, I accept, he sincerely believes, though it passes my understanding to know why. [An HON. MEMBER: "He had no lunch."]It is not only a question of his having had no lunch—

Is it in Order, Mr. Williams, to refer to whether an hon. Member is starving or not?

I think we have had rather too much of this lunch talk.

I should like for a moment to refer to the White Paper, which the hon. Member for Nuneaton, whose ideas as to its tardy appearance are rather like mine, again like myself but for different reasons, does not regard as satisfactory. I should very much like to know how the ideas embodied in the White Paper are going to be put forward, and my whom. We know that, on 23rd October, there is an Empire Air Conference in Montreal. Presumably delegates from this country will go to that conference to represent the national policy. The House of Commons has never been permitted to know what the policy is. It would be extraordinarily comforting if one were really able to believe that the Government were quite certain what their own policy was.

Policy in respect of what?

The Empire development and control of Civil Aviation.

I know that.

The hon. Member may know it, but the Government have never really told the House what their policy regarding Civil Aviation in the post-war world really is. We are also aware that after the Montreal Conference there will be a conference in Chicago on 1st November. May I ask the Under-Secretary who is to represent us at both these conferences? A Minister has at long last been appointed to take charge of Civil Aviation. Unhappily, I gather he is, at present, more or less under the Air Ministry, and I believe that, at the moment, he is in West Africa. Is he to be brought home from West Africa in time to represent us at that conference, and, if so, before he goes there, is he to to be allowed sufficient time in this country to confer with those who are deeply interested in the development of Civil Aviation after the war, or will he go only to put forward the policy of the chosen instrument? I think these are very important questions. Personally, I do not favour the policy of one chosen instrument, but the Government may still favour the policy of one chosen instrument, which it will continue to subsidise, but whatever their policy we ought to know it.

On a point of Order. May I ask your guidance, Mr. Williams, with regard to future speeches—including my own, I hope—on whether the question of the chosen instrument can be discussed, in all that it implies, because it does raise very vast questions?

Certainly not in all that it implies, because it certainly would involve legislation. The matter of the chosen instrument is getting on to ground which would seem to be really beyond the province of the White Paper, and going beyond the financial question of this Debate.

With very great respect, Mr. Williams, we are asked to sanction the expenditure of an enormous sum of money. Surely as British Overseas Airways Corporation is subsidised by the Government, and is entirely under the control of the Air Ministry and moreover of the military side of the Air Ministry, it should be in Order to discuss that chosen instrument, financed by money which we are being asked to vote.

Yes, anything which actually is being done can be discussed, but any change of policy would, I think, require legislation, and that is the direction in which we must not go.

Naturally, I will make every possible endeavour to keep within your Ruling, Mr. Williams, and, if we may discuss what is actually being done, I hope it is in Order for me to ask what is not being done at the moment, because that is what is also important. I ask the Under-Secretary now whether Lord Swinton is to represent us at this conference; if so, when he is expected to arrive there; if he is to represent us, whether he is to be permitted sufficient time in this country, before he goes there, at least to meet those in this country who would wish to inform him of their view as the best interests of this country regarding Civil Aviation in the post-war world, that being what is to be discussed at the conference. Turning to the White Paper, on page three we find that the Government declare they wish:

"(i) to meet the needs of the peoples of the world for plentiful, efficient and cheap air services."

There is not the slightest doubt, whether the Government go to this conference or not, and whoever they send to the conference, that the needs of the world with regard to "plentiful, efficient and cheap air services" are going to be met. That is a certainty. What matters is who is going to meet them and where, and whether those who hope to meet them on behalf of this country will be able to ensure that the Empire air routes are safeguarded by this country and the Empire. I differ fundamentally from the hon. Member for Nuneaton, who talked of a scheme of international world airlines.

It is a very good idea.

It is a wonderful idea, but it will never, in our lifetime, nor in the lifetime of our children, be more than an idea.

There is no reason why the hon. Lady should shrug her shoulders.

I did not do so but I would remind the hon. Member that this is a free country, and if I wanted to shrug my shoulders, I should do so, and I have far better shoulders to shrug than the hon. Member has. I am making a speech on a very technical subject, which, owing to the change of business, I have not had time to prepare, and I hope you will not divert me from my argument, because you know very well how offensive I can be if I am diverted.

I am not trying to divert the hon. Lady; I am only hoping that she will keep in Order.

I am extremely sorry, Mr. Williams, but hon. Members opposite are trying to lead me away from the subject. I say that cheap and efficient air travel round the world is an absolute certainty; other nations will provide it if we fail to do so. 2.30 p.m.

Therefore, No. 1 is really merely voicing what anyone with a sense of reality knows will be the fact. No. 2 is asking

"to maintain broad equilibrium between the world's air transport capacity and the traffic offering."

If you provide really efficient air lines, that again in time would right itself. I would very much like to ask the meaning of No. 3. I direct the Committee's attention to this because it has an importance which it is very difficult to over estimate. The Government propose

"to ensure equitable participation by the various countries engaged in international air transport."

We are told that at the conference there are to be 54 Governments represented. The size and responsibilities of the countries represented will be very different. What exactly are we to understand by the word "equitable"? I want to be certain that whatever else happens the interests of Great Britain will be proportionately represented, and I should like myself to be sure that the interests of the Empire as an Empire will be proportionately represented. Are we to go to a conference and is this country to be pledged to abide by arrangements laid down by a small country with neither our responsibilities nor our power? For instance, the hon. Member for East Aberdeen (Mr. Boothby), in discussing the currency arrangements, stressed the difference between the responsibilities of a country of the size of Monaco and a country the size of the United States. I agree and therefore I want to know what is meant by "an equitable participation." Is equity to be judged on the world interests of the countries concerned, or on the existing or previous air lines of the countries concerned, or on the capacity of the countries concerned to run an air line, or what is the basis of equity to be?

As a nation we go to the conference very gravely handicapped by the appalling mistakes we made in the past. For years before the war I implored this country to allow transport planes to be designed, built and flown unfettered by interference from the Air Ministry. There is absolutely no question that we can build, design and produce aircraft which are second to none in the world. We have done it in the field of military aviation, and it is one of the catastrophes of our time that, owing to the mistaken policy of the Government, we have considered transport planes as merely peace-time planes and that military machines were the only machines in which we ought to interest ourselves in the war period. America, with her vision and her imagination, has appreciated from the first that the transport plane is just as much a part of the military machine as the military plane. She has been building these planes for many years past.

However, I believe that America is only too anxious and willing to co-operate with us on the question of Civil Aviation if we have a reasonable policy. The mistake to-day is in trying to parcel out everybody's rights into little compartments, terrified that someone else is going to get a little more than you are. I want freedom. Let America have rights provided that we have exactly the same rights. That is all I ask. With regard to machines, it is obvious that, if we are to run efficient air services round the world, we have to buy transport machines from America for several years to come. I admit that the principle of Government direction is absolutely essential, and with regard to all technical matters, the more effective you can make an international organisation the better. The ideal for all questions of safety and such technical matters is, of course, that they should be under international control, and the larger the number of nations you can persuade to agree to that the better.

I hope that all British interests are to be invited forthwith to make application to conduct services over the main world trunk routes and Empire communications. I know that that must be very painful to the hon. Member for Nuneaton but it is absolutely essential to the wellbeing of this country and the Empire. I believe that if that application were made the response would be extraordinary and I hope that Lord Swinton will come back and ask all interested people to meet him and not tie us to a policy of one chosen instrument.

I, personally, am against direct subsidies. I believe that you should have the chosen lines running on an equal basis and no subsidies, and that all approved companies should be awarded their proper proportion of mail contracts. There are airports all over the world to-day. The routes are mapped out. I do not know how many hon. Members have seen maps of the American Army Transport Command Services, but they are extraordinarily interesting. The routes are there. Then, let us fly them but do not let us apportion pieces of the world and restrict our own traffic, and do not let it be restricted by other nations whose interests are infinitely less than those of our own and whose interest in and necessity for running air lines is very much less than our own. Britain should receive proportionately no less favourable treatment than any other world Power, and are we certain that that will be assured at the forthcoming conference? The word that is important there is "proportionately" no less favourable. If the British Overseas Airways Corporation is to be the only official instrument of the Government, it will inevitably rule out the possibility of other interests starting up and it will be terribly to the detriment of our trade and of our Empire and our economic stability. I hope sincerely that we shall reach agreement with the Empire at the conference at Montreal.

If the Government are concerned in wishing to put forward an Empire air policy at the conference at Chicago I cannot consider a date when the American elections will be at their height as most opportune. I regard it as completely fantastic to send there at such short notice a Minister who has been very busy in West Africa, who has not had time, whatever his ability, to make himself aware of what the most recent aviation interests of this country are, nor in view of what private enterprise if unfettered could achieve what policy it will be advisable to pursue. If he were the greatest genius living he would not have had time in which to consider all these matters thoroughly. I am a great admirer of the Chairman of the British Overseas Airways Corporation, but if he approaches the Minister he does so as Chairman of the British Overseas Airways Corporation and must of necessity put forward views in the interests of the Corporation. I therefore ask, Are we tied to the chosen instrument and those views which are to be put forward to the conference, or are the views of industrialists of this country who are vitally interested to receive any representation whatever? I may be a lone voice, but I protest with all the power at my command at the abominable way this House has been treated with regard to this policy. Also at sending a Minister who, however great his ability, has had no time to acquaint himself with the feeling or capacity of this country today or of the policy it would, in view of that, be wise to pursue. I doubt, indeed, if the Government know their own policy on the matter. I protest against the Government not having permitted us to have a Debate on Civil Aviation. A Debate on the Adjournment would have been useless, and what we are saying here to-day is useless because it is said on this Vote and we can take no action. We should have had a Debate on the approving or disapproving of the White Paper, which may prove exceedingly mischievous and dangerous; therefore, again, I protest at the way the House has been treated.

While my speech will not be so vehement as the one we have just heard from the hon. Lady the Member for Frome (Mrs. Tate), I do think that there is a very important point of principle and a still more important point of procedure with regard to the international air line. I do not altogether disagree with my hon. Friend the Member for Nuneaton (Mr. Bowles) about the possible ultimate desirability of an international air line, but I am quite certain of this, that just as in the League of Nations we started at the wrong end so, in exactly the same way, we shall be starting at the wrong end if we try to get international air lines now. The way we should proceed in all these international things is not to start with some grand scheme at the top but to work up from realities from below. The assumption which underlies his argument, that peoples quarrel but Governments do not, is entirely contrary to my experience.

No, I complained about different nations having their own chosen instrument. I said in the letter I quoted that their Governments could not keep out of international trouble because they would be obliged to support their own chosen instrument. I think it would probably be better to go the whole hog to start with, rather than to let Europe have a network of vested interests in air routes, because then we should have to fight them. Let us start now, because there is very little opposition in Europe and there are no vested interests.

I am afraid I could not agree with that. I very much doubt whether the hon. Member for Nuneaton has any idea of the nationalistic feeling that prevails to-day, not merely in individualistic countries but most of all in countries like Russia, who have an entirely different mentality to ours. To suppose that Russia is internationally-minded over these matters is, in my opinion, totally to misconceive the whole situation. The difficulty which we found in the experience we had between the two wars is that whereas nations will not object to private individuals supplying them with particular services or particular classes of goods, immediately Government trading or Government interests come in then immediately it arouses nationalistic opposition which creates very great difficulty.

Now we had no difficulty whatever in buying goods from Russia before all matters were in the hands of the Russian Government, but the moment the Russian Government started trading as a Government—I am not offering any opinion on its merits or on the desirability of the 1917 revolution—immediately political considerations were brought in. I was one of those in favour of trading with Russia and I was attacked on all sides—

If we are going into the question of trade with Russia we are getting very near to being outside the Rules of Order, and I would like to ask the hon. Gentleman, having made his illustration, to come on to the actual White Paper itself.

I accept your rebuke, Mr. Williams, but I think you will agree that the illustration was really extremely apposite to this question of international air lines, and that brings me to the White Paper. Whatever we may think about the policy of international air lines, and I would by no means wholly condemn it, I do say it is far too early to consider it, and, therefore, we should ask that when the British Government go to this conference, they should see that ample opportunity is given for the British genius— British private enterprise—to make its contribution to these services. There can be no question that British genius in aviation is the foremost in the world to-day.

If it is the foremost—and I am not doubting that it is—why should the hon. Member worry about my scheme, because it will get the orders?

The hon. Gentleman is inviting me to discuss a subject which I am not certain the Chairman wishes me to pursue, but I may perhaps say if British genius is left untrammelled it will work on very different lines from British genius in harness, in which it is somewhat uncomfortable. I would only add that if we had had international transport 50 years ago the hansom cab and the omnibus industries would be the biggest industries in the world to-day. I do beg Members of the Committee on this air question—

We are entering too much into a Debate in regard to the value of private and public enterprise. I have allowed the hon. Gentleman to say a certain amount, because the same statements were made on the other side, but he really ought to keep to the point.

I will endeavour to do so, Mr. Williams, but I may perhaps point out, with the greatest respect, that the White Paper deals with this very question of competitive practices, subsidies, and equitable participation in international air transport. That is my argument, that the whole question of subsidies bears tremendously on this question of private enterprise. On that I disagree with the hon. Lady the Member for Frome, although I agree with much she has said. I do not like concealed subsidies. If we are to have subsidies, let us all know what they are and let them be paid direct. Then the taxpayers in every country know exactly where they are and what they are paying. Do not wrap it up in a mail contract, which is a service for carrying letters and parcels. We want to judge it on an economic basis. If mails should go by steamer or by some other form of transport, let us know which is the more economic method. Let us have direct subsidies. I would appeal to the Under-Secretary of State that our representatives at the international conference should try to bring out into the open quite clearly what subsidies are being, or will be, paid for international air transport, because we shall never get the matter straight unless we deal with it on those lines. I am a little uneasy about cheap air services. We are asked here to see that the people get cheap air services. What does that mean? If it means that we are to get air services at a reasonable rate, having regard to the expense of the traffic, I am in favour of it, but are we to have air transport at a ridiculously uneconomic price? If that is what it means, it is greatly to the disadvantage of this country. If our mercantile marine is to be largely undermined by wholly uneconomic air transport it is certainly not to the advantage of this country, and I hope, therefore, that the word "cheap" in paragraph 6 (i) means at a reasonable economic cost and does not mean that these services are to be so heavily subsidised at the expense of the taxpayers of the different countries that a great disturbance will be caused in the normal means of transport.

2.45 p.m.

One other thing needs to be borne in mind. In the past the British Government has not, as compared with certain other Governments, kept perhaps as closely in touch with the industrial and commercial interests of this country. In some ways that has been a good thing. It has been an honourable tradition of the Foreign Office not to over-support British traders. However, a good many other countries do not take that point of view. For instance, I think our American friends very often keep much closer in touch with the industrial and commercial interests of their country than do our representatives. I hope that in this forthcoming conference our representatives will give the greatest consideration to the people who are interested in this matter. It is a great, growing, and perfectly legitimate trade, both in manufacture and operation, and it is really essential that our representatives at this forthcoming conference should, in conjunction with the representatives of the Dominions, put up a case and stand fast on this matter, which will affect so vitally the future development of this great new industry. I would ask the Under-Secretary to see that the views of those who may be concerned are carefully borne in mind and that our representatives put up a strong case, which they can do. It is really essential, not merely for our own immediate interests but for the future necessities of this subject. Nothing is ever to be gained by a group of countries like the British Empire putting up a weak case. It invariably leads to disappointment, resentment and friction in the future, and it is essential that right from the start it should be understood by all concerned that we stand for the fullest participation to which this Empire and this country is entitled in this great, growing traffic, and we intend to have it.

Like other hon. Members who have taken part in this Debate, I was not aware that the subject was to be raised until a short time ago. I have, therefore, not prepared any speech, but I have tried to follow the course of the Debate to see what is disturbing those people who are so anxious to have one at this time. As one who took part in the last Debate in this House on the Adjournment before the House rose, I feel that considerable progress has been made since that date, and I do not share the apprehensions of the hon. Lady the Member for Frome (Mrs. Tate) over this White Paper. Quite frankly I see nothing in it to be alarmed about, nor do I feel alarmed about the appointment of a Minister who will be responsible, I hope, for putting the British case.

I am sure the hon. and gallant Member would not wish to misrepresent me. Far from being apprehensive at the appointment of the Minister, I welcome it. All I regretted was that there was no longer time between his appointment and the conference for him to make himself familiar with the subject and hear the various interests of this country.

I did not want to misrepresent the hon. Lady, who expressed apprehensions, but not at the appointment of the Minister. I think we have made tremendous progress since the last occasion when we had a short Debate. Up to then, we had been getting nowhere. We had had Debates in this House and in another place and the results were always negative. Since then, however, a great many things have happened. We have not only had a new Minister appointed, as we demanded, we also asked that he should be a Minister of Cabinet rank, that Civil Aviation should be divorced from the Air Ministry, that a new Department should be set up to deal with Civil Aviation, that aeronautical research should be taken away from the Ministry of Aircraft Production, or the Air Ministry, and a new Department set up to deal with it. These things have since been done. A new Minister of Cabinet rank has been appointed, a new Department will be set up, I understand, when legislation has been passed through this House, and Civil Aviation is to be divorced from the Air Ministry as soon as is possible having regard to the war situation. Only a day or two ago there was a very important announcement by the Minister of Aircraft Production to the effect that a college of aeronautical research is being set up with a Government grant of £5,000,000. That, I think, is an admirable step which I am only sorry was not taken many years ago. That is progress, and we ought to be thankful for it.

But I share the view of the hon. Lady who said that this should have been done long ago, for then the Minister would have been given a better opportunity of studying the case before meeting 54 other nations in an international conference. On the other hand, I do not fear that Lord Swinton has not sufficient knowledge of this subject. For many years he has been associated with air matters, as we well know, and we have reason to be grateful to him. He was responsible for setting up shadow factories before the war and for the laying down of certain types of aircraft for the defence of this country. We have every reason to be thankful to Lord Swinton for the foresight and energy he put into his job at the time. When the history of the Battle of Britain is written, as it probably will be one day, people will realise what a wonderful job he did. It was my duty as adjutant of fighter squadrons during the Battle of Britain and afterwards to see that squadrons were kept supplied with aircraft and I know what a near thing it was at that time, and that is the answer to those who criticise the Government for not laying down a programme for transport planes at that critical time.

After all, Lord Swinton has had opportunities of keeping in touch with this subject. He has been a Cabinet Minister for a considerable time; all the time he has been in West Africa he had been a member of the British Government and as such, I presume, has received Cabinet papers. If I know anything about him I am sure that he has had those papers, and has read them. Therefore, he should be well informed as to what has been going on in the Cabinet as regards Civil Aviation. Further, I know that while he has been in West Africa he has done a great deal of work in connection with Civil Aviation in preparing bases and so forth in that part of the world. I believe he has done a good job, as my right hon. Friend the Secretary of State for the Colonies will, I am sure, tell us when he comes to survey the work of his Department.

I do not wish to follow the Utopian flights of the hon. Member for Nuneaton (Mr. Bowles) into the stratosphere of international air lines. I think we should be satisfied that we have got this White Paper as a basis for discussion at Chicago. We will, I hope, have the support of Canada and other Dominions—which is very important—for most of the White Paper's proposals. If there is any opposition I do not think it will come from the Empire. We shall have to meet it from our competitors in Civil Aviation. I hope that as many of the proposals as possible will be adopted, because the White Paper was drawn up in the interests of this country and the Empire and in the hope that they would be accepted. There may be things in it which are not acceptable to everybody in this House, but, as a basis for discussion, I do not think there is any room for complaint about the White Paper. I am sure that we all wish Lord Swinton God speed and good luck, and that we shall give him every possible support in the task which he is about to undertake at the forthcoming conference in America.

I rise to put only one point to my right hon. and gallant Friend the Under-Secretary, and I should be grateful if he could find it possible to answer it. I join with my hon. and gallant Friend the Member for the Isle of Wight (Captain P. Macdonald) in saying that this White Paper represents a very satisfactory basis for the forthcoming discussions at Chicago. The point I wish to put arises out of what my hon. Friend the Member for Frome (Mrs. Tate) said with regard to the third objective of the Government, as set forth in page 3 of the White Paper:

"To ensure equitable participation by various Governments engaged in international air transport."

That point is brought out a little more fully in Section 7, paragraph (4), which states:

"The convention would provide for the elimination of uneconomic competition by the determination of frequencies."

"Frequencies" are defined as the total services of all countries operating any international routes. The paragraph goes on:

"Distribution of these frequencies between the countries concerned. …"

I understand that the Lord Privy Seal, in another place the other day, spoke about quotas of aircraft. I regret that I have not the relevant passage, as HANSARD is temporarily out of print, but I would be grateful if my right hon. and gallant Friend would tell me whether it is a fact that the numbers of aircraft to be contributed by every country to this scheme of international Civil Aviation will be fixed in any way, or their numbers determined at the conference. After all, we are in a rather serious situation in that we have no transport aircraft on the stocks except some for military purposes. Some drawings and plans are being prepared, as I understand it, and we are told that at any time within the next three or four years Civil Aviation transport machines will be produced. What is to be the basis of these quotas? Are we to invite international approval to a certain quota in this country which is based on the numbers of aircraft which we would hope to have operating in three or four years' time, or is to be fixed upon the estimated numbers of aircraft which we hope to purchase from the United States as soon as the war ends? Exactly what is the basis of the quota?

It is quite possible that we could argue for a large quota, on the basis of our standing in the world and the prospects that there are, throughout the Empire, for Civil Aviation. We could make that quota high, but there is not the slightest use in doing that unless there is the prospect of fulfilling it. Alternatively we could make the quota small, having regard to our present resources and capacities, and ensure at the conference that the quota was flexible and took into account our expectations in the future.

Quota of machines?

Yes, I take it that that is what is meant by "determination of frequencies."

indicated dissent.

Anyhow, conception of the quota of machines lies within that mention in the White Paper of the determination of frequencies. I would be glad if my right hon. and gallant Friend could elucidate the meaning of that paragraph.

I hope to keep within Order this afternoon, and I intend to be commendably brief in my observations. I think it is a little unfortunate that the Debate on the subject is as restricted as it is on such a Motion as we have before the Committee. I cannot accept for one moment the idea which has been expressed that this White Paper, which comes within the Rules of Order, is confined solely to questions of air law and technical regulations. It involves a great deal more; those and other questions overlap, even in the wording of the White Paper itself. For one thing, the important consideration of the principle of national sovereignty in the air is involved, but if one developed that subject it would lead us into very wide fields. The question of uneconomic competition, which infers that if we are to provide for its elimination we must provide for the preservation of economic competition, wherever it might be, is also involved. The question of ownership and of operation is involved in all that is behind the White Paper, and therefore it is involved in what is behind our delegations, both the official one to Montreal and that to the larger conference at Chicago.

I am concerned with the atmosphere that is involved in this, because I cannot for the life of me see that these regulatory proposals as set forth in the White Paper are anything more than proposals to regulate private competition and the interest of private concerns in Civil Aviation. I will not develop that, but I feel that I ought to stress the point that we cannot divorce the question of regulation from the more vital and general principles involved in both the productive and the operational side of Civil Aviation. I read the other day that the scientists of the world are directing their attention to inter-planetary communication. I wonder how a Martian would interpret the idea of planetary sovereignty of the stratosphere. Surely the point involved is that the air is such a different medium from that for any other kind of transport—so universal a medium—that we cannot consider the question of air transport, in respect of speed and everything else, from the old narrow points of view which have been involved in the past and which are included in the speeches that we have heard to-day.

I hope that the hon. Member will confine himself to this planet.

I used that by way of illustration, and we have had it on several occasions from your predecessor, Major Milner, that a passing reference is not necessarily out of Order. Anyhow, I will not develop the question of the Martians but will confine myself to one or two things which have been said to-day. I was interested in the speech of the hon. Member for Frome (Mrs. Tate). I could not help thinking that she completely made out the case for internationalism which was put by my hon. Friend the Member for Nuneaton (Mr. Bowles). A great part of the difficulties and the problems that she raised would not arise, but for the fact that competition in the air is being visualised on the basis of private ownership. The hon. Member behind her spoke, in as contemptuous terms as she did, about internationalism in respect of Government enterprise in Civil Aviation.

I was not contemptuous. What I pointed out was that we found, when the Government started trading, that there were very serious frictional difficulties.

I also deny that I spoke in contempt. I tried to be a realist.

I notice that the people who are most touchy are those who are never afraid to offend the susceptibilities of other people.

I must protest. I am not in the least touchy. I desire to help the hon. Member. He made a mistake. I spoke to a large extent in agreement with one of his colleagues.

These interruptions are really unnecessary. I do not think the hon. Lady will deny that she is contemptuous of the whole idea of internationalism in Civil Aviation. When I spoke of the contempt of the hon. Member for The Wrekin (Mr. Colegate) I had in mind that he made reference to the hansom cab as an old method of transport which would still be in operation if the State had had during the Victorian era a control of the development of transport. I interpret that expression as one of contempt for the principles for which I stand. But, if the hon. Member does not wish to be convicted of contempt, I will not convict him of contempt of court. I will not debate the assumption that there must be inefficiency under State control, but I want to rebut the assumption that efficiency is the first consideration here. The international character of aircraft, and of this universal medium, and what it may involve in respect of the possibilities of future war, and the relations of State to State, are much more important than efficiency and, even if it meant a smaller degree of efficiency, that would not be too big a price to pay for a real prospect of peace in the future, which we are not likely to get under the kind of competitive scramble involved in the principles for which the hon. Member stands.

How does the hon. Gentleman propose to control robot planes in the future?

If the hon. Lady stands for private enterprise in robot planes she may develop her own argument. I do not know what she means. Robot planes are certainly not evidence of private enterprise by any means. They are evidence of efficiency. She is always so anxious to interrupt that, if I allowed her, she would probably get me far away from the subject. But I resist the assumption, first, that international control of operations and production which would be involved in the policy for which the Labour Party stands necessarily means inefficiency in the development of Civil Aviation even to the extent represented by the hon. Member who spoke about the hansom cab. I do not admit that, but, even if it were true, it would be true only to a degree. Civil Aviation in its international aspect is so vital to the future of the world that I think it will be a matter of comparative unimportance whether this or that degree of efficiency is reached by this or any other country. Not that I in the least regard Civil Aviation as unimportant. I think it is very important and I want it to be developed by this country in its stride.

3.15 p.m.

We must have a sense of proportion and must put one thing with another when we are dealing with such vast issues as are involved in this matter. If we expanded Civil Aviation 20 times over pre war, we would not require air displacement to more than the extent of eight big bomber squadrons of the Royal Air Force. I shall not develop that, but my speech in the last Debate, the speech of my hon. Friend the Member for Nuneaton, and articles in the Press, even from those who are vitally interested in Civil Aviation, have put the point that we are stressing too much. My complaint is that it is being done deliberately on the part of people who are commercially and in business interested in private interests in Civil Aviation. There is no need for hon. Members to interrupt. It is my view, and I am entitled to put it.

The hon. Member is not entitled to impute motives in that manner. I have not the slightest interest in it.

The hon. Member must not take too much on himself. It does not follow, because I followed him in the Debate, that every reference I make is personally directed to him. No one can doubt that private interests in this House in Civil Aviation have got together. We have to hand it to the business Tories. They are not like some of our people, who seem to think it is necessary to suggest that other Members who are loyal to the party are not altogether loyal to the interests of the class they represent. The business Tories always stick together so far as their class interests are concerned. There is not the slightest doubt that behind this agitation the disproportionate aspects that have been expressed in this House and outside, and in the campaign in the Press, are the private interests of people who want to make money out of Civil Aviation. We think that the interests of Civil Aviation are much more important to the world than the interests of a few commercial firms. Whether it is a question of the railways or shipping or anything else, we are not concerned as a party with their interests against the interests of the nation and the world as a whole. There is to be an Empire discussion with officials on the 24th. Is there a mandate behind that discussion in favour of an Empire policy or a policy of an Empire board? We have two of our greatest Dominions, Australia and New Zealand, who have accepted a policy which is identical with that of the Labour Party in this country.

Has Russia accepted it?

I am not concerned with Russia. I am concerned with the British Empire. I hope that Russia will realise her international responsibilities in regard to Civil Aviation, because I cannot believe that she will be self-contained about aviation. She will have European interests. I am convinced that Russia will in time come into a rational organisation of world air transport. Perhaps the Under-Secretary will tell us what the position is in respect to Russia.

The White Paper is, in general, to be welcomed. I remember many years ago, when I.N.C.A. got into its drive, what problems and difficulties we had in European aviation. All the time there have been two air laws for one medium, one as the result of the Paris Convention of 1919, and the other as a result of the Havana Convention of 1928. That is because America has been pan-American in its ideals. One must say that Canada and America were in step so far as that pan-continental idea is concerned. We are under no illusions about the position.

It may be Utopian to talk about international aviation. It is to the extent that we cannot force an international policy upon countries that will not have it, and we know precisely where America stands. All that I am concerned about is that, in any discussions there may be between the nations of the world in respect of air regulations, air law, and all the rest of it, we shall have the background of a larger ideal than that of private enterprise and competition, with its inevitable results in the bloody business of war over again. Let me repeat that the difficulties and troubles that have been brought forward in the Debate to-day are based upon an assumption of private enterprise, and that they may be overcome easily if we have a real international policy dominating the air transport of the world.

There is one question I would like to ask my right hon. and gallant Friend. I am sure the hon. Member for West Islington (Mr. Montague) will not be surprised if I do not enter with him into those wishful substrata spheres of controversy to which he has just referred, except to say that we must beware of wishful thinking in the country and in this Committee. I agree with my hon. Friend the Member for Frome (Mrs. Tate), that neither Russia nor the United States at least are likely at this juncture to agree to international control.

Are not those precisely the arguments that led to the disruption of the League of Nations?

I will not pursue the controversy of Government control versus private enterprise, except to say, as an air pilot, that I know we need the best in the air and I do not think we can get the best without trial and error. No Government can afford to make mistakes. Therefore, the Government, if they are wise, do nothing. In my opinion that has been our trouble as regards Civil Aviation in past years. I will not however enter into that controversy. The question I want to ask is this. Our representatives will go to the United States to carry out the points in. the White Paper; can we have any assurance with regard to the machines which it is proposed we should use to carry out what is in the White Paper? There, I think, is the whole crux of our future in the air in the immediate post-war years. Are we going to be allowed to build suitable aircraft in this country or must we rely on what can be obtained from elsewhere? There is a rumour going round my constituency. My right hon. and gallant Friend will know the private enterprise to which I refer when I say that it is situated on the edge of the constituency of my hon. and gallant Friend the Member for Thorn-bury (Sir D. Gunston). There is a strong rumour in my constituency that they have had ready for a year the designs of a magnificent post-war civil air transport plane. The rumour is very strong that we cannot build that plane because the Americans tell us that they do not like it and that it is too far ahead of any design that they have. I would like to hear from my right hon. and gallant Friend that we have more freedom to go ahead on our own. I would therefore like to ask my right hon. and gallant Friend either to contradict that rumour or to make quite certain that the plane which is being built with the enterprise, skill and integrity of my constituents will have a chance very shortly to show what it can do.

I hope the Committee will have gathered from my hon. Friend the Member for Frome (Mrs. Tate) that her ideas, which she presented to the Committee with commendable brevity, are definitely other than those of the hon. Member for East Islington (Mr. Montague). I was tempted to make a debating speech in reply to him, but I refrain from doing so because I know that there is a good deal of other Business still to be taken. I must, however, say one thing. Time after time the hon. Member makes innuendoes against hon. Members on this side of the Committee. He tries to do it in every speech, and it ought to be pointed out to him. He never offers a shadow of proof, but he suggests that those who have an interest in Civil Aviation are interested only because they have private interests in it. That suggestion is perfectly monstrous. It is just as bad as hon. Members on this side saying that Members of the Labour Party are interested in Nationalisation only because they hope, if they can bring it about, to get fat jobs. No one says that on this side because no one thinks there is any truth in it. I hope the hon. Member will try to clear up his mind, and not bring out such innuendoes again.

I cannot allow that observation to pass without reply. I made no innuendo against the hon. Member, but I was referring to the hon. Lady. All I said, and I repeat it, is that the whole of the argument that has been put forward from time to time in the agitation throughout the Press has been upon the basis of the commercial enterprise of private firms, whether in shipping, railways, or air manufacturing firms. It is a fact, and everyone knows it, and to say so does not constitute a personal reflection upon anyone.

I hope that is a withdrawal, and I hope that the innuendo will not be repeated. I therefore leave that point. The appointment of Lord Swinton is extremely good. He has a good knowledge of the air from his previous experience in the Government. He is extremely industrious and strong-minded, and is a very active man. As to the White Paper, I have read it, but I would like to read it again before coming to any final conclusions about it. I thought that the introduction was very good. It is soundly written, and I con- gratulate the Government on it—with all the reservations that we all make that that is subject to further examination. I would like to make a further observation, which is the real reason for my getting up. It may appear to some hon. Members that this is the point rather of a sea-lawyer, or of an air-lawyer. If they will look at the last Clause in the White Paper they will see that it reads like this:

"Such, in broad outline, are the proposals which His Majesty's Government favour in present circumstances for the ordering of postwar international civil air transport. The proposals are of a provisional nature and may be modified in the light of the views expressed by other countries."

There is no word that they may be modified as a result of views expressed in Parliament. I hope it was only a slip. I do not believe for a moment that it would be done deliberately. Perhaps the draftsman, or the Minister who "vetted" the White Paper might have been just a little more careful with those words. I hope that Lord Swinton will have a really good term of office and that he will do all he can—as I know he will—in the interests of British aviation.

The Debate, which has taken the form, as hon. Members themselves have characterised it, of a series of unprepared speeches, has ranged from hansom cabs to the stratosphere and from the extreme internationalism of the Left to the hard advocacy of private enterprise. The task is not so easy therefore for the Under-Secretary who has to answer. The hon. Member for Nuneaton (Mr. Bowles), who opened the Debate, said that in his view the purpose of Civil Aviation was that it should be a boon to mankind and not a menace. With that objective not one person in this Committee is in disagreement. The disagreement enters when we come to the process of implementing that objective. I took note of one sentence of my hon. Friend the Member for The Wrekin (Mr. Colegate) when he said That he hoped the views of all concerned would be borne in mind at the Chicago Conference. If the Government were to bear in mind at the Chicago Conference the views expressed to-day by all concerned the Government would not have any policy at all, because we should be torn first one way and then another. What the Government have done is to endeavour to give a broad lead by laying this White Paper, which puts forward proposals for an international regulatory system. The hon. Member for Nuneaton based his speech on two main contentions. The first was control of subsidies, and the second the need for abandoning the principle of sovereignty in the air. The retention of that principle was also criticised by the hon. Member for West Islington (Mr. Montague).

On the first point I would put the point of view of the Government in a sentence. We want to abandon subsidies so soon as is practicable, and, provided that that process can be carried out by an international agreement, in such a way that this country does not suffer a disadvantage. We all remember the lessons, which we have had to learn bitterly, of unilateral disarmament in order to set an example to the world. Let us not fall into the same error when we seek to consider the possibility of unilateral abolition of subsidies. Let us lead with other nations towards an agreement that subsidies shall be abolished. When we come to subsidies—I do not want to go into this subject in any detail—they are hard to define. A subsidy may be a cash payment. It can be provided by selling aircraft at a price lower than is economically justified. It can be introduced by an absurdly high mail contract or by an enterprise which runs a prosperous internal line loading its overheads from a less prosperous external line on to the internal line.

Broadly speaking, we have taken the view in the White Paper that control of subsidies depends, as it were, on a three-legged stool. The first leg is control of frequencies. The second leg is control of rates, that is to say you will have to try to get some measure of rates in relation to speed, not the high rate you pay but the low rate you pay. There must be agreement whereby people will not be able to fly at more than X miles an hour for less than a particular sum. Otherwise you may enter into a world speed race which, in aviation, may be as costly as any other international race. Third comes the control of subsidies. We want control of subsidies. We have said so in the White Paper. If we fail because countries adopt subterfuges or methods of hidden subsidies, I believe that the three-legged stool can stand on two legs, control of frequencies and control of rates. That is why we put forward these three proposals, but it is on the first two, which I have just enunciated, that we lay importance.

Then, as regards the freedom of the air and the rights of national sovereignty over the air, we maintain that a nation shall have sovereign rights of the air over its own territory, and I believe that to put forward any. other concept at the Chicago Conference would be very much like a lone voice crying in the wilderness. The hon. Gentleman said—these were his words—"We must not allow the 53 nations at Chicago to perpetuate this doctrine." I would ask him how this country is to go forward and forbid 52 other nations to adopt a conception which most nations in the world, including many great Powers, have shown no signs yet of being able to abandon.

I am sure that the right hon. and gallant Gentleman would agree that in certain cases this country and the Empire could give a tremendous lead. I do not think we should run away from supporting those views.

This country is not running away. It is being practical and setting an example by saying we can allow the doctrine of sovereignty of the air to continue with no menace to the rest of the world, provided that it is by a world-regulated free system. We say we want the maximum degree of freedom in the air, and in this White Paper we have laid down the four freedoms; first, the right of innocent passage, second, the right to land for non-traffic purposes, third, the right to drop passengers originating in the country of origin of the aircraft, and fourth, the right to pick up passengers in another country destined for the place of origin of the aircraft. We want to see the whole world accept these four freedoms, but we are not prepared to concede those freedoms except as part of an international regulatory system. Those who have the interests of this country and the British Empire at heart—and although it it a little out of fashion in these days to talk about the interests of the British Empire, I think the more we do so the better—[Interruption]. I am not the slightest bit ashamed of saying that at Chicago we want to see that the interests of the British Empire are adequately looked after. At Chicago we can do two things. We can look after the interests of the British Empire, and we can forward the doctrine of freedom of the air, provided that we are insistent that we should only concede those four freedoms laid down in the White Paper in return for subscription to an international authority which will administer the new international regulatory convention.

Can the right hon. and gallant Gentleman assure the Committee now, that the rest of the Dominions endorse the point of view which is now being applauded by the people behind him? Are they entirely in agreement with the opinion he is voicing here?

Yes, indeed. If the hon. Member will turn to the Records of Debates in another place, of 10th May, column 694 onwards, he will see that in that place the Lord Privy Seal announced this:

"I repeat that the principles, the elimination of uneconomic competition, the setting up of national quotas, equilibrium between transport and capacity"—

I am sorry, but it is not in Order to quote the exact words used in another place.

With respect, it is a Minister I am quoting.

The Rule is that they may not be quoted.

Surely, anybody is allowed to quote Government policy as adumbrated in another place, or in this place or outside?

I will naturally bow to your Ruling, Major Milner. I did take counsel with the Deputy-Chairman beforehand, and I understood that I would be in Order but naturally I bow to your Ruling.

Further to that point of Order. I have a clear recollection of a Ruling not so many days ago, that a statement of Government policy, whether delivered in this House or in another place, could be quoted verbatim.

I am advised that has never been the case in strictness.

I think I can, without transgressing the Rule, having read the most relevant passages assure my hon. Friend opposite that what was said by the Lord Privy Seal in another place, is virtually the main part of this White Paper. He said we had first adopted the Canadian Draft Convention which also incorporated those very principles, and then we had got agreement with the Dominions on putting forward a regulatory system, the outline of which is contained in the White Paper.

Will the right hon. and gallant Gentleman explain, as his right hon. Friend did not the other day, what the Lord Privy Seal meant by uneconomic competition?

The Committee has a lot of work to get through and I have a lot of things to answer. I think it would be best to allow me to do my best, or my worst, as the case may be, and see if I can take that in my stride. We are being realistic at the Chicago Conference, and are putting forward proposals for an international regulatory system.

I come to the speech of the hon. Lady for Frome (Mr. Tate) who spoke, she said, without any preparation. It was a speech, if I may say so powerful in language and form. She expressed surprise and complaint at the document being produced at such a late date. I must not transgress the Rules of Order, but if she would look up the particular columns of HANSARD of another place, to which reference has been made, she will see there is nothing new in this White Paper, nothing which has not been put before Parliament previously in Ministerial declarations. This is a tidying up and collating of various declarations that have been made previously. I think she must admit that point if she will turn her mind back to the sentence I was reading when I was stopped by you, Major Milner. She asked me certain questions. She asked how the White Paper would be put forward, that presumably delegates will go to Montreal, and she said the date of the conference was fantastic. It was not for us to say. We are going to the conference at the invitation of the United States, and she must not blame His Majesty's Government for a date for which we had not the responsibility of setting.

As my right hon. Friend the Secretary of State for Air said, the conference at Montreal on 24th October is to discuss operational and technical problems connected with the establishment of air routes between the Commonwealth countries, whereas the International Conference at Chicago is to be on broad world matters. The hon. Lady has asked who is to represent us at both conferences. It is not usual in the case of official conferences to reveal the names of civil servants, because any deliberations at official conferences must come back to Ministers for endorsement. Of course, it will be a civil servant who will be leading our delegation.

3.45 P.m.

As regards the Chicago Conference, to the best of my knowledge, Lord Swinton will be back in ample time to be in this country to study the situation and be present at Chicago. The hon. Lady asked: Would he have time to confer with interested parties, or would he put forward the policy of the Chosen Instrument? It would be out of Order to go into that, but I can say this—which covers also the point made by the hon. Member for West Islington (Mr. Montague), who said that this was a proposal for the orderly control of private enterprise. These proposals allow of the national expression of any nation subscribing to the National Convention on Civil Aviation, in any form that that nation likes. You can have private enterprise, if you like, under these regulatory proposals, and you can have State regulation. It would be out of Order, and it would not be germane to the issues raised in the White Paper, to discuss whether this country continues on its present policy or modifies that policy in future.

In view of the immense importance of the Empire Conference, is there no hope that some Minister can represent us there, in addition to civil servants? Surely it is very dreadful that no Minister should represent us at this conference?

No; the whole agenda and the purposes of the conference, which were declared in this House by my right hon. Friend the Secretary of State, show that it is of a limited scope and on an official level. That is the agreement come to by this country and the various countries of the Empire. Of course, Lord Swinton will be able to confer with who- ever he likes. I do not know whom he will confer with. But my hon. and gallant Friend the Member for the Isle of Wight (Captain Macdonald) was quite right when he suggested that Lord Swinton was up to date on these matters. We have taken special steps since his appointment to send all the papers, including reports of the deliberations in this House and in another place, to him, so that he will be right up to date when he arrives in this country; and he will then have some days in hand, to consult those people whom he may wish to consult. The Noble Lord the Member for South Dorset (Viscount Hinchingbrooke) asked about equitable distribution. He asked—and I think there is some slight confusion in his mind—was there going to be a quota of aircraft? There is no conception of limitation of aircraft. What we want is some measure of agreed control of frequencies. The determination of frequencies will be based on a formula which has to be agreed, but we would like to see it based on a formula which will take traffic, actual and potential, into account, but is not based on the supply of available aircraft.

I would like to answer at once the question put to me by the Noble Lady the Member for Central Bristol (Lady Apsley). She said that an aircraft was being made in her division, and that there was a rumour that it was not being proceeded with because the United States did not like it, and because it was too modern. I only wish that some of the critics of that particular aircraft—known, I think, as the Brabazon One—had heard the tribute of the Noble Lady and the secondhand tribute of the United States, that it was so modern, because the criticism has always been that it is going to be out of date before it flies. Actually, I do not think it will be, but I assure the Noble Lady that there is no truth in her suggestion. That aircraft is being constructed so far as our policy of the first importance of military effort will allow. I think I have answered all the questions which have been put to me, and I thank the Committee for having given me this opportunity of endorsing what so many Members on all sides of the House have said, that we wish Lord Swinton well in his leadership at the Chicago Conference.

Question put, and agreed to.

Resolved:

"That a Supplementary sum, not exceeding £1,250,000,000, be granted to His Majesty, towards defraying the expenses which may be incurred during the year ending on the 31st day of March, 1945, for general Navy, Army and Air services and supplies in so far as specific provision is not made therefore by Parliament; for securing the public safety, the defence of the realm, the maintenance of public order and the efficient prosecution of the war; for maintaining supplies and services essential to the life of the community; for relief and rehabilitation in areas brought under the control of any of the United Nations; and generally for all expenses, beyond those provided for in the ordinary Grants of Parliament, arising out of the existence of a state of war."

Resolution to be reported upon Tuesday next; Committee to sit again upon Tuesday next.

I beg to move, in page 1, line 13, leave out from "shall," to end of line 17, and insert:

"to such extent as may be specified in the Order, have the immunities and privileges set out in Part I of the Schedule to this Act, and shall also have the legal capacities of a body corporate."

I indicated on Second Rcading that it was the intention of the Government to move Amendments the effect of which would be to set out clearly on the face of the Bill the maximum immunities which were to be given under the Bill. This Amendment is the first of two or three Amendments which will give effect to that intention. The Committee will observe that it brings within the general framework of the Schedule the immunities which are intended under the Bill. I do not think the Committee will expect me to give a further explanation. Our intention is, I think, quite clear, and I did explain that intention on Second Reading.

The Amendment proposes that these organisations shall have the legal capacity of a body corporate. Will that entitle them to take legal proceedings in this country against British citizens?

Yes, it will have that effect.

Amendment agreed to.

I beg to move, in page 2, line 1, leave out "persons," and insert:

"such number of officers of the organisation."

The purpose of this Amendment is to ensure that the Order in Council lays down the actual number of individuals who are entitled to the immunity described in the Schedule. Under the Bill, as it stands, it would only apply to high officers, and, theoretically, any number of officers of whatever rank, as was laid down, would be entitled to the immunity. This Amendment, and the succeeding one, enable us to define, in the Order in Council, not only the high officers concerned, but the actual number of individuals who will receive immunity.

May I ask for some kind of indication of what number of officers the Minister has in mind? When we had a Debate on this some time ago, we were rather perturbed because we thought a great number of people might obtain these very high privileges. Personally, I have never seen the necessity for the Bill, nor do I now. The Minister has made a number of concessions, but I think he ought to say what number of people the Government have in mind. Is it a dozen, or five, the heads of departments, or one from each State? What conception is in the Government's mind?

I think I can oblige my hon. Friend on that. Of course, the number concerned will naturally vary with different organisations. Take the case of U.N.R.R.A. Our proposals would be to give these immunities to officers of the rank of Deputy Director-General and upwards. As I explained on Second Reading, in the case of U.N.R.R.A., there might be seven or eight officers of that rank, of whom probably not more than three or four would ever be in this country at one time, and it is the purpose of this Amendment to ensure that, if we give organisations immunity for these Deputy Directors-General, the number of such Directors-General is limited.

This is quite different from any other form of diplomatic privilege we have ever had. Diplomatic privilege is something accorded to the representative of the head of a foreign State, and certain other people in his building, and, as a rule, the building—the Embassy itself—is deemed to be part of the foreign country concerned. But, now, we are going to have, it may be, a dozen people, Directors-General or upwards—I do not know what the title is above that—and you are going to have them in a building which is not part of another State, though it may have a measure of diplomatic immunity, a number of people who are citizens of several different countries. You will have the extraordinary situation of Mr. A., who comes from one country, and Mr. B., who comes from another country, in the same building, both having diplomatic privilege and being immune from certain legal processes. But are they immune from legal processes one against the other? You are going to have the extraordinary situation of a Czech gentleman and an American gentleman working in adjoining rooms, or in the same room, and each having diplomatic privilege. The one is not living in part of Czechoslovakia, and the other is not in part of the United States. They are living in a building in London which is not part of another State. What is their status? It is a very extraordinary situation. We have never had this situation, except in a building which is deemed to be part of another country. I do not know where we are going.

I think the point raised by my hon. Friend, though extremely interesting, is rather outside the scope of this Amendment, the purpose of which is to put some limit on the numbers of individuals who get immunity under Part II of the proposed Schedule on the Paper. With regard to my hon. Friend's general point, I think it is obvious that those individuals will have diplomatic immunity one against the other, and, unless it was waived, that immunity would stand. I did make it clear on Second Reading that, in cases of crime, or breaches of the peace and so on, we would expect that diplomatic immunity to be waived, and, in fact, that is the custom in international organisations of this kind.

May I ask how these Orders in Council will be arranged? Will the Government present to the House an Order in Council whenever one of these new organisations is established in this country, and will the Orders have to be modified every time there is a change in the number of officials in any particular organisation? According to the wording of the Amendment, it is now incumbent upon the Government to specify the number of persons who are considered to be high officers of any particular organisation.

I think the answer to my Noble Friend's question is this. Certainly, every new organisation will have to have its own Order in Council. If, after an Order in Council has been applied to a particular organisation, there is any desire or need to extend the privileges of that organisation, or the numbers of people who enjoy those privileges, it would obviously require another Order in Council to do that.

Amendment agreed to.

Further Amendment made: In page 2, line 1, leave out "who hold," and insert:

"as may be specified in the Order, being the holders of."—[Mr. Law.]

I beg to move, in page 2, line 3, leave out "or represent any," and insert:

"and upon any person who is the representative of a"

The purpose of this Amendment is, again, to limit the immunities which are granted under the Bill. As the Bill stands, any person who represents a Member-Government on the governing body of the Committee would get this immunity. Our intention is, not that every single representative would get immunity, but only the one individual who could be described as the representative of the Government. The other members of his team, advisers and so on, would not get immunity.

Amendment agreed to.

Further Amendment made: In page 2, line 5, leave out from "organisation," to end of line 8, and insert:

"to such extent as may be so specified, the immunities and privileges set out in Part II of the Schedule to this Act."—[Mr. Law.]

I beg to move, in page 2, line 9, leave out paragraph (c).

The purpose of this Amendment is to limit the privileges conferred under the Bill to those high officers who Come under paragraph (b) and to delete subordinate officers. I made no secret on the Second Reading of the fact that I disliked the Bill and I was sorry that the House gave it a Second Reading. But the House has done so and the principle of the Bill is accepted, and the question we have to face is the extent to which that principle should be applied. It should be confined to persons of high office in these organisations, and, if my Amendment were carried and paragraph (c) were omitted, it would have that effect. We are in a little difficulty in this matter because we do not know, and in fact have no idea at all, what number of persons would be likely to be affected if paragraph (c) remained in the Bill. No one can tell us that, because no one knows how many organisations will eventually come under the Bill nor what number of persons they may seek to employ in this country. The only possible light to be given to it is by the analogy of the present practice with regard to diplomatic rights in this country.

In answer to my hon. Friend the Member for South Salford (Mr. Stourton) on Wednesday last, the Minister gave some very interesting figures. He told us that at the present time there are some 22 ambassadors and 15 ministers accredited to the Court of St. James, and that there are some three other missions in the country who have no one of that rank to represent them. He told us in respect of these matters that there are at the present time in this country, on the staffs of these various missions, persons holding diplomatic rank to the number of 359, and further, that there are persons in subordinate positions on their staffs to the number of 325, making the very large total of 684 persons, who are more or less covered by diplomatic privilege in respect of these various missions. That is a proportion of rather more than 16 to one as between the subordinate persons and heads of missions, but I cannot see whether, in the case of these organisations we are now considering, the proportion will be smaller, higher or lower. There will need to be multiplications of these organisations and we would not go far wrong if we said that the proportion would be higher.

We are faced with the proposition that these hundreds of people are to be given immunity in greater or lesser degree from the laws of this country while they are working for these organisations. I ask the Committee to consider that very seriously, and to think whether we are wise to extend the principle of the Act to that extent. These people are being put above the law; in the words of the Government,

"they are to be given immunity from State and legal processes in the course of the performance of their official duty."

It is not very easy to foresee exactly the precise difficulties that arise, and I have no doubt that there will be some very surprising difficulties. The unsatisfactory position we would be in with regard to the question of the traffic law was pointed out by various Members on Second Reading. Whereas British subjects, when driving motor cars, are restrained from committing offences by the fear of imprisonment, such a restraint would not operate in the case of the officials of these organisations who were going about their business.

There is the question of relief from Income Tax. I put to the Minister of State on the Second Reading what seemed to me to be a very serious dilemma, and I asked him to address his mind to the fact that what he was proposing was this. If in the same office, employed upon the same work, and paid the same salary, there were two persons, both British subjects, one domiciled in this country and one not so domiciled, according to this proposal, the one domiciled in this country would pay Income Tax, and the one not so domiciled would not pay Income Tax. With Income Tax at the present level, that would mean, in effect, that one would receive twice the amount of the other man for doing the same amount of work. The Minister was not very anxious to deal with the point, and I had to remind him again at the end of his speech, and all he could say was that he did not think it would be a very well run office if two people were employed to do the same work with such different conditions. That was a very poor answer.

This proposal under the Bill is laying down that that should be the law. We ought not to agree to the creation of such a situation with regard to the staffs and different organisations. We do not know how many there may be, but I suggest, on the figures I have quoted, we shall be dealing with the cases of hundreds of people. While we agree with the principle of these amenities for the persons at the head of these organisations, it should stop there. I cannot see that any real justification has been offered to the Committee, as yet, going any further, except perhaps that the Government have been a little hasty in their conversations with other countries and sometimes assume that the House of Commons will do whatever they ask. We should draw the line here and say, "You may have these exceptional privileges for the heads of these different organisations but we will not grant them to all and sundry."

When the Minister comes to reply there are two points on which I hope he will give us further information. Paragraph (c) says:

"To confer upon such other classes of officers and servants of the organisation … as may be specified in the Order."

It will be within the discretion of the Minister or the Foreign Office to decide the people they consider it necessary to include. He may be able to give some information of a more detailed kind about what subsidiary officers and servants it would be suitable to include under the Order. The other point on which I hope that he will give us some further information is this. I do not consider that on Second Reading or at any time we have really had put forward any real justification of the necessity for including this class of official within the realm of these diplomatic privileges. So far as I remember, the main point which the Minister made on Second Reading was that it was very undesirable that a lawsuit should be brought against any high official of a foreign Government, and that if that were done, some political issue might in some way be brought in and tagged on. It does not seem to me, however, that that can reasonably apply to subordinate officials. I should not have thought that was sufficient reason for including them, and I hope that if the Minister insists on retaining this section, he will now give us some much more definite information and more definite reason why it is necessary to include these persons.

I would like the right hon. Gentleman to deal with the question of the diplomatic bag when he replies. Are all these people to have privilege for their correspondence, or will that correspondence be liable to censorship like everybody else's? It seems to me a rather serious matter if we give these hundreds of people immunity from censorship at the present time. We do not yet know exactly how and when the war will end, and there has recently been a case in which considerable anxiety was felt about leakages of a certain nature from this country through the diplomatic bag. While that was unavoidable in the case of an ordinary legation and embassy, and was recognised to be so unavoidable, it does not seem to be quite the moment when we should present a large number of stray people, here from all over the world, with the privilege of having their letters passed abroad uncensored from this country. If my right hon. Friend could enlighten me on that, and assure the Committee that that is not so, I think we should all be relieved. If it is so, I wonder whether this matter ought not to be looked at further?

I feel a good deal of sympathy with the Amendment moved by my hon. Friend the Member for Colchester (Mr. Lewis). In the adjourned Second Reading Debate, I was unfortunately not able to hear the speech of my right hon. Friend, but I read it afterwards. I am bound to say that it did not remove the objections which I have felt to this Bill from the time it was first brought here from the other place. This Bill curtails in very drastic fashion the rights of a very large number of British citizens to make claims for personal injuries, for workmen's compensation and for a number of matters of that nature. As I understood what was said by my right hon. Friend on the adjourned Second Reading, his answer was: "Well, this, in practice, will not matter very much, because arrangements will be made behind the scenes with the ambassadors or the heads of these organisations who are quite willing to waive their rights in appropriate cases and with the insurance companies who are also sometimes interested in these matters. All these arangements will be made and, in fact, nobody will lose any advantage which they would enjoy if they were entitled to pursue their normal legal remedy."

That, to my mind, falls far short of the way in which we in this House ought to deal with the rights of individuals. If it be the case that in all these numerous cases where claims for personal injuries and other matters arise, the ambassadors, or whoever are the persons at the head of these organisations, are going to waive their privileges and allow claims to be made in the ordinary way, then I see no reason at all why we should include all these subordinate officials in the scope of this privilege. I should have thought that if these claims are in any event to be allowed, it would have been very much better to leave all these subordinate people outside the scope of diplomatic privilege altogether and to allow persons who have legal claims against them to pursue their claims in the ordinary way.

I feel there is a tendency growing on the part of Governments to expect the House of Commons to agree to these informal arrangements, and to regard an informal arrangement of this kind as a satisfactory substitute for the legal rights which the law of England vests in every British citizen. I cannot take that view, and I must say, as a matter of principle, that I should prefer to leave persons who have legal claims to their right to establish those claims, if they can, in the usual way in the courts and not to make the success or otherwise of their claims depend upon arrangements which are made, no doubt with the best will in the world, between different classes of officials or functionaries. For that reason I cannot see why this Bill should be extended to this much greater class of additional individuals to whom my hon. Friend's Amendment refers.

There is one point among the many others I discussed on Second Reading which worried me and which still continues in my mind. I notice that immunity is given to several hundred people—maybe 1,000 or more—who are acting under the instructions of the corporation and who could not claim immunity if they acted as private individuals. What I am concerned about is that they are apparently given immunity only for the purpose of their official duties, but who is to say what is an official duty or not? The corporation. That is the point. The corporation might come in and cover innumerable acts which a private individual could not normally do in this country, and I should like an assurance from the right hon. Gentleman that a corporation will not constantly bring its servants under its wing and say. "Oh yes, he acted in such a way on this occasion under our instructions; we know that if a British citizen had done that he would land himself in trouble, but we will put our arm around him and say that on this occasion the act is one which we had instructed him to perform." That position might well arise in innumerable cases. In view of the answer given a moment ago to the hon. Member for North Battersea (Mr. Douglas) we must remember that a corporation can sue a British citizen when it pleases at any time; therefore, we must see that it does not unduly protect its own servants.

The Amendment to this paragraph deals with the junior classes of officers and servants of the proposed new organisations. The Minister in a moment will introduce an Amendment to the same paragraph, and that Amendment will have the effect of introducing Part III of the Schedule on the Paper. I wonder, therefore, whether I should be in Order in making a reference now, since we are considering the general question, to Part III of the Schedule? I am not at all clear about what will happen if we pass the paragraph in this form, with the Schedule attached to it. It seems to me there will be several individuals, many of whom may be Czechs, Poles, possibly Americans, Canadians, and outer representatives of the British Dominions, many of them junior in age and of both sexes, who are going to receive immunity from rates and taxes. Presumably, diplomatic immunity will include permission to import various kinds of goods for their own use without any payment of Purchase Tax or Customs Duty.

I think my Noble Friend is under a misapprehension; there is no intention of giving these immunities.

That is what I do not understand. The words of Part III of the proposed Schedule, Subsection (2) say:

(a) "in the case of a British subject who is a national or citizen of, or who belongs to, any part of His Majesty's dominions outside the United Kingdom … like exemption from relief of taxes or rates as is accorded to an envoy of a foreign sovereign Power …"

That is to say, he has the same status as an ambassador. A young Canadian or South African is in exactly the same position as an ambassador. He can import wines, cigars, wireless sets, silk stockings and high-powered cars without paying Purchase Tax or Customs Duty. We seem to be getting into an extraordinary position, and I would be grateful if my right hon. Friend would explain the intentions of the Government.

I want briefly to support the Amendment which has been so ably moved by my hon. Friend the Member for Colchester (Mr. Lewis). I think the House must have been somewhat surprised, when I put two Questions to the Minister of State last Wednesday, to learn that there are nearly 700 diplomatic representatives in this country who are already receiving diplomatic privileges. I suggest that we should be very sparing in extending these immunities, and should confine them, as is suggested by the Amendment, to officials holding high offices, and exclude subordinate officials. I would remind the Committee that diplomatic privileges are open to serious abuses. I do not propose to quote any, because attention was drawn to them on the Second Reading of the Bill, and again in Committee by several Members. I therefore hope my right hon. Friend will see his way to accept the Amendment and exclude subordinate officials from diplomatic immunity.

I do not want to support the Amendment, but I do think a point should be made in regard to the problem which is now engaging the attention of the Committee. This discussion has brought out very clearly the fact that the whole question of diplomatic immunity has become extraordinarily complex and difficult in the light of modern world developments, and that it seems very necessary that very much more attention should be given to the problem as we move into the world of international relationships and international forms of organisation. It seems rather absurd that the methods, privileges and forms which were suitable to the old world should be perpetuated in the new world into which we hope we are moving. An hon. Member made the point that he was not satisfied that this Bill was at all necessary. For myself I would much prefer that the whole system of diplomatic privilege should be abolished if that were at all possible. But the point before us now is whether we should extend these privileges to junior and lower grade servants, as we are prepared to extend them to those in more privileged positions. I would urge the Foreign Office to make an attempt, in consultation with other Powers, to get some new international arrangement in regard to this problem. It has been pointed out that if this Amendment is lost the Government will operate Schedule III, so far as these classes are concerned. That means that certain privileges will be enjoyed, that these people will be immune from suit and legal process in respect of things done or omitted to be done in accordance with their official duties.

4.30 p.m.

What "official duties" mean it is difficult to say. During this war there have been a number of organisations in this country which have enjoyed immunity. They have violated certain accepted practices; they have broken certain recognised laws, and yet they have been outside the law. Before we go on bringing in big classes of people into this category there should be an examination of the question, not only by the Foreign Office itself, but by that Department in consultation with other countries. Some of these offices may very well be established in London. There might be hundreds of clerical workers, and others such as cooks, butlers and the most menial servants, who would be entitled to these special privileges. If that be so, the problem ought to be freshly considered by the Powers concerned in order that we may get a convention on this question of immunity and an organisation which fits into the facts of the modern world.

We are considering paragraph (c) but we are also considering the necessity of Part III of the Schedule. Let us suppose that one of these gentlemen is driving a motor car on official duty. He is immune from suit and legal process. He can exceed the speed limit, drive past traffic lights and do things for which some of us from time to time have suffered legal processes. Suppose he was employed by U.N.R.R.A. He could say, "I am driving for U.N.R.R.A. I have gone past the traffic lights, I have bumped into somebody, I have driven on the wrong side of the road, and I had my head lights on when I ought not to have had them on." Are such people to be immune? I would like to know, because, if so, I would like to be immune myself.

I very much wish I could oblige my hon. Friend the Member for Colchester (Mr. Lewis), and other hon. Members who have supported the Amendment, by accepting it on behalf of the Government. But I am afraid that if I did accept it it would render the purposes of this Bill absolutely nugatory, and I greatly fear that if we put subordinate officials outside the operation of this Bill the purposes that we have in mind in putting this Bill forward would be almost completely thwarted. Perhaps I should explain to the Committee these immunities to subordinate officials. There are two kinds of immunity—and only two—that we propose in the proposed Schedule.

First there is immunity from Income Tax. The reason why it is desirable to exempt these officials from British Income Tax, assuming that they are not British subjects ordinarily living here, is that to levy taxation upon them would really be defeating the purposes which the House of Commons had in mind when, in the case of U.N.R.R.A., it voted £80,000,000. It voted it in order that U.N.R.R.A. might carry out specific functions and perform certain operations which it seemed to the House of Commons were in the interest of this country as well as of the nations in general. If Income Tax is levied here on the servants of U.N.R.R.A., it means that we are deducting from that £80,000,000 whatever the amount may be that we are deducting in taxation. That is not in itself a very fair thing to do.

When the House of Commons votes my right hon. Friend his salary and subsequently deducts Income Tax, is it not doing precisely the same thing?

I do not think it is, because in this case it would not stop there. We give an undertaking to subscribe to the purposes of U.N.R.R.A. one per cent. of our national income for one year. Just because it happens that the office of this organisation is centred in London, within our control, we are theoretically in a position to deduct Income Tax, and therefore to give to U.N.R.R.A. for its purposes something less than one per cent. But it would not stop there because, while we might theoretically gain some trifling advantage by deducting Income Tax here, if every other country did exactly the same thing we should lose on balance far more than we gained. If we really vote money for an international organisation of this kind for certain purposes, if we intend the purposes to be carried out to the fullest possible extent of the money voted, we ought in common sense and fairness to the other contributors not to levy taxation on the salaries of the servants, which are derived from the organisation.

This is an argument about taxing U.N.R.R.A. We are not talking about taxing U.N.R.R.A. U.N.R.R.A. employs a man at a certain salary. Are these foreigners going to pay the Income Tax, if there is any, of their own country? The British Ambassador at Washington gets so much salary and so much expenses. On his salary he pays Income Tax, because he is deemed to be resident in the United Kingdom. Are these employees who come from other countries going to be exempt both from our taxation and their own national taxation?

I do not think it is possible to say anything definite on that point. I think it is purely an arrangement for the organisation itself.

I do not take the view of the hon. Gentleman, but I think it should be clarified. There are officers in Washington who will be exempt from American taxation. Is it the case that all that is proposed is to apply the same principle to foreign officials resident in this country? Would they not be liable to ordinary taxation as nationals of their own nation?

The right hon. Baronet is right. I have no doubt that we shall be accorded the same privilege in New York, for example, that we are willing to accord in London. With regard to the point raised by my hon. Friend the Member for South Croydon (Sir H. Williams), he said this was not a question of taxing an organisation but individuals in the organisation. I do not think there is a great deal in that argument, because the organisation has to pay the salaries of these people. It is only the salaries derived from the organisation which are involved. If British taxation was levied, the only effect would be that the organisation would have to pay higher salaries than otherwise.

On a point of Order. The Amendment is to omit paragraph (c) and to exclude certain persons from diplomatic privileges. Some hon. Members have been referring to the Third Schedule. It is a matter which some of us wish to discuss when we come to it. May I ask whether the present discussion will in any way invalidate our right to discuss it when we come to it?

If the discussion went too far it would. I was hoping that it would only he a reference.

I think it is clear that it would be more convenient if I did, not pursue the argument further but waited until we have a chance to discuss it on the Schedule. My hon. Friend the Member for Gravesend (Sir I. Albery) asked me to explain why we had to insist upon retaining this paragraph. Almost everyone who has supported the Amendment has seemed to regard immunity from legal process in relation to official acts as precisely the same thing as immunity from legal process for all other acts. The hon. Member for Southampton (Dr. Thomas) said it was entirely limited to official acts, but who was to define what was an official and what a private act? He went on to say that obviously it was the organisation which would give the definition, and therefore the subject had no protection. I am sure in this case he is quite wrong. If an action were brought against a member of an organisation and there was some doubt as to whether the offence had been committed in pursuit of his official duty or in his private capacity, the onus of proof would be on the defendant, and he would have to satisfy the court that it was an official and not a private act.

rose—

It would be for the court, and not for the corporation, to decide. The court would not have to accept the word of the corporation that it was an official act. The onus of proving that it was an official and not a private act would be on the corporation and, if it did not satisfy the court, diplomatic immunity would not arise.

Suppose the case of a person driving a motor car to convey himself and other people. He is one of the persons entitled to immunity. A policeman tells him he has broken the law, but the driver claims diplomatic immunity. The policeman, however, summons him and the person does not appear. What is the court to do in a case like that?

The position is the same as at present. What my right hon. Friend said is quite right. If this privilege is claimed, somebody would go with an affidavit to the court making the claim, that the court would have no jurisdiction. If the prosecutor disputed it, it would be for the court to decide.

Suppose he never goes to the court?

He has got to claim the immunity, and if he fails to claim it, immunity is waived.

I was drawing the attention of the Committee to the fact that this immunity from legal process applies only to the official acts of the subordinate members of the organisation. It is quite clear, I think, that no injury can be suffered by a British subject under this Bill. As regards cases of traffic accidents which more than one hon. Member has mentioned, I endeavoured to make it clear on Second Reading that we have got the procedure so tied up that the victim of a motor accident, where the aggressor, so to speak, is somebody who claims diplomatic immunity, is at no disadvantage. More than one hon. Member on Second Reading and in the discussion to-day drew attention to the case of a German diplomat before the war who ran down a British subject, and then claimed diplomatic immunity, with the result that the British subject had no remedy. I would like to clear up one or two points on that case. It was the case of a certain Dr. Auer, who ran down a Colonel Simmonds. Colonel Simmonds got some damages from the insurance company, but they were thought to be inadequate. That event took place, not shortly before the war as was described, but in 1933. It was as the result of that case that the new arrangements were made under which it is now impossible for the victim of a road accident to be without legal or, at any rate, practical redress.

With regard to legal immunity in general. I think that the House agreed on Second Reading with my argument that it was necessary to give immunity from legal process to the organisation as a whole because, if you did not do that, you would inject into the courts, under the guise of legal and justiciable issues, a great deal of political argument which would be extremely damaging and dangerous. If the Committee accepts that argument, as the House accepted it on Second Reading, it really defeats the whole purpose of the Bill if we exempt from that immunity from legal process the subordinate officials of the administration, because, quite clearly, if we exempt the administration and do not exempt the officials, one could bring an action, not against the administration in form, but against the officials of the administration. That action, however, would in fact be directed against the administration as certainly as if one were legally able to bring an action against the organisation direct. I do not see how it is possible to get away from that position. Therefore, I would ask the Committee to accept the argument that, if we are giving immunity to the organisation, it is a necessary concomitant that we should give legal immunity to the subordinate officials of the organisation.

My hon. Friend the Member for Gravesend asked me what kind of subordinates it was intended should receive these immunities. Obviously, the kind of people we have in mind are those who could be attacked in the courts in the name of the organisa- tion. That means that they would be people who had official tasks to perform which brought them into business and other relations with British subjects. There is no intention of applying the provisions of the Bill or giving legal immunity to doormen, liftmen arid servants in the narrow sense of the word. It would be confined to people whom one could describe as officials of the organisation.

Suppose the doorman was carrying an important message. That would, for a particular moment, be an important function. Should he not, too, have immunity. Why not?

It is our intention to limit the immunity to the classes of person I have described. We shall have to run the risk about which my hon. Friend is so sensitive and fearful. I would again explain that, much as I would like to oblige hon. Members—and the Government have done a good deal to meet legitimate criticism—it would not be possible to do so on this occasion without going against the whole principle of the Bill.

The Committee should realise how far the argument used by my right hon. Friend has taken us. He has been pressed on many occasions to give the reasons why it is necessary to extend these privileges to subordinate persons. He has been reluctant to do it, but he has now given one specific reason. It is in order that these organisations might get cheap labour, for he said that if these people had to pay taxes they would want more money. That is a monstrous suggestion. Why should they be entitled to get cheap labour in this way?

Consider what will happen. We get an organisation of this kind set up in London. A post falls vacant. It could be filled perfectly well by an Englishman or a Frenchman, or someone of another nationality. The Englishman applies for the job and he is told that the payment is so much a year. He replies that when Income Tax is taken off he could not live on such payment for work of that kind. The Frenchman applies, and when he is told what the payment is, he says that the job is worth twice as much to him. That argument shows the complete folly of this proposal. I would commend it particularly to the attention of hon. Members opposite. Are they going to vote for a proposal which, the Minister has plainly told us without any equivocation at all, is desired to enable this organisation to employ cheap labour?