House of Commons
Tuesday, February 5, 1946
Prayers
[Mr. SPEAKER, in the Chair ]
Oral Answers to Questions
Employment
Distributive Trades
asked the Minister of Labour whether it is his intention to permit the absorption by the distributive trades of as much labour as they employed before the war; and if not, what steps he proposes to take to prevent it.
I have no intention of taking powers to prevent employers in the distributive or any other trades from filling vacancies with available workers, or workers from entering any employment that is available to them.
Is my right hon. Friend aware that between 1925 and 1939 the numbers employed in distribution increased by some 600,000, and does he not agree that if the additional labour required for export, the building industry and agriculture has all to come from the manufacturing industry, there will be a serious reduction in manufacturing output?
I am afraid it would require a memorandum to answer all the questions contained in that supplementary, but the essential point is, if 600,000 persons extra were employed in distribution, it was because the employers wanted them, had work for them, and were willing to pay them.
Will the right hon. Gentleman be careful to do nothing to penalise the distributive trades merely because they are distributive trades?
asked the Minister of Labour whether he has any information to show that shop-keeping employers are not utilising employment exchanges to secure adequate staffs for their shops.
My information shows that shop-keeping employers are notifying vacancies to employment exchanges in considerable numbers.
Is the right hon. Gentleman aware that the Parliamentary Secretary to the Ministry of Food stated in public the other day that shopkeepers were not utilising labour exchanges in engaging employees and that is one reason why there are queues at food shops, and whether we may take it for granted that he does not agree with his colleague in the Government?
I would not like to commit myself to that; all I can say is that my information is accurate.
Agricultural Workers (Wages)
asked the Minister of Labour whether he is prepared, in collaboration with the Minister of Agriculture, to take steps to secure the establishment of a basic wage of £4 10s. per week for all agricultural workers.
The responsibility for fixing minimum wages in agriculture rests with the Agricultural Wages Board, which is constituted under Act of Parliament.
May I take it that the answer is "No"?
Is not this matter necessarily dependent upon the Government reaching a national wages policy in general, and is not the time for this long overdue?
I do not think that applies at all.
Is the Minister aware that a previous Minister of Labour intervened in the question of agricultural wages to the benefit of the workers?
Light Clothing Trades
asked the Minister of Labour, why the basic minimum rates for time work, for piece work and for learners in the light clothing and allied trades are higher in Scotland than in England; and whether he will now take steps to bring them to the same level.
The statutory minimum remuneration for workers in these trades is fixed by Orders giving effect to proposals by the wages councils, of which there are two for this trade, one for Scotland and one for England and Wales. New proposals for increasing the remuneration of workers in England and Wales have recently been submitted to me and are under consideration. I have no doubt that all relevant considerations have been taken into account by the wages council in framing these new proposals, and I would not propose to exercise my authority to refer them back simply on the ground that in some respects they differ from those operating within the scope of the Scottish Wages Council.
May we take it that this discrimination is a form of inverted compliment to the extra efficiency of Scottish workers, and is it symptomatic of the discrimination which we may expect in nationalised industry?
No, Sir, it might be symptomatic of a desire to keep Scotsmen in Scotland, where they can get better wages, instead of letting them come to England.
Let the Scottish employers put that in their pipes and smoke it.
Building Workers, Scotland
asked the Minister of Labour whether he will state the number of men employed in the building industry in Scotland on 31st December, 1945.
Building industry figures for Scotland based on the annual exchange of U.I. books are only available each July. I am informed by my hon. Friend the Minister of Works that it is not possible at present to give employment figures for any later date.
Is the right hon. 'Gentleman aware that on nth December he stated that in July there were 35,600 workers in the building indus- try in Scotland, and why cannot he give a roughly comparable figure for December?
That figure was based on the July return of unemployment insurance books. There is a good deal of fluctuation one way and the other, but if it will assist the hon. and gallant Gentleman, I will give him provisional estimates. They cannot, however, be absolutely accurate.
Could they be circulated in the OFFICIAL REPORT, as they are of general interest?
Statistics
asked the Minister of Labour what is the present number of men and women, respectively, employed in civil life and the corresponding number six months ago.
I am not sure what the hon. Member means by "employed in civil life" but the number of men aged 14 to 64 and women aged 14 to 59 engaged at the end of November last, the latest date for which figures are available, in employment and services other than in the Armed Forces and the Women's Auxiliary Services is estimated at 16,070,000, compared with 16,330,000 at the end of June. If, however the hon. Member means the number engaged on work for export and home civilian manufacture and services, the corresponding figures are 13,806,000 and 12,427,000 respectively, showing an increase of 1,379,000. All these figures exclude private domestic service.
Can the right hon. Gentleman say why the labour situation today is quite as tight as it was six months ago—
Much tighter.
—in view of the fact that demobilisation has been proceeding? What has happened to all these men and women?
That is quite a separate question. [HON. MEMBERS: "No."] With all respect I think it is a separate question. I have tried to understand the original Question. If the hon. Gentleman will make clear what he has in mind I will try to make clear what is in mine.
Engineering, Trafford Park
asked the Minister of Labour whether is he satisfied that redundancy of engineering personnel in the Trafford Park area is being efficiently disposed of.
Yes, Sir. I think the difficulties are being satisfactorily overcome.
Is the right hon. Gentleman satisfied that there is adequate and frequent consultation with the Board of Trade in solving this difficult problem?
That is rather another question. I was asked whether I am satisfied redundancy is being efficiently disposed of. I have confined myself to that. I am satisfied it is.
Would the right hon. Gentleman answer my point about consultation with the Board of Trade? I should be much obliged at having an assurance on that.
Certainly, Sir. Whenever this question of manpower relates to any question of pushing other work forward, there is active consultation—that is the word—"active" consultation with the Board of Trade.
Unemployment Statistics
asked the Minister of Labour how many registered unemployed to the nearest convenient date, obtain at Stretford, Urmston, Astley, Irlam and Cadishead
At 10th December, the latest date for which figures are available, the number of unemployed insured person suitable for ordinary employment on the registers of the Stretford and I
am employment exchanges were 162 and 2 respectively. There are no separate employment exchanges at Urmston, Astley or Cadishead.
Restoration of Trades Practices Act
asked the Minister of Labour if he is in a position to say when the Restoration of Trades Practices Act will be put into operation.
No, Sir.
Is the right hon. Gentleman aware that his predecessor gave a promise to restore these practices and privileges to the trade unions, which were surrendered in an abnormal situation, and can he give any idea when that promise will be implemented?
That promise remains and will be honoured, but I was asked when it will be honoured, and I cannot say when.
Compositors (Wages)
asked the Minister of Labour what was the average wage of compositors in the London area on 31st August, 1939, and 31st January, 1946, respectively; and how many separate increments were granted in the intervening period.
I am unable to give the average wage of compositors, but the established rate for compositors in general printing in the London area in 1939 was 89s. per week and is now 115s. per week. There have been four increments in the intervening period.
Does the right hon. Gentleman, who, I am afraid, has had experience himself in these matters in another capacity, realise what a heavy burden is placed on periodicals?
No, Sir. When I consider the profits made by these concerns with the shortage of paper, I am not satisfied they cannot well afford these increases.
Demobilisation
Progress
asked the Minister of Labour what is the present weekly rate of demobilisation for all Services; and is this rate the same as that attained at the end of December last.
In the first fortnight of January over 100,000 men and women each week were demobilised from the three Services. This is substantially higher than the figure for the last fortnight of December, 1945, which was reduced by the Christmas holidays and bad weather.
asked the Minister of Labour if he will state by what date it is expected that the demobilisation programmes of the Army, Navy and R.A.F., respectively, will be completed.
It is not possible to say at present when demobilisation will be completed, as this will depend on a number of factors which are now under consideration.
I do not think my right hon. Friend understood my Question, which relates to the current demobilisation programme due to finish at the end of June. Can he say whether that programme will be finished earlier than the end of June?
I would draw attention to the statement made by the Prime Minister in a recent Debate, to the effect that it is hoped that the extent of demobilisation planned for the end of June will be completed by the end of April.
Is it proposed to continue the present rate of demobilisation until this programme is complete?
It is proposed to continue the rate of demobilisation under the scheme I have already announced and we are now running at an additional 1,000 a week.
Building Workers
asked the Minister of Labour whether, in view of the approach of the best season for building, he is now prepared to extend the scope of Class B release to all bricklayers and other tradesmen in the categories of building and civil engineering and industries ancillary thereto, at present serving in His Majesty's forces.
Steps have already been taken towards achieving a balanced labour force in the industry by increasing the proportion of bricklayers and of certain other categories of building operatives, as compared with carpenters, within the total allocation of Class B releases to the building industry.
Has the right hon. Gentleman consulted with his colleague the Minister of Health on this matter, and is the Minister of Health quite satisfied with the present scope of release under Class B in the building and ancillary trades?
To the first part of the question, I can give an affirmative answer: I have consulted my right hon. Friend; as to the second part, whether he is satisfied, I do not think he will be satisfied until he has got every man I can obtain for him.
Volunteer Mineworkers
asked the Minister of Labour whether he is yet in a position to state when a release scheme will be formulated for men who, whilst in the Forces, volunteered for the mines.
I have nothing to add to the statement I made in reply to the hon. Members for South Islington (Mr. Cluse) and Bewdley (Major Conant) on 18th December last, a copy of which I am sending to my hon. Friend.
Agricultural Workers
asked the Minister of Labourhow many of the 18,000 men from the Forces, to be released under Class B for agricultural work, have so far been released; and whether he is prepared to increase the total to a figure over 18,000 in view of the shortage of labour in agriculture.
1,529 by 15th January, the latest date for which figures are available. As regards the second part of the Question, the answer is in the negative.
Is the right hon. Gentleman aware that that shows this emergency block release scheme is going far too slowly and will he take steps to accelerate it?
That block release scheme was announced only on 4th December, and I do not think it is going too slowly. Every effort is being made to push it along.
But two months have elapsed.
Women
asked the Minister of Labour if he is aware of the increasing difficulties experienced by many firms in securing female labour; and if he will now consider a revision of the demobilisation scheme as applied to women.
I am aware that a number of firms are experiencing difficulty in securing female labour. As regards the second part of the Question, I am not prepared to depart from the Class A and Class B release scheme.
Will the right hon. Gentleman say what he proposes to do to alleviate this position? Is it really necessary for him to continue to sit on the Bevin scheme like a broody old hen?
I should think it would have to be some size of hen to sit on anything associated with the name Bevin.
Brick Makers
asked the Minister of Labour what is the total number of brick makers now released from the Services under Class B scheme; and what is the average weekly rate at which workers are returning to the brick-making industry.
Complete information is not available as to the number of brick makers released from the Forces in Class B. Under the "block" release arrangements, however, 501 men were reported as released by 31st December, to return to the brick, tile and glazed pipe industries. In addition, a number of brick makers are included in the workers named by the Ministry of Works for release to the building materials industries, but in the case of these named workers it has not been found possible to keep separate statistics for releases to each occupation within the whole industrial group. As regards the second part of the Question, the figures for January are not yet available but the average weekly rate during December was 55.
Is the right hon. Gentleman satisfied that the release of men for brick making is adequate, and is there some means whereby priority can be given to the release of these men to increase the supply, as, I understand, the bricklayers are being held up?
Priority is being given to the release of brick makers. This only began to operate from 4th December, and on 31st December we began to get the thing moving. We hope there will be plenty of bricks for the bricklayers to use.
Military Service
Agricultural Workers
asked the Minister of Labour how many agricultural workers it is proposed to call up during the period to be covered by the Class B release of 18,000 agricultural workers from the Forces.
It is proposed in 1946 to call up 8,000 men, the great majority of whom will not leave agriculture until after completion of the Class B programme.
Is the right hon. Gentleman aware that his offer of 18,000 men under Class B is therefore quite illusory, and does he understand how serious it will be for the country if not enough young men go into farming during the next 12 months?
That, and all other relevant factors, and some which might be possibly considered irrelevant, are taken into consideration. But the manpower for the Forces must be obtained, and the same thing applies with other industries. Meantime, there is a rapid increase in the number of men coming out under Class A, and the question will be examined again should there be any need to make a change.
Is the right hon. Gentleman aware that there is a steady and continuous decrease in the number of people employed in agriculture, and that in order to implement the programme of the Minister of Agriculture, it is necessary that there should be an increase of something like 250,000?
That is not the question I was asked. I was asked about men coming out of the Forces, and I have answered that.
Personal Case
asked the Minister of Labour whether he will take steps to ensure the exemption from call-up for the Army of Percy George Humphreys, who volunteered for service in the Merchant Navy six years ago, served on the high seas throughout the war, went on several Arctic convoys to Russia, received the Africa Star, and is now employed building houses for the Huntingdon R.D.C., particulars of his case having been given to him by the hon. Member for Huntingdon on 15th January 1946.
I have no power to grant exemption from liability for service under the National Service Acts, but the present position of Mr. Humphreys has been explained in the letter sent to the hon. Member on 30th January.
Will the Minister tell the House how he justifies compelling young men to serve in the Army in peacetime when they have braved the perils of the seas for six years in wartime?
I am merely operating the terms of the National Service Act, by which I am bound.
Will the right hon. Gentleman take steps to change his decision in this case?
I will be very glad to look into it, and see whether there is any possibility of doing so in circumstances such as these.
Scotland
Housing
asked the Secretary of State for Scotland how many houses were completed in Scotland during the six months ended 31st December, 1945; and how many are still required to house the people.
According to the latest information available, 921 permanent houses and 434 temporary houses were completed in Scotland during the half-year ended 31st December, 1945. It is estimated that approximately 500,000 houses are required to meet the Housing problem in Scotland.
In view of the undertakings given with such lighthearted irresponsibility during the General Election, is the right hon. Gentleman satisfied with that progress?
I hope the hon. and gallant Gentleman is not going to make me responsible for lighthearted declarations made in many quarters during the Election. I have enough to do to take responsibility for my own statements, which were serious and earnest.
asked the Secretary of State for Scotland how many houses in Airdrie are controlled or owned by Scottish Special Housing Association; what are the rents charged for these; and how does this compare with rents charged for houses of similar size owned by the local authority of Airdrie
The Association own 56 houses at Airdrie. Of these, 36 were requisitioned by the Ministry of Supply who let them to transferred war workers at non-subsidised rents of £28, £33 and £38 a year for 3, 4 and 5 apartment houses respectively. The remaining 20 houses, all of 3 apartments, are let with the aid of Exchequer subsidy at £ij per annum to persons rehoused from unfit or overcrowded houses. The rents of comparable houses built with Exchequer subsidy by the Town Council vary from £13 to £32 for 3, 4 and 5 apartment houses.
Is the hon. Gentleman aware that the figures he has given me are in violent conflict with those submitted to me from the Town Chamberlain of Airdrie, and that the rent for a three-apartment flat is not £iy 10s. but £20, and not let as he described to workers, but are let—
Speech.
The hon. Lady is giving information and not asking a question. This is Question Time.
Is the hon. Gentleman aware that houses are let to blitzed people from Clydebank who are unemployed and simply do not understand the great disparity between the local authorities' rents and the rents of the Scottish Association?
These figures are supplied to me by my Department and I accept them as being reliable. If the hon. Lady challenges them, I should be grateful if she will send me her information, and I will gladly look into it. As regards the rents, if she will send me any further information, I will examine it and gladly say who is right or wrong.
asked the Secretary of State for Scotland if he will make a statement with regard to the completion of the unfinished houses at Whithorn, Wigtownshire.
The building of these houses was suspended during the war and difficulties with regard to drainage have postponed their resumption. I understand, however, that the town council have now received tenders for the completion of the houses and that these will shortly be submitted for my approval.
Will the Parliamentary Secretary bear in mind that the unfinished state of these houses for so long has caused great inconvenience to the inhabitants of this ancient and royal burgh, and will he give this matter careful consideration?
I am very grateful that it has been called to my attention. I think that the hon. Gentleman can now take it that there will be no time lost in having the houses completed.
asked the Secretary of State for Scotland if he will make a statement with regard to the delay in delivery of the 34 Swedish houses allocated to the county council of the Stewartry of Kirkcudbright.
The timber sections from Sweden arrived in this country about two or three months later than was originally anticipated. When they did arrive, in order to minimise the difficulties of local authorities on the site some weeks were spent in sorting out the timber sections at the ports of discharge. The first deliveries began during the week commencing 14th January and timber sections for eight houses were delivered that week to the Stewartry; arrangements have now been made for additional sections to be dispatched to this authority.
asked the Secretary of State for Scotland what steps have been taken to surmount the delays that have arisen in connection with the completion of the Orlit factory in Edinburgh.
Difficulties in the supply of cement asbestos sheeting for roofing the factory have been overcome by releases from emergency stocks. The only outstanding requirement to complete the factory is-roofing glass. As a result of a meeting which I had with representatives of the firm on this and other matters affecting progress in their housing work, I have arranged for the highest priority to be given to this demand and I understand that the glass will be on the site at a very early date.
Can my hon. Friend state what delay this has accounted for in the permanent housing programme?
I would not say that it was undue. The firm have overcome it by adaptation in some ways. I trust that the firm will now be enabled to proceed expeditiously with this work.
asked the Secretary of State for Scotland whether he will consider raising the basic building limit figure for dwelling houses from £1,200 in Scotland, having regard to the fact that there is more broken time and higher transport charges for much of the material and fittings which come from the south and that a great deal of the building is done in stone.
This limit is being kept under constant review, but having regard to the current cost of house-building by local authorities in Scotland, and to other relevant considerations, we would not be justified in raising it beyond £1,200.
Is the Minister aware that the present figure of £1,200 has virtually prohibited the building of private houses in Scotland especially during the last six months? When you compare the figure for Scotland with England does it not show that it is discriminating against Scotland?
I would hardly agree with that, but if the hon. Gentleman has any new factors I will gladly look into them. I have not a very rigid mind on this question but even so I have not seen my way to alter it.
Is it a fact that a figure of £1,200 is considerably below the tenders received and accepted by local authorities?
On an average it works out the same because the figure for Scotland works out below that of England and in other cases it is higher. It depends on certain circumstances.
Is the hon. Gentleman aware that certain new factors as well as the factors contained in the Question on the Order Paper have raised the cost of building houses in Northern Scotland, and will he bear in mind that there is an increase of £300 on houses in Scotland compared with similar houses in England?
The facts are not with the hon. and gallant Gentleman. In certain parts of Scotland tendering is lower than that of England. As a matter of fact, at the moment the level throughout Scotland is lower than that suggested by the hon. and gallant Gentleman, and if he cares I will show him some facts of tendering which will amaze him in certain respects.
I said the North-West of Scotland.
asked the Secretary of State for Scotland the percentage per total population of houses built, other than by municipal enterprise, in the following cities of Scotland during the five years prior to the outbreak of war: Glasgow, Edinburgh, Dundee and Aberdeen.
The percentages of houses built by private enterprise to populations in Glasgow, Edinburgh, Dundee, and Aberdeen, are 08, 2.32, 75 and 1.43 respectively.
asked the Secretary of State for Scotland the number of houses in Glasgow in the course of construction on 1st January, 1946.
659 permanent houses and 151 temporary houses were under construction in Glasgow at 1st January, 1946.
Is the hon. Gentleman aware that there is a feeling of public disquiet at the slow progress made, and will he take all steps to expedite the building of houses?
As a matter of fact, the record of Glasgow on a comparative basis works out well with the rest of Britain, but that does not satisfy me, and I am constantly in touch with the Glasgow Corporation, and indeed with other local authorities in Scotland, with a view to a considerable increase in the building programme.
asked the Secretary of State for Scotland the percentage per total population of houses built in the following cities of Scotland during the five years prior to the outbreak of war: Glasgow, Edinburgh, Dundee and Aberdeen.
The percentages of all houses built by local authorities and private enterprise to the total populations in Glasgow, Edinburgh, Dundee and Aberdeen are 1.21, 3.16, 2.26, and 3.17 respectively.
asked the Secretary of State for Scotland the number of houses, temporary and permanent, at present being built in Edinburgh; the number of workmen employed; and the comparative figures for September, 1945.
At present 202 temporary and 364 permanent houses are under construction in Edinburgh compared with 66 and 232 respectively in September, 1945. The total number of workmen employed is 776, compared with 517 in September.
asked the Secretary of State for Scotland the number of houses, temporary and permanent, at present being built in Scotland; the number of workmen employed; and the comparative figures for September, 1945.
At present 1,950 temporary and 6,917 permanent houses are under construction compared with 505 and 4,539 respectively, in September, 1945. The total number of workmen employed is 13,600, compared with 8,900 in September. In addition, 1,580 German prisoners of war were employed in September, 1945, against 2,500 at the present time.
Does the hon. Gentleman realise that the figures which he previously gave to me, compared with those given now, suggest that it will take something like 50 years to satisfy the normal requirements of housing in Scotland?
On the figures I have shown I think that Scotland not uncreditably shows a marked development in housing, and I am hoping that this improvement will be accelerated and considerably increased in the next six months.
Will the hon. Gentleman explain to the Minister of Health how he managed it and encourage him to do the same?
I have enough trouble explaining my difficulties to my wife without explaining them to anyone else.
asked the Secretary of State for Scotland if it is his intention to give a monthly report of the progress of house building in Scotland.
Yes, Sir. The first report will be published in the latter part of this month, and it will show the progress made up to the 31st January of this year.
Fishing (Three-Mile Limit Encroachment)
asked the Secretary of State for Scotland if he is aware that on the nights of 26th and 27th December, 1945, 13 and 17 trawlers, respectively, were observed fishing in Hoy Sound between the Karn of Hoy and Marwick Head, in Orkney, many of them within the three-mile limit; and how soon he will be able to station a fishery cruiser in northern waters for the protection of the livelihood of the inshore fishermen.
I have been informed that unidentified trawlers were working as stated by the hon. and gallant Member. I am glad to say that my most recent information shows that there has been no repetition of large scale encroachments on the limits, and that a fishery patrol vessel has taken up duty in Scottish waters. Steps have also been taken to expedite the return of other cruisers to their normal duties In arranging the patrol careful regard will be had to the requirements of Northern waters.
Hill Cattle Subsidy
asked the Secretary of State for Scotland whether a decision has yet been reached with regard to the long-term policy to encourage cattle breeding by means of the hill cattle subsidy; what the subsidy is to be and for how long it will be paid.
With regard to long-term policy, I cannot usefully add to the reply given to my hon. Friend yesterday by my right hon. Friend the Minister of Agriculture and Fisheries. So far as 1946 is concerned, it is proposed to pay subsidy in Scotland on the same conditions as in 1945, except that the subsidy will be £5 10s. per head for breeding cows and£1 10s. per head for heifers and homebred bullocks.
Will the Secretary of State for Scotland suggest to the Minister of Agriculture that the system by which the subsidy is paid in Scotland is better than the English one?
It is not for me to suggest that. It seems that the hon. Member has already suggested it.
Is the right hon. Gentleman aware that there is an unsatisfied demand in many parts of England, where cattle breeding for various reasons is not suited to the locality, for high-class cattle, and will he have regard to that in considering the long-term proposal, so that we can purchase cattle from Scotland and not from Canada as hitherto?
I will certainly have regard to all the relevant factors.
A highly unsatisfactory answer.
County Committees (Farming Operations)
asked the Secretary of State for Scotland when it is proposed to publish detailed accounts of farming operations by the Scottish Board of Agriculture and by the W.A.E.C.s in Scotland; how much money has been spent on these operations; and what have been the total profits or losses.
asked the Secretary of State for Scotland if he will publish a list by counties of those farms requisitioned by the W.A.E.C.s, together with their acreage and the total profit or loss on each farm.
I am circulating in the OFFICIAL REPORT a statement, showing by counties the subjects requisitioned under Defence Regulation 51 and occupied and managed by the Department of Agriculture for Scotland or by agricultural executive committees in Scotland, their acreage, and the accumulated profit or loss, as at 30th November, 1944, the latest date for which figures are available. The net cost of these operations was £199,000 and the trading profit at that date amounted to £17,153. I do not propose to publish detailed accounts of these operations.
Why not? If there is nothing to hide, cannot we have the details? Some of these operations have been going on for so long as five years, and why cannot Parliament and the country know just what the profit and loss have been?
I have nothing whatever to hide so far as the administration of my Department is concerned, but it would require a tremendous amount of work to publish the details. I can assure the hon. Gentleman that we have nothing whatever to hide.
On a point of Order. I am not satisfied with that reply, and I beg to give notice that I shall raise the matter again on the Adjournment.
Following is the statement showing accumulated profit or loss as at 3oth November, 1944, in respect of farming operations on subjects requisitioned under
County. Subject. Acreage. Profit. Loss. A.— Subjects occupied and managed by Department of Agriculture for Scotland —— £ £ Argyll Torosay 12,000 3,517 — Ross and Cromarty Killilan and Glomach 32,000 — 1,880 Ross and Cromarty Braelangwell 4,470 — 963 Stirling Comer and Cailness and Rowchoish 6,739 — 1,394 Sutherland Invercassley, Langwell and Benmore 57,484 — 3,547 Wigtown and Kirkcudbright Craignell, Orchars and Roundfell 8,904 — 2,529 121,597 £3,517 £10,313 Net Loss= £6,796 (a) B.— Subjects occupied and managed by Agricultural Executive Committees —— Aberdeen Smiddyhill 25 10 — Aberdeen Newbigging Croft 14 — 20 Angus Kinnaird Park, Kilny and Pitmedie, Cossans, Dodd 651 3,721 — Argyll Ardencaple 940 — 224 Argyll Ballinaby 1,124 — 290 Ayr Balkissock 79 — 561 Banff Heads of Auchinderran 388 — 159 Dunbarton Allenpore 16 — 88 Fife Bandirran 300 434 — Fife Easter Upper Urquhart 877 5,959 — Fife North and South Cults 73 42 — Fife Bankhead, Inchdairnie, Auchmuir and Ryelaw 795 7,810 — Fife Dalbeath and Whinnyhall 375 349 — Fife Wester Coldrain 311 — 2,237 Fife Lingo 551 — 1,856 Inverness Milton of Leys 116 289 — Inverness Orbost 403 — 1,445 Inverness Mid Feabuie 34 163 — Inverness Waternish 196 — 2,188 Inverness 18 Liniclate 38 — 720 Kincardine Garberstrypes 80 150 — Kincardine Meetlaw 103 — 29 Kincardine Northhill Plantation 100 — 203 Midlothian Blackhill 145 — 191 Perth Bolfracks 155 — 385 Perth Middleton and Mains of Panholes 296 — 601 Ross and Cromarty 7 Garrabost 1 — (b) 75 Ross and Cromarty Balnagown, Balnagore, Rhives, Knockgarty, and Garty Smithy 1,386 16,815 — Ross and Cromarty Brae of Findon 133 322 — Ross and Cromarty Mid Craiglands 183 — 345 Selkirk Bowerhope 1,276 193 — Wigtown Broadwigg 352 — (b) 391 11,516 £36,257 £12,008 Net Profit =£24,249 (a) Total of A and B 133,113 Net Profit =£17,453 (a) Notes: (a) In calculating profit or loss, no account is taken of interest on capital, insurance or administrative expenses. (b) Position as at 30th November 1942; subject is now let and no further profit and loss account has been prepared.
Defence Regulation 51, and occupied and managed by the Department of Agriculture for Scotland or by Agricultural Executive Committees in Scotland .
Aircraft Industry
asked the Secretary of State for Scotland what steps he has taken to bring to the notice of the Scottish Council on Industry the necessity for an indigenous Scottish aircraft industry as an essential part of a balanced economy for Scotland.
The Scottish Council on Industry are fully alive to the importance of developing aviation in Scotland, and the need for maintaining an aircraft manufacturing industry was stressed in their recent Resolution on this subject. I understand that the council are exploring the position in consultation with industrial interests concerned in Scotland.
Can my right hon. Friend say what are the difficulties in the way of the establishment? Is it because of private enterprise being unenterprising?
Is my right hon. Friend aware of the fact that the Scottish Council on Industry is depending on his making representations to the Government to get an aircraft industry in Scotland?
The Scottish Council on Industry will not depend in vain on my putting up a fight so far as Scottish industry is concerned.
Milk
asked the Secretary of State for Scotland how many tuberculin-tested and standard licences have been suspended in Wigtownshire in 1943, 1944 and 1945, respectively; and how these compare with other counties in Scotland.
The numbers of tuberculin-tested (including certified) and standard licences revoked or suspended in Wigtownshire during 1943, 1944 and 1945 were 54, 40 and 46, respectively. The number revoked or suspended in all counties in Scotland in 1944 was 106. I regret that the figures for all counties for 1943 and 1945 are not available, but those for 1945 are being obtained. I shall communicate them to the hon. Member as soon as they are available.
Does not the Secretary of State consider that this high rate of suspension of licences is due to the fact that this county, situated as it is at the South-West extremity of Scotland, suffers from the long time which it takes to send samples for test? Will his advisers find some way in which this may be overcome?
I will look into the point. I am entitled to assume at the moment that one of the reasons for the revocation of so many of the licences is that the samples have been rather unsatisfactory, which consequently would justify the position which I have explained to the House.
Questions
Food Stocks (European Relief)
asked the Prime Minister whether, in view of his recent assurance that all possible food reserves will be released for relief in Europe, and of the statement made on 21st March 1945 that these reserves amounted to 6,000,000 tons, he will now state the total tonnage held in reserve at the outbreak of war and at 31st December 1945 or later suitable date.
At the outbreak of war stocks of food in the country, apart from those held by retailers and farmers, amounted approximately to 3 million tons, the comparable figure at 31st December, 1945 was 4.2 million tons. During 1945 stocks were reduced by 1,800,000 tons primarily to help European countries.
Can my right hon. Friend give us any indication of a further reduction?
I have given the hon. Member the figures.
Civil List Pensions
asked the Prime Minister whether, in view of the increase in the cost of living, he will consider reviewing the sums payable under the Civil List in recognition of valuable work.
The amount of the Civil List was increased by Parliament in 1937 from £1,200 to £2,500 a year partly with the object of increasing existing pensions. One hundred and nine pensioners have had their pension increased during the last five years, and the average new pension granted has also steadily increased. I intend to continue this policy.
Is the Prime Minister aware that many of the older people are suffering hardship at the present time owing to the increased cost of living, and in view of the increased salaries given to the Civil Service, will he consider this matter further?
I am aware of that and that is why I intended to continue the policy indicated in my reply.
In view of the fact that no party issue arises on this, and in view of the fact that some of the sums paid can only be described as derisory, will the right hon. Gentleman consider having an impartial body such as a committee set up to advise the House or him on how these pensions should be dealt with?
That is another matter but I should like to consider it.
Thank you.
Peace Celebrations
asked the Prime Minister whether, in view of the fact that between 3,500,000 and 4,000,000 tons of coal were lost in consequence of the German and Japanese V-Days, he will give an assurance that the country's depleted resources shall not be further depleted by more peace celebrations.
The consideration raised by the hon. Member is one of many which the Government will bear in mind before coming to a decision on the question of the nature and extent of victory celebrations.
Will my right hon. Friend be good enough to discourage all these celebrations until peace is actually restored to the world?
Can the Prime Minister who, like all the best Members of the House, was at Oxford, give us an assurance that he does not agree with these materialist and kill-joy views from Cambridge?
Yugoslavia (Pavelitch)
asked the Chancellor of the Duchy of Lancaster whether he will take steps to locate the Yugoslav war criminal, Pavelitch, reported to be at large in the British zone in Carinthia, Southern Austria, and have him handed over to the Yugoslav Government for trial.
Yes, Sir. Every effort has been, and is being, made to apprehend this man.
Official Visits Abroad
asked the Prime-Minister how many junior Ministers of the Crown left this country on official missions during the recent Parliamentary Recess; what countries were visited; what was the object of the respective journeys; what results were achieved in each case; and what was the total cost to public funds.
Five junior Ministers made official visits abroad during the recent Parliamentary recess.
The Parliamentary and Financial Secretary to the Admiralty visited Gibraltar; Malta, Italy, Egypt and Palestine to inspect Naval Establishments and Dockyards in the Mediterranean with particular reference to possible reductions in staff and to look into the question of speeding demobilisation.
The Parliamentary Secretary to the Ministry of Supply and Aircraft Production visited Germany to inspect Ministry activities in exploiting German research equipment and to discuss the Ministry's interests in Germany with the Control authorities.
The Secretary of Overseas Trade visited Denmark, Sweden and Norway in order to gain first-hand knowledge of the work of the commercial diplomatic posts in those countries and to make personal contacts with officials and business men.
The Financial Secretary to the War Office went to Germany to visit the Headquarters of the British Army of the Rhine and other units.
The Vice-Chamberlain of the Household accompanied by the Parliamentary Private Secretary to the Minister of Health visited Denmark and Sweden to look into the latest developments in the administration of the hospitals and health centres in those countries.
The knowledge gained and the personal contacts made in these visits have been and will be of great value to the Government. The approximate cost to public funds, which can be readily identified, of these five visits is £750;
Is the Prime Minister satisfied that in each case the Minister concerned asked himself this question, "Is my journey really necessary?"
Yes, I am quite sure they did and I asked it myself. I do not take a parochial view of these matters. After all, this country is a part of a great Commonwealth and Empire and it has wide connections with other countries. We have had visitors from many other countries—
Ask Bevin.
—and I think it is all to the good that there should be these contacts.
Can the Prime Minister tell us whether on any of these journeys any of these Ministers took any of their relatives with them?
Not to my knowledge.
Arising out of the original reply, might I ask the Prime Minister if any staff reductions have been effected by the visit of the Parliamentary Secretary?
No, Sir. I think that seems a very extraordinary question to ask. Does the hon. Member mean staff reductions or expenses?
The right hon. Gentleman said that the Parliamentary Secretary visited certain ports to look into staff reductions. Did he achieve any?
I hope I have explained in my reply that that was the object of one of the particular visits—to look into the whole question of staff reduction. Of course, staff reduction will take place.
asked the Chancellor of the Exchequer how many Members of this House left the country during the Parliamentary Recess on Government sponsored missions, whether as individuals or in groups; what countries have been visited; what is the estimated cost to the public of these journeys; and on which Votes will this cost be presented.
I will circulate these particulars in the OFFICIAL REPORT.
Following are the particulars:
Number of Members in Group .. Countries visited .. Cost .. Charged to Vote for 8 Germany £229 Army 6 Austria £76 Army. 8 Poland £70 Diplomatic and Consular Establishments, etc. 8 India £5,200 India and Burma Services.
( a ) Provision for the visit to India is included in the Supplementary Estimate H.C. 56 of 1946. It covers the expenses of two members of the House of Lords as well as eight members of the House of Commons.
( b ) The estimate for India includes the cost of air transport. For the other parties the figures quoted are exclusive of air transport costs which are charged to Air Votes and are as follows:
Germany £206 Austria £288 Poland £454
asked the Chancellor of the Exchequer how many visits abroad were made by Members of the Cabinet at the public expense during the year ended 31st December, 1944; what each of them cost his Department; how many members of the civil or military staff belonging to his Department went on each trip; and who accompanied the Minister, in each case, from amongst his personal relations.
As the answer is rather long I will, with my hon. Friend's permission, circulate a statement in the OFFICIAL REPORT. It may however, be summarised by saying that, in all, War Cabinet Ministers paid 15 visits abroad during 1944; the total of civil and military staffs from their Departments who accompanied them was 148; and on three occasions the Ministers were accompanied by personal relations. As these visits took place during the war, when transport and other facilities were provided by military authorities, it is difficult to provide any reliable figure of cost.
May I ask the Chancellor of the Exchequer whether he will compare the figures which he has now given with the answer the Prime Minister gave to Question number 47 today, in which it was stated that the cost of recent visits was only £750 and that only a handful of people was involved?
Undoubtedly the cost of such visits under this Government is "chicken feed" compared to the cost incurred during the war. I would add that in my view both were probably well justified. During the war it was desirable, and during the peace it is not less desirable, that Ministers and Members of Parliament should not stay stuck in this country but should move about the world, and particularly about the Empire, in order to perform their public duties.
While not wishing to dissent from Ministers travelling in time of peace,
Name of Minister. Destination. Date. Number of staff * from the Minister's Dept. from the Minister's Dept. Personal Relations accompanying the Minister. Rt. Hon. W. S. Churchill … Normandy … 12/6/44 3 nil. Rt. Hon. W. S. Churchill … Normandy … 20/7— 22/7/44 5 nil. Rt. Hon. W. S. Churchill … Italy … 10/8— 29/8/44 9 nil. Rt. Hon. W. S. Churchill … Quebec … Sept. 1944 65 Mrs. Churchill. Rt. Hon. W. S. Churchill … Moscow … 7/10— 22/10/44 17 nil. Rt. Hon. W. S. Churchill … Paris … 10/11— 14/11/44 12 Mrs. Churchill. Sub. Mary Churchill. Rt. Hon. W. S. Churchill … Greece … 24/12— 29/12/44 7 nil. Rt. Hon. A. Eden … Quebec … Sept. 1944 2 nil. Rt. Hon. A. Eden … Moscow … Oct. 1944 14 nil. Rt. Hon. A. Eden … Paris … Nov. 1944 5 nil. Rt. Hon. C. R. Attlee … Italy … Aug.— Sept. 1944 1 nil. Rt. Hon. Sir J. Anderson … Brussels … Nov.— Dec. 1944 2 Lady Anderson Rt. Hon. O. Lyttelton … Normandy … June 1944 4 nil. Rt. Hon. O. Lyttelton … Brussels … Sept. 1944 1 nil. Rt. Hon. O. Lyttelton … Italy … Sept. 1944 1 nil. * Excluding the Minister.Excluding the Minister.
Germany (Refugees, Repatriation)
asked the Chancellor of the Duchy of Lancaster whether he is aware that at the end of October, 1945, refugees in the Oldenburgh district of the British zone in Germany were paraded before a commission consisting of English, Polish and Soviet representatives, and forcibly repatriated against their will; and on whose authority this action was taken.
I have made inquiries in Germany, but I am unable to trace any record of this incident. Investigation is still proceeding and I should be grateful for any details in my hon. Friend's possession.
may I ask the right hon. Gentleman whether he would also agree that the results of the recent visits are "chicken feed" in comparison with the results of those made during the war?
Will the right hon. Gentleman furnish a copy of his answer to the Select Committee on M.Ps.' Salaries and Expenses as it appears to be relevant?
Following is the statement:
In view of the appalling scenes which were described to me, would my hon. Friend repeat the assurance already given that since this date orders have been given all over the British Occupied Zone that these forced repatriations are to cease?
I do not think it is necessary to repeat that assurance every day.
In view of the great shortage of manpower in Poland, is it not desirable that everything possible should be done to return these Poles, so that they can work in their own country?
Would not the hon. Gentleman agree that the shortage of manpower is due to the fact that so many are in Siberia?
Austria
Refugees, Great Britain
asked the Chancellor of the Duchy of Lancaster whether he is now in a position to announce the date when Austrian refugees resident in this country will be allowed to return to Austria to assist in its reconstruction and development.
As stated in the replies I gave to my hon. Friend on 17th December, and to the hon. Member for the Queen's University of Belfast (Professor Savory) on 23rd January, arrangements have already been made for a certain number of these refugees to return to Austria. A wider scheme is under consideration, and on this I hope to be able to make an announcement in the near future.
Could my hon. Friend say approximately how many refugees will be affected?
I do not think any assessment has been made of the number, of Austrian refugees in this country, but the intention is that it should be on the widest possible basis.
Allied Commission (British Element)
asked the Chancellor of the Duchy of Lancaster what is the size of the British element of the Allied Commission for Austria; and how many of its personnel are military and how many are civilians.
The total strength is 2,170 persons; 1,703 are military, and 467 civilian.
Is my hon. Friend aware that a number of these people are merely duplicating the administrative functions which could probably be exercised by the Austrian Government in the Austrian provincial and local administration? Will he take steps to reduce that section of the British element which is not engaged in the tasks of military supervision and de-Nazification?
I cannot give that assurance, because our purposes in Austria go far beyond the two points which my hon. Friend has mentioned. They are clearly delineated, and require a considerable amount of supervision at the present time.
National Finance
Coal Industry (Taxation)
asked the Chancellor of the Exchequer how much the Treasury received for the years 1900 to 1945, inclusive, in tax from holders of debentures and shares in colliery undertakings.
This information is not available.
It may be inconvenient for the Chancellor to give these figures, but is he aware that if the Coal Bill is passed—
The hon. Gentleman is making an insinuation which he is not entitled to make.
I would remind the hon. Member that the unavailability dates back to 1900.
War Damage Payments
asked the Chancellor of the Exchequer when he hopes to be in a position to make a statement as to the future payment for air-raid damage.
The date of payment under the business and private chattels schemes and of value payments under the War Damage Act, must depend not only on financial considerations but also on the availability of supplies, particularly of building, labour and materials.
asked the Chancellor of the Exchequer if, having regard to the hardship caused to old people of limited means whose homes have been destroyed by enemy action, and the necessity for them now to rent other premises, when war damage compensation will be paid to owner occupiers of small dwellings thus affected; and whether he will consider expediting compensation in hardship cases who have now waited five years for compensation.
Cost of works payments can only be paid when the work of repair or rebuilding is done. I am afraid that it is difficult to discriminate between various classes of claimants to priority in value payments.
Will my right hon. Friend consider placing these distressed persons on the Civil List, which the Prime Minister is now going to increase?
U.N.R.R.A. (British Contributions)
asked the Chancellor of the Exchequer whether he will state, up to the nearest ascertainable date, the contributions of Great Britain to the resources of U.N.R.R.A.; the further contributions to which Great Britain is pledged; and the influence of these contributions on the dollar-sterling exchange.
asked the Chancellor of the Exchequer whether the sterling combination of His Majesty's Government, to the funds of U.N.R.R.A. is convertible into currencies outside the sterling area; and, if so, what is the extent of our loss of foreign exchange resulting from this.
£75 million have been spent out of our first contribution to U.N.R.R.A. of £80 million. In addition to the balance of £5 million we have agreed to make a further contribution of £75 million. We are entitled to spend at least 90 per cent. of these contribuitons in the United Kingdom and the British Colonies, and no appreciable part of our contribution will be expended in dollars, but, in so far as we give away goods—to U.N.R.R.A. or anyone else—for which we should otherwise have been paid, our supplies of foreign exchange are reduced.
Will the Minister call the attention of the amiable sentimentalists, who are urging that we should reduce our meagre rations to supplement the great efforts, to the facts that he has just given?
Will the Chancellor confirm that the 10 per cent. of our contributions, to which he referred, is convertible into other currencies?
The position is that a further 10 per cent. may be spent anywhere within the sterling area or outside. Part has been spent in the sterling area, and a small amount outside.
Braille Watches (Purchase Tax)
asked the Chancellor of the Exchequer whether he will consider, in the near future, exempting braille watches from Purchase Tax for the benefit of blind persons.
My hon. Friend will not expect me to anticipate my Budget Statement.
International Monetary Fund and Bank
asked the Chancellor of the Exchequer whether he will publish a list of countries which had accepted, by 31st December last, membership of the International Monetary Fund and Bank; and what are the prospects of the U.S.S.R. joining both organisations.
I am circulating in the OFFICIAL REPORT a list of the 35 present members of the International Monetary Fund and Bank set up by the Bretton Woods Agreements. The Government of the U.S.S.R. have stated that they need more time to study the proposals.
In the event of Russia not joining, can the Minister say what will be the effect on world economy?
That is rather a hypothetical question.
Following is the list:
The following countries accepted membership of the International Monetary Fund and the International Bank for Reconstruction and Development by 31st December last.
Belgium, Bolivia, Brazil, Canada, Chile, China, Colombia, Costa Rica, Cuba, Czechoslovakia, Dominican Republic, Ecuador, Egypt, Ethiopia, France, Greece, Guatemala, Honduras, Iceland, India, Iran, Iraq, Luxembourg. Mexico, Netherlands, Norway, Peru, Paraguay, Philippines, Poland, Union of South Africa, United Kingdom, United States of America, Uruguay, Yugoslavia.
In addition the Danish Government has indicated that Denmark desires to become a member of both Organisations and will sign the Agreements when quotas for Denmark have been fixed.
State Lotteries
asked the Chancellor of the Exchequer whether, in view of the fact that in New South Wales the Government is making a profit of £1,340,000 a year on State lotteries, he will consider introducing State lotteries into this country.
No, Sir.
Is my right hon. Friend aware that if the Government introduced a State lottery, with Government bonds as prizes, it would increase the revenue of the Exchequer, and perhaps stimulate National Savings?
That is just the question on which I have some doubts. This is a matter on which people hold strong opinions, and I am not expressing mine; I am merely pointing out that the controversy would be likely to lose us more savings than we would gain.
And more seats.
Ex-Servicemen (Income Tax)
asked the Chancellor of the Exchequer if he is aware that Servicemen who take up civilian work on demobilisation are automatically taxed as single men for a period, sometimes running into several months, causing considerable hardship to married men with families who get no allowances for them; and will he see that on demobilisation men are correctly classified for Income Tax with the least possible delay.
I have been making arrangements with the Service Departments designed to reduce this period to a minimum. If my hon. Friend will let me have particulars of any individual cases, I shall be glad to look into them.
£5 Notes
asked the Chancellor of the Exchequer whether the new £5 notes are legal tender for any amount.
These notes like the old notes, are legal tender in payment of amounts of £5 or over.
Will my right hon. Friend make a statement on the very common occurrence of people tendering five pound notes at railway stations for railway fares, perhaps having nothing else in their pockets, and the notes being refused? Has my right hon. Friend any statement to make which would give the railway companies some instruction in the right direction?
No, Sir. I am afraid I should have to give travellers an instruction in the right direction. The position is governed by the Currency and Bank Notes Act of 1928. A person holding a five pound note is not entitled, as a right to change. He can tender the note for amounts of five pounds and a penny and larger sums.
May I ask the Chancellor of the Exchequer whether, in view of the Government Bill to nationalise the Bank of England, he will now make the banknotes issued by the National Bank of England legal tender for smaller sums?
Overseas Sterling Balances
asked the Chancellor of the Exchequer if he will give the latest total of sterling balances held by overseas countries; and whether that total was still increasing.
I would refer the hon. and gallant Member to the figures contained in Table 7 of Command Paper 6707, published last December. The total is still increasing.
Italy (British Occupation Costs)
asked the Chancellor of the Exchequer if, under the new financial arrangement with Italy, the Italian Government will be credited with the sterling equivalent of the lira amounts spent by the British Occupation Army in Italy; and if so, whether the sterling thus paid to the Italian Government will be available only for purchases from this country and other countries within the sterling area, or also those outside the sterling area.
No, Sir. The Italian Government receives no such sterling credit.
France (Sterling Debt)
asked the Chancellor of the Exchequer what amount of sterling is owed to this country by France under the Financial Agreement of 1945.
£150 million.
Electric Hairdriers (Purchase Tax)
asked the Chancellor of the Exchequer whether he is aware of the hardship involved on hairdressers, and particularly on those restarting in business, by the fact that electric hair-driers are subject to 100 per cent. purchase tax; and whether he will reconsider the amount of this tax in view of the fact that such equipment is necessary for carrying on trade.
As I told the hon. and gallant Member for South Belfast (Lieut.-Colonel Gage) on 18th December last, I will consider this, with other suggestions of tax reduction, before next April.
Questions
Post Office (Women Workers, Release)
asked the Chancellor of the Exchequer how much longer female G.P.O. workers will be compulsorily retained.
I cannot say at present.
Road Fund Licences (Perforation)
asked the Financial Secretary to the Treasury why he refuses to resume the perforating of Road Fund licences issued to motorists.
The perforation first introduced in 1938 was dropped in 1942 in order to save labour. It is an intricate production operation out of proportion to its convenience to the public.
Will the Minister give an undertaking that as soon as labour becomes available he will restore this convenience which is the due of people who are suffering from heavy taxation?
It is a costly process and people can quite easily cut round the licence. Normally they only take it out once a year, and this can be done with a pair of scissors quite simply.
World Cereals Shortage
Government Proposals
As the House will know, the world position in regard to cereals supplies has been giving us considerable anxiety for some time past, and I am taking the earliest opportunity of making a statement on this important matter.
Last summer it was clear that only the maximum efforts on the part of the overseas producing countries could meet world requirements. Since then, the position has deteriorated. It was not until shortly before Christmas that we had an exact measure of the position. By then, the importing countries knew how long their harvests would last, and the exporting countries the quantities they could ship.
The position was made worse by a series of droughts. During 1944–5, these reduced the harvests of Australia and Argentina. North Africa has suffered a similar disaster. The 1945–6 harvest in South Africa has been seriously reduced by drought and reports from India within the last few weeks of failure of the rains, and other disasters, make it clear that that country will be faced with the prospect of famine.
Full information regarding the position in South Africa and India had not arrived when I left for Washington, shortly after Christmas, to discuss the whole question of cereal supplies, mainly wheat and rice, with the United States Government. At that time; the situation was sufficiently serious to compel us to review the requirements of all importing countries, and examine what measures could be taken to increase supplies from the exporting countries.
We estimated, when I was in Washington, that the wheat requirements of the importing countries during the first six months of this year would amount to a little over 17 million tons, against which there were available exportable supplies of only 12 million tons. Since then, developments in India, South Africa and elsewhere have increased requirements, while supplies are now expected to fall short of 12 million tons.
We recognise that all importing countries will have to make heavy sacrifices. His Majesty's Government have taken the lead in accepting a reduction of nearly 250,000 tons in the United Kingdom wheat imports for the first half of 1946. This reduction cannot be met out of the stocks held in this country, which have been progressively reduced since "D"-Day to the lowest point consistent with the maintenance of distribution. The stocks now held in this country are nothing more than a working stock and contain no reserve element.
Since it cannot be met out of the United Kingdom stocks, the reduction in imports decided upon by His Majesty's Govern- ment will have to be met by making greater use for direct human consumption of our wheat supplies, and this will necessitate, an early increase in the flour extraction rate to 85 per cent. [HON. MEMBERS: "Hear, hear."] Hon. Members had better wait until they hear the effect of it. This may not, however, be the last step we shall have to take.
The change will be effected gradually and, while it will mean a return to the darker war-time loaf, there will certainly be no deterioration in the nutritive value of our bread. It will, however, materially reduce the volume of animal feeding stuffs, as my right hon. Friend the Minister of Agriculture will explain, and in consequence will result in a diminution of livestock production in this country. This will mean less bacon, poultry and eggs than we had hoped to enjoy later on this year.
His Majesty's Government are in close touch with the U.S.A., Canada and Australia, with the object of increasing exports from those countries to the importing countries. Much will depend upon their success, as well as that of Argentina, in their effort to maximise the collection, movement and exports of wheat during the next few months. We are confident that they will spare no effort, but the needs of the importing countries of the world are appalling. The United States have already started a publicity campaign to avoid the waste of bread and to increase shipments to Europe, where starvation, disease and death are threatening thousands.
The world position in regard to rice supplies is no less serious, and is indeed a contributory factor to the wheat shortage, since countries which cannot secure rice for consumption turn to wheat or flour as a substitute. In Washington, we were faced with the same gap between requirements and available supplies as we were for wheat. For the first six months of 1946, we found ourselves with 2,000,000 tons less rice than were "required to meet the demands of all claimants.
The collapse of Japan seriously aggravated the rice position because the rice-consuming countries of the East were liberated before rice production could be got into full swing. The United Kingdom has been unable to make any major con- tribution to this problem, because its normal import requirements are very small, but in our desire to make our fullest contribution we have ceased entirely the importation of rice into this country. We propose to continue this policy of not issuing rice for the civil population, until world supplies again become adequate to meet essential needs.
This acute shortage of wheat and rice has had a serious effect also on our supplies of fats. Owing to the shortage of cereals in India, the Indian Government have announced that they must retain substantial quantities of groundnuts for their own consumption, with the consequence that we shall obtain less than half the quantity of groundnuts which we had expected to obtain from that source. This deficiency in our supplies of vegetable oils has been made more serious by the fact that the whaling fleets which Were despatched to the Antarctic last autumn to secure more whale oil have so far achieved very poor results, owing to the exceptionally unfavourable weather. Our stocks of oils and fats were substantially reduced last year in conformity with the Tripartite Agreement with U.S.A. and Canada. I cannot, therefore, make good from stocks these deficiencies. It is therefore with much regret that I have found it necessary to reduce the butter, margarine and cooking fat ration from eight ounces to seven ounces per week, by reducing the cooking fat ration by one ounce from 3rd March.
In the circumstances which I have described, I am sure that the nation will regard any avoidable wastage of bread as an anti-social act, and I intend to spare no effort to bring this fact home to our people. This applies equally to private houses, canteens and restaurants. No bread is to be served in any catering establishment with a main meal except on request. I expect the trade to co-operate with me, but if this appeal is not effective I shall consider what further steps can be taken. Wherever food is served, there are opportunities for economy and avoidance of waste which will help to see us through our present difficulties. His Majesty's Government are confident that when the facts are explained to them, the public will respond with full co-operation and support.
I had hoped that it would have been possible to give the British public some gradual improvement in their diet. I still confidently cherish that hope, but I must postpone its fulfilment. Unfortunately, world harvests of many commodities were very bad last year, and Mankind cannot have a world war without experiencing shortages for some time to come. We have faced worse situations than this in the past. This period of shortage, difficult as it may be, will pass, and there are fuller times ahead—perhaps sooner than we dare to hope. But, in the meantime, this country must join with the other countries of the world, in making its contribution to the global war against hunger.
My right hon. Friend the Minister of Food has dealt with the world food situation and has explained how it affects food consumers in this country. It is my task, speaking also for the Secretary of State for Scotland, to deal with its significance for home farmers. For them it means briefly a serious cut in feedingstuffs supplies and an urgent need to sow all the grain they can this spring.
The cut in feedingstuffs supplies arises from two factors. First, because of the world wheat shortage much of the coarse grain which would have been available for feeding livestock here and elsewhere has to be diverted for milling into bread. Secondly, we are raising the rate of extraction of wheat and that means a loss of milling offals at the rate of something like 300,000 tons per year. I have had to decide what is the best use I can make of the reduced supplies of feedingstuffs. There will be no change in rationing arrangements for the present winter period and ration coupons issued for the period up to the end of April will be honoured. It is in the period from May to September that the cut will be felt. In the interests of national health the priority given to milk production must continue, although rations for dairy cows during the summer are not in fact substantial. The only large issues in this period are the basic rations for pigs and poultry, which at present rates would absorb about half the summer supplies of rationed cereals. Commercial pig and poultry keepers are at present receiving rations sufficient for one-quarter of the numbers of stock kept before the war. In April, 1945, it was announced that rations sufficient for one-third of these numbers would be issued from May, 1946. The cut in cereals is so great that not only is this undertaking now impossible of fulfilment, but a reduction is inevitable and on present calculations, as from 1st May, pig and poultry rations will be based on one-sixth of the pre-war numbers. No change will be made in the rations for domestic pig and poultry keepers. These classes did not benefit from the increases to commercial producers last year.
I need not tell the House with what grave concern I view this grievous blow to our reviving livestock industry, involving as it does the abandonment of an undertaking given by my predecessor before the disastrous series of droughts occurred. I can only promise that as soon as more feedingstuffs are obtainable commercial pig and poultry keepers will have strong claims for a much better share. In the meantime, there is an urgent task before our home farmers. It is imperative that they, in common with farmers all over the world, shall put forth their maximum efforts to restore the situation after the next harvest by sowing as much grain as they can this spring. They must continue a high level of tillage so as to make the maximum contribution to the nation's granary, while at the same time redoubling their efforts at self-sufficiency. All this means sowing more spring wheat, for the more wheat there is in the world, the more speedily can coarse grains return to their use as feedingstuffs, but where that is not practicable we want more barley and more oats. That is the task for our farmers, but everyone with a garden or allotment can also help to meet this food shortage. The> Government hope that all classes of the community will grow as much as they can this year and that local authorities and others will continue to foster this "Dig for Victory over Want" campaign. The need for self-help is just as great as in the dark days of the war.
Two right hon. Gentlemen have just made to the House statements of the utmost gravity. I do not know what the feelings of other hon. Members may be, but I was completely unaware of the situation which has just been revealed. I hope that I am not exaggerating the importance of the position, but I cannot help feeling that it might have been possible to keep us a little bit more informed about these questions. It was not so very long ago that we worked together under conditions of great difficulty, and I must frankly express my astonishment that this situation has been so suddenly put before us in this way. I cannot ask all the questions which occur to my mind now; they must be obvious to the House but I would like the Minister of Food to recall that his predecessor was very careful to keep the public in his confidence at every stage, which was largely the reason for his success. I do not know when the decision was taken about wheat, or groundnuts. We were, left entirely in the dark, until suddenly a statement is made covering an enormous field of our national life. I cannot think that the Government have treated the House fairly in these matters. I do not know when the wheat situation was known, or the position in regard to groundnuts, or meat, or the other things mentioned, or why it should not have been made known at the time instead of all these things being piled up in this way. I do not wish to pursue the matter now. If I have shown indignation, I genuinely feel it, because we have not been partisan in national matters in this House, and we have been treated as though we were a type of Opposition which could not be given information. I would ask whether we can be given early facilities, in order that this serious national position may be examined by the House.
I would like to put right at once the statement of the right hon. Gentleman, that this House has not been kept informed. He will remember, and the whole House will remember, that, on many occasions my right hon. Friend the Member for Oxford University (Sir A. Salter), and the late hon. Member for the Combined English Universities (Miss Rathbone) stressed this matter on the question of supplying food to Germany. I had to answer on each occasion that the stocks were not here with which to do it. The position with regard to groundnuts, rice, and wheat, did not reveal itself until within a few days before Christmas. Two days after Christmas, I left for the United States of America, to try to get what we could, settled. May I tell the right hon. Gentleman that since leaving the United States, and having fixed the global position, I have been informed by the United States that their estimate of their own wheat stocks is exactly 61,000,000 bushels less than it was when I was there? That means a fresh allocation.
With regard to India, the right hon. Gentleman will know as well as I do that nobody knew the facts about India until the monsoon failed, and that this position developed immediately on that failure. I say this with all good faith; I resent being challenged with not keeping the House informed. It is my desire to keep the House informed at all times, in so far as I can. My Ministry is a little bit different from other Ministries. I have to go out into the world and buy on a sellers' market today. To come here and reveal stocks openly to the House makes my position very difficult, unless I want to force the prices up to sky high positions. I am quite sure that, on reflection, the right hon. Gentleman will see that there has been no malice, or no desire to keep his hon. Friends or my own hon. Friends, or the House as a whole, devoid of knowledge with regard to the facts.
On a point of Order. I submit that there is no Motion before the House, and yet this is developing into a Debate.
I hope that hon. Members will put their remarks in the form of questions.
I will put my remarks in the form of questions. May I ask the right hon. Gentleman who made the first statement, if he will realise that he has dealt with a wide variety of food topics, and it is hard for us to accept that it was impossible for him to give us the information on any of them, until he gave us information on all of them. I, therefore, ask him whether, in the future, he will keep us informed on each of these matters, and if I may say so without undue persistence to the Prime Minister, I hope it will be possible to give us more generous information through the usual channels. If we are to co-operate as we naturally wish to do on a matter which affects the nation as a whole, may I ask the Leader of the House to tell us when we may debate this anxious situation?
I quite agree that the House would legitimately wish to debate this subject and the consequences upon the agricultural situation to which reference has been made. There was a provisional agreement that there should be a Debate on agriculture, and agriculture is bound to be affected in this matter. If we have discussions through the usual channels, it may be that we can meet both points of view and discuss both subjects by mutual agreement.
As the right hon. Gentleman knows, the agricultural Debate was to be on long-term policy. We would not wish to lose that Debate. The purpose of this Debate, I suggest, would be to consider the immediate situation in respect of food and agriculture. Perhaps that can be arranged through the usual channels.
We will talk about that. In that case, the agriculture Debate can come on a Supply Day. As I say, we will talk about it and try to meet the point.
I would ask the Minister whether it is not possible to give us rather fuller and more accurate information than he has been giving to us. For example, could we be told the total global food stocks in this country now, as the late Prime Minister did on 21st March, at a time when we were engaged in two wars? Can he not expedite the very interesting report which the Under-Secretary of State for Foreign Affairs told us yesterday had been prepared by the Emergency Economic Committee for Europe? Does he not realise that the statements which he has made have come as a great shock to the House, in view of the fact, for example, that as recently as 26th October he himself said that if certain administrative measures were taken to stop waste, he hoped and believed it would be possible to meet in full the essential needs of the world? That illustrates the necessity for the fullest information being given.
In view of the gravity of the statements which have just been made, and the urgent need for increasing production at home, has a case not been made out today for an immediate increase in the wages of the agricultural workers?
Is the Minister of Food now able to say whether we can hope to avoid bread rationing in this country?
My one desire is to avoid that.
Is my right hon. Friend aware that his announcement regarding the lowering, by one ounce, of cooking fats is not nearly so serious in the opinion of the housewives of Britain, as his sudden withdrawal of dried eggs; and can we have a statement regarding dried eggs?
There are 15 Questions on the Order Paper tomorrow about dried eggs, and we need not anticipate them; as far as this House is concerned, there will be no dried eggs today.
May I ask the Minister of Agriculture how we are to reconcile the statement of the Minister of Food, that as far back as last summer it was known that the wheat position was difficult, with his own refusal on several occasions to put the subsidy per acre for wheat back to £4 per acre? My right hon. Friend the Member for Southport (Mr. R. S. Hudson) and Others of my hon. Friends have repeatedly asked him to do so, and on 15th November last the right hon. Gentleman stated in answer to a Question:
"The food shortage applies less to wheat than to other foodstuffs."—[OFFICIAL REPORT, 15th November, 1945; Vol. 414, c. 704.]
He refused then to put back the deficiency payments. Will he do it now?
The hon. Gentleman has quoted a reply which I gave with regard to the general shortage of foodstuffs in the world. I declared that wheat was less short perhaps than many other commodities. That was strictly correct at that time, according to all the calculations made by exporting countries. Therefore, I have nothing to withdraw from that statement. With regard to the decision taken by my predecessor in February, 1945, that the wheat acreage payment should be reduced from £4 to £2 for the 1946 harvest, I have certainly resisted any change in that decision. Having embarked upon a price-fixing policy only in February, 1945, to give the farmers of this country the kind of guarantees and stability they require, I thought then, and I still think, that to break into that price-fixing machinery within the first year of its operation would be fatal to the confidence of agriculture.
On a point of Order, Mr. Speaker. Is it in Order for the Noble Lord the Member for Horsham (Earl Winterton) to impute that this grave state of affairs, in relation to food supplies, is due to a Socialist Government being in office in this country?
Nothing of that sort reached the Chair. The Noble Lord is entitled to his own opinions.
May I add a personal explanation, Mr. Speaker? The hon. Gentleman's charge is completely without foundation and the hon. Gentleman has no—
On a point of Order. I have witnesses behind me.
A Select Committee?
It is now long past three o'clock. Bearing in mind that this matter is to be debated, we might get on with the Business of the day.
But is not my Noble Friend entitled to a withdrawal of these accusations?
On the contrary, the Noble Lord should withdraw them.
I understood the Noble Lord to say that he was misunderstood.
But the whole point was that I never made any such statement.
Is there any means—
Order.
The Noble Lord says he made no such statement, and I think the hon. Gentleman must have misunderstood.
If you ask me to withdraw my statement, Mr. Speaker, I very much regret I cannot do so, in view of the fact that I, and hon. Members behind me, heard the Noble Lord's statement.
A Select Committee?
Let us leave these personal recriminations and get on with business.
I want to ask the Minister of Agriculture if he is taking any special steps in the present emergency to ensure the sowing and growing of cereal crops on marginal land during this forthcoming season.
I can assure the hon. Gentleman that I have despatched a letter this day to the chairman of every war agricultural executive committee in the country, appealing to them to call their executives together and make known to every farmer within their areas the serious food situation.
rose —
Why not put back the deficiency payment?
They ought to do it out of loyalty.
Business of the House
May I ask the Leader of the House if he has a statement to make on Business for this week?
I undertook last Thursday to reconsider arrangements for the Debate on the Second Reading of the National Insurance Bill and the Committee stage of the Money Resolution. Discussions have taken place through the usual channels and in the circumstances of this case it is now agreed that the Second Reading will not be concluded on Thursday but continued on Monday of next week until 6.30 p.m. Afterwards we shall take the Committee stage of the necessary Financial Resolution, and consider Amendments to the Bank of England Bill, which are shortly expected from another place.
I have also to announce a re-arrangement of Business for Friday of this week. We shall take the Report and Third Reading of the Ministers of the Crown (Transfer of Functions) Bill as first order, followed by the Report and Third Reading of the Agriculture (Artificial Insemination) Bill and Committee stage of the Supplementary Estimate for the Ministry of Education.
In view of the Motion on the Paper to suspend the Rule, perhaps the right hon. Gentleman could tell us, for the convenience of the House, what arrangements he has in mind for today?
I understand that there is an agreement through the usual channels, which I hope the House will approve and co-operate in implementing, that the Division—if there be one—on the Second Reading of the Investment (Control and Guarantees) Bill will take place at approximately 10.15 p.m., and that thereafter we shall proceed with the Money Resolution.
Could my right hon. Friend say whether he is giving any extra time for the National Insurance Bill?
Yes, Sir. It is proposed, tomorrow and on Thursday, to suspend the Rule to the extent of one hour on each day.
Statutory Rules and Orders, Etc
Seventh Report from the Select Committee, brought up, and read, as follows:
Your Committee have considered the Drafts of the Double Taxation Relief (Taxes on Income) (U.S.A.) Order, 1946, the Double Taxation Relief (Estate Duty) (U.S.A.) Order, 1946, and the Double Taxation Relief (Taxes on Income) (France) Order, 1946, copies which were presented on 28th January, and are of the opinion that there are no reasons for drawing the special attention of the House to them, on any of the grounds set out in the Order of Reference of the Committee.
They have also considered the Bake-houses (Employment on the Sunday before Christmas) Order, 1945 (S.R. & O. 1945, No. 1580) and the Air Navigation (Amendment) (Ministry of Civil Aviation) Order, 1945 (S.R. & O. 1945, No. 1637), copies of which were presented on 22nd January, and are of the opinion that the special attention of the House should be drawn to them, on the ground that they appear to make some unusual or unexpected use of the powers conferred by the Statutes under which they are made.
They have also considered the Carpets (Imported) (Maximum Prices) Order, 1945 (S.R. & O. 1945, No. 1505), a copy of which was presented on 11th December, the Wages Board (Unlicensed Residential Establishment) Order, 1945 (S.R. & O. 1945, No. 1510), a copy of which was presented on 17th December, the General Apparel and Textiles (Wholesalers' and Retailers' Maximum Prices and Charges) (No. 3) Order, 1945 (S.R. & O. 1945, No. 1529), the Women's and Maids' Outerwear (Manufacturers' Maximum Prices) Order, 1945 (S.R. & O. 1945, No. 1530), copies of which were presented on 18th December, the Utility Furniture (Maximum Prices and Charges) (No. 7) Order, 1945 (S.R. & O. 1945, No. 1555), a copy of which was presented on 19th December, the Gloves (No. 9) Directions, 1945 (S.R. & O. 1945, No. 1506), a copy of which was presented on 20th December, the General Furniture (Maximum Prices and Charges and Miscellaneous Provisions) (No. 2) Order, 1945 (S.R. & (O. 1945, No. 1579), the Control of Engagement (Amendment) Order, 1945 (S.R. & O. 1945, No. 1557), the Disabled Persons (Standard Percentage) Order, 1945 (S.R. & O. 1945, No. 1570), the Order amending the Labelling of Food (No. 2) Order, 1944 (S.R. & O. 1945, No. 1550), the Bananas Order, 1945 (S.R. & O. 1945, No. 1551), the National Health Insurance (Emergency Additional Benefits) Amendment Regulations, 1945 (S.R. & O. 1945, No. 1644), and the Contributory Pensions (Emergency Provisions) Regulations, 1945 (S.R. & O. 1945, No. 1655), copies of which were presented on 22nd January, and are of the opinion that the special attention of the House should be drawn to them, on the ground that there appears to have been unjustifiable delay in the laying of them before Parliament.
To lie upon the Table.
Memoranda relating to certain Orders to lie upon the Table, and to be printed. [No. 69.]
New Member Sworn
Wing-Commander Edward Arthur Alexander Shackleton, O.B.E., for the Borough of Preston.
Business of the House
Proceedings on Government Business exempted, at this day's Sitting, from the provisions of the Standing Order (Sittings of the House.)—[ Mr. Herbert Morrison .]
Orders of the Day
Investment (Control and Guarantees) Bill
Order for Second Reading read.
3.50 p.m.
I beg to move, "That the Bill be now read a Second time."
I present to the House today a simple, short, modest but, as I shall argue, necessary Measure. This Bill will help His Majesty's Government to control the flow and the direction of new investment, and also to stimulate that flow when necessary. It will give the Government two small, but useful, additions to their set of tools for economic planning. With the Bill goes Command Paper 6726, which contains a Memorandum and a draft of the Order I shall propose to make when the Bill has become law. The House will, no doubt, have studied these papers with attention.
The Bill follows our latest streamlined legislative model. It contains only two operative Clauses. Clause 1 gives power to the Treasury to control all new access to the capital market. It provides, substantially, for the continuation of the present power of controlling new capital issues—the present power, which has been available during the war under Regulation 6 of the Defence (Finance) Regulations. The purpose of this control is simple. It is to ensure that the order of priority of schemes for raising new capital shall be determined by one criterion only, namely by their relative importance in the general national interest; whereas, in the absence of such control, they would be determined by other criteria, namely, their relative appeal to profit-seekers and the relative plausibility of their presentation to a credulous public by company promoters and others. Therefore, we propose to substitute the national interest as the test, rather than follow the old-world practice. In a second sense, the control will be valuable in ensuring good timing in the raising of capital for approved purposes. Given that a number of purposes have been approved, it is desirable that we should have good timing of successive releases of new securities and that we should have orderly marketing—a phrase often used in regard to produce, but equally applicable to securities—without any unnecessary disturbance or congestion in the money market.
I would like to say a word at this stage about the Capital Issues Committee. It is intended to retain the Capital Issues Committee as an executive instrument of the Treasury in relation to Clause 1 of the Bill. This body is a non-statutory body, which was instituted in 1939 and has done excellent work during the war. I am sure my predecessor at the Treasury, the hon. Member for the Scottish Universities (Sir J. Anderson), will agree with me when I pay a tribute on my behalf, and I know on his, to Lord Kennet and his colleagues for all the valuable public service they have rendered under difficult conditions but not always with full appreciation of their efforts. Many criticisms made of them have quite missed the mark. I am glad to add that Lord Kennet has consented to continue as chairman of the Committee for a further period, which is entirely at Government discretion. He will continue as long as the Government would wish him to do so, although he has had a long innings and might well feel that the great public spirit which he has shown has earned him some relaxation. Two members of the existing Committee, Mr. Binder and Mr. Neilson, are retiring, and I have appointed in their place three new members, Mr. Babington Smith, a director of Glyn Mills, and one of the ablest of the younger men in the City, Mr. H. V. Berry, who has just retired from the post of, assistant general manager of the Union Discount Company—this gentleman has the unusual qualification of being equally well-known and respected in the City of London and in the Fabian Society—and Mr. C. P. Lister, a relatively young industrialist, who has special knowledge of the export trade.
The other members of the existing Committee are continuing, to serve for the present. The function of this Committee is to act as a licensing authority for new issues, and to advise the Treasury on the suitability of particular applica- tions in the light of the policy laid down by the Government from time to time. I hasten to say this; there have been complaints about delay—many of them unfounded, as such complaints commonly are—but I am anxious that once an application has been made to the Committee in the future, it should be dealt with as quickly as possible. Lord Kennet is as anxious as I am on-this point. I shall take an early opportunity of discussing with the Committee, now it has been reconstituted, and following this Debate, the best means of securing expeditious procedure, of removing causes of delay, and of seeing whether we cannot get rid of any reasonable ground for complaint in this matter. On the other hand, people must not be unreasonable, and expect replies to applications to raise large sums by return of post. People must not ask too much; but I will endeavour, with the help of the Committee and the Board of Trade, and other authorities who are deeply and properly concerned and must be consulted, to devise a plan whereby consultation will not be unduly prolonged. A sharp prong will be ready to be applied to those who slumber, to wake them up as speedily as possible.
When this Bill is passed into law, and when the draft order mentioned in the Command Paper has been brought into force, Regulation 6 of the Defence (Finance) Regulations will be revoked. One of the consequences will be that the present requirement of Treasury consent to public offers for sale of existing domestic securities will lapse. There has been some misunderstanding in the past about that; so, to make it quite clear, I will repeat that when the draft Order is made and the existing Regulation is revoked, the present requirement for Treasury consent to the sale of existing domestic securities will lapse, and this will put an end, as far as Treasury control is concerned, to the recent controversy, on the relative merits of placings on the one hand, and offers for sale on the other hand. For the rest, the draft Order follows, in the main, the lines of the existing Regulations.
That does not mean that it is unchangeable for all time; and while, in the main, it follows the existing Regulations, there is a number of matters on which I propose to consult the National Investment Council we are setting up, and to collect their views as to whether, and if so, in what direction, and to what extent any of these arrangements should be modified. Initially, the restrictions on bonus issues will be continued in their present form; but I shall discuss this matter, together with others, with the National Investment Council. It will be one of the first matters which I propose to discuss, because there will be much debate about it. I should, however, add, lest there be any misunderstanding of my own view or that of the Government, that bonus issues in the past have often led to abuse. I think that cannot be denied. They have often led to concealment, both from the public and from the workers in a particular industry, of the true rate of, profit on invested capital. Bonus share issues have often been a racket—not always, but often. We are entitled, therefore, to look at them with a certain suspicion, although I am not here committing myself to the existing arrangements exactly in their present form—
Will the right hon. Gentleman give us one example of the racket?
No, I am not going to be led into that sort of discussion. I am talking in an entirely impersonal way. Later in the Debate, when the thing has "hotted up" a bit, I may; but, for the moment, I confine myself to saying that bonus issues should be viewed with a certain suspicion, although it may well be that sometimes there are good reasons for them. However, we will look into all this at an early date on the National Investment Council.
May I say a word about this Council? It is proposed, as will be seen from the Memorandum, to set up this body to ex-officio , while others will be chosen for their individual capacities. They will include the Governor of the Bank of England, the Chairmen of the Capital Issues Committee, and of the Public Works Loan Board—which, as the House knows, looks after loans for local authorities—the Chairmen of the two Finance Corporations for industry, and the Chairman of the London Stock Exchange. The Council will also contain a prominent trade union leader, whose name I hope to be able to announce shortly; Mr. C. E. Prater, who is Chairman of the Finance Committee of the Co-operative Wholesale Society. [ Interruption .] Well, why not? The Cooperative Wholesale Society manages much larger funds than many other concerns. We shall have a lot of common sense from that quarter to blow the cobwebs away.
I have also invited Sir Clarence Sadd, Vice-Chairman of the Midland Bank, Sir Clive Baillieu, whom I have selected not because he happens, at the moment, to be President of the Federation of British Industries, but because I think highly of him, anyhow—there is no disqualification in being President of the Federation—and Mr. Nicholas Davenport, who is a stockbroker, but is also well known as a lively writer on financial subjects. That is a fine body of high-powered, collective wisdom. I have not put any Members of Parliament on the Council. I do not think it right that Members of Parliament should be asked to do the hard brain work that will be required for the advice on which the Government relies; but I do say, quite seriously, that I think that, from the collective wisdom of this body, the Government will be able to derive much advantage. I hope and believe it will be a very valuable new organ in our discussions of these matters.
I will now say a word about the relationship of the financial controls which we are debating in this Bill to the so-called physical controls. The financial controls contained in this Bill, and in certain other Bills including the Bank of England Bill, will supplement the physical controls over the allocation of labour and materials, and the control of new building operations through building permits and the like. I do not know whether it will be denied—it will be interesting to see whether it is denied in the Debate which follows—but in my view it is very difficult to deny the statement that at the present moment the demand for capital is greatly in excess of the supply. This will continue to be the case for some considerable time to come, the length of the period being difficult to estimate at present. That position exists both in terms of money and also in terms of real resources—the labour, materials, equipment, and so forth, on which we are dependent. Hence, it appears to me there is a most obvious need for control in the determination of priorities according to the national interest. The demand being so much greater than the supply, the demand must somehow be cut down to the level of the supply, until the supply can be increased; and this does demand control in the determination of priorities.
If we were to return to a "free for all" scramble, such as we had after the last war, it is clear that it would lead us to great chaos; it would lead to inflation; and it would be no exaggeration to say we should soon be landed in a first-class national disaster. There is no doubt about that at all. To take one particular point relating to the money market, if we returned to unregulated competition in the money market, the result would be to drive up the rates of interest. This would have the effect of increasing needlessly the cost of borrowing both to the Government and to productive industry. Both the Government and industry would have to pay more for their loans, if we allowed unregulated competition. This, in turn, would mean a reversal of our cheap money policy, which we are steadily pursuing, with some visible results in terms of stock exchange movements; and it would also mean a depreciation of the value both of Government and of industrial securities. Now, we are against this. It would mean, on the one hand, a depreciation of the value of war savings; and we are strongly against that. We desire to maintain the value of war savings. On the other hand, it would also increase the cost of industrial reconversion; and that would be a most disadvantageous state of affairs. Nothing of this kind can be allowed to happen. We must take steps to stop it. This Bill is an instrument for preventing it, for maintaining capital values, for ensuring a proper rationing of new capital, and for putting first things first.
One word about undistributed profits. Clause 1 of the Bill does not deal, and is not intended to deal, with undistributed profits. In my Budget speech, I urged industrialists to put new development before higher dividends; and there was no dissent from any part of the House. I made the payment of the E.P.T. refunds conditional, as my predecessor had indicated must be the case, upon this money's being used for development, in the broad sense of the word, and not merely being handed out to shareholders. Though we are anxious, and though we have taken steps, to promote this attitude in relation to undistributed profits, it is inevitable that, over the use of such profits, there should be, in these times, some measure of control. But this financial Measure is not the most convenient Measure of exercising the control I have in mind. On the contrary, it is the view of the Government that such control as may be necessary over the use, by firms, of their undistributed profits, should be effected by the physical controls operated by the President of the Board of Trade. That is the practical way to approach the matter, rather than by seeking to impose financial controls, such as are provided in this Bill, upon this particular element in our economic set-up.
On the other hand, I would like to say that firms who desire to make new issues of capital, or to borrow from either of the two Finance Corporations, will be expected, as a condition of the permission to raise new issues or to secure a loan, to make a suitable contribution from their liquid resources to the cost of the new development assisted by those means. I would take the tin-plate development in South Wales as an example. It is clear that some of the firms who will be concerned and might desire to raise new capital, would be quite prepared, and would regard it as reasonable, to meet a considerable part of the cost of the new plant out of their own liquid resources, in this sense, the use of liquid resources and undistributed profits will be part of the same scheme of things as the licensing of new issues.
Clause 2 provides that the Treasury may guarantee loans up to a limit of £50 millions in any one financial year—
Would the right hon. Gentleman allow me? He has referred to liquid resources and undistributed profits. They are two entirely different things. A firm may be hard up and have no liquid resources, and yet have undistributed reserves.
In many cases, they are the same; in others, they may be different.
I feel that the matter is one requiring some explanation—
I do not want to spend too long on that point. I do not think there is really any dispute.
I am only speaking as a chartered accountant, and I was hoping that the House might understand—
No doubt, the hon. Gentleman will make it very clear and will help the House to understand, if he catches Mr. Speaker's eye later on. I should not venture to compete with a chartered accountant in such a matter; but I really do not think we should gain much by pursuing the question. I think the point is very clear; but I will endeavour, very briefly, to make it clear again. This Bill does not deal with the question of undistributed profits. There is no provision for control over those profits. Control over them, where it needs to be exercised, can be exercised through the physical controls by the Board of Trade, such as building permits, allocations of materials and so on, rather than through financial controls. That, I think, is agreed. I ventured to refer, when I was talking primarily about undistributed profits, to liquid resources, and I am bearing in mind certain discussions which I have had with industrialists. There are many of these who, not having distributed profits in the past, have temporarily invested them in Government securities; and such investments are commonly referred to as liquid resources, because they can quickly be realised.
Under Clause 2, the Treasury may guarantee loans up to £50 millions in any one year: than to introduce a one-clause Bill substituting some other figure.
This power of guarantee has a two-fold purpose. First, it is intended as an anti-slump weapon. If there should be danger of trade depression hereafter, and if private enterprise and finance were somewhat hesitant in embarking upon new ventures which were desirable in the national interest, these guarantees could be used to stimulate industry and production, and to promote employment. This is the first purpose—an anti-slump measure. In the second place, quite apart from a trade depression, this power can be used for the reconditioning of private industries, which, in this Parliament, the Government would not propose to transfer to public ownership. It may well be that some of the reports of the working parties, which my right hon. Friend the President of the Board of Trade has set up, may suggest that such a guarantee would be a useful aid in procuring finance to modernise a backward industry and make it more efficient.
These are the possibilities that we have in mind. I will not name the industries, but many will spring to mind at once—industries which are in a bad way, and are greatly in need of modernisation and new plant, but may have considerable difficulty in raising the necessary money on their own credit in the capital market. It is in these cases that such a guarantee could be very helpful. Clause 2 (2) provides:
It has been asked whether these guarantees do not overlap, and even conflict, with the operations of the two new Finance Corporations. The answer is that there is no overlapping; the one provision may usefully supplement the other. The Finance Corporations have their share capital, which is provided, in the case of the Finance Corporation for Industry, by the Investment Trusts, the Insurance Companies and the Bank of England, and, in the case of the Industrial and Commercial Finance Corporation, by the banks, including the Scottish banks. In addition, of course, they have borrowing powers. But—and this is the point I should emphasise—there is no Treasury guarantee behind any of the advances which the Corporations may make to industry. They make these advances in the exercise of their own good judgement, but without any Treasury guarantee behind them.
Cases, therefore, may well arise in which part of the requirements of an industry, or of a section of an industry, may be met by a loan from one or other of the Corporations, and the rest by a loan guaranteed by the Treasury. In this way industrial risks might be spread and diminished, by a sharing of the responsibility between the Treasury and the Corporations. I would emphasise that the guarantees under this Clause are not required for the development of any nationalised industry. New capital for nationalised industries will be provided by direct Government borrowing. The guarantees under this Clause, therefore, are all for private enterprise. I hope that is appreciated by hon. Gentlemen opposite.
I wish to say a word about the National Investment Board, for which no provision is made in the Bill or the Memorandum. This Board was a device mentioned by the MacMillan Committee—if I remember rightly; I think a minority report of that Committee proposed the setting up of what they called a "National Investment Board." Lord Keynes advocated it in what was then the Liberal Yellow Book; and some members of the Labour Party have advocated it from time to time. But this Government, after close and careful consideration of the best way of achieving our purpose, have now moved beyond that conception. The Cabinet, subject always to the approval of the House of Commons, must be responsible, and is prepared to be held responsible, for economic and financial planning in this country. The Cabinet cannot delegate its Ministerial responsibilities in these matters to any independent or semi-independent Board. The Capital Issues Committee—to take the first of the two bodies we are envisaging here—is, in practice, an executive instrument, subject to Treasury direction. On the other hand, the National Investment Council will be an advisory body. It is the Government itself which, in our considered view, must take the responsibility for planning, including the planning of investment. One of the most informed of our daily newspapers has discussed this Bill with very great activity of perception and variety of comment. It is the "Financial Times," which I read every morning. It is brought to me before I get up.
It does not do the right hon. Gentleman much good.
On the contrary, every day the markets grow better and better. "Gilts are firm," I read; a fine stimulus. But in a leading article in that paper this morning, I read that this Bill is "breathtaking in its utter comprehensiveness." I did not think it was all that. On the other hand, one of the most intelligent Press comments on the Bill which I have read is a leading article in last week's "Tribune," which I invite all hon. Members who have not read it to read.
Did the right hon. Gentleman read that in bed, too?
No, Sir, that is a weekly. I read that in other circumstances. The "Tribune" has improved tremendously since this Government came in; it has become an instructive agent.
Is not that an attack upon the Minister of Health?
No, Sir, a tribute. I would like to read one or two sentences from the "Tribune," on which I could not improve in terms of exposition:
"The Investment Bill does not mark a new economic epoch"—
the statement in the "Financial Times" this morning suggests that it does—
"but it is a useful Bill. … Far more important than the Bill iself is the decision, which has now been taken, that the Cabinet itself is to assume responsibility for investment planning. We can now rest assured that the powers of direct control over building, materials and equipment, which the Government hold under the extension of wartime powers, will be applied, not merely for the negative purpose of avoiding inflation, but also for the positive purpose of planned reconstruction and industrial development. Although the Investment Bill itself contains nothing new, it is clear that the Labour Government means to do something new and is in no doubt about the fundamental necessity for planned investment. The period of 'Unplanned Investment' is closed for ever. The present Bill, the nationalisation proposals, the Supplies and Services Act, the Distribution of Industry Act, the National Insurance Bill—with all these the arsenal is rapidly filling up. No single measure or Act can alone constitute economic planning. But all of them together provide the means to economic progress."
That is good sense. I thank whoever wrote it for having put the case so well.
As I understand the matter, it is said that the national plan is produced by a combination of this Measure and physical control, but as physical control is, primarily, temporary, and as I understand this Measure is permanent, would the right hon. Gentleman explain the matter?
So long as we have them both, we shall use them both. We are going to have this Measure for eternity if the House accepts the Bill; but the other control is only for five years. As the five years go on we will look at the situation as a whole and see what can be done.
Ministers are now giving a good deal of attention to working out the best machinery for economic planning. We are collecting and collating essential information of many kinds, much of which we hope to publish The House, the public and the Press will have a considerably greater volume of statistical information than it has been possible to make available in the war years, when security considerations and shortage of staff limited our output very severely. We shall correct that and increase the flow of information. Each year we must have a manpower budget, as well as a money budget. We must know the facts regarding not only the surpluses or deficits in finance, but also the surpluses or deficits in labour, both in the country as a whole, and in particular areas and industries. All that must be studied. We must be able to estimate the prospects for the future. On that basis, we must make our plans, aiming at full employment, a fair distribution of wealth among the different sections of the community, and the best use, in the national interest, of all our resources, whether physical or financial. These plans must not be mere essays; they must be consistent with practical possibilities. They must not be too rigid or hidebound. They must be capable of continuous adjustment in the light of changing conditions. We shall never be able to sit back, as some planners imagine, and close our eyes, and let the plan take charge, like one of the automatic pilots in an aeroplane. It was said, long ago, that eternal vigilance is the price of liberty. Eternal vigilance is equally the price of successful planning. And without successful planning, there is no liberty for the people.
Hon. Members opposite, or some of them, are opposed to this Bill. Later in the Debate they will develop the reasons why they are opposed to it. But there is one point with regard to their Amendment on the Order Paper, on which I would like to comment. They declare in their Amendment that this Bill gives permanent and uncontrolled power to the Government. Permanent power, yes, unless some later Parliament proposes—though I hope it will not—to repeal the Bill. But uncontrolled power, no. Control rests, and must rest, with this House of Commons, with its eager, expectant and resolute majority. It is they who exercise control, in the last resort, over anything done or proposed to be done by this Government. The control remains democratic in character, and what we do and what we propose will be published to the world. The Press—both the "Tribune" and the "Financial Times"—will be able to comment on it.
Looking back, we remember what happened at the end of the last war, when the party opposite had power, and when they were able to put their theories into disastrous effect. We were at that time deluged with decontrol. It has been said, not untruly, that there was a paradise for profiteers and security for speculators—but insecurity and unemployment, as we well know, for the great majority of the citizens of the land. We remember, in particular, how the Lancashire cotton industry was sold down the river to shady financiers. We remember what happened to the shipping industry. There, too, there was the most wicked speculation. In one month only, in 1919—I give this as one illustration out of many—30 new companies were floated.
There was no capital control and no investment control. Those 30 new companies were floated on a total capital running into millions of pounds, not in order to produce anything or to build ships, but to buy up existing ships for the purpose of making speculative profits. One company at that time raised its capital for this purpose from £42,000 to £3,500,000—simply to buy up existing ships. Yet a little later, in 1921, these ships were sold for barely a quarter of what they had fetched during the boom; and the shipyards on the Wear and the Clyde and the Tyne closed down, many of them forever. I recall these things in order that we may see the present discussion in its right perspective. This Bill is a small, but necessary, part of a big plan, to stop all that sort of thing from happening again.
4.33 p.m.
The right hon. Gentleman the Chancellor of the Exchequer has delivered a speech of a pattern with which we are now becoming familiar. There is one great advantage about the Chancellor of the Exchequer, and that is that he knows what he wants, he goes out to get it and he does not make any bones about it. This Bill, the Second Reading of which he has moved in a most able speech, and to which some of my hon. Friends will move an Amendment later, is the second of three Measures designed to give to the Government complete control over the financial system of this country. The Chancellor himself said that it was not a breathtaking Bill. I do not know what takes his breath, but, at any rate, he admitted that it was a streamlined Bill. It is a Bill of modern design, which leaves in the hands of the Minister concerned all the power, and removes it as far away as possible from the House of Commons. The first of these Bills was the Bank of England Bill; this is the second, and I understand there is to be a third Bill dealing with exchange control. When we have in power a Government whose policy it is to have a complete and comprehensive planning of the economic life of the nation, it is not to be wondered at that they should bring in such proposals, but they are proposals which, none the less, we on this side of the House will strongly oppose. We want to get these issues between us clarified.
Before I go on to criticise the Clauses of the Bill, I would like to make clear three points. The first is that we on this side of the House do not dispute the need for some temporary continuation, during the transitional period, of the financial controls which were found necessary during the war. But we do object very strongly indeed to making them permanent, and that is just what this Measure does and is designed deliberately to do. There is no question about that.
Secondly, I want to make it clear that the policy laid down by the Coalition Government and reinforced by my right hon. Friend the Member for Woodford (Mr. Churchill) in his declaration of policy to the electors, which accepts as one of the primary responsibilities and aims of the Government the maintenance of a high and stable level of employment, is something by which we stand now as firmly as we stood when we were members of the Coalition Government. Unlike the right hon. Gentleman, however, we believe that to find plenty of work, with individual liberty to choose one's own job, free enterprise must be given a chance and encouragement to plan ahead. Under this Measure it cannot do so. We believe in close co-operation between industry, finance and the State, as explained in the White Paper on Employment which was issued by the Government of which the right hon. Gentleman the Chancellor of the Exchequer and I were both members. But we do not believe that measures of compulsion such as are envisaged in this Bill, should form any permanent part of our economic structure. We admit them as a temporary necessity, but we do not admit that they should form any permanent part of the economic structure.
Thirdly, we on this side of the House would welcome any sensible measures for protecting the interest of the saving and investing community from fraud, sharepushers and financial trickery of any sort. I am a little disappointed that the Chancellor should have given priority to this Measure over a Bill which, no doubt, will be coming forward in due course to implement many of the proposals of the Cohen Committee. These proposals, which will be coming forward no doubt in due course in the form of a Bill, combined with the present-day control of the Stock Exchange Council, which is now extremely strict, should be fully effective to deal with this aspect of the problem. There is nothing in this Bill which goes any further to help us in that direction.
May I now come to the Clauses of the Bill? Clause 1 gives the Treasury the control of borrowing. Clause 2 gives the Treasury power to guarantee loans under certain circumstances, and the Chancellor has explained to the House something of what he has in his mind in connection with Clause 2. Although I shall have some observations to make on Clause 2 later on, I do want to make it clear that it is Clause 1 to which we mainly object, and it is the chief reason for our opposition to this Bill.
What does Clause 1 do? It makes permanent the powers by which the capital market was controlled during time of war. It shows clearly that the Government intends its policy of controls and restrictions to be a permanent feature of our national economy, and not merely a temporary expedient to meet the time of shortage caused by the war. That point was emphasised in the interruption of the hon. and gallant Member for King's Norton (Captain Blackburn) during the Chancellor's speech, when the Chancellor indicated that at the end of five years, when the Controls (Services and Supplies) Act runs out, he would look at the situation and consider whether such legislation should be made permanent. He has an open mind, at any rate. But he is making this part of his proposal permanent here and now, although, without the other part, it would not be effective. In other directions the Government have given the country the impression that their systems of rationing and restriction were merely temporary measures, but here they have laid bare for all to see the plan which they have of permanently controlling and restricting the economy under which we have to live.
The workers were always restricted.
The Chancellor of the Exchequer is much more realistic in this Bill than some of his colleagues have been in their remarks about other Bills that have been introduced. The power given by Clause 1 is quite complete. The Treasury may make orders for regulating the borrowing and raising of money in Great Britain, except from a banker carrying on his ordinary course of business; and of course, the control of bankers has already been secured by the Bank of England Bill. They have, however, a little monopoly reserved to them in this Measure. There is then to be a continuation of the war-time Capital Issues Committee—which is not the same as the National Investment Council of which I will speak later—and this is to be the instrument for licensing and timing investment under the direction of the Treasury.
I will say here a word about the Capital Issues Committee, with whose work I was constantly in touch when I was Financial Secretary to the Treasury. I join with the Chancellor in paying a tribute to the work of that Committee and to its Chairman, Lord Kennet. They carried out to the very best of their ability an extremely difficult and sometimes rather disagreeable job. I gather that the Committee are to be strengthened with new bipod, some of it perhaps a little red, or at any rate pink. But for all that, the Committee is to go on. I know the extraordinary difficulties under which the Committee have worked in the last few years, and I know the considerable volume of criticism to which they have been subjected. I know also that they were not free agents, and that they were working strictly within the confines of Treasury instructions.
What were those instructions in the past, and what are they likely to be in the future? During the war, although innumerable difficulties cropped up in the administration, the main function of the Committee was quite clear. It was restrictive. Its purpose was to prevent any issues of capital other than those directly necessary for the war effort. That was the Committee's objective, and they succeeded. They wanted to reduce to the barest minimum any possible competition with Government issues. That was a clear-cut object, and the sense of it was apparent to everybody. As long as the war was going on, we were all agreed that to win the war was the great objective. Therefore, it was not so difficult for the Treasury to give guidance to the Capital Issues Committee, or for the Capital Issues Committee to follow that guidance. Nevertheless, it was difficult enough. I can remember, as will some other hon. Members, difficulties of one kind and another that cropped up. For two years the conversion of debentures to a lower rate of interest was vetoed. I remember a decision that new issues, although they were sanctioned with a view to helping the war effort, could not be dealt in on the Stock Exchange, and that led to all sorts of repercussions. There was also considerable discussion with regard to the obnoxious condition relating to bonus issues, a problem which is much misunderstood and with which, I hope, some hon. Members will deal later in this Debate. It is difficult to understand the Chancellor's obsession about the capitalisation of reserves, because really no new investment is involved.
I merely took over the regulations made by the late Government, in which the right hon. Gentleman was Financial Secretary.
I know, but I find it difficult to understand the Chancellor's view on this matter, and I hope that at a later stage of this Bill he will go fully into it. My own feeling is that, as time goes on and as the war recedes, the position will become very much more difficult. We all admit that during the transitional period some continuance of capital issues control is necessary, and my right hon. Friend the former Chancellor of the Exchequer, in his memorandum of guidance to the Capital Issues Committee, which was brought out after the end of the European War, talked of the order of priority of capital issues being determined according to their relative importance in the general national interest, having regard particularly to current Government policy in respect of physical investment. Already we are getting on to more difficult ground, although in the transitional period, when goods and services are still controlled by the Government, it is not unreasonable, and indeed it is important, that finance also should be controlled. It will become increasingly difficult to carry out these instructions, because there will be an increasingly wide divergence of opinion on what constitutes the national interest. Is it, perhaps, a speedy promotion of the Socialist State? [HON. MEMBERS: "Hear, Hear."] There are all sorts of differences of opinion about that.
Once the transitional period has passed and markets are again free, how on earth will the Capital Issues Committee be able to carry out their duties? I do not know. In a period when plenty succeeds scarcity and when there are no longer any physical controls, who is to be the judge of what capital issues are to be permitted? Perhaps this period of freedom and plenty is never coming. I do not know. Perhaps the Chancellor knows in his heart that the Socialist system can never produce freedom and plenty, and that all it can produce is a dull equality and a gradually declining standard of life for us all. If so, no wonder he wants this Bill. In conditions of that sort there will be ever-increasing need for financial restriction, and ever-increasing need" for the Chancellor to limit the opportunities of those who want to raise capital. If, happily, we return once again to a time when plenty replaces scarcity, how will the Committee decide on priorities? I want to know that. No doubt the Chancellor feels that he is an admirable judge of what is good for the people, and therefore, of the industries and businesses which should be permitted to raise capital. I do not fancy a world in which he occupied that position, although it would be slightly better than if the President of the Board of Trade were to be Chancellor of the Exchequer, since his ideas of austerity are so oddly balanced. Under his regime he would give us cigars and no meat, and luxurious motor cars but no hot water with which to shave in the mornings.
You could shave in cold water.
Of course you could so long as the water was soft. But why should the Government, why should the Minister, why should the bureaucrats decide what is good for us? Will not this Socialist Government leave us some shreds of democracy? Why should not the consumer be allowed to have sortie little choice how he spends what money is left to him after the Chancellor has taxed him? We on this side of the House still believe in free will. We believe in the individual being allowed the choice of how he is to live his own life, and how he will spend the little money left to him. No system of Gallup polls will ever tell the Government what the consumer wants as accurately as a free market and price system. The system of prices and market constitutes, as someone has said—I think it was Professor Lionel Robins—a perpetual General Election under Proportional Representation as to how the people wish to spend their money. If they are allowed to retain that freedom surely the capital market must be available to producers and those who wish to supply the needs of the people.
True, the people will, not always want what the Government think they ought to have. Different Governments have different ideas. Some Governments, for example, may be composed of men who would very much like to prohibit alcoholic refreshment—there are not so many now as there was 20 or 30 years ago. In others, there might be men who did not approve of horse racing or cinemas. Others might think that the people should be denied a free Press. Every Government is bound to contain faddists and under a system of controlled investment; these faddists would seek to impose their views upon the people. The Chancellor of the Exchequer must bear in mind that we shall not always have a Labour Government and he may not at all like the fads of succeeding Governments. We, in this country, still believe in freedom. I think it was a bishop who said he would rather see England a nation of drunkards, than a nation of slaves. If it was a bishop who said it he would, indeed, know something about the doctrine of free will. But the Chancellor of the Exchequer wants to decide what is good for the people of this country, and that is something which the people of this country resent very bitterly. I suggest that grown-up people should be allowed to make their own choice, and, if they are wrong, take the consequences of their follies.
The right hon. Gentleman has been speaking about the minds of the people. Which class of people? Does he mean the majority—the working people—or what does he mean?
All the people—I suggest that they ought to be allowed to spend their money in the way they want to spend it. When the Chancellor has taxed people as much as he desires, he ought to leave them with some income to spend, in just the way they want to spend it. I think that that deals with the point the hon. Member raised. Of course, the Chancellor may argue that this sort of thing will not happen. He may say that even if he is taking great powers under this Bill, he does not propose to exercise them to the full. If that is the case, perhaps he will not mind limiting his powers a little in time and extent. Perhaps he will think that over and will see his way to accepting some Amendment in that direction. After all, in the case of other controls he has only got five years. Perhaps he might consider limiting the control under this Bill to a certain period.
Or the right hon. Gentleman may say that there is no fear of the consumers' choice being limited. He may say he is net interfering in any way with the use by existing companies and firms of their cash and reserves. If this is the argument, it brings me on to another criticism which I think is very pertinent to this Measure and that is the criticism that this Bill will handicap new entrants into industry. It will protect the rich firms, the well-established individuals with large capital resources. "Support the existing firms," say the Government in effect, through the Chancellor of the Exchequer. This is the policy they are following, of giving every opportunity to those who have got there and very little to those who have not yet made their way. It is a really remarkable thing that the Chancellor believes that he can control investment when he proposes to leave free the investment of reserves by existing businesses and merely confine his attention to the very sector of the field of investment which the Treasury is least likely to be able wisely to guide, namely, the sector which predominantly caters for new enterprises. Of course, the Chancellor indicated in his reply to that interruption that he had in mind to extend these controls to the physical aspects later on, if it was necessary. Does he intend to go on with the allocation of labour permanently? If he does, perhaps he will let us know about it; I would like him to answer that question, although I know it is a very awkward question to answer.
Let us see how this thing will work out. Some new process, let us say, will be invented, a new device or a new machine will be contrived. A proprietor wants to raise some capital to develop it, he wants to get some bold imaginative men to come forward with money and float a company for the purpose. What does he do? He goes to the Capital Issues Committee with his project. Can hon. Members imagine what will happen? Let us suppose that it is an umbrella which dries itself and rolls itself automatically. When he approaches the Capital Issues Committee he will be told that the committee must have the advice of all the Government Departments concerned. That is the way this business is conducted. It is not conducted by a committee, with a representative on each Government Department, sitting round the table. If the Chancellor must go on with this idea he might consider that possibility, because it is not conducted like that at present but is conducted largely by correspondence and minutes.
The Board of Trade will be asked their opinion about the umbrella. They might well take the view that there were already quite enough established firms in the umbrella business. [ Interruption .] Perhaps I might be allowed to develop this theory and I will answer the hon. Member later on if I may. The Board of Trade will state their opinion. They might, as I say, express the view that there are enough firms already established in the business. They might say that the Capital Issues Committee would remember that only recently permission had been given to the issue of new capital to three firms making mackintoshes, and this, of course, might greatly interfere with the sale of mackintoshes. Indeed, the investors who have put their money in these new mackintosh businesses might argue that they have done so, very largely, owing to the fact that the Capital Issues Committee sponsored by the Treasury and under the auspices of the Government had approved the issue.
Therefore, the Board of Trade will say, the investor must not be let down. The Board of Trade will certainly not prove very encouraging to the project. Other Departments will be consulted by the Capital Issues Committee. Somebody may say, "Let us consult the Meteorological Department of the Air Ministry and find out their view about the weather." If they say it will be a fine summer, the Committee will not be very inclined to allow the manufacturer to go forward with the project, and will rather allow that bicycle manufacturer to have a little more of the small amount of rationed capital he was seeking because with such fine weather he will be able to do good business.
But at this point the Colonial Office may come in and take an interest in the matter; they will support the project, and say, "There would be a great demand for these umbrellas in West Africa; the people in West Africa would be much encouraged by the chance of buying these umbrellas, particularly if they were brightly coloured"—(At this point the dyestuffs controller shakes his head very discouragingly). The Colonial Office will say, "If the umbrellas are available in the market of West Africa, the output of ground nuts will be increased because there will be something for the natives to buy, and the people engaged in producing ground nuts will work harder." The Colonial Office, therefore, will support the project. Here the Ministry of Agriculture will prick up their ears and say, "More ground nuts, more feeding stuffs—that is good for us. That means more milk. We support the project." The Ministry of Health will say, "If this will produce more milk, we shall support it"; but at the same time they will have to bear in mind that until they can greatly increase the pasteurisation facilities, it would be very unwise for any more milk to be produced, and therefore they must do everything they can to get the pasteurisation business moving quickly, although the iron and steel people, when consulted about that, are not at all encouraging.
All these things take a great deal of time. The House will appreciate that Departments do not come to decisions lightly; in every case the decision has to go up very high, and very likely to the Minister himself. What happens? Finally, there is such a clash of views that the matter has to go to the Cabinet, and of course before the Capital Issues Committee can give their opinion they have to get clear guidance from the Departments. When it comes to putting the matter on the agenda of the Cabinet, the matter is so unimportant that it never finds a place on the agenda, and therefore it is never resolved, and the Capital Issues Committee are unable to give the umbrella manufacturer an answer, and he, with a heavy heart, uses what little money he has left to buy a ticket to go to America. The truth is that progress is not due to the combined wisdom of the great majority. It is due to the bold, adventurous, enterprising spirits whose genius enables them to see ahead of the rest of the world and whose vision and energy enable them to force their way forward in spite of the laughter and jeers of the crowd and the sneers of the people who are in authority. It was adventurers who made England, and not Government Departments. "The Times," which is not always entirely favourable to the point of view I represent, says:
We have built up in the City of London a great capital market. This capital market has been the means whereby our Empire has been developed. But for it, would the gold mines of South Africa have reached the great state, of development they have come to? Would the copper mines of Rhodesia, the rubber plantations of Malaya and Ceylon, or tea and tin in the Far East and India have done so? Of course not. There are many countries which have no capital market and where the only way to finance large operations is the slow and painful process of building up entirely out of income. In this country we developed the idea of one man making fruitful not only his own savings, but the savings of other people. That is the basis on which all our wealth and prosperity has been developed, that is the process which this miserable Bill will check and retard.
I would like incidentally to ask the Chancellor whether he has gone fully into the question of the limitation on borrowing between parent and subsidiary companies. It occurs to me that it would be a wholly unnecessary and most damaging interference with the mechanism of trade. This is a point on which other hon. Members on this side of the House feel very strongly, and I beg the Chancellor, or whoever replies from the Government Front Bench, to give serious attention to this problem, and give us an answer. The matter is causing considerable anxiety in the commercial world at the present time.
Never before was there a time when it was so important as it is today that the trade of the world should be expanded, and yet the Government come forward with a Bill to restrict it. This Bill has got re-strictionism and Government control written all over it, and it is not a temporary Measure dealing with an awkward year or two, but a permanent Measure to cabin and confine the traders and business men, the merchants and financiers, of our country for ever. The Chancellor belongs to a party which wants to spread light, but it spreads darkness. He wants to see expansion, but all the Measures he introduces promote restriction. We on this side of the House cannot understand it. Perhaps the right hon. Gentleman is frightened of inflation—and no wonder. Let me tell him the way to curb it and to avoid the necessity for permanent, continued restriction of capital issues. The way to avoid inflation is by greatly increasing production and by reducing the extravagant expenditure of the Government, by reducing taxation, not only on the smaller incomes but on the larger incomes, of those people who from their savings will find the money to fill up the capital market the right hon. Gentleman is so anxious to restrict. Of course, there will be shortages of capital if he goes on with his policy of excessive taxation. Let the Chancellor attend to the business of being the guardian of the public purse and the protector of the taxpayer, which he seems to have forgotten. Do not let him spend all his time in setting up a great structure for placing in the hands of his overworked officials tasks which are very much better left to other people.
In the employment White Paper which was presented by the Coalition Government various methods were proposed for dealing with the problem of booms and slumps, and for avoiding the difficulties which have arisen in the past. We all realise that there is much room for experiment in this field. It was admitted that the Government could seek to even out capital expenditure over the years by the proper use of the great power they have got in their responsibility for public projects, whether promoted by the Government, by public boards or by local authorities. It was recognised also that there is great scope for co-operation in the field of private investment between government and business. But we must not forget that, whereas it is quite easy by law to prevent private enterprise making an issue of capital, you cannot force a man to borrow money for a project which he does not think will be successful.
Therefore, it is impossible to have planned investment over the whole field unless the whole field is in the charge of the Government. No doubt that is what the Chancellor would like, and in a Socialist State that is what would happen. That is, no doubt, what he wants to achieve, but there is a risk—and I hope the right hon. Gentleman the Chancellor will give due regard to it, There is a risk that the Government, in what they are doing now in all these Measures, will make capitalism unworkable without putting anything in its place. That is the thing to remember, and it is a criticism of the policy of this Government which is not confined to hon. Members on my side of the House. If the Government own everything, they can in theory plan everything, but if private business is to be allowed to continue, how can business men plan their work many years ahead, if they are uncertain whether or not they will be able to get capital for extension when the time comes for them to need it?
Of course, the Chancellor has gone a great deal further than the White Paper on Employment ever went. This Bill is an extreme example of delegated legislation—what the Chancellor called "streamlined legislation"—the kind of legislation which deprives this House of its power to put it all in the hands of the Government. In spite of that, Parliament is showing itself ready to accept this kind of Measure, and to give up its own powers in a vast sector of the national economy to a Government Department which exercises control by order. It is not a very democratic control. The procedure in this House for dealing with regulations, as the Chancellor knows only too well, is not one which it is very easy to use for proper" discussion of the sort of regulation that we are likely to get.
I agree that this is only an enabling Bill, and if it is operated by a wise Chancellor it might not do much harm. But we may not always have a wise Chancellor. The right hon. Gentleman may one day regret having forged a weapon of such power ready to the hand of some extremist who may oust him from his post. We shall seek to amend this Bill in various ways. In the White Paper which accompanies the Bill there is, for example, an Order which exempts the borrowing of sums less than £50,000. Perhaps the Chancellor will consider putting this exemption in the Bill, and not merely in an Order, or is he putting in the £50,000 now as a measure of appeasement, knowing well that he will have to reduce it substantially?
I would remind the right hon. Gentleman that I inherited that limit from the right hon. Gentleman my predecessor.
The right hon. Gentleman will remember that the limit had been increased from £10,000 to £50,000, and I had been hoping to see it increased still further. I hope he will put it in the Bill, and indeed I should be glad if he would put in £100,000. Of course, if he really feels that he will soon have to reduce the £50,000 to £10,000, perhaps he will be good enough to tell the House this later on in this Debate.
We shall also seek to amend the Schedule to the Bill, on which we shall have something to say in Committee. It contains a good deal which is very objectionable, particularly in paragraph 2 and I am sure the learned Solicitor General will appreciate this point. Paragraph 2 as it stands gives the Treasury power to give directions to any person, and not merely to a person suspected of wrong doing. I should have thought that this goes far beyond anything which should be allowed. It would for instance enable directions to be given to a solicitor acting on behalf of a client, thus abolishing the confidential relationship which, I am sure the learned Solicitor-General will agree, is absolutely necessary if justice is to be done in this country. I hope he will give his attention to it, and possibly say a word or two about it later.
I have not said anything, about the national investment council, I leave that to others. I regard it as nothing more than a facade set up by the Chancellor to take the place of the investment board which he and his party promised the country at the Election, in that pamphlet which secured them many votes. They have thrown it overboard. I do not criticise the Chancellor for departing from such a promise, which he probably had not studied very closely when it was published. In any case, it is quite clear that he has learnt better now. He has told us that he has advanced since the time of the General Election, it is very encouraging to see progress by the right hon. Gentleman.
Are the right hon. Gentleman and his party now prepared to support the National Investment Board should the Chancellor change his mind?
Perhaps the hon. Gentleman did not hear what I said. I have just said that I do not criticise the Chancellor for changing his mind, because. I thought the proposal for a National Investment Board was a very foolish one. I am very glad he has changed his mind. It seems to me, on the face of it, that the National Investment Council—composed of such busy men as the Chancellor of the Exchequer, the Governor of the Bank, and the others whose names he read out to us—will not have time to carry out the functions which the White Paper assigns to this advisory body. How often will that body meet? We shall be able to inquire from time to time how it is getting on. I think it will turn out to be just like the Board of Trade, of which the Archbishop of Canterbury is a member and which never meets at all. It is quite clear that it is only a facade. If hon. Members will look at the front page of the Bill, the explanatory and financial memorandum, they will see that the cost of administration of this measure is estimated by the Chancellor to be only £10,000. A National Investment Council which really did the work which the Chancellor envisages, would have to have on it not only men who gave their whole time to it but a very considerable permanent staff. I suggest that it is unlikely to prove a reality at all. It will perhaps have a few meetings in the first year. Chancellors of the Exchequer do not have many hours to spare to preside over new bodies, but it will, no doubt, have a few meetings in the first year. But in a year or two we shall hear no more about it.
At a later stage we shall put forward further views on Clause 2. We do not object to the principle, but we may be asking for some more information about the forms which the loans are likely to take and the terms which are likely to be granted to borrowers. Under this Bill, the powers of the Treasury over the use of this money are, as the Chancellor told us, wholly unlimited, whereas on previous occasions Government investment in industry has normally been limited to more specific purposes. There is always a danger that the Government will think too much in terms of subsidising industries rather than of creating conditions under which such industries could stand on their own feet.
I would like, in summing up, to add two or three more comments. This Bill seeks to make permanent the existing wartime method of control, and that is the principle reason why we object to it. It is more interested in established businesses than it is in new ones. It gives a certain monopoly to the Bank. It does nothing for the protection of the investing public. It leads the investor to suppose that because the imprint of the Committee is on the prospectus it will give him security; though, in fact, it will frequently involve him in loss. It really does damage to the interests of the saving public and it makes it more easy for the fraudulent than it was before—
That is an advantage to the right hon. Gentleman.
I am not going to enter into an argument of that sort with the hon. Gentleman who represents such a small section of the community. I know very well that hon. Gentlemen opposite accept my point of view as being sincerely held. I accept their point of view as being sincerely held, and I do not propose to enter into an argument of that sort with the hon. Gentleman. This Bill is so designed that the Treasury will become the permanent judge in matters in which it has the strongest vested interest. As the "Economist" says in its last issue about the Treasury,
"It would raise its hands in horror to be told it had rigged the market to get its own way, but in brute truth that is precisely what it has done both in the war and since."
We on this side do not object to continuing control though we should like it to be exercised in a more flexible way than in the past. But we cannot agree to its becoming a permanent part of the economic life of this country. That is a policy of restriction and not of expansion. This Bill is not a step towards a high and stable level of employment. That can only be achieved in an ordered society by encouraging enterprise—and allowing a fair reward—by those who earn it by their industry, their foresight, and their skill.
5.22 p.m.
On what is for me an alarming occasion, my first address to the House, may I crave the indulgence of the House? The purpose of this Bill, as I see it, is to control or, alternatively, to stimulate investment according to the circumstances of any given time. I, therefore, feel that we must consider it in the light not only of present-day conditions but of those future conditions to which reference was made in the White Paper on Employment Policy to which the right hon. Gentleman who has just spoken has already referred. As I view it, a Bill of this kind should have three particular functions. First, it should deal with the present quite exceptional state of affairs. Next it should serve to iron out future trade fluctuations. In the third place—and this, again, is for the future—it should seek to maintain that total volume of demands that is so necessary for the full employment of our people.
Turning to the first point, it will be generally agreed that the demand for capital very greatly exceeds the supply; that the Government must, by reason of their commitments, have the lion's share of what capital is going; and that there still exists a very real danger of inflation. I, therefore, feel there cannot be any objection to rationing such capital as is available among the large number of applicants in order that those whose undertakings are of the greatest importance to national reconstruction can get the capital that they require. May I say a word about the Capital Issues Commit- tee, which some of us imagined would have been the nucleus of a national investment board that would be set up? When I first saw there was not going to be a National Investment Board, I admit I was rather concerned. The more I thought the matter over, however, the more I came to the conclusion that this kind of thing could best be performed by the Government themselves, that the decisions to be taken were of such high moment that they could only be taken by the Government themselves; and that, therefore, the Chancellor would, with the help of the Advisory Committee which he is proposing to set up, use the Capital Issues Committee as an executive instrument for carrying out Government policy. May I say a word about the point to which my right hon. Friend has already referred, namely, the delay which sometimes takes place on the part of the Capital Issues Committee when dealing with applications made to it? I have heard about this relay from several sources, and I Would, therefore, ask my right hon. Friend really to look into this matter very closely. I quite appreciate that applications have to be referred not only to the Treasury, but to a number of other Government Departments, and that makes it longer. Nevertheless, I feel that a fixed time should be given in which a definite answer "Yes" or "No" should be given to every application made to the Capital Issues Committee.
I now come to the second point, that of ironing out future fluctuations in trade. Under a system of private enterprise not subject to control, booms and slumps have in the past moved in cycles, a boom almost invariably being followed by a slump. A boom is caused by over optimism on the part of employers, who come to the conclusion that the time has come to expand their productive capacity. It is an excellent thing to expand one's productive capacity, but there are times when it is wise to do so and times when it is less wise. It is unwise to do so when prices are high, when competitors are likely to be expanding, and when it is more difficult to see whether a project is likely to be favourable or the reverse. Conversely, when trade is slack, that is a good time for expanding because other competitors will not be following suit and it will be more easy to decide as to whether any given project is desirable at any given time. Human nature, how ever, is a very potent factor in these matters. We all spend when times are good and we retrench when times are bad: it is the same with industrialists. In these circumstances it is necessary to regulate the market for capital investments in order to see it does not develop into a boom or—to use a colloquial phrase—that the pot does not boil over. But the pot may boil over in some other country, in particular in the United States. They may have a slump and that slump may spread to us; and if it does it is going seriously to affect the market for capital investment, which is the first to be affected by a slump. If it spreads still further it will affect capital replacement. Let us take the case of a firm which puts aside 5 per cent. every year for replacements. If it decides, owing to the circumstance of the time, to cut its replacements to only 2Í per cent., that does not sound a great deal: indeed it is a small matter for the firm concerned. But to the unfortunate firm receiving the orders it means a cut of 50 per cent.
It will be realised, when this sort of thing covers a wide field, how sudden, how swift, and how disastrous a slump of this kind can become. That is where the second or positive function of this Bill comes in—the function for stimulating investment. Obviously there will have to be some increase in public capital expenditure, but private industry cannot be allowed to lay off its burdens on to the shoulders of the Government. It must lay its plans in advance so that it will be able to carry them out when the Government ask them to do so. The Government guarantee provides up to £50 million in one year. May I ask my right hon. Friend to consider whether that figure could not be increased substantially? I will give two reasons. In the first place, it is necessary to jump in very quickly to cure a slump. It may be said that a one-Clause Bill could be brought to this House and passed very quickly: I have no doubt that this might be possible, but one cannot tell what the Government programme may be at any time, and hon. Members will realise that it takes a longer time to get even a simple Bill through this House and another place than some of us imagined before we came here. My second reason is psychological, namely, the importance of bolstering up public confidence. If the public know that a substantial sum of money will be made available by means of these guarantees, they are far less likely to become slump-minded. Therefore, I would ask my right hon. Friend to consider this point and see whether it would not be reasonable to increase the figure from £50 million to £100 million.
Finally, I come to the question of maintaining the volume of purchasing power so as to provide full employment for our people. Some hon. Members may question this, as being almost analagous to the point which I was making about curing a slump. I admit the one is complementary to the other; nevertheless, I submit that there is a certain difference between the two. Let me give an example. Let me take the two years 1929 and 1937. These years were not years of slump, they were years of good trade and almost years of boom, yet during those years there was a large volume of long-term unemployment throughout the country.
It may be argued that this long-term unemployment was due to the decline in our export industries. I agree that it was to some extent. It may also be argued that it was due to the bad distribution of industry in what we now call the development areas, by which those areas were far too dependent on one particular form of production and, if that form of production fell on bad days, there was nothing to take its place. Throughout the country, in the areas which were not in any way dependent on the export trade and in areas that were not what we would call development areas, this long-term unemployment persisted. It was due to some other cause than a slump. It was due to lack of purchasing power in the pockets of the public to buy the things which they wanted and for the making of which factories and workers were available. This state of affairs must not be allowed to go on. In the first place, we must cure it by ensuring a better distribution of the national income so that too much purchasing power is not concentrated in too few hands, with the result that there is too little purchasing power spread over the mass of the people. That was a feature of the 1920's and 1930's. We have to do away with that.
Next the Government will have to make their plans. They will have to consider how much total expenditure of both a capital and consumer nature, taking also into account export demands, will be needed in any given year to employ the total number of men and women estimated to be available in the labour market. They will also have to estimate how much expenditure is actually likely to be made. Should the latter figure show a deficit on the former, it should rest with the Government to make up that deficit, by stepping in and spending money on their own account. That is a point which I hope whoever replies on behalf of the Government will elucidate a little further. There is no reference to the point which I have been making in the White Paper accompanying this Bill. Nevertheless, I am fortified in the belief that this question is fully in the mind of the Government by the fact that in this White Paper there appear, for the first time, the words "full employment" The right hon. Gentleman opposite, while addressing the House, quoted from the White Paper on Employment Policy the very words to which I myself am going to refer—"a high and stable level of employment" for which the Coalition Government made themselves responsible. I submit that the Chancellor of the Exchequer has gone one better than that today. He has, in perfectly plain and simple language, said that his financial policy has as its object this maintenance of full employment. May I congratulate him most heartily on his vision and courage. In conclusion, I make no apology for drawing this matter to the attention of the Government since I am convinced that when conditions become normal the Government may have to spend money in order to maintain full employment, and upon the maintenance of full employment depends the future prosperity and the future greatness of our country.
5.38 p.m.
I am glad that it falls to my lot to congratulate an old friend on an admirable maiden speech. The hon. Member for Accrington (Mr. Scott-Elliot) spoke with a vigour and sincerity which, I think, the whole House appreciated, and I am sure that I can speak for all of us in saying that we look forward to further contributions from him.
The Chancellor of the Exchequer described this Bill as short, simple and modest. It is, I believe, one of a series. It would appear that these Bills are the means by which the Government obtain powers to do anything, at any time, and anywhere. I think the description "short and simple" is fair, but "modest" would not appear to me to be quite in keeping. Perhaps it is because of that disregard of Parliamentary control that there would seem to be a certain lack of jubilation, even among the Chancellor's own supporters, in regard to the way in which these Bills have been brought before us. It seems to me that the Chancellor of the Exchequer is dealing, in this Bill, with two quite different situations. The first is the period of scarcity through which we are now passing, when he, like his predecessors, has got to do all he can to restrict expenditure on consumer goods and cut down what we buy; and the second is the period of abundance which we all hope may come, although, I am bound to say, there are not, at present, any very obvious indications that it will come during the present administration. But during that period of abundance he will want to maintain expenditure at a level to absorb all the goods that can be produced, as described by the hon. Member for Accrington in his maiden speech.
The objects of this Bill and the White Paper, as I understand them, are to protect the gilt-edged market by avoiding what the Chancellor of the Exchequer would think was unnecessary competition; secondly, to minimise the risk of inflation by cutting down capital expenditure; and, finally, to maintain or, in the words of the White Paper,
Turning to the subject of interest rates, I think that the right hon. Gentleman is right in his attempt to reduce the burden on the country by reducing the interest rates. Further, if I might here make to the Financial Secretary to the Treasury an entirely non-controversial suggestion, it would be that he would assure us that the rumours are untrue that the right hon. Gentleman is proposing to issue 2⅗ longdate stock in the near future, because I think if he did it, the shock to the Government plans might defer for some time the cheaper money policy which the Chancellor wants to see. There are two other methods of controlling money rates. There is the method employed in the last war of offering a fixed amount of longdated stock, at a fixed price, low enough to attract the public and induce them to buy. That failed in the last war, and we had to pay double the rate of interest towards the end of the war compared with what we paid at the beginning.
There is the new method—and I will not go into it in any detail because I spoke about it on the Second Reading of the Finance Bill—which was referred to by the late Sir Kingsley Wood in his last Budget speech. He said that we had evolved an entirely new technique and had revolutionised public opinion on the subject of interest rates. I should like to ask the right hon. Gentleman why he does not make full use of this new instrument. Why does he lack boldness in handling the instrument that has been evolved? Is it because he is afraid that an increase in bank money and in bank deposits would cause inflation? Surely, no one will be richer, and it will not cause anyone to spend any more. It is sometimes said that only rich men smoke cigars. It may be that only the right hon. Gentlemen on the Government Front Bench are rich enough to smoke cigars, but smoking cigars will not make men rich nor help them to sit on the Front Bench. In the same way increasing bank deposits will not in any way increase the risk of inflation. It is the Government's expenditure on account of which there is unnecessary borrowings that causes that. I think that it is perhaps significant, that it was under a Conservative Chancellor of the Exchequer that this modern technique was evolved, and it was under a Socialist Chancellor of the Exchequer that there was an increase in controls and restrictions. We approach the question of controls in a different way from that of the Government. We look upon them as disagreeable and unpleasant things, which we have, on occasion, to adopt and we would unhesitatingly do so when they are necessary. The right hon. Gentlemen opposite appear to look upon them as very pleasant things, almost toys, with which they can amuse themselves. I only hope that when the novelty of acquiring power for the first time has passed, they will adopt a more realistic attitude.
Reverting to the question of inflation, the Chancellor of the Exchequer apparently thinks that this measure of rationing issues is going to help in that direction. I should like to point out to him that in 1938 the expenditure on capital formation was £785 million. The amount spent by companies as opposed to local authorities was £550 million. The amount of that £550 million which was raised by issues was £93 million, so that on that basis the amount that would go through the net would be 83 per cent., and what the Chancellor would catch would be 17 per cent. I suggest that these measures are not going to be an effective brake, when going down hill. They are worse than useless because when one wants to reverse the procedure, one cannot take them off completely. It is the more disturbing in that the companies that will be particularly affected, are small new companies, while the great monopolists—had we won the Election it may well be the powers of monopolists to exploit the public would have been curbed by now—would still be able to use their huge resources unfettered. It is the smaller company or the newcomer that is caught by these regulations. I have often heard right hon. Gentlemen opposite complain of the lack of enterprise in the capitalist system. I can only say that they are contributing their share to this lack of enterprise. These restrictions, I believe, are going to be costly.
May I describe what I think happens to an industrialist who wants to extend his business and raise money in the market? To do so he goes to a financial house, puts his proposition and, before the war if it were accepted as a sound proposal, the financial house would issue the stock, subject only to the delay involved in not bringing out the issue at a time when there was a glut. Therefore, there might be a delay of a few days. Now the proposal will come before the Capital Issues Committee. The Chancellor of the Exchequer says he is going to reduce the waiting period. I take it he is going to reduce the exceptional time taken, which in some cases is very great indeed, to the average of two months. I wonder if it is possible to reduce it much below that, when we remember the number of Government Departments to whom these matters will have to be referred and who will have to be consulted.
What will happen is that the financial house quite obviously cannot accept a proposition subject to a two months' delay, lest the market may move in that time to such an extent that the issue will either show a profit which is undeserving and unhealthy, or show a loss which is even more unhealthy. Therefore, it has to charge an excessive rate in order to safeguard itself. What generally happens is the whole matter is deferred for fresh negotiations and further delay follows. I am afraid that the only way of dealing with the demand which exceeds the resources available is by physical controls, but I should like to remind the right hon. Gentlemen opposite that the need for the different controls, is accentuated by the Government's failure to unwind the war machine. The real cure for all these things is an increase in the supply of goods. We are not getting on with it because the Government are not succeeding in converting this country from war to peace as rapidly as they ought.
It is only a few weeks since my right hon. Friend the Member for Woodford (Mr. Churchill) told us that the number of people in the Forces was about 4,000,000. I have not heard that figure contradicted. I would like to ask right hon. Gentlemen opposite how long they think the country can bear this burden. I do not want to belittle in any way their fears about inflation, because I look upon inflation as the gravest situation in the country now. At the moment, it would seem more probable than not that we shall be faced with all the social injustice involved in, and all the appalling dislocation that comes from, catastrophic inflation. Unless the Government can produce a wages policy I cannot see how that will be avoided. I think Members on all sides of the House will agree that there is no possibility of increasing real wages, except by an increase in productivity. Un- less this is done you merely get a scramble between one section and another, in which nobody gains, and then you get inflation. So far as I know, the Government are doing nothing about that. Is it that they just do not know what to do, and think that if they produce a lot of Bills like this and put on a lot of restrictions and controls, it will divert public opinion, or at any rate make an appearance of being busy, or is it that they are so preoccupied with their nationalisation plans that they have not the time and energy to think what to do? I think right hon. Gentlemen opposite are rather like the man who, walking over a mountain and seeing a distant view which seemed glorious, was so preoccupied with it, that he forgot about the abyss at his feet, and had a very precipitous fall.
I come to the third point—maintaining a high level of employment. If we have unemployment in the near future—it is not impossible—it will be caused in no way by the lack of effective expenditure. I think the pent-up savings of our people during the war amount to £8,000,000,000, a large proportion of which people are longing to spend. But there may well be bottlenecks, in fact, there are sure to be, unless we unwind the war machinery at a much quicker rate than we are doing at present. If the Government mistake the disease and try to apply the wrong remedy, if they try to diagnose the conditions of 1946, by what was applicable to the conditions of 1935 and propose a remedy that was fashionable in 1920, and which is quite out of date now, I think we are in for disaster. But when we come to a period of abundance—and there is no clear indication of that—then I entirely agree that there must be Government regulation of the amount of expenditure. I am one of those who feel absolutely convinced that only the capitalist system could have raised the standard of living to the extent to which it has been raised in this country, and that only that system can make the immense contribution towards raising it to the level we all want to see. But it is no part of my claim that the capitalist system is without any defect. Of course, we know that in the past depressions have been caused by the fact that decisions to save and decisions to invest have got out of line so that a trade cycle has followed, bringing with it a slump and unemployment.
There are two methods of dealing with that. There is the democratic method of ensuring a demand. The present Chancellor-of the Exchequer, like his predecessors, has had to tax very highly to cut down expenditure, but when we get to the period of abundance he will have to do the reverse; he will have to stimulate expenditure in every way he can. In that way, markets will be ensured for the goods which manufacturers want to produce. We now know that manufacturers re-equip their factories not because we buy stocks and shares, but because their prospects for sales are good. If we can provide the conditions under which there are good markets—and that can be done, as is shown by the White Paper produced by the Coalition Government—then we can, in a democratic way, ensure that there is adequate expenditure and investment in capital equipment. The other method is the authoritarian one, by which the Government take it upon themselves to direct investment. That means that the Chancellor must choose what is good for us. It would be for him to say, "Whisky is much better than beer, therefore I will allow a distillery to be built, but I will not allow a new brewery to be built." He could say, "New investments must take place and this factory, which does not want to rebuild, must do so." In fact, in the words he addressed to the Fabian Society—if he was reported correctly—the Chancellor could say, "Never mind about the profit motive."
But if you do that, if the Government have to order people, in an arbitrary way, how they are to invest, that means that the taxpayer has to take responsibility. I would like to ask the right hon. Gentleman whether he thinks that the mandate we hear so much about, was a mandate to a few in the Government to decide what is good for the population as a whole—that we should have bicycles or sewing machines? What is then a mandate for the Chancellor to decide what is a good financial risk, and letting the country bear the loss if there is a failure? Perhaps the Chancellor has an idea that, if he chooses some good advisers, he can be infallible in his choices. He was brought up in the dizzy intellectual heights of that great establishment in the Strand. Now he has come to Whitehall, and is taking a more active part in business—or is threatening to do so—than any of his predecessors. I would like to offer him a little City experience, and to tell him that in the City the men there, who devote such limited talents as they have entirely to making judgments of what are good and bad financial risks, which is a good industry to support and which is bad, expect to be right only on balance. They expect to be right more often than they are wrong. When they make a mistake—and they often do—it is only they and their immediate concerns which suffer. But when the Chancellor makes a mistake, the whole country suffers.
We all know the story of great books which have been offered to many publishers and have been rejected but are, finally, accepted Just the same thing happens in the City. A promising proposition is put forward to one financial house after another, and is turned down, but if it is a good thing somebody always backs it in the long run. That is democracy. In a free market someone will be found who will be right. You cannot ensure that infallibility in one man. Is the Chancellor going in for a great career of public works? If so, is he quite sure that he can plan so well as to be certain that these works will not be white elephants? In the 18th century there were useless and fantastic towers scattered about the country that were named "Follies" after the name of their builders. It will be a sad business if future generations think of the middle of this century as a period when "Dalton's Follies" covered the land.
May I, in all diffidence, offer the right hon. Gentleman one more piece of advice? One of the first things one learns in business is to cut one's losses. I would suggest that, however admirable his object in this Bill, his methods of achieving it are out of date and old-fashioned. The protection of the gilt edged market is clumsy and costly, the means of minimising the risk of inflation are ineffective and unfair, and stabilised investment is dangerous and authoritarian. I suggest to him that he does cut his losses and makes drastic Amendments in order to produce an up to date Bill. I have known the right hon. Gentleman for a long time and have great respect for him and I do not want to be thought to be criticising him too much. I fully realise that he cannot be expected to understand all these things. No ordinary human being could possibly have as many fingers in as many pies as the Chancellor has now, and understand all the questions involved. If only he and his colleagues were prepared to drop some of their fancy views, and come down to realism and to dealing with the really urgent problems before the country while our victory at the next Election might be less sweeping the country would be a happier place to live in.
6.1 p.m.
I rise to support the Second Reading of this Bill and to continue the line of policy that I was advocating and endeavouring to carry out until a few weeks ago. This country has managed its finances during the past six years better than any large capitalist country in the world. I remember, early in the war, having conversation after conversation with the late Sir Kingsley Wood, who informed me of the difficulties he was having at that time to avoid inflation. Probably the reason I was more interested in the danger of inflation than many other hon. Members at that time was that I was in the Army of Occupation after the last war and saw the way the German people "went through it," so that I dreaded inflation ever coming to this country. As a result, I put question after question and made speech after speech. Some of my dearest and closest friends, Who, though they are no longer here, have served their fellows in our own country so well, and have built up our movement as the result of great sacrifice, thought I was over-doing it. Since then, they have admitted that the policy was correct.
As a result the late Sir Kingsley Wood began to impose controls and introduced a number of proposals, all of which had the support of the whole House at that time, to avoid the dangers of inflation. The same kind of ideas which are finding expression in the present Amendment created difficulties for the late Sir Kingsley Wood at the beginning of the war. The question now arises whether we are to manage our finances in peace as well as we have done during the war. It is generally known that the chief advice to the Treasury throughout the war came from Lord Keynes, who, in 1936, wrote: of affairs in this country have learned. I agree with the hon. Gentleman opposite that nobody knows it all, and in these days that is the first lesson to be learned. We who belong to the people learned very early in life that a lesson dearly bought is a lesson well taught, and those of us who know the industries of this country know the need for Bills of this kind, and for policies of this kind, in order to prevent a repetition of those dark, drab days which millions of our fellow countrymen passed through between the wars. The lesson to which I have just referred is being applied in the Government's legislative programme, in their financial policy, and in this Bill. We can no longer afford to allow private interests to compete with the real national interest, and all hon. and right hon. Members on this side who really believe that have the duty of applying their belief in every possible way.
This Bill is a contribution towards full employment and will tend to eliminate those deep fluctuations from which we suffered between the two wars. Great credit is due to those who initiated the publication of Command Paper No. 6623. I would ask my hon. Friends on this side in particular to study the Command Papers that have been issued since the beginning of the war. They give a clear picture of the finances and the economic conditions of this country and we should use the whole of our influence to ensure continued publication. We should also take this to its logical conclusion.
I should like to know from the right hon. Gentleman who is to reply whether, after studying those Command Papers, he is satisfied with his present machinery, even if he gets this Bill? Another question to which I should also like a reply is, whether we are mobilising our national finances to enable this country to carry out the great economic and social development to which we have committed ourselves? The Chancellor of the Exchequer said today that this Bill provided for the use of two tools, the first of which was finance, upon which he dwelt for a long time—and on finance the Government have a clear policy. The second tool, he said, was economic, but he did not dwell upon the White Paper which deals with the logical conclusion of this Bill, namely, the economic development which must take place behind it. He said, first of all, that the Cabinet cannot devolve and rele- gate its responsibility for planning. No one suggested that. What we do say and admit is this: the Cabinet should prepare broad policy, basic decisions, and main principles, but the members of the Cabinet are too busy to be drawing up plans themselves. That work should be carried out by following the policy of the Labour movement of this country; and in connection with Bills of this kind national economic plans should be laid down and an economic general staff set up.
I have here a publication with which the Chancellor of the Exchequer had something to do. I am quoting from page 3, on which we find the following: contained in the White Paper? Why are the functions of the National Investment Council to be only advisory? Who is to do the economic planning? Ministers can decide broad principles and submit specifications, but Ministers are all far too busy to prepare and lay out plans of the kind about which we are speaking.
The outstanding lesson of the period 1919–1939 is the need for national and local planning. In modern countries you either plan, as the White Paper advocates, or you have anarchy. You either have organisations or you have chaos. Most large industrial countries have already taken steps to carry out the policy advocated by the Labour movement of this country and the policy which I am now advocating. The White Paper admits that we are in urgent need of a planned economic policy. I would ask, therefore, have the preliminary plans been drawn up? If not, why not? Has one of the main essentials, namely, manpower, been budgeted for? The people of our country have suffered far too long from the law of unequal development.
I want to pay a tribute to the Chancellor of the Exchequer in taking the steps that he has taken on the introduction of the Bill, although it is of a limited character. I am advocating tonight that the Bill should be carried to its logical conclusion in order that this country may organise the wealth of peace as it did for war. What proportion of the national income is to be allocated to such things as housing, re-equipment, industrial development, building and electrification? We are in a serious economic position. The only road forward is by a maximum amount of national ownership. A national economic plan and national ownership will give us the maximum production.
Not necessarily. More production is secured by more work. [HON. MEMBERS: "Oh."]
I will deal with that interruption. During the war, the people of this country made a magnificent contribution to the winning of the war. Never in the history of the world have people worked as did the industrial workers during the recent war. If we have the maximum of national ownership, those workers will serve their country well in peace as they did in war. So, therefore, I advocate the maximum of national ownership. The people who have had something to say on that matter ought to be doing all they possibly can to carry it out, now that they have real power behind them. If we also have a national economic plan, more organisation and more horsepower per person employed, we shall be on the only road forward.
Anybody who is interested in industrial affairs, and has the audacity to ask people to work harder in these times, simply fails to understand the situation or is blind to the facts. As a matter of fact, the men and women of this country exert greater energy and exploit their lives more for the purpose of giving the maximum production than do any people in any other part of the world. They work harder than people do in most other parts of the world. I am not asking hon. Members to accept my word for that. Let them read the publications put forward by the Right. There is one entitled "Planning for the Next Job," in which we see an indictment against the policy that has been pursued during the last 50 years in this country, the maximum exploitation of human energy and the minimum of expenditure on machines. The time has arrived when all Labour people should be advocating that we make machines the slaves and not make slaves of the people of our country, in the way in which someone has suggested. We need more horsepower per person employed. We must give people more to work for and more to live for. We must give them an incentive. We must get more goods into the shops in order that the hard-gained earnings of our people can be spent upon the consumption goods which they so urgently require.
During the peak period of the war, half our manpower served in the Armed Forces, in supply services or other Government services. Despite Lend-Lease, our volume of imports was 80 per cent. of the pre-war level, and we survived, with great potentialities for expansion, if we approach our peace problems in the same way as we did the problems of war. The reason then was that we had a national plan to win the war. We had a gigantic national effort put in behind that plan, and we had a united people determined to win the war. Just as our people were great during the war, so they will be great in peace—and we shall get the same results—provided that we know where we are going and are determined to get there. We should put into operation, now that we have the enormous backing of the people and their mandate and instructions to carry it out, the policy I have frequently indicated of a national economic plan. We should do so with considerable drive, and our people will be satisfied to work for their country in peace in the same way as they were satisfied to do so during the war.
6.19 p.m.
The House always listens with respect and attention to the views of the hon. Gentleman who has just resumed his seat. Many of us on this side regret the circumstances in which that speech has been delivered. When, a few weeks ago, the hon. Gentleman thought it proper to resign his Ministerial office, I was, of course, entirely unaware of his motives for that action, but of one thing I was confident: that that action was taken on grounds of the deepest sincerity. The speech of the hon. Gentleman does none the less underline and emphasise some of the views which we on this side of the House hold. His resignation represents the first rift in the Government lute.
The Measure which we are discussing this afternoon, like so many others which have been introduced into this House since last July, disguises to a great extent the bounds of the powers taken beneath high-sounding expressions of intention, of how those powers are to be exercised. In other words, it is another of those Bills which are difficult to denounce in detail, but which, for proper consideration have to be viewed in the light of other Measures which go along with them. In our view, this Bill perpetuates the slowing down of financial business, and imposes even additional delays, by setting up yet another board with entirely new statutory powers. It is, of course, all part and parcel of the Socialist jigsaw, and must be studied in conjunction with the Bank of England Bill and the Coal Industry Nationalisation Bill. I am not sure, but I think the right hon. Gentleman this afternoon was the first to use the expression that it was all part of a master plan, a subtle interplay of all these enactments which help to spread the tentacles of the State control octopus in various directions, just as the Coal Industry Nationalisation Bill was extended to allied industries such as coking ovens, and prevented undertakings which have been compulsorily deprived of their business from launching out on other enterprises, by sterilising the stock given as compensation.
By the same token this Measure goes outside its apparent intentions. For one thing, it exempts borrowings from a bank, which, at the first blush, appears to be a gesture of freedom. But we have learned to look beneath the surface; we have to bear in mind that the Bank of England Bill enables directions to be given to the joint stock banks, and so, once again, what look likes a gap is closed by the right hon. Gentleman. Indeed, all these financial Measures are interlocked, and by this Bill yet another nail is driven into the coffin of London's position as the financial centre of the world. This will bring the most harsh repercussions upon international trade and those invisible exports which are so necessary in our present situation. I predict that foreigners will certainly fight shy of doing business through a centre where, perforce, they have to negotiate, directly or indirectly, under the supervision of a Government Department, and the business will go elsewhere.
Where?
I am sure that the hon. Gentleman can exercise his imagination. I am confident that he is aware of that, and I am anxious not to be too long.
Rigidity is the chief theme of this Measure, and the success of some of the most important international business and trading transactions depends upon rapid decisions, involving just the financial arrangements envisaged by the Bill. May I submit to the right hon. Gentleman that it is often a matter of days and possibly even hours, and the closest financial bargaining which decides whether this country or another wins certain business? The delay, inevitable under this Bill, may easily lose this country a contract which would have meant the expenditure of millions of pounds in labour and material. I suggest that that is a most valid objection. We are debating this Bill under the shadow of the grievous news which we had after Questions today. During my Membership of the House I have never known hon. Members on all Benches in a more sombre frame of mind than when the Minister of Food had to tell us that he had returned from America empty handed. The right hon. Gentleman might well have concluded his statement by adding that, unless this country is able to produce goods and services at competitive prices, our people will be confronted with something very like starvation.
The hon. Member for Stoke (Mr. Ellis Smith) referred, very properly, to the impact of this Bill upon full employment. I well remember in my constituency, when the electors were being invited to vote for my opponent, and "jobs for all." No-one can view without certain disquiet the unemployment figures recently published. I hope it is a passing phase—nobody but a knave or a fool would wish otherwise—but it is, none the less, a fact that for every minute and a half that the present Government have been in office, one person has been added to the unemployment register, and these dark patches represent the very areas which were hardest hit between the two wars—South Wales, Durham, and the like. The importance of investment policy, and its impact upon employment, is that whether you run your industries under State control or under private enterprise—whatever our views may be—nothing does more damage to employment and trade than uncertainty and frustration. Uncertainty has descended upon our body economic like a deadly blighting mildew, and is already reflecting itself in the unemployment figures. We on these Benches believe that, once you start tinkering with the delicate financial machinery of the country then you damage the whole structure of its trade and employment.
To the Chancellor I would say that it is cynicism run riot for him to repeat, as does the President of the Board of Trade, that free enterprise is on trial, when by Bill after Bill our industrialists are being shackled until they are powerless. Bind the strong man first, and then accuse him of lack of action. We object, as my right hon. Friend the Member for the City of London (Mr. Assheton) did, on the score that this Bill is a monopolists' Bill which helps the great combines such as the cooperative societies, as against the small trader, the man who should really be encouraged.
At Question Time the other day an hon. and learned Friend of mine was rebuked for referring to a Minister as a "right hon. and totalitarian gentleman." I hope that I shall be at least in Order if I say that this Bill is another milestone on the road to the corporate State. My personal friends who hold the views of hon. Members opposite—and there are quite a few—tell me that I do not understand their philosophy, because my mind is soaked in material things; that Socialism has behind it a spiritual urge, and that it is a religious crusade. When hon. Members go up into the temple to pray, they begin by thanking God that they are not as other men, and they have a particular form of prayer of which we lesser mortals are unconscious. Whence comes this fetish for boards, for these anterior authorities and ultra Parliamentary bodies? I have tried to discover, and I remembered, when investigating this matter that the right hon. Gentleman the Chancellor, whatever may be the spiritual urge of his comrades, spent his boyhood against an ecclesiastical background, which must have influenced his steps along the road of life later on.
So I turned to the pages of Holy Writ for an explanation and, after due searching, I have found, or I think I have found, the motive power behind the present policy. It is to be found in the New Testament, in the 27th chapter of the Acts of the Apostles, which describes in the most graphic language—as the Chancellor and you, Mr. Deputy-Speaker, will readily recall—the shipwreck of Saint Paul off the Island of Malta. Now whence comes this urge for boards and committees and working parties and, now, a council? I believe it comes from that particular chapter which explains the uplifted aims of hon. Members opposite, which we mere mortals are unable to understand, because that chapter closes by saying that:
The Ministers of the late Government went on Boards.
It is really unkind of the hon. Gentleman to spoil what I had meant to be a peroration. However, when it comes to the shipwreck of the State, that is a matter which we on the Opposition Benches view with alarm, and we shall presently register that opinion in the Division Lobbies.
6.32 p.m.
After listening to the three speeches from right hon. and hon. Members above the Gangway, I think I am beginning to understand why the Tory Party object to the powers it is proposed to give under Clause 1 of this Bill to enable the Treasury to regulate the borrowing and the raising of money. The truth of the matter seems to be that the Tory Party stands for, and wants to see, the unrestricted operation of finance capital once again. This Bill is designed, as the Chancellor of the Exchequer told us, to prevent that free-for-all scramble in the City. We have heard something from the hon. and gallant Gentleman the Member for Holderness (Lieut.-Commander Braithwaite) about the dangers of all these controls, and how it is so necessary to have free enterprise if this country is to survive. I have a very vivid recollection of the lack of controls in the City and of free enterprise in this country before the war broke out, and it resulted in the misery and degradation of mass unemployment for the people of this country.
This Bill, as I see it, is a part—and I hope only a small part from what the Chancellor of the Exchequer has said today—of the machinery that the Government intend to use for bringing about a planned economy upon which to base full employment, and upon which to raise the standard of living of the people of this country. If that is the aim of the Labour Government and of the Labour Party, as I believe it is, then the Liberal Members, on this bench at any rate, will support the Government to the full.
It is perhaps a little unfortunate that the Government chose the title of "National Investment Council" for the advisory council which it is proposed to set up in the White Paper, because this confuses it with that National Investment Board that was first of all referred to in the Liberal Yellow Book, and was again referred to in the Labour Party manifesto for the Election called, "Let Us Face the Future." The Investment Board was always intended to deal with far more fundamental things than are dealt with in this Bill. It was to be set up to determine social priorities and to promote the better timing of private investment. That, I believe, was stated in "Let us Face the Future." Obviously the personnel of the Investment Council which is now to be set up is almost purely financial in character. It will be dominated by the Treasury and if it were to deal with social priorities, I think the Chancellor of the Exchequer would agree with me that the Treasury is the wrong Department to have control of such priorities. In the White Paper, in fact, the position is made clear, because it says that this advisory council is to be a link between the financial institutions which are represented upon it and the Bank of England, and—this is the important part—
On top of that, of course, the Government have their housing powers, and the nationalisation of those great industries and services, coal and power and transport, will enable them to exercise still further influence over another section-of our total national investment. There have been references to the nationalisation of the Bank of England, which again is a part of this organisation. There is also the Distribution of Industries Act which, personally, I do not think goes far enough for the purposes we have in mind, if we are to have a planned economy that will really give us full employment and will really enable us to build up the standard of living of our people to that extent to which we can build it up if we use all our human and our material resources in the proper way. Tomorrow we are to begin our Debates on the great social security Measure, which, together with the Children's Allowances Act means that there is to be a redistribution of the national income in such a way as to extend and steady the consumption of this country.
Through the redistribution of the national income in schemes of that kind it will be possible to equate production with consumption. One of the main causes of unemployment before the war was under-consumption, and we have to build up consumption for the purpose of full employment. All these Measures are just parts of a jigsaw and the Government until today—and, indeed, the Chancellor of the Exchequer only did it in a very sketchy way—have given us no comprehensive view, even in the broadest outline, of how they intend to integrate the various parts of the planning machine which they are setting up through these various Measures. From the White Paper, and from what the Chancellor said this afternoon, it is obvious that the Cabinet, as it should, is to be responsible for establishing social priorities and for planning our investment as a whole. After all, it is only the Cabinet which can decide what proportion of our resources is to be devoted to exports or to civilian consumption, or to housing, or to the re-equipment of individual industries, or to things like education and so on. What I would like to know, and I hope the Minister who replies will be able to tell us something about it, is what machinery has the Cabinet for helping it to reach decisions in these matters? There are the Cabinet secretariat and their statistical department and so on, but what is the composition of the secretariat? How are they adapting the secretariat for the purposes of planning our national economy, and what technical and statistical assistance are they getting on which they can base their decisions?
There is another very important matter. The Cabinet today is quite as hard pressed as any Cabinet during the war. The Ministers, with this great revolution they are bringing about in the economic and social life of the country, are hard pressed by the routine work of their Departments. Have any of them the necessary time to read, think and discuss, in order to reach sound decisions in carrying out this tremendous revolution—I deliberately insist on the word "revolution"—in our economic life at the present moment? From these benches, particularly my hon. and learned Friend the Member for Montgomery (Mr. C. Davies), we have always insisted during the war that there should be a small Cabinet composed of Ministers without Departmental duties, who can do the necessary thinking and be able to discuss, investigate, and plan. I think it is even more important that we should have a small Peace Cabinet of Ministers who, freed from the day-to-day detail of running a Department, can plan this great revolution so that there is no possibility of failure. If the Government fail in carrying out this revolution—fail through not setting up the right kind of machinery at the top in order that the right kind of thinking and judgment shall be fully developed by discussion amongst themselves—it may be that the planning of our economy will be thrown into disrepute. It may throw us back, not into the free enterprise we knew before the war, but into an economy that would be controlled not in the interests of the people of the country but of the big vested interests that brought about the misery and degradation of mass unemployment before the war, the joint stock bankers, the big industrialists like I.C.I. and so on, who would dominate the country in their own interest. I beg of the Government to let us know what they are doing to set up the right kind of machinery at the top to plan our economy in the interest of the people for full employment and a rising standard of living.
6.43 p.m.
Being a firm believer in the wisdom of the well-known saying, "Money, like muck, should be well spread," I support these proposals because they do make a start in the direction of applying the fertilising qualities of money in the right place, at the right time, in the right quantity. But I have an uneasy feeling that, like my income, these proposals do not go far enough. At a time when we are still conscripting men into the Armed Forces and directing them into arduous and hazardous industries, we should not be loath to take powers to conscript capital. The Chancellor said that we are collecting and collating information, and it is with a view to helping him that my further remarks will be addressed.
I would like to direct attention to the very large sums of money accruing annually, indeed weekly, to the insurance companies. Listed under the heading of "Insurance" in that "punters' Bible," that mine of information, the "Stock Exchange Year Book," I noticed the names of 241 companies. Time will not permit me to mention more than two or three, and so I apologise to the rest in advance. At the end of 1944 the total funds of one of these companies, the Prudential, stood at £420,674,000, no shillings and no pence. I have not been able to ascertain the 1944 income. I have worked out the income of ordinary, industrial and general branches, which approximated to £49,000,000, but the income from the investment of this £400 million estate cannot be found out, at any rate from "The Times" report which I studied in order to get the information. I think it is safe to assume that the income of this colossus, now exceeds £60 million a year, and it is a fact that the income of the Prudential, together with two other insurance companies, now amounts to more than £100 million per annum.
By reason of this financial hegemony, these people bid fair to control the economic life of the country. There seems to be no limit to their ambitions. The Prudential Company has £150,000 invested in the Arsenal Football Club. Where I come from we take a poor view of the Arsenal. We prefer West Bromwich Albion. But perhaps this is not the time to discuss that. At a time when vast sums are necessary for rehabilitation and reconstruction of coal, cotton and other industries, the question arises whether football is the best avenue for investment of a sum of money such as this.
What these people do with this large income, is of material importance. Out of the pennies of the workers has been built a Colossus which bids fair to devour those whose pittances built it. Between the wars, Mrs. Patterson, the wife of a Durham miner whom I knew, insured her husband for a few pennies a week so that if he died she could bury him decently. The Prudential spent large sums of money in Gdynia for the Polish coal industry, which in turn had the effect of helping to oust British coal from continental markets we had enjoyed for generations, so that the ultimate effect of Mrs. Patterson's pennies was to put her husband out of work and on the dole.
Another of the activities of these people is revealed by the speech of Sir Edgar Home, one-time Chairman of the Prudential Company. I will quote him. He said at the 1934 annual meeting:
Happily, evidence exists which indicates that there will be not too much resistance to what I propose, because it seems that from time to time the insurance hierarchy feel the strain. In fact, at the 1933 annual meeting of the Britannic Assurance Company a cry from the heart was heard. Complaint was made that difficulty was being experienced in investing surplus cash on reasonably remunerative terms. To point the argument further, let us go back to Sir Edgar Home again. Speaking at the 1936 Prudential Assurance Company annual meeting, he said:
6.54 p.m.
This Bill is a restrictive Bill, as are so many other Bills which we have seen in the past few months. They come along to restrict the enterprise and the individuality of the ordinary person. This is but another nail in the coffin of the individual, the adventurer who has made the country so great in the past. There is no doubt that the reason this is being done is to satisfy the mania of the Socialist Party for their theory of controls. I welcome the part of this Bill which is there to protect the ordinary investor. We all know that there are sharks in the City, as there are in other parts of the world, but I do not like the way that the Government intend to protect the investor. Their idea is to stifle 100 good people in order to save them from one bad man. Just because a man burns his coat tails in a fire, it is not a good thing to insist that the whole population should be put in asbestos clothing for the rest of their lives. This country has been made great by the taking of risks in the past.
Nevertheless, I welcome the fact that the essential industries are to be helped. Shipping and cotton, and other industries, may need help in the near future, but the way to provide it will be for the Government to help them, either financially or by guarantees. Under this Bill, the Government have estimated that a limit of £50 million a year should be used for that purpose. Why not make it £100 million or £200 million, because that is a better way of helping essential industries than diverting capital away from perhaps smaller people, who may be worthy in their own opinion, but who, in the Government's opinion, are not worthy to have the money. If this investment control Bill had been introduced 100 years ago, or more, we might never have seen the safety pin, the fountain pen, or blotting paper. One can so well imagine the Government saying, "We have plenty of sand in this country to blot up the ink. What is this new fangled idea of blotting paper?" After all, these things are due to the ingenuity of a man who invents them, who is prepared to risk his own money, and who has succeeded in this country in the past, but if he is not allowed to do that in the future other countries will be stealing a march on us.
Other countries will be making great fortunes where our own citizens are being stopped, just because the Government think their money would be better employed in some other scheme. I see that, under this Bill, if we go to Northern Ireland to borrow money, and it is brought to this country, it immediately comes under the Bill and is controlled. Will not that make everybody go and start industries in Northern Ireland? The Government say that the Northern Ireland Parliament can bring in exactly the same rules and regulations as this country. Will Northern Ireland ever bring in control of investment if they see that this Bill is going to bring industry from this country to Northern Ireland? No, they will not. Industries will not only go to Northern Ireland, but to all other parts of the world, and we shall be the losers again.
I want to dwell for a moment on the £10,000 a year estimated as a suitable sum for the expenses of running the National Investment Council. I take it that the National Investment Council will not be paid. In war time, people have been prepared to give their services on the Capital Issues Committee free of charge or as part of their war effort. The hon. Member for Stoke (Mr. Ellis Smith) has said that if people can work in wartime under national control they can do it in peacetime. I differ with the hon. Member, because I do not believe that there is the same stimulus in peacetime. There is such a thing as patriotism in war time and that is what made us put forward all our weight. Suppose the Governor of the Bank of England refuses to serve. I understand from the Chancellor that he has already shown his willingness to do so, but the next Governor of the Bank of England, or the next chairman of the Stock Exchange, might well say "I have no inclination or time to serve." I sup- pose he will be compelled to do so, but I would like the Chancellor to inform me on that point. Have these people the power to resign if they find that it is taking up too much of their time? I suppose they will be forced to go on.
Suppose, if all goes well, and you get the people on the National Investment Council whom the Government want there, and they are all serving very well and in a friendly way. Surely it will be a full-time job? If a man is to do a full-time job, surely he will want some remuneration for it? There will have to be permanent officials, always ready to deal with new applicants. There is a queue at the moment, and the Chancellor has told us that he will see that there is as little delay as possible in future. If he is going to have people there all the time, unless he is going to pay them, the scheme will be a failure. Perhaps, as one right hon. Gentleman on this side of the House has said, the National Investment Council is all a facade. Perhaps the Treasury are going to do all the controlling—quite rightly, as the Chancellor says—but in reality is not the National Investment Council just a sop? In any case, they have no executive power. The Government will make the decisions. If so, those decisions are bound to be prejudiced, because it is very hard for any Government to make the decisions without prejudice. If some rotten company promoter comes to the Government and says, "I want to build up an industry in a district where there is a lot of unemployment," the Government will 9ay to him, "That is a grand idea," regardless of the disastrous effects it may have upon the shareholders. The Government may be delighted to send an industry to an area which they wish to be developed, no matter how bad the prospects are. It is, indeed, difficult for the Government not to be prejudiced over this, and, in fact, they will be forcing the public, by the limitation of what they can do with their new investments, to go in one particular direction, regardless of what the people really want.
We on this side of the House believe that there should be temporary control. In wartime it was essential, and at the present time we have not settled down to such an extent as to make it completely unnecessary. We believe in temporary control of investment, just the same as we believe in rationing, but we do not expect the Government to come to us in two or three years' time and say that we must not have ham, or saddle of mutton, because Spam and dried eggs are of greater importance in the national interest. We want our freedom for investment as well, and we want freedom to be able to plan ahead. Some industrialists might want to build a factory to produce bicycles, with a view to enlarging a year later to include tricycles. But each new venture which they propose to start would have to be put separately before the Government, and consultations would have to follow, which means that we cannot plan ahead. The Minister of Agriculture is one Minister who has gone on the right lines and has decided to let the farmers plan ahead, and know what he is doing, and that is exactly what industry wants. At the moment, under this Bill, industry will be stifled and I believe it is being stifled simply to appease the Socialists' mad mania for control.
7.6 p.m.
In spite of the excellent speech of the Chancellor of the Exchequer, I find this Bill disappointing. In my view, it does not go far enough. It approaches the problem from a too narrow and parochial point of view. I admit that it has got good points, and the best point in it is the fact that it makes permanent the very valuable wartime reforms of the new issue market. Before the war, I spent a considerable time making a detailed study of the workings of the London capital market in the period 1930–1938, and, to anyone with a tidy mind or a sense of social justice at all, the facts are shocking. The waste of national resources, the misdirection of capital, the grotesque profiteering of insiders in the City, the fleecing of the amateur investors, and consumers too—all these facts are, I think, sufficiently familiar already, anyhow on this side of the House.
But perhaps the worst feature of the issue market was its instability. If we take the figures of non-Government home issues on the new issue market, we find that they fell by 50 per cent. between 1930 and 1932, rose 200 per cent. between 1932 and 1936 and fell 40 per cent. between 1936 and 1938, and the result on employment and the economic welfare of this country was disastrous. The position was that successive Conservative Governments, in the name of private enterprise, allowed complete freedom to the City to float whatever new issues the private amateur investor could be induced to subscribe to. That was the criterion—whether or not the new issue would be subscribed for by the private investor. The theory of hon. Members opposite was that the private investor knows what is best for him, and that what is best for him is best for the nation as a whole. Well, it is the old theory of private enterprise, and what a bankrupt doctrine it is. It has never been anything of the kind.
We have heard a lot today about a new umbrella, and what a shame it would be if no money could be found for patenting that new umbrella. What would have happened in the old days? The inventor would have gone into the City and looked for a City man to float a company to exploit it. He would have been told this: "It is no good, old boy; the public won't buy umbrella issues just now, but we could sell the suckers automatic machine issues instead." This kind of thing would have happened in the old days before the war. Hon. Members opposite talk about consumers' choice, but when has there ever been really democratic consumers' choice. It is a lot of nonsense, and hon. Members opposite have been reading theories when they should get down to facts. They are a lot of doctrinaires on that side of the House, a lot of theorists who have been reading Professor Hazek.
The theory is that the investor knows what is good for him and that what is good for him is good for the nation. The truth is the exact opposite. In the first place, the average private investor has not the faintest idea of sizing up a prospectus and never has had. He is totally incapable of doing it. In the second place, even if he picks a good profitable investment for himself, is it an investment which the nation is most urgently in need of? Not a bit of it. When we needed investment in cotton it went into automatic machines. When we needed capital in agriculture, it was sent overseas to finance competitors of British farmers in this country. And apart from the misdirection of capital, the timing of investment was all wrong too. When un employment is widespread, is it possible to get private investors to invest? Not a bit of it. Yet, on the other hand, when there is the possibility of an inflationary position developing, private investors are scrambling all over the place to subscribe to new issues. The truth of the matter is that quite apart from any considerations of fraud the new issue market is unstable, inefficient and expensive. The great point about this Bill is that it provides the means of cleaning it up. As Lord Keynes once said, we cannot allow the nation's economic development to be the by-product of the activities of a casino. Therefore, I welcome this Bill inasmuch as it limits the influence on the new issue market of the tastes and opinions of private investors and substitutes the more disinterested and more expert judgment of the National Investment Council and the Treasury.
I have now said all that I intend to say in favour of this Bill. Now I want to strike a more critical note; but I will try not to do what hon. Members opposite are doing; I will try to be constructive about it. My main complaint is that it only touches the fringes of the problem. In spite of its Title, it does not control investment at all. Investment is very properly defined in the White Paper on National Expenditure as:
In the first place, at least seven-eighths of the gross investment of this country is not financed by borrowing at all. It is financed out of the revenue, past and present, of private companies. Suppose that this Bill had been law in 1938 and that the Treasury had exercised all its powers under this Bill at that time, how much investment would it really have controlled? We get some indication by looking at the figures of the issues on the new issue market. Home issues, including private placings, on the new issue market in 1938 totalled £177 million, but we must subtract from that Government and local authority loans, leaving a balance of £76 million. But even that figure overstates the situation, because probably more than half of that amount was not money for new investment, but money with which to repay old creditors. Therefore, it is fair to say that not more than £40 million was the total amount of new money raised on the new issue market in 1938. If this Bill had been law then it is most unlikely that the Treasury would have controlled more than one-eighth of the total investment of the country. It would certainly not have controlled more than £100 million out of the £715 million gross investment.
The Chancellor of the Exchequer has already given his answer, which is that the rest of investment is controlled by the use of physical controls. Of course, that is true enough and very important, though it is worth pointing out that as scarcity diminishes and as controls are relaxed from labour, controls will become increasingly difficult to enforce. I have two objections to the answer given by the Chancellor. The first objection is that although it is true that physical controls regulate seven-eighths of investment, they are also controlling the one-eighth over which the Chancellor is now super-imposing financial control. Therefore, the question arises of the coordination of the use of financial and physical controls. We shall have the Capital Issue Committee running off to the Departments to find out whether they will grant building licences if the Capital Issue Committee grant financial licences. And the Ministry of Works will run off to the Capital Issue Committee to find whether financial licences will be issued if a building licence is issued. I am not satisfied that this is good administration, and that it is an efficient way of controlling the investment of this country. Nor am I quite clear as to what would happen if the Ministry of Works and the Capital Issue Committee disagreed. Who would have the final say on the matter? The whole setup of the planning of investment is not clear at all.
The hon. Gentleman will realise that the Treasury always wins the fight.
My second objection to the Chancellor's reply is that, if borrowing is controlled and the use of reserves is free, I am bound to agree, with the greatest reluctance, with hon. Members opposite that the new firm is going to be penalised at the expense of the old. I cannot see any answer to that at all. I know an old-established firm which proposes to invest £250,000 very shortly, and it will raise the money entirely out of its own resources. It could raise four times, or probably 10 times, that amount out of its own resources without coming under the control of the Treasury. Then let us consider the young competitor which might spring up and which has to go on to the new issue market and, therefore, run the gauntlet of Treasury control. If these controls are effective in any way they are bound to penalise the new firm at the expense of the old.
The trouble seems to be that the Treasury is hypnotised by its own borrowing problem. It feels that when a new firm goes on the new issue market, and issues new securities there, then it is competing with the Treasury's borrowing programme. It does not realise that when an old-established firm, in order to raise money for new expenditure, sells £250,000 worth of securities out of reserves that that interferes with its borrowing programme just as would the floating of a loan. In both cases savings are absorbed in competition with the Treasury's borrowing programme. I would like some reassurance on this matter.
In view of these considerations, and others which I have no time to mention, I suggest that we should regard financial control of investment as only a temporary expedient while some new form of control is being worked out. The Government must have a coherent and comprehensive investment plan. It must effect this plan with the smallest possible number of the simplest possible controls. That is not happening at the moment. I am putting these criticisms forward not in any partisan spirit, but in a constructive way. The point I am putting forward is an individual viewpoint. I cannot pretend that I am raising it in response to any pressure of my constituents. But I suggest that financial and physical controls are not adequate for dealing with the planning of investment in a peacetime, semi-Socialist economy. They should be looked upon as legacies of the war and replaced as soon as possible by more direct and simple methods. The method I should like to see adopted would be for all large and medium-sized firms to be required to make budgets of their future capital expenditure, and to submit these budgets to the appropriate planning authority.
It is difficult to calculate, but I think it is reasonable to say that if the exemption limit of £25,000 of capital expenditure in one year were laid down, we could expect a few thousand applications to come in each year covering about three quarters of the private investments. These budgets would come from firms and would be channelled through the appropriate Government Departments; they would then be approved, postponed, or rejected in the light of the Government's overall investment plan. If approved, these budgets would automatically carry with them the right to raise finance through borrowing or through the use of undistributed profits, whichever way was preferred by the business concerned. This method is both simple and effective as a means of controlling investments. It is based on the truth that it is not the borrowing of money which affects employment, but the spending of it. It will overcome the difficulty in regard to the use of undistributed profits without the present tangle of financial and physical controls. It will overcome the difficulty of co-ordinating those controls. Furthermore, the statistical value of these budgets, even if no action were taken on them, would be invaluable from the point of view of planning unemployment policy. Therefore, this matter deserves consideration by the Chancellor. It would not be difficult for the firms themselves to prepare these budgets. It would be first-class business practice, and it would show them where they stood. It would not be a troublesome form to make.
It has often been said that this Government will be judged not by whether it plans, but by whether it plans wisely and well. I want the Government to stand back a bit and think of this question of investment control in a more imaginative way. The Treasury must cease to be hypnotised by its borrowing policy. It must lift its eyes from the day-to-day workings of the new issue market. How- ever, for the reasons I have given, I do not oppose this Bill altogether. It has good points, and I congratulate the Chancellor on the speed with which his particular paragraphs of "Let's Face the Future" are going on the Statute Book, even though this final paragraph is somewhat "watered down." As I have said, nobody pretends that this question of investment control is backed by any mass movement of the electorate. No blood has been shed over it at Labour Party conferences. But it fills a warm place in the hearts of the backroom boys of the Labour movement; and of a number of City men with social consciences, recently honoured with the title "The City's Quislings." Beneath its technicalities I believe this question of investment control strikes a shrewd blow at the capitalist system. It is a good Socialist Measure, and for that reason I welcome this Bill, but I would ask the Chancellor to regard this matter in a more imaginative light.
7.24 p.m.
The hon. Member for Southern Norfolk (Mr. Mayhew) must be congratulated on having let the cat out of the bag in one respect. He said that seven-eighths of the prewar investments came from private enterprise. The Members of his party have time and time again accused private enterprise of sucking the companies dry and leaving them in a rotten and inefficient state. They could not do that if seven-eighths of the prewar investments had been provided out of undistributed profits.
There are two regrets I have about this Bill. The first is that it is unlimited in time. I think most of us on this side of the House would agree that, first of all, the investor needs protecting, though it is going to be difficult, even under a Socialist Government, to keep the fool and his money from being parted. We are agreed also that during the next two, three or five years in the difficult transitional period, control will have to continue. But why should not the Government take the powers for five years only, so that if the experiment is successful they can take the powers for a further five years, and if it fails the whole thing can peter out?
The second regret I have is this. I think the Chancellor's time could have been spent much more profitably by bringing forward a general wages policy and dealing with the economic problems of the day than by playing with us in this manner. The Chancellor must have read the leading article in the "Economist" about a month ago, urging upon the Labour Party the imperative necessity for a general wages policy. Somehow the Government seem to fear facing up to that fact. In his speech the Chancellor said this Bill would give an orderly regulation to new issues, and he said the alternative would be profit seeking. I would like to ask the Under-Secretary to ascertain from the Chancellor whether he is against profit seeking.
Is there anything wrong in profits? Is there anything morally wrong? Does he condemn profits? If so, I would like to know why. He also said we would remember that in the years 1919–21 there was a "free-for-all" scramble. I could understand that statement coming from Back Benchers who know no better, but the Chancellor of the Exchequer should know better. ( Laughter .) Well, that shot has gone home, anyway. After the 1929 crash, as the Chancellor well knows, the rules of the London Stock Exchange were tightened considerably, and things that happened in 1919 would be impossible in these days. He also said that he remembered after the last war there was security for the speculator but only unemployment for the worker. That is another dangerous half-truth that does nobody any good. There was just the same insecurity for the investor as there was for the worker. For instance, the Sheffield Steel Products Company was floated with a capital of £4,000,000 subscribed by ordinary investors. Today it stands at no more than £187,000. The rest has been written off. There has been no more security for the investor than there has been for the worker. Firms like Armstrong Whitworth, the White Star Line and other shipping companies also suffered. There was no more security for one side than for the other. It is doing nobody any good playing party politics in that manner.
Is the hon. Gentleman aware that the issue of preference shares in respect of the White Star Line, which would never have been allowed under the arrangements which the Government now propose, led to the conviction of Lord Kylsant for fraud and helped to make us responsible for the situation at the beginning of this war when we had less tonnage of shipping than this country had at the beginning of the last war?
I am not prepared to go into the Kylsant case at the moment, but the hon. and gallant Gentleman will remember that the auditor of the company was a leading Quaker in England who sanctioned the matters which were adopted. I think before a shot like that is fired across the House in Debate, other matters should be taken into consideration.
Were not the auditors Messrs. Price, Waterhouse and Company?
At any rate, may I make my other points clear? The hon. Member for Stoke (Mr. Ellis Smith), whom we all admire for what he has done, made a point, and this is where we on this side differ so vitally from hon. Members on other side of the House. He said that what matters is the public ownership of assets. That is humbug. I challenge any miners' representative on the other side of the House to come with me to coalfields that I know intimately, and ask the men if they will work harder if the mines are owned by the nation, than they were doing when the mines were owned privately. I know they will not. The ownership of the property makes not one iota of difference to the men who are working. What really matters, as the hon. Member for Stoke half confessed, is not ownership, it is not the playing about with these securities, but it is production.
Does the hon. Member appreciate that there is something in the argument that things can be done under public ownership which private ownership cannot do?
I agree with the hon. Member, but I challenge the thesis that men will work harder and more conscientiously for a publicly-owned concern than they will for a private concern. The men are not interested in who owns the property. What matters to this country is production and not playing with ownership. Unless the miners turn out more coal, we are going to be cold, and unless the building workers build more houses there will be no houses. It is production and not ownership that matters. Instead of the Chancellor wasting his time and that of the Cabinet on a Bill which, to my mind, does not cut much ice, I suggest that he should tackle the question of P.A.Y.E., and say to the workers that anything under £500 a year shall be tax-free, and then we would soon get the production we require.
The hon. Member is going quite beyond the scope of the Bill.
The question of production versus ownership was raised by the hon. Member for Stoke, but I will not pursue it further. Many hon. Members on this side are in sympathy with many of the ideas behind the Bill, but we contend that the Government are not tackling first things first and are merely playing with politics.
7.32 p.m.
As my right hon. Friend the Chancellor rightly said, this is a simple Bill containing only two operative Clauses, the first to control the issue of new capital, and the second to enable the Treasury to encourage investment by a system of guarantee. If one understands correctly some hon. Members opposite, they regard the Bill as a thoroughly comprehensive Measure to enable the Government to control investment in this country 100 per cent. It is because the Bill fails to do this that I shall have a few words of criticism to make on the lines of the criticism made by my hon. Friend the Member for South Norfolk (Mr. Mayhew), but I would like first to refer to the statements made by hon. Members opposite about this being a comprehensive Bill.
Only a few days ago the "Daily Express" described the Bill as "an Essential Work Order for capital in perpetuity," and I would like to think that this were true; because it is apparent, without having a fundamental understanding of economics, that we are always going to deal with the eternal triangle of land, labour and capital. Up to the time of this Bill, it was, unfortunately, true that land and capital were in the hands of a very small minority, with the result that labour, the third member of the triangle, was exploited by the other two. Before the war, there was a far more cruel Essential Work Order on labour than any direction imposed during the war. Although in theory the employer said to the worker, "You are free to go to work where you like, any job is open to you," in practice what he said was, "Either you take the job I offer you, or you can starve with the other 1,000,000 unemployed in the dole queue." That was the direct result of the worker being exploited by the other two, land and capital.
This Government was elected to redistribute the shares of that eternal triangle. We have already made plans under other Measures, and will continue to make plans, to ensure that the land is used correctly. This Measure is a small effort to ensure that capital is used correctly. Hon. Members on this side of the House believe in the greatest happiness of the greatest number, and that happens to be the workers. Consequently, it is most essential that more and more, we should control land and capital in the interests of labour, the third member of the triangle.
Hon. Members opposite have spent a great deal of time in telling us why we should continue to leave capital investment and industrial development to private enterprise. I wish to make two small points to show how private enterprise in the course of its development has failed to meet the needs of the people of this country. First, private enterprise has been far too prone to follow the ebb and flow of boom and slump of the trade cycle. In time of boom, the private investor has been only too willing to rush into any speculative scheme which offered some hope of a high reward, and he has been inspired in so doing by his own selfish desire for profit. Under private enterprise, nobody can blame the private investor for seeking the highest reward in the best possible market. Similarly in time of slump and depression it has been found impossible to encourage that investor to invest. He has been discouraged by the lack of opportunities for reward, and again, under private enterprise, quite rightly, he has refused to come forward with new investment. That is not in the best interests of the country as a whole, and therefore, it is necessary to constitute some new method of investment instead of leaving it to the private investor who, as history has shown, has failed to do his job properly.
Secondly, I think that history also shows us that very often something re- quires to be done which is socially necessary but not financially attractive. Again, under private enterprise, one cannot expect the investor to invest in some proposition which will not give him a good return. Naturally, he is concerned only with what he is going to make out of it. Therefore, it is necessary for the Government to take over and provide an extra attraction in the form, as this Bill puts it, of a guarantee to encourage, where necessary, the investor to invest in a proposition which, standing on its own, is not financially attractive but which is necessary in the common interests of the country.
I want now, briefly, to touch on a point of criticism which follows very closely the criticism made by hon. Friend the Member for South Norfolk. To my mind, in contradiction to hon. Members opposite, this Bill is not a particularly good Bill because it does not go far enough. It touches only the fringe of investment, since it is only tackling the new issue market. The whole purpose of having control of investment is to ensure, not as an end in itself, the proper financial manipulation, but to ensure that industrial production occurs in the direction which we consider best for the people of the country. I need hardly remind hon. Members that that flow of production, or that alteration in the trend of production, is not influenced, as my hon. Friend the Member for South Norfolk said, to the extent of more than one-eighth by new investment; the bulk of it is influenced by existing capital investment.
To take a simple example, there may be, shall we say, a big chemical drug company, which at the present time has a certain investment in Government securities, and may also have deposits in the bank. This Bill would not forbid or prevent that firm, if it so wished, selling its Government securities and using its bank deposits in order to develop the drug business at a time when the Government might feel that, far from development taking place in that direction, investment ought to go into something more socially necessary. In other words, to my mind this Bill fails really to control capital investment adequately in the country.
Another small point of criticism is that I feel that the £50 million which the Bill grants to enable the Treasury to give guarantees is far too small. What is £50 million when it is a question of trying to influence direction of capital in this country? I feel that £100 million or £200 million would not be too much to enable the Government to stabilise investment and to get investment going into those channels which are not financially attractive, but which are so vitally necessary if we are to get this country on its feet again. With regard to Paragraph 3 of Article 8 of the proposed Provisional Order, I see that the Chancellor makes sound provision for preventing new companies from being started merely in order to attract investments from the people of the country to be used for some socially unwise purpose, but I would like to ask the Minister who is to reply whether he feels that sufficient care has been taken to make sure that it is impossible for holding companies already in existence with a number of subsidiaries to acquire money from the public up to a limit of £50,000 from each of, say, 10 subsidiaries, and then to mass that money together, through internal financial manipulation, and perhaps acquire a sum of £500,000 or even more in order to create a capital investment, which would mean directing the means of production along a line socially undesirable.
Having made these points of criticism, which I think the Government must already have in mind, and to which I am sure they will attend on some future occasion, to the discomfiture of hon. Members opposite, I must say that, on the whole, this is a reasonably good Bill. It goes in the right direction, and side by side with the Bank of England Nationalisation Bill, it is yet another cornerstone in the deliberate policy of the Labour Government to take over from private enterprise and to create a financial policy which will enable us to direct industrial development, not in the interests of a small financial minority, but in the interests of the people of this country.
7.43 p.m.
I listened with interest to the speech of the Chancellor in moving the Second Reading of this Bill. He began, as he has done before, and as other hon. Members opposite have done, by calling it a streamlined Bill. It is rather difficult to understand what is meant by this. Perhaps the reference is to the speed with which Bills pass through this House. On many occasions one is inclined to say "That's a Bill, that was." After so describing the Bill, the right hon. Gentleman went on to suggest one or two of the benefits which it would bring to the public, and one of those benefits was to protect a credulous public from company promoters. I suggest to hon. Gentlemen opposite that if ever there was an occasion when a credulous public was deceived by a prospectus, it was during last June and July. During those months figures were mentioned which no chartered accountant in the City of London would ever have dreamed of passing.
Another point on which the Chancellor touched was the issue of bonus shares, which he said was often nothing but a racket; but when he was challenged to give one single instance where an issue of bonus shares could be regarded as a racket, he failed completely to do so. Perhaps before the Minister replies to the Debate, the Government will have discovered some instance—although I doubt it—where they can tell us that the issue of bonus shares was a racket. The Chancellor also said that by the issue of bonus shares the workers in a factory could be deceived. I think it is rather the other way round—that by the failure to issue bonus shares, by the failure to bring issued capital up to the level of assets and earning power, the workers in a business are deceived as to the exact prosperity of the company and deceived about any possible increase in wages to which they might think they are entitled.
If the hon. Gentleman would like an answer on that matter, I would instance the example of many colliery companies which, by the issue of bonus shares out of accumulated earnings, have managed to convey the impression that they have only half their earning capacity, and they have used that impression in wages negotiations, and said they were earning only three per cent. or four per cent., when in fact they were earning four times as much.
In such cases it is probable that when the bonus shares were issued, the company was in a prosperous state. The fact that at some future date the company earned only two per cent. or three per cent. on its capital would have no bearing on the fact that earlier it had been in a prosperous condition.
Having issued bonus shares, the colliery companies are now appealing to the community to provide cash to put the collieries in proper condition. The colliery companies have used the money for the purpose of issuing bonus shares instead of for the purpose for which it was accumulated.
The hon. Member is quite wrong. In such cases the capital was not accurately related to the assets, and so it was decided to issue bonus shares.
On a point of Order, Mr. Speaker. May I draw your attention to the fact that during this Debate on an important Measure there is not even a Minister on the Government Front Bench?
That is not a point of Order.
I was discussing the fact that the workers were misled because companies have not necessarily in the past—and will not be able to do so in the future—brought their capital into line with their assets and their earning power. Hon. Members opposite always delight in giving examples of companies paying dividends of 50 per cent. or 100 per cent. If companies are not to be allowed to bring their capital into line with their assets, they will continue to do this, and will have to pay out to shareholders money which would normally go into reserve, and this may have an undesirable effect from the point of view of the Chancellor's attempt to reduce the possibility of inflation.
This Bill restricts small business enterprise. There is nothing in it that will encourage capital to be put into small business, which may prosper and which may at some later date, because they have prospered, desire to issue bonus shares. An hon. Member opposite, at Question Time today, inferred that the desire to participate in a small enterprise could be adequately satisfied by a national lottery. Accordingly, it would appear that people would prefer to invest their money in national lottery bonds, or perhaps have the excitement of a possible win in a football pool, than they would in financing some hitherto untried invention which might be of tremendous benefit to the community after it had been adequately developed. In the Memorandum to this Bill it says that the Government will endeavour to maintain a proper balance between the economic resources of the community and the demands that are made upon them. That may be all very well if we were only concerned with what goes on in this country alone. But, as always, hon. Gentlemen opposite and the Chancellor of the Exchequer, in particular, ignore the factor of world trade, and competition with other countries. I would suggest that while he is doing his "Blondin" act between the board-room of the Bank of England and the dome of the gilt-edged market some few hundred yards away, he will find that foreigners are going ahead—
Cutting the rope.
—with their plans and, as the hon. Member opposite says, cutting the rope from underneath the Chancellor while he is doing his balancing trick, which he still intends to carry out. Where in actual fact does the new capital for industries come from? It comes from the accumulated resources of countless thousands of successful small businessmen. This money finds its way into the normal banking channels of the country, and eventually arrives, if they will trust him with it, in the hands of the Chancellor of the Exchequer I suggest that he is trying to do the thing completely the wrong way round, trying to create a system of cheap money, bolstered up on the soulless metropolis of our nationalised basic industries and completely ignoring the essential part the small industrious people have to play in our national economy.
What is going to happen?—[An HON. MEMBER: "Socialism."]—I repeat, what is going to happen if industries are restricted at every turn in raising fresh capital for future enterprises? I would ask the Chancellor whether foreign countries are to be allowed to take advantage of the state of affairs that he is creating? Can sterling balances be used by countries abroad for the purpose of starting businesses over here in England? Can the United States, if they think there are favourable opportunities, start up businesses in this country, while ordinary industrialists over here will be told to go to the end of the queue of the National Investment Committee? The Chancellor has said, but I am inclined to doubt it, that the demand for capital at the present time greatly exceeds the supply. I do not think that that is the experience of those who have anything to do with the gilt-edged market.
Capital is pouring in because there is no other outlet. The Chancellor refuses to allow it to find better and more lucrative employment in the industries of the country. It is possible that there is an exaggerated demand. Industry has been denied capital now for over six years. A person who has been denied food for a considerable period may tell you that he is hungry enough to eat an ox, but if you actually confronted him with one you would find that it would be only a very small portion of the animal that he would eat. Industry has been starved of capital, but once capital has started filtering through into industry, then other people, who say they want capital, will, I suggest, when they see their competitors have already started on production, decide that, after all, they do not want it. The demand is there because everybody is going into the Chancellor's queue, putting in applications simply as a "try-on" to see whether they can get something. It is rather like saying to people, perhaps one's constituents, "Put in your application. There is no guarantee that you will get any petrol, or any dockets, but there is just a chance that you might get some." That, I suggest, is why there is an exaggerated idea of the amount of capital that is required by businesses at the present moment.
Again, the Chancellor tells us that he is anxious to avoid inflation. I think the people in this country are feeling very apprehensive at the present moment as a result of their experiences. Their money is becoming progressively worth less and less. In fact, not only are they finding it difficult to employ it even at, say, 3½ per cent., but we are told that the Chancellor wants to depress the value even further and get it down to 2½ per cent. That is not holding out very much hope to those people who have life savings on which they hope to live during their old age. The Chancellor also said that he wants the purchasing power of war savings to be maintained. That is not the experience of the present moment. How often have we heard, sometimes from our constituents, of people who put their money into war savings in 1940, 1941 and the other war years and now want to spend them, only to find that if they had not been patriotic and refrained from spending years ago, they would have done very much better than holding on to their money and hoping to purchase goods at the present time.
Now we do at last see a change of heart amongst hon. Gentlemen opposite. We watch very carefully what they say during their weekend speeches. We noted a week or two ago that their speakers were soft pedalling on the question of the nation's food supply and perhaps it was a portent to what we heard this afternoon. Again, during the last few days hon. Gentlemen and right hon. Gentlemen opposite have been saying that the only solution to our present problems is in greater production, something which we on this side of the House have been saying for many months.
So that you could get better profits.
It is very gratifying to hear the hon. Member for Stoke (Mr. Ellis Smith) saying this afternoon that he had read a very excellent book called, "Tools for the Next Job," because production was one of the main themes throughout that document. It was very gratifying to have the opinion of the hon. Member, so obviously an anti-Luddite on the necessity of bringing our industry up to date, of putting more horse-power at the elbow of the workers. I asked the Minister of Fuel and Power the other day what saving he anticipated he would be able to make in manpower as a result of the mechanisation of the mines, and I might also ask the hon. Member for Stoke what saving in manpower he hopes to make as a result of the extra horse-power he is going to put at the elbow of the workers. It is vitally important to increase production. That, as hon. Gentlemen opposite know, will enable us to have less hours of work, more good for everybody to buy with their money, and a better life for all. But that has long been advocated from this side of the House. We have never indulged in, or encouraged, the restrictive practices so dear to hon. Members opposite.
I am very glad to see one thing, namely, that the Chancellor does not intend to do anything about the Building Societies. Perhaps he now realises that the Englishman prefers to own his own house, rather than be the uneconomic tenant of a subsidised local authority. I hope he will convey that belief to the Minister of Health.
I now turn to the Schedule to the Bill. In paragraph (3) we find the first indication of the real hallmark of a totalitarian measure, that is, the power of entry and search. We are to be exposed to the possibility of people knocking at the door and demanding entry to see whether we have some securities concealed somewhere in the house. I would like to ask the Chancellor whether this extends to safe-deposit boxes in banks. If he has made provision so that he can conduct searches in the homes of the people, will the safe-deposit boxes not also be subject to the prying eyes of the Chancellor? Will that sort of thing encourage foreigners to entrust their securities and their business to financial institutions in the City of London? I suggest not.
Furthermore, this Bill, which can be altered by the Chancellor of the Exchequer at any time, may confer very much wider powers upon him than we see at the present moment. It is sometimes said that the holder of a £1 note is simply the possessor of a non-interest-bearing Government security. A person who is keeping a large number of these securities—several hundreds of pounds—in his own home may discover, at some future date when hon. Gentlemen opposite have got themselves into extreme difficulties because of their programme, that it will be considered an anti-social act to have a lot of money in hand. I would suggest that this paragraph gives the Chancellor of the Exchequer the right of entry, so that he can inspect the widow's mite and examine the life-savings of the aged.
This is nothing but an enabling Bill; it will enable the Chancellor of the Exchequer to do what he likes with the country's investments. I would suggest to the housewives of this country that this Bill, while it will control capital, will not produce corsets; while it will assist nationalisation, it will not produce nylon; and while it may conform to Socialist dogma, it will not increase the supply of dried egg.
8.7 p.m.
I am not at all surprised that both the hon. Member who has just sat down, and the "Financial Times" should find this Bill breathtaking in its sweep. For my part, I find it disappointing. In the first place, I think it is a mistake not to have put into it a piece of Labour Party policy which has been worked on for many years—a National Investment Board. I know perfectly well, as every hon. Member of this House knows, that the main lines of investment policy must be a responsibility of the Cabinet, which is responsible to Parliament and must decide how much of the country's resources are to be sent in this and that direction. But the day-to-day execution of that policy cannot be done by the Cabinet, they have not the time, and I am afraid that, as things are, the day-to-day execution will be left to the Treasury, and that I consider to be a disaster. I look upon the Treasury as the epitome of negation, a millstone round the neck of public enterprise. I believe that for the Socialist purposes we have in mind, we ought to have built up a new executive body; I believe that a National Investment Board, as it has been worked out for years by the thinkers of the Labour Party, would have been that body.
The second piece of disappointment or, at least, of doubt, I feel about this Bill concerns Clause 2. I do not believe that Clause is adequate for the purposes for which it was designed, that is to say, for example, the reconstruction of an industry. I should like to take as a practical example the industry into which I was born and which I know fairly well, the heavy woollen and worsted industry of the West Riding. How is that industry to be affected by this Bill? That industry, in the spinning and manufacturing ends at any rate, on the whole is hopelessly inefficient. It is inefficient for several reasons. One of the most important reasons is the location of the mills. Many of them were built in the days of water power, high up in valleys far away from transport. Others were built in areas which have since become built up, surrounded by small houses without any possibility of expansion, with the result that no addition to those mills is possible according to an orderly process, or efficient lay-out.
Apart from the position of the mills themselves, another trouble is that the buildings are antiquated. The most modern mill in my division of Hudders- field was built 60 years ago, I think. Many of them are unsafe. In the constituency represented by the Financial Secretary to the Treasury there is a mill which has engines on the top floor and that mill has to be propped up. We know perfectly well in the West Riding that it is not unknown for machinery to come crashing down from the top floor on to the heads of people working below. There is all that kind of thing leading to inefficiency in the mills—
The hon. Member is very sweepng in his condemnation of the industry. How does he account for the fact that that industry has and always had one of our largest export trades?
In very large measure it is due to the peculiar skill of the West Riding workmen, and that goes all the way through the mills. They have the most extraordinary skill, to which I am the first to pay tribute—I mean everyone working in those mills. They are working against what will soon become hopeless odds. They are also doing a fine job under the handicap of almost obsolete machinery. It is obsolete for two reasons. This is another sweeping generalisation. A great many of the machine makers are little better than glorified blacksmiths. The second reason is that because of the tariff wall, during the last ten years before the war the industry was kept in the warm and did not feel the cold blasts coming from the more efficient industry in Czechoslovakia and elsewhere.
I am sorry to interrupt the hon. Member again, but he is making a most sweeping assertion in saying the machinery is obsolete. Does he realise that the machinery which is being produced today for the worsted industry is exactly the same as that installed in the mills at the moment?
I am sorry I could not catch that point.
Does the hon. Gentleman realise that the machinery being produced is exactly the same? There has been no change in development—
I asked the hon. Gentleman to repeat that point because I did not see how it was going to help him. That is precisely the point I am trying to make —that our people have not advanced at all. Our machinery makers have not advanced at all, whereas in Czechoslovakia they have the latest and most up-to-date stuff. The stuff coming from the British manufacturers is absolutely obsolete.
The point is, that the best thing that can possibly happen to the majority of our mills in the West Riding now, is for somebody to stick dynamite under them and blow them up so that we can start again and rebuild. But the ordinary owner of the mills has not himself the resources to build. He has either not the financial resources, or he has not the enterprise. Those who have any enterprise at all at the present time are using it to float their concerns off on to the public, and I warn the Chancellor of the Exchequer that the sort of thing is likely to happen in the West Riding which happened in Lancashire after the last war—we shall have "City slickers" slinking about from mill to mill, which is something that did not happen in the West Riding in days gone by. The necessary reorganisation of that industry cannot possibly come from private enterprise. It can come only from public funds guaranteed as they will be under this Bill.
But the criticism or doubt that I have about this Bill is this: I am afraid that, when the time comes for the reorganisation of this industry, it will be impossible to induce West Riding investors to reinvest money, even under a public guarantee. My complaint of this Bill is that there is no power in it, to compel investment in an industry, to compel capital reorganisation; and because of that, though I welcome in many ways the provisions of this Bill, particularly the continuation of controls, I feel that I must express a serious doubt about its ability to meet the problems that will face us in the future.
8.26 p.m.
I have noticed as, I think, we all have on this side of the House, that during this Parliament there are always two characteristics of the Measures brought in by right hon. Gentlemen opposite, as there are also in the speeches they make. There is, first, the political side of it which is tolerably well adjusted to their requirements; and, secondly, the actual realities of the situation with which they ought to be dealing, which are entirely ignored in their speeches, and of which the Measures themselves either prevent satisfactory solutions or make them very much more difficult. We who sit through these financial Debates—and they are very frequent—are beginning to understand the policy of the right hon. Gentleman the Chancellor of the Exchequer of political appeasement. I think we understand it rather well.
Take this particular Bill. There has been talk for many years from Gentlemen opposite, on the subject of a national investment board, and something has got to be done about it, and so this Bill is brought in. It has nothing in it whatever like a national investment board, as everybody has pointed out. Further, it uses the exact machinery now in existence which is designed to prevent anything happening at all. But I think the Chancellor of the Exchequer very reasonably calculated, "I am a very busy man and I have not very much time to make it better and it will probably get through." I have no doubt it will. There is a little more appeasement to be done. There is the City to appease. He calculates: "There is the City to appease just a little bit. How shall I do that? What is easier than to appease the City? All you have to do is to bring forward Lord Catto again with his stage army of decayed peers to do their turn on the boards and then to shuffle them off into the wings, where they will soon be forgotten." I feel, in connection with his relations with the City, that he does sometimes slightly misrepresent them. It rather reminds me of Gibbons' story of the Emperor Maxentius. I have no doubt he remembers it. He was in the habit of levying heavy contributions on the senators of Rome and he also took a very lively interest in their wives and daughters. It was on this latter activity that Gibbons remarked: entirely fatuous, of course, but everybody will not know that. Finally, the right hon. Gentleman calculates that if he brings in a nice two-Clause Bill giving himself power to do whatever he happens to fancy and to put in gaol anybody he does not like, then from behind him he will receive an elevenfold Heil. Actually I think he has only received a threefold one. If I may turn from the purely political aspects to the realities with which hon. Gentlemen opposite ought to be dealing, the big problem which should never be absent from the minds of any hon. Member of this House is: How we are to get our balance of payments right, how we are going to close the yawning gap between our exports and imports. I believe that is going to be the main problem of the post-war period. Not the problem of full employment—I do not believe that is going to be the main problem. The problem is how to close that yawning gap, and that is what we ought to be thinking about. To do that we must not only produce more but produce the things which we can sell abroad. Production itself is the simple part of the problem. Planners hate consumers' choice. They want people to take what they are given and like it.
We can do that at home for a certain time but people will not stand it for very long. We cannot do it with our customers abroad; certainly not under the Financial Agreement with America and not ultimately, I believe, even under a Schachtian economy. Germany managed to get a great many imports from her neighbours by passing on to them large quantities of aspirins and mouth organs which their customers were not very anxious to buy. The reason they could do that was because they had the sanction of force behind them, and they were prepared to use it. We have not the sanction of force behind us and, thank God, we should not be prepared to use it if we had. The problem remains that we have got to develop production in those lines of goods which will sell abroad when the present sellers' market comes to an end.
There has been a persistent trend for a great many years, even in countries where the standard of living is low, for people to spend a smaller proportion of their income on food and clothes and a larger proportion on manufactured articles and services; in jargon—the shift from primary to secondary and tertiary production. Not only is there this trend but actual requirements in new goods and services are constantly changing. Between 1860 and 1910 the proportion of textiles in our total exports declined from 62 per cent. to 38 per cent. Between the wars, as we very well remember, the old basic exports, like coal and cotton, were continually depressed, but other things were buoyant: tyres, motors, electrical machinery, gramophones, wireless, artificial silk, asbestos, photographic materials and hundreds of other things some of which were not thought of in 1914 and none of which were sufficiently important to figure separately in the trade returns. There is every reason to suppose that a similar trend will continue. The pace will be forced, and we shall have to go even more quickly because our foreign customers whom we used to supply have been going on with their own industrialisation during the war, and are now in a position to supply themselves with a great many of the things which we supplied before the war. It is our invention and skill in developing new lines which, in the long run, will enable us to live. It is no good our saying that we much prefer stability and do not like dynamic change; we cannot afford not to compete.
What is going to happen under this particular Bill? First, most of the new investment is not planned at all. The money will come from reserves and depreciation of existing companies. This helps a little, but there are two main objections. The first is that it is thoroughly unjust because the race goes to those with the largest bank balances, and the second is the question of vested interests. Any one who owns an existing process or service has a vested interest in not bringing something else on to the market which is going to make that out of date. In Alaska, for instance, the development of air services was most strongly opposed by the drivers of the dog teams, and those that sold them fish, and if the only people who had capital were the people who had dog teams there would not have been any air services. That is precisely the position we are in; although this unplanned capital expenditure may slightly mitigate the situation, it is not going to solve it. The right hon. Gentleman opposite keeps on fixing certain factors in any problem and leaving others free. That is not planning but chaos.
I would like to say a word or two about the demand for capital which will be going through the Treasury sieve. I noticed that the Chancellor of the Exchequer at a Press conference the other day—he is always rather more forthcoming at Press conferences—said that his powers would be exercised with "discretion, skill and judgment." There is no harm in his saying "discretion, skill and judgment." It is very like saying that the weather on Tuesday week will be fine. But there are the greatest practical and psychological difficulties in the way of the Treasury in this process of picking a winner. We are told money must be put into sound enterprises, and in my experience that means enterprises which were sound 20 years ago. If the hon. Member for South Nottingham (Mr. N. Smith) has anything that is sound he ought to sell it at once because it means the thing is no good. Then, of course, there is the great danger of political pressure. Further, it is extraordinarily difficult in practice to apply the social and moral priorities about which we have heard. I should like to say a word on social priorities. No one who has meditated long on history and economics can fail to realise that the strands of good and evil are nearly always intertwined. That is the statesman's tragedy—he cannot do anything without some evil resulting. If I may say so with respect, I think some of those princes of the church who have espoused the Socialist cause are underestimating that fact. Though it might not be true to say that they have grasped the crozier before completing their studies in theology, it is true to say that they have done so before completing their studies in economics. We all remember the tremendous propaganda there was early in the war in favour of larger houses, more refrigerators, electric points and so on.
What could be better than that people should have a really good house? But there is the desperate overcrowding to remember. The larger the house the longer it takes to build, and the longer it takes the more people there are who are going to die of tuberculosis and the more families there are which are going to be broken up through the discomforts of close quartering. Therefore, a line has got to be drawn somewhere. I am not saying the Government have not drawn the line at the right place but that wherever you draw a line some evil is bound to result. Perhaps the best example of the difficulty and confusion that may be caused by moral considerations being applied to economic developments without sufficient thought is railway construction in Southern Italy. The first railway to be constructed in South Italy was between Naples and Portici. It had to be built with considerable diversions because tunnels were forbidden owing to the moral danger to passengers during the periods of darkness. Supposing the moral objection had been sustained, there would have been no railways in Italy because, as those who served in Italy during the war know to their cost, it is a mountainous country. Of course the solution to the problem was simple—namely, lighting the carriages just as the solution of dishonest company promoting is simple—full disclosure. I very much hope that the Minister of Fuel and Power will remember that.
If we could for a moment test the possible workings of this machine by an actual example, what would we find? Suppose we imagine that the zip-fastener was invented when this machinery was in force. What would the Treasury say about it? I doubt if their reaction would be favourable. First social priorities. Would it not be more socially desirable to pour another £100 million down the drain in some moribund industry? Then, is the zip-fastener sound? I have no no doubt that some good Parliamentarian like the hon. Member for Nelson and Colne (Mr. Sydney Silverman), who is not in the House at the moment, would say that any Government that would allow capital to be devoted to the zip-fastener was unworthy of His Majesty's confidence and he would ask supplementaries on hunt the zipper. Then the question of stability arises. If the zip-fastener is adopted what is to happen to the maker of hooks and eyes? Then there is political pressure. There is a big hook and eye factory in old Charley's constituency. Taking one thing and another I am inclined to think it would have been turned down. The real and vital thing is that our foreign customers do not want hooks and eyes, but zip-fasteners and therefore we must supply the zip-fasteners.
When the Solicitor-General comes to reply I hope he will say something about what is going to happen in the development of new processes. I do not know how we are going to do it under this Bill. I suggest the only incentive he can offer is a step in the peerage to any of his noblemen who pick an outsider that comes home. We are in a very serious position in this country and on this side we have realised it for a very long time. If we are to survive we have got to have a plan and it must be a plan at the top and a plan which really deals with vital things. Instead of that, what are we getting? We are getting a series of plans designed to construct a Maginot Line against the economic dangers of the thirties. Hon. Members opposite are not one war behind but two wars behind. They are much further behind than Generals even were, and are not dealing with the problems with which we are faced. We are looking for a plan that will deal with these problems. val. In the issue of 25th January these words were printed:
8.38 p.m.
This was introduced as a small Bill and, small Bill though it is, it is of considerable importance. I confess I am distinctly puzzled by the reasons for which it is being opposed at present. I am puzzled as to the suggestions made by the hon. Members opposite. I think they must have forgotten that in the White Paper on unemployment issued under the Coalition Government there was a quite clear and definite recommendation that during the period immediately after the war private investments must be controlled and directed and the capital markets would have to be controlled in order to ensure proper priorities. To listen to some of the speeches that have been made from the benches opposite to-night one would think that they had completely forgotten that recommendation. They now suggest that we should get back to the economic anarchy which prevailed in the capital markets between the wars. That has already been dwelt on by several people, but when the Member for the City of London (Mr. Assheton) produces the instance in support of his case of a hypothetical small man with a patent umbrella, no doubt concealed under the benches opposite, and says it is because of the rights of that small man that we must revert to the period when the small man lost nearly half of what he had invested in new issues in the City of London I begin to wonder where we are getting to and what is the real foundation of his argument. We have that as a very clear and definite recommendation for the transitional period. I should have thought that the only point on which Members opposite could have objected was to say, "We recognise, in the words of the White Paper to which we subscribed at the time, that access to the capital market will have to be controlled in order to ensure the proper priorities for the time being, but we object to the control being permanent."
Further in the White Paper there is a passage dealing with the way in which the expenditure of local authorities is to be controlled in order to promote steady employment. It seems that the control there imposed for municipal finance is exactly on the lines of the control proposed by this Bill. That being so, I want to ask Members opposite this pertinent question: If this control was recommended for local government finance permanently, is there any essential difference between the considerations for private investment and the considerations for investment by local authorities, which make it impracticable or unwise to apply to the former that which is here recommended for the latter? The suggestion is that local authorities are to submit their programmes of capital expenditure, for a considerable number of years ahead, to the appropriate Department, and that these programmes are to be assembled by an appropriate co-ordinating body—and I would remind Members opposite that this was in the White Paper produced by the Coalition Government—and that they will be adjusted upward or downward in the light of the latest information on the respective employment situation. If this entails slowing down of programmes, adequate powers, through withholding the loan sanction or grants, are ready at hand. If it entails acceleration the Government will, by granting loan sanctions or otherwise facilitating finance, bring forward projects which otherwise might have had to wait for a later opportunity.
That was in the White Paper, and refers to one particular kind of finance. From the point of view of the national interest and the promotion of full employment, I entirely fail to appreciate what difference in principle there can be behind that foresight and what amount and nature of control, in the case of local government expenditure, and in the case of demands on the capital market by those seeking to make private investments.
To turn from the White Paper, I suggest that some of the speeches made by Members opposite tonight have omitted two important considerations. First, it was clearly foreseen, not only in the White Paper but by everyone with experience of what happened at the end of the last war, that at the end of this war there would be a demand for capital expenditure, a pent-up demand of the war years, which could not be met out of available goods. That is the present state of affairs. The important point is this: Not only is that so, but in view of our situation in the world at large, it seems perfectly clear that for many years to come the demand for capital expenditure is bound to exceed the available supplies. Put into terms of goods and services, for many years, at least, we shall need more than is available in the way of goods and services in order to meet capital development on the one hand, and consumer needs on the other. That seems to be a real and sound justification for making these powers permanent.
I would make a further observation with regard to the criticisms made that this Bill is inadequate. I have often advocated—as, indeed, other Members on this side of the House and, long ago, the Liberal Party advocated—a National Investment Board, with a wider function and for a different purpose than the purpose of this Bill. This is a cog in the wheel; it is not the whole wheel. It is not intended, as I understand it and the Chancellor's speech, to do more than fulfil a limited purpose by dealing with demands on the capital market for investment. It is unsound criticism to suggest that a Bill for a limited purpose such as this should also provide for a very large number of other things of a more sweeping character. Bills of a streamlined variety, such as this, are those which provide the suitable and necessary implements, because you cannot control investment by Act of Parliament. All you can do is to provide the necessary and proper machinery for doing the job. The criticism that this Bill does not contain a great deal more by way of statements of principle, method, and the functions of councils, which are not mentioned in the Bill itself, but only in the White Paper, is just as inappropriate as it was inappropriate for Members opposite to criticise the Coal Nationalisation Bill the other day on the ground that it did not produce coal. You cannot control investment, or mine coal, by an Act of Parliament. All you can do is to set up a proper administrative machinery for doing what you want to do.
We have been told that this machinery will be an abuse of freedom, and will be to the detriment of the small man. It is a magnificent view of the small man, one from the bird's eye view of the City of London, to suppose that the small man is going into the market to the tune of £50,000 or more. If that is the kind of small man the Conservative Party have in mind, then all I can say is that that man is a comparatively big one. If the Conservative Party are thinking of the small man as an investor I would like to remind them that in 1928 £117 million was subscribed by investors to issues made in the City of London. Three years later 42 per cent. of that money had been completely lost. That loss was not a mere paper loss. The boom of those years led to untold misery in this country and from the financial results of the 1931 slump there arose first the crash in Austria, then the world crash which began in financial troubles and gave Hitler and his friends their opportunity in Germany. Those who at that time upheld, and now uphold, that system of crazy finance called private enterprise in the City of London, must be prepared to take their share of responsibility if that happens again.
8.50 p.m.
I shall not detain the House for more than a very few minutes—indeed, I cannot—but I would just like to say that I find myself sharing to a very great extent, somewhat to my astonishment, the views expressed by an hon. Member opposite earlier. The hon. Gentleman said he was extremely disappointed in this Bill, and I too, am extremely disappointed in it. The right hon. Gentleman, the Chancellor of the Exchequer well knows that in order to recover economically we have in this country to, make the greatest productive effort in our history, and make it quickly. This involves, as I think he will probably admit, and as I think Members on both sides of the House will readily agree, a policy of most vigorous economic expansion, which must be undertaken at the earliest possible moment. This in turn, involves the constructive planning of the volume, timing, and general direction of investment, with the object of maintaining our available factors of production at the highest possible level. I agree, and I think my hon. Friends would readily agree, that a measure of control over capital issues is necessary, at any rate during the present phase of reconversion. We do not want a repetition of the gramophone and dog racing booms of the early twenties. But this is all of subsidiary importance to the constructive planning of the broad flow of public and private investment, because it is the totals of investment, of consumption, and of expenditure which determine at any given moment the general level of business activity in this or any other country. As soon as the Government have settled these aggregates they have accomplished their main economic task.
The Chancellor of the Exchequer told us this afternoon that it had been decided after great cogitation and consultation to confide these matters to the Cabinet, as they were the only responsible body who could really decide the broad lines of economic and investment policy. I just do not believe that it is possible for a Cabinet of twenty administrators, each one presiding over a separate department and every man overworked—as they all know and we all know—from morning to night, to decide effectively the general investment policy of this country from day to day as it should. I think the Government had a great opportunity in this Bill to implement the proposals of the Coalition White Paper on employment policy and policy generally, and I think they have completely failed to do it. They could and, in my submission, should have established what some of us have been pleading for in this House for the past twenty years—an economic general staff, to carry out a complete and factual inquiry into the structure and equipment of British industry as it exists today—a thing that has never yet been done—and secondly to prepare, as several of my hon. Friends have suggested, the statistical data relating to employment levels, price trends, the volume of production, the effective demand for credit, the prevailing rates of interest on different types of investment, foreign trade, and so on, which it is necessary to know in the greatest detail at all times before we can carry out a constructive or effective economic policy. We have known none of these things in any detail at any time during the last twenty years.
We should also have established not this phoney investment council with advisory powers but what many of us have been pleading for for many years—an effective national development board with subsidiary branches or boards for Scotland and Wales, to act as the executive authority for the achievement of a balanced internal economy, maximum output, and the regional coordination of public and private enterprise in this country. One of the most important functions of such a board would have been the preparation of schemes, for execution in a strict order of priority: schemes for public enterprise, in co-ordination and collaboration with private industry; and to plan the reconversion of industry—we have not planned it even to the extent they have in the United States—because the needs of each industry differ when it comes to converting from war to peace. One may be able to provide capital out of E.P.T. credits, one may require assistance in meeting tax liabilities and terminal losses, others may require direct loans for re-equipment.
What have we from the Government? We have first of all a permanent extension of a Defence Regulation designed for war purposes, and wholly restrictive in character. Secondly we have permission for the Treasury to guarantee loans up to £50,000,000 a year for what is vaguely called "Reconstruction or Development." We have known too well what the ideas of the Treasury have been in the last two or three years on reconstruction and development. Thirdly, we have what I must persist in calling this phoney advisory council on national investment, without any executive powers. I think that, as the hon. Member for South Norfolk (Mr. Mayhew) and other hon. Members have said, it is a facade to get out of the National Investment Board to which the Government were pledged in one of those great booklets which did so much obviously to win the general election.
The only good thing I can find to say about this council is that one of my old partners, Mr. Nicholas Davenport, has been appointed a member; and I do think that its meetings may be brighter and gayer than they might otherwise have been in view of the rather heavy composition of the council. He will bring a cheerful element into the proceedings; but I rather agree with an hon. Member on this side of the House who said he expected there would be a few meetings of the council and that then it would gradually fade into the shadows, like so many of the facade councils we have seen in the last.20 years, and we shall never bear of it again.
We have, however, something specific in this Bill, a Schedule of penalties which has to be seen and read to be believed. I am not a lawyer, but I understand the Solicitor-General is going to reply to this Debate, and he may have a complete answer, but when I read:
Finally, there is the Kennet Committee. That is the only real executive body under the Bill. Some of us have known the Committee for a long time. I will not say much about it except that it is a purely negative body and that there is nothing constructive about it. The Chancellor of the Exchequer has anticipated this criticism, but much remains in it. The Committee in the past has been dreadfully, frightfully slow in action, and a damper on activity and enterprise. Speaking entirely for myself, I say that the continuation of the Committee in precisely the same form and with precisely the same functions into the years of peace gives me, at any rate, cause for a good deal of apprehension.
Clause 2 involves the further application and perpetuation of naked Treasury control. If I could believe that the White Paper on Employment Policy represented a real change of heart on the part of the Treasury I might feel a bit happier about the Bill, but I do not believe it. I agree with some of my hon. Friends on this side that doubtless money will be available to certain industries which are obsolete or in difficulties; but I cannot see the Treasury taking the risks involved in the far more important process of developing new industries. That is the real and acid test by which the Bill will be judged.
The Chancellor of the Exchequer admitted the need for a constructive investment policy designed to secure expansion and a balanced economy, but in my judgment he has failed to produce the machinery necessary. The Bill is restrictive and negative in its character and, as such, it is a terrible revelation of the mentality of the Government, a mentality obsessed with doctrinaire theories but devoid of courage, commonsense or imagination.
This incredible obstacle race which is now the conduct of British industry and trade, is to continue. The Chancellor is dependent for his revenue upon the size of our national income. The President of the Board of Trade goes journeying round the country saying, "We must increase our exports by 75 per cent. above 1938." Then he makes it impossible to do so. He rushes about the field, urging the competitors to greater effort, but at the same time erecting obstacles which only too often require the competitors to go back to the beginning and start again. We can talk, and legislate, as an hon. Member opposite has just said, but in the end everything depends upon production. Nothing else matters but production all the time. All experience goes to show that the average man—as against ourselves as Members of Parliament devoting themselves to selfless public service for the glory of it—will not work hard for the love of it. He has to be either induced to work or made to work. You either have to give him a carrot or a kick. All that the President of the Board of Trade gives him is lectures, one lecture after another.
Ministers either cannot or will not realise that, having confined by far the greater part of the industrial field of this country to private enterprise, they must create the conditions under which private enterprise can successfully function. Petty, vexatious and restrictive control, at lower levels, are no substitute for constructive planning at the highest level of all. The Chancellor of the Exchequer had a chance to do that constructive planning in the Bill but he has not taken it. What we want in this country is what a great American economist, Alexander Hamilton, once described—he had a great influence in this country at one time—as "the incitement and patronage of Government." That is what the industry of this country requires, incitement and patronage. It is not getting either the incitement or the patronage of this Government under the Bill. It is because we think that this Bill signally fails to provide them—that on the whole it will have a damping and restrictive, instead of stimulating, effect—that we shall go into the Lobby against it.
9.6 p.m.
It is hardly necessary for a Conservative spokesman to say much tonight after the two admirable speeches which we have just heard, the first from my hon. and gallant Friend the Member for Flint (Lieut.-Colonel Birch), who proved conclusively that the wise are always the merry, and the second from my hon. Friend the Member for East Aberdeen (Mr. Boothby), who is always an expansionist, and who has always been a very stern critic of the Treasury. They have helped to provide me with the text of a few observations which I will now venture to address to the Chancellor of the Exchequer.
To my mind, one of the main objections to this Bill is, that it sets up a perpetual Treasury dictatorship over a very wide range of British industrial activity, at a time when the Treasury is overwhelmed by responsibilities, and when no week passes without more being thrust upon it. This House, which has now practically become a sausage factory from the point of view of producing legislation, knows that to each Bill which comes through the House there is the same tag attached: "With the permission of the Treasury." The Chancellor is loading his officials with work at the present time, and it seems to me that they will hardly be able to bear the strain put upon them. Furthermore, the Treasury officials would be much better engaged in doing something to restore order to our finances. Never in our history have we been in a greater financial mess. Never was it more desirable that the thought of the Treasury should be given to funding our vast external debts. Instead of dealing with these matters of high importance, they are going into the squalid details of every Bill affecting the domestic life of this country.
The Treasury also have a duty, an old-fashioned duty which perhaps makes no appeal to the present Chancellor of the Exchequer It is to curb the fantastic expenditure by Government Departments and agents. When I hear the Chancellor of the Exchequer trying to put up some sort of argument to fence off the gilt-edged market from outside competition, I feel inclined to tell him that the best possible security for the gilt-edged market, if he would do his duty, would be to cut down some of the appalling waste which is disturbing the industrial life of the country, and hurting our credit both at home and abroad.
Particularise.
I am quite willing to particularise. At the present moment, although the war against Japan and Germany has now been over for over six months, we are still spending practically at the same rate as we were before the Allies defeated the Japanese.
There is another powerful reason against putting users and providers of capital at the mercy of the Treasury. The Treasury is taking absurd precautions to protect its vested interests in the gilt-edged markets, and it will go to any length to defend that interest. Consider its plan for producing Government securities to compensate some owners of properties about to be nationalised. It manufactured a security more ingenious than any provided by Dr. Schacht, a security which, in certain circumstances, can neither be cashed nor sold, a security which the Government reserve the right to value at any figure they choose. Now I am quite certain that to the Chancellor of the Exchequer these synthetic Government securities—because one can hardly call them gilt-edged securities—seem more important than new capital for British industry. Again I make an appeal to him. It is quite obvious that when the Treasury have to produce ingenious schemes, like those that gave birth to such monstrosities as synthetic securities, that really means that the Treasury is seriously overworked. The Treasury officials are probably among the most able and devoted of public servants, but I am sure that they are desperately overworked. They are also very short of staff, and this Bill is, indeed, an impossible addition to their burdens.
I would like to ask a question of the Chancellor of the Exchequer, an extremely polite question: What qualification has the Treasury to deal with the needs of British industry—a Department with a special aptitude for saying "No" in clear and chilling English? Treasury officials are the world's champions in procrastination. Why, their Lordships have always delighted in the truth that a letter answers itself, and they have always killed a variety of schemes from Government Departments by merely ignoring them. So, if it takes a very long time for the most exalted Government Department to get a decision from the Treasury, what hope will there be for ordinary users and providers of capital to obtain the swift decisions which are necessary in competitive industrial life?
It is no bad thing to have a miser as Chancellor of the Exchequer, but no one will accuse the present Chancellor of being mean; on the contrary, he throws money about as if it were confetti. But he is a power miser.
Is the right hon. Gentleman opposed to the compensation Clauses in the various nationalisation Bills?
I did not catch the question.
Does the right hon. Gentleman oppose the compensation provisions in the various nationalisation Bills? If these are too heavy, we can undoubtedly reduce them.
That really is the rice, not the confetti. I was saying that the Chancellor of the Exchequer is a miser, and I must say to him that even his power rapacity must be satiated by the powers he obtains under this Bill, for it will enable him to do almost anything with a large sector of national life and liberties. Now the Government put forward two safeguards against the dictatorial power sought by the Chancellor. There is the Investment Council, of which the Chancellor gave us such a glowing account this afternoon. This Council contains some venerable financial dignatories, national and nationalised figures, but they have no public responsibility for the use of the powers granted by this Bill. Their advice may or may not be taken by the Chancellor or they may not be invited to advise. They are in the position of the Bishop of the Isle of Man in another place. His Lordship can sit, but he cannot vote. As the Chancellor is a former President of the Board of Trade, he would probably describe their position, to use another episcopal illustration, as being rather like the Archbishop of Canterbury, who is still a member of the Board of Trade, but never attends.
There is another illusory safeguard in this Bill. Companies whom the Chancellor denies entry to the capital market, can borrow from a bank. What about the Chancellor's other little Bill, the Bill that turns the Bank of England into the East End branch of the Treasury? That gives him power to direct the joint stock banks not to make advances to an industry or a company of which he disapproves. There are no safeguards in this Bill; it is the worst example of government by order. It is a tight brake on an active investment policy which is vital to Britain's recovery. This Government devotes far too much time to controlling capital instead of recognising the urgent need for creating new capital. The Chancellor has great faith in the Treasury's infallibility in judging investment policy, but no one is a good guide to industrial investment policy or any form of investment policy who is not skilled in taking risks. The Treasury looks upon taking risks rather like Lady Astor looks upon taking alcohol—with extreme repugnance. If one wants to expand old businesses, start new industries, or find new markets, one must be prepared to spend large sums of money without any hope of an immediate, or sometimes, any, hope of a return.
That is how millionaires are made.
I wish hon. Members of the party opposite who are jeering at that quite useful platitude, would make an unprejudiced study of the growth of businesses which have brought great prosperity to Britain. [An HON. MEMBER: "What about coalmines?"] Let me give the House three instances. The history of Courtaulds is a very interesting one. It was an old-fashioned Victorian silk business, but some livelier members of the family decided that it should make some extensions, and they went into the crape business. Apparently our Victorian forbears used a great deal of crape, in order to mourn their relatives, but the gay Edwardians gradually agreed that that was a rather uncivilised custom, and Courtaulds began to look about for another development. They made a very curious discovery from a book written in the 17th century by a French abbé, and one of the younger members of the staff of Courtaulds thought that he could find a process for making silk out of wood. He set to work to persuade his employers, who were interested in this idea, to take it up, but they very soon regretted their interest, because as the months and years rolled on they lost a great deal of money. In fact, they were in very difficult circumstances. Then, the experiment turned out to be a success. Courtaulds became one of the greatest businesses in the world.
I would say to hon. Members opposite who are always jeering at British industries that Courtaulds went over to the United States of America, which prides itself on its tremendous efficiency in production, and they became the leading business in the United States in the rayon industry. They beat every one of their American competitors and let us remember—this is incidental to my argument—that during this war the British Government had to sell most of those Courtaulds' shares in order to carry on the war effort. That is one thing. Let me mention another set of businesses, the Rhodesian copper companies. Their contribution to this war can hardly be exaggerated. During the last war we paid a tremendous price for copper. In this war great changes occurred. We got copper at half the price we paid in the 1914–18 war, and we were also supplying America with many of her needs in copper. Then, of course, I could mention, perhaps, Rolls Royce. I need not say much about Rolls Royce because everybody knows the part they have played in our salvation.
Now, I would ask the House to let us ruminate. [ Interruption .] I am very glad to carry the House so well with me. Let us ruminate on what priority a Treasury Committee would give Courtaulds if they had power to withhold capital from them when they were trying to expand. I can imagine a Treasury official putting on his glasses and saying, "Ah, this is a luxury industry speculating in a fantastic process," and as for the Rhodesian copper companies they would be described as a sheer gamble, whilst Rolls Royce, of course, would be a rich man's toy which might do some harm to the harness trade if it got any encouragement.
May I put it to the right hon. Member that in Soviet Russia Gosplan authorised expenditure on fundamental and applied scientific research at least ten times as much as was spent here on British private industry?
I think that may be the case, but I have not heard that any Russian engine was as good as the Rolls-Royce Merlin. I must not get into controversy because that is a thing I always wanted to avoid, so I am going to turn to an illustration which might greatly interest hon. Members opposite. I am going to refer to a business which is very dear to them, the company which publishes the "Daily Herald." In the course of a very few years millions were spent in trying to establish that journal. It was a trying time for the publishers because when newspapers lose money they lose money in plentiful abundance. The publishers of the "Daily Herald," Messrs. Odhams, had to make several issues in order to build up the "Daily Herald" so that it might compete with the other great and widely circulating dailies. They took great risks by aid of the capital market. They had courage and they won through, but I ask what sort of priority would the Treasury have given such a pertinacious, lavish applicant. Surely, therefore, these illustrations show that, without investors taking great risks, there can be no great expansion.
Before the right hon. Gentleman departs from that point, may I ask whether I am to understand him to say that the Government would not embark upon any speculative project because it is, in fact, the Government? How does he reconcile that with the fact that the most speculative project of all is the atomic bomb, which this and the American Government—[ Interruption .]
I quite agree that the atomic bomb is the most speculative of all. There is no doubt about that, and we may discover it to our cost. But I was saying that this Bill gives the Treasury a stranglehold on the capital market, and that, if Britain is to recover, those who provide capital should be encouraged to take risks. We all know that the good bureaucrat abhors risks, because he is always looking over his shoulder at the Public Accounts Committee. Our future will be very bleak if we devote most of our energies and capital to developing too many of our so-called basic industries. Coal, which has occupied a great deal of the time of the House in recent times, has been one of our important industries. Does anyone believe that any British industrialist in 2046 will rely solely on coal for power? Of course, he will not.
Let me ask another question. Can any Government Department, or any banker, judge between the prospects of new companies in new industries? This point was put with great effect by my hon. and gallant Friend the Member for Flint. How can a Government Department choose between the prospects of new companies in new industries? Companies succeed in competitive businesses because they are guided or run by men full of brains and with fire in their bellies—not the sort of men who can put impeccable arguments to the Treasury—and I think it will be a very sad day for this country when investors are deprived of the opportunity of backing such men.
What are our competitors doing? Take a great industrial country like the United States or Canada. Are they giving their Treasuries power to dictate in the use of capital? No, they are encouraging them to employ money in materials and processes which are creating important new industries, and we should be doing likewise. This Bill may easily send some of our most hopeful and enterprising inventors to countries, like the United States or Canada, where there is freedom to finance and market costly inventions and processes. Under this preposterous Bill, Whitehall is to be made the centre of all investment, and we may be quite sure that Whitehall will play safe in granting investors priorities and will favour established businesses or prosperous monopolies against young, adventurous, not to say speculative, businesses.
So far I have hinted at a few doubts about this Bill. A few more occur to me. We are all in agreement about the point, put with great strength by the hon. Member for East Aberdeen, about the need for producing more goods more swiftly than ever before, but do not let us lose sight of the need for selling more services. Britain is pre-eminent in banking, insurance and, indeed, all sorts of brokerage. The Government seeks to increase its controls over these activities. It will not, for instance, declare its policy about re-opening the great commodity exchanges, and, in this Bill, it is putting forward many impediments to the City's work. The Socialists certainly dislike the City, but they should remember that the City is a great earner for Britain, and has brought much trade to this country. They should also remember that this constant abuse of the City is well reported abroad by not disinterested parties who are very anxious to take over the functions hitherto performed by the City of London.
I ask hon. Gentlemen opposite to consider whether it is wise, at a time like this when we are more up against it in an economic sense than we have ever been in our history, to continue to abuse institutions which are playing, or can play, a great part in restoring prosperity to Britain. I listened here today to certain criticisms of the bankers. Do not hon. Gentlemen opposite realise that the British banking system is not only the best in the world, but the envy of the world? No British bank has failed in this century, but thousands—[An HON. MEMBER: "What about Farrows?"]—Farrows was a ramp, not a bank. [ Laughter .] Hon. Gentlemen opposite may find this a subject for laughter, but it is well recognised that in America during the last 20 years something like 10,000 banks have closed their doors. The same observation could be made about banks all over the Continent of Europe. Would it not, therefore, be a good thing for the Socialist Party for once to recognise that Britain can achieve something?
Hon. Members opposite really must recognise that both our banks and our insurance companies are great earners for Britain. There is no part of the world in which a British insurance policy is not honoured. We have obtained great prestige by the sale of services abroad, and this Government should do everything in their power to increase the sale of British services. It is not sufficient merely to sell British goods abroad. British services sold abroad are useful in bringing orders to this country for British goods, as the Chancellor of the Exchequer well knows. I readily admit that the City man is not infallible; he is not like the Treasury official. But he has great experience and skill in matters of investment. This Bill will add greatly to his difficulty in selling British services abroad.
The guarantee Clause in this Bill is the only thing in it that is not restrictive. Indeed, it is a most ridiculous Clause. Fifty million pounds to stop a slump when our national income is over £8,000 million a year! The Chancellor is learning something by contact with persons in the Treasury, but if he thinks that sum is going to play any part in stopping a slump, he had better look at the amount of money spent in the United States by President Roosevelt at the instigation of Lord Keynes when he believed he could solve the slump by an expenditure of money. As a matter of fact, this guarantee Clause is irrelevant because, if we accept the President of the Board of Trade as an authority, as, indeed, we should on trading matters, he told us in a speech last Saturday that we will have an acute labour shortage in England for many years. Therefore, it is unnecessary for the Chancellor to put this piece of window-dressing in his Bill.
There are only one or two other points which occur to me about this Bill and the Memorandum. One is the fatuous statement on page 2 of the Memorandum:
Let us take the Chancellor's really senseless opposition to capitalising reserves. The other day he made an excellent speech—at least, it was good in parts—in which he praised industrialists who built up reserves but only distributed a part of their earnings. He thought that was a splendid thing. If he accepts his own argument, surely there is no case whatever for continuing this ban against capitalising reserves. Of course, there is only one argument that can be put forward for the Chancellor's present policy. It debars Socialist propagandists of a stock peroration against profiteering. That is the only justification. Some points about gambling have been made by various supporters of this Bill. I thought they were rather innocent. They said this Bill will stop gambling in shares. Stock Exchange gamblers are a nuisance to the City and to industrialists, but the turnover of gambling in the Stock Exchange is trifling by comparison with the turnover in football or racing pools. If the Government want to stop this gambling, a Bill much smaller than this would achieve their desire. It will not of course be as popular as baiting the City.
To sum up, this Bill is an attempt to establish control by the Treasury over most of the users and providers of capital. I would tell the Chancellor that he cannot run British industry from Whitehall. This Bill fetters enterprise and weakens confidence, and confidence at the present moment is a quality which is absolutely necessary to our recovery. It favours monopolistic business. It will create the worst bottleneck ever known in Whitehall, and it is the most remarkable example of Socialist inconsistency. For years, the party opposite have declaimed against what they call the domination of industry by finance, and how often have they urged against the excessive power of the Treasury. I remember speeches by the Chancellor attacking Lord Snowden for his subservience to Treasury officials. Now what do we find? We find that the high priests of finance, who are the heads of the Treasury, are to be made dictators of British industrial development. So this is how we face the future? The most depressing fact about this Bill is that it creates more uncertainty. As I have said before, confidence is now one of Britain's vital needs, for we are in black times. Last Saturday the President of the Board of Trade said that we were in grave economic difficulties. We are, indeed. They are the worst in our history. Unless we speedily surmount those difficulties we shall lose many of our former markets, and we may become a permanently impoverished nation, which will be a tragedy to us, but almost as great a tragedy to a world seeking peace and stability. Why does not the Chancellor accept the spirit of the other remark of the President of the Board of Trade, that everything now depends upon the efforts of managements and workpeople? I do not think that employers will be found wanting, but why seek to discourage them by an unnecessary and harmful Bill such as this? Let us restore the Treasury to its proper functions by rejecting this Bill. Its rejection will be a great encouragement to all lively producers upon whom Britain's recovery depends. I have not exhausted the subject, but I have exhausted my time.
I beg to move to leave out from the word "That" to the end of the Question, and to add:
9.42 p.m.
In common with most of my hon. Friends on this side of the House, I listened with amusement and delight to the speech of the right hon. Member for Bournemouth (Mr. Bracken). Delighted as I was, I could not understand what the greater part of his speech had to do with this Bill. It was a pleasing and interesting disquisition upon British industry, but except incidentally and occasionally, and purely by chance, it did not, so far as I could gather, in any way impinge upon the provisions of the Bill. It was garnished by a number of fine phrases, such as one often hears from the Opposition, to the effect that either the Government as a whole, or a particular Government Department—in this case the Treasury—had been set up in some sort of dictatorial position, that its motives were most sinister, that its practices were most inefficient, and that it was quite incapable of performing any of the functions which the Bill places upon it. That sort of argument we have heard, I will not say ad nauseam , because it was so charmingly put forward, but we have heard it long enough to be familiar with it, though no more convinced by it.
We have also heard from hon. Members opposite the other type of argument which they use so often about Measures which we introduce—that they interfere with the freedom of the citizens of this great country. Hon. Members opposite seem to assume that freedom of the citizens of this country is synonymous with, and means precisely and exactly the same thing as, financial freedom for the great financiers and industrialists, whereas the truth is exactly the contrary, if they will be so good as to give it one moment's thought—that the more free financiers are to play about with the finances of this country, the less freedom is there for the citizens.
I listened with great attention to try to discover what was the attitude of hon. Gentlemen opposite to the first essential question which this Bill raises, namely, whether they agreed with a system of control or whether they did not? The right hon. Member for the City of London (Mr. Assheton), who spoke first from the benches opposite, said quite clearly that he was prepared to accept a measure of temporary control. I do not believe the right hon. Member for Bournemouth, who spoke last, knew whether he was in favour of temporary control or not. If he had formed an opinion on that point, he kept it a most jealously guarded secret. I can only hazard what he really thinks, although I find it much more easy to hazard a guess why he would not tell us what he thinks.
If the case which the right hon. Gentleman and other hon. Gentlemen opposite were putting forward was that there should be no controls, not even temporary controls, I can only, much as I grieve to do so, use the word "mandate." I say I grieve to do it because, whenever that word is used in this House by any hon. Member on this side, it evokes a chorus of agonised protests from hon. Gentlemen opposite. I sympathise with them. It is a term which must provoke the most disagreeable recollections for them.
I am very much obliged to the hon. and learned Gentleman for his courtesy in giving way. I want only to ask whether he is going to deal with the mandate for a National Investment Board.
The Solicitor-General: I can assure the right hon. Gentleman that we on this side of the House, in sharp contrast to hon. Gentlemen opposite, are most anxious to address ourselves to the points at issue. I had become tempted against my will to refer to our mandate. I have expressed my apologies. That mandate, quite clearly and most emphatically expressed by the electorate of this country, was that they wanted a planned economy. They were not prepared to commit this country to the errors which disgraced the records of the administrations which guided its destinies after the last war. If, therefore, hon. Gentlemen have been able to form an opinion as to whether they want controls or not, and if they feel they do not want any controls, I can only refer them to the unpleasant truth that the electorate of this country definitely do want them. Hon. Members opposite are accustomed to remind us that this House should represent and give effect to the will of the people. In this instance we would only seek to accept that recommendation from their side. The right hon. Member for the City of London, however, was much more forthcoming and explicit. He said quite clearly, as he was bound to say, that it was nonsensical to oppose the principle of control altogether, and he went so far as to accept that we must have at least temporary control for what he described as the transitional period.
Hear, hear.
The right hon. Member for Bournemouth now seems to have made up his mind. I suppose he must have had a little prompting from his neighbour, the right hon. Member for the City of London. If the case that right hon. and hon. Members opposite are putting forward, is that they accept the principle of control for a temporary period, I would say this to them. We propose to plan the economy of this country, and when we have planned it there is no reason why we should hand it back to the financiers and industrialists. Therefore we propose to make this control permanent, if the House accepts the Bill. It is, unfortunately, a fact that the existence of speculators and profiteers does not come to an end with the end of a world war. They are an unpleasant nuisance which continues with us always. If this Bill has any value at all, it has a permanent value, and therefore we propose to continue this as a permanent system in our legislative apparatus.
Apart from the general vituperative criticism which was levelled against the Bill, and which fell like confetti across the Floor of the House—in just as much abundance and with just as little effect—the points of substance that were made by hon. Gentlemen opposite were, so far as I could see, few in number, and I hasten to deal with them. One does seem to require particular attention. The hon. Member for Skipton (Mr. Drayson) drew a most affecting picture, and rather an embarrassing one, of my right hon. Friend examining the widow's mite. The history attached to the picture, was that he had broken down the widow's door, and that he was then examining the widow's mite. When we were framing this Measure we thought we should, at least, gain some guidance from the former Measures adopted by the administration which preceded the present Government, and the provisions which enable entry to be made upon premises, were in point of fact taken from the Defence (Finance) Regulation No. 8 which was in force throughout the war. [ Interruption .] I am simply pointing out that we took this example from previous regulations, and we thought—perhaps mistakenly—that it was a good example. Anyhow the provisions are not new. They existed in the Defence Regulations throughout the whole period of the war. We have in point of fact considerably toned down these. Regulations. When they were applied throughout the war they did not require that there should be any warrant from a magistrate enabling entry to be made on the premises. The Regulations, as framed, now provide that if the Chancellor wishes to examine the widow's mite, he will have to go to a police court and obtain a warrant before he can enter on the premises. The necessity for obtaining such a warrant did not exist before.
Hon. Members opposite were also concerned with the fact that documents which might have been found upon premises, could be used against the person charged notwithstanding they might incriminate him. No doubt it will be distressing for them to hear that the regulations in this respect have been considerably toned down. What actually happened before was that any explanation which the prisoner charged had to give could be used against him whether he wanted it to be used against him or not, even if it did incriminate him. We have removed what hon. Gentlemen opposite have described as a crying injustice, but which they tolerated for a period of years without protest. [HON. MEMBERS: "War years."]. There is no reason why there should be an injustice in war years any more than in peace years, but, and I say this advisedly, it is a most dangerous attitude of mind to think, as was thought after the Great War, that because the war is over we can sit back and do nothing more about it.
The national crisis now, so far as the industry of this country is concerned, is as acute and as pressing as it was after the last war. [ Interruption .] I am very much indebted to hon. Members opposite. They make my task very much easier. They have complained that this Bill is restrictive, and we have put it forward as an essential part of the apparatus that we require to regulate the industry of this country. It is as important now as it was at any time during the war, and it would be a most dangerous thing for people to sit back—as no doubt hon. Gentlemen opposite want to do, it is inherent in every word they have said during the course of this Debate—and throw controls to the winds, doing precisely nothing to guide finance and industry. I challenge any hon. Gentleman opposite to say what sort of alternative has ever been proposed from the Benches opposite other than the tearing up of every financial and other control, substituting nothing whatsoever. Hon. Gentlemen opposite either have not considered, or have not learnt anything from, the history of what followed in this country after 1918. My hon. Friend the Member for Kettering (Mr. Mitcheson) quoted figures of the slump in 1930. Millions were lost—millions of money invested by the ordinary small investor were thrown away, simply because there was no sort of financial control. It was an heritage from five years of Conservative administration. [ Laughter .]
rose —
Order.
The only attitude that hon. Gentlemen opposite can adopt is to try and laugh it off.
The hon. and learned Gentleman put out a challenge just now. May I tell him that we on this side of the House accepted the White Paper on employment, as did his colleagues over there, and that was our policy?
I am indeed surprised, after what was said this afternoon by my hon. Friend the Member for Kettering (Mr. Mitchison) that hon. Gentlemen opposite should be so ready to acknowledge that White Paper. It certainly does not assist their case. [ Interruption. ] It is perfectly obvious, What it means is obvious to anybody Who listened to what the hon. Gentleman said. [An HON. MEMBER: "What did he say?"] If hon. Gentlemen were not here when he spoke, or did not listen to the quotations, if they were taking tea when my hon. Friend was quoting from the White Paper, I can only recommend them to read it after this Debate.
I have endeavoured, after the peroration we heard from the right hon. Gentleman who spoke last, to bring this Debate back to this Bill. It is a Bill which, as has been said, has a limited objective. It is a necessary and indispensable part of the apparatus of control with which we desire to re-mould and plan the economy of this country. It is, as my right hon. Friend has said, the complement to the physical controls which will control the disposition of actual physical resources. It is the complement of those controls in the financial sphere, and it is no more. Right hon. and hon. Gentlemen opposite have seen something extremely sinister in it. What in fact does it do? It gives the Treasury the power, not the duty or the obligation, to say in respect of investments or intended investments or proposed investments that will not conduce to the common good, that will not be useful for the purposes of rebuilding the industrial life of this country, that those investments shall not be allowed. It says no more than that. Indeed, it says very much less than that, because it imposes a de minimis limit of £50,000—[HON. MEMBERS: "Not the Bill."]—I am much obliged—not the Bill but the draft Order that will be made under the Bill. In the case of any investment which is in excess over a period of 12 months of that amount, the Treasury have the right, if that investment is a useless investment or an investment which in the circumstances ought not to be made, to refuse consent to its being made, and no more. What there is so sinister in that—and that is all that Clause 1 says—passes my comprehension. Of course, it is easy to dress it up and make it appear the beginning of some gigantic conspiracy from this side of the House. It is nothing of the sort. It is simply a machinery enabling Bill designed to enable the Treasury to prevent investments going astray.
It was attacked—and this was the part of the right hon. Gentleman's speech which did seem to have relevance to the terms of the Bill—on the grounds that it mght stifle enterprise. If what he means is that the Treasury would discourage and, perhaps, prohibit merely speculative undertakings of no intrinsic value, I have no doubt they would. We were regaled by a history of Courtaulds. I think he referred to other companies as well. It is well to remember when one is talking about discouraging enterprise and industry and so on, that of every speculative, hopeless enterprise which is undertaken on the financial market perhaps one out of 500 succeeds. That, I should have thought, was a very generous estimate. If all the Treasury does is to discourage 499 out of those 500 speculative enterprises, which really mean a waste of public investment, then it will perform an extremely useful function; and that is what it is designed to do. It is designed to differentiate between those investments which will conduce to building up the necessary basic industries of this country and those investments which are simply light, volatile, and foredoomed to failure, or, if they succeed, are directed to such ends they cannot be said to assist national needs.
Is the hon. and learned Gentleman really saying the Treasury is going to be right 499 times and wrong only once?
I should like to say 500 times. All I can say is this: If the personnel of the Capital Issues Committee are wrong—[An HON. MEMBER: "You mean members."]—I said personnel and I mean personnel—in interpreting the policy of the Government laid down as the result of the advice of the National Investment Council, I should think there are few people in this country likely to form a better judgment than they. The National Investment Council—hon. Members know who the personnel are; they have had them read out this afternoon—is very broadly based, and has among its number, men with an extreme wealth of industrial, commercial and general experience of the City of London and of the money market. That is the best sort of advice that you can get. It is representative and it has experience.
I want now to pass on to certain criticisms of detail. It was said by hon. Gentlemen opposite that this Bill would discourage the small capitalist, the small undertaker, and it would favour the monopolist as against him. The hon. Gentlemen who advanced that criticism must have forgotten temporarily that there is a £50,000 limit. If that has not been forgotten I do not know—[HON. MEMBERS: "That is in the Order and not in the Bill."]—It is in the Order that will carry out the intentions of the Bill.—[An HON. MEMBER: "We are not debating the Order."]—The House is debating the effect of this Bill I have been saying that this is a harmless Bill and hon. Gentlemen opposite have been reading into it all sorts of things and saying that it is most harmful. I say that this Order which will carry out the intentions of the Bill imposes a £50.000 limit. In point of fact, the small undertaker will not be affected at all. The Bill only affects those capital issues which exceed in any one period of 12 months, £50,000.
How many concerns have an issue of £50,000?
I am very much obliged to the hon. Gentleman. He makes it perfectly clear, by asking that question, how harmless is this Bill. The Bill and the Order are intended only to deal with very big capital issues, very big raisings of money, and, therefore, as hon. Gentlemen have sought to do, to read into it this sinister conspiracy and cramping, hampering effect and stranglehold on British industry is quite nonsensical. The small man who does not want to raise more than that sum of money can do so completely unhampered. He has not to obtain permission from the Treasury and he can go ahead with his enterprise as he likes. I would remind the House that the two financial corporations mentioned in the Memorandum which accompanies the draft Order in the White Paper are specifically designed, one of them at any rate, to assist the small man. One is specifically designed to deal with issues, the raising of money, up to £200,000. I am authorised by my right hon. Friend to tell the House that in point of fact in stimulating and assisting small enterprise a sum of upwards of £1,000,000 has been spent already by that corporation. [An HON. MEMBER: "SO what?"] The hon. Gentleman who has made that interjection looks a bit concerned. The monopoly for which this Bill is to be the protagonist is, in point of fact, the only, or substantially the only, enterprise that will be brought within its ambit. This Bill and the Order made under it are designed to deal with these big capital issues and big capital issues only, so that the apprehension that it would in any way interfere with the small man or stifle enterprise or prevent new entrants into the industrial sphere is completely unfounded.
The right hon. Gentleman who spoke last did make one or two points of detail that I should like to deal with. He was concerned, as I understood him, with the fact that the draft Order under the Bill affected bonus issues as well as issues in which there is a bonus element. I will say at once that that is a question on which the Chancellor of the Exchequer would welcome the advice of the National Investment Council. That is a matter peculiar to their experience. I do not wish to be understood as saying that bonus issues or issues in which there is a bonus element are harmless. Sometimes they are, sometimes they are perfectly bona fide , but frequently they are not and in the past they have been made vehicles of abuse. Furthermore, they are to be considered from this aspect that where you have a bonus element in the price of shares it does constitute an attraction to investors. Therefore, any system which sets out to control the investment market would not in any sense be complete unless it did cover bonus issues and issues in which there is a bonus element. If a company offers its shareholders £1 shares at 10s., that will constitute an attraction to the would-be investor.
I am sorry to trouble the Solicitor-General but I would like to say that if a company issued £1 shares at 10s. it would not be illegal, it would be a crime.
Perhaps I had better not say what I was going to say on that, but there are particular cases in which it can be done. It is arguable that bonus issues and issues with bonus elements are proper subjects of control, but the mere fact that the Treasury has control and can refuse permission does not mean that permission will always be refused. Hon. Gentlemen opposite seem to confuse the fact that the Treasury has a right to refuse control with the fact of absolute refusal. Subsidiary companies are a point on which I wish to touch. That again is a matter on which my right hon. Friend, will welcome advice from the National Investment Council. As has been pointed out in certain London papers mere loans between parent and subsidiary companies do not of themselves necessarily involve a new issue of capital. It does not mean that they will attract fresh capital in the money market, but, nevertheless, it is quite, obvious that the complicated and substantial financial operations often involved in loans between associated groups of companies should be brought within the scope of the Bill. It again does not follow they would be prohibited, but it is right to refuse permission if they infringe against the policy which the Government lays down having consulted the National Investment Council. I just want to say one word on the question of delay. Hon. Members were very concerned on this question.
That is a perfectly fair point. But I would remind them that it is a completely erroneous conception that in the case of a big capital issue of over £50,000 you can do that in two hours, as was suggested, or even in the matter of days. It takes a long time to formulate, to work out the scheme, and to convince the people from whom you are trying to get the money. The time which is taken to get the necessary consent from the Capital Issues Committee does not loom large in comparison to the time which is necessarily involved in developing a scheme for a big capital issue. But, as my right hon. Friend has said, he regards it as a matter of prime importance that delays involved in obtaining the consent of the Treasury, acting on the advice of the Capital Issues Committee, should be reduced to the absolute minimum. That is a factor which he will take very carefully into account. He will insist that the delay should be reduced to the absolute bare minimum.
I submit to the House that that fear is very much exaggerated, and that there is really very little in it. There has to be delay in connection with a big capital issue, but in so far as my right hon. Friend can bring it about—and he can—that delay will be increased in only the slightest degree by the necessity for obtaining consent. In so far as the constitution of the National Investment Council is concerned, that is simply an advisory body on general matters of policy, so that in the matter of delay the position is as it was before so far as the Council is concerned, except that the proceedings will be accelerated. The picture drawn by the right hon. Member for the City of London is completely beside the point. Obviously, it is fantastic, and would not happen in that way. Those Departments which were concerned would be consulted and have to give their views about it quickly, because it is recognised that that sort of question should be decided with the minimum of delay.
I have dealt with the points of detail to which criticism was directed. I commend the Bill to the House on these grounds: It is an unambitious Bill; it is an enabling Bill; it is a machinery Bill, and nothing more. If the principle is accepted that you must have some form of control—and, having regard to present circumstances, that is a principle which cannot reasonably be controverted—then it is inevitably necessary that you must have a Bill in this form. This Measure simply gives the Treasury powers, in certain circumstances, to withhold consent to new issues. I have not dealt with Clause 2, which has been referred to, as that is purely constructive in its effect, and I suggest that there can be no real criticism of that, except that possibly the figure of £50,000,000 should be increased. If my right hon. Friend thinks that that figure should be higher he will certainly consider it—
I must point out that if we take the Financial Resolution, and pass the Committee stage, which means approving the figure of £50 million, the promise which the Solicitor-General has given to the House cannot be carried out.
It could be done by re-committal.
Without further prolonging this Debate, I commend this Bill to the, House as a permanently useful Measure, with no deleterious consequences, and one which is adequately and
properly designed to achieve the limited purpose for which it has been framed.
Question put, "That the words proposed to be left out stand part of the Question."
The House divided: Ayes, 326; Noes, 142.
Division No. 75.] AYES. [10.21 p.m. Adams, Capt. Richard (Balham) Dodds, N. N. John, W Adamson, Mrs. J. L. Donovan, T. Jones, D. T. (Hartlepools) Allen, A. C. (Bosworth) Douglas, F. C. R. Jones, P. Asterley Allighan, Garry Drioerg, T. E. N. Keenan, W. Alpass, J. H. Dugdale, J. (W. Bromwich) Kendall, W. D. Attewell, H. C. Dumpleton, C. W. Key, C. W. Attlee, Rt. Hon. C. R. Durbin, E. F. M. King, E. M. Austin, H. L. Dye, S. Kinjhorn, Sqn.-Ldr. E. Ayles, W. H. Ede, Rt. Hon. J. C. Kinley, J. Ayrton Gould, Mrs. B. Edelman, M Kirkwood, D. Balfour, A. Edwards, Rt. Hon. Sir C. (Bedwellty) Lang, G. Barnes, Rt. Hon. A. J. Edwards, John (Blackburn) Lavers, S. Barstow, P. G. Edwards, N. (Caerphilly) Lawson, Rt. Hon. J. J. Barton, C. Edwards, W. J. (Whitechapel) Lee, F. (Hulme) Battley, J. R. Evans, E. (Lowestoft) Lee, Miss J. (Cannock) Bechervaise, A. E. Evans, S. N. (Wednesbury) Leonard, W. Belcher, J. W. Ewart, R. Leslie, J R. Bellinger, F. J. Fairhurst, F. Levy, B. W. Benson, G. Farthing, W. J. Lewis, A. W J. (Upton) Berry, H. Fletcher. E. G. M. (Islington, E.) Lewis, J. (Bolton) Beswick, Flt.-Lieut. F. Follick, M. Lewis, T. (Southampton) Bing, Capt. G. H. C. Foot, M. M. Lindgren, G. S. Binns, J. Foster, W. (Wigan) Lipson, D. L. Blackburn, Capt. A. R. Freeman, Maj. J. (Watford) Lipton, Lt.-Col. M. Blenkinsop, Capt. A. Freeman, Peter (Newport) Logan, D G. Blyton, W. R. Gaitskell, H. T. N. Longden, F. Boardman, H. Gallacher, W Lyne, A. W. Bowden, Flg.-Offr. H. W. Ganley, Mrs. C. S. McAdam, W. Bowen, R. Gibbins, J. McEntee, V. La T. Bowles, F. G. (Nuneaton) Gibson, C. W. McGhee, H. G. Braddock, Mrs. E. M. (L'p'l, Exch'ge) Gilzean, A. Mack, J. D. Braddock, T. (Mitcham) Glanville, J. E. (Consett) McKay, J. (Wallsend) Brook, D. (Halifax) Goodrich, H. E. McKinlay, A. S. Brooks, T.J. (Rothwell) Gordon-Walker, P. C. Maclean, N. (Govan) Brown, George (Belper) Greenwood, Rt. Hon. A, McLeavy, F Brown, T. J. (Ince) Grey, C. F. McNeil, H. Bruce, Maj. O. W. T. Grierson, E. Macpherson, T. (Romford) Buchanan, G. Griffiths, D. (Rother Valley) Mainwaring, W. H. Burden, T. W. Griffiths, Rt. Hon. J. (Llanelly) Mallalieu, J. P. W Burke, W. A. Griffiths, Capt. W. D. (Moss Side) Mann, Mrs. J. Butler, H. W. (Hackney, S.) Guest, Dr. L. Haden Manning, C. (Camberwell, N.) Byers, Lt.-Col. F. Gunter, Capt. R. J. Manning, Mrs. L. (Epping) Castle, Mrs. B. A. Guy, W. H. Marshall, F. (Brightside) Chamberlain, R. A. Haire, Flt.-Lieut. J. (Wycombe) Mathers, G. Champion, A. J. Hale, Leslie Mayhew, C. P. Chater, D. Hall, W. G. (Colne Valley) Medland, H. M. Chetwynd, Capt. G. R. Hamilton, Lieut.-Col R Middleton, Mrs. L. Clitherow, Dr. R. Hannan, W. (Maryhill) Mitchison, Maj. G R Cobb, F. A. Hardy, E. A. Monslow, W. Cocks, F. S Hastings, Dr. Somerville Montague, F Coldrick, W. Haworth, J. Moody, A. S. Collick, P. Henderson, A. (Kingswinford) Morgan, Dr. H. B. Collins, V. J. Henderson. J. (Ardwick) Morris, Lt.-Col. H. (Sheffield, C.) Colman, Miss G. M. Hicks, G. Morris, P. (Swansea, W.) Comyns, Dr. L. Hobson, C. R Morrison, Rt. Hon. H. (Lewisham, E.) Cooper, Wing-Comdr. G Holman, P. Mort, D. L. Corlett, Dr. J. Horabin, T. L. Moyle, A. Cove, W. G. House, G. Murray, J. D Crawley, Flt.-Lieut. A. Hoy, J. Naylor, T. E. Cripps, Rt. Hon. Sir S. Hubbard, T. Neal, H. (Claycross) Daggar, G. Hudson, J. H. (Ealing, W.) Nicholls, H. R. (Stratford) Daines, P. Hughes, Hector (Aberdeen, N.) Noel-Baker, Capt. F. E. (Brentford) Dalton, Rt. Hon. H. Hughes, Lt. H. D. (W'lverh'pton, W.) Noel-Buxton, Lady Davies, Edward (Burslem) Hutchinson, H. L. (Rusholme) O'Brien, T. Davies, Ernest (Enfield) Hynd, H. (Hackney, C.) Oldfield, W. H. Davies, Haydn (St Pancras, S.W.) Hynd, J. B. (Attercliffe) Oliver, G. H Davies, R. J (Westhoughton) Isaacs, Rt. Hon. G. A. Orbach, M. Deer, G. Irving, W J. Paget, R T. Delargy, Captain H. J Janner, B. Paling, Rt. Hon. Wilfred (Wentworth) Diamond, J. Jeger, Capt. G. (Winchester) Paling, Will T. (Dewsbury) Dobbie, W. Jeger, Dr. S. W. (St. Pancras, S.E.) Palmer, A. M. F. Pargiter, G. A. Skeffington-Lodge, T. C. Walkden, E. Parker, J. Skinnard, F. W. Walker, G. H. Parkin, Flt.-Lieut. B. T. Smith, Capt. C. (Colchester) Wallace, G. D. (Chislehurst) Paton, Mrs. F. (Rushcliffe) Smith, Ellis (Stoke) Warbey, W. N Paton, J. (Norwich) Smith, H. N. (Nottingham, S.) Watkins, T. E. Pearson, A. Smith, S. H. (Hull. S.W.) Watson, W. M. Peart, Capt. T. F. Smith, T. (Normanton) Webb, M. (Bradford, C.) Perrins, W. Solley, L. J. Weitzman, D. Piratin, P. Soskice, Maj. Sir F. Wells, W. T. (Walsall) Popplewell, E. Sparks, J. A. Westwood, Rt. Hon. J. Porter, G. (Leeds) Stamford, W. White, C. F. (Derbyshire, W.) Price, M. P. Steele, T. White, H. (Derbyshire, N.E.) Pritt, D. N. Stewart, Capt. Michael (Fulham, E.) Whiteley, Rt. Hon. W. Proctor, W. T. Stokes, R. R. Wigg, Colonel G. E. Pursey, Cmdr. H. Strachey, J. Wilcock, Group-Capt. C. A. B. Randall, H. E. Strauss, G. R. Wilkes, Maj. L. Ranger, J. Stubbs, A. E. Wilkins, W. A. Rees-Williams, Lt.-Col. D. R. Summerskill, Dr. Edith Wilkinson, Rt. Hon. Ellen Reeves, J. Symonds, Maj. A. L. Willey, F. T. (Sunderland) Reid, T. (Swindon) Taylor, H. B. (Mansfield) Willey, O. G. (Cleveland) Rhodes, H. Taylor, R. J. (Morpeth) Williams, D. J. (Neath) Ridealgh, Mrs. M. Taylor, Dr. S. (Barnet) Williams, J. L. (Kelvingrove) Robens, A. Thomas, Ivor (Keighley) Williams, Rt. Hon. T. (Don Valley) Roberts, Sq.-Ldr. Emrys O. (M'rion'th) Thomas, I. O. (Wrekin) Williams, W. R. (Heston) Roberts, Goronwy (Caernarvonshire) Thomas, John R. (Dover) Williamson, T. Rogers, G. H. R. Thomas, George (Cardiff) Willis, E. Royle, C. Thomson, Rt. Hn. G. R. (Ed'b'gh, E.) Wills, Mrs. E. A. Sargood, R. Thorneycroft, H. (Manchester, C.) Wilmot, Rt. Hon. J. Scott-Elliot, W. Thurtle, E. Wilson, J. H. Segal, Sq.-Ldr. S. Tiffany, S. Wise, Major F J. Sharp, Lt.-Col. G. M. Titterington, M. F. Woodburn, A. Shawcross, C. N. (Widnes) Tolley, L. Woods, G. S. Shawcross, Sir H (St. Helens) Tomlinson, Rt. Hon. G. Yates, V. F. Shinwell, Rt. Hon. E. Turner-Samuels, M. Young, Sir R. (Newton) Shurmer, P. Ungoed-Thomas, L. Zilliacus, K. Silverman, J. (Erdington) Usborne, Henry Silverman, S. S. (Nelson) Vernon, Maj. W. F. TELLERS FOR THE AYES: Simmons, C. J. Viant, S. P. Mr. Collindridge and Skeffington, A. M. Wadsworth, G Captain Snow NOES Aitken, Hon. M. Gammans, Capt. L. D. Morrison, Maj. J. G. (Salisbury) Amory, D. Heathcoat George, Maj. Rt. Hn. G. Lloyd (P'ke.) Morrison, Rt. Hn. W. S. (Cirencester) Assheton, Rt. Hon. R Glossop, C. W. H Mott-Radclyffe, Maj. C. E. Astor, Hon. M. Gomme-Duncan, Col. A. G. Neill, W. F. (Belfast, N.) Baldwin, A. E. Hare, Lieut.-Col. Hn. J. H. (W'dbr'ge) Neven-Spence, Major Sir B. Barlow, Sir J. Harvey, Air-Comdre. A. V. Noble, Comdr. A. H. P. Beamish, Mai. T. V. H. Head, Brig A. H. Nutting, Anthony Bennett, Sir P. Hinchingbrooke, Viscount Orr-Ewing, I. L. Boles, Lt.-Col. D. C. (Wells) Hogg, Hon. Q Osborne, C. Boothby, R. Mollis, Sqn.-Ldr. M. C. Peake, Rt. Hon. O. Boyd-Carpenter, Maj. J. A. Hope, Lord J. Peto, Brig. C. H. M Bracken, Rt. Hon. Brendan Howard, Hon. A. Pickthorn, K. Braithwaite, Lt.-Comdr. J. G. Hulbert, N. J. Pitman, I. J. Bromley-Davenport, Lt.-Col. W. Hurd, A. Ponsonby, Col. C E. Bullock, Capt. M. Hutchison, Lt.-Cm. Clark (E'b'rgh W.) Poole, O. B. S. (Oswestry) Butler, Rt. Hon. R. A. (S'ffr'n W'ld'n) Hutchison, Lt.-Col J. R. (G'gow, C.) Prescott, W. R S. Carson, E. Jarvis, Sir J. Price-White, Lt.-Col. D. Challen, Flt.-Lieut. C. Jeffreys, General Sir G. Prior-Palmer, Brig. O. Clarke, Col. R. S. Jennings, R. Raikes, H. V Clifton-Brown, Lt.-Col. G. Keeling, E. H. Ramsay, Maj. S. Conant, Maj. R. J. E. Kerr. Sir J. Graham Rayner, Brig. R. Corbett, Lieut.-Col. U (Ludlow) Lambert, G. Reed, Sir S. (Aylesbury) Crookshank, Capt. Rt. Hon. H. F. C. Lancaster, Col. C. G. Renton, D. Crosthwaite-Eyre, Col. O. E. Legge-Bourke, Maj. E A. H. Robertson, Sir D. (Streatham) Crowder, Cant. J F. E. Linstead, H. N. Robinson, Wing Comdr. Roland Cuthbert. W. N. Lloyd, Maj. Guy (Renfrew, E.) Ropner, Col. L. Davidson. Viscountess Lucas-Tooth, Sir H. Ross, Sir R. Digby, Major S. W. Lyttelton, Rt. Hon. O. Sanderson, Sir F. Dodds-Parker, A. D. MacAndrew, Col. Sir C. Scott. Lord W Dower, Lt.-Col. A. V. G. (Penrith) Macdonald, Capt. Sir P. (I. of Wight) Shephard, S. (Newark) Drayson Capt. G. B McKie, J. H. (Galloway) Shepherd, Lieut. W. S. (Bucklow) Drewe, C. MacLeod, Capt. J. Smith, E. P. (Ashford) Dugdale, Maj. Sir T. (Richmond) Macmillan, Rt. Hon. Harold Smithers, Sir W. Duncan. Rt. Hn. Sir A. (City of Lond.) Macpherson, Maj. N. (Dumfries) Spearman, A. C. M. ' Duthie, W. S Maitland, Comdr. J. W. Spence, Maj. H. R. Eccles, D. M Manningham-Buller, R. E. Stanley, Rt. Hon. O. Eden, Rt. Hon. A. Marlowe, A. A. H. Stoddart-Scott, Col. M Erroll, Col. F J. Marsden, Capt. A. Stuart, Rt. Hon J. Fleming, Sqn.-Ldr. E. L. Marshall, Comdr. D. (Bodmin) Studholme, H. G Fletcher, W. (Bury) Maude, J C. Sutcliffe, H. Foster, J. G. (Northwich) Mellor, Sir J. Taylor, C. S. (Eastbourne) Fox, Sqn.-Ldr. Sir G. Molson, A. H. E. Taylor, Vice-Adm E. A. (P'dd't'n S.) Gage, Lt.-Col. C. Moore, Lt.-Col. Sir T. Thomas, J. P. L. (Hereford) Galbraith, Cmdr. T. D. Morris-Jones, Sir H. Thorneycroft, G. E. P. Thornton-Kemsley, Col. C. N. Webbe, Sir H. (Abbey) Winterton, Rt. Hon. Earl Touche, G. C. Wheatley, M. J. York, C. Turlon, R. H White, Sir D. (Fareham) Walker-Smith, D. White, J. B. (Canterbury) TELLERS FOR THE NOES: Ward, Hon. G. R. Williams, Lt.-Comdr. Gerald (T'nbr'ge) Sir A. Young and Willoughby de Eresby, Lord Mr. Buchan-Hepburn
Main Question put, and agreed to.
Bill accordingly read a Second time.
Motion made, and Question put, "That the Bill be committed to a Committee
of the Whole House."—[ Mr. Oliver Stanley .]
The House divided: Ayes, 141; Noes, 314.
Division No. 76.] AYES. [10.34 p.m Aitken, Hon. M. Harvey, Air-Comdre A. V. Pitman, I. J. Amory, D. Heathcoat Head, Brig. A H Ponsonby, Col. C. E. Assheton, Rt Hon. R Hinchingbrooke, Viscount Poole, O. B. S. (Oswestry) Astor, Hon. M. Hogg, Hon. Q Prescott, W. R. S Baldwin, A. E. Hollis, Sqn.-Ldr. M. C. Price-White, Lt.-Col. D. Barlow, Sir J. Hope, Lord J. Prior-Palmer, Brig. O. Beamish, Maj. T. V. H. Howard, Hon. A Raikes, H. V Bennett, Sir P. Hulbert, N. J Ramsay, Maj S. Boles, Lt.-Col D. C. (Wells) Hurd, A Rayner, Brig. R. Boothby, R Hutchison, Lt.-Cm. Clark (E'b'rgh W.) Reed, Sir S. (Aylesbury) Boyd-Carpenter, Maj. J. A. Hutchison, Lt.-Col. J. R. (G'gow, C.) Renton, D. Bracken, Rt. Hon. Brendan Jarvis, Sir J. Roberts, Maj. P. G. (Ecclesall) Braithwaite, Lt.-Comdr. J. G. Jeffreys, General Sir G. Robertson, Sir D. (Streatham) Bromley-Davenport, Lt.-Col. W. Jennings, R. Robinson, Wing Comdr. Roland Bullock, Capt. M. Keeling, E. H. Ropner, Col L. Butler, Rt. Hon. R. A. (S'ffr'n W'ld'n) Kerr, Sir J. Graham Ross, Sir R. Carson, E. Lambert, G. Sanderson, Sir F. Challen, Flt.-Lieut. C Lancaster, Col. C. G. Scott, Lord W. Clarke, Col. R. S. Legge-Bourke, Maj. E. A. H. Shephard, S. (Newark) Clifton-Brown, Lt.-Col. G. Lennox-Boyd, A. T. Shepherd, Lieut. W. S. (Bucklow) Conant, Maj. R. J. E. Linstead, H. N. Smith, E. P. (Ashford) Corbett, Lieut.-Col. U. (Ludlow) Lloyd, Maj. Guy (Renfrew, E.) Smithers, Sir W. Crookshank, Capt. Rt. Hon. H. F. C. Lucas-Tooth, Sir H Spearman, A. C. M Crosthwaite-Eyre, Col. O. E Lyttelton, Rt. Hon. O. Spence, Maj. H R. Crowder, Capt. J. F. E. MacAndrew, Col. Sir C. Stanley, Rt. Hon. O. Cuthbert, W. N. Macdonald, Capt. Sir P. (I. of Wight) Stoddart-Scott, Col. M Davidson, Viscountess McKie, J. H. (Galloway) Stuart, Rt. Hon J. Digby, Major S. W. MacLeod, Capt. J Studholme, H. G. Dower, Lt.-Col. A. V. G. (Penrith) Macmillan, Rt Hon. Harold Sutcliffe, H. Drayson, Capt. G. B. Macpherson, Maj. N. (Dumfries) Taylor. C. S. (Eastbourne) Drewe, C. Maitland, Comdr. J. W. Taylor, Vice-Adm. E. A. (P'dd't'n, S.) Dugdale, Maj. Sir T. (Richmond) Marlowe, A. A. H. Thomas, J. P L. (Hereford) Duncan, Rt. Hn. Sir A. (City of Lond.) Marsden, Capt. A. Thorneycroft, G. E. P. (Monmouth) Duthie, W. S Marshall, Comdr. D. (Bodmin) Thornton-Kemsley, Col. C. N. Eccles, D. M. Maude, J. C. Touche, G. C Eden, Rt. Hon. A Mellor, Sir J. Turton, R. H Erroll, Col. F. J. Molson, A. H. E. Walker-Smith, D. Fleming, Sqn.-Ldr. E. L Moore, Lt.-Col. Sir T. Ward, Hon. G. R. Fletcher, W (Bury) Morrison, Maj J. G. (Salisbury) Wheatley, M. J. Foster, J G. (Northwich) Morrison, Rt Hn. W. S. (Cirencester) White, Sir D. (Fareham) Fox, Sqn.-Ldr. Sir G. Mott-Radclyffe, Maj. C. E. White, J. B. (Canterbury) Gage. Lt.-Col C. Neven-Spence, Major Sir B. Williams, Gerald (Tonbridge) Galbraith, Cmdr. T D. Noble, Comdr. A. H. P. Willoughby de Eresby, Lord Gammans, Capt. L. D Nutting, Anthony Winterton, Rt. Hon. Earl George, Maj. Rt Hn G Lloyd (P'ke.) Osborne, C. York, C Glossop, C. W H. Peake, Rt. Hon. O Gomme-Duncan, Col. A. G. Peto, Brig. C. H. M. TELLERS FOR THE AYES Hare, Lieut.-Col. Hn. J. H. (W'dbr'ge) Pickthorn, K. Mr. Buchan-Hepburn and Sir A. Young NOES .. Adams, Capt. Richard (Balham) Beswick, Flt.-Lieut. F. Byers, Lt.-Col. F. Adamson, Mrs. J. L. Bing, Capt. G. H. C. Castle, Mrs. B. A. Allen, A. C. (Bosworth) Binns, J. Chamberlain, R. A Allighan, Garry Blenkinsop, Capt. A Champion, A. J. Alpass, J. H. Blyton, W. R. Chater, D. Attewell, H. C. Boardman, H. Chetwynd, Capt. G R. Attlee, Rt. Hon. C. R Bowden, Flg.-Offr. H. W. Clitherow, Dr R. Austin, H. L. Bowen, R. Cobb, F A. Ayles, W. H. Bowles, F. G. (Nuneaton) Cocks, F. S. Ayrton Gould, Mrs. B Braddock, Mrs. E. M. (L'p'l, Exch'ge) Coldrick, W. Balfour, A. Braddock, T. (Mitcham) Collick, P. Barnes, Rt. Hon. A. J Brook, D (Halifax) Collins, V. J. Barstow, P. G. Brooks, T. J. (Rothwell) Colman, Miss G. M. Barton, C. Brown, George (Belper) Comyns, Dr. L Battley, J. R. Brawn, T. J. (Ince) Cooper, Wing-Comdr. G. Bechervaise, A. E Bruce, Maj. D. W. T. Corlett, Dr. J. Belcher, J. W. Buchanan, G. Cove, W. G. Bellenger, F. J. Burden, T. W. Crawley, Flt.-Lieut. A. Benson, G Burke, W. A. Cripps, Rt. Hon. Sir S. Berry, H. Butler, H. W. (Hackney, S.) Daggar, G. Daines, P. King, E. M. Roberts, Goronwy (Caernarvonshire) Dalton, Rt. Hon. H. Kinghorn, Sqn.-Ldr. E. Rogers, G. H. R. Davies, Edward (Burslem) Kinley, J Royle, G. Davies, Ernest (Enfield) Kirkwood, D. Sargood, R. Davies, Haydn (St. Pancras, S.W.) Lang, G. Scott-Elliot, W. Davies, R. J. (Westhoughton) Lavers, S. Segal, Sq.-Ldr. S. Deer, G. Lawson, Rt. Hon. J. J. Sharp, Lt.-Col. G. M. Delargy, Captain H. J. Lee, F. (Hulme) Shawcross, C. N. (Widnes) Diamond, J. Lee, Miss J. (Cannock) Shurmer, P. Dobbie, W. Levy, B. W. Silverman, J. (Erdington) Dodds, N. N Lewis, A. W. J. (Upton) Silverman, S. S. (Nelson) Donovan, T. Lewis, J. (Bolton) Simmons, C. J. Douglas, F. C. R. Lewis, T. (Southampton) Skeffington, A. M. Driberg, T. E. N. Lindgren, G. S. Skeffington-Lodge, T. C. Dugdale, J. (W. Bromwich) Lipson, D. L. Skinnard, F. W. Dumpleton, C. W. Lipton, Lt.-Col. M. Smith, Capt. C (Colchester) Durbin, E. F. M. Logan, D. G. Smith, Ellis (Stoke) Dye, S. Longden, F. Smith, H. N. (Nottingham, S.) Ede, Rt. Hon. J. C. Lyne, A. W. Smith, S. H. (Hull, S.W.) Edelman, M. McAdam, W. Solley, L. J. Edwards, Rt Hon. Sir C. (Bedwellty) McEntee, V. La T. Soskice, Maj. Sir F. Edwards, John (Blackburn) McGhee, H. G. Sparks, J. A. Edwards, N. (Caerphilly) Mack, J. D. Stamford, W Edwards, W. J. (Whitechapel) McKay, J. (Wallsend) Steele, T. Evans, E. (Lowestoft) McKinlay, A. S Stewart, Capt. Michael (Fulham, E.) Evans, S. N. (Wednesbury) Maclean, N. (Govan) Stokes, R. R. Ewart, R. McLeavy, F. Strachey, J. Fairhurst, F McNeil, H. Strauss, G. R Farthing, W. J. Macpherson, T. (Romford) Stubbs, A. E. Fletcher, E. G. M. (Islington, E.) Mainwaring, W. H. Summerskill, Dr. Edith Follick, M. Mallalieu, J. P. W. Symonds, Maj. A. L. Foot, M. M. Mann, Mrs. J. Taylor, H. B. (Mansfield) Foster, W. (Wigan) Manning, G. (Camberwell, N.) Taylor, R. J. (Morpeth) Freeman, Maj. J. (Watford) Manning, Mrs. L. (Epping) Taylor, Dr. S. (Barnet) Freeman, Peter (Newport) Marshall, F. (Brightside) Thomas, Ivor (Keighley) Gaitskell, H. T. N. Mathers, G. Thomas, I.O. (Wrekin) Gallacher, W. Medland, H. M. Thomas, John R. (Dover) Ganley, Mrs. C. S. Middleton, Mrs. L. Thomas, George (Cardiff) Gibbins, J. Mitchison, Maj. G R. Thomson, Rt. Hn. G. R. (Ed'b'gh, E.) Gibson, C. W Monslow, W Thorneycroft, H. (Manchester, C.) Gilzean, A. Montague, F. Thurtle, E. Glanville, J. E. (Consett) Moody, A. S Tiffany, S. Goodrich, H. E Morgan, Dr. H. B. Titterington, M. F. Gordon-Walker, P. C. Morris, Lt.-Col. H. (Sheffield, C.) Tomlinson, Rt. Hon. G. Greenwood, Rt. Hon. A. Morris, P. (Swansea, W.) Turner-Samuels, M. Grey, C. F. Morrison, Rt. Hon. H. (Lewisham, E.) Ungoed-Thomas, L. Grierson, E. Mort, D. L. Usborne, Henry Griffiths, D. (Rother Valley) Moyle, A. Vernon, Maj. W. F. Griffiths, Rt. Hon. J. (Llanelly) Murray, J. D. Viant, S. P. Griffiths, Capt. W. D. (Moss Side) Naylor, T. E. Wadsworth, G Guest, Dr. L. Haden Neal, H. (Claycross) Walkden, E. Gunter, Capt. R. J. Nicholls, H. R. (Stratford) Walker, G. H. Guy, W. H. Noel-Baker, Capt. F. E. (Brentford) Wallace, G. D. (Chislehurst) Haire, Flt.-Lieut. J. (Wycombe) Noel-Buxton, Lady Warbey, W. N. Hale, Leslie O'Brien, T. Watkins, T. E. Hall, W. G. (Colne Valley) Oldfield, W. H. Watson, W. M. Hamilton, Lieut.-Col R. Oliver, G. H Webb, M. (Bradford, C.) Hannan, W. (Maryhill) Orbach, M. Weitzman, D Hardy, E. A. Paget, R. T. Wells, W. T. (Walsall) Hastings, Dr. Somerville Paling, Rt. Hon. Wilfred (Wentworth) White, C. F. (Derbyshire, W.) Haworth, J. Paling, Will T. (Dewsbury) White, H. (Derbyshire, N.E.) Henderson, A, (Kingswinford) Palmer, A. M. F. Whiteley, Rt. Hon. W Henderson, J: (Ardwick) Pargiter, G. A. Wigg, Colonel G. E. Hicks, G. Parker, J. Wilkes, Maj. L. Hobson, C. R. Parkin, Flt.-Lieut. B. T. Wilkins, W. A. Holman, P. Paton, Mrs. F. (Rushcliffe) Wilkinson, Rt. Hon. Ellen Horabin, T. L. Paton, J. (Norwich) Willey.F. T. (Sunderland) House, G. Pearson, A. Willey, O. G. (Cleveland) Hoy, J. Peart, Capt. T. F. Williams, D. J. (Neath) Hubbard, T. Perrins, W. Williams, J. L. (Kelvingrove) Hudson, J. H. (Ealing, W.) Piratin, P. Williams, Rt. Hon. T. (Don Valley) Hughes, Hector (Aberdeen, N.) Popplewell, E. Williams, W. R. (Heston) Hughes, Lt. H. D. (W'lverh'pton, W.) Porter, G. (Leeds) Williamson, T. Hutchinson, H. L. (Rusholme) Price, M. P. Willis, E. Hynd, H. (Hackney, C.) Pritt, D. N. Wills, Mrs. E. A. Hynd, J. B. (Attercliffe) Proctor, W. T. Wilmot, Rt. Hon. J. Irving, W J Pursey, Cmdr. H. Wilson, J. H. Isaacs, Rt. Hon. G. A. Randall, H. E. Wise, Major F. J. Janner, B. Ranger, J. Woodburn, A. Jeger, Capt. G. (Winchester) Rees-Williams, Lt.-Col. D. R. Woods, G. S. Jeger, Dr. S. W. (St. Pancras, S.E.) Reeves, J. Yates, V. F. John, W Reid, T. (Swindon) Zilliacus, K. Jones, D. T (Hartlepools) Rhodes, H. Jones, P. Asterley (Hitchin) Ridealgh, Mrs. M. TELLERS FOR THE NOES: Keenan, W. Robens, A. Mr. Collindridge and Key, C. W. Roberts, Sqn.-Ldr. Emrys (Merioneth) Captain Snow
Bill Committed to a Standing Committee.
Investment (Control and Guarantees) [Money]
Considered in Committee, under Standing Order No. 69.
[Major MILNER in the Chair]
Motion made, and Question proposed,
"That for the purposes of any Act of the present Session to provide for the regulation of the borrowing and raising of money, the issue of securities, and the circulation of offers of securities for subscription, sale or exchange, to enable the Treasury to guarantee loans in certain circumstances, and for purposes connected with the matters aforesaid it is expedient to authorise—
10.45 p.m.
I hope the Financial Secretary to the Treasury, who I think is prepared to reply on this Motion, will be able to clear up a difficulty in which this Committee has been placed by the speech of the learned Solicitor-General earlier on the Second Reading of the Bill. It will be within the recollection of hon. Members that the learned Solicitor-General dealing with a most important part of the Bill, and a part which attracted attention during the Debate from Members on both sides, that is to say, the amount of the loan which the Government could guarantee—the £50,000,000—made an announcement which was obviously a considered one, and which I think the House welcomed very much. He said that, when it came to Committee, if in the course of Debate their was a general expression of opinion that the sum of £50,000,000 was too little, then the Chancellor of the Exchequer—I do not think I am misquoting him—was prepared to reconsider the amount, and, if necessary, to increase it. But I think the learned Solicitor-General has overlooked the fact that were we now to pass the Committee stage of this Financial Resolution, which includes the sum of £50,000,000, once that is passed tonight, whatever the discussion in the Committee, if such discussion could take place at all, whatever the views expressed, whatever the desire of the Chancellor of the Exchequer to meet us, it would, in fact, be impossible.
I am sure that the learned Gentleman cannot have made that pledge, on such an important point, on behalf of the Government without previous consultation with the Chancellor of the Exchequer. It was, obviously, a pledge given in all, sincerity, which was seriously meant, and which was welcomed. Now under the procedure of the House it is obvious that it will be impossible to carry out that pledge. We have no desire, on this point, to delay the proceedings at all, but we do ask the Financial Secretary to consider the situation that has arisen. Once this Financial Resolution passes its Committee stage, there will be no opportunity whatever to have this figure of £50,000,000 increased. The only way in which the Solicitor-General's pledge can be carried out—and if I may say so, the hon. and learned Gentleman is personally interested in seeing that the pledge he has given to the House should be carried out—would be for the Government to withdraw this Resolution tonight, and put it down again tomorrow without the figure of £50,000,000 being included. If they do that, I can assure them on behalf of my hon. Friends, we should then treat it as a purely formal proceeding, and allow it to go through. If they persist, if they force this to a Division tonight, then they are asking the Committee to make it impossible for the solemn pledge given by the Solicitor-General, no doubt with the approval of the Chancellor of the Exchequer, to be implemented.
Apart from that serious point on which, I hope, the Financial Secretary to the Treasury will be able to reassure us, there are just two questions which I want to ask upon the Financial Resolution itself. The first is on paragraph ( a ). I find some words there which, I confess, are to me completely meaningless, No doubt the Financial Secretary to the Treasury will be able to explain what they mean. In line 10 hon. Members will see these words:
The second point on which, I think, we should like some guidance from the Financial Secretary is this. I think he ought to give us, if he can, come indication of the estimate which he has made under paragraph ( c ), of the expenses which are to be incurred in the administration of this Measure. I think it would be very helpful. It is not so much the actual amount of money, because I do not suppose it could be very big. Compared with the sums being spent in other directions it will be negligible. But an estimate of the expenses to be incurred will give us some idea of the size of the machine which it is intended to set up. I say frankly that, although, in most cases I should be happy to have a reply from the Treasury that a machine was going to be small, in this case I hope we shall get a reply which shows that this machine is going to be big, because in view of the work which will be put upon it, if not in the immediate future, certainly in the next year or two, when conditions improve, unless it is big, the delay is going to be intolerable.
Perhaps the hon. Gentleman would answer two specific questions. First, may I ask whether any payment is going to be made to—I was going to call them members of the advisory council but the learned Solicitor-General prefers another term; he calls them, "broad-based personnel." Could the hon. Gentleman tell me whether or not the "broad-based personnel" of the advisory council are to receive emoluments? I imagine not, because they are advisory and nobody ever pays an advisory council. If they were paid, one might think possibly that one had to take their advice. Could the hon. Gentleman answer the same question in relation to the Capital Issues Committee? Incidentally, as regards the Capital Issues Committee, I would like to congratulate the hon. Gentleman, the Financial Secretary and the right hon. Gentleman, his leader, on having succeeded in finding yet one more peer to be chairman of one of the committees set up by them. As long as they stick to another place for their selections, they will not go far wrong. The only danger is that they may exhaust the supply.
Now if the advisory council is not to be paid, I hope that the Capital Issues Committee will be paid, because I cannot believe that there will be any active, people—not merely retired but still engaged in active work—who will, without any remuneration, be able to devote in the future the time which I believe this Capital Issues Committee will take. We cannot judge by what happened in the case of the Kennet Committee in the war. Difficulties of labour and of supply have made it a mere stripling, but all of us, even right hon. Gentlemen opposite, hope that a time will come, perhaps before very long, when the shortage of labour, the shortage of supplies, will disappear or will be much reduced, and when everybody will be anxious, not that issues should be restricted, but that issues in a constant stream should be considered. When that time comes, there will be a flood of applications to this committee, and unless it sits day in, day out, then the applications will be delayed, the whole process will be slowed up and, if they are to sit from day to day, clearly the hon. Gentleman could not expect them to do that without some remuneration.
Perhaps the hon Gentleman could give me answers on those three points—first how it will be possible, if the Committee stage of this Bill is passed tonight, to implement the solemn pledge given to the House 20 minutes ago by the Solicitor-General; secondly, the meaning of the really rather obscure words I have quoted, which perhaps are plain to him but not to me; and thirdly, some estimate of the expense to be incurred through the machinery to be set up under this Bill.
Quite briefly, but I hope adequately, I will do my best to answer the three or four questions which the right hon. Gentleman the Member for West Bristol (Mr. Stanley) has put to me. This Resolution is a short and a straightforward one. Its terms are pretty wide, and will, normally, give opportunity for adequate discussion on the Bill in Committee. But I admit straight away that the fact that £50,000,000 in any one year is mentioned, does tie us down to that sum, and we do not desire the Committee to be under any illusion about that.
The right hon. and gallant Gentleman appeared to suggest that my hon. and learned Friend the Solicitor-General gave what he called a solemn pledge. I had a whispered conversation with the learned Solicitor-General whilst the right hon. Gentleman was making that point, and I gather that all he said was—[HON. MEMBERS: "Oh"]. Hon. Members opposite have not yet heard what he said. I would like, in parenthesis, to remind hon. and right hon. Gentlemen opposite that the Solicitor-General would not in any event make a solemn pledge on his own account; he could do no more than speak in the name, and with the authority of, the Chancellor of the Exchequer. Having said that, what he did say was that his right hon. Friend the Chancellor of the Exchequer would consider it, and if in Committee there was a genuine feeling amongst Members of the Committee that the amount was not enough, it should be altered.
11.0 p.m.
That is just the point I was making. I was not saying that the learned Solicitor-General had pledged himself. What I said was that he had pledged the consideration of the Chancellor.
No.
I am very sorry. Obviously then there is no difference of opinion between us. What the right hon. and gallant Gentleman has just said explains exactly what the situation is. The Solicitor-General did no more than indicate that the Chancellor of the Exchequer, who is always the personification of sweet reasonableness in these matters, was willing to increase the amount if it was the view of the Committee that £50,000,000 in any one year was not enough. There are ways and means to do so. [ Interruption .] Well, I was going to tell the Committee what the ways and means are. I started off by telling the Committee that under this Resolution if could not be done, but it would be possible, if the Committee wanted it, to bring in an amending Bill of one Clause making the amount larger.
A few moments ago the House agreed to send this Bill upstairs. Who will be the Chairman of the Committee which considers it? I do not know, but certainly it would be wrong if he allowed any discussion upstairs on the question of an increase in the amount fixed in the Money Resolution.
There could be a discussion in the Committee. What the Committee could not do of course would be to pass an Amendment making the £50,000,000 figure. £60,000,000, or £100,000,000, in any one year.
The point I was making, with very great respect, is that any sum, in excess of the amount laid down in the Money Resolution, could not be discussed upstairs.
While the Financial Secretary to the Treasury is getting advice from his leader, may I ask whether it is not perfectly clear that if this Committee tonight passes this Resolution, first there can be no ultimate Amendment, and, secondly, there cannot even be a discussion upstairs on an increased sum? The only way in which it could be altered would be to have another Resolution, and, as my right hon. Friend said, we would be prepared to let such a Resolution go quite formally without discussion, so long as the Chancellor of the Exchequer put in a higher figure which would be a maximum figure. This maximum figure could be discussed under the Rules of Order either here or upstairs.
All that is perfectly true. Might I for a few moments direct the Committee's attention to the actual wording of the Resolution? What it does do is to authorise the Treasury to guarantee to find, or to underwrite as it were, in any one year, sums up to £50,000,000 in Great Britain. It is the view of His Majesty's Government that, at the moment at any rate, £50,000,000 is an adequate sum to cover any commitments of that kind which might come in course of payment within the first year, and if it is found by experience that the amount is not enough, it is perfectly possible and easy for a short amending Bill to be introduced to make the amount more. What right hon. and hon. Members opposite forget, and what the Chancellor of the Exchequer and the Solicitor-General tried to make plain, is that this is not the only string to our bow. There are other ways of helping industry. This Resolution embodies one. I hope no one in this Committee believes that this is the only method by which industry in this country can be stimulated. Therefore, it is the view of His Majesty's Government that this amount is sufficient, at any rate to begin with, until we know where we are. In any case, it will be mostly the friends of hon. and right hon. Gentlemen opposite who will want to touch this £50,000,000. One can well imagine, in those circumstances, why it is that they do not think £50,000,000 is enough.
There are two points of Order I want to put to you, Major Milner. First, is it in Order, when we have had a Second Reading and we come to a Money Resolution, and before we have even disposed of the Money Resolution, for the Government to say, "It is such a bad Bill that before we get any further we will change it into another Bill"? Secondly, is it in Order for the hon. Gentleman to make implications, as he did just now, that the purpose of this Bill was to provide hon. Members on this side with finance?
The first point is not, I think, a point of Order. With regard to the second point, I did not gather that there was any personal reflection on hon. Members.
The right hon. Gentleman asked me if I could explain—
rose —
This has nothing to do with the Resolution
I must ask hon. Members to abstain from unnecessary interruptions.
On a point of Order. The hon. Gentleman opposite has just said hon. and right hon. Gentlemen on this side are going to "touch" the Treasury. Could we have an explanation of that?
In my view there was no personal reflection on hon. Members.
The right hon. Gentleman the Member for Bristol West, asked me to explain certain words in paragraph ( a ) of the Money Resolution. The explanation is that an industry might have a loan of say, £100,000, or even £1,000,000, not all of which would be guaranteed under this Bill. It may only be guaranteed as to interest and principal as to half. That being so, these words are there to indicate that, in certain circumstances, the guarantee may cover only part of instead of the whole of any loan given or made to an industry, or part of an industry, at any one time. I hope that satisfies the right hon. Gentleman. That is the true explanation.
It is difficult to square it with the words, because the words are "the loans guaranteed under the said Act." If half the loan is not guaranteed under the said Act, I do not see how it is brought into the total of £50,000,000 at all.
I think the right hon. Gentleman may find some help if he looks at the Bill itself. The actual words are embodied in Clause 2, which says:
"Provided that the aggregate capital amount of the loans in respect of which guarantees are issued in any one financal year under this section "—
then, missing out words in brackets—
"shall not exceed fifty million pounds."
The words in brackets commence:
"(excluding any part of that amount which is guaranteed …)."
That, at any rate, is the intention and what I am assured the Parliamentary draftsmen intend the meaning of these words to be. The Government may desire to guarantee the part and not the whole of a given loan. That being so, those words make that possible. The right hon. Gentleman asked me whether the Capital Issues Committee was at present being paid—
Will be paid—
Yes, I know. The answer to the question is, "No." He asked me further whether, in view of what he thought may be the excessive amount of work flung on that Committee, in the future it should not be paid. I will pass the suggestion on to my right hon. Friend the Chancellor of the Exchequer. So far as I know at the moment, there is no intention of paying the Capital Issues Committee or the new Investment Council that is to be set up if the Bill becomes law. The staff, however, most certainly will be paid. It is for the staff that we have estimated a yearly sum of 10 thousand pounds. The right hon. Gentleman asked me whether the machine set up to carry through the work would be small or big. The short answer is that it will be reasonable for the work in hand, capable and efficient for the exercise of what it has to do. I think that covers all the points raised by the right hon. Gentleman. That being so, I hope the Committee will now let us have this Money Resolution.
It is clear that the Government have changed their minds in the last half hour as to how to deal with this question of the limit of £50,000,000. The Financial Secretary has now told us that the idea is that if they find, in the course of the next year, that, as a result of experience, they want to exceed the amount, they will introduce a one-Clause Bill for the purpose. That is very different from what was indicated to us by the Solicitor-General, and indeed by the intervention of the Chancellor himself. What the Solicitor-General indicated was that if, in the course of the Committee stage, it was indicated that an increase in the limit was desirable, the matter would be reconsidered by the Government at once. When he was challenged on that remark, and it was pointed out to him that it would not be competent for the Committee even to discuss the matter, the Chancellor of the Exchequer from his seat used these very words—I quote them exactly. They were not quite what he meant to say. [HON. MEMBERS: "How do you know?"] These were the words he said:
"We will recommit the Bill."
What he meant to say was: "We will recommit the Money Resolution." Is it not correct? I will give way to the right hon. Gentleman.
The whole matter was dealt with by me in my opening speech. [ Interruption .] It was. What I said was: "His Majesty's Government believe that £50,000,000 will be enough." I went on to say: "If it should prove that it is not enough, it would be very simple to deal with the matter by an amending Bill." That is what I said in my opening speech. I venture to suggest that since then, some Members of the Committee have been showing great ingenuity in tying themselves into knots about matters which are not really very serious.
I did not have the advantage of hearing the right hon. Gentleman's statement. [ Interruption .] Perhaps hon. Members should not be in quite such a hurry to jeer at me till after they have heard the reason. As Members of the Public Accounts Committee, we were holding a meeting upstairs. [HON. MEMBERS: "Why speak?"]. Because I thought it right to call attention to the way the Government have changed their minds—[HON. MEMBERS: "NO."]—during the discussion of this question.
11.15 p.m.
This has arisen since the Bill has had its Second Reading, and we are now discussing the Money Resolution, and nothing the Chancellor can have said on the Second Reading can change the position now, for they have changed their minds. [HON. MEMBERS: "NO."] It was perfectly clear that when the learned Solicitor-General was winding up on the Second Reading, both he and the Chancellor of the Exchequer intended to convey to the House that, if during the Committee stage opinion indicated that the amount should be raised above £50,000,000, steps would be taken to do that by recommitting the Money Resolution, and now we are told: "Oh, no, it will not take place in the course of the passage of this Bill, but if, later on, perhaps in six months, we find we want to extend the limit, then we will introduce a one-Clause Bill for that purpose." All I am drawing attention to is the complete change of mind on the part of the Government, and I am rather surprised that the Chancellor should question the accuracy of what I have said.
What my hon. Friend has said is, I think, well within the recollection of the Committee, and is an accurate statement of what happened during the last 10 to 20 minutes after we had taken the Division on the Second Reading of the Bill. The Chancellor certainly indicated to me, as I understood it, that he intended, if the discussions upstairs, where he estimated they would be, and where they certainly will be by the vote of the House, suggested that the figure should be higher—that the Bill would be recommitted for that purpose. It is no great error that he should have slipped up on a matter of financial procedure, but I would say to him that, when he has been Chancellor of the Exchequer for years instead of months, he will realise [ Interruption ]—I said "Chancellor" because he is not likely to be promoted to any other job—when he has been interested in these financial matters for a long time he will realise there are certain pitfalls, and he has fallen into one which is quite easy to fall into, and that is, that, when you have passed a Money Resolution in Committee of the whole House, it is out of Order to discuss a higher figure, either upstairs or here, or anywhere else.
If he is genuine in wanting a discussion on this matter, then I would remind him, for he need not have made his intervention at all, that the only course for him to adopt is to withdraw the Resolution tonight, and then put it down in an amended form, when we will let him have it formally. It will then be possible to discuss it upstairs. Now I understand from the Financial Secretary he wishes us to pass the Resolution as it is, but I repeat, it will then not be possible for the Standing Committee to have any further discussion on this. All he says is that if an opinion is expressed that that figure should be raised, it can be done six months or perhaps a year later by amending legislation.
The Lord President of the Council is here, and in view of the great programme of legislation the Government have on hand, I doubt if he will welcome the possibility of an amending Bill of this kind. He may think it is a good plan, but it seems to me much simpler to withdraw the Money Resolution in the way that has been suggested tonight and put in another about which there would be no argument. To legislate on this topic tonight and in the Committee stage and then to resume all these discussions again seems to me rather to be trifling with the House, and wasting its time. I may say that I do not recollect, in connection with the Money Resolution on an important Bill, any amending legislation on that very topic being foreshadowed in the Committee of the whole House. I do ask the Lord President of the Council, as Leader of the House, whether he thinks it is a good plan, or whether he will accept the alternative, which has been handed to him on a plate, not a golden plate, but, nevertheless, on a plate, on the basis of not discussing the matter further but having the formality of an amended Resolution. There certainly is no advantage in its being forced through in its present form tonight.
I hope the Leader of the House will consider this very serious proposal that we are making from this Bench in order to help him out of a difficulty. Hon. Gentlemen opposite seem to be unable to appreciate the point, which is, that the Chancellor of the Exchequer, both himself and through the Solicitor-General, said that he would not object to a discussion of a higher figure in the Bill. It was they who said that. All I am concerned to do is to point out that a discussion, if we pass this Resolution, cannot, in fact, take place. Hon. Gentlemen opposite may not want it to take place. We have had an offer from the Front Bench, and it is to the Front Bench that we direct our attention and not to those behind, because it is to them and not to those behind that the management of the business of the House remains. I hope, therefore, that the Lord President will appreciate that this is a genuine offer intended to get him out of what is a tricky difficulty. We offer this in good faith and we hope that he will accept it.
Let me say straight away that I am exceedingly grateful to the right hon. and gallant Gentleman for the very reasonable and helpful spirit in which he has just addressed the Committee. I say that seriously, because his spirit was a very nice one. I think the? fact of this situation, which I do not believe is as serious as has been advanced, is that both sides of the House have quite innocently got the Committee into an argumentative tangle. I appreciate that. Sometimes things are said by way of quick interchange which are not in good form. But the substance of the thing still remains that the real point of view of my right hon. Friend, the Chancellor of the Exchequer, is that he has put £50,000,000 into this Bill and into the Financial Resolution. He thinks that quite likely that will be enough, but if, in the course of experience, it should prove not to be enough, and there is a general wish that it should be increased, he thinks that it would be best to do it by short amending legislation. While he appreciates the point that the right hon. and gallant Gentleman made about not pressing matters tonight, or arranging to amend the Resolution, and taking it pro forma later on, which is a very
reasonable and kindly offer on his part, I still think, on the whole, it would be better to allow the Financial Resolution to go through on the understanding that, should experience show that the £50,000,000 is not adequate, then my right hon. Friend, whose mind is quite open on the point, will bring forward amending legislation later on for the purpose of increasing the amount. Question put.
The Committee divided: Ayes, 284; Noes, 131.
Division No. 77.] AYES. [11.24 p.m. Adams, Capt. Richard (Balham) Dugdale, J. (W. Bromwich) Keenan, W. Adamson, Mrs. J. L. Dumpleton, C. W. Key, C. W. Allen, A. C. (Bosworth) Durbin, E. F. M. King, E. M. Alpass, J. H. Dye, S. Kinghorn, Sqn.-Ldr. E. Attewell, H. C. Ede, Rt. Hon. J. C. Kinley, J. Austin, H. L Edwards, Rt. Hon. Sir C. (Bedwellty) Kirkwood, D. Ayles, W. H Edwards, John (Blackburn) Lang, G. Ayrton Gould, Mrs. B. Edwards, N. (Caerphilly) Lavers, S. Barnes, Rt. Hon. A. J. Edwards, W. J. (Whitechapel) Lawson, Rt Hon. J. J. Barton, C. Evans, S. N. (Wednesbury) Lee, F. (Hulme) Bechervaise, A. E. Ewart, R. Levy, B. W. Belcher, J. W. Fairhurst, F. Lewis, J. (Bolton) Bellenger, F. J. Farthing, W. J. Lewis, T. (Southampton) Benson, G. Fletcher, E. G. M. (Islington, E.) Lindgren, G. S. Beswick, Fit.-Lieut. F. Follick, M. Lipton, Lt.-Col. M. Bing, Capt. G. H. C. Foot, M. M. Logan, D. G. Binns, J. Foster, W. (Wigan) Longden, F. Blenkinsop, Capt. A. Freeman, Maj. J. (Watford) Lyne, A. W. Blyton, W. R. Freeman, Peter (Newport) McEntee, V. La T. Boardman, H. Gaitskell, H. T. N. McGhee, H. G. Bowden, Flg.-Offr H. W. Gallacher, W. Mack, J. D. Bowen, R. Ganley, Mrs. C. S. McKay, J (Wallsend) Bowles, F. G. (Nuneaton) Gibbins, J. McKinlay, A. S. Braddock, Mrs. E. M. (L'p'l, Exch'ge) Gibson, C. W. Maclean, N (Govan) Braddock, T (Mitcham) Gilzean, A. McLeavy, F. Brook, D. (Halifax) Glanville, J. E. (Consett) McNeil, H. Brooks, T. J. (Rothwell) Goodrich, H. E. Macpherson, T. (Romford) Brown, George (Belper) Gordon-Walker, P. C Mainwaring, W. H. Brown, T. J. (Ince) Greenwood, Rt. Hon. A. Mallalieu, J. P. W. Bruce, Maj D. W. T. Grierson, E. Manning, C. (Camberwell, N.) Buchanan, G. Griffiths, D. (Rother Valley) Manning, Mrs. L. (Epping) Burden, T. W. Griffiths, Rt. Hon. J. (Llanelly) Marshall, F. (Brightside) Burke, W. A. Griffiths, Capt W. D. (Moss Side) Mathers, G. Butler, H. W. (Hackney, S.) Guest, Dr. L. Haden Mayhew, C. P. Byers, Lt.-Col. F. Gunter, Capt. R. J. Medland, H. M. Chamberlain, R. A. Guy, W. H. Middleton, Mrs. L. Chetwynd, Capt. G. R. Haire, Fit.-Lieut. J. (Wycombe) Mitchison, Maj. G. R Clitherow, Dr. R Hale, Leslie Monslow, W Cobb, F A. Hall, W G. (Colne Valley) Moody, A. S. Cocks, F. S. Hamilton, Lieut.-Col R. Morgan, Dr. H. B. Coldrick, W. Hannan, W. (Maryhill) Morris, Lt.-Col. H. (Sheffield, C.) Collick, P. Hardy, E. A. Morris, P. (Swansea, W.) Collindridge, F. Hastings, Dr. Somerville Morrison, Rt. Hon. H. (Lewisham, E.) Collins, V. J. Haworth, J. Mort, D. L. Colman, Miss G. M. Hicks, G Moyle, A. Comyns, Dr. L. Hobson, C. R Murray, J. D Cooper, Wing-Comdr. G. Holman, P. Neal, H (Claycross) Corlett, Dr. J. Horabin, T. L Nicholls, H. R. (Stratford) Crawley, Fit.-Lieut. A. House, G Noel-Baker, Capt. F. E. (Brentford) Daggar, G. Hoy, J. Noel-Buxton, Lady Daines, P. Hubbard, T. O'Brien, T. Dalton, Rt. Hon. H. Hudson, J. H. (Ealing, W.) Oldfield, W. H. Davies, Edward (Burslem) Hughes, Hector (Aberdeen, N.) Oliver, G. H Davies, Ernest (Enfield) Hughes, Lt. H. D. (W'lverh'pton, W.) Orbach, M. Davies, Haydn (St Pancras, S.W.) Hutchinson, H. L. (Rusholme) Paget, R T Davies, R. J (Westhoughton) Hynd, H. (Hackney, C.) Paling, Rt. Hon. Wilfred (Wentworth) Deer, G. Hynd, J. B. (Attercliffe) Paling, Will T (Dewsbury) Delargy, Captain H. J Irving, W J. Palmer, A. M. F. Diamond, J. Isaacs, Rt. Hon. G. A. Pargiter, G. A. Dobbie, W. Janner, B. Parker, J. Dodds, N. N. Jeger, Capt. G (Winchester) Parkin, Flt.-Lieut. B. T. Donovan, T. Jeger, Dr. S. W. (St. Pancras, S.E.) Paton, Mrs. F. (Rushcliffe) Douglas, F C. R. Jones, D T (Hartlepools) Paton, J. (Norwich) Driberg, T. E. N. Jones, P. Asterley (Hitchin) Pearson, A. Peart, Capt. T. F. Smith, S. H. (Hull, S.W.) Warbey, W. N. Perrins, W. Snow, Capt. J. W. Watkins, T. E. Piratin, P. Solley, L. J. Watson, W. M. Popplewell, E. Soskice, Maj. Sir F. Webb, M. (Bradford, C.) Porter, G. (Leeds) Sparks, J. A. Weitzman, D. Pritt, D. N. Stamford, W. Wells, W. T. (Walsall) Proctor, W. T. Steele, T. White, C. F. (Derbyshire, W.) Pursey, Cmdr. H. Stewart, Capt. Michael (Fulham, E.) White, H. (Derbyshire, N.E.) Randall, H. E. Strauss, G. R. Whiteley, Rt. Hon. W. Ranger, J. Stubbs, A. E. Wigg, Colonel G E. Rees-Williams, Lt.-Col. D. R. Summerskill, Dr. Edith Wilkes, Maj. L. Reid, T. (Swindon) Symonds, Maj. A. L. Wilkins, W. A. Rhodes, H Taylor, H. B. (Mansfield) Wilkinson, Rt. Hon. Ellen Robens, A. Taylor, R. J. (Morpeth) Willey, F. T. (Sunderland) Roberts, Sqn.-Ldr. Emrys (Merioneth) Taylor, Dr. S. (Barnet) Willey, O. G. (Cleveland) Roberts, Goronwy (Caernarvonshire) Thomas, Ivor (Keighley) Williams, D. J. (Neath) Rogers, G. H. R. Thomas, I. O. (Wrekin) Williams, J. L. (Kelvingrove) Royle, C. Thomas, John R. (Dover) Williams, Rt. Hon. T. (Don Valley) Sargood, R. Thomas, George (Cardiff) Williams, W. R. (Heston) Scott-Elliot, W. Thomson, Rt. Hn. G. R. (Ed'b'gh, E.) Williamson, T. Segal, Sq.-Ldr. S. Thorneycroft, H. (Manchester, C.) Willis, E. Sharp, Lt.-Col. G. M. Tiffany, S. Wilmot, Rt. Hon. J Shawcross, C. N. (Widnes) Titterington, M. F. Wilson. J. H. Shurmer, P. Tomlinson, Rt. Hon. G Wise, Major F. J Silverman, J. (Erdington) Turner-Samuels, M. Woodburn, A Silverman, S. S. (Nelson) Ungoed-Thomas, L. Woods, G. S. Skeffington, A. M. Usborne, Henry Yates, V. F. Skeffington-Lodge, T. C Vernon, Maj. W. F. Zilliacus, K. Skinnard, F. W. Wadsworth, G. Smith, Capt. C. (Colchester) Walkden, E. TELLERS FOR THE AYES: Smith, Ellis (Stoke) Walker, G. H. Mr. Joseph Henderson and Smith, H. N. (Nottingham, S.) Wallace, G. D. (Chislehurst) Mr. Simmons
NOES. Aitken, Hon. M. Hogg, Hon. Q. Ponsonby, Col C. E. Amory, D. Heathcoat Hollis, Sqn.-Ldr. M. C. Poole, Major Cecil (Lichfield) Assheton, Rt. Hon. R Hope, Lord J. Prescott, W. R S. Astor, Hon. M. Howard, Hon A. Price-White, Lt.-Col. D. Baldwin, A. E. Hulbert, N. J. Prior-Palmer, Brig. O. Barlow, Sir J. Hurd, A Raikes, H. V Beamish, Maj. T. V. H. Hutchison, Lt.-Cm. Clark (E'b'rgh W.) Ramsay, Maj. S. Birch, Lt.-Col. Nigel Hutchison, Lt.-Col. J. R. (G'gow, C.) Rayner, Brig. R. Boles, Lt.-Col. O. C. (Wells) Jarvis, Sir J. Reed, Sir S. (Aylesbury) Boothby, R. Jeffreys, General Sir G. Roberts, Maj. P. G. (Ecclesall) Boyd-Carpenter, Maj. J. A. Jennings, R. Robertson, Sir D. (Streatham) Bromley-Davenport, Lt.-Col. W Keeling, E. H. Robinson, Wing Comdr. Roland Bullock, Capt. M. Kerr, Sir J. Graham Ropner, Col L. Carson, E. Lambert, G. Ross, Sir R. Clarke, Col. R. S. Lancaster, Col. C. G. Sanderson, Sir F. Clifton-Brown, Lt.-Col. G. Legge-Bourke, Maj. E. A. H. Scott, Lord W. Comyns, Dr L. Lennox-Boyd, A. T Shepherd, Lieut. W. S. (Bucklow) Corbett, Lieut.-Col. U. (Ludlow) Linstead, H. N. Smith, E. P. (Ashford) Crookshank, Capt. Rt. Hon. H. F. C. Lloyd, Maj. Guy (Renfrew, E.) Smithers, Sir W. Crosthwaite-Eyre, Col. O. E. Lucas-Tooth, Sir H Spearman, A. C. M. Crowder, Capt. J F. E. Lyttelton, Rt. Hon O. Spence, Maj. H. R. Cuthbert, W. N. MacAndrew, Col. Sir C. Stanley, Rt. Hon. O. Davidson, Viscountess Macdonald, Capt. Sir P. (I. of Wight) Stoddart-Scott, Col. M. Digby, Major S. W. McKie, J. H. (Galloway) Stuart, Rt. Hon. J. Dower, Lt.-Col. A. V. G. (Penrith) McLeavy, F. Studholme, H. G. Drayson, Capt. G. B. Macmillan, Rt. Hon. Harold Taylor, C. S. (Eastbourne) Drewe, C. Macpherson, Maj. N. (Dumfries) Taylor, Vice-Adm. E. A. (P'dd't'n, S.) Duncan, Rt. Hn. Sir A. (City of Lond.) Maitland, Comdr. J. W. Thomas, J. P. L. (Hereford) Duthie, W. S Marlowe, A. A. H. Thorneycroft, G. E. P. (Monmouth) Eccles, D. M. Marsden, Capt. A. Touche, G. C. Eden, Rt. Hon. A. Marshall, Comdr. D. (Bodmin) Turton, R. H Erroll, Col. F. J. Maude, J. C. Walker-Smith, D. Farthing, W. J. Mellor, Sir J. Ward, Hon. G. R Fletcher, W. (Bury) Molson, A. H. E. Wheatley, M. J. Foster, J. G. (Northwich) Moore, Lt.-Col. Sir T. White, Sir D. (Fareham) Fox, Sqn.-Ldr. Sir G. Morrison, Maj. J. G. (Salisbury) White, J. B. (Canterbury) Gage, Lt.-Col. C. Morrison, Rt. Hn. W. S. (Cirencester) Williams, Gerald (Tonbridge) Galbraith, Cmdr. T. D. Mott-Radclyffe, Maj. C. E. Willoughby de Eresby, Lord Gammans, Capt. L. D. Neven-Spence, Major Sir B. Winterton, Rt. Hon. Earl Glossop, C. W. H. Noble, Comdr. A. H. P. York, C. Gomme-Duncan, Col. A G. Nutting, Anthony Hare, Lieut.-Col. Hn. J. H. (W'dbr'ge) Osborne, C. TELLERS FOR THE NOES Harvey, Air-Comdre. A. V. Perrins, W. Mr. Buchan-Hepburn and Head, Brig. A. H Pickthorn, K. Sir A. Young Hinchingbrooke, Viscount Pitman, I J.
Resolution to be reported Tomorrow.
Adjournment
Resolved: "That this House do now adjourn"—[ Mr. Collindridge .]
Adjourned accordingly at Twenty-five Minutes to Twelve o'Clock.