I beg to move, "That the Bill be now read a Second time."

The Bill affords an opportunity which Malta needs for facing her reconstruction period, and planning her economic and social policy. This week the Government have made a pronouncement regarding their views on the future of responsible government in that Colony. That provides a basis for constitutional development and political institutions in that Island. Our purpose today is to provide financial recources, so that the basis for sound responsible government can be properly laid.

I am sure the whole House feel a great debt of gratitude towards the people of Malta for their heroic endeavour and courage during the tragic period through which Europe has passed. We are anxious that some practical recognition of our gratitude should be given, and that an adequate basis should now be afforded to Malta for responsible government. She endured two and a half years of siege, and maintained herself under the most trying conditions, amid great damage and wholesale destruction, and the work of reconstruction must now proceed. During the last year of so, very considerable thought has been given to the problems of rehabilitation and reconstruction in the island to the cost, and to plans for the work requiring to be done. In May 1945, the right hon. Member for West Bristol (Mr. Stanley) sent Sir Wilfrid Woods to make an inquiry as to the financial basis, and an economic survey of possibilities for reconstruction in the postwar period. I would like to express our very profound regret at the death, the other day, of Sir Wilfrid Woods, who has from time to time rendered us very considerable service. I think the House will agree that his Report covers a very wide field, and is concerned with a very complicated situation. Sir Wilfrid Woods was invited to examine the present, and prospective, financial position of the Malta Government in the light of the policy of His Majesty's Government for granting responsible government after the war. The statement which was made at the time clearly showed that this problem was one of very considerable difficulty, and that obviously the former grant which had been made was inadequate for the situation which required to be dealt with in the postwar period. In November, 1942, Parliament had been asked to make a gift of £10,000,000 for this work, and that was done for the purpose of restoration of war damage and the rebuilding of Malta after the war. That statement contained the assurance:

"If the total liability of the Malta Government for compensation and rebuilding, after allowing for contributions from private owners, exceeds the sum of £TO,000.000, His Majesty's Government will be prepared to make available such further sums as may be required to meet liabilities, which are found, in the circumstances existing after the war, to be beyond the capacity of the Government of Malta to meet from their own resources, having regard to all other calls upon those resources at that time."

Sir Wilfrid Woods made his able and comprehensive survey and in July, 1946, His Majesty's Government announced what further assistance should be given in all the circumstances. There were two ways open for that assistance to be given. Either it could be given in the form of instalments, as necessary according to the progress of expenditure incurred—such instalments being voted by Parliament—or it could be given in the form of a definite sum, as is proposed within the terms of this Bill. It was felt by the Government at the time that it was better that the contribution to Malta should be in the form of a definite sum because, if the system of instalments were adopted, it would involve a degree of Treasury control. Also, it would possibly create friction from time to time when differences arose between the Government of Malta and His Majesty's Government, and a degree of control in regard to expenditure would be necessary which undoubtedly would be prejudicial to responsible government in Malta itself. For those reasons, it was felt that this additional sum of £20,000,000 should be regarded as a definite charge against the Consolidated Fund; that the payments should be made annually against a reasonable anticipation of expenditure; that the payments should begin when the £10,000,000 gift already made was exhausted; that the grants could be made under Ministerial authority; and that the Ministers in Malta should present their audited statements. They could prepare their programmes of work and they could have a reasonable assurance that they were planning within the financial limitations of the grant and, therefore, could pursue their policies accordingly.

The Woods Report, when it was published, was adopted in Malta, as it has been noted in this country. I would point out that Sir Wilfrid stated in the second paragraph that in writing it he had been obliged to make some large assumptions as to probable future policies. He said:

"The material furnished in Malta was mainly such as I obtained from public departments in reply to specific inquiries. All possible assistance and facilities were afforded to me in the course of my inquiry, but I found that very few of the many policies which had been discussed had been formulated in detail or had been the subject of even an approximate estimate of the cost involved. Consequently the estimates used in this report are highly specu- lative and neither they nor, in most cases, the schemes to which they relate have had the seal of formal approval by the Government of Malta placed upon them."

Of course, there were high hopes in Malta as to the extent of the assistance which His Majesty's Government could give to the Island. Undoubtedly, from time to time there were expressed views of expectancy which were of unlimited finances and which, obviously, were never in the minds of His Majesty's Government when they agreed to come to the aid and assistance of Malta during this postwar period. The details of the Woods recommendation, which cover a pretty wide field, are set out on pages 2, 3 and 4 of his Report. It is hardly necessary at this point that I should examine them. He estimates that a sum of probably £42,437,000 would be required if the anticipated Budget deficits in Malta during the next year or so were to be covered, and if activities connected with water supply, sewers, health development, educational development, town improvement, war damage compensation, social services and general reconstruction work were to proceed. He added that he thought that £42,000,000 was a sum in excess of anything which His Majesty's Government could reasonably be asked to meet.

His figure of £42,000,000 was made up of £10,000,000 for reconstruction; £28,800,000 for war damage; £3,057,000 for social welfare and development; and £581,000 to cover Budget deficits. What is now proposed is that for war damage and reconstruction, and other services, provision by this Bill will be of the order of roughly £20,000,000, which must be related to the £10,000,000 already granted, and a further £1,000,000 which will accumulate in interest on the £10,000,000 grant. Therefore, the direct grant is in the neighbourhood of £31,000,000 towards the great work which needs to be done in the Island. I would point out that to this sum of £31,000,000 must be added an allocation of £1,000,000 from the Colonial Development and Welfare Act. In addition probably there will be a deficit of £580,000 in regard to the Budget for 1946–47 and 1947–48 which will involve a grant in aid of that amount. Further, there is a commodity subsidy for 1947–48, which will probably amount to something in the neighbourhood of £450,000. All these sums must be taken into account when the degree of assistance which the Government are now offering to Malta is calculated. I should refer, of course, to the statement made in the House in regard to the Colonial Development and Welfare Act. This allocation is an innovation under the 1940 to 1945 Acts and, if Malta is to share in this, the 1940 Act will need to be amended.

The former Secretary of State for the Colonies in July, 1946, said:

"They realised that the local Government is faced with the need for carrying out a substantial programme of public works in connection with the social services of the Colony: there is an urgent demand for more schools, better hospital facilities, an extended water supply and the like. Under its present constitution Malta could look for assistance under the Colonial Development and Welfare Act for these purposes; once responsible Government is restored, it would normally be debarred from the Act itself from benefiting from its provisions."—[OFFICIAL REPORT, 9th July, 1946; Vol. 425; c. 66.]

The Government, therefore, as an exceptional measure, felt that Malta should have the benefit of the Act by seeking an Amendment to Section 1 (5) of the 1940 Act which lays down that

"the expression 'colony' means a colony not possessing responsible government."

If Malta were to enjoy responsible government some modification of the Act would become necessary in order that she should be included.

I would also point out that it is not only the £1,000,000 allocation under the Act which Malta will enjoy, but also a number of essential services which are provided by London. Such things as the training of the Civil Service for Malta, provision and assistance in respect of higher educational development, surveys and research work, which are often necessary in the Colonial areas, are also made available to Malta as a result of the Colonial development arrangements under that Act. It was also pointed out in July

"that the new Constitution shall not be unduly handicapped by the financial burdens thrown on this small community by its gallant part in the war. They for their part can reasonably expect that the Malta Government will spare no exertions to maintain a balanced Budget, though they will be prepared, if necessary, to make some provision by way of grant-in-aid to meet the costs of administration during the financial year 1947–48 in accordance with Sir Wilfred Woods recommendation. They also recognise that the complete cessation of commodity subsidies at the end of the current financial year, as recommended by Sir Wilfrid Woods, might in the circumstances impose an undue burden on the Government and people of Malta. They are, therefore, prepared to meet one-half of whatever provision for such subsidies in the Malta estimates for 1947–48 is agreed to be necessary, subject to a maximum contribution of £450,000."—[OFFICIAL REPORT, 9th July, 1946; Vol. 425, c. 67.]

Therefore, these additional sums must be taken into consideration alongside the £20 million and the provision of the £10 million gift which was guaranteed in 1942.

Of the £10,000,000 free gift so far, as I announced in the House on Wednesday last, £3,749,300 has already been expended on war damage compensation, new buildings, housing schemes and the clearing of debris and of that expenditure no less than £848,000 has been incurred in the United Kingdom. Already some comprehensive plans have been prepared for the reconstruction of Valetta and three other towns, and it is hoped that these will be the basis of the town planning arrangements in the immediate future. Though the provision which the Government make falls short of the Woods estimate by about £9 million, I would point out to the House that this expenditure of £33 million will probably be spaced out over a period of one or two decades. Certainly there will be a series of programmes probably extending into 15 or more years. It is now the responsibility of the Malta Government to plan to make their own social programme in the light of the asistance we can give to the Island, to balance the Budget, and also to do what I think all of us will agree to be very necessary, to get an equitable balance between direct and indirect taxation, because the time is ripe for the introduction in Malta of Income Tax and other forms of direct taxation.

I think the House will agree, considering the very difficult economic and financial problems confronting His Majesty's Government at the present time, that this does represent a very substantial contribution. It certainly will encourage responsibility in Malta; it will prove to be of very great benefit in the economy of the country and in the development of its taxable resources; and it will also give the necessary incentive to the Malta Government as they assume responsibility for careful and economic expenditure in regard to their requirements in the immediate future.

I understand that some objection has been taken to the Bill on the ground that the financial provision ought not to be final and that the Bill

"imposes upon the British taxpayer the burden of paying financial reparations to Malta for damage done by Italy and does not provide Italian labour and materials for the repair of damaged, and reconstruction of destroyed, buildings in the colony."

I would only point out to the House that this and previous Governments have made a pledge which they feel all of us desire must be properly honoured, and we feel that it would be an unfortunate thing if a Clause in a particular Treaty which has not been discussed in the House should be made the occasion for obstructing what appears to us to be a very necessary recognition of an heroic struggle and an expression of our own gratitude to a people whose country was badly damaged in the great struggle in which so many nations were engaged. I would also point out that it would be impossible, impracticable, and politically inexpedient at the present time to get labour from outside for Malta, particularly as the Island has its own problem of unemployment with regard to the dockyard, and labour is gradually being diverted. Also, it has a population which is possibly too large for the somewhat limited resources of the Island itself.

On the further point as to whether this constitutes a final payment or not, I should like to report to the House that this morning I have received a telegram from the Governor in which he tells me he received a request several days ago that the National Assembly should be resummoned in order to express some views on the Bill which is before the House today. It was resummoned and the members passed a resolution, which is contained in the telegram on behalf of the National Assembly and is:

"The Constitutional Committee have considered the reply from the right hon. Secretary of State for the Colonies and consider the proposed terms regarding finality as unsatisfactory in view of the fluent costs of labour and material and it is not possble to assess now the eventual final cost of reconstruction and assembly. Therefore, it repeats its request for the matter to be left open for further discussion if necessary."

I thought that the House should be put in possession of that telegram, because I notice that this is a matter of some concern to hon. Members in various parts of the House. I would like to say, and the House to recognise, that the grant which is made available as a result of this Bill is not likely to be exhausted for a very considerable time ahead, that it affords, at the moment, a very substantial basis for social and economic planning, and that it enables the Government to make long-term policies, to look well ahead and to get on with the great tasks which now confront them. It is the view of the Government that the £33 million which now becomes available should be regarded as a final payment, although it is possible that the House later on, when it comes to consider the working of the Colonial Development and Welfare Act, may increase the money available under that Act, and thereby enable Malta to share in the new allocations. That is a possibility, but one cannot pledge Parliament as to what it will do in the future. However, I make the point for what it is worth.

I am not sure whether I understand the right hon. Gentleman. Are the present Government bound by the pledge that was given during the war that the whole of the war damage would be borne by the Imperial Government? Are the Government going back on that promise in any way?

No, the Government are not going back on the pledge that was given, but I would ask the hon. Member carefully to read the pledge. It was not so comprehensive as that. I have already read to the House the statement which said:

"If the total liability … after allowing for contributions from private owners exceeds the sum of £10 million, His Majesty's Government will be prepared to make available such further sums as may be required to meet liabilities which are found in the circumstances as existing after the war to be beyond the capacity of the Government of Malta to meet from its own resources, having regard to all other calls upon those resources at that time."

If when the war damage is finally repaired, it should be found to have cost, say, £35 million, and that £35 million is beyond the capacity of Malta to bear, would the Government then increase the sum now being voted in order to meet the whole of that cost? From our point of view, that is the whole point.

I could not pledge what a future Government would or would not do.

This Government.

This point cannot possibly arise, as far as this Government are concerned, for the simple reason that this money cannot be exhausted, however extravagant the planning in Malta may be, for another decade or so Therefore, it would be wrong for us to pledge what a future Government ten, 15 or 20 years hence may do in hypothetical circumstances.

Surely, if we are not to carry out the pledge which the right hon. Gentleman has just read, whatever Government is in power, then we are going back on our word? It is not a question of ten, 15 or 20 years; we should meet the expenditure which is necessary.

At this point, it is really impossible to form any exact judgment as to the degree of expenditure which the Malta Government will be called upon to meet. What the pledge did say was that regard must be had to the capacity of the Government of Malta to meet its responsibilities. No one would suggest that the full burden of reconstruction and of developing social services in Malta should fall upon the shoulders of the British taxpayer. Therefore, it becomes necessary for us to say to Malta that if assistance in education, social insurance and all those other developments should go on, which is the desire of the people of Malta, at least part of that cost should be found in Malta itself, and, further, that the taxable income of Malta should increase. These contributions which we are making today to the economic life of Malta will increase the taxable capacity.

As I have already said, we must all recognise that Malta, in common with most other Western democracies, should extend in her budgeting the principle of direct taxation. There should be Income Tax, and it is only fair to say that part of this cost must fall, and should fall, on Malta itself. In any case, I think that the House must agree that, considering our own financial difficulties, a contribution in the neighbourhood of £33 million is reasonably generous. It places decision and responsibility on the Maltese Ministers in regard to their planning; it provides the necessary incentive for economic expenditure, and, I think it can be said truthfully, it affords the local Government its great opportunity. Finally, we are glad to make this practical contribution to the life of Malta. She shared in the common struggle for the preservation of freedom, her own freedom as well as the freedom of others and that of the world. In the light of the explanation that I have given, I hope that the House will give the Bill a unanimous Second Reading.

I should like to join with the Secretary of State in adding my tribute to the people of Malta. Much has been said of the way in which they withstood siege, bombardment and starvation. Now many of their homes are ruined We also owe a great duty to the children. Last Saturday I saw in the centre of Malta some of those who are suffering from infantile paralysis, and no Englishman could see those children without feeling a great debt of gratitude for the way their parents stood by our side in our trials. This country has a debt of honour to these children and to the people of Malta. It must be remembered that they placed themselves voluntarily under the British Crown in 1799. As the right hon. Gentleman said, on 10th November, 1942, the then Chancellor of the Exchequer stated that he proposed to make a free gift of £10 million to provide compensation for war damage, as well as other expenses incidental to postwar rebuilding. He went on to add that if £10 million was not enough, further sums might be required to meet liabilities which were found to be beyond the capacity of Malta to provide, and that His Majesty's Government would be prepared to make available such further sums.

But what has been happening during the last two years since we finished the war and since we made a solemn pledge? In May, 1945, as the right hon. Gentleman said, Sir Wilfrid Woods went out to Malta, and he came back in July, 1945, and wrote his Report, and sent it to the Secretary of State on 6th September, 1945. The elections in Malta took place in November, and the Maltese asked for this Report to be laid before them That was not done. December, January, March, April and May passed, and still the Report had not been published. On 2nd May another Commissioner was sent out, Sir Harold MacMichael. Those elections that had taken place were not contested by all the political parties in Malta. The Labour Party gained eight seats, and one independent was elected; there were eight Labour and one independent. About 30 per cent. of the electorate voted. What did Sir Harold MacMichael find when he got to Malta? He says in his Report on page 13:

"During the days which followed I was able to make many informal contacts with individuals and groups among all classes of the population. No progress could, however, be made with formal business, since it was clear that public opinion favoured some elucidation of the financial background before committing its representatives to discussion of constitutional issues, and, until the contents of the Woods Report and the extent of the assistance which might be expected from His Majesty's Government were known, this background remained obscure."

I certainly agree it was obscure.

"On 15th May I was able to arrange my first meeting with this body (three of its members were unable to attend) and on your instructions, I handed to them in confidence copies of the Woods Report."

I want to ask why it took nine months to publish that Report. Anyhow, it was published as a Colonial Office publication. We want to get this commitment clear to the House. Not all the Maltese representatives whom he saw were elected. They were Mr. Torregiani, a business man, not a Socialist, Dr. Boffa, leader of the Labour Party, and Mr. Miller, secretary of the G.W.U. They maintained that war damage should be paid in full. I must point out that Sir Harold MacMichael was not negotiating with a democratically representative body. Anyhow, on 9th July, 1946, the Secretary of State made a statement here. I may be stupid; but I do not think any person reading that statement would suppose that this sum of money was intended to be a final quittance or settlement. Nor did the people of Malta. I found a good deal of disquiet in their ranks on this subject.

On 25th September, 1945, the National Assembly asked the Secretary of State if he would keep the financial question open, and on nth December tie right hon. Gentleman printed this Bill. There is nothing in it that tells the House this is a final settlement. This has been sprung on the House at the last moment, in my opinion. The attitude taken has been that this is an innocuous Bill, and I begin to feel that the House has been hoodwinked —and the Press, too. On 17th January, when I was in Malta, this letter appeared. It was addressed to the Secretary of the National Assembly in answer to a letter of 25th September. It seems a long time to have taken to answer a letter of 25th September. The letter said:

"I am directed by His Excellency the Governor to state that he has been requested by the Secretary of State for the Colonies to inform you that he has received and considered the National Assembly's resolution forwarded under cover of your letter of 25th September, 1946. The Secretary of State would be glad if you would communicate the following reply to the National Assembly."

I will not read the whole letter, but it goes on to say:

"His Majesty's Government do not feel able to accept the Assembly's suggestion that the financial terms as announced should be regarded as subject to further negotiations at a later stage."

So this Bill is put before the House, and the Government, who are morally pledged, are about to break that pledge, and to do untold harm to the name of England and everything it stands for in the Empire. Only in the local Maltese Press, and in a Colonial Office publication, both made public less than a week ago, at the last moment, has the situation become anything like clear.

Now, what are the contents of Sir Harold MacMichael's Report concerning the financial negotiations? It, seems to me that we have a muddle in Sarawak, a mess in Malaya, and that there may be disaster in Malta. I would point out that the sum of money is a comparatively small proportion, about £250,000 a year. What are the estimates of meeting war damage and other expenses incidental to postwar planning? I do not believe anybody could make those estimates now. Nobody knows what the costs of raw materials are going to be in five, ten, 15 years' time. Nobody can say how long it will take to rebuild the three cities which have been destroyed. I believe that Sir Wilfrid Woods makes it quite clear that his estimate is only rough. What he does, in fact, is to ignore the cost of clearance and demolition, and also of "stock in hand" in the shops, which the Government in Malta, which is a British Government now, with practically no assistance from elected representatives, has admitted, these two points alone may be another £1,000,000. But let us look and see what he says. He says:

"A full and final settlement of the question of financial aid from the United King- dom to Malta by payment of a single sum to the Malta Treasury or to trustees would have obvious advantages, but it is not a practical proposition."

He goes on to give figures, and the right hon. Gentleman read them out very fairly. But the point is that the war damage is estimated at £26,800,000, and the war damage to property of the Government of Malta is £2,000,000 and reconstruction £10,000,000. What Sir Wilfrid Woods thinks about this question of liability, which is a vital question, on which hon. Members in all parts of the House must be interested, because the honour of our country is at stake, was expressed thus:

"The Chancellor's statement is generally interpreted in Malta as containing an undertaking to make available any further sum over and above the £10,000,000 already assured which may be required, unless Malta's own resources are capable of bearing the additional burden it and when it presents itself. This seems to be a reasonable interpretation of the statement, but if it is accepted it becomes a practical certainty that the total commitment of His Majesty's Government will greatly exceed £10,000,000. It may be trebled or even more than trebled."

I am very suspicious as to why it took so long to get this Report published and made public. Anyhow, we have a liability which cannot be shirked. What is going to be the effect in America if we behave like this? Is it going to be good? I very much doubt it.

Let us look at Malta's resources, and see what they are. Only one eighth of the wealth of the people of Malta is real wealth, the rest is in earned services, and by money coming in from emigrants who go out of the country. Sir Wilfrid Woods sums it up most ably on page'10 of his Report:

"It is impossible to arrive at any reliable figure to represent Malta's future national income. I should say explicitly, though it is sufficiently implied in what I have said already, that if there was a really drastic reduction of the total employment afforded by the Dockyard and other Service activities the national income could not be kept at the level I have suggested as probable and the revenue-raising capacity of Malta would be diminished proportionately."

I do not know what the total number is now, but since that Report was written the numbers in the dockyard have decreased considerably, and men have been discharged from the dockyard. I want to make the point strongly, because this is a situation for the Government, and those concerned with reabsorbing this labour.

What is the labour situation? The population has gone up 30,000 in seven years during the war. That is a pretty big rise in a population of 250,000. It is now going up at the rate of 5,000 a year. There is a very high birth rate in Malta. There are 11,000 emigrants who wish to leave Malta, 5,000 of whom want to go to Australia. There can be no question of drafting labour in from outside; it is a question of bringing raw materials in and getting emigrants out, of ensuring full employment in the island and the maximum use of the Maltese labour force. The question may very pertinently be raised as to where these raw materials are to come from, because if they can be acquired from some source other than the United Kingdom it will greatly reduce the burden on ourselves. I want to put to the Secretary of State a point about the way things happen in the Empire. The Admiralty sent out an order to Malta which was interpreted as meaning that there should be a five-day week. It was cancelled, and there was a strike in Malta.

May I point out that the Admiralty did not send out any such signal? So far as the 44-hour week is concerned, the Admiralty's instructions were to consider the situation with the Governor and to take all factors into account before applying the five-day week. The signal did say that the 44-hour week should be worked from 6th January.

What happened in the Malta Dockyard was that some message got out, and the impression was given to the workers, rightly or wrongly— I will not stress the point, because I have not the quotations with me—that His Majesty's Government had changed their minds. A local paper said in effect," If you want to get your way with Englishmen, flog some British officers." It is unfortunate that such impressions should be given.

If we go on with this policy of breaking our pledge we are helping the anti-British people in Malta, for there is anti-British feeling. There is also the majority of pro-British feeling, but it is pretty shaky at the moment. I will read out the concluding sentence of a letter from the Labour leader to the right hon. Gentleman. He says:

"No small doubts axe being cast on Great Britain's traditional ideas of fair play by the refusal of the British Government to accede to the sensible demand for postponement until conditions return to normal. It would serve no useful purpose for Great Britain to stick to a wrong decision when on the eve of self-government the people of Malta are unanimously determined not to accept the views of the British Exchequer as final."

They sent copies of that letter to Members of this House, and a very similar telegram was sent by the Chairman of the People's Party to my right hon. Friend the Leader of the Opposition. I cannot help saying, and it needs to be said, that I believe that on this occasion His Majesty's Government have been clumsy, shifty and unskilful, and I believe that if the House gives a Second Reading to this Bill it will be dishonest.

I hope all sections of the House realise the seriousness of the issue which is now before us. The right hon. Gentleman, in introducing this Bill, tried to slip it through as if it did not very much matter, as though it were a question on which we were all agreed. I cannot accept that, especially after the speech of the right hon. Gentleman, and unless we can get a very different assurance from the right hon. Gentleman who will wind up I for one cannot vote for this Bill. I shall certainly vote against it, not because I wish in any way to prevent Malta from getting this money, but because I believe it contains a direct contravention of the pledge which this country has given to the people of Malta. The right hon. Gentleman has read out that pledge, which is quite clear and explicit. He went on to say that if the money was not enough possibly some other future Government might increase it, but how can we reconcile that statement with the letter sent by the Lieut.-Governor, in which he said, as my hon. and gallant Friend behind me has just pointed out:

"His Majesty's Government do not feel able to accept the Assembly's suggestion that the financial terms as announced should be regarded as subject to further negotiations at a later date."?

If that means what it says, this is a final payment which is not open to further negotiations, and if that is the interpretation which anybody can put on this letter and which I for one put on it, it is a direct contravention of the pledge given to Malta during the war. If any hon. Member votes for this Bill in its present form he is breaking the good name of Great Britain. I will not vote for it.

May I make another point? A lot of this trouble arises because of the way in which these negotiations have been carried on. My hon. and gallant Friend the Member for Hythe (Brig. Mackeson) has explained that for some reason month? went by before the Report was published. Now the right hon. Gentleman comes here this morning and reads out a telegram which he received today, in which the strongest protest is raised by the people of Malta against being kept in the dark. That is how I understand the telegram. They have not been consulted as to the way in which this money shall in fact be allocated. What is the matter with the Colonial Office nowadays? Why is it so ham-handed in handling all its negotiations throughout the world? We started off with Sarawak, and that was a pretty sorry story, the end of which we have not yet heard; then we have had Malaya, in which the Colonial Office has had to eat its own words and go back on everything it said at the beginning; and as for the story of Palestine one hardly cares to mention it today, so serious is it in all its implications. With regard to the handling of Imperial Preference, as the right hon. Gentleman knows, I have just come back from Jamaica, and if there is one thing that annoys the people of Jamaica, of all political parties, it is that a half promise was given to the United States to consider Imperial Preference without any consultations whatever.

I do not see what Imperial Preference has to do with this Bill.

I was only giving it as an illustration. Why have not the people of Malta been brought into this from the very beginning? They are not a bunch of mendicants coming to Great Britain for money; they want to feel that we are partners with them and that they are partners with us. I have listened to many speeches from the right hon. Gentleman when he used to sit on these Benches, and words that he often used were "the necessity for co-operation and collaboration". I never knew quite what they meant, but certainly in the Colonial Empire today people do not feel that they are getting any co-operation or collaboration from the right hon. Gentleman. In fact, go where you will and receive what letters you like from all parts of the Empire, you will hear that the policy of His Majesty's Government today represents dictatorial domination from Downing Street of a type they have not known for the last 50 years. [HON. MEMBERS: "Nonsense."]. It is all very well for hon. Gentlemen opposite to disagree; that is the way in which this sort of treatment is regarded when negotiations and statements are made without any real co-operation.

The people of Malta, through their representatives, were taken into consultation in regard to the proposals made in the Wilfrid Woods Report.

Why then does the right hon. Gentleman get the sort of telegram he got this morning? That does not suggest that they are happy about the way in which their views are considered, nor does it suggest that there was any real attempt to co-operate with public opinion in Malta. Important as it is in the long run, I think that this is a comparatively minor consideration. What matters today, and what hon. Members should consider, is whether or not the pledge which we gave during the war, in clear and unmistakable terms, has been contravened. Unless I can get some further assurance from the right hon. Gentleman, who I imagine is having trouble with the Chancellor of the Exchequer, I shall vote against this Bill.

As I understand it, this Bill has two different purposes. The first purpose is contained in Clauses 1 and 2, which deal with compensation for war damage, and the second purpose is covered by Clause 3, which deals with development and social welfare. On the question of compensation and rebuilding, the point at issue between the two sides of the House appears to be whether we shall grant a fixed sum now, or whether there shall be a fund out of which money can be drawn.

That is not the question—whether there shall be a fixed sum now, or whether it shall go on from time to time. The fixed sum is a permanent sum, and nothing further can be done after it is settled.

"A fixed sum now" is what I said. On this question of a fixed sum, no one on these Benches is in any way at issue with the party opposite in regard to our obligations to the people of Malta, and we fully subscribe to everything that has been said, but there are various considerations which make it desirable to have a definite fixed sum in a Bill of this kind. If there is no fixed sum, then there will be interference, supervision and checking by the Treasury; every item of expenditure will have to be justified to Treasury officials in this country. At a time when the Colony is about to receive self-government, this would seem to be inappropriate and would also be irritating. It is desirable that the people of Malta shall stand on their own feet, and that they shall tax themselves to make up a proper Budget, which they have not had for the last few years. The pledge is not in the wide terms which are alleged. The pledge simply says:

"His Majesty's Government will be prepared to make available such further sums—"

That is further sums over £10,000,000—

"as may be required to meet the liabilities which are found, in the circumstances that exist after the war, to be beyond the capacity of the Government of Malta to meet from its own resources, having regard to all other calls upon these resources at the time."

We do not know what are the Maltese Government's resources because Malta has not as yet got direct taxation. When Malta has direct taxation, they will be in a position to say that they have £30,000,000 to play with for rebuilding purposes, and they can then assess what they will have to raise to cover any outstanding deficits there may be in other directions. The Opposition's point, therefore, is one of sound and fury, and there is nothing in it at all. Furthermore, this sum of £30,000,000 will not be expended for at least 20 or 30 years, and as I hope I have shown, the final amount to be drawn cannot be assessed until the Maltese have taxed themselves.

Cannot the hon. Member draw a distinction between the two parts —one part is in regard to war damage, over which we have given a pledge, and the other is in regard to restoration? Both are mixed up together, and that is really the reason for this confusion.

I think it is a confusion among hon. Members opposite. As I have already stated, the pledge is that we shall provide a further sum after the Government of Malta have found out what their resources are. What I am trying to point out is that the Government of Malta must under the pledge take certain action to find out what their resources are, and when these resources are exhausted, then they would come upon the fund. In this case, as they are not likely to exhaust the fund until 30 years' time, all this talk about imperial dictatorship is just sound and fury, which comes badly from the party opposite who have brought the Empire to the brink of ruin, and whose omissions in the imperial field we have great trouble in rectifying at this stage.

The matter which interests me far more arises out of Clause 3, which deals with the Colonial Development and Welfare Act. This is an important question, and there are some matters I should like to put to the Secretary of State which arise out of it. I read very carefully the Debates which took place in 1940, in which the present Secretary of. State took part. This fund is not to be used in cases where Colonies have self-government or responsible government. Strangely enough, no mention of responsible government was made in the 1940 Debates and the reason for the qualification. I presume territories having responsible government were omitted from the scope of the Act because responsible government was felt to be irreconcilable with the Secretary of State's duties under the Act. I should like, therefore, to ask what is "responsible government" under the Colonial Development and Welfare Act, and at what stage is a Colony to be regarded as being excluded from its benefits? Are we departing from the principles of that Act in applying moneys arising out of the Colonial Development and Welfare Act to a Crown Colony, which is now becoming a dyarchy, and is this to be used as a precedent in future? Thirdly, how much is Malta to receive out of the fund? The Secretary of State mentioned the sum of £1 million in his opening speech. As far as I can see, the Government can allocate to Malta what they like, but it is obviously a limited fund, and if territories such as Malta receive a substantial amount, other territories will therefore suffer. I hope that nothing I have said will in any way detract from my great admiration for Malta. Certainly, we on this side want to honour the obligation that the Government of 1942 undertook. We think we are honouring it, and that this is the most practical way of so doing.

I would like to begin by making it quite plain that in the criticisms I shall make I fully recognise that during the war an obligation was undertaken, on behalf of this country, that we would see that Malta was provided with the finances necessary for rebuilding the island. I regard that as a binding undertaking on this Government, as on any other Government, and I am hoping, like other Members on this side of the House, that before this Debate concludes we may have an undertaking from the Government that, if this sum of money proves to be inadequate for carrying out the pledge that was given, it will not be regarded as a final payment. I regard the pledge as being, in effect, a guarantee of indemnity, that we would see that the money was provided.

I want to say a few things to the Secretary of State, rather in his capacity as a Cabinet Minister and a member of the Government than in his capacity as Colonial Secretary. Here, we are confronted with a bill which the people of this country will have to foot because of the unsatisfactory terms of the Italian Treaty. The whole of the destruction of Malta was done by enemy aircraft based on Italy. A great part of it was done by the Italians themselves, and the rest was done by the Germans, whose aircraft were based on Italy. For a year we faced alone the whole of the malice of Italy. The great Italian campaign, in its early stages, was fought entirely between Italy and ourselves. Not only was there great destruction from the air, but there was also great destruction by Italian surface craft and submarines. Yet, in the draft Treaty, there is no provision whatsoever for any reparations to be paid to this country and the British Empire, or Malta. Russia is to receive £25 million—

The hon. Member is getting rather wide of the subject. He cannot discuss the whole of the Peace Treaties, and Russia's reparations, on this Bill.

With great respect, Sir, the point I am seeking to make is that this Bill imposes a charge on the taxpayers of the country which, in equity, ought to be borne by the Italians, who were responsible for this damage. I submit that that is a point which is relevant in the Debate on this Bill.

So far as that goes it is relevant, but to discuss the whole details of the Treaties which Russia has made, and so on, would be going far outside the scope of this Bill.

In that case, I will confine myself to saying that it is a remarkable thing that when a peace treaty provides for reparations to be paid to our Allies, no provision should be made for any reparations to the British Empire to cover this great amount of damage which was done to the Island of Malta.

I do not know whether the Financial Secretary to the Treasury intends to intervene in the Debate, but if he does perhaps he will explain how it is anticipated that sterling in this country will be made available for the reconstruction of buildings in Malta. Obviously, sterling itself is of no value for that purpose; it is a question of acquiring the raw materials that are required. I put down a Question to the Secretary of State to ask how much of the existing gift of £10 million had been expended, and I obtained from him particulars as to where it had been expended. Are the building materials to be sent out from this country to any appreciable extent? At present, that is a very serious bottleneck in the provision of building materials for our own housing campaign. I was not surprised to find that only £800,000 of the last gift had been expended in this country. What has happened is that we have been obliged to buy all kinds of building materials from Italy, the United States, and other foreign countries. It is the British taxpayer who is being called upon to pay, by these purchases in Italy, for the reconstruction of damage that was done by Italian bombs. For the purchase of materials in countries like the United States it means that there will have to be a further increase in British exports to meet the cost. I would, therefore, ask the Government to say, plainly and explicitly, how they intend to make available to the Government of Malta the raw materials which will be required, and which will be paid for out of the money voted by this Bill. Finally, I protest most strongly against a burden of this kind being put upon the British taxpayer when it ought to be paid by those who are responsible for the damage done, and who were defeated in the war.

I welcome very much the fact that there is no discord on either side of the House that this is a debt of honour which we owe to Malta, and one which we are determined to discharge. I only regret that in this Debate we are not of the same mood as when the former Secretary of State for the Colonies, now the right hon. Gentleman the Member for West Bristol (Mr. Stanley), presented his Civil Estimates, in 1942. In that Debate, the right hon. Gentleman said that he could not imagine that any Committee had ever voted such a large sum with so much readiness and so much satisfaction. I think we are all agreed that the contribution of Malta to our Imperial defence' during the war was one of the most remarkable feats in the history of the British Empire. We should remember that in making this contribution to Malta we are making a contribution to an associate and an Ally, as well as to a Colony, which, by history and geography, has been joined as a permanent link in our Imperial communications. At the same time, I cannot agree with the hon. Member for The High Peak (Mr. Molson) when he said that in order to discharge this debt of honour to Malta we should, therefore, go back on our undertaking to Italy. During the war, we promised the Italians that they would be allowed to work their passage, and I feel that it would be a very deplorable thing if the traveller, at the end of the journey, were to be thrown into chains and then presented with a bill for his transport.

Would the hon. Gentleman say why it is permissible for Italy to be chargeable for reparations to Russia, and other countries, and not to the British Empire?

I will deal with that in a moment but, in the meantime, I will quote what the hon. Gentleman the Member for The High Peak himself said in a Debate during the last Session. He said:

"I hope that in the matter of reparations we shall continue to take the point of view of Italy in international conferences. This country, which has suffered more than any of the Allies except France from the intervention of Italy in the war under Fascist domination, is not making any demands upon Italy for reparations."—[OFFICIAL REPORT, 27th May. 1946; Vol. 423, c. 954.]

I feel that we can all associate ourselves with that view because, after all, if Italy is to return to democracy and to enter once again into the family of Western nations, we have a duty to discharge to her. Equally, if we, are to have a satisfactory strategic position in the Mediterranean in which Malta will continue to function as a link in our defences, it is incumbent that we should have a friendly Italy, not a sullen Italy, bankrupt and unable to co-operate with us in the defence of our Commonwealth and Empire.

If I may be permitted to do so in connection with the question of whether Italy should pay reparations to Malta, I would quote also what the Foreign Secretary said not long ago. I feel this answers the question raised by the hon. Member for The High Peak as to why we considered it just and proper not to exact reparations from Italy when the Russians did so. The Foreign Secretary said:

"If Italy is called upon to make reparations deliveries in the form either of existing industrial plant and equipment or of goods from current production, her ability to export and earn foreign exchange will be correspondingly reduced, and the assistance she will require from abroad will be correspondingly increased … His Majesty's Government cannot be a party to letting the British taxpayer in for a procedure which would, in practice, amount to their money and labour going to a third Government as reparations on Italy's account."—[OFFICIAL REPORT, 4th June, 1946; Vol. 423, c. 1838.]

It is obvious that if we continue to give Italy relief and help which, in turn, would be transferred to Malta, we would in effect merely be taking money from the taxpayer's left pocket in order to put it into his right pocket, and no effective contribution would be made towards easing the burden on the British taxpayer.

I would like to refer to the remarkably fine Report of Sir Wilfrid Woods on the finances of Malta, because a close study of that Report will answer some of the questions raised this morning. The crucial question is, what will be Malta's capacity for raising revenue in the coming years? In that Report Sir Wilfrid Woods gives an estimate of what that capacity is likely to be, and says that even if there is direct Income Tax in Malta, the annual revenue is unlikely to rise higher than £3 million per annum. Giving a very modest estimate of expenditure in the coming years, which would offer only a limited amount of the progress and social security which he regards as being desirable. Sir Wilfrid is of opinion that the expenditure in Malta is likely to approach £3 million. Therefore, it is clear that there will be no substantial surplus from revenue to pay either for new construction or for the building of essential works and the provision of services, such as of hospitals, which are today so vitally needed in Malta. Whatever contribution this country makes will be the basic capital contribution which Malta will have in order to develop under her new constitution. The former Secretary of State for the Colonies made it clear—and I believe he was absolutely right in doing so—that if we are to give a new Constitution to Malta, it is no good burdening the infant Constitution with such heavy financial burdens incurred during the war that they will stunt the growth and development of the Colony. It is incumbent upon the Government, in assessing the amount to be contributed to the finances of Malta, to see to it, above all, that their pledge is carried out to the full—the pledge to reconstruct those buildings which were damaged because of the part Malta played in the war.

When the Financial Secretary replies, I hope he will make it clear that our pledge in this matter is absolute—[HON. MEMBERS: "Hear, hear."] that whatever war damage there is will be completely repaired by the contribution which this country can and should make, because it is clear from the figures of Sir Wilfrid Woods that Malta is incapable of making any capital contribution to the reconstruction of old buildings or to the construction of new ones. I hope we shall be unanimous today in deciding that the contribution which His Majesty's Government will make to Malta will fully satisfy all the requirements for the repair of the Island. In addition, I hope there will be ample provision from the Colonial Development and Welfare Fund for those new works of social progress in Malta which Sir Wilfrid Woods cannot see any hope of being able to create unless there are adequate subsidies from an outside source.

The payments we make to Malta are in discharge of a debt of honour. They benefit the giver as much as the beneficiary. Whatever the new Constitution of Malta may offer, her future lies in close association with the British Empire. She is an essential part of our Imperial defence, and the good will of the Maltese people—as was proved in the last war— is something of incalculable value which cannot be assessed in sterling. I believe this Bill to be a good one, and consequently I hope this House today will demonstrate that not only is it a token of good will, not only is if a great contribution to the reconstruction of the Island, but it is a promise that Great Britain and Malta will in future have the close, the intimate, and the friendly association which they have had in the past.

I am sorry to introduce into this Debate what, may seem to be a dissident and a rather sordid note but I am convinced that in the years before us the sordid aspects of finance and exchange will be the most grievous and oppressive that this House will have to face. I wish I could see for one moment a clear issue out of our anxieties. I yield to none in my admiration of the contribution that the people of Malta made to the winning of the war, and of the courage and endurance with which they sustained the bitter and heavy attacks of the enemy and, pledge or no pledge, I would say that we should do our utmost to restore the damage which has been wrought, and to raise the social standards of those loyal subjects of the Commonwealth and Empire to the limit of our resources.

I have listened to this Debate, and I have heard nothing about the resources from which these and other payments are to be made. I cannot help thinking that the sinister note struck in the Government White Paper published this week—I use the term "sinister" advisedly—has not come home to the great majority of our people. I feel also that the courageous, wise, and grim warning given us, not for the first time by the President of the Board of Trade has not sunk in either to this House or to our people. J view with grave and unfailing interest any drain on our dollar and sterling resources that can be avoided If the Financial Secretary is to reply I would ask him to tell the House, in the frankest terms, what is to be the effect of these payments, and the payments asked for by warmhearted and generous people in this House, over and above the large sum which is now set aside. Is it thought that when we are scattering millions here and there that a few more millions do not matter? I would remind him of the dictum of one of the greatest Chancellors of the Exchequer who ever lived, Mr. Gladstone, when he said that a Chancellor of the Exchequer who did not look at the candle-ends was not fit to hold his office. I would ask him, now and for the next two years, until we can see our way more clearly as to exactly what will be the effect of these payments on our dollar and sterling resources, to think not in dollars or in pounds but in cents and pennies, because that is what we shall have to do in the years that lie ahead.

The keynote of this discussion was struck by the hon. Member for The High Peak (Mr Molson), when he said that there was no question of our desire to help the Maltese people to the limit of our resources; but we must watch those resources to see that we do not make terms which, when the time came, we should not be able to fulfil. I would ask the Colonial Secretary, in the gravest terms—unless something totally unexpected is likely to happen within the next two years—to consider how far he can discharge even the commitments with which he is now faced much less add to them under the Colonial Development Welfare Fund. I would ask the House very carefully to consider the warning given by the hon. Member for The High Peak and others. It is not only a question of limiting our resources, but whether we dare impinge farther upon them, until the Financial Secretary is clear as to what our exchange commitments will be, because we do not want to hold out great hopes if, when 'the moment comes, we may not be able to fulfil them.

I am sorry to introduce what may appear to be a sordid note into this discussion. What I have said may look like some limitation of our desires to do our utmost for our fellow subjects in Malta. But, in view of the Government's own declaration of our great economic necessity, and in view of what has been said 'by that most able spokesman, the President of the Board of Trade, I feel that we ought not to pledge ourselves to indefinite and vast external expenditure; and, therefore, if this Bill goes to a Division I shall vote against it.

It is always a pleasure to listen to the speeches of the hon. Member for Aylesbury (Sir S. Reed) and the hon. Member for The High Peak (Mr. Molson), whether one agrees with them or not. What they say is always reasoned and always sincere, but I feel that some hon. Members opposite ought to realise that a Member of this House bears some responsibility when he is using words which may cause injury in our relation with other people across the seas. When they speak of the action of the Government in relation to the electors here—well, they are educated and experienced, and know just how much importance to attach to what is said, so it does not really matter. But the hon. Member for Hornsey (Mr. Gammans)—I am sorry he is not in his place—really should realise that language which is appropriate for a share-pusher describing his rival's wares ought not to be used of the conduct of the Government of England in relation to people abroad—because his words will inevitably be used by the enemies of England to distort what has been done. I feel that that sort of conduct is to be very much regretted.

May I point out that the hon. Member for Hornsey (Mr. Gammans) used strong language over Malaya, and proved to be perfectly correct in doing so?

Language used over Malaya, even in the disputable event of it being right, is hardly relevant to what we are discussing now, and I think that I should be in trouble if I were to go off on so irrelevant a theme. What the hon. Member for Hornsey did this morning was to get up in this House and state half a dozen times over that the Government of this country were cheating the Maltese people. That is the whole effect of what he said, and it will be repeated in Malta, and used as an instrument among politically uneducated people to create hatred against this country. To make remarks which can be, and which any responsible man knows will be, used for such purposes, is irresponsible and wrong. I make that point particularly when a statement is made which is so completely unfounded as in this case.

This Bill is quite a simple one. Its object is to put into the Consolidated Fund, for the purpose of a drawing account really, because that is what it amounts to, £20 million for the obligations which we have undertaken in Malta, the expenditure of which will certainly extend over a minimum of 10 years. How that affects the pledge which we gave to the Maltese people, I fail to see. It is merely one of the steps necessary to the fulfilment of that pledge. We put that much into the bank as a drawing account, and, as and when it is required, it will be used, but the pledge, as I understand it, will still be ours—

I do not know if the hon. Gentleman heard the opening speech of the Secretary of State for the Colonies, because he said, quite definitely, that this was a final payment, and, whatever the cost of the war damage, no more would be available after this had been expended.

I certainly did not understand that. What I understood was that the right hon. Gentleman intervened, and put the Colonial Secretary in an extremely difficult position by suddenly asking him for a pledge to the proposition that the present sum would not at some future date be treated as final, committing the Treasury in the middle of his speech; and I think that the right hon. Gentleman, when he was a Minister, would have been loth to give a pledge in those circum stances.

I should have known what this Bill meant.

Then it certainly seems that the arguments which have been stressed have been wholly irrelevant, because what this Bill does is simply to make a sum of money available, as it is required. The situation will be, supposing our pledge is unperformed when this money has been expended, for the Government of the day to consider the matter. It is suggested that there should be negotiations. There is no need for negotiation about the Bill, which sets aside £20,000,000. Ten years hence, however, when that money is expended, the Maltese Government will be in the strong position of being able to say to whatever Government is then in power here, "That pledge which you gave us still requires some action on your part." It would be impossible, it seems to me, for any Government to turn to this Measure and say that it prevented them from listening to representations by the Maltese Government, or that it cancelled them out. Upon what Clause in the Bill would the Government of the day then rely? The suggestion that the Bill is an attempt to cheat the Maltese people is quite unjustified by anything which appears in the Bill.

I will intervene for only a very few moments, because most of the arguments have by now been made. There seems to be great confusion in the minds of hon. Members on the other side about whether the Bill represents the final settlement or not. To me, and to most of my Friends on this side of the House, it appears that the Colonial Secretary said very definitely that it is the final settlement. That impression, after today's debate, will, I believe, be that of Malta as well. We are talking quite a lot about what we all feel in the matter, but we should be talking entirely about what the Maltese will think. They are the people who suffered so terribly during the war, and their sufferings gave rise to the promise or pledge. If they sent a telegram to the Colonial Secretary this morning and asked him not to make this a final sum but to leave the matter open for discussion at a later date, it would be right for us to agree to what they want. It would be the least we could do after all they have lone for us in the past.

I appeal to hon. Members on all sides of the House to realise what this Bill will mean to the outside world. Let them realise that the Maltese who fought gallantly for us are not only in Malta but that large numbers are in Egypt, in the United States and in Australia. They can all be, and should be, very good friends of ours. How would they feel about the Bill? How will the United States and Russian regard it? They are watching these things. The Colonial Office is the one Government office at the present moment which seems to be doing most doubtful things in regard to the Colonies. Those things come up one by one for discussion. It seems to be a regular Friday practice. On the last Friday on which this House met we discussed Sarawak. Perhaps the Colonial Secretary will realise, since he knows my feelings on that subject, that I am a little suspicious about the present Bill. I also know what happened in Malaya. Sir Harold MacMichael is well known in Malaya, and if his name is also linked up with the Bill for Malta I am distressed to think—

Sir Harold MacMichael is in no way associated with the Bill.

Not with the Bill as such, but he is frequently mentioned in the White Paper. I have not had time to read his own Report properly. I only got it this morning. I will not press that point at all. I will urge the Minister to bear in mind that if he gives £20,000,000 today, and says that the money is to be used for a longish period, it may have to be spent in obtaining raw materials from the United States. Let him remember that the £ has not always the same value in the United States. It has not the same value as it had when we obtained the loan a few months back. Goodness knows what its value will be in a few years' time. The Maltese therefore will not be satisfied with the receipt of £20,000,000. They do not know what they are likely to want in the near future, or what the £ will then be worth. I may be wrong, but it seemed to me that the hon. Member for South Croydon (Mr. Rees-Williams) used a kind of veiled threat. He said that the money would be there for the Maltese to use but not until we were satisfied that the Maltese were taxing themselves.

I did not make that suggestion at all. I may have expressed myself badly, but what I meant to say was that, having this money behind them, they would be able to tax themselves more effectively than otherwise. I certainly did not hold out any threat. The simple fact that they can draw from His Majesty's Treasury would not enable them to tax themselves. That is what I meant.

Does the hon. Member mean that they would have to tax themselves in Malta for war damage? Our pledge was that we would pay for all the war damage.

That was the point I tried to make. I think the pledge was that we would help them to meet such liabilties as arose out of the war after their resources had been exhausted. It is necessary for the Maltese to call upon their own resources before they are entitled to call upon us. We are now, in fact, doing something freely on our own, which we are not called upon to do.

I feel that our debt is very clear and that we ought to give the Maltese as much as possible. We must not, as the hon. Member for Aylesbury (Sir S. Reed) suggested, start by breaking our pledge if we have not enough money to go all round. That would be entirely wrong. We ought to be determined to carry out our pledge to the fullest extent that we can and we have enough to do this. I beg the Colonial Secretary that he will let it go out to Malta, before the Debate is finished, that she will not suffer for lack of funds from this country, as was origally pledged, that, in the long run, any money which she has to spend on reconstruction will be set aside for the restoration and development of that country, such as upon arrangements for migration, and that the actual war damage money is something that we shall look after, when we know more fully what it is.

The hon. Member for Brighton (Mr. Teeling) referred to confusion among hon. Members on this side of the House. I have been impressed by the confusion there appeared to be among other hon. Members with regard to the exact fault which the Government were committing in bringing forward this Bill. Hon. Members opposite were clear, as they always are, that the Government are committing some fault but there was a complete disparity of opinion as to the particular fault. Hon. Members opposite have stressed what I believe to be indisputable, that whatever question of resources may come into consideration, a pledge such as the one we have made to Malta is one which must be redeemed and is on all fours with any pledge this or any other Government have given to the people of this country. In fact, it is a more sacred pledge in so far as the people of Malta are not in a position directly to influence the Government of this country as the electors here can. There is, therefore, no disagreement on this side of the House that we should stand by any pledge that has been made to Malta.

Confusion appears to exist on the other side of the House as to the exact terms of the pledge, which the hon. Member for South Croydon (Mr. Rees-Williams) read out. It is a pledge to bear that part of the burden of repairing the war damage of Malta which the resources of Malta do not permit the Colony to bear themselves. It has been suggested by some hon. Mem- bers that the Government are being parsimonious in their discharge of the pledge, while others say they are profligate. Those who say that the Government are parsimonious argue that the Government are limiting the pledge by putting down a figure of £20,000,000. I cannot see how the Government could have done this except by bringing forward a Bill in which a definite sum of money was mentioned. The fact that the Government have put down a definite sum shows the Government of Malta that there is so much money on which they can draw. If no sum of money had been mentioned and no Bill had been brought forward, they would have no idea whether it would be £2,000,000 or £200,000,000 on which they could draw. So far as the wording of the Bill is concerned, there is nothing to debar any future Government of Malta from coming to any future Government of this country and saying that the sum is not sufficient, and I have no doubt whatever that whatever the political complexion of the Government of that day such an application from Malta would receive attention—

That might be true of some future Government but it cannot, after the statement of the right hon. Gentleman the Secretary of State for the Colonies, be true of this Government because this Government have said that this is a final settlement and they will not allow any further application.

What we have to go on is the wording of the Bill which says:

"A sum of twenty million pounds … towards the expenses incurred …"

It does not say that that is in final settlement, and what we are asked to pass is this Bill. That is how it appears to me. No doubt we shall have further elucidation from the Front Bench.

The point raised by the hon. Member for Aylesbury (Sir S. Reed) was that we should consider our resources. His argument was somewhat difficult to follow. On the one hand, he said there should be no question of going back on our pledge, and, on the other, he talked of the inability of our resources to meet the demand. I thought he might be straying into irrelevancy but if his remarks were relevant they could only mean that we should consider our resources before considering whether we could make this sum of money available. Apart from the fact that that appears to contradict the arguments from the other side of the House, I hope it is an argument which the House will very emphatically reject. When we consider the debt we owe to the inhabitants of Malta, we should take the first occasion we can for cutting our coat according to our cloth and not go back on pledges we have made to them. I am sorry if I am doing the hon. Member an injustice. I can put no other interpretation on his words. They either mean that we should think twice before making this provision, or they mean nothing at all which is relevant to this Bill.

I welcome the fact that the Government are untying any connection between the financial aid and self-government. It would be most unfortunate at a time when we are trying to bring our Colonies towards self-government if the very fact of their approaching self-government debarred them from participation in financial benefits to which they would otherwise be entitled.

My personal researches into the background of this Bill have been somewhat hampered by the difficulty of obtaining copies of both the MacMichael and the Woods Reports. The Malta White Paper was published on Tuesday and refers to the MacMichael Report which was published on the same day. With all due respect, Mr. Speaker, J suggest that when papers like that, so very much running together, are issued, they ought to be available in the Vote Office and not have to be obtained direct from the Stationery Office.

I am very glad to be able to say a word or two in this Debate because I know Malta well and have many friends there. Nobody who knows Malta and the absolutely unique part she played in this war, as shown by the granting of the only special George Cross, could fail to do all in his power to see that this matter is not dealt with in too hasty a manner. We are all very grateful to the hon. and gallant Member for Hythe (Brigadier Mackeson) for having gone out to Malta last week and for the information he has brought back to this House. In my opinion it emerges from this Debate that His Majesty's Government have chosen a final sum and are now imposing it on Malta against Malta's will. That is borne out very clearly by the telegram which the Secretary of State read this morning. What is the good of appointing a financial adviser to go out to Malta, to quote his own terms of reference, to examine the present and prospective financial position, and when he gives an estimate which he himself says may be rather wide of the mark and in that estimate says that over £42,000,000 is required for reconstruction and that nearly £29,000,000 is required for war damage, decide on an arbitrary figure and make it a final settlement?

In order not to mislead the House, will the hon. and gallant Gentleman make it quite clear that the £29,000,000 he quotes was included in the Report he has mentioned in the £42,000,000 which he has also quoted?

I beg the right hon. Gentleman's pardon if I did not make it clear. Of course I mean that the £29,000,000 was included in the £42,ooo,ooo. It must be realised by the Ho use that the Maltese paid a War Damage Contribution just the same as we did in this country, and as we have accepted the responsibility for rebuilding Malta we must see that they are fully repaid and that war damage is separate from the whole problem of reconstruction. That has not really been made clear in the Debate today. What we on this side of the House are complaining about, is particularly war damage. Perhaps I might quote a few lines from the MacMichael Report. On page 15, it says that on 10th June, 1946, about 10 days after the publication of the Woods Report Sir Harold had a further meeting with the Finance Committee in Malta, and at the close of their discussions the committee asked him to telegraph in the following terms:

"After discussing the economic position of Malta with the constitutional commissioner, it was agreed that he should be requested to ask His Majesty's Government to indicate as soon as possible the extent of assistance that they are prepared to give to Malta apart from the reimbursement of war damage."

It is war damage that we must be quite certain is repaid in full. If we decide on a final sum now, I cannot see how we are able to guarantee that it is paid in full. The Secretary of State this morning said in his speech that this Bill is practical recognition of what Malta has done. I do not think that is the point at all. We have given a pledge to rebuild Malta, and it is our duty to do so, no matter whether it is recognition of what she has done in the war, or not. I do not for one moment suggest that one day we shall not have to make a final decision, and a final settlement. That is quite obvious, but we on this side of the House do not think that this is the proper moment to do so.

Clause 3 has, I think, only been referred to by the hon. and gallant Member for Bexley (Major Bramall). Perhaps, in the heat of the Debate on the other subject, it was left out of discussion, but it is a very important point. I am glad to see that Malta will still benefit when she has self-government under the Colonial Develop-and Welfare Act. As is well known, Malta has depended in the past practically entirely on employment given to her population by the Services in Malta. Our Service commitments in this area may well have to be cut down, and the Maltese even with emigration—and many Maltese are waiting to emigrate—must look to other activities. Anything which we can do to help them in this matter, whether financial or otherwise, will be of the greatest value to the island. There is no shortage of labour there at the moment; there will be enough employment for some time, and their war damage repairs have been held up for lack of materials, just as have our war damage repairs. I think it is to the future that we should all look for assistance to Malta under this Clause.

Before dealing with the question of the pledge, which seems to be so little understood by hon. Members opposite, I wish to ask the Government whether any of this sum of £33 million is to be spent, even indirectly, in connection with dockyards, the harbour, warehouses, aerodromes, or fixed defences. If that is so, and all such expenditure on these purely military matters is not entirely covered by Service Estimates, I hope His Majesty's Government will make it quite clear what advice they have had from Service Departments in this connection.

Everyone who has spoken in this Debate has agreed, naturally, that any help Malta requires from this country to repair the ravages of war, must be given. No one grudges the George Cross Island anything as some part repayment for her steadfastness and devotion to duty. I make no apology at all for labouring the point about the pledge, because hon. Members opposite have either completely failed to grasp the argument from this side of the House, or for some extraordinary reason, are deliberately misunderstanding it. The Colonial Secretary spoke of recognition of Malta's heroic struggle, and, almost in the next sentence, he said we were honouring our pledge. I cannot see how that is so when he states that this sum of money mentioned in the Bill is a final payment.

Many of us were surprised to hear that he had only just received a telegram from the National Assembly conveying a resolution complaining that the fact that this was to be the final payment was unsatisfactory, and begging him to leave it open for further discussion. It was certainly a surprise to me that at this late hour this information should have arrived. The suggestion of a further payment to be considered later on made no sense to me. If the cost turns out to be more than £33 million, and if it is outside Malta's capacity to meet that further cost, is it the intention of His Majesty's Government—the present Government—to give a pledge that that further sum will be forthcoming? That is the question on which we want an answer. It has been asked six, eight or a dozen times on this side of the House, but, as far as I can see, it has not been understood. The argument that some other Government may be in power in ten or 20 years' time seems to me a very extraordinary one. I very much hope it will be so, in fact, I feel sure it will be so, but it does not make very much sense for a Minister not to give a pledge because he cannot be sure that the present Government will be in power at a future date.

I was not suggesting that it would not be this Government.

I was referring to the Colonial Secretary's own remarks and I think he would agree that that was the meaning of what he was telling the House. The hon. and gallant Member for Bexley (Major Bramall) spoke about a definite sum, and tried to indicate that a definite sum has to be mentioned in the Bill, otherwise it would be an unsatisfactory Bill. I do not think any of us disagree with that. The whole point is, Is this definite sum a final sum? We have had an answer, which I hope may be altered before the end of the Debate. Nor is the only thing that matters the words of the Bill, another argument used by the hon. and gallant Member for Bexley. It is not only the words of the Bill which are important, unless we are to understand that the word of the Colonial Secretary, speaking from the Government Front Bench, is something of no importance, which I cannot believe to be the case. I am inclined to think that because the Bill gave us no indication that this was to be the final settlement the Colonial Secretary, for some unexplained reason, is trying to bounce the House into accepting this Bill. It should have been made perfectly clear in the Bill that this sum is a final payment, and that if any further payment is to be made it should be reconsidered at some future date. The hon. Member for South Croydon (Mr. Rees-Williams) actually went so far as to say that the question of the pledge is a matter of no substance whatever, and went on to say "at least not for 20 or 30 years".

I said that the argument had no substance, not the pledge. The matter which was referred to in the argument of hon. Members opposite would not arise for 20 or 30 years. That was my point.

But the argument is about the pledge, and as to whether or not His Majesty's Government are carrying out the pledge which was given. I hope that I am not introducing too controversial a note when I say that pledges to our own citizens are one matter and that I for one, at any rate, have become accustomed to them being broken by His Majesty's Government, but a pledge given to our Colonial citizens is in many ways a much mcre important matter.

There is one other important point to which I would refer in connection with the speech made by the hon. Gentleman the Member for Aylesbury (Sir S. Reed), to whom I always listen with the utmost respect. He was asking whether we could afford this sum of money. I would only say that His Majesty's Government are spending vast millions on so-called compensation to more than a million shareholders in the railways, in paying a vast and needless bureaucracy, in buying coal undertakings and taking over the Bank of Fngland. They are squandering huge sums of taxpayers' money on schemes which can only be said to be imperilling our national recovery. If we cannot afford this sum for Malta, let me suggest—and I hope the hon. Gentleman the Member for Aylesbury will agree with me—that at least His Majesty's Government might abandon some of these wild and unnecessary schemes.

In conclusion. I hope particularly that I may have an answer to the question which I asked at the beginning of my speech about the Service angle and the possibility of some of this money being spent for purposes connected with the military in Malta. Failing an assurance that the Government will honour their pledge, which at present clearly they do not intend to do, I shall have no hesitation in voting against this Bill. Anybody who votes for it can comfort himself, if he can find comfort in the fact, with the knowledge that one more pledge from the Socialist Government has gone down the drain.

During my career in the Service I spent many years in the Mediterranean and, on that account, I know Malta very well and I have, in common with every hon. Member in this House, great regard and admiration for the manner in which Malta went through that two and a half years of siege, involving not only tremendous devastation but tremendous human suffering. We admire the fortitude with which they went through this most difficult period. I think it is also agreed by everybody, not merely on account of that, that we should make good in Malta the damage that was caused by the war. We have given a pledge to that effect. We have said that we would do so, but during this Debate it has become obvious that there is considerable confusion in the minds of hon. Members opposite upon that fact.

The Secretary of State has said that this is final as far as the Government are concerned. It has been pointed out that it is impossible today to know what will be the final sum required in order that war damage might be paid for. Therefore, by making this final settlement as far as the Socialist Government are concerned, it is not carrying out the pledge which was given to the Maltese. That action will do an immense amount of harm. It is a very bad habit to promise to do something in support of a foreign country, or for our own people in the Dominions or Colonies, and then, when the time comes, to go back on that pledge. I am sorry to say that of late there have been a good many examples of that kind of conduct. We gave a pledge about Poland. I do not know what the Government are going to do about that.

The whole difference between the Socialist Government and their supporters, and my hon. and right hon. Friends on this side of the House, is on the question of the Government not carrying out the pledge which was given to the Maltese, thereby doing irreparable harm to the honour of this country. The Colonial Secretary puts forward the financial position of the country as one excuse for laying down this sum and making it an end of the obligation of the Government. We all know what a terrible mess the finances of the country are in due to the administration of the present Government. But, surely, that is no reason why this country should default and not carry out her pledge. Another hon. Member talked about the words spoken by the hon. Gentleman the Member for Hornsey (Mr. Gammans) and said what a lot of harm they might do. I would say that it is far more important to fulfil our pledge. We are judged far more by the deeds which we do in fulfilment of the word which we give than some hon. Members realise. That is the ultimate test—not what is said, but what we do. In this case the Government are not fulfilling the pledge which was given.

The right hon. Gentleman the Colonial Secretary has said that the Maltese must assist in this matter and that the finances which they receive through taxation would be taken into account. Everybody who has known Malta for many years knows perfectly well that the financial position of Malta is almost entirely dependent upon the Services, the Army, the Navy and the Air Force, and the work in the dockyards, the aerodromes, and so on. For all practical purposes, other industries do not exist. I hope it will be possible to bring some industries into being which will have a great financial benefit for the Island, but I cannot envisage that. It is ridiculous to talk about the Maltese assisting in the matter. In any case, the amount which they could contribute would be infinitely small, and it does not relieve us of our responsibility for carrying out our pledge. One of my hon. Friends referred to the remarks of the hon. Gentleman the Mem- ber for South Croydon (Mr. Rees-Williams), who said that this argument had no substance. I intended to make that point. I entirely agree that on this side of the House it is a matter of great substance that we should honour our pledges, whether they be to our Colonies or to a foreign country.

It was said by another hon. Member that the people of Malta should be able to stand upon their own feet. In regard to this matter, it is impossible. We hope that in future the Maltese will be able to develop some industries which will be of great benefit to them. What those industries will be, I cannot imagine, but I hope that some will be found. Work in the dockyard has been cut down and probably it will be cut even more. That work was an enormous asset to the finances of Malta. Also, no doubt the Services—the Army, the Navy and the Air Force—which used to be in Malta will be diminished considerably. Again, the finances of the country will be considerably lessened, and then we talk about Malta standing on her own feet. I reinforce the request made by my hon. and gallant Friend the Member for Lewes (Major Beamish) in regard to the availability of this amount of money. If this amount is insufficient to carry out our pledge will the amount be made up? If that undertaking cannot be given I certainly will vote against this Bill, not because I do not want the Maltese to have it—of course, we all want it—but on principle, because the Government are not fulfilling the pledge which was given to the Maltese in 1942.

I think one point from the Government side has remained unanswered and that was the complaint by the hon. Member for Northampton (Mr. Paget) who said that we on this side of the House were using strong language. I should like to point out to him that if he looks back on the records of this House he will find that many Members of the Socialist Party, including —and I say this with very great respect —the present Secretary of State for the Colonies, used strong language and caused considerable' difficulty for many persons overseas who were administering our Colonial Empire. This is a place where I understand Members may use strong language if they feel strongly, and I do not think in view of the precedent set by the hon. Member's own party that he can complain about any language used in this House today. It seems to me that there was a certain amount of confusion, on the Government side when drawing up this Bill, between compensation for war damage and reconstruction. We on this side of the House are particularly interested in compensation for war damage, because we feel that here the British Government is pledged by the statement made during the days of the Coalition Government that we should make good any war damage caused in Malta.

I regret myself that this Bill is not cast sufficiently wide to take into consideration some of the wider issues of reconstruction which I believe the state of Malta today requires. I have myself paid several pleasant and happy visits to Malta and know something of its condition. Some of us, for example, are interested in the suggestion that Tripolitania should go to Malta, as a trustee under the United Nations. I think that that is a suggestion worthy of consideration. We all know that Malta before the war was too small for the population it supported. That brings to my mind a point which the hon. and gallant Member for Hythe (Brigadier Mackeson) mentioned. When he was talking about the emigration of populations I recalled reading a report before the war of what Signor Mussolini said in regard to the development of the Pontine Marshes South of Rome. He said that in his experience the introduction of electricity led to a fall in the birth rate. The corollary of that is that the black-out in Malta led to an increase in the birth rate, and the Secretary of State may be interested to report these facts to his colleagues the Minister of Labour and the Minister of Fuel and Power. Perhaps that is one of the objects of the Ministry of Fuel and Power in cutting the supply of electricity, thus hoping to overcome some of the difficulties brought to light in the economic White Paper.

I would suggest that these are subjects in Malta which are worthy of consideration, over and above the immediate issues of war damage for which we feel this country is responsible. Beyond that there is one further point I should like to make and that is the possibility of development of Malta as a holiday resort. I think the Italians did a very good job of work in the development of Rhodes as a delightful tourist centre. I believe Malta as a holiday resort offers great opportunities to British shipping passing it and to the airlines, which can reach it quickly. I think worthy to be taken into account is the matter of Imperial Preference. What is our policy in the future in regard to helping Malta with Imperial Preference? These questions have a bearing in a wider sense on the reconstruction of Malta, as do the defence proposals and service payments of the future.

If I might be allowed to say so, I would, with great respect, give credit to the present Secretary of State for wanting to do the right thing by Malta, but I think that this is another example of what the hon. Member for Rugby (Mr. W. J. Brown) pointed out in the first week of this Parliament when he was speaking to the Government. He said that as time went on it was not their good will or good intentions which would be in question, it would be their capacity. I believe that the Secretary of State for the Colonies does want to do the right thing by Malta but it is largely a question of the way it should be done. We believe that the present Bill, reinforced by what has been said today by the right hon. Gentleman, fails to fulfil the pledge given by the Coalition Government. It is not only necessary that justice should be done but that justice should appear to be done. That does not appear to be the case at the moment, in view of the fact that there has been no real consultation with those in Malta who will be called upon to rule in that country Perhaps I am not expressing myself correctly there. There have been consultations, but the people of Malta do not feel that they have been taken into proper consultation, otherwise I do not think they would have sent a telegram such as the Secretary of State read out today.

I should like now to refer again to Clause 3. It does appear to me that Clause 3 is rather in the nature of a sop. The Government are making a final settlement, but the Government leave a door open by saying that Malta will still be liable for financial support under the Colonial Development and Welfare Act. I am not against that in itself. I think as time goes on it will become increasingly difficult for places such as Malta to carry the overheads of modern government, and they are going to need a great deal of outside assistance for health services, research and so forth. Therefore it is most important that Malta should continue to receive support in some form or another, but I would put to the Secretary of State the question, is this the right way of doing it? This subject raises a constitutional issue of considerable importance which is whether, once a dependent territory has obtained self-government, it can be treated as before under the Colonial Development and Welfare Act, especially when there is the very limited sum of £120 million for an enormous area all over the world. Is it going to be eaten away by spending it on countries which have achieved self-government part of which is that they must be financially responsible for themselves? As the hon. Member for South Croydon (Mr. Rees-Williams) asked, is this to be a precedent? I would ask again of the right hon. Gentleman whether he regards this as a precedent for other territories which will achieve in due course their self-government. Will they continue to be liable for support from the Colonial Development and Welfare Fund?

I think the people of Malta are already agreeable to a degree of dyarchy. That is inevitable for quite a long time to come. But until they know what our defence requirements are going to be in Malta they cannot know the exact position. They will need to know what is going to be spent in the dockyards, on airfields and so forth, and until they know that they will not know where they stand financially. Obviously our defence is going to be for a long time to come the greatest source of income to that territory.

Finally, I should like to make a remark or two on this question of Britain being a milch cow. To the Lord Privy Seal and to others "pounds, shillings and pence" are apparently meaningless symbols. They sound equally meaningless when they fall from the lips of the Minister of Transport when he talks about millions of pounds for transport compensation. But I would put it to the Government that there are many people who hope that the pound is still going to be worth something. However, if these vast sums are going to be paid out it is going to be very difficult for this country to survive. I would not in any way go back on the pledge we made to Malta some years ago. We must honour that pledge and do our utmost to set the people of Malta in the next few years on the way that they wish to go, and at the same time safeguard our currency. I would again ask the Secretary of State, if not now, then on some other occasion, to give us an opportunity of discussing some of these wider issues which I venture to raise on this occasion, but I would ask him, at this moment, to give an answer to the question about the future intentions of the Government in regard to the Colonial Welfare and Development Fund.

I beg to move, to leave out from "That," to the end of the Question, and to add instead thereof:

"this House, while welcoming the decision of His Majesty's Government to provide a further instalment towards the repair of war damage in Malta, declines to give a Second Reading to a Bill which fixes a final sum for reconstruction before the total amount of damage has been ascertained."

I should like to start by saying a word on that part of the Debate which has aroused no controversy whatsoever in this House. I should also like to echo the words used by the right hon. Gentleman in his opening speech in our tribute to the people of Malta and our determination to show our gratitude to them for the way that they stood by us in our time of trial. I shall only speak for a very short time because the point at issue is a very simple one.

First, I will refer to some of the speeches that have been made from the benches opposite. We started, of course, with a speech from the right hon. Gentleman's faithful Sancho Panza, the hon. Member for South Croydon (Mr. Rees-Williams), who spoke with all his usual zeal and even less of his usual success. But, apart from him, the three speeches which were made by the hon. Member for Northampton (Mr. Paget), the hon. Member for West Coventry (Mr. Edelman) and the hon. and gallant Member for Bexley (Major Bramall) were speeches which, apart from the trimmings, had they been made from the Front Bench would have made me seriously reconsider my decision to vote against the Bill, because all of them said what the Secretary of State had not said—that they do not regard this as a final payment, that to regard it as a final payment would be a breach of the pledge, and that, clearly, if, when the time came, it was found that more money was required to fulfil the pledge, that that money must be forthcoming from the Government.

That is our view, but it is not the view expressed by the Secretary of State. He has said to the people of Malta earlier, and to us in this House today, that although the Bill makes no mention of this being a final settlement, His Majesty's Government regard it in that light, and that, in so far as he and the Government of which he is now a member are concerned, there are no circumstances which would justify a reopening of the talks, or an addition to this sum, which is to be regarded as a final settlement. That, I think, not unfairly puts the statement which he has made to the House today. Therefore, it is not with the actual contents of the Bill that we are concerned, but with this embellishment which has been put upon it on behalf of the Government. It is impossible for us to ignore statements made to Malta and now repeated so categorically by the Secretary of State.

The main difficulty into which we have fallen arises from the fact that in this Bill, we are attempting—and, I think, rightly—to do two things at the same time. The first is to deal with the payment of war damage, and the second is to deal with reconstruction—one, the actual physical repair of the buildings which have been damaged, and, the other, assistance towards new developments in the island's social system. Those two things with which we deal in the same Bill, and for which we provide one sum, stand on wholly different grounds. The payment for war damage is the subject of a specific pledge given by the Government in 1942, and accepted by their successors, the present Government. That pledge is plain, and is set out, for all practical purposes, in the explanatory Memorandum to this Bill.

The pledge is that we shall make good the liabilities arising from the repair of war damage which are found to be beyond the capacity of the Government of Malta to meet from their own resources. In order to determine the sum of money required to meet that pledge, we want to know two things—What has it cost to repair the war damage, and what has been the capacity of the Government of Malta to contribute towards that cost? At this moment, we know neither of these things. We have an estimate by Sir Wilfrid Woods, but an estimate which he, himself, admits cannot, in its nature, be accurate as to the final cost. It is impossible at this moment to estimate what will be the financial contribution that Malta can make. Therefore, no one could pretend that, in fixing a final sum at this amount, we are in a position to say what, in fact, is to be the sum which, in the long run, will be found to be needed to meet the pledge which has been given. So much for war damage.

The other part of the Bill dealing with reconstruction stands on wholly different grounds. There we have given no pledges. The amount that we give depends upon what this country can afford, and upon the amount which we think it right to charge upon our own taxpayers for the assistance of Malta. And it has this other difference. As far as the reconstruction is concerned, I agree wholeheartedly that we want a fixed and final sum given to the Maltese now before they start on the work of self-government. In this Bill, there are two wholly inconsistent things. These matters should be settled, the Bill should contain the final fixed sum which is to be given to Malta for the purposes of reconstruction, and over and above that, it should contain whatever instalment the Government think it right to give now towards meeting our pledge to bear the responsibility for the war damage.

That, I think, would have the effect that, whereas the desire of the Government —and, I believe the proper desire of the Government—is that reconstruction and the amount that we can afford to help that reconstruction should be finally fixed now, it would, at the same time, meet the demand—and, I think, the proper demand—of the Maltese people that this account of war damage should not be wound up by a final payment until it is really possible to ascertain how much the liability has been upon Malta as a whole, and how much of it falls to be assumed by the people of Malta.

Would the right hon. Gentleman explain how, in fact, war damage and reconstruction can be separated? If we are rebuilding a large part of Malta, the two things are so integrated that there can be no separate systems.

I do not think that that is the case at all. The vast majority— £26 million out of £28 million—of Sir Wilfrid Woods' estimate is going to the reconstruction of private building. We have no difficulty in this country in drawing a distinction between the compensation, or the money we provide for the reconstruction of a building which was destroyed, and the money which we provide through other channels for the erection of wholly new buildings for other beneficial, social purposes. It does not seem to me at all impossible to separate the two.

We have great difficulty about it in this country. That is the whole point. In my own borough we have the most immense difficulty through that very thing. It is most difficult.

Certainly, it has never been suggested, as far as I know, up to now that it was impossible to carry out the pledge we gave that we should bear this liability for war damage. But the mere fact of mixing these two things together does, of course, make it extremely difficult to find how much we are contributing out of this £30,000,000 to the two branches. At one moment it is possible for the right hon. Gentleman to say, "Here you have a Bill for £30,000,000, and as Sir Wilfrid Woods' estimate was only that of £28,500,000, it is probable that this £30,000,000 will cover the whole of the war damage expenditure." At another moment we can say that in this £30,000,000 we are making a most generous contribution to the reconstruction—not the repair of the war damage— of Malta, and by this capital payment we are setting them on the road to self-government. But the fact is that out of this £30,000,000 we cannot do both. This £30,000,000 will either probably cover—although even that is not certain —the amount of war damage, and leave nothing at all for reconstruction, or it will make a generous contribution to reconstruction, and fall far short of what is certainly necessary for expenditure upon war damage.

Therefore, I suggest that, even now, the Government might consider whether it would not be possible to meet this in the way that I have suggested, that is to say, to allocate a definite, fixed, and final sum for our capital present to Malta for the purposes of reconstruction and to enable her to start upon self-government and, at the same time, repeat with regard to war damage the procedure of the earlier Bill, which is, to make available a further sum as an instalment towards meeting the cost, but making it plain that, if and when it is found that further sums are available, not only other Governments that may be called upon to deal with the actual situation, but this Government, if they are then in power, would be prepared to find the extra sum and meet the liability in full.

I have only one word to say upon Clause 3. I shall not object to it in this Bill because of the particular circumstances of the case, but I hope that the right hon. Gentleman is not going to make this a precedent without giving very careful consideration to the issues that are raised. The hon. and gallant Member for Bexley thought it was all quite simple, and that it was a splendid thing that people who get self-government should be entitled to draw on this money; but J think that the hon. Member for South Croydon will agree that there is really more in it than that. In the first place, of course, I certainly thought that capital sums required by Colonies obtaining full self government were to be met from other sources, and that, therefore, the £120,000,000 would be available, untouched, to those Colonies that do not get self government. The effect of this, of course, is simply to take away some money which otherwise would have been available for some other Colony. Nor do I think that it is wholly satisfactory that a Government which has got real self government and responsibility should be in receipt of annual payments out of a fund of this kind from this country. This country will have no means at all, as it will in all the other Colonies, of checking how the money is spent, on what purposes it is spent, and whether the expenditure, when it has been carried out, has been wise. Nor does it foster a feeling of self reliance, which is a necessary accompaniment of governmental and ministerial responsibity, that it should be possible for a responsible self governing Colony to draw upon funds of this nature. I say, therefore, that I will accept it on this occasion, but I hope that, before this is used as a precedent for other cases, much more consideration may be given to this point.

In conclusion, in view of the fact that the right hon. Gentleman has repeated a categorical statement that this is to be regarded as the final settlement, not only of any assistance for reconstruction, but of our pledge in respect of war damage, I have no alternative but to move the Amendment which stands in my name upon the Order Paper, and to ask my hon. Friends to support it in the Lobby.

May I say, first of all, in case it passes from my mind and I fail to take the opportunity, that the moneys that may be advanced under Clause 3 of this Bill from the Colonial Development that Fund? In other words, schemes same rules, regulations and limitations as are imposed now on all money provided by that Fund? In other words, schemes which Malta may put forward under the terms of that Clause will have to be submitted, just as they would have to be were they submitted by any other Colony.

I think that the speech of the right hon. Gentleman the Member for West Bristol (Mr. Stanley) is in marked contrast with most of the speeches which we have heard this morning from the Benches opposite. We in this House are quite familiar with the usual "give and take" of debate; and frequently, not only on one side, but on both sides of the House, we say things which the rest do not take too seriously. But when we are discussing, as we are today, a place like Malta, I think we should be very careful how we choose our language and what we say; and I regret very much—and I am positive many Members of that side of the House also, regret very much—that we should have listened, as, unfortunately, we did, to the speech of the hon. Member for Hornsey (Mr. Gammans), which charged this Government with broken faith, broken pledges, and all the rest of it. As my hon. Friend the Member for Northampton (Mr. Paget) said in the course of what, I thought, was an admirable speech, it is a great pity that that kind of speech should be made in this House; because it will receive the widest publicity all over the world, and certainly in Malta, where people, not so versed in democratic government as we are, will put their own construction on it, and will not take what he said, as we have to all too frequently, for what it is worth.

If the right hon. Gentleman objects to my having charged the Government with a broken pledge, would he care to comment on the cable which the Colonial Secretary has received, in which the Labour Party in Malta also accused the Government of breaking pledge?

My right hon. Friend the Colonial Secretary read that cable, but the gloss which the hon. Member for Hornsey has put on it is, quite frankly, not there. All that the cable contained was what I think any of us might have imagined it to contain, namely an intimation that they are not satisfied with the amount of money which is being allocated to Malta. Of course, none of us are ever satisfied.

I thought that the telegram the right hon. Gentleman read out was the telegram, to which reference has been made, from the leader of the Labour Party in Malta, not the letter, which was quite another thing, from the Constituent Assembly.

The telegram I read was from the Governor, and expressed the views of the constituent consultants who had been in touch with the National Assembly. The letter referred to by another hon. Member was a communication from the Secretary of the Labour Party. I understood the hon. Member for Hornsey (Mr. Gammans) to make reference to the telegram which I received this morning from the Governor, after his consultations with the representatives of the Malta people.

Would the right hon. Gentleman deny that the Government have been accused of bad faith by the Secretary of the Labour Party in Malta?

The point made by the hon. Member for Hornsey was that I had received a telegram this morning, and had communicated it to the House, making that charge. That my right hon. Friend is most emphatically denying.

I might perhaps add that even supposing the Secretary of the Labour Party in Malta did accuse the Government of bad faith, that is one thing, but for a responsible Member of this House, who is supposed to have the facts in his mind, to do the same is quite another thing.

I quoted it, and I say categorically that this is a breach of faith by His Majesty's Government, and is a disgraceful thing for the House of Commons to support. The Labour Party in Malta are right and you are wrong.

That is the core and centre of the discussion we are having this morning. The view of many hon. Members opposite is that in making this allocation of £20 million to Malta the Government are in some way breaking faith with the pledge that was given during the war. The words have been read over and over again; I take it that we are now all familiar with them. It is our definite view —and I feel that anyone who reads those words carefully will agree with us—that the announcement made by the then Government of this country was to the effect that a grant of £10 million would be made to assist Malta to make good the war damage she was suffering and that it went on to say—I am paraphrasing here— that, if it were not sufficient, further sums would be made available. The right hon. Gentleman knows very well that Malta was then suffering heavily from bombing, and was standing up to it as an outpost of the British Commonwealth of Nations in a most magnificent way. There was, however, this proviso, that those sums would be conditioned by the fact that Malta would have to do something from her own resources to help. I hope no one in any part of the House will say that what I have just said is not a fair paraphrase of the promise that was given. The £10 million was earmarked, and some of it has been drawn. The question then arises, are we to implement the rest of the promise then given and to which we all assented? In this Bill we propose to set aside a further £20 million to assist Malta to implement the pledge that was given.

A valid point which was made with great force by the right hon. Gentleman opposite was that we cannot at this juncture say what the sum should be because we do not yet know what the exact cost of repairing the war damage will be. But as he said, and this is a strong point, we have some sort of estimate to go on. It is perfectly true that we cannot tell finally and completely what the making good of war damage will cost. We admit that, but we have to work as ordinary human beings, with common-sense and within the four corners of what is available, and in these reports, with which most hon. Members are familiar, we have something quite definite to go on. In them we were told, and no one has queried this estimate which seems to be a fair and reasonable one, that the estimate would be something like £28 million. I think that figure is accepted.

It is about £28,500,000.

Actually, it is £28,800,000. If that outside estimate, by a responsible person with no axe to grind, who went there and took all the evidence he could find, be agreed, we may say that war damage amounts, in round figures, to £29 million. The Government are in fact finding £31 million against an amount of war damage—and it is here that we are charged with having broken faith—estimated at £29 million. In addition we are going to find money for other purposes, as my right hon. Friend said when he opened the Debate. We are going to find £1 million from the Colonial Development Fund, and there may be, and probably will be, more to come.

When the right hon. Gentleman says £31 million, does not that mean £30 million plus £1 million from the Development Fund?

It is £30 million plus £1 million which has already accrued by way of interest, making £31 million which is available. We are also finding £1 million with possibly more to come—it will all depend when the time arrives; we cannot bind any future Government or Colonial Administration—from the Development Fund. Grants in aid and commodity subsidies have been made; figures have been mentioned which in fact bring the total contribution from the British taxpayer to something over £33 million. The amount which was given by Sir Wilfrid Woods —the figure was also quoted by an hon. Gentleman opposite—for war damage is about £29 million; for social welfare and development schemes it was £3 million, and for reconstruction £10 million—a total of £42 million. There is a difference of £9 million between what we are going to give them and the requirement estimated by Sir Wilfrid Woods. I repeat therefore that we have covered war damage in the £31 million—[HON. MEMBERS: "No."] Yes.

That is the whole gravamen of our figures. It is all very well for Sir Wilfrid Woods to make what I have no doubt was a most careful estimate and say £29 million, but with changing world prices we do not know whether in fact it will be final. The sum may be very much more.

It also may be very much less. In fact, all the indications are that prices will never, as far as we can see, be so high as they have been recently, but, as the years go on, will probably come down. [HON. MEMBERS: "No."] Yes, it is as fair an assumption as the assumption made by the other side. I agree with the right hon. Gentleman that this is the core and centre of the charge of bad faith levelled at this Government, and I for one feel that it should be answered. I like to feel that any Government I belong to, or any other organisation, keeps its promises and does not break faith. If I felt for a moment that this Government had broken faith I would be the first to come to this Box and say to the House that in my view it had done so. I looked at these figures and the facts, and I am positive in my own mind that this Government has not broken faith, and I do not want the Maltese people who stood by us, and by whom we are now going to stand, to think that that faith has been broken.

Have we or have we not an unlimited liability for war damage and other incidental expenses?

I will come to that if I have time, but that raises other considerations which the House has not so far considered. If we give the Maltese a blank cheque, which is apparently the suggestion made from the other side, would it be astonishing if they did not take advantage of it, and used it to the utmost? Of course we have to keep our promise, but we have to keep it with our feet on the ground. Experts have been out there, and they have come to the conclusion that the war damage estimate is £29 million. As I say, we have more than covered it by the £31 million I have mentioned, and in addition we have also covered other items. I was saying, before I was interrupted, that the total global figure of £42,500,000, which Sir Wilfrid Woods arrived at, included social reconstruction, welfare and the rest, as well as war damage. Towards that figure we are finding a total of £33 million, with the possibility of more to come from the Colonial Development and Welfare Fund, which I think is very good. After all, this country has its troubles as well as the Maltese.

I would remind the House and the hon. and gallant Member for Hythe (Brigadier Mackeson), who has just come back from Malta, that the Maltese are not doing so badly at the moment; they are doing quite well, because wages and employment are good—I should like to feel that things were equally bright in this country. Although we must pay the tribute due to the Maltese, we have, as the hon. Member for Aylesbury (Sir S. Reed) reminded us, to remember the British taxpayer. What we are suggesting here keeps the promise which was made, and is a generous gesture to the Maltese in the troubles which face them. I do not want to speak too long, but I want to hammer home that particular point. The difference between the two sets of figures is £9 million, and Sir Wilfrid Woods' figures contained provision for health, schools, hospitals, sewerage, housing, education, and for all sorts of things which are highly desirable, but which this House did not, in 1942, promise to provide at the British taxpayers' expense. It may well be said that the £9 million could be allocated to these things but we certainly did not take responsibility for them at that time.

The assistance we are now giving over a period to the Maltese can help their economic recovery, and can assist them to meet from their own resources a greater part of expenses which they should bear—because after all, they are living there and enjoying the results. We should see to it that they are not spoon-fed by the people of this country, who have troubles of their own. It has been pointed out by my hon. Friend the Member for South Croydon (Mr. Rees-Williams) that the Maltese pay no income tax, and when we put that beside the burden which even the lowest paid people of this country have had to carry during the war, it is astonishing that right hon. and hon. Members opposite should press us to give what amounts to a blank cheque in this matter.

Since the right hon. Gentleman has specifically mentioned "right hon. Gentleman," I would point out that I was in entire agreement with giving a fixed and final sum for the purposes of reconstruction in payment of war damage in fulfilment of our pledge, at whatever the cost.

I accept that correction. I had forgotten that the right hon. Gentleman is the only right hon. Gentleman on the Bench opposite at the moment, but I began my speech by saying that his remarks were in marked contrast to some of the other speeches we heard from Members opposite. I should like to say one word about the suggestion that my right hon. Friend should indicate that his mind is not closed, and that although this appears to be a final settlement, he should indicate that it will be possible to add to it if need arises later on. No one can bind a future Government. It may well be, although I do not think it will be, that the right hon. Gentleman will be at this Box when pressure is being brought by some of his friends to increase this allocation in a few years' time. He would not feel bound by anything the Labour Government had done, and it is quite impossible, therefore, for my right hon. Friend, not knowing what the circumstances would be, to bind this or any Government in this matter.

That does not mean that if it were right, proper and just for a further allocation to be made, the allocation should not be made. It will be for the Government of the moment to decide when that moment comes, and we cannot legislate now for hypothetical considerations which might arise. We should only be holding out a further promise to the Maltese, who possibly would then say, "We need not worry very much, because if the worst comes to the worst, we can go back to them and get more out of them." We want to get the Maltese, now that they are about to receive what may be described as their own Government, to stand on their own feet and make a financial success of their country. To hold out the hope that they can keep coming back, and that this £20 million, which is, I think, generous, is not a final payment, but only a bit on account, would be a disservice to them and to the people of this country.

I should now like to reply to the hon. Member for The High Peak (Mr. Molson), who took the view that we should look to Italy in view of the fact that it was Italian bombers which created the havoc in Malta. There is a good deal to be said for that, but the trouble is how we are to get the money from Italy. The second difficulty is that we are not the only nation involved. The Foreign Ministers, and, indeed, the delegates to the Peace Conference in Paris, came to a contrary conclusion. As a matter of fact, I was the instrument for this Gov ernment at the Economic Conference, on 9th September, when the announcement was made that we would not look to Italy for any reparations. That was a public announcement, and I am sure that the hon. Member would not want this Government to go back on it, even if it were possible. It is true that the Russians will receive reparations from Italy to the tune of 100,000,000 American dollars, but I would remind the House that they are not getting it in cash and that they are not getting it immediately, but after two years. It will be spread over seven years, and some of it will be paid in kind, such as war material which cannot be devoted to a peace-time use, and for which the Italians themselves can find no use.

The right hon. Gentleman is fully aware that under that agreement part is to be from current Italian production, that Italian reparations were increased to cover the amount that was to have been paid by Bulgaria. Why should not Italian materials be made available for the rebuilding of Malta, instead of the British taxpayer having to foot the bill?

I do not want to get involved in a long discussion on how the reparations, agreed to under the Italian Treaty, will be paid. I took part, as one of the junior delegates from this country, in the discussion of this most complicated matter, which is not easy to explain. But I can say that the materials will, in all likelihood, not be going from Italy at all. They will be imported into Italy, for Italian workmen to work upon, and then will be re-exported to Russia towards payment of reparations. As to production, it is not current now; it is current after two years. You have to let Italy get back on her feet. Frankly, what the hon. Gentleman has suggested is not the way out. You cannot import labour or materials into Malta, and charge Italy with their cost, nor even get labour and materials from Italy for that purpose, because they are not there. In any case, we are bound to our Allies under arrangements which have been agreed and will shortly be embodied in the Treaty.

I end as I began, by saying that my right hon. Friend the Colonial Secretary, in bringing forward this Bill, has brought forward a Measure of which the House and the country can be proud. Instead of breaking a pledge, he has more than kept the pledge which was made with the consent of all parties in 1942. It is our view that when this Bill reaches the Statute Book, and in years to come, the Maltese will realise more and more the help we have given them. Instead of realising that we have let them down, as has been suggested, they will know that their best friends have been the people of this country who, amidst their own financial difficulties, have thought of them, and have come to their assistance in such a magnificent and generous way.

The right hon. Gentleman the Financial Secretary has attacked one or two of my hon. Friends on this side of the House, and although he is welcome to do so it means that some of us intend to stand by our friends in this matter. When he said that some of the words used from this side had been indiscreet I want to remind him that if the moderate language we heard today had been used over the last 10 years, and before, by some of the Members on his side of the House, things might have been very much easier. I welcome the fact that the right hon. Gentleman is a convert on this question, and that we have had something of the same sort from the Colonial Secretary. I have always held the view that one could not be too careful, as a Member of this House, in what one said about international, imperial or inter-colonial affairs, and I welcome the fact that the Socialist Party and the Government have been taking that line today. I hope that Government back benchers will pursue a similar line in their speeches in future, for it was never more needed than at present.

There is a general feeling on all sides of the House that we wish to keep the pledge that was given in 1942. The only real difference between this side of the House, and the other side, is whether we are doing it adequately' in this Bill. Everyone wishes to do what is best in the interests of the Maltese people, because we realise the terrible suffering they have undergone, and what the bombing of their island has meant. Some of us, and I am one of them, who have had our own houses bombed, and have had to seek lodgings, realise even more the extreme discomfort which the Maltese people have had to undergo. So, let us all start from the basis that we all sympa- thise with them, and want to keep the pledge which'we gave. I agree with the Financial Secretary in what he said about the British taxpayer, who has to bear a very heavy burden and terrible privation at the moment.

But I am against this Bill because, whether there is a limitation of £30 million or not, it is the wrong time to deal with this matter now. According to the Government's own White Papers, we are on the verge of a financial crisis, and we cannot possibly tell what £30 million will buy in three or six months' time, or in three or 10 years' time. If you like, let us say, "We will give you a token credit to go on with," but what is the good of trying to deal with the whole matter of the future reconstruction and war damage of Malta, which are mixed up in this Bill, until you have settled its future? What is to be the basis of Malta's utility and development in future? Will it be a big military centre or not? How is it intended to deal with the surplus population of Malta? It is wrong to have a Bill of this sort until you have decided these matters. May I ask him, when we come to the Money Resolution, to tell us whether the materials which will go to Malta from this country will count in the figures of our export trade, because they are not trade as I understand it; they are a gift to the Maltese.

I have no wish to take any great time on this subject, but I regret the controversial note which was sounded by the right hon. Gentleman the Financial Secretary. I have tried not to accentuate it in any way, and I think I have succeeded, but I think this Bill is hopelessly ill-timed from the financial point of view. Beyond that, it is a great pity that much more consideration was not given to this question of reparations for Malta during the last 18 months. From the events of the last week it looks as if the Government have now muddled away the chance. My third point is that with the present position in regard to materials and finance in general, this is a completely wrong time to bring in such a Bill, for it means that we give a nominal sum today without the haziest idea of whether or not it will carry out the pledge, which was to make good the war damage. That is where we differ. I think most people want to keep the pledge, but I do not think this Bill will necessarily do so, whatever is the intention of the Government.

I have indicated to the Financial Secretary that, if it is possible, I should like an answer today as to whether the goods exported for the purpose of reconstruction in Malta come under the general list of exports. In this case they are a gift, in the same way as goods which come in under U.N.R.R.A., and I should like to know if they are definitely included in the total amount of exports, because if they are, they are not necessarily balanced by imports.

They will, of course, appear, when and if they are exported from this country, in the trade returns, as exports. I would remind the hon. Gentleman that the use of this money by Malta will be spread over a large number of years, and that not all the materials for which this money will be used will come from this country. In fact, a lot of it may not be spent upon materials at all, but in other ways. Goods and material exported from this country will not be left out of the trade returns because the destination is Malta. Although the hon. Gentleman described these as a gift, in actual fact these things will probably not be sent by the Government, but by private exporters, who will, of course, receive payment.

In formally thanking the right hon. Gentleman for his answer, so far as I am concerned, the larger the proportion of this money which is spent on goods in this country the better I shall like it.

I wish today to raise the question of the supply of British Iron and Steel Federation houses. I am sorry that that part of the House which normally contains the greater proportion of Members interested in the Iron and Steel Federation seems to be so empty, but as I develop my argument perhaps the reason for that will become apparent.

The first question which I would like to address to the Parliamentary Secretary is, who is, in fact, responsible for these houses? At one time, practically every commercial concern was claiming the credit for them; but now, in some strange way, it seems that nobody is responsible. Hon. Members may think that as these houses are described as British Iron and Steel Federation houses, the British Iron and Steel Federation may be in some way involved, but that, apparently, is not so. I will read a letter which I have received from a firm called Steel Houses Limited. The general manager writes:

"I think I should make it clear, in the first place, that the British Iron and Steel Federation are not directly concerned in the provision of British Iron and Steel Federation houses. They produced designs for the house which were handed over to my company on its formation, and not at any time have the Federation taken part in the provision of the houses"

I happen to notice on the note paper— I suppose by one of those commercial coincidences—that the telephone number of British Steel Houses Limited appears to be the same as that of the British Iron and Steel Federation. I am glad to see that the Senior Member for the City of London (Sir A. Duncan) is here, because I know that it is also his telephone number. But whatever the connection between the British Iron and Steel Federation and British Steel Houses Limited, which everyone appears to want to slur over, may be that does not rest purely on the question of identity of telephone numbers. It is true there are ten members of this company and it is true only one of them is in the British Iron and Steel Federation. But if one looks more closely at the Articles of Association, one sees this rather remarkable provision:

"In the case of a poll each of the contractor members"—

That is, each of the other nine members—

"shall be entitled to one vote, and the steel members"—

There is only one—

"shall be collectively entitled to such a number of votes as is equivalent to the total votes of the contractor members for the time being."

The House will realise that, however many contractor members there may happen to be at any time in this firm, there can never be any possible chance for them to outvote the British Iron and Steel Federation. It just happens also that the articles provide that this year, at any rate, the chairman of the company shall be nominated by the British Iron and Steel Federation. I make these points because I know that the Senior Member for the City of London is very interested, personally, in the supply of houses, and because I feel that if he realised the degree of control which his Federation have over the—I am so sorry, Mr. Deputy-Speaker, I believe I have been addressing the wrong Member entirely. "If the Senior Member for the City of London were here," is what I should have said. But one can understand if the affairs of the British Iron and Steel Federation are in the confusion of those of Steel Houses, Limited, he would be fully occupied elsewhere.

In order that we may see the degree of muddle, confusion and incompetence which has marred the programme of the production of this company, let us look at what has been said by the British Iron and Steel Federation about their houses, and compare it with what has, in fact, taken place. I have a copy of a document which the Federation were kind enough to send to all hon. Members. It is entitled, "The Battle of Steel." In one chapter, entitled "Mulberries and Houses" they say:

"The British Iron and Steel Federation has for some time been carrying out research on the construction of permanent steel houses —as opposed to the temporary structures sponsored by the Government as a stop-gap measure.… The industry is not, however, concerned only to show that an all-steel house can be pleasant to look at, comfortable to live in and permanent, but rather to make the maximum contribution to solving the problem of rapid, sound construction, with the minimum of skilled building labour."

Then they go on to explain exactly how they propose to do that. They say:

"The use of steel-frame construction has been general practice in most large buildings for some years. It can be applied with advantage to houses, and will allow the use of any kind of material for walls and roofs. By enabling the roof to be put on early in the proceedings, it makes possible under-cover work almost throughout—an important point in the British climate."

That was the promise. Let us look at the performance. I will take as an example my own constituency, because I believe that it is typical of most housing sites on which steel houses are being erected.

Early in May, my local authority, the Hornchurch Urban District Council, ordered 200 of these houses. On 1st July, they had ready the first site, for 50 houses. At the end of August they handed over two other sites, one for 50 houses and one for 100 houses. It will be seen, therefore, that the first site for 50 houses has been available for seven months and that the other two sites for the remaining 150 houses have been available for five months.

Up to date, 22 houses out of 200 have roofs. That does not seem to carry out the suggestion in the Federation's booklet that roofs can be put on early in the proceedings. I am very sorry that the Senior Member for the City of London is not here, because I would have liked to hear from him what he would describe as "late in the proceedings." It seems a strange way of carrying out in practice the policy of rapid construction. I thought I was right to get into touch with British Steel Houses, Limited, to ask them for an explanation. I suggested rather forcibly that it may have been due to a lack of materials. They replied to me, and I think I ought to quote from their letter. They said:

"Your statement that the Federation and my Company have lamentably failed to supply components is not correct. As mentioned previously, the Federation have no part in the matter."

Though they have no part in the matter, they do appoint the chairman and have 50 per cent. voting representation. With that proviso, I accept that statement. The letter goes on:

"The supply of materials has not, in any way, been responsible for lack of progress. The progress has been entirely dependent upon (a) access to sites, (b) lack of labour."

Perhaps it will give some idea of the commercial competence of British Steel Houses, Limited, and of their controller, the British Iron and Steel Federation, if one just analyses those two items. First, with regard to access to sites. They have had one site for seven months and the other two sites for five months. That fact may have been what influenced the Company subconsciously—and I am not making any suggestion of an attempt to deceive the House, since the Company knew that I was going to use their letter in the Debate—to make a mistake in their own favour of two weeks in the case of the first two sites and just under four months in the case of the larger site for 100 houses, In regard to the dates they give for access. I am sure that the mistake is not at all deliberate since they must have known that they were delivering materials to the sites prior to the dates which they give me as the dates on which they had access.

I ought perhaps to explain the way in which this business works British Steel Houses, Limited, are the central organisation, as I understand it—I know the Minister will correct me if I am wrong— and the local authority chooses the contractor. But they have to choose a contractor nominated by British Steel Houses, Limited. It is a very reasonable arrangement, because British Steel Houses chooses a contractor who is thoroughly conversant with the work. In the case of the Hornchurch sites, British Steel Houses chose—and I make no complaint about it—one of their own shareholders, a very able firm. I make no complaint about it at all; I give it merely as an example of how matters are dealt with.

In order to present a really true picture to the House let me say that British Steel Houses said to me, in regard to the large site in my constituency about which I am most anxious:

"Work commenced on excavation for foundations on 10th December, 1946."

I went down on 27th December in order to see the foundations. It is true that work had commenced on excavation for foundations, but the firm omitted to say what foundations. The foundations of which excavation had then commenced were for a temporary hut for the use of the general foreman when he arrived on the job.

In describing the part which the steel industry—and here again is why I am so sorry that there does not seem to be any representative of the industry present here—plays in this matter, the pamphlet' to which I have referred says:

"The British steel industry believes that in the postwar years its contribution to the advancement of the people's material welfare must be as vital as the part it has taken in securing Britain's survival against Axis aggression."

It seems to me that British Steel Houses, Ltd., who must be in the forefront of this struggle, this life and death struggle for houses, are a little careless about dates. Let me look at their further excuse about shortage of labour. They said, in regard to my own sites:

"At present"—

apparently they refer to 12th December—

"the total number of men available for these three sites is 47, which you will agree is quite inadequate for building 200 houses. Internal work for completion of the houses is entirely dependent on tradesmen, carpenters, plumbers, etc."

I was doubtful and puzzled about their choice of date. I looked the matter up, and found the three sites all endorsed for that date:

"Acute frost and thick fog."

However, I consulted the allotted contractor—-their shareholder—who wrote:

"With reference to your remark on the telephone regarding the number of men stated by British Steel Houses to be on these sites, so far as our own men are concerned"—

Sub-contractor's men are omitted—

"on the Beltinge Road site"—

That is one of the smallest—

"the figure on the average for that week, taking into account absenteeism, is 74, and we therefore presume that some error has been made in giving you the figure of 47."

This does not seem to me a particularly strong argument and it does not show a particular grasp of business affairs to take the foggiest, coldest day of the year, to ignore sub-contractor's men, to choose one site only from three when giving the figures, to give an arbitrary figure for absenteeism and finally to reverse the digits. It would have been much better if they had subtracted the number they first thought of because after all they got the figure wrong. It perhaps did not occur to them that I should have had a labour return for the site in question showing the figure as 115. In case anybody thinks it was exceptional and that the men were crowding along because it was a foggy day, let me say that it is not unusual, because a month later the figure was 106. That figure included 39 carpenters with a foreman carpenter, four bricklayers, nine plasterers and painters and eight other tradesmen. These were for 50 houses of which only half have roofs. As a policy for making the minimum use of skilled building labour, that seems to be interesting. I hope the Parliamentary Secretary will tell us how we make the maximum use of it. The reason for the lower figure is simple. The allotted contractors were standing off the steel erectors. I inquired why. The reason was simple. British Steel Houses provided all the steel cladding needed but the only thing they forgot was that, in order to fix it, it was necessary to have some form of nut and bolt. That deals with the argument that the supply of materials

"has not in any way been responsible for lack of progress."

Here is another example, it appears that it is usual for British Steel Houses to forget to supply nuts and bolts. I am informed when the contractors came to erect the steel framework in the first place they found that British Steel Houses had forgotten to supply any nuts or bolts by which these could be attached to the steel roofs. I am not a technical man but a little practice at Meccano leads one to understand that, if one is fixing a piece of steel to another, one needs a mechanical contrivance of that sort. It is a deplorable thing that the British Iron and Steel Federation have not yet reached that conclusion.

I do not want to weary the Parliamentary Secretary with the many details of the delay and incompetence which has marked the career of these houses—it would take too long—but I will give one or two examples. The arrangement is for a lavatory upstairs with an overflow pipe from the tank in which there is a ball-cock, which is the usual arrangement, but apparently it did not occur to those who constructed the house that the best place for the water to flow was outside the house rather than inside. When the assembly arrived it was found that no pipe was provided to take the overflow outside. In dealing with the prefabricated house that is a serious matter because a hole has to be drilled in the outer cladding and a glass wool partition has to be fixed; that could not be done and the phasing of the job was thrown out. Glass quilting arrived—more than sufficient for the site —but the only difficulty was that it came with an instruction from British Steel Houses saying that it was only to be fixed with a special flat-topped nail and washer but those nails and washers were not sent.

I am sorry that we have not more representatives of the iron and steel trade on the other side of the House today because we ought to impress on them what all this delay in the erection of houses means in terms of human misery. I have been looking through my local housing list and have picked out one or two cases. One is of a man and wife with three children over 14 who have no separate accommodation at all and have to live in three rooms with four other people. Another is of a war widow with five young children, four of whom she has to send to an institution. She lives with one in a small ill-lit and completely unheated room. Up and down the country there are families deprived of homes and any chance of a decent and ordinary life by the bureaucratic inefficiency, incompetence and muddling of the British Iron and Steel Federation and its creature, British Steel Houses Limited.

The only parallel is the Crimean War and the supply method then adopted. There were great quantities of boots in the Crimea but they were all for the left foot. So closely to my mind do British Steel Houses Limited follow the pattern of the Crimean War supply methods that one wonders whether the right hon. Gentleman and his associates on the British Iron and Steel Federation are not waging a private war of nerves against the Soviet Union.

My suggestion here is that in order to succeed with these houses—I hope the Parliamentary Secretary will deal with this matter—the job ought to be properly phased and the only method by which prefabricated houses can be erected is to have a group of men who are expert on a particular job and go from one job to another. In order to do that one must have a steady supply of material. One cannot get a steady supply unless there is a central depot of which there is in charge someone a little more competent than whoever it was who composed the letter to me and who knows, for example, that if one sends out a number of steel frames one must send out so many steel bolts to fix it.

I have said sufficient to be able to say that when one compares the record of the British Iron and Steel Federation in this matter with their performance it is possible to say, what a record of incompetence—and when one looks at their promises—what a record of conceit. I hope the House will therefore excuse me if I take a moment longer to follow the strategical plan of the right hon. Member for Woodford (Mr. Churchill) and say a word or so about tyranny. The British Steel Houses Ltd. concluded their letter to me with the following observation which I commend to the Parliamentary Secretary. It says:

"I feel therefore that your question might be devoted towards obtaining the necessary labour for these houses and I can assure you that when this is forthcoming, the builder) will rapidly produce finished houses."

I would like to ask the Parliamentary Secretary how many people they require for these houses. They have 115 and are standing off men now. How many do they need? Leaving that aside, it is of course true that everywhere in the country there are grave problems of labour and how labour and materials can best be used.

I thought the best thing I could do in carrying out this idea was to have some sort of conference in my constituency where we could meet together, all the organisations, to discuss housing, and this very question of labour. But I was up against one difficulty, and this is where I again work my way round the Federation. It happened that the only hall available in my constituency was a British Restaurant and it has the misfortune to be built on the ground of a firm very well known to hon. Members of this House because its product, at any rate indirectly, is responsible for about two-thirds of our correspondence. They manufacture a duplicating machine. Roneo, Ltd., is the name of the firm, and it is controlled by a group. One member of the group is actually supplying parts to these houses, and another member is represented on the Iron and Steel Federation.

I thought that from them I should have sympathetic treatment. But what happens in practice when one tries to carry out the advice that these great magnates give one? I have been informed by the Chairman of Roneo, Ltd., and I think it is right that I should give the House his name, it is Mr. G. S. Maginness, that if I dare to apply to the Hornchurch Urban District Council for the use of the British Restaurant to hold the meeting there on the subject that the British Iron and Steel Federation suggests I should discuss, he will step in as ground landlord and get the council to ban the meeting. Let me make absolutely clear what Labour Members are up against. I sent him a copy of what I was going to say, and he wrote as follows:

"You have been good enough to send me a copy of the report you propose to submit for discussion at your meeting on 14th February, but I think you will agree that it would not be feasible to expect me to undertake to examine such documents on each occasion before the hall is let for a meeting, and that is what would have to happen if we departed from our practice. In these circumstances, I am very sorry that my company cannot see its way to depart from its previous practice."

And what was the previous practice? I have checked up, and on no occasion which I can discover was the Tory candidate in the General Election refused the use of the hall. I have put this matter to Mr. Maginness and he has assured me that the fact that the ban was imposed at the time when I became a Member of Parliament is purely and entirely a coincidence.

We are to have our meeting. A youth organisation has long planned a social entertainment but is prepared to give it up. I have quoted the instance to show how ready one industrialist is to sabotage the other, how little interest these great men in the steel and associated industries really have in the welfare of the ordinary man, and how particularly ill-fitted they are to deal with any task which affects' the ordinary man's welfare. May I emphasise this again? I am holding a meeting for everybody—there are even Conservatives on the conference arrangements committee —to consider matters which affect the housing of the very work people of the man concerned. What happened is that it is left to workingclass boys and girls to give up their own scant leisure and entertainment so that a hall built with public money can stand idle and untenanted as a tribute to his powers as ground landlord. There we have tyranny open and unashamed.

I have taken too long already. Let me sum up finally the two questions I wish to put to the Parliamentary Secretary. They sum up all I want to say. First, how on earth were the Ministry naive enough to be taken in by the promise of the British Iron and Steel Federation? Second, now that he has had—as he no doubt will have had from other hon. Members—an account of how they are carrying out their work, does he suppose that there is any reason to believe that either the British Iron and Steel Federation or their creature, British Steel Houses Limited, have either the confidence, the drive, or the good will to assist in the housing of the ordinary men and women of this country?

I am very glad indeed that the hon. Member for Hornchurch (Mr. Bing) has raised this matter. It is certainly true, as he himself has suggested, that this problem is not merely one which has arisen in his constituency. In fact, up and down the length and breadth of this land this steel house is protruding its ugly nose upon the landscape. In my constituency we have 80 of them at present in course of construction. As we have gained experience of these houses, certain aspects of the problem have arisen which are slightly different from those which my hon. Friend has outlined but which, I think, are also of importance not only to the local citizen but to the national taxpayer. The housing authority in my area, driven by the desperation of the housing position of so many of its people, placed an order for 80 of these houses. As they go up we have begun to see just what is involved in the proposition. We think that the steel house is a pretty poor bargain indeed. We do not like its design, we do not like its appearance, we have serious doubts about its durability, and we are outraged by its price.

As my hon. Friend has said, we are wondering a little how it came about that my right hon. Friend the Minister of Health was ever inveigled into lending his support to the scheme for the production and issue to local authorities of large numbers of these houses. As we come to inquire into the facts of the situation, we begin to realise just what has happened: namely, that these super industrialists came along to the Ministry of Health and said, with all the power of their experience and status behind them, "Just give private enterprise a chance and the houses will come rolling off the production line in their thousands." A figure of something like 30,000 of these steel houses was guaranteed to be produced, like rabbits out of the hat, in order to relieve the des- perate position of this country. I think obviously the Minister responsible thought that if some of the most reputable firms in the country were given a Ministerial go ahead, then 30,000 houses would be produced.

I can hardly blame my right hon. Friend—in view of the fact that rapid performance was promised, and a guarantee given of the immediate availability of the materials and components required—for having said, "All other considerations are overruled by this consideration of speed." But what has been the result? We have had some very animated gibes from Opposition Members about the housing targets of the right hon. Gentleman the Minister of Health. I should like to point out that against the 30,000 houses promised by these giants of private enterprise the housing return today of steel houses completed in this country is nil. I am prompted from behind that the number is now 10, so that something must have happened in the last week to speed up the delivery of bolts and nuts. But that is against the figure of thousands which was the basis of the offer originally made and on which we proceeded.

The biggest recommendation of these steel houses was that they were to be had so to speak, "off the peg," and, therefore, there has not been, quite understandably, the meticulous argument about their design, cost and other factors that there otherwise would have been. If this offer now proves to have been a "phoney" one these other considerations become of increasing importance In my own area we have had a chance to see these houses going up, and we are concerned about three factors which will arise more and more as the propaganda atmosphere of housing gives way to the more solid assessment of what we have achieved in the way of housing. These steel houses are inferior in size, inferior in design and inferior in our opinion in durability. I hope that the Parliamentary Secretary is not going to tell me this afternoon that the Dudley Committee approved of the design of these houses and that that is sufficient guarantee of their quality. I do not care if 100 committees have passed the design. We still think it is inferior.

These houses are what we call ring-of-roses houses. There is the central chimney stack and around that there are grouped three rooms and a hall, all with inter-connecting doors. By joining hands, it would be quite easy for the family to play ring-of-roses round the central chimney stack if the doors were left open and, in view of the size of these houses, it would not be necessary to have very many members in the family to form the ring. Instead of the traditional English fireside there is a hearth which is only comfortable on one side and the poor wretch who sits on the right side, against the door leading into the dining recess, is in the full line of the domestic traffic as well as of the draughts.

More serious than that is the question of size. This is only an 880 square feet house. It is true it has got some outbuildings which add another 100 square feet, but those outbuildings were only added as a kind of afterthought. They are of lighter and cheaper construction than those in the traditional brick house. It is a three bedroomed house, yet how does it compare with the traditional type of three bedroomed house? The steel house has an area of 880 square feet plus outbuildings against 1,059 square feet for the traditional house. So even if we take the outbuildings into consideration we have got 80 square feet less in area: a matter of serious consideration in a small house when there is a family. But—and this is a point which gives us considerable concern—what are we paying for this house with its diminished area and inferior design? I am informed that the cost to my local authority is going to be £1,307 "above the slab," and yet we are building brick houses in Lancashire of the three bedroomed type, the area of which is considerably greater, for £1,170. So for the smaller steel house we are paying £137 more. The cost per square foot works out considerably higher. Frankly I cannot see where the money is going to, and I do hope that the Parliamentary Secretary will give us some kind of indication, by breaking down these figures, of how this cost is reached. It is no good his saying that the additional burden will not fall upon the local authority because, after all, what the ratepayers do not pay, the taxpayers will have to pay, and it all comes out of the same pocket in the end.

This house is supposed to have a 60-year life, but we are not particularly clear on what basis that is argued. The Burt Com- mittee have given their scientific consideration to the merits of this house under the different headings, and I must say that, after reading their report with some care, they do not seem to me to be wildly enthusiastic about it. They point out—and this concerns us in Lancashire where we have very inclement weather to contend with—that the avoidance of corrosion will be an important factor in the durability of the house. They go on to suggest that, for protection against corrosion, certain types of paint will have to be selected and applied and, in conclusion, they say:

"Although the degree of maintenance necessary in the latter part of the life of the buildings cannot be foreseen, this type of house is considered suitable for a 6o-year loan, provided that satisfactory precautions are taken against corrosion of the frames and claddings."

In other words, if we are to have any kind of durability for the house, we have got to add on to this initial high cost an unknown factor of maintenance which may work out at a tremendous figure and add, accordingly, to the total cost.

Having seen these houses recently in one of the finest rainstorms that Lancashire can produce, with all the elements battering their fury against the steel walls no thicker than a motorcar body, I must say that I share the doubts of my own local housing officials as to the 6o-year life of this house, even with all the paint in the world put upon it for its protection. Yet apparently, even the initial cost of this house has not yet been settled, and this is a point on which I wish to be enlightened this afternoon. With the question of maintenance still in the dark hereafter, the constructional price of this house has, apparently, yet to be settled. The cost is to be reviewed after the completion of the first 10,000, in order to find out whether the figure that has been quoted is likely to prove sufficient or not.

I want to ask the Parliamentary Secretary whether, when this review of the price takes place, there is any likelihood of that review being in an upward direction. Are we likely to go into even more astronomical spheres in reaching the price of this 880 square feet steel box? After all, as my hon. Friend the Member for Hornchurch has been explaining, this has not proved a smooth process of construction. All sorts of difficulties and delays have occurred on the site. Are those difficulties and delays going to be taken into consideration in reassessing the cost, and are the taxpayers to carry the burden of the breakdown in the efficiency of the British Iron and Steel Federation's plans? Secondly, if the cost is revised, will it be revised retrospectively, and shall we find that, the first 10,000 having been erected under a guarantee of swift and efficient performance which has not been fulfilled, there will be a retrospective additional payment?

I am sure that my hon. Friend the Parliamentary Secretary is aware that, on the different sites up and down the country where this house is now being erected, all kinds of additional touches are having to be put to it. This is the outcome of testing out the construction in the light of practical experience, and the local officials, or maybe the contractors themselves, have found that they have had to add a bit here and there. In my own area, for example, the Borough Engineer, on his own responsibility, has painted with bitumastic paint the interior walls of certain parts of the building to protect them against the condensation we fear will occur. That is not included in the £1,307 which is supposed to be the total cost of the house.

I want, in my final word, to suggest to my hon. Friend the Parliamentary Secretary that the principle on which we are basing prices for these prefabricated houses is quite wrong. Apparently, what happens at present is this: the inventor or potential manufacturer of the prefabricated house submits his priced bills of quantities to the Ministry, and these bills of quantities are examined and approved by an expert committee; and on that total sum the price is based. That, of course, must mean that one tends to get a higher price for a prefabricated house than one would get for a brick house. Surely, it means that we are getting all the disadvantages of prefabrication without any of the advantages.

Let me give an example in relation to the steel house. It is a steel framed house, to which steel cladding is applied externally. The very construction of the steel frame adds £137 to the cost of the house. We know it is bound to do that, because the frame gives us a duplication of the function of the wall. In the brick house, the wall does the job of keeping the house together, of keeping out the cold and so on. When there is a steel frame, plus steel cladding, there is duplication of function, which does add to the cost. But to offset that we ought to be having two advantages—less manhours taken on the site for construction of the house, and, also, the advantage of the saving in skilled labour of various kinds. But are these advantages being reflected in the present costing system on which the price is being based? We are getting increasingly alarmed at the high price of these prefabricated houses that are supposed to have all the merits of mass production and all the merits of scientific knowledge behind them. But what is happening? These merits are merely being reflected in rising prices, of which, possibly, we have not yet seen the ceiling. Therefore, I want to ask the Parliamentary Secretary if any scientific analysis of the building process in the construction of the prefabricated houses is being considered, and whether we are likely to see a rather more balanced and rigorous method of costing applied to these houses in the future.

I suggest to the House that in the lesson of the B.I.S.F. house, we have a classic example of private enterprise being given its head, a super edition of private enterprise at that. We often hear the Minister of Health taunted because he does not give private enterprise its head. It is said on the benches opposite that if only it were, houses would spring up like mushrooms, and all the homeless would be under a roof tomorrow. Here is an example of some of the most reputable private firms in the country having staked their reputations on a rapid, smooth flow of production of houses, cost no bar. Well, we were prepared to pay the cost, but they have not produced the goods, and I hope that the right hon. Gentleman will learn from this lesson not to trust private enterprise again.

I want to intervene only very briefly in this Debate because the hon. Member for Hornchurch (Mr. Bing), in a speech which Members opposite evidently found more amusing than instructive, have made certain accusations against the British Iron and Steel Federation; and purely out of fairness to them I should like to tell the House a little of what I know of the position of the Federation in this matter. I should like to make quite clear that I have no personal interest whatever in the Iron and Steel Federation, nor in British Steel Houses, and I intervene only out of fairness, and because I happen to know a little bit about their position. Naturally, I do not know what the difficulties in Hornchurch and in Blackburn are with B.I.S.F. houses, but I do know that in my own constituency, Worcester, our experience has been very different.

In order to show the position of the Iron and Steel Federation in this matter, it is necessary very briefly to trace the history of British Steel Houses and show how and why the company was originally formed. In 1943, when the Government Departments concerned were examining the possibility of building houses by methods other than the traditional ones, many technical difficulties immediately became apparent. For example, most of the materials available for cladding were non-load-bearing, and they could only be used if the roof and floor loads were taken by either steel or concrete or some other load-bearing material. Therefore, the steel industry was asked to consider the possibility of a steel framework to take the load of the roof and floor in order that non-load-bearing cladding could be used in conjunction with the steel framework. After some preliminary work had been done it became obvious that if a wholly satisfactory design was to be produced an independent and very intensive study of all the many complex problems of non-traditional housing would have to be made. As no Government Department was at that time in a position to carry out this investigation, the whole matter was referred by the Government to the British Iron and Steel Federation.

Which Government was that?

The Coalition Government. The Federation were asked to take on responsibility for these investigations for the country as a whole. They took them on and engaged a very eminent architect and a consulting engineer with their respective staffs, and the eventual outcome of the research was the first of the experimental houses erected at Northolt at the request of the Ministry of Works in order that their Scientific Department could keep in close touch with the progress of the work being done. The final designs of the experimental steel house were approved by the Scientific Department of the Ministry of Works, and that I think answers the hon. Lady the Member for Blackburn (Mrs. Castle) who was wondering who approved the original designs for these houses. The answer is the Ministry of Works. Incidentally, they also received the approval of the architectural and building Press.

Next came the problem of how best to make the resulting information available to the country as a whole. The steel industry was very naturally only concerned with providing the steel components as and when they were required, but it was realised that unless a large number of these houses were ordered the benefits of mass-producing the components could not be made available to the public. Therefore, a group of the largest building contractors in the country were consulted on how best to get this information over. After careful examination of the new houses these nine large building contractors agreed to sponsor their construction, and it was for this reason that a company was formed in 1946 called British Steel Houses, Limited, for the purpose of negotiation and for coordinating the work for which the nine building contractors would be responsible.

The Federation could take no part in this work at all, but an executive committee was formed by the new company consisting of four contractor members, and four persons with specialised knowledge of those sections of the steel industry which would be called upon to supply the steel components, that is the framework, windows and steel sheeting. This arrangement enabled the British Steel Houses, Ltd., to enter into negotiations with the Ministry of Health on behalf of the building contractors.

I am sure that the hon. Member wants to be fair. Surely the position on the executive committee was that there were four members, nominated by the British Iron and Steel Federation, and they were also entitled to appoint the chairman, and four representatives of the contractors?

That is not my information.

From where does the hon. Member get his information?

There were originally four contractor members, and to them were added people who had specialised knowledge of those sections of the steel industry which were to supply these components, which was a very natural thing. The mere fact that one of these four steel members happened to be the chairman is what apparently annoys the hon. Member.

The actual passage in the article of association is that:

"The steel members of the Company for the time being"—

and the hon. Member will agree that the only steel member is the British Iron and Steel Federation—

"may nominate and appoint four persons to be members of the committee."

That gives them four votes, and the contractors have four votes. Under the next article a member of the Iron and Steel Federation is nominated as chairman, and so he would have the casting vote.

I am sure that the hon. Member will not wish me to enter into a discussion on that, as I have not got a copy with me. These arrangements enabled the company to enter into negotiations with the Minister of Health, on behalf of the building contractors for a large bulk order, permitting the manufacture of components to be undertaken on a mass-production basis.

The hon. Member is giving the House a very detailed account of a very complicated and technical matter. He began his speech by saying that he was not connected with it in any way. Would he care to tell the House from where he derives the information he is now giving?

It is available.

But where did the hon. Member get it from?

From literature provided by the Iron and Steel Federation. Anyone can get it.

If the hon. Member for Nelson and Colne (Mr. S. Silverman) had been interested in housing, he would have obtained it a long time ago.

It was agreed that the Ministry should be responsible for securing collaboration of local authorities and the allocation of sites against the total bulk requirements of the Ministry, it being understood that the contracts would be drawn up between the individual local authority and the individual building contractor nominated by the company for the particular area. It was agreed that the steel components should be ordered in bulk, and the services of the British Iron and Steel Federation were obtained to help in this way. The Corporation act merely as agents for the company, and the steel members of the executive committee give their services completely free in a purely advisory capacity. They are not in any way responsible to the Federation, which plays no part whatever in the conduct of the company's affairs. As I said before, I have no knowledge of the difficulties in the constituency of the hon. Member for Hornchurch, but I have no doubt that the Parliamentary Secretary will deal admirably with the points he raised. All I am concerned about is to see a little fair play. I could not allow the hon. Member to make the accusations he did against the Federation without seeking to show that they have no direct responsibility at all for the provision of houses.

I am sure that the House is extremely grateful to my hon. Friend the Member for Hornchurch (Mr. Bing) for raising this important issue, but before we draw the inevitable conclusion that this venture is a bad thing I think we ought to try and study why it has failed. I believe there are some characteristics of this kind of thing which are good, and others which are profoundly bad, and it is because the bad parts outweigh the good that the net result is almost always disastrous. Since there is some good in it, I believe, when houses are required as urgently as they are today, the idea of getting a standardised design, and processing it by a company whose job it is to see that the parts are manufactured and sent to the site on schedule, has a good deal in it in principle.

Why then did this particular venture fail? At what point did it fail? The first lesson we must draw is that it failed primarily because British Steel Houses, the firm responsible for progressing the manufacture and supply of the parts were more or less obliged—and I say "more or less" advisedly—to acquire the parts that were required from a limited number of firms. I have no doubt that it will be said in defence that that was not so, that the firm could go outside the ring and buy parts from other firms. But, in practice, they do not do so. Almost invariably, the firm is obliged to obtain the parts it requires from a limited number of contractors, which insist on being associated with the organisation which places the orders. It is precisely because the progressing firm is in this predicament that certain parts, nuts and bolts, for example, tend to fall short on schedule, and thereby hold up the whole outfit. Since British Steel Houses would obviously want to get the parts on to the sites complete, as they were no doubt anxious to sell the houses, why is it that they could not get the nuts and bolts as quickly as they should have got them? Why is it that they could not plug up the gap? Why could not they go to small firms outside the ring, and get the parts made quickly?

I think the answer is that the small firms are normally used for this sort of job when the big firms cannot produce the goods. I come from Birmingham, where there are 11,000 firms of this kind. We are extremely reluctant to have anything to do with a firm such as British Steel Houses, for they know perfectly well that, whenever there is a contract going, the good part of it will always go to the big people in the ring, and only the awkward parts of the contract, which involve a great deal of difficulty and loss, will be handed out to them. In fact, it is always "the dirty end of the stick" that is offered to us, and we are therefore reluctant to accept it. I speak as a small manufacturer in the engineering business and it is a pity, from the point of view of the public who want these houses. What then is the cure?

It seems to me that there are two points we must meet in order to overcome these difficulties. The first is that the organisation responsible for the progressing of the production—in this case British Steel Houses—must be (a) an organisation which does not make profits and (b) an organisation on which none of the "big boys" are directly represented. Even if it appears on paper that it makes no profits, if the big firms in the cartels are on its board, the little people will not believe what they read on the paper. So we may as well face it; an organisation for progressing a standardised house, British Steel Houses in this case, ought to be a nationally-owned, non-profit-making corporation and must not have representatives of the big firms on its board. You cannot get away from it, if you want the small engineering firms to help you out.

May I interrupt the hon. Member? British Steel Houses Limited is a non-profit-making concern.

The hon. Gentleman is illustrating the very point I was making. We will not believe that. It may be perfectly true; but as long as there are representatives of the big people on the board we argue—and we also are business men —that their profits can be got in two or three or four different ways.

And they are in the majority.

I am reminded that those representatives are in the majority. However, the point I was making was that not only must the organisation be nonprofit-making on paper, but it must not have upon its board representatives of the big firms who are, in fact, getting most of the business. If that is done, and made quite clear, you will get not only the help of the big firms, but also of the small firms who will be willing to help to block up the gaps wherever supplies suddenly fall short.

There is one other absolutely essential factor. The organisation which progresses' the standardised house or, for that matter standardised equipment of any kind, must in no way be directly connected with the manufacturing side. It must be known that the progressing firm has to place every one of its orders outside its own organisation. Otherwise, I repeat, the little people called in to help will always have the feeling, derived from years of experience, that they are only called in when there is the dirty end of the stick to be dealt with. If, however, it is known that the organisation during the progressing has to place out all its orders for the equipment required, little firms will know perfectly well that they will have a fair deal.

If the Ministry can think in terms of that sort of progressing organisation, setting it up outside Whitehall altogether, having it non-profit-making, with no representatives on its management of the big firms or of any of the firms with which it will deal, we will get what we want. The question may then be asked: "What does that leave? Whom can you put on the board?" When you set up an organisation, like British Steel Houses, you know the types of firms with whom it will deal and you should get business men if you must have them from other types of firms with whom you are not going to deal. That should not be difficult. Having got that kind of progressing organisation I think it becomes possible for the Minister to pass through its demands for a certain number of standardised houses. This organisation will progress the job on modern scientific lines, and through it it will be possible to get the right materials on the right sites at the right times. When that is done efficiently, we will get the right houses at the right price.

I must, in the first place, congratulate my countryman the hon. Member for Hornchurch (Mr. Bing) on the brilliant wit with which he entertained his friends on the other side of the House. I have seldom heard so much laughter and merriment about a serious subject, but apparently his audience was very easily amused. I was glad that, towards the end of his speech, he showed his feelings about the tragedy of the fact that these houses are not finished.

The main burden of his speech was an attack on the Iron and Steel Federation. Those of us who were in the House yesterday will recall the answers given to a series of Questions by the President of the Board of Trade and by the Minister of Fuel and Power, and I think that we shall be interested, after all that has been said in what seems to me very confused and muddled argument, to use the hon. Member's own words, to hear the exact extent of the responsibility which the Parliamentary Secretary will place on the Federation, and the responsibility which his own Ministry must bear.

First, I think I must congratulate my hon. Friend the Member for Hornchurch (Mr. Bing) on his speech, not only for the knowledge of the subject which he displayed, but also because of the brilliant way in which he presented his case to the House. I have listened to many speeches on Adjournment Debates in this House, and I do not remember one more brilliant than that to which we have just listened. I shall not be expected, I hope, to deal with all the points which have been raised during this Debate. I want to give a short history of this steel house from the point of view of the Ministry to show what it is up against at the present moment. We felt that because of the lack of ordinary traditional building material, and because of the lack of skilled building labour, we should adopt all possible, satisfactory methods of supplementing the traditional house by other means of house production; and quite a number of non-traditional types were, therefore, submitted to an expert committee and passed by them.

They selected those which they considered gave the most promise of success. The B.I.S.F house was one of the types selected, and it appeared to us to be a very good type of steel house, because no special factory equipment would be required for the fabrication of its component parts and also because there would be a demand for less skilled labour. Let it not be supposed that no skilled labour is required in prefabricated houses, but less skilled labour is required than in the construction of conventional houses. The British Iron and Steel Federation were the original sponsors of this house, and in conjunction with nine of the largest building and civil engineering contractors in the country, who had been closely associated with the Mulberry Harbour scheme, they formed this special company. British Steel Houses, Limited, to develop and build the houses.

That was an added reason for our going forward with the B.I.S.F. house, because it meant that there was immediately available a large organisation for the carrying out of this scheme. We, therefore, decided to arrange for a programme of 30,000 of these houses to supplement the traditional building programme. These 30,000 houses, according to the statement made to us, would be completed by the 31st December, 1946. That was the programme in front of us. The history of this house is a very good example of the sort of thing which needs to be studied by those who are everlastingly asking for large figures to be given as to the possible number of houses to be produced for this or that programme. It was easy to say "30,000 by 31st December, 1946." But, when they got started on the scheme, it was quite obvious that there were a large number of difficulties, and very soon modifications were needed in the programme. So, on 17th June, 1946, it was agreed that the 30,000 programme was far too large and it was reduced to 15,000 to be completed by 31st December and the whole programme completion was put off until May, 1947. Then, when we got to September, 1946, even the proposals of June were being proved to be impossible of realisation because of the other difficulties which were being met and the number was reduced to 10,000 to be completed by December, 1946. A month later it was reduced to 5,200. When we came to total up the absolute completion of the programme on 2nd January this year we found that the number completed was 70. That is the history of the great programme that was put forward for the building of this house.

The point about all this is that it is so easy to manufacture figures, but so difficult to get the component parts to manufacture houses, and those difficulties have not been taken into account. Probably the most important factor was the failure of the British Iron and Steel Federation to live up to any of their steel programme and their inability in phasing and coordinating the programme of the various parts.

Could the Minister explain what some of those difficulties were? He must have had representations from the Federation. Was it shortage of raw materials based on material supplied by the Minister of Fuel and Power, or what was it?

As is natural, people begin to get a little impatient when the weaknesses of these schemes are revealed.

But it was the hon. Member's Department.

Yes, I can always understand that it is always our Department which is thought about, particularly when it happens to be their political views at any one particular time. We are very thankful for the very kind consideration that is given to us by hon. and right hon. Gentlemen opposite.

The difficulties and shortages were, first of all, in complete sets of steel and then, when that was overcome, as my hon. Friend has said, it was found that they failed to produce the necessary foundation bolts at the right time when the bolts were wanted. The programme has not been so arranged as to fit in and phase. When that was done, there were other shortages of other fixing bolts in other parts of the structure. So we can go on, step by step. [AN HON. MEMBER: "The Ministry of Supply"] We then found that the other equipment was falling behind, and so on.

We felt that if this was to be made a successful programme at all, and the maximum speed and economy was to be realised in the carrying out of the scheme, the normal methods of dealing with it, in relation to the local authorities, would not be appropriate. Therefore, we decided to agree to a price being fixed centrally with British Steel Houses, Limited, for the production of the houses. In order to retain the maximum flexibility in the carrying out of the scheme it was agreed that the actual contracts for the erection of the houses should be made by the local authorities with individual contractors covering their areas. Therefore in effect, we had a scheme which approximated very nearly to the normal methods of building. The local authorities were saved a great deal of trouble in preparing plans and getting out bills of quantities and things of that sort.

When we came to go into the details, of course, it was discovered that the contemplated price would be rather higher than for the normal traditional house, but we felt, since we should thereby be getting houses rather more quickly than if we used the traditional methods, that we should be justified in paying a larger sum for the B.I.S.F. house We went very carefully, and so did our experts, into the constitution of the price. It was also agreed that when the first 5,000 of those houses had been completed the cost would be very carefully analysed and a new price would be arranged as a result of that investigation. That new price could not be made retrospective to the 5,000 houses that had already been completed

The local authorities were not to suffer in any way. We were using our powers under Section 17 of the Housing (Miscellaneous Provisions) Act in saying that a sum would be paid to the local authorities by way of compensating them for the difference between the cost price of the B.I.S.F. house and the normal type house. All that was explained to the local authorities, and because we felt that the house was peculiar in the way in which it was constructed and erected, we allocated the house only to the larger urban authorities who could provide sites for at least 50. Unfortunately, in the carrying of it through, difficulties with regard to manufacture and supply of steel made the programme go awry It was largely subject in the early stages to the shortage of steel of all types.

This is particularly due to teething difficulties in the development of these new types of schemes when one comes to launch them on a large scale. I am bound to say in fairness that in addition to that there was unfortunately, because of the slowness of the temporary housing programme, an overlapping between that temporary housing programme, and the B.I.S.F. programme whereby the materials required for the B.I.S.F. house which it had been anticipated would be set free because of the completion of the earlier scheme were not set free so that there was a good deal of competition between both types of houses in such things as asbestos sheeting and so on. There was, therefore, a slowing-down so far as the B.I.S.F. programme was concerned.

This must be recognised because it applies generally to prefabricated constructions of other kinds in the country. There is an overall shortage of the necessary building labour. While it is true that the prefabricated type of house demands less skilled labour than the traditional house, it still requires a considerable amount of the normal building labour. Those difficulties are gradually being overcome. The supply of steel com- ponents during the latter part of 1946 considerably improved. The difficulty of the smaller parts whose production had not been adequately and properly phased in the early stages is gradually being overcome and I see no reason at all why we should despair now of a steady improvement in the production and erection of B.I.S.F. houses. It must be admitted that they are rather less in superficial area than the standard houses but there are compensations for that in the outhouses which have been provided. I do not agree—and I do not see how I could agree—that they are inferior in design to a very large number of other prefabricated houses and to a considerable number of the traditional houses which are being erected.

I think I can conclude by giving a few details of the position of the programme at the present moment so far as these 30,000 houses are concerned. On 16th January, 14,377 of them had been begun, taking the country as a whole. The framework of 7,786 had been erected, roofs were on 4,236 and the clad walls had been put on 3,146. That is a considerable step forward in the latter part of last year and we have every reason to believe that the programme will go forward and get to reasonable completion. So far as the composition of the body for the carrying out of the operation is concerned, it is not for me to enter into details as to how it is or should be constructed, but we have had other difficulties with other prefabricated types of houses, and while I think the case is clearly proved that there was a good deal of unjustified optimism on the part of British Steel Houses in regard to the programme put forward, I believe that a really good contribution to the housing problem will be made by the steel houses when they overcome the difficulty—

There is one point which puzzles a great many of us on this side of the House. The hon. Gentleman has referred to the shortage of building labour as one of the factors for this slow-up of the programme in general. Can he explain why it is that, month by month, there appear in the unemployment returns thousands of building trade operatives? What is the explanation there?

In an industry such as the building industry there must be at all times a good deal of movement from a completed scheme here to a new scheme started elsewhere. At any particular moment when the return is made that applies on the quesion of unemployed building operatives. Those operatives who are really in course of transmission, from one completed programme to the starting of another, are recorded on that day as being unemployed. But in a great number of cases it is only for a short period whilst in transmission from one occupation to another.

I am very much obliged. Does the hon. Gentleman recollect that when we sat on the Government benches and whenever that explanation was given it was greeted with jeers by hon. Members opposite?

I would ask the Parliamentary Secretary to add to his very helpful and useful statement some information about our previous experience about steel houses. As he is aware—and I see the Joint Under-Secretary for Scotland is on the Front Bench with him—in the twenties in Scotland there were many hundreds of steel houses. They are still in being and are among the most comfortable houses we have. They were known as the Weir house or the Atholl house. As far as I can recollect, there was no difficulty in the construction of those houses. In fact, more were available than the local authorities in those days would take. Can the Parliamentary Secretary explain why in that previous Administration we had a superabundance of those houses and why he is not able to provide them today?

I am not prepared to take as a statement of fact what the hon. Gentleman has said in regard to the overabundance of houses, and so on. Quite understandably, there might have been a sort of hesitation on the part of local authorities to take such a thing as a steel house because a good deal of experience must be had before one can get people to trust such a new institution.

But they are there now They were erected 25 years ago.

Experience has shown that the steel house is a real contribution to the solution of this problem. If we can progress with the investigations we are carrying out in connection with the maintenance of the outside of the house, and deal with condensation inside the house, and prove to people that these difficulties are being overcome, I see no reason why the steel house should not become as popular as any type of house.