GOVERNMENT POLICY

§ Mr. Harold Macmillan (Bromley)

In the Debates which have so far taken place on the Loyal Address there have been two outstanding contributions. Last week the House listened with grave attention and respect to the Minister for Economic Affairs. Many hon. Members have since carefully read and re-read that statement. It was cast in a grim mould. There was little deviation from its sombre theme. It was felt by all its hearers to be of vital, perhaps historic, importance. Yesterday, the House listened to one of the most powerful and overwhelming of the many orations which it has heard from the greatest figure in public life today. The 878 Minister for Economic Affairs, save in his elevated peroration, never deviated from a cold and dispassionate but relentless presentation of the case. My right hon. Friend the Member for Woodford (Mr. Churchill) displayed all the variety of talent and genius which have made him one of the greatest orators in history.

Yet these two speeches, for all their contrast, had one thing in common. Both were formidable indictments of the policy which His Majesty's Government have followed over the last two years. Indeed, in some respects, having regard to the occasion and the position of the speaker, of the two perhaps the former was almost the more damning. This Amendment accuses Ministers in respect both of their past actions, or inactions, and of their future intentions. Two years ago the Socialist Party was in a strong and apparently inexpugnable position. A large majority in the House of Commons, even if not based upon a majority of votes cast, gave them an overwhelming advantage. The Government contained a number of tried Ministers who had learned experience in the testing days of war. This superiority was reflected by a general attitude of members of the triumphant party in the early Debates of the Parliament. We were treated with a mixture of arrogance and condescension which we might have resented had we not realised it would be so fleeting.

I remember that the Leader of the House used humorously to chaff us on our inability to conduct the functions of Opposition with sufficient vigour. He offered to give us lessons; but that was before he and his friends became so sensitive to criticism. Indeed, never have a Government started a Parliament with such a fund of good will. Apart from the convinced Socialists whose suffrages they had obtained, they had with them a large part of the middle classes as well as the general body of organised labour. They had a substantial support from that most important body of the electorate which has little or no party affiliations They had a friendly Press—[Interruption']. They had not started to muzzle the Press then. That came later. Indeed, in all sections of the public, Parliament, Press, and the people, the general feeling was one of good will. Even among formal opponents the mood was one of "Give them a chance."

879 But there was one fatal worm in the bud, one lurking disease which, like a poison, began to eat into them from the very start. This Government ever since they took office have been haunted by their promises. Of course, I know that the Leader of the House, astute politician as he is, has been able—as he did last night—to quote a few saving phrases, a few warning sentences, which were put into the pronunciamentos of his party and which he was able to call in aid. Of course, that it why he put them there. It is an operation which, if I have been properly informed, is known in another connection as "hedging"—£50 each way on Utopia and £5 on that likely outsider Austerity. Let each hon. Member opposite remember and honestly search his heart and mind. Let him ask himself this question—Is it not a fact that the general impression created on the public mind two years ago was that a Labour Government would bring into being—I do not say a universal millennium in a fortnight—I think it was housing that was to be done in a fortnight—but at least a good long step towards it? Abroad, a Socialist Foreign Minister would automatically achieve a deep and sympathetic friendship with the rulers of the Soviet Union. At home, after all the sufferings of the war, conditions of clothing, transport, housing, food and leisure—in a word, all general comfort would rise to standards hitherto undreamed of,

I will not weary the House with the quotations from the speeches of 1945. Ministers must be almost as sick of them by this time as we are. How far away it all seems now. These dreams have melted like the snows of yester-year, and now comes the inevitable judgment upon them. The Minister for Economic Affairs will recognise these words, for he wrote them himself many years ago: Continual professions without performance are the most damaging form of advocacy. It drives away people to bitter disillusionment. And yet, so skilfully was this propaganda conducted through the later years of the war, with increasing assiduity, that not only the congregations but the preachers themselves became victims of their own heresies; for they persisted in this false mood of optimism, in spite of the warnings, for over two years, and some of 880 them, to judge from yesterday's Debate, are not convinced yet. They were remarkable for their blindness. Perhaps the most farcical example, which I cannot refrain from quoting, is to be found in a splendid piece of oratory delivered at Liverpool on 6th October, 1946, by the Attorney-General, and for which I understand he has not yet apologised. On that day he delivered himself of the following rhapsody: The dawn is here. We are marching towards the sunshine of a greater liberty than our people have ever known. To make the people happy, to let the people sing is certainly the object of the Labour Government. Well, I do not know what song they are singing now, unless it be to their former Prime Minister—" Will ye no come back again? "

What a record of two years work! First, the fuel crisis. Does anyone seriously maintain today, except the Secretary of State for War, that the fuel crisis was well handled last year? Even he must be a little dizzy by his sudden transition to the Horse Guards. All this sad story is so well known that I need not tell it once again. The wounds of the last winter upon our economy are still unhealed. Then the food crisis comes along, and once more, conflicting statements, confusion, uncertainty and disorder. I am not myself what is called "calorie-minded," but since it is the accepted standard of measurement, let us remember that the Minister for Economic Affairs told us that we are to be reduced from 2,870 calories to "just below 2,700." It is, perhaps, worth remembering that a careful and scientific investigation has shown that, at the worst moment of the slump in 1932, in Stockton-on-Tees, then my constituency, the unemployed man consumed 2,910 calories; and, in Newcastle in 1933, the same scientific inquiry showed a total consumption of 2,837 as the average intake of the unemployed man. Now, the average for the whole country is to be under 2,700.

Next, the housing fiasco. The right hon. Gentleman the Leader of the House last night made a spirited if rather stale attempt to refute the charge against his own administration by a comparison between the period after this war and the period two years immediately following the first war. It is easy to be wise after the event and, indeed, as somebody wittily said, it is wise to be wise after the 881 event. The purpose of looking back to the past is to learn its lessons and apply them. That is what the National Government did in the very throes of war. The Leader of the House did not tell us that. He did not tell us of the plans made by that Government, of which he and some of us on this side of the House were Members—plans to build up the labour force to a very high figure, and that force has, in fact, been available to Ministers. At the same time, plans were made to manufacture various types of prefabricated houses. [An HON. MEMBER:" Give the figures."] If the hon. Member will wait a minute, we will come to the figures. The right hon. Gentleman did not analyse the figures—

§ The Lord President of the Council (Mr. Herbert Morrison)

If the right hon. Gentleman will forgive me, I was talking about houses, not paper.

§ Mr. Macmillan

So are we. The Conservative Party did not claim that a great output of permanent houses could be achieved in the first two years, but we said that we would undertake to build 220,000 permanent houses in the first two years after the end of the German war. Of course, that was laughed out of court as hopelessly inadequate, and even the right hon. Gentleman the Member for Wakefield (Mr. Arthur Greenwood) called it chicken feed. Now, with great pride, the Leader of the House tells us that his Government have built 226,000 houses in the same two years, but he did not tell us—he carefully refrained from telling us—that nearly half that number—103,000 out of 226,000–were the "paper" to which he has just referred—prefabs. It is true that, in the two years from the end of the last war, housing was not conspicuously well handled. Indeed, it could not have been; it was handled by Dr. Addison. After two years had been wasted, he was summarily dismissed by Mr. Lloyd George for being incompetent. What did he do then? He did what all incompetent Liberals always do: he became a Socialist.

In his valedictory letter to one of his old retiring colleagues, the Prime Minister used the words that "age must give way to youth." Age, in the form of the right hon. Member for Wakefield, goes out, and youth, in the form of Lord Addison, comes in. The truth is that if the second world war had not come about, the 882 immense strides to settle the housing problem would have led to a rapid solution. Let us give honour where it was due; it was due, above all, to the efforts and tireless labours of two men, Mr. Neville Chamberlain and Sir Kingsley Wood.

Then came the financial crisis. I hesitate to tread upon the ground of finance where even an Agag might prove too clumsy. I fear I am not competent to join issue with an expert knowledge in the more intricate parts of the Chancellor of the Exchequer's apologia. Since he made his speech last Friday, I have read it several times over carefully, slowly, and aloud to myself. But I am still—and that is the experience of other hon. Members on all sides of the House—somewhat befogged and confused. Perhaps I was meant to be. The Chancellor would have made a perfect conjuror. He has all the patter, all the quickness, and the rather dramatic personality that is required. But, all the same, dazed as one is by the flood of talk, and mesmerised by the rapidity of the sleight of hand, one yet has an uneasy feeling all the time that one's gold watch could not really have been turned first into a rabbit, and then into a glass of water. And one's dismay is all the greater when one gets to one's seat and finds that the conjuror has kept your watch.

Nor do I wish to enter into the battle of the economists. I thought, considering his doctorship, that the Chancellor was a little hard on the professors. Of course, Professor Robbins and Mr. Harrod are not so well informed as the Chancellor. They have only the sources of information which the Government choose to reveal. But I think "old wives' tales" was a trifle severe. Perhaps, I might put it this way. The Chancellor is better informed, but the professors are more objective. The Chancellor is counsel for the defence and the professors are expert witnesses, to be duly browbeaten, of course, by counsel. But, nevertheless, expert and impartial witnesses.

The truth is that the Chancellor, so it seemed to me, proved too much in his speech. First, like the magistrate in "Albert and the Lion' he gave the opinion that" no one was really to blame." He said that he had always been against convertibility, which he accepted" with very great reluctance." Then, on 8th July, he clearly thought 883 that he had made arrangements to avoid any substantial dangers which convertibility might hold for us, because he told my right hon. Friend the Member for Warwick and Leamington (Mr. Eden): In a large measure, 15th July has already been discounted, and the additional burden of assuming these new obligations … will be noticeably less than many people may suppose."—[OFFICIAL REPORT, 8th July, 1947; Vol. 439, c. 2150.] Than who supposed? The Chancellor? The professors? The Opposition? The facts prove that the critics were right, and that the Chancellor was wrong, for the rate of drawings, which were running at 75 million dollars a week in June, rose to 115 million dollars a week in July, and 150 million dollars a week in August—twice the rate. By mid-August the game Was up. Surely, a rise of from 75 million dollars a week to 150 million dollars a week was a noticeable effect. It was a devastating effect. It has involved the blocking of the last 400 million dollars of the loan, and, which is not at all a pleasant thing even under duress, it has involved the breach of a solemn treaty obligation by His Majesty's Government.

Nevertheless, the Chancellor tells us that there has been no leakage, voluntary or involuntary. I observe, as Professor Robbins points out very accurately, that some £230 million of the dollar credit was, in effect, used for the repayment of capital or of block sterling, not upon current account at all. This was a voluntary leakage, but was it wise, or was it well timed? Why at this particular moment was it necessary to make these payments to India and elsewhere? If there was no other leakage, and everything else happened according to the plan, why did the drawings double? It was not because the planned expenditure of the Loan, about which I will have a word to say later, had arranged for twice the amount to be spent on dollar purchases during those particular weeks. Perhaps the answer is to be found in the Prime Minister's statement in the Debate on the first day of this Session. He said: The problem was very fully discussed … before we parted for the summer Adjournment. Since that Debate the world situation has deteriorated. Our own position has necessarily got worse with it. Indeed, the immediate effect of that Debate was to accentuate the dollar drain,"—[OFFICIAL REPORT, 21st October, 1947; Vol.443, c. 39.] 884 I am not surprised. I remember the speeches that were made in that Debate by the Government side and I remember the Prime Minister's own speech. It seems that, by the Prime Minister's own admission, his observations caused an immediate flight from sterling.

There used to be a Defence Regulation against the spreading of alarm and despondency. I do not know whether it still stands, but the Prime Minister's speech calls it a dollar drain. Once we had a Prime Minister with whose every speech the prestige and glory of Britain rose like a star. But, however low the Government have brought the national prestige, this leakage ought not to have been possible. Convertibility was not supposed to apply except to current transactions. The rate of legitimate current transactions ought not to have been very different after 15th July–15th August from what it was immediately before or after. Why, then, did the rate of loss double within a month?' Clearly, the Chancellor did not expect that it would, hence his reply. He would not have given an untruthful reply, and on 8th July he clearly believed that watertight arrangements had been made by the nationalised Bank of England. By the way, there will be no bankers ramp for Ministers to climb out on this time.

I repeat, why did the rate rise from 75 million dollars to 150 million dollars? Either there was a fatal flaw in the so-called "gentlemen's agreements," or they were broken. Perhaps it was that foreigners were allowed to convert gross sterling earnings, instead of net sterling earnings, which was obviously intended. Was it, perhaps, because of that, or was it that they were allowed artificially to increase their sales and to decrease their purchases so that they were able to take advantage of the golden opportunity of getting out of sterling into dollars? In any case, the very words "dollar drain," which the Prime Minister used, and which Mr. Snyder, the Secretary of the United States Treasury, also used, assumes a free movement of funds such as used to exist in the old days. I repeat that in theory there can be no drain on capital account. There can only be a transfer of legitimate current earnings.

Therefore, I think the House and the nation are entitled to a clear and simple explanation. The facts are admitted. 885 There is no doubt at all about the character of the transaction, and I say that we are entitled to a clear and simple balance sheet which would give us the answer in an understandable form. No one can say that such a balance sheet was presented in such a form in the Chancellor's speech last Friday. Apart from the issue as to how much of the dollar loan has been allowed to disappear without direct benefit to ourselves, the Chancellor defended at considerable length the use of the loan. He denied indignantly the statement that the loan had been squandered, and he tried to prove this by explaining the percentages of the different commodities that we had bought such as food, machinery, raw materials, tobacco, films and all the rest of it.

Of course, the dollars were not squandered in the sense that nothing was obtained for them. Nobody ever suggested that. They were used to purchase commodities, as the right hon. Gentleman described them. Nevertheless, they were not spent according to any proper plan. If a man with a certain income purchases to a far greater extent than his income a large number of things which are desirable in themselves, such as motor cars, books, pictures and so on, the mere fact that those things have a value does not acquit him of the charge of having misused and, in this sense, squandered his resources. He, as an individual, has committed the mistake which we, as a nation, have committed, of living beyond his means.

None of the agility of the Chancellor can explain two simple facts; first, why the loan, which was confidently expected to last five years, has run out in little more than one year; and, secondly, why at the end of the Chancellor's second year of administration of our finances, our position is so infinitely worse than it was at the end of the first year. There is another vital point, for these are very serious issues. Apart from dollar shortages and our unfavourable position in terms of cash transactions, what about stocks? What is our inventory position? Is there more or less in the industrial pipeline? To what extent have we been de-stocking? Moreover, what is the new position to be? Even now that we have got rid of convertibility, or it no longer runs, it appears that the adverse balance still runs at a devastating rate. It is apparently the policy of the Government to budget 886 for a position in 14 months' time, when the total reserves of the whole sterling area will be reduced to £270 million. As "The Times" rightly observed: Such a figure might be contemplated as the outcome of an unforeseen emergency; as the calculated aim of a fourteen months' policy, it leaves no margin for miscalculations. We have had some experience of miscalculations. The truth is that the Chancellor's policy has been wrong throughout. His internal inflation and his unbalanced Budget have produced an unjustifiable complacency and a false sense of prosperity at home. The first stages of inflation are always more agreeable, like the first stage of any rake's progress. Experts disagree as to what should be the precise figure of capital investment. The Government have now decided to reduce the amount by £200 million per annum. But the totality of the amount directed to capital investment is not the only test. The chief test is its effectiveness, its qualitative value. It is selection, priority, allocation and a central plan which are required. In spite of all the talk about planning, there has been no central strategic plan at the centre. There has been continual tactical interference at the circumference with the whole of industry and commerce. The Government have spent two years at the wrong job. They have neglected their own job in order to interfere with everybody else's.

Before I leave the Chancellor's speech, I must make one observation about his attack upon Lord Woolton. With great and sensational emotion, the right hon. Gentleman brought all his heavy guns to bear upon the statement which Lord Woolton made at Stoke-on-Trent, in which he used the words, "days of over-full employment." This was answered in Monday's "Times" with his usual skill by my hon. and learned Friend the Member for the Combined English Universities (Mr. H. Strauss) who pointed out that the true and only begetter of these words was the Leader of the House of Commons, who used them at his Press conference on 20th August. If the Chancellor of the Exchequer had not been so anxious to convict my noble Friend, he would have been a little more cautious about his attack.

Of course, what both Lord Woolton and the right hon. Gentleman meant was this: While we all want to see a job for 887 every man, We do not want to see such an inflationary state of affairs that there are three jobs waiting for every man. Indeed, the Government's own policy is to create artificial unemployment by withholding raw materials from certain non-vital industries. In that way, by the deliberate creation of unemployment, by making a pool of temporarily unemployed persons, it is hoped to man the more vital industries. Indeed, the old pressure of unemployment is going to be used to secure re-employment and re-deployment of the manpower and womanpower of the country.

In all these spheres of administration—and in these times administration is vastly more important than legislation—Ministers have failed, first as regards food, then fuel, then finance, and then the almost cynical mishandling of our Defence Services, on this side of the House we have always had an affection for the bluff and genial Minister of Defence, which has not been wholly dissipated even by the "piffle and poppycock" speech. Up to that day, or at any rate up to a certain day last spring, our affection was combined with respect. But we have not forgotten how the Socialist back-benchers called his bluff. He struck his flag within a few hours, in a most unsailorlike manner. As my right hon. Friend the Member for Woodford has just observed to me, he is more "Co-operative" than sailorlike.

§ The Minister of Health (Mr. Aneurin Bevan)

When?

§ Mr. Macmillan

At Hull. "Betrayed the nation's need." I have the quotation.

§ Mr. Bevan

The right hon. Gentleman is as inaccurate as usual. Will he quote the words in which I said "the managers in the industry"?

§ Mr. Macmillan

Of course, if the right hon. Gentleman withdraws them—

§ Hon. Members

No.

§ Mr. Bevan

It is altogether too disingenuous. Will the right hon. Gentleman quote the words in which I said "managers of the steel industry"?

§ Mr. Macmillan

I understand that in the quotation of a speech—[HON. MEMBERS:" Withdraw."] The right hon. Gentleman was reported in the Press [HON. MEMBERS: "Ah!"]—I regret I have not the cutting—as having said that the people who have been running the steel industry had betrayed the nation's needs. Is that right? "The people who have been running the industry have betrayed the needs of the nation."

§ Mr. Bevan

The right hon. Gentleman in a few minutes has already changed the original quotation. His first statement was that I said—

§ Mr. Churchill (Woodford)

What did the Minister of Health say?

§ Mr. Bevan

I know the right hon. Gentleman wants me to make his speech for him.

§ Mr. Quintin Hogg (Oxford)

Why does not the Minister of Health tell us?

§ Mr. Speaker

There is so much noise on both sides of the House that I do not know what anybody is trying to say.

§ Mr. Bevan

I merely wish the right hon. Gentleman—which is customary in this House—to quote his authority. Why should I make the right hon. Gentleman's speech for him? Let the right hon. Gentleman give his quotation.

§ Mr. Hogg

Let the Minister of Health tell us what he said.

§ Mr. Macmillan

Both the right hon. Gentleman and myself have some experience of this House. Since he challenges me I must frankly admit I am not armed with the precise words. I, therefore, withdraw the remark. But I shall look up carefully the quotation from which I had drawn only a few phrases—I have not the whole thing with me now—and in a proper way I shall certainly publish again what he did say—and I do not think that there will be very much difference in the broad meaning.

Suppose the Government do finally introduce a steel Bill. Why, what then? Why then, it is argued, the most terrible tragedy may happen, because the House of Lords, it is said, may so delay the Bill that it may not be passed before a General Election. But would this be very bad? "Oh yes, very bad," it is said. But why? "Why? Because the Socialists might lose the Election, and then steel would not be nationalised." But would not that be the will of the people? "Oh no," reply the Socialists. "You do not understand how the thing works. When the people vote Socialist, that is the will of the people prevailing and triumphing; but when they vote Conservative, it is the triumph of the forces of reaction." What hypocrisy! What absurdity! The truth of the matter is, hon. Members opposite know that the House of Lords controversy has been revived for reasons of pure political tactics. In the first place, 892 it is a convenient, if rather stale, red herring to distract public attention from the Government's mishandling of affairs. Secondly, as my right hon. Friend said yesterday, it is an act of appeasement towards the Minister of Health. It is a squalid deal between Ministers whose relations with each other remain consistently unfriendly. For all these reasons I confidently ask the House to support this Amendment.

I notice that some observations which I permitted myself to make outside have incurred the censure of the "Daily Herald." Fortunately, I am in good company, because I shared the pillory with the Primate of All England. Continuing this line of criticism, I was challenged in Debate the other day by an hon. Member for whom I have a great respect, since he defeated me at Stockton-on-Tees, who asked me last Friday—and it was a very fair question—whether I really wanted to see us surmount this crisis or to see the Government go down. The answer is that I passionately want to see both, and I firmly believe that the first is impossible without the second. The right hon. and learned Gentleman the Minister for Economic Affairs made a fine appeal on Thursday. What did he say? He said: … let no man stand in our way."—[OFFICIAL REPORT, 23rd October, 1947; Vol. 443, c. 293.] In all sincerity, I make him this reply: Alas! His friends and colleagues stand in his way by their feeble and faulty administration, by their persistent preaching of the class war, by their malicious attacks on ownership and management, and by their ceaseless taunts against those very industries upon which they know we must depend; and now, most foolish and reprehensible of all, when, to use the right hon. and learned Gentleman's own moving words, democracy and Western civilisation are at stake, by their decision, for purely partisan reasons—and the Prime Minister knows it—to prepare the lists, unprovoked as he admits, and unchallenged as he admits, for a bitter and useless constitutional struggle which cannot unite but which must divide our people. I say to him in all seriousness, and I say to hon. and right hon. Members opposite in all seriousness: Let the Government no longer stand in the way of the people.

§ several non. Members

rose——

§ Mr. Speaker

Mr. Arthur Greenwood.

§ Mr. H. Macmillan

Perhaps I might interrupt, Mr. Speaker, in order to make myself perfectly clear, to the Minister of Health. I have just obtained his exact words as quoted in the "Yorkshire Post" on 18th October, in a report of a speech he made at Hull. He said: We will not leave the industry in the hands of those who have betrayed the nations needs and cannot be trusted to develop the industry to the extent required by our necessities.

§ Mr. Bevan

That is not the managers.

§ Mr. Churchill

In view of the disturbance which arose in the House just now, will the right hon. Gentleman say whether that is an accurate quotation or not?

§ Mr. Bevan

Certainly, but it is the owners, not the managers.

§ Mr. Macmillan

I cannot allow the right hon. Gentleman to ride out on that. If he says the words "the hands of those" does not include management as well as ownership, then I do not know what it does mean.

§ Mr. Arthur Greenwood (Wakefield)

If the altercation has now come to an end perhaps I might begin what I was about to say. I cannot, of course, emulate the polished oratory of the right hon. Member for Bromley (Mr. H. Macmillan), or his carefully chosen words, and I do not propose to do so. Nor do I propose to deal with this situation in that spirit of levity which he showed during various parts of his speech. The more I listen to Conservative back-benchers and Front Benchers the more bewildered I become. The complaint of the right hon. Member the Leader of the Opposition—whose speech yesterday interested and amused me—was that we had a plan. The Leader of the Opposition does not like plans. He likes a nice, juicy freedom going back to the Middle Ages, when every man worked his own will and the devil took the hindmost. What does his master's voice say today? The right hon. Member for Bromley complained that there was "no central strategic plan at the centre." Well, I never knew where else a central plan could be. I never thought it could be at the periphery. Central strategic plan at the 894 centre! That is high-powered planning, that is; that is super-planning.

Who speaks the voice of the Tory Party? Its leader or those apostles of his who speak their own gospels? At one time the right hon. Member for Bromley was himself a planner. This afternoon he went out of his way to pour balm on his leader by describing him as one of the greatest men in the world. That was certainly implied, and in some respects I would admit the claims of the right hon. Gentleman.

§ Mr. Osborne (Louth)

In all respects.

§ Mr. Greenwood

This afternoon what I shall challenge is the right of the present Leader of the Opposition to any place in the making of the future, because I do not think he understands what it is all about. We had from the Leader of the Opposition yesterday, and again today, anathema upon anathema. We have had nothing from the intellectual forces opposite—such as they are—of any constructive kind whatever. I shall revert to that in a moment.

Here, I should like to say something about the programme for this third Session of Parliament. The first two Sessions have been hard; and I take my responsibility for some of the hardnesses that there were during those two Sessions. I think it is right, if we can, to lighten the burden somewhat in the third Session. I am not a reformed character in this matter. I held this view during the second Session. When one looks at the programme for this Session—and the right hon. Gentleman the Member for Bromley admitted that most of it was non-controversial, which is broadly true—one sees elements in it which could not be opposed by either side of the House. It might have been thought, six or eight months ago, that one of the most hotly contested and bitterly fought Bills would have been a Bill about India. Thank God that Bill is no longer necessary. The India Act was passed in the second Session, and if there is honesty of purpose and real patriotism on the other side of the House, then the Burma and Ceylon Bills will follow the same course. [Interruption.] Had the Leader of the Opposition been Prime Minister, he would have avoided bloodshed at the cannon's mouth. Instead of one little corner in the North of India being disturbed and troublesome, the whole of India would 895 today have been in flames. The argument I am putting is that the India Act having reached the Statute Book without any serious challenge from the other side, the Burma and Ceylon Bills should follow the same course.

On the home front we shall see, after 40 years of propaganda and toil on the part of some of us, the end of the Poor Law system. I was very glad that my hon. Friend the Member for Houghton-le-Spring (Mr. Blyton), in moving the Address in reply to the King's Speech, paid attention to the great changes which have taken place. I, personally, shall feel a very proud man, because I have been interested in this question for a long time, as some of my Northern colleagues know. I shall welcome the obliteration from the Statute Book of the horrors of the Poor Law system. Are the Opposition going to oppose that? No, they dare not do that. They cannot oppose the rectification of the charges between the local authorities and the State, although there may be certain things which will cause a serious difference of opinion.

I am sure I shall not make a speech which will receive universal approval from all quarters. There is a nationalisation Bill included in the programme to deal with gas. I was in favour of that earlier in the year, but I changed my mind later in the Session. I would have preferred to see iron and steel in the programme, for reasons which hon. Members opposite will not appreciate. The right hon. Gentleman has no right to say, as he said today, that it is not going to be done. My right hon. Friend the Prime Minister, in his opening speech this Session, pledged this Parliament to deal with iron and steel in accordance with the policy of my party, and that undertaking I accept without reservation. I say, however, that in my view now—and I admit I have changed my opinion; it is not a crime if a man sincerely and honestly changes his opinion—it would have been wiser to have taken iron and steel.

The right hon. Gentleman has said that output is high, and there was a rumour that if we started playing with this industry there would be great perturbation of mind, unsettlement and so on, but I would point out that this policy has been known since the last General Election. We have raised hopes among hon. 896 Members on this side, and fears in the minds of hon. Members opposite, but this year doubts have arisen on this side because it was felt that our undertakings were not going to be fulfilled. I came to the conclusion—and I am speaking for myself—that the wiser course would have been to have faced the problem this Session and to have got the row over. I do not believe that the House of Lords will turn down the gas Bill. But, there is to be another Measure. I am no lover of the House of Lords. I can see no place for hereditary peers in the middle of the 20th century. Had the steel Bill been introduced this Session, the need for the use of the Parliament Act-as it was passed might have arisen, but no need would have arisen for tinkering with it. I am expressing a purely personal view, and my right hon. Friends on the Government Front Bench will, of course, disagree with me. I regard this as a very doubtful political expedient on which we are entering this Session, for reasons entirely different from those of right hon. Gentlemen opposite.

We heard statements about the economic crisis made yesterday and today by Members opposite. They have to make up their minds whether or not there is an economic crisis. Their speeches vary. Sometimes it is a grave economic crisis, sometimes it is a manufactured thing, and sometimes it is supposed to have been created almost deliberately by the Prime Minister and his colleagues. I wish they would make up their minds. There is a Member of the House of Lords who used to be a Member of the House of Commons of whom it was said he had one foot in the Middle Ages and the other in the League of Nations, but the speech of the Leader of the Opposition showed that he had one foot in the United States and the other in the Dark Ages. Although his right hon. Friend has tried today to impress on the House that the Government lack plans, he still in his heart of hearts sticks to his plan, while his great warrior and great leader does not want anything of the kind. After the speech of the Leader of the Opposition yesterday, the real slogan of the Tory Party is "Back to Orpingtonism", whether they are to be Buff Orpingtons, I do not know, not being a poultry expert. I heard it said yesterday that the hon. Member for Orpington (Sir W. Smithers) was the master of the Tories, and someone said 897 in my hearing that there were now two because the Leader of the Opposition had joined him. It is a sad end to a party which claims to have been a great factor in our national life.

I remember sitting in this Chamber, on the opposite side of the House, when the present Leader of the Opposition was Prime Minister, and we were discussing a Motion about the rebuilding of our old Chamber. The right hon. Gentleman spoke passionately in favour of the rectangular Chamber. I can see him now as he described how, in semi-circular Chambers, men went from loyalty to loyalty day by day; how he himself had gone across the Floor more often than any other Member of the House. I agreed with the rectangular Chamber because of the advantage to the two-party system. I earned the deep and almost undying hatred of what was left of the Liberal Party. My old friend, Sir Percy Harris, almost died of a bleeding heart. I still stand by what I said then, that when there is a thunderstorm, a crisis, men and women in this House must make up their minds as to which umbrella they are sheltering under. If the Liberal Party want a little parasol of their own they can have it, but I am talking by and large. This defence of the rectangular Chamber is a serious part of my argument. It supports my view that the strength of democracy in this country is based on the two-party system. I admit that we were usurpers at that time. What is left of the other party can be discarded; I can apply to them that tragic phrase, "displaced persons." The truth is that in this country we have, in the active life of the nation, whether national or local, whether it be in industry, commerce, or anything else, two types of character—the adventurous, who will march and take chances, and the cautious who will say, "Thus far and no farther." At that time I did not call them reactionaries, but now that the war is over, and we can speak more freely, I can say that that is what I meant.

What have the Opposition, those cautious, timid, cowardly men, to offer this country and the world? Nothing, except a return to the dark, bad, and bitter past. I have never heard any constructive proposals from them. On the contrary, I have seen peeping out from speech after speech the old Tory remedy for every economic crisis—economies at 898 the expense of the poor. It has always been, Economise." If that is a constructive proposal then God forgive them. The right hon. Member for Woodford, in a speech, he made at Brighton, said he had no policy at that moment, but that when the time came for him to put one forward—if he ever does—he will have something. He has a jack in the box. Why not release the spring? Let us have a look at it. The box is empty or the jack in the box has lost its spring. The Opposition cannot have a policy; their roots are so deep in the past that they cannot now see the sunlight in the air. Every speech they have made has hinted at economies in our social expenditure in all directions. They cannot offer anything else. They do not understand that they are living in a changing world. This is a changing world. The world is going through bitterness and trial now. This country has been going through a social revolution during the past two years, a revolution not yet completed, and one which must still be pursued. The one constructive line of activity today is that of social democracy. There is no other. The old system is outworn; it is dead. It cannot be revived. The only thing that could possibly take its place would be something infinitely worse, something Fascist inspired.

We are marching now towards social democracy. As many of my hon. Friends know, these two words mean a great deal to me. This is to be the justification for victory in the war. The second world war was not fought against totalitarianism. It was fought by our enemies against social democracy on the Continent, and if we are to justify victory now, if we are to vindicate ourselves for the sacrifices we made, then we must for ever extirpate from our economic and political life every vestige of totalitarianism. That we can only do by this approach to social democracy. We have travelled, in a generation, a very long way and we shall travel a good deal further yet. Social democracy, deepened in its purpose because of our victory against hell during the war, fortified by a richer experience, will, I am certain, march forward. I say to the House that we must choose between chaos or social democracy. Either way will be hard; one way will be ruin. Social democracy will be the final victory.

§ Lady Megan Lloyd George (Anglesey)

The House has just listened to a characteristic speech from the right hon. Gentleman the Member for Wakefield (Mr. Arthur Greenwood), for whom Members of all parties have a high regard and respect. The right hon. Gentleman the Member for Bromley (Mr. H. Macmillan) began his speech by saying that no Government had started off, with a greater amount of good will than the present Government. I think that is true, but I would like to remind the right hon. Gentleman that the measure of the good will of his party was shown by the fact that they moved a Vote of Censure within a short time of the Government coming into Office. They expected the Government to solve the immense postwar problems not in two years but in a few months.

Twice in the last six months this House has been asked to give a Vote of Confidence in the Government, and twice we have been assured by the Government and their supporters that their policy was adequate to meet the economic emergency. Yet each time that Vote of Confidence has been followed by a further and graver crisis. Each time the Government have been forced to acknowledge the inadequacy of their policy by producing another one. Tonight we shall be asked to vote once again, to express our confidence in the Government. Unfortunately, we can only judge them by their record. It is true that the Minister for Economic Affairs made a courageous and impressive speech in the Debate last week, and that it received a considerable measure of approval from men and women of good will in all parts of the House and in the country. But the right hon. and learned Gentleman has made many good speeches before. Indeed, he has been making good speeches all through this Parliament. I wish one could say the same about all his colleagues all the time.

But up to now there has been a wide gap, a gap as wide as our balance of payments, between the speeches of Ministers and the policy carried out by the Government. I will only quote two instances, among a great many. Two years ago, barely three months after the Election, the Chancellor of the Exchequer said that we must save dollars to the utmost. He was quite right. He also said that we must cut down, without any delay, all 900 imports which required dollar expenditure, and yet, in the two years following that speech, the Government allowed the tillage acreage of this country to fall by approximately one million acres. Here is another instance which I would like to quote. The Chancellor has never ceased, quite rightly, to point to the dangers of inflationary tendencies, and the right hon. Gentleman the Minister for Economic Affairs said in his speech on the White Paper in March: We cannot afford increases in wage levels-or shorter hours unless they increase productivity per man year."—[OFFICIAL REPORT, 10th March, 1947; Vol. 434, c. 994.] Yet shorter hours have been introduced. In the five months following that speech. wage increases had been granted to 21 industries, affecting over two million workers; many of them, no doubt, thoroughly justified, many of them, no doubt, overdue, and many of them, no doubt, remedying genuine grievances, but as the right hon. and learned Member for Montgomery (Mr. C. Davies) has pointed out again and again in this House, this is not the way to stop the inflationary tendency, it is another example of the vast gap which exists between the speeches of the Government and their policy.

It will be said that everything is changed now. The right. hon and learned Gentleman the Minister for Economic Affairs is in a very much stronger position. He has greater powers. The test of the new Ministerial set-up will still be whether he is to be allowed to carry out the purpose and intentions of the speech which he made last week. That is the acid test. The right hon. and learned Gentleman pins his faith, and has always pinned his faith, to increasing exports at the temporary expense of the home market. He has always put his shirt on the export market, and, as far as I can see, he is going to put everyone else's as well. The Government have set a very high export target. They are asking industry, employers and workers to work harder and export more, but are they creating the conditions in which they can achieve that target? We are going to be faced with great difficulty in achieving that target. Every country in the world is doing, or trying to do, what we are trying to do—that is to export a great deal more and import a great deal less.

901 The British exporters are meeting very great difficulties. Are they to get assistance from the Government? I would like to quote some of the difficulties they are meeting. They may be successful in securing orders but their actual shipments are limited to a fragment of those orders because they are unable to obtain import licences. I have an instance here of an engineering firm, and there are many other instances, where their orders are halved, for this reason. We hope that the Government will press on with multilateral and bilateral—[Interruption.] I mean import licences from other countries. My argument is that I hope that the Government will press on with multilateral, certainly, but with bilateral agreements as well, on currency and trade so as to facilitate the position of the exporters. May I say that we on these benches welcomed the statement made at Question time today by the President of the Board of Trade in which he announced a reduction of tariffs between a number of countries. We only hope when the details are made known that the agreement will thoroughly justify our expectations. We also hope it is only a first instalment and will be followed up vigorously by the Government.

I would like to say a word about the other side of the Government's policy, the cut in imports, and, particularly, about the greatest single item of our dollar bill—food. The Government have announced a programme, a very large programme, which is designed to bring about a saving of food imports up to £100 million. That is a long-term programme, but as the Government have made it clear, this is a long-term depression. I would ask the same question here: Are the Government going to provide the farmers and agriculturalists of this country with the means to carry out that policy or is it to remain only a paper policy? The farmers, as my right hon. Friend the Member for Bromley pointed out earlier in his speech, need tractors, and yet last year the Government allowed £4 million worth of tractors to be exported from this country. I am informed that tractors are still being exported, not in such large numbers, but they are still being exported while the home market is unsatisfied. There is also a shortage of spare parts, which means that many tractors already in the possession of 902 farmers are completely immobilised and useless for lack of these spare parts, and have been immobilised for months. There is a need for fertilisers, particularly potash. I am informed that factories in Germany processing potash are to be dismantled. I hope that this is not the case. I should be grateful before the end of the Debate for an assurance on that point, because it is very important.

Are the farmers to have priority for the essential equipment of their industry? They need labour and they will not be able to carry out this policy unless they get it. A hundred and thirty thousand prisoners of war are to be repatriated, and we are very glad about it, but they are to be repatriated by the next harvest. Who is to replace them, and where are they to live? They are not going to be housed in camps as the prisoners of war were. Twenty-three thousand houses have been completed in the rural areas and yet, as the right hon. Gentleman pointed out, only about 1,800 have been let so far to agricultural workers. I would like to know, and I hope that we shall get information on this point, how many of the 350,000 houses now being built will, in fact, be let to agricultural workers and, in addition, what is to be the programme of special priority houses for letting to agricultural workers?

§ Mr. Bevan

Does the hon. Lady mean agricultural workers in the agricultural industry or the mechanics as well?

§ Lady Megan Lloyd George

I mean the agricultural worker or the worker in any trade ancillary or essential to agriculture.

§ Mr. Bevan

Then the figures which the hon. Lady has given are false figures because they only relate to agricultural workers working on the land.

§ Lady Megan Lloyd George

I am glad to hear that, but they are all absolutely essential to agriculture. I am only anxious to find out whether these people who are essential to the working of this great plan which is put forward by the Government are to be given houses. These are really not trivial details. All these things make the difference between the failure or success of this vital policy for the cutting down of imports. After all, we are dealing with the most effective way of saving dollar imports.

903 I should like to say a word about the proposal of the Government with regard to the House of Lords. Great indignation has been expressed in many quarters that the Government should choose this moment to amend the Parliament Act of 1911. It is said that it is not necessary, I think the Leader of the Opposition called it an act of social aggression. If I may so so, that description would be far more justly applied to the proposals of 1911 of which the right hon. Gentleman himself was a sponsor. This is a milk and water, an anaemic proposal by the Government, and I should have thought its very tameness would have been shocking to such a full-blooded revolutionary as was the right hon. Gentleman the Leader of the Opposition. The truth is that the right hon. Gentleman is looking at this question from the other side of the barricades this time, and his judgment is naturally influenced by that. We have been asked why do this thing now? There has been no conflict for 30 years. There has been no cause for a conflict. With the exception of two short periods and the Coalition Governments of the two wars, there have been Conservative Governments in this country, and the House of Lords has only been asked to pass Conservative legislation. There was no virtue in that. The truth is that for 30 years we have had in this country two Houses with a single reactionary purpose. That is the real truth of the matter.

But hon. and right hon. Gentlemen above the Gangway say, "Look how exemplary has been the behaviour of the House of Lords in the last two trying years; they have passed the Transport Bill and the Coal Nationalisation Bill with hardly a groan. Of course, because they knew perfectly well that whatever they did, those two Bills would become law by the automatic working of the Parliament Act and their only power, therefore, was to delay the operation of those two Acts over two sessions. But what is going to happen next year when their veto becomes operative? That is the question. What guarantee has the Government that they will not use their veto? Of course nobody can guarantee such immunity, not even the Leader of the Opposition. I believe myself that no Government, placed as the present Government are placed, would be wise to 904 take that risk. If the good behaviour of the Lords is going to continue as hon. and right hon. Gentlemen have implied, why then this opposition to the extension of the Parliament Act? Why stir up all this trouble? Why foster disunity if the Lords are going to behave in the exemplary manner they have already done? To me—and I may say that this is not an hereditary view although it would be all the better if it were—it is not a question of whether one agrees with the nationalisation of iron and steel. To my mind that has nothing to do with it. The issue today is the same as the issue was in 1911, whether a totally unrepresentative Chamber is going to be permitted to frustrate the will of the elected representatives of the people.

Finally there are some who say that this is a political irrelevancy at this time. Perhaps in this connection I may be permitted to make one quotation from a speech made in 1911 by the Chancellor of the Exchequer of the day. He was referring to the Liberal Government, but it applies equally in my mind to a Socialist Government. He said: If the peers rejected their Measures or mutilated them, they were not fighting the Liberal Party, they were making a mockery of free institutions. I believe that that is equally true today, and I believe that such a thing cannot be called political irrelevancy at any time in a democratic country. If I may say so, there is a very much deeper and more potent cause of disunity in this country, and that is the class antagonism which sometimes unfortunately is fostered by members on both sides of the House, and particularly unfortunately by some Ministers. The worst of the offenders has now been confined to barracks. Yesterday it was clear that war had been declared also from the benches above the Gangway. Yesterday Marlborough went to war—the party war—and although the Leader of the Opposition ended up with a stirring appeal for national unity, yet he spent the greater part of his speech in beating the Tory drum as only he can beat the drum. I think that here are far more potent causes of national disunity. I regret it, because I myself believe that the people of this country, exhausted though they are by six years of war, discouraged by rationing and by the prospect of long austerity, if they are united, can show the world that they are still capable 905 of doing what they did during the war, and of showing that endurance and that courage that alone will bring us through the economic crisis.

§ Mr. Parkin (Stroud)

It has been a great pleasure to listen to the speech by the hon. Lady the Member for Anglesey (Lady Megan Lloyd George). It is indeed refreshing to listen to a speech from the benches opposite which is really concerned with present-day policies and with the job we have to do now and in the future. After all, we are supposed to be discussing the problems indicated in the Gracious Speech for the next 12 months, and up to now, from the benches "opposite above the Gangway, we have listened to a series of petulant criticisms of what went on last year or the year before or just before the Election. One has the impression that hon. Members opposite enjoyed themselves during the Recess working up a speech which got better and better each time they delivered it and they really must make it now in the House before it is too late. At the same time, they have lost touch with the situation in the country, because, although the economic situation is so grave and although the people of this country will suffer worse things in the material sense before this winter is out, yet there is amongst the workers of the country the beginning of a feeling that they are understanding what is required of them and can beat the difficulties ahead because now they see the way out. It is only now that the Government have got somewhere, in an overall project for industry, which can be understood by the country as a whole in relation to our export needs, so that we can get down to the details and put a target ahead of the ordinary workers in the country.

It is about one aspect of the improvement in the situation that I wish to speak. I wish to refer to the prospects of improved trade relations with Eastern Europe, with those countries of Socialist reconstruction who are beginning to see the results of their efforts in the last two years, the benefits of getting their devastated lands back into cultivation, and the benefits of their own planning systems. The importance to the future of this Government of improved relations, particularly improved trade relations, with those countries is very clearly understood by the Opposition. In fact, the right 906 hon. Gentleman the Member for Warwick and Leamington (Mr. Eden) paid a delicate tribute to their importance by introducing into the early part of his speech an attack on those hon. Members of our party who went to Eastern Europe. I thought it was a gentlemanly thing on his part to rush in to the defence of the Government in spite of the fact that his own reputation still bears the scars of the attacks made by members of the present Government on him as Foreign Secretary when they were in Spain. In spite of this recollection, he rushes in to invent an entirely new constitutional doctrine—that no one must criticise the Government from outside the country. He need not have troubled himself.

I am sure that my colleagues and Friends on this side of the House do not need to be reassured that the party which travelled around Eastern Europe did not spend its time attacking the Government. It is a monstrous suggestion to imply that anything of the kind was done. On the contrary, we had the opportunity to explain to the people there a good many things which have been left unexplained in the last two years. We explained a few things about the nature and structure of the Labour Movement which seemed in some cases to put us in a rather different light to them, an explanation which might well be studied by the Opposition were it not that it would have a very depressing effect on them. We had to explain that the Labour Movement is not like many Social Democratic parties on the Continent, a tightly-disciplined party with a political philosophy within narrow limits, but a movement containing all elements in the working classes, Marxist and non-Marxists, right-wing and left-wing, Co-operatives, vegetarians and trade unionists. We even have a few members who present Tory criticism in a purposeful and cogent way because of the inadequacies of the Opposition when it comes to a Debate like this. We represent something similar to the National Front which the countries in Eastern Europe have formed to carry out their own plan.

For the same reason, the Labour movement will never split. It is necessary sometimes to explain that, although we have differences of opinion, we never carry them to the length of splitting because it is understood before we start that there are differences of opinion. If high 907 hopes are sometimes entertained by the Opposition that a word of criticism here and there is the beginning of disaster to the Labour movement, one can only remind them of the words of King Charles II to his brother: They will never get rid of me to make you King, James. That was a comforting explanation to some of our friends in Eastern Europe.

Of the trade treaties which are in course of negotiation, I propose to say very little because one does not wish to make any remarks which might upset negotiations while they are in progress, but one or two things need to be said. First, with regard to the agreement with the Soviet Union which is the largest and most important of the agreements at which we ought to aim and which we ought very shortly to secure. It is obvious that both Governments seriously and earnestly wanted a trade agreement. Therefore, when examining the reasons why the negotiations were broken, one is driven to the conclusion that one side doubted the ability or the goodwill of the other really to carry an agreement to its conclusion. Therefore if the negotiations are to be reopened, one side must not merely indicate willingness to reopen negotiations but must lay down specific proposals upon which they can be reopened.

The second point is that there is no doubt that we have not been able to convince the other side that we could deliver the goods they want in return for food and raw materials. That is unfortunate. They have a wrong view of the situation, and it requires re-presenting to them. Not only the Soviet Union but also Yugoslavia have had unfortunate experiences over the question of guarantees. In view of the way things are run in this country, we have obviously not a State bulk buying and selling organisation for the export trade, and therefore we need to assure the negotiators on the other side that commitments will be fulfilled. I should have thought it would have helped the Government in their industrial policy at home to take on certain obligations as targets to present to the trade unions and industries. I should have thought that it would have helped a good deal on a subject such as steel rails or timber-cutting machinery—some of which is made in my 908 constituency, and the Russians would be very glad to receive it—if one could say to the industry concerned, "It is up to you to reach a certain target. We have committed ourselves on your behalf to reach it. If you can reach it or exceed it, so much the better because there is more to be bought with the produce of your labour." It would have helped a good deal in carrying out what I referred to as the implementation in detail of the overall plans now set out by the Government if one could quote specific trade treaties of this kind.

It is a little unfortunate that when negotiators come to this country to inquire what they may buy in exchange for what they sell, they are sometimes turned loose in the countryside, and told "You can go round the factories and look for yourselves." Today industrialists have very full order books. They all think they are made for life and that if only the Government were to disappear they could get enormous quantities of raw materials and carry out the orders they have on their books. In fact those order books are largely bogus because they are duplicated. At the first breath of a depression, the whole thing will collapse and they will be searching for orders. At the moment they are liable to take a weary line with people knocking at the door and suggesting further business. It would be better if the Government played a more vigorous role in arranging co-ordinated deliveries of certain articles.

I want to say no more about negotiations for trade treaties which may be in progress, but I suggest that as a result of what our little group has been seeing and hearing in the last few weeks these targets to be held up in front of our people as incentives can be progressive and augmented. For instance, in Yugoslavia my hon. Friend the Member for Horn-church (Mr. Bing) has suddenly made himself an expert on the statistics of tobacco growing and smoking, and he made a large number of inquiries about Yugoslav tobacco which proved quite an attractive proposition to the Ministers who talked to us about it. Indeed, Marshal Tito himself expressed a special interest in our suggestion that there would be a great future for Yugoslav tobacco, if it could be grown from the type of plant which people in this country like to smoke. I do not want to talk 909 about that as an element in the existing negotiations, for I have no means of knowing whether tobacco is one of the subjects now being discussed, but I think it can be held before the people of this country as a possible extra.

It could be explained that if certain industries produce more than the target, there is an immediate and attractive reward in the way of a fresh import that we can afford. Going to the northern part of the Continent one had similar discussion with Mr. Hilary Mine, the Minister for Industry in Poland, who was talking about the great improvement in agricultural production in his country. He talked rather proudly of the rapid increase in the pig and poultry population. We know we want maize from somewhere else to increase our own pig and poultry population, and I am sure the Government will do all in their power to get that maize which we know now to be surplus. At the same time we can get still more from Poland in addition to the trade agreement which has already been made, for it is clear that, if they are offered deliveries of machinery and of the equipment they need, the Poles are prepared to forego the consumption themselves of this agricultural surplus and will sell it to us.

If we can hold up in front of the people in this country these targets—so much we have now got for bare existence; the next 10 per cent. means bacon and eggs back on the breakfast table; the next 5 per cent. tobacco and other attractive luxuries from overseas—I am sure it would help the Government in the implementation of these enormous tasks which the Minister for Economic Affairs was expounding to us the other day. He has had the duty in the last 12 months of talking again and again in vast global figures which are practically incomprehensible to ordinary people. They do not in themselves provide an incentive; in fact, sometimes he said, "This is not even a target. It is a statement of what we should have to do if we were to meet our obligations." Broken down into targets, industry by industry, that begins to make sense. Broken down into targets, industry by industry, the Minister for Economic Affairs can get over that unfortunate attitude which I detected the other day that this was democracy on the defence, and get back into the enthusiasm which he himself engendered 910 and observed when he used to go round the factories as Minister of Aircraft Production during the war.

Of course the right hon. Gentleman the Member for Aldershot (Mr. Lyttelton) who is so amused by that remark, just would not know what it meant. That is where the real barrier lies in the House. It is a sort of emotional barrier which is quite insurmountable from that side, and I do not think that hon. Members opposite are capable of understanding that the Minister for Economic Affairs can go into a factory canteen at lunch time, address the workers as "comrades," and get an emotional response which brings that increase in production, energy and devotion which will solve our problems. I know it is a thing which, with their point of view, they will never understand but, at the same time, it is so easy from our point of view to get this extra 10 per cent. of enthusiasm and energy from the workers if they know what the target is, and how to go to it.

The Minister for Economic Affairs said that these targets and projects had to be understood right the way down to the factory and workshop level. He has put a lot of time into getting the rather intellectual acceptance of managements on the other side of the cold facts of the situation. Now that has to be translated into an emotional acceptance and enthusiasm on the part of the only people who can produce the goods, those who get their hands dirty. He has spoken several times also about the importance of works councils, joint production committees and so on. That is not democracy on the defence; that is, as the Lord President said, democracy on the march, and that is why, in spite of the meagre material prospects before us in the next few months the Labour movement, as a whole, is gaining courage rather than losing it, and gaining enthusiasm rather than losing it, because we can begin to see our way through.

There is one thing I will touch on before I sit down—these curious rumours about food subsidies. It has been suggested that the Government have been considering removing the subsidies on food. That has not been confirmed or denied, but it is important to point out that if we are really to get this democracy of workshop level working towards targets which can be understood; if we are really to get an enthusiasm for working overtime, for 911 removing restrictive practices, for exceeding norms of output, breaking targets, and so on, we must start with stability at the bottom, we must start with stability of the wage structure. If we are to have a wages policy, we must have a profits policy, we must have some willingness from the other side to enter into an agreement that if there is stability on the one hand, there will be stability on the other. It would be more attractive to us if works councils and joint production committees could have, by law, the right of access to all the information about the accounts of the projects and plans of the firms for which they work.

With good will, however, the same results can very frequently be obtained. I have known them obtained by managements declaring at annual shareholders meetings that they do not intend to pay more than a certain percentage on the shares, so that people who want to speculate in them can take that as a tip and leave them alone; by saying that it is their intention over the next period of years to pay everything above that into re-equipment, expansion and improvement. That helps the morale of the workers a great deal. I have known firms who have explained the balance-sheets honestly to their works councils. That helped a great deal. If there can be assurance, there is no objection to high earnings on the part of technicians or managements. We in this movement have no objection to high earnings; what we object to is that the extra efforts of workers and of managements should be dissipated in inflationary payments to people who merely own shares and have not been near the factory for years. Let the high earnings be paid to managements for good results by all means, and let incentives be given to the workers. However this basic stability of wage structure, if the worker is to accept it, cannot be monkeyed about with by the Chancellor of the Exchequer by the sudden imposition of a poll tax.

If the Government are thinking that the standard of life cannot be maintained over the next six months or so, they ought to say so frankly. If they are going to "do a 1931" they ought to do it properly, and not in an underhand way. If they have not the courage to go ahead and get this extra production, which will 912 fill this gap by the methods I have suggested, and if they really feel there must be a deflationary Measure, let them be honest and not suddenly impose this poll tax on the people, this sudden abolition of the same amount for all classes through the food subsidy. It must be remembered that there are many industries in this country where the average wage is less than £6 a week. There are some where it is less than £5, but I do not want to take extreme cases. It is a very serious matter to cut off 10s., 12s., or 15s. a week from a family income of that size in that way. [An HON. MEMBER: "It is intended to do it."] It may be intended to do it, but, I warn the Government that if it is done there are all sorts of ways in which workers can upset stability. They can go slow, and object to all sorts of existing agreements which have been come to in their particular industry. There are all sorts of ways of defeating a move of this kind. The Government must have the absolute confidence of the workers at workshop level that their basic standard is guaranteed, and that it is not going to be fooled about with.

The ideal on which we fought the Election was to implement our duty following on the war. It was a war against the forces of progress, and against the workers of. Europe. The workers in Europe have won the war and have to carry out their duty of consolidating those gains. Our duty in this democratic country is that of enabling democracy to grow and go forward towards controlling material things, and on that this whole movement is based. That is why we are not in the least deterred by the scoldings of hon. Members opposite at this stage. The Labour movement will take fresh enthusiasm at this point and carry on with its programme undismayed.

§ Major Guy Lloyd (Renfrew, Eastern)

It is always interesting to hon. Members to have the opportunity of listening for a while to anyone who has been visiting the other side of the "iron curtain" and to get his reactions to what he learned there. But the hon. Member for Stroud (Mr. Parkin) will forgive me, I hope, if I do not pursue some of the arguments he put forward, or dispute with him some of the economics he learned there. Before passing on, however, I would like to say that I can never 913 understand why individuals who come back from the other side of the iron curtain—

§ Mr. Gallacher (Fife, West)

There is no iron curtain at all.

§ Major Lloyd

—never tell us the answers to the questions so many people in this country want to know. There are such questions as: What do the Russians do with those who continuously absent themselves from work? What do the Russians do in regard to unofficial strikes? What do tire Russians do to insist upon increased production, and what do the Russians do to discipline those who will not obey the orders of their leaders in the unions? Those are the kind of questions we ask and it would be nice if the hon. Member who has had such an interesting visit with his happy little group of comrades, had been able to answer them.

Today I have the opportunity, as a representative of Scotland, to express the views of the great majority of the Scottish people on this Amendment we have put forward. [Laughter.] Certainly, because in fact Scotland was never led away up the garden path anything like so badly in July, 1945, as were England and Wales. Scotland had not entirely forgotten, as had so many other parts of the country, the lamentable experiences Scotland and the whole country had during those two disastrous years of Socialist Government between 1929 and 1931. Public memory is always very short, and those years are always slurred over by hon. Members opposite. Were they not the years between the wars, which are supposed to have been years of Tory misrule? Scotland has not forgotten the bitter lesson learned as to the true meaning of Socialist promises at the General Election in 1929 and the bitter disillusionment which followed those promises, and the result of the General Election of 1931 when the Labour Government was swept away from power by, I believe, the biggest majority returned against any Government that has ever been booted out by the electors of this country. Exactly the same thing has happened already, within two years or a little more, as happened then, except that the consequences are worse, and likely to be more lasting because, unfortunately, it is not possible now, in view of the tame majority opposite, to get rid of our new masters, as we did then.

914 So Scotland goes on, as other parts of the country go on, suffering from the consequences of that disastrous decision, that period of midsummer madness, in July, 1945. On the other hand, the Scottish people are not surprised at what has happened, because so many of them expected it, and a great many of us on these benches, in speech after speech during the Election campaign, predicted that it would happen, if the people were so foolish as to believe the promises of the Labour Party. Where have those promises gone? They have gone with the wind, and are repudiated everywhere. Now, in spite of the brave new world, and the Socialist Utopia, we are reduced to a state of affairs which even Ministers opposite have to describe as disastrous in the extreme, and as a situation of unprecedented gravity.

At last the wheel comes full circle and the Minister for Economic Affairs tells us the truth, that the promises have gone into the limbo of forgotten things. But the majority is still there, and they have betrayed the nation. It was not because they were not warned. As has been emphasised in speech after speech during the last few days, the Government have had every warning of the way things were going and what would happen if they did not listen to advice. In every single instance those warnings, which came from this side of the House, or from responsible newspapers, have been laughed at and despised. Every time we have warned the Government what would happen we have been mocked at, and told that it was just Tory propaganda. They even suggested that we manufactured the fuel crisis, or had something to do with the cold weather of last winter.

Can it be denied by hon. Members opposite, who make cheap jokes to cover up their failure, that every one of our warnings was laughed at, and that the Minister of Fuel and Power himself denied our suggestions? He told the country there was nothing in it, that it was, in fact, just Tory propaganda. It was the same story about our warnings in regard to the possibility of grave inconvenience through cuts in electricity supplies. The Scottish people were told again and again by Scottish Members of Parliament on this side of the House that that was inevitable. The great leaders of private enterprise in Scottish distribution of electricity warned Scotland 915 that they would have to go desperately short. We warned the Minister of Fuel and Power in the House of Commons, and he was warned by leaders of the industry. His answer was "nothing of the kind. It is Tory propaganda. I should know, and it is not true." Within a few weeks Scotland and the nation suffered because those warnings were ignored. We warned the Government and the people that the American Loan would not last for five years; we said that it would not last for more than a year or two. I said that at many meetings in Scotland, and I was laughed at by the ignorant hecklers at the back of the hall, who said that it was Tory propaganda, and that the Loan would last five years; had not the leaders of the Labour Party always told them so? Where is the Loan today? Again, gone with the promises of the Labour Party.

My second indictment against this Government and against those who sit behind them, tamely earning their thousand a year—which they never put before the people of Scotland as one of those reasons why they should vote them into power at the last Election—is that they have not only broken the promises they gave to the people of Scotland, but have refused to accept any warnings which might have been of great value had they been acted upon in time. My third indictment—and this is a matter which angers the people of Scotland more than any other—is that they have plainly pursued theories, dogmas and doctrines which the majority of the people of Scotland believe are fallacious, and which they now know are fallacious. They have ignored the needs of the nation. Above all, they have ignored the needs of Scotland, and of all parts of the British Isles.

Scotland has received a raw deal from this Government. No part of Britain had more promises given ad lib from every Labour platform throughout Scotland—" We will look after the interests of Scotland, we will see that Scotland has this, that and the other." What has Scotland got that she wanted as a result of the Labour Government? Invariably Labour Party Members from Scotland put the party whip before the needs of Scotland. That is known throughout the length and breadth of Scotland, and there is no honest Labour 916 Member who represents a Scottish seat who does not know that it is true. Hon.; Gentlemen have definitely put the party whip before the interests of Scotland, in spite of the fact that some of them had hopes of promotion which I understand have not been fulfilled.

I have just returned from an enthusiastic campaign in Scotland, where I spoke two and three times a night, and the overwhelming enthusiasm of the audiences, many people being turned away in some cases, show what Scotland thinks. One of the things which irritates the people of Scotland more than another is the propaganda untruth that we on this side of the House have no policy That follows the typical Socialist propaganda in other parts of Europe, based upon the belief that if they tell a big enough lie and go on telling it, it may be believed. That assertion is not true, and the reason why the party opposite continue to make this gross misstatement of fact is because the policy which we follow and have been pressing, and the faith and philosophy in which we believe, are fundamentally different from their own.

We are not a class party. Neither would we form a Government, and never have formed one, as a class party. There is the class party—on the other side of the House. There are those who for years have preached class hatred in the industrial areas of Scotland and who in most cases, owe their seats and salaries in Parliament solely to the fact that they have preached class hatred and endeavoured to arouse class envy and to divide the people of this nation when unity was the most vital essential of all. It is because this is known in the industrial areas of Scotland that they are despised for their broken promises. Now that they have obtained power they are despised because they have betrayed the interests of Scotland, and have put out the propaganda untruth that we have not a policy which can still save the nation from disaster in spite of His Majesty's Government.

§ Mr. Beswick (Uxbridge)

I was surprised at the modesty of the hon. and gallant Member for East Renfrew (Major Lloyd) who got up to speak in the name of the majority of the people of Scotland. I was even more surprised that he should say that the whole position of Scotland 917 depended upon two years of minority Labour Government between 1929 and 1931, I am sure that the majority of proud Scottish people, for whom he pretends to speak, would not say that their entire history depended upon those two years.

§ Major Lloyd

May I interrupt, for the sake of accuracy, to say that I said no such thing? I said that the people of Scotland had not forgotten those two years.

§ Mr. Beswick

But the hon. and gallant Member went on to say that their position has been ruined by the Government of those two years. What surprises me even more is why, if the hon. and gallant Gentleman has all this ability and prescience, of which he so freely boasts, he and his party did not do something about the gap in our overseas trade in the years before the war. If these business people are