§ 6.42 p.m.
§ LORD RANKEILLOUR rose to ask His Majesty's Government whether the organization for the disposal of surplus stores has now been completed; on what basis will the proposed Disposal Department be constituted, what will be the scope of its powers and what other Departments will be enabled to dispose of stores on their own responsibility.
§ The noble Lord said: My Lords, in putting this question I shall add very few observations of my own. The question arises from another question of a similar kind put on October 16 last by Lord Meston. The noble Lord, Lord Pakenham, in answering that question, said that the arrangements which were contemplated were based on the principles stated in paragraph 10 of the White Paper issued in July, 1944. I have examined that White Paper and I find, rather to my surprise, that there will be no fewer than four Government Departments concerned in the disposal of surplus stores. There will be in some cases the Ministry of Supply, in others the individual Departments, in others a new Disposals Department, and in others the Board of Trade. This is very different from what prevailed at the end of the last war, when there was one authority, controlled by the then Minister of Munitions.
§ The system then was that the various Departments made known what stores they wished to dispose of and the Disposals Board dealt with them all, so that the whole business came under one 199 authority. Not only that, but the Ministry of Munitions had the responsibility of liquidating the contracts which were in operation at the time of the Armistice. That was also a very important matter and has not hitherto, I think, been mentioned by any spokesman for the Government. I presume that at the end of the war there were enormous war contracts still in operation. That was the case in 1919, and it required very difficult negotiations to get those contracts liquidated. Whatever other criticisms were made against the system at the time, there was no allegation that the liquidation of contracts then effected was not well and skilfully done.
§ I want to say a word about another point which I think was not mentioned by Lord Pakenham; it relates to the fixed assets, the immovable assets. How are they going to be dealt with? Are they going to be dealt with by the individual Departments—the individual Service Departments in most cases—or by some other body? I am not concerned at the moment to defend the old Disposals Board, but I had to present estimates based on their work twice in the time of Mr. Lloyd George's Government, and, looking back on the then debates, I was agreeably surprised to find what a very strong brief I had. Whether I did justice to the brief is not for me to say, but their record at any rate amounted to this, that they were able to co-ordinate the process of disposal and they realized an enormous sum—over £500,000,000—for the Exchequer. I am not wedded to anything like the same Board, but I do say that there must be some co-ordinating authority, as otherwise the various Departments will spoil each other's market by each attempting to realize its own surpluses.
§ I would add that it is necessary to have practical business men for this work. I am not a hostile critic of the Civil Service, but in these enormous transactions the staffs 6f the individual Departments lack the necessary experience. I note that the noble Lord, Lord Pakenham, said that there would be distribution through the particular trade dealing with the goods. I do not quite understand what he means by that. Does he suggest that a syndicate should be formed within the trade to which the goods should be passed over from whatever Department was con- 200 cerned, or does he mean that there should be individual sales from the Department to the trade? I cannot help thinking that if there was any risk of abuse under the co-ordinated system which prevailed in 1919 and 1920, there will be at least as much opportunity of abuse under this system.
I am afraid that I have not understood the point. Will the noble Lord amplify it a little, so far as distribution to the trade is concerned?
§ LORD RANKEILLOUR
I am asking how that is to be effected. Will the disposing authority try to get the trade in some corporate capacity, through some syndicate, to take the goods, whether by sale to them or by sending the goods to them for disposal, or will it sell the goods individually to different concerns in the same trade? I cannot help thinking that there are possibilities of abuse in such a system quite as great as any which existed under the Disposals Board. I should like to have some assurance that there will be real co-ordination of sales, and that they will not be left, as was apparently at one time intended, for the separate action of different Departments.
§ 6.49 p.m.
My Lords, I should like to explain the general character of the organization which has been set up and is now working before dealing with the precise questions raised by the noble Lord, which—I say this without any kind of objection—take me rather outside the character of the question which he put down on the Paper. But after all that is what one is here for—to attempt to supply noble Lords with information. The House may recall that on a recent occasion I attempted, in reply to a question, to explain the economic principles governing the disposition of surplus stores. To-day the question on the Paper is concerned rather with the administrative issue which is involved. The Government is asked what kind of an organization has been set up and how it will function. Here, again, in the administrative no less than in the economic sphere, we are following very closely the White Paper which was drawn up by the Coalition Government. The organization is, indeed, that foreshadowed in the Coalition Government's White Paper, and it is now complete, although 201 the Government will not hesitate to make any changes which may become necessary to speed up the process of disposal within the White Paper policy.
Speaking broadly, there are three ways in which this business of disposal might have been organized. One method would have been to have had a single Disposal Board as was done after the last war, and as would seem to have been the preference of the noble Lord, Lord Rankeillour. On that subject, I would just recall what the present Chancellor of the Exchequer, then President of the Board of Trade in the Coalition Government, said in July, 1944. He referred to mistakes which were made at the end of the last war—lack of control over prices, which resulted in profiteering, the unnecessary number of middlemen who were allowed, the speculators who were able to deal in surplus goods, and the fact that markets were flooded with adverse effects on new production. This is what the present Chancellor of the Exchequer, speaking then on behalf of the Coalition Government, said:In the light of the experience of last time, which was not a very fortunate experience, we have rejected the idea of having one single Disposal Board.That was the policy of the Coalition to which we arc adhering.
Another method would have been to allow each Department to dispose, as best it could, of whatever goods each happened to have in its possession. But both these methods have been rejected by the Government in favour of one which, although at first sight it may appear more complicated, seems, on careful consideration, to be the one best calculated to avoid the evils of last time and, generally, to secure the best results. The essence of the plan that we are following is that for each class of goods there is assigned, first, a Department entitled "Disposal Department" and, secondly, one entitled "Negotiating Department." These two Departments in some cases may prove the same but there is at least one for each class of goods.
To the Disposal Department, for each class of goods, will be reported any surplus goods of that kind which any Department of the Government may have available. I think that there was some slight misapprehension in the noble Lord's mind on that point. This means 202 that Departments other than these Disposal Departments will not sell on their own responsibility.
The Department selected as Disposal Department is that one which has been the main purchaser of the goods in question during the war, not the one which may, at the moment, possess the goods—like the War Office. Thus the Ministry of Supply is the Disposal Department for cloth and electric motors, the Ministry of Works is the Disposal Department for furniture and building materials, and the Admiralty is the Disposal Department for ships' stores. The Disposal Departments have the responsibility of sorting, cataloguing and, where necessary, assembling the goods, and of making the contract of sale. They are responsible, therefore, for ensuring physical delivery.
In addition, for each class of goods, a Department is designated "Negotiating Department." This is the Department most closely concerned with the production and distribution of the goods for civilian use. It is responsible for consulting the industries and trades affected by the disposal of the goods, for determining the channel of disposal and, where necessary, the price and the rate of release. Putting it loosely, the Negotiating Department finds the buyer, whereas the Disposal Department organizes and ensures physical delivery. The Negotiating Department is in many, but by no means all, cases the same as the Disposal Department. Thus, the Board of Trade is the Negotiating Department for cloth and furniture, whilst the Ministry of Supply, Ministry of Works and Admiralty are Negotiating Departments respectively for electric motors, building materials and ships' stores.
§ LORD RANKEILLOUR
My Lords, I ask the noble Lord's pardon for interrupting him, but is not the Board of Trade itself a Disposal Department for certain classes of goods?
No, my Lords, the Board of Trade is the Negotiating Department for cloth and furniture but: not a Disposal Department. Perhaps I should add that the disposal of raw materials, food and machine tools, falls outside these arrangements as does that of buildings with which I do not feel that the question to-day is concerned. But as regards raw materials and food, your 203 Lordships will appreciate, certainly Lord Woolton will easily understand, that the appropriate controls will handle the raw materials and food that are surplus. Machine tools are being dealt with under a special arrangement announced last year and operated by the Ministry of Supply. As regards buildings, in reply to a point which Lord Rankeillour raised, I may tell your Lordships that factories will be disposed of by the Board of Trade, but other buildings will be dealt with by the various Departments concerned. While on that matter perhaps I may mention that the business of liquidating contracts will be dealt with also by the Departments concerned.
Dealing with the last of the special points raised by Lord Rankeillour, regarding the actual method by which the trade will be brought into the matter, I can say that this method will vary with the classes of goods. Sometimes a syndicate of the trade will be involved, and sometimes the method of disposal will be by tender. The organization which I have attempted rather rapidly to describe, was laid down by the Coalition Government in their White Paper, and a large number of schemes have been prepared and are working under it. It provides that disposal should take place in an orderly manner so as to ensure fair distribution at reasonable prices, and to provide that the rate of release should be carefully supervised. The White Paper lays stress on the need to ensure a rate of release which would be fast enough to get goods into the hands of consumers when they are most required, and to clear badly needed storage and production space.
Now I am coming to something which will be of interest to the House even at this late hour. The Government have both these objects very much in mind and have recently been reviewing the machinery of disposal to see if any changes or improvements need to be made. They have concluded that the machinery set up by the Coalition Government—of which the noble Lord, Lord Wootton, was such a shining ornament—should be retained but that it is necessary that it should be more closely co-ordinated so as to ensure both speed in the disposal of goods to the public and rapid clearance of production space. I am able to announce that the President of the Board of Trade has been given 204 co-ordinating responsibility over the whole field covered by the White Paper. That is the first part of my new announcement, that the President of the Board of Trade has been given co-ordinating responsibility. He has been able and this will interest Lord Rankeillour—to secure the assistance in this task of General Sir Wilfrid Lindsell, who, as your Lordships know, has had great experience of the movement of goods during the war and who is also in charge of the related problems of clearing requisitioned factories. General Lindsell will be particularly concerned to see that consumer goods which are badly needed at present are made quickly available to the public when they become surplus. Fortunately, rapid disposal of goods which are in short supply involves no danger of damage to the industry and to employment in it through the flooding of the market. It must not, however, be thought that large quantities of consumer goods are likely to be available from Government stores in the near future. I have rather rapidly explained the general set-up of the organization and I hope that the noble Lord will be impressed by the appointment of General Lindsell.
§ LORD RANKEILLOUR
Has it not come to this, that the President of the Board of Trade will not have a Disposal Board, but will have practically the same powers as Lord Inverforth operated after the last war?
If the noble Lord cares to summarize the position in that way I cannot stop him, but I feel that these careful plans, basing themselves on the White Paper of the Coalition Government, and supplemented by the new announcement concerning the President of the Board of Trade and the appointment of General Lindsell, are perhaps rather more far-reaching and elaborate, and, I hope, will prove a great deal more successful than the arrangements which were in force last time.
§ 7.4 p.m.
§ LORD WOOLTON
My Lords, may I congratulate the Government on some of the disposal work which has come within my notice in the last few months? I think that the work done on the disposal of machine tools is most admirable, and I believe that we shall avoid the catastrophic position of the last war when we so nearly 205 ruined the machine tool industry of this country by too rapid disposal. I have seen some of the work of the disposal factories, which seems to me to have been excellently done. The reason for my speaking, apart from a natural desire to pay a compliment to the Government when they have done something very well, is to get them to speed up the distribution of consumer goods. The truth is that we are going to be very cold this winter. There are many hundreds of thousands of people in this country in need of blankets, and I hope that the President of the Board of Trade, who has become almost the model of efficiency—at least he has told the rest of us that we ought to be efficient—will take up this problem of the most speedy release of these things which the Government have in very large quantities. As demobilization rapidly proceeds, more and more of these blankets should be available. The Ministry of Health had very large quantities of these goods, which they had put aside for rest centres and the like. I beg the Government to try to do something for the poor people of this country who have not got these goods and who are going to be in need of them. I therefore beg for speed.