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Part of Orders of the Day — Civil Estimates and Estimates for Revenue Departments, Supplementary Estimate, 1946–47 – in the House of Commons at 12:00 am on 28th February 1947.

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Photo of Mr Richard Law Mr Richard Law , Kensington South 12:00 am, 28th February 1947

There can be no doubt that the hon. Member for Ipswich (Mr. Stokes) has performed a signal service in moving his Amendment today. He has rallied to his standard followers from many unexpected quarters of the Committee. How far they will follow him will depend both on the quality of his leadership, whether he sees it through to the end, and what reply the Chancellor of the Duchy of Lancaster will make to the many criticisms from every side of the Committee which have been made of these Estimates and of his administration. There has indeed been a remarkable degree of unanimity in today's Debate. These Supplementary Estimates are extremely important. The function of the House of Commons in checking and criticising the expenditure of the Government has always been one of its principal functions. That function has become inconceivably more important today, particularly when we are dealing with Estimates that involve large external payments because of the acute economic position of our country today. Therefore, the Committee is quite right in scrutinising these Estimates with the very greatest care. More than one Member of the Committee has asked the Chancellor of the Duchy this question, and I should like to put it to him again: Can he say how much of these Supplementary Estimates, in particular Subheads G and H, is related to dollar expenditure, and not only to dollar expenditure, but to expenditure in hard currency?

3.15 p.m.

I understand that it was your Ruling, Major Milner, that we could not have an answer to the general question as to how much of the whole expenditure was in hard currency. If we cannot have that, I hope that at least we may have some guidance as to how much of the expenditure in these Supplementary Estimates involves dollar expenditure, either directly or indirectly. I should like to add to that another question which I hope the Chancellor of the Duchy can answer. Can he say whether these sums, in so far as they involve dollar expenditure, have already been paid or whether they are yet to be paid? I ask that because I saw in the Press a day or two ago that our drafts on the American credit already amounted to something over £200 million, and it would interesting to know whether these items G and H, in so far as they represent dollar expenditure, are included in that total or are yet to come. If they are yet to come it means that the position is very much worse than most of us already think it to be, and that the American credit will be running out even more rapidly than it seems to be now.

In his opening speech the hon. Gentleman referred to Item H—the "Joint Export-Import Agency: working capital" —as an investment, and I hope that he is right and that it may in fact prove to be an investment. I agree with my hon. Friend the Member for Flint (Mr. Birch) that the Minister is a little optimistic in assuming that it will necessarily prove to be so, but, nevertheless, as I say, I hope he is right. What I would point out, however, is that in so far as it does prove to be an investment the dividend will not come in, if at all, for a considerable number of years, whereas the economic crisis that this country is facing with regard to external expenditure is immediate and likely to face us even this year. I hope the Chancellor of the Duchy of Lancaster will not talk too light-heartedly about this being a long-term investment.

The hon. Gentleman also said the real reason for this addition to the expenditure was that the Potsdam Agreement had not been implemented this year and that the Treaty with Austria had not been concluded this year. My hon. Friend the Member for Flint pointed out, as I thought perfectly justly, that no one could really base a policy on the assumption that Germany would become an economic unit in the past year, and still less on the assumption that the Treaty with Austria would be concluded within 12 months. I suggest to the Minister that the real reason for the increase in expenditure is not the reason he gave but that the economic life of Germany has been in a state of paralysis and that he has been unable to get German industry going again. We all know that coal has been, and still is, a very great problem. It is less of a problem than it was and, as the Chancellor said, there has been some improvement in the position, but it is not really only a question of coal. There has been a great deal of talk on both sides of the Committee today about de-Nazification and I think that the de-Nazification policy has had some effects upon this general economic paralysis in Germany. But even more important than the de-Nazification of individuals is the de-Nazification of German industry which the Control Commission seems hardly to have touched at all so far. German industry in the British zone has had every kind of control imposed upon it and every kind of price fixed, so that it pays no industrialist to use it and no employee to work for it. Surely, the first thing to do is to unfreeze the German economic machine. If the Minister will give more attention to that matter it is very probable that he might be saved the trouble of coming to the Committee again and asking for still further money for Germany.

I want to ask the Minister a number of questions on specific points in the Supplementary Estimates. Subhead D, "Additional provision for information and education services for Germany," is the first to which I will refer. In the Debate a week or two ago I asked the Minister whether the educational establishment in Germany had been or was to be reduced. He did not answer me, not because he wished to avoid answering me but, I think, because he did not have time to do so. It would be useful if the Committee could have a reply to that question this afternoon. The fact that education has been handed over to the Germans does not mean that the functions of the education officers in the zone are fewer than they were. Indeed, from many points of view, those functions are, I believe, increased in importance as a result of the transfer. The influence that the education officers will be able to exert upon the Germans has probably been increased. Therefore, I should think it would be a very great pity if the educational establishment were to be reduced. While on the subject of education I would congratulate the Minister on the step he took in appointing Mr. Birley, the headmaster of Charterhouse, as education officer in Berlin. That appointment will do a great deal of good.

Now I would say a word about the Information Service. I do not think that anybody can be in the zone without being conscious of the very great amount of misinformation that there is in the minds of the Germans—misinformation about what we are trying to do, what we have done and about our administration generally. I think it was the hon. Member for Uxbridge (Mr. Beswick) who stated earlier on that he regarded our expenditure on the Information Service as being a very good investment. I must say that I agree with him. One of the most unfortunate elements in the situation in Germany is the way in which the Germans completely misunderstand our policy and the facts of the situation. For example, there was a time when every German was under the impression—and I dare say it still goes on—that we were exporting food from Germany to this country. I do not know whether that was true or not, but that kind of impression ought to be eradicated. A more forceful Information Service should do something to eradicate it.

I would now revert for a moment to Subhead G, "United Kingdom share of relief imports." Those imports presumably very largely consist of food. I have great sympathy with the hon. Member for Ipswich, who said that he had great misgivings about the sources of information upon which the Chancellor of the Duchy relied for the statement he made in this House about the food position. I have the same misgivings. The Committee will remember that it is only a fortnight ago that the Chancellor of the Duchy, speaking in this House, said that 64 per cent. of the population in the British zone were getting rations at a level of from 2,500 calories to 3,900 calories a day. The hon. Member for Ipswich quoted a letter this morning from Germany in which it was said that in the last rationing period the population of the Ruhr was not averaging more than 1,100 calories, I think he said, but, at any rate, the average was far less than the 1,500 calories of the 34 per cent. of the population to which the Chancellor referred and, unfortunately, less than the calories which he said a greater part of the population was receiving.

Then, again, I find myself very much concerned about a report in the newspaper which Mr. Hoover has made to President Truman on the food situation. Not only does Mr. Hoover envisage the purchasing of food for shipment to both zones far in excess of anything we have been led to expect so far, but he found mat over 41,000,000 people living in the two zones received on an average 1,550 calories daily. If Mr. Hoover's figure is right, the Chancellor's figure—that 64 per cent. of the people living in the British zone were receiving between 2,500 and 3,900 calories—cannot possibly be right, too. It would be of great assistance to the Committee if the hon. Gentleman could define rather more precisely what the food position is in Germany, and how it is that he arrived at those percentages which he quoted in the Debate a week or two ago, I dare say he cannot do it now, but it would be useful if at some future time he could say what these categories are which received the extra rations and comprise 64 per cent. of the population, how many people are in each category, and so on. If he could find some means later on of giving the Committee a more detailed analysis of this problem, I think hon. Members and the people in Germany would have more confidence than they have at present in the announcements he makes from time to time on the food situation in Germany. For my own part I agree with the hon. Member for Ipswich that the Chancellor has no intention whatever of misleading the House and the Committee, but I find it very hard to believe that his sources of information are as good as they might be.

One word about the problem of displaced persons which was raised by the mover and seconder of the Amendment. There is a good deal in what was said by my hon. Friend the Member for Bucklow (Mr. Shepherd), that some of the displaced persons have proved themselves to be not very good citizens—