Orders of the Day — Hire Purchase and Credit Sales

– in the House of Commons at 12:00 am on 12th March 1956.

Alert me about debates like this

10.7 p.m.

Photo of Mr Arthur Bottomley Mr Arthur Bottomley , Rochester and Chatham

I beg to move, That an humble Address be presented to Her Majesty, praying that the Hire-Purchase and Credit Sale Agreements (Control) Order, 1956 (SI., 1956, No. 180), dated 17th February, 1956, a copy of which was laid before this House on 17th February, be annulled. This Order arises from the Chancellor's statement made in the House on 17th February. It increases the minimum deposit required upon a wide range of consumer goods. In most cases it increases the rate from 331 per cent. to 50 per cent., but in a few cases the rate is raised from 15 per cent. to 20 per cent. In the last twenty months there have been several changes in the hire-purchase orders. The Government do not seem to be guided by any facts; they indulge in what might be called a "hit or miss" policy.

On 12th July last my hon. Friend the Member for Stechford (Mr. Roy Jenkins) asked the President of the Board of Trade if he had any plans for compiling hire-purchase statistics. The President said that consultations were taking place with retailers and finance houses, and that he hoped to collect the information with a view to getting those statistics. Subsequently, the hon. Member for Orkney and Shetland (Mr. Grimond) asked the President whether he had any further information, and the President said that he could not tell because he had not got sufficient facts to guide him. Perhaps the Parliamentary Secretary will be able to tell us whether those facts have been compiled, and what evidence there is to support the present action of the Government.

In his statement, the Chancellor of the Exchequer appealed to his political opponents to give the new measures a chance, and to give the public the opportunity of judging their actual effect for themselves in the coming months. I think that came ill from the spokesman of a party which made things so extremely difficult for the then Chancellor, Sir Stafford Cripps, during a time of economic crisis. He gave his life in his service to this country. I believe that if there had been a sufficient response to his appeals we might not be suffering such an acute crisis now. But I would forget all that if I thought that the present policy of the Government would help to overcome our difficulties. In that case I should urge my colleagues to give the Government their support.

But I believe that this Order, like the other hire purchase Orders, has been directly aimed at the less fortunate sections of the community. During its term of office from 1945–1951 the Labour Government did nothing to bring about direct controls on hire-purchase deposits. It is true that there were wartime controls and these were retained in the case of price-controlled goods, but the terms were nothing like so harsh as those being imposed today. The requirement for hire purchase was 12½ per cent. deposit and a period of two years in which to pay.

One has to acknowledge that in a time of difficulty such as the present some restrictions are necessary, but the Labour Government used different methods and we think that this Government should try them too. For instance, in 1947 a directive was issued to the Bank of England that the clearing banks and acceptance houses should not provide additional funds for domestic hire purchase above the 1946 level. A directive was also given to the Capital Issues Committee not to sanction new issues for hire purchase finance. Our reason for doing that was that we. too. wanted to put the emphasis on the export trade, and I am sure that one of the reasons for this new Order is that the Government themselves want to influence the export trade.

Quite frankly, I do not think that this hire-purchase control will do that. The Government have brought it in because they will not face the need for physical controls. If we are really to help the export trade, we must recognise that that means the allocation of raw materials to the manufacturers according to their export performance. The Government profess to believe in free enterprise, yet they are using these hire-purchase controls as planning instruments. In my judgment, they are doing it in a most stupid way, without any facts, and certainly with no decided policy.

Since the Conservatives have been in power they have introduced four Orders. In February, 1952, they introduced the first, which imposed a down payment of 33⅓ per cent. and limited repayment to 18 months. That applied to the hire purchase of many consumer goods—motor cars, commercial vehicles, office furniture, water heaters, washing machines, vacuum cleaners, sewing machines, refrigerators and other goods, but, sensibly, domestic furniture, bedding and cookers were then excluded.

In July, 1954, the then Chancellor referred to Tory prosperity and, because of that, all hire-purchase restrictions were abolished. Traders were left to make their own arrangements. At the same time, the Chancellor wrote to the Capital Issues Committee saying that it would be inappropriate to impose a rigid ban on all new finance for hire purpose. What was the result? Many of the leading finance companies—notably United Dominions Trust Ltd.—were able for the first time since the way to raise new finance for the hire-purchase business, and that has added further to our difficulties.

Photo of Sir Gerald Nabarro Sir Gerald Nabarro , Kidderminster

In fairness. I am sure that the right hon. Gentleman would admit at once that the particular company which he has mentioned—with which, incidentally, I have no association at all—is concerned much more with the hire purchase of such major items as machinery than with hire purchase of domestic articles of the type which we are now discussing.

Photo of Mr Arthur Bottomley Mr Arthur Bottomley , Rochester and Chatham

Substantially that is correct, but I shall have something to say as to how the vested interests are looked after and the smaller manufacturing companies are neglected in the new Order. I shall come to that. Let me say that the Order I have mentioned gave this and other companies associated with hire-purchase finance opportunities which they did not have before.

I was going on to talk about the further Order which became necessary because of the restrictions which the Government had to make as a result of the economic difficulties confronting the country. The next Order was in February, 1955. The minimum deposit was to be 15 per cent. and the repayments were to be made over two years. That covered all the goods in the initial Order of February, 1952, and added others, particularly furniture, which in my judgment was a mistake.

In July, 1955, the Chancellor of the Exchequer introduced into the House yet a further Order. This increased the deposits required to 33⅓ per cent., but the repayments period was not changed. In this case the increase did not apply to household furniture, in which instance the deposit remained as before.

Today we have Order No. 180, against which we are praying and by which the deposit required is raised in most cases to 50 per cent., and from 15 to 20 per cent. in the case of furniture and bedding. Many new hire-purchase controls are introduced for the first time. In this case the goods which are affected are those necessary in providing homes—sink units, baths, basins and bathroom fittings, for example; but capital goods are also included, and a 50 per cent. deposit is required in the case of ship or boat building, building connected with the aircraft industry and other plant and machinery of all kinds. In addition to all these impositions, Purchase Tax has been increased, and most of these consumer goods, which affect the average household, have to carry that additional burden, too.

This is a story of extraordinary changes and reversals of Government policy, and I cannot see how the Government can justify it. The action ranges from freedom, with no deposit at all, to the last Order, which is a savage imposition of the requirement of a 50 per cent. deposit.

Not only is it a fact that households generally are affected, but I also believe that the Government have misled industry. For instance, from the 1953 Budget, when the Chancellor gave tax reliefs, until July, 1955, the manufacturers of consumer goods were encouraged to boost production, with no limit and no restraint. Industry, believing that the Government knew the facts, took advantage of that encouragement and went ahead. I have some interesting figures to show what happened. The motor car industry, which in 1952 was producing 37,000 cars per month, was producing 64,000 per month in 1954 and 74,000 in 1955. In 1952, 41,000 washing machines were produced per month; in 1954, 70,000; and in 1955, 79,000. In 1952, 52,000 vacuum cleaners were produced per month; and this number rose to 101,000 in 1954 and 111,000 last year. These are round figures. The figures for television sets were 67,000 in 1952, 100,000 in 1954 and 140,000 in 1955. In other words, in those three years production was roughly doubled.

Photo of Mr William Shepherd Mr William Shepherd , Cheadle

Are these figures produced in order to prove that prosperity under a Tory Government is higher than under a Socialist Government?

Photo of Mr Arthur Bottomley Mr Arthur Bottomley , Rochester and Chatham

I will come to the point, and the hon. Member will not like it. I am producing these figures to show that the Government have encouraged this kind of development, this boost, and now have to cut back, causing unemployment and difficulties for the manufacturers and for industry, which at times believes that this Government represent them. I am trying to show that the Government have misled them. In those three years production roughly doubled. In the radio and television industry, such was the pressure because of this so-called prosperity, that demands were made upon Continental suppliers for accessories, cabinets and television and radio sets, and that is now causing harm to the very industry which we are attacking still further by the hire-purchase Orders. The Government really ought to give serious attention to that if they are concerned about the employment situation in those industries.

Last week some Questions were put to the President of the Board of Trade, who seemed to take the view that the question of imports and exports was a matter for industry. I do not think the Government are energetic enough in the promotion of export trade. Whatever industry is able to do for exports by its own endeavours, I cannot see that that would be enough to compensate for the cut in home sales caused by these Orders. For that reason, I am bound to say the Government carry a tremendous responsibility both for creating dislocation of industry and for rising unemployment.

The workers suffer in all ways. Un-employment and hire-purchase restrictions are an attack on the standard of living on working-class families, especially young families. They have little or no savings and therefore cannot afford the deposits. Many people desperate for articles now have to resort to moneylenders or pawnbrokers, a thing unheard of during the period of the Labour Government. It is particularly hard on young married couples setting up home for the first time.

A private survey was carried out last year and showed that 48 per cent. of hire purchase was used in providing furniture for homes. Some sections of the furniture trade seem to be reasonably satisfied. I was looking at a journal the other day which conveys this view. I would ask the Government to look at the price margin, by which they will see that the trade is able to make a 45 per cent. margin as against a 33 per cent. under the Labour Government.

This also hits at the small manufacturer. The very fact that there is discrimination against those who have not the necessary resources to pay large deposits but who want new plant and new machinery is hurting the small manufacturer and those not in large industrial organisations. Those are the people who suffer by the Government's policy of a higher bank rate and the credit squeeze. The Prime Minister said that we are all in this fight against inflation together. We are all in the fight, but the Government inflict a penalty on the working class and on the small trader and the small industrialist.

Over the weekend the Prime Minister said something about taking four bites at the cherry. I should have thought that was unrealistic—

Photo of Mr Arthur Bottomley Mr Arthur Bottomley , Rochester and Chatham

As my right hon. Friend says, "It is difficult." The Prime Minister said that it was in order to avoid swallowing the stone. I think the Prime Minister has looked at this matter in a most unrealistic way. He has swallowed the stone and the result has been pain for himself and the country. In all these circumstances, I say this Order is not fair and not the most effective way to control inflation. For that reason, I shall ask my right hon. and hon. Friends to vote against the Order.

10.24 p.m.

Photo of Sir Stephen McAdden Sir Stephen McAdden , Southend East

May I at once declare an interest in the subject we are discussing, in that I am a director of a company which manufactures television and radio sets and I have, not in my constituency, but on its borders, a factory which is engaged in the manufacture of such sets. I hope therefore that it will not be thought that I am disqualified from contributing to a discussion if I know a little about the subject.

It is a fact that there is a considerable amount of uneasiness among manufacturers of television and radio sets, radiograms and recording sets as a result of this Hire Purchase Order, and not only as a result of the Order but of a number of other circumstances. I do not want to follow the right hon. Member for Rochester and Chatham (Mr. Bottomley) in all his arguments, but there is difficulty in the industry in understanding the pattern which is being followed in the treatment of that industry. At the same time, it does not serve to exaggerate the facts.

It is the fact, as I do not think the right hon. Gentleman would deny, that in the lifetime of this Government the radio and television industry has enjoyed a number of considerable advantages, under which there has been continued expansion in the industry and a great improvement in its sales.

Photo of Sir Gerald Nabarro Sir Gerald Nabarro , Kidderminster

That is as a result of my hon. Friend on television.

Photo of Sir Stephen McAdden Sir Stephen McAdden , Southend East

My hon. Friend does me too much honour. The radio and television industry has enjoyed a prosperity which it now finds sadly threatened. I think it is justified in querying whether there is a carefully thought out treatment of the industry, for this reason. Originally, hire-purchase restrictions were removed entirely, Purchase Tax was reduced, and the Independent Television Authority was created. This combination of circumstances led people to believe that there was an era of unexampled progress before it to which there could be no possible end.

Photo of Mr Herbert Butler Mr Herbert Butler , Hackney Central

Would the hon. Member agree that possibly he was returned because of these factors to which he has drawn attention?

Photo of Sir Stephen McAdden Sir Stephen McAdden , Southend East

I might have been elected for a variety of reasons, but I am quite sure that my constituents, if put to the test, would continue, very sensibly, to elect me again.

I was making the point that that combination of circumstances—the creation of the Independent Television Authority, the complete removal of hire purchase restrictions and the reduction in Purchase Tax—led to a considerable expansion within the industry, but that when faced with the present economic situation, which all the talk of the right hon. Gentleman about class warfare, and so on, will not dissipate, the Government have had to introduce certain measures which, undoubtedly, have a serious effect upon the industry. Nevertheless, I am quite sure that no responsible person in the industry is unconscious of the fact that the Government's primary responsibility is to preserve the value of the £ and that greater hardships would be inflicted upon industry if we were compelled to devalue, as the previous Government were, and that unless we take adequate and proper steps to protect the £, that might well come upon us.

Industry understands these difficulties and problems but it would welcome an indication from the Government as to whether we have reached a position from which it can begin to plan again. I am anxious to know—[Laughter.] Hon. Members opposite must not laugh at the suggestion of planning. Planning was going on within industry before they were born, much more sensible planning than that with which they were connected. It is not something that is new to industry.

The industry today is anxious to know—I hope my hon. and learned Friend the Parliamentary Secretary will be able to give some indication—whether the state at which we have arrived, with the latest measures affecting hire-purchase deposits and the rest, is likely to continue for a reasonable period so that it will be able to make its plans accordingly. More than that, the industry would welcome an indication from my hon. and learned Friend as to whether he is aware that at a time when those who are engaged in the production of radio and television sets are being placed upon short time because of these restrictions and other things, we are permitting the importation of radio and television sets and recording machines manufactured in the main in Germany. Manufacturers can understand that it may be necessary for us to consume at home less of what we produce, but they cannot understand why at the same time we are expected to consume more of what is produced abroad.

We find that the retained imports of receivers of all types rose from 15,677 in 1954 to more than 54,000 in 1955. In 1954 only 444 chassis of radio receivers were imported, but in 1955, 7,637 were imported, of which 7,612 came from Germany. [HON. MEMBERS: "Oh."] The number of units imported in 1955—[HON. MEMBERS: "Oh."] I know we are talking about amplifying radios, but I do not need the noisy assistance of hon. Gentlemen opposite in putting these facts. The number of units imported in 1955 was four and a half times as many as in 1954, and the money value of the imports increased by over 1,200 per cent. at a time when the domestic radio industry was being subjected to these difficulties.

I want my hon. Friend, if he will, during his reply to touch on the question of the continuity of policy towards the radio industry, and, secondly, to tell us what action he proposes to take, if any, to deal with the import of these kinds of things from Germany. At a time when we are being subjected to these restrictions, the radio shop windows are full of machines of this type imported from Germany, and I think that is unfair to British industry. I hope my hon. Friend will deal with that.

Photo of Sir Stephen McAdden Sir Stephen McAdden , Southend East

When I speak in this House I am always prepared to give way to all those who listen with interest to what I have to say, but I have not the slightest intention of flattering the intelligence of those hon. Members opposite who have not had the courtesy to listen to me by giving way to them now.

10.32 p.m.

Photo of Mr Ernest Davies Mr Ernest Davies , Enfield East

My right hon. Friend the Member for Rochester and Chatham (Mr. Bottomley) has made the general case for the Prayer against the Order, and I should like to deal with one or two specific matters which arise because of the effects of the Order in the constituency which I represent. The restrictions which are being imposed on hire purchase are having a serious effect upon employment in the industrial areas which are largely engaged in the production of consumer goods. There is no question that those firms which are engaged in the production of consumer goods at the present time have had to cut back production and have had to give notice to a considerable number of their employees. Whereas up to the imposition of these latest restrictions it was, generally speaking, possible to obtain alternative employment, now the situation has become such that there is no question that this country is faced with a serious problem of unemployment.

In Enfield is a large number of firms engaged in the production of consumer goods, particularly radio, television and other electrical apparatus, including cookers and the like. Since these restrictions were introduced. I have had made to me representations, not only from the workers in those concerns, but from the managements themselves. After the autumn Budget those firms were aware that they had to cut back their production, and they planned accordingly, and they were satisfied that they could continue production and maintain employment at the level they then planned. But no sooner had we returned from the Christmas Recess than these new restrictions on hire purchase were imposed, and plans which had been made in response to the autumn Budget had to be thrown aside and the situation became extremely difficult.

I wish to refer to certain firms in my constituency of which the major one is that which produces Ferguson radio and television sets. This firm employs about 4,000 persons in Enfield. Following the introduction of the autumn Budget, it had to reduce its establishment by about 600 persons. As soon as the latest hire-purchase restrictions were introduced, a revision of its programme and planning was made, and a further 400 people were declared redundant and dismissed.

The management of the firm maintain that the present policy of the Government is contrary to the interests of this country, because this firm is engaged up to 50 per cent. of its work in the export market. If home sales fall in the way which is inevitable as the result of these hire-purchase restrictions, then the export trade will fall automatically. Up to the present this firm has spread its overheads between home and overseas production, and in the face of considerable competition has succeeded in obtaining very important overseas orders. In the face of competition from fifteen other countries represented by about fifty-seven firms, it has obtained no less than 57 million dollars worth of orders for N.A.T.O. In the view of the firm that amount of orders was obtained because it was able to spread the total production costs over the home and overseas sales. The firm now claims that as a result of what is practically a cessation of sales of radio and television sets at home, it will not be able to compete in the overseas market.

I contend that the Government's policy is short-sighted. Here is a firm with 50 per cent. of its production going overseas which will now be in grave difficulty in obtaining any overseas orders at all. It seems to me that Government policy regarding this industry is inconsistent. We have had before this House the Measure for introducing commercial television. The Government are sponsoring the expenditure of large sums of money on the construction of transmitters and other capital investment in commercial television at the present time. But at the same time, through these hire-purchase restrictions, they are making it difficult, if not impossible, to produce new television sets or to convert existing sets for the reception of commercial television.

These representations have been made to me by firms in my constituency which I should have expected to support the present Government. I will end with a quotation from a letter from the Thorn Electrical Industries, Ltd., which produce Ferguson radios: In these circumstances, we have no confidence in the measures now introduced, and sincerely trust that after reflection of the points raised, you will feel the same way and use your influence to have them repealed, before untold harm is done to the radio, television and electronic industry, which is so vital to the country's defence programme. I commend to the Parliamentary Secretary that statement from an industrial firm in my constituency.

10.40 p.m.

Photo of Sir Gerald Nabarro Sir Gerald Nabarro , Kidderminster

There was only one part of the speech of the right hon. Member for Rochester and Chatham (Mr. Bottomley) with which I found myself in almost entire agreement. He had something to say about the compilation of hire purchase statistics. I want to say to my hon. and learned Friend at the outset this evening, that we in this country are, in my opinion, drifting into a very dangerous position indeed with the whole of our hire-purchase transactions through lack of accurate statistical information as to trends and the extent of hire purchase, the sum total of raw materials involved and the aggregate of capital sums entailed.

I commend to my hon. and learned Friend—and I hope that when he replies he will say a word or two about it—the system which has obtained in the United States for nearly a quarter of a century since the very serious depression and slump in the early thirties, whereby each hire purchase contract is registered at a central statistical bureau. From that statistical information, which is relatively simple in character, though, of course, extensive, can be deduced a wealth of information which is of great value in guiding economic and financial policy.

I strongly support the Orders which we are debating tonight. In my view, hire-purchase restriction on a proper and realistic scale at the present time is inseparably bound up with other measures which have come to be called, in generality, the "credit squeeze." Hire-purchase restriction is, in my view, valueless without a higher Bank Rate. It would be valueless without restriction of credit through the banks. It would be valueless without application of other variants of the credit squeeze at a dozen different points in our national economy.

I do not believe that the employment position to which various hon. Gentlemen have referred, notably in the Midlands where my constituency is situated, is by any means as serious as the newspapers and others would have us believe. For instance, in this Order reference is made to floor coverings, which include carpets. It is true that in the principal carpet-manufacturing centre of the United Kingdom, namely, in Kidderminster, there are at the present time—[Interruption.] I hope that the hon. Member for Enfield, East (Mr. Ernest Davies) in his ignorance will not sneer. [HON. MEMBERS: "Oh."] I hope that the hon. Member who said "Pooh pooh" when I made that statement—

Photo of Mr Ernest Davies Mr Ernest Davies , Enfield East

I did not open my mouth or make any sound whatsoever.

Photo of Sir Gerald Nabarro Sir Gerald Nabarro , Kidderminster

My impressions were very different.

In fact, in Kidderminster is concentrated nearly 50 per cent. of the whole of the carpet industry, and in the town of Kidderminster at present there are certainly 1,000 carpet workers on short time. In the Midlands as a whole, notably in the motor industry and associated engineering works, there are something of the order of 40,000 workers on short time. As so much of this is attributed not entirely correctly to these hire-purchase restrictions, cannot it be put into proper perspective?

At the last census in the Midlands area there were 47,000 registered vacancies for jobs, and many of those jobs were in factories and industries associated with the export trade. I say, therefore, that although the credit squeeze in its various manifestations, including these hire-purchase restrictions that we are debating this evening, may be painful to those workers whom it directly affects, I still believe that we should keep the whole problem in proper perspective and recognise that a policy of full employment does not necessarily mean that every worker remains in the identical job for all given time, but that there must be tolerable flexibility and mobility of labour. I am not impressed by arguments about large-scale unemployment developing in certain industries.

My hon. Friend the Member for Southend, East (Mr. McAdden)—who, I am sorry to see, has left—put forward what I thought was a most damaging view point upon certain aspects of national economic and financial policy. Practically every Member who has any knowledge or breadth of vision about industrial and economic affairs will support the general policy followed since the end of the war—the policy of liberalisation of Western European trade. Can any body reasonably say that because imports into the United Kingdom of a certain manufactured article from Western Germany happen fortuitously to have risen in the last year or two we should immediately clamp on a protective tariff to shelter our own equivalent industry? If we were to do that sort of thing—and that seemed to be the logical conclusion of my hon. Friend's argument—we should in a very short time strangle much of our overseas trade.

If my hon. Friend complains about a few television sets coming here from Western Germany, I can say in reply that the managing director of a well-known Black Country engineering firm making washing machines recently returned from Western Germany with the quite sensational news that he had sold the Germans £1 million worth of washing machines, all to be manufactured in the Black Country. Trade is a two-way affair—here I speak not only as a politician but as a businessman and industrialist—and any artificial restrictions which are put at this moment upon commercial intercourse with Western Germany or any other foreign country in Europe and perhaps elsewhere, can only accentuate the already difficult economic circumstances in this country.

I want to say a word about the right hon. Gentleman's plea for the allocation of raw materials. If he looks through the hire purchase list he will find that a substantial part of the items are manufactured goods, which largely entail the consumption of steel. I had a fierce controversy with the right hon. Member for Huyton (Mr. H. Wilson) during the later Committee stages of the Finance Bill last autumn, as to whether the increased Purchase Tax—on that occasion we related it to steel clothes posts made in the Black Country—should be regarded as a disincentive for the importation of steel and, thereby, an economy in the use of steel. In my view, increased Purchase Tax upon manufactured articles using steel and consumed on the home market and hire-purchase restrictions upon similar articles—also largely steel consuming—are together, in themselves, an effective alternative to what the right hon. Gentleman called physical controls, namely steel rationing.

I believe that in time of peace it would defy the ingenuity of any Socialist Minister—were one in office—or Conservative Minister to evolve a system for the successful allocation of steel to manufacturing industry, with the bias in favour of the export trade. It is relatively easy to do so in war-time, when nearly every steel requirement has a Government contract number or sub-contract number, but to try to discriminate in favour of articles which are directly or indirectly for export is a near-impossibility in time of peace.

I therefore tell the right hon. Gentleman that there has been no major change of Government policy—as he alleged—in this regard. My hon. and right hon. Friends do not believe in physical controls, but we do believe in monetary and fiscal controls and manipulations, to serve the same end. The right hon. Gentleman was utterly wrong when he accused us of a change of policy. On the contrary, I was elected on a policy of stating that these matters would be dealt with by monetary and fiscal weapons. I was elected on that policy, and that is exactly what we are doing tonight with hire purchase restrictions.

Perhaps I may quote the following words to the House: Any country pursuing a policy of economic expansion and full employment faces a constant danger of inflation. The risk is that home demand may take away from the export trade and swell the import bill. Here sound monetary and fiscal policies are powerful weapons. We propose to continue their flexible use. What words of wisdom, indeed—"United for Peace and Progress;" the Conservative policy at the 1955 General Election, which increased my majority at Kidderminster by 60 per cent.—and a jolly good policy, too. No change of Government policy, Mr. Speaker—utter consistency, Mr. Speaker—transparent honesty—and a complete rebuttal of the poppycock talked by the right hon. Gentleman.

Photo of Mr Harold Wilson Mr Harold Wilson , Huyton

The hon. Gentleman was kind enough to refer to a little controversy that he and I had on the Finance Bill. Will he not, in the interests of the consistency which he is now so praising, also recall that that controversy had to do not so much with me as with his own Front Bench, and that his arguments on that occasion were rebutted by his hon. Friend the Economic Secretary?

Photo of Sir Gerald Nabarro Sir Gerald Nabarro , Kidderminster

The right hon. Gentleman was much better on the B.B.C. "Any Questions?" programme last Friday evening. He talked a little sense then, but that was on non-political issues. The fact is that my right hon. Friends on the Front Bench have always endorsed the words of wisdom which I used earlier in the same debate.

The Orders before the House this evening are an essential part of a progressive, objective and realistic economic and financial policy. I commend them to the House, and I hope that they will have the unanimous and enthusiastic support which they so clearly deserve and merit.

10.53 p.m.

Photo of Mr Frederick Willey Mr Frederick Willey , Sunderland North

If the hon. Member for Kidderminster (Mr. Nabarro) had unfolded his policy for prosperity as it has unfolded over the past few months, I doubt whether he would have increased his majority—I doubt whether the Government would be in a majority at all. I want to put a few questions to the Parliamentary Secretary and to ask him to explain the attitude of the Government towards the Development Areas.

My hon. Friend the Member for Enfield, East (Mr. Ernest Davies) mentioned the Thorn Electrical Industries, Ltd. That firm has a factory at Spennymoor in the North Eastern Development Area and has a redundancy list of 300 or 400. It has a subsidiary at Sunderland which will also face redundancy. This is where Government responsibility comes in. As the hon. Member for Kidderminster will appreciate, the Government, in a Government-owned place, have just completed a factory at Government expense, extending the production capacity at Sunderland—

Photo of Sir Gerald Nabarro Sir Gerald Nabarro , Kidderminster

Is it any part of Government policy in the Development Areas to guarantee continuity of work in every factory that is erected? Not so far as I am aware.

Photo of Mr Frederick Willey Mr Frederick Willey , Sunderland North

This is a factory which has just been completed, and I think I am entitled to ask what is the Government's policy. Is it to complete these factories so that they will stand idle? We have had experience of that. We had two Government factories in Sunderland which stood idle for twelve months. Are we to face that again as a result of deliberate Government policy? This does not affect exports in the sense of encouraging them to produce them.

I want to deal with another industry which has not been very much mentioned—the furniture industry. On Saturday I met the North-Eastern delegates of the National Union of Furniture Trade Operatives. Again, most of our furniture trade operatives are working for factories built by the Government. What is the position? In most of the factories, if they are fortunate, they are working a three-day week. We had a delegate from one factory who had worked one day in fourteen. We could discover only one factory in the whole North-East which had worked a full working week.

Again, what is the policy of the Government? These factories are carrying on production largely on Government promises. Were these firms brought in so that the production should be prejudiced by deliberate Government action? The case will be made out, as the hon. Member for Kidderminster has tried to make out, that there will be a transfer to other work. I would say, first, that it is not economical from the point of view of Government expenditure to transfer working from Government-owned factories.

But, apart from that, what did I find? In some instances there is no alternative work available. The only examples I could find of workers having transferred to other work were examples of furniture trade skilled operatives who had transferred to labouring work. What good does this do to our present economic difficulties? I ask the Parliamentary Secretary and the Minister of Supply these questions. I think it is probably kinder to allow the Minister of Supply to slumber, but I would ask the Parliamentary Secretary—

Hon. Members:

Wake up.

Photo of Mr Frederick Willey Mr Frederick Willey , Sunderland North

While the Minister of Supply slumbers, I put these questions to the Parliamentary Secretary. Were these consequences intended by the Government in bringing in this Order? Did they intend to put out the workers in factories where there is no alternative work available? Did they intend to put out workers in Development Area factories, where there is no similar work available? li this was—

Photo of Mr Arthur Skeffington Mr Arthur Skeffington , Hayes and Harlington

Would it be in order to ask the principle of hire purchase restriction loudly, as I cannot hear my hon. Friend?

Photo of Mr William Morrison Mr William Morrison , Cirencester and Tewkesbury

The right hon. Gentleman is creating no disturbance that I can hear.

Photo of Mr Frederick Willey Mr Frederick Willey , Sunderland North

I observe that the Minister of Supply is awakening. I will not repeat what I have said, but I will conclude by asking the Parliamentary Secretary this: if these consequences were not intended, and if he is not to take the responsibility for causing this redundancy in the Development Areas, and for upsetting and reversing Development Area policies, what is he going to do about it? He knows quite well that he has a direct Government responsibility for Development Area policy, so I hope that tonight he will give us some words of comfort and will tell us what he is going to do to improve the position in the North-East and other Development Areas where there is considerable apprehension. I hope he will tell us that he will withdraw this Order, and that if he accepts the case of the hon. Member for Kidderminster that we are in a midst of an economic crisis—

Photo of Sir Gerald Nabarro Sir Gerald Nabarro , Kidderminster

I said nothing of the sort.

Photo of Mr Frederick Willey Mr Frederick Willey , Sunderland North

—and we have to redeploy our manpower, then we will do it in an intelligent and constructive way. We shall not cause universal, inconsequential unemployment, wherever it may fall, but I hope that, so far as the Development Areas are concerned, the Government will accept responsibility and mitigate the harm which they are doing there.

11.2 p.m.

Photo of Mr Derek Walker-Smith Mr Derek Walker-Smith , Hertfordshire East

It may be convenient if, before I come to the main theme of this discussion, I refer briefly to the point put by the right hon. Member for Rochester and Chatham (Mr. Bottomley), and by my hon. Friend the Member for Kidderminster (Mr. Nabarro) about the hire purchase statistics. I welcome the interest which they have both evinced in this matter, and I can tell them that the working out of these statistics is in progress, on a voluntary basis, and has met with an encouraging response. The examination is being carried out as rapidly as is possible, and it is hoped that we may be able to begin publishing the results by April, or thereabouts.

I now turn to the main content of this Order and the main criticism which has been levelled against it. We are tonight concerned with a Motion to annul the Order. If that Motion were carried, it would have the effect, not of doing away with the hire purchase restrictions, but of restoring the position to what it was under the Orders of February and July last. The annulment might have certain effects welcomed by manufacturers of commodities subject to hire purchase, but it would also have the unfortunate and, I think, unintended effect, of restoring perambulators to the ambit of the hire purchase restrictions, from which they are now happily exempt.

Hon. Members opposite have notified their intention of dividing against these Orders, but if they follow precedent on the two 1955 Orders there will be no vote as a result of this debate this evening.

Photo of Mr Derek Walker-Smith Mr Derek Walker-Smith , Hertfordshire East

The hon. Gentleman asks why. I am simply commending to the House the example which he and his hon. Friends have set. In March, 1955, hon. Members opposite tabled a Motion to annul the hire purchase Order of the previous month. It was debated, but they did not divide against it. There was no Motion for the annulment of the July Order at all; and what I am saying is that if they have regard to precedent, there will be no Division on this Motion tonight.

Photo of Mr Donald Chapman Mr Donald Chapman , Birmingham, Northfield

But a great deal has happened since then; the situation is totally different. These hire purchase Orders, far from merely causing a reduction in home demand, are causing unemployment, and in my constituency, for example, are probably entailing the waste of millions of pounds worth of investment.

Photo of Mr Derek Walker-Smith Mr Derek Walker-Smith , Hertfordshire East

The hon. Member puts the unemployment position in very round and general terms; but it is my intention to come to the unemployment situation in a rather more precise and detailed manner than he has condescended to do in his interruption.

The Orders in 1955, which were not controversial between us because there was no Division against them, established the principle of hire purchase restriction over the main field of consumer durable goods and the principle of the differentiation into two main categories of minimum deposit. This Order maintains those principles, but it goes further. It maintains and accentuates the principle of differentiation by raising the 15 per cent. minimum to 20 per cent. and the 33⅓ per cent. rate to 50 per cent. It brings in certain further goods, mainly capital goods. On the other side, the Order exempts perambulators from hire purchase restrictions.

It will be clear that the change in the minimum rate of deposit must be judged against the general economic background of the country. On that I think there is fairly general agreement.

Photo of Mr George Darling Mr George Darling , Sheffield, Hillsborough

That the Government have got us into a mess.

Photo of Mr Derek Walker-Smith Mr Derek Walker-Smith , Hertfordshire East

The hon. Gentleman succumbs to the temptation of oversimplification. If he had made his intervention standing instead of sitting I think he would probably have put it in very much the same terms as I was about to do; that is to say, that we are spending more on consumption—not more than we should like to do in a social sense—but more than in an economic sense we can afford to do, as a nation dependent on the export trade.

I believe also that there is general agreement on this part, at any rate, of the prescription— that we must abate to some extent consumer spending in order to divert more of our resources of labour and materials to the export trade. That object was defined very clearly by my right hon. Friend the Chancellor in the economic debate last month. The hire purchase restrictions in fact promote that object by relieving pressure on home demand and getting purchasers to use more of their own money and consequently less of borrowed money.

It will be agreed that hire purchase restrictions are effective in restraining consumer expenditure and diverting our resources to the export trade. As evidence of that I quote the trend in the proportion of hire purchase sales to cash sales in respect of television and radio sets before and after the 1955 Orders. In January and February of last year, immediately before the first Order, the ratio of hire purchase sales to cash sales of television sets was six to four. In the three months from November of last year to the end of January of this year the ratio was even between the two. For radio sets, the ratio before the Orders, in January and February, 1955, was even, and in the three months from November, 1955, to January, 1956, the ratio of hire purchase to cash sales was four to six and a half.

Photo of Mr Derek Walker-Smith Mr Derek Walker-Smith , Hertfordshire East

I will come to them.

The inference to be drawn from those figures is that hire purchase restrictions have brought about a desirable readjustment in favour of cash sales as against sales from borrowed money. Those figures are a tribute to the action taken by my right hon. Friend the Lord Privy Seal, because they derive from the two Orders made last year. Those figures also suggest that a further dose of the same medicine would be beneficial for the complaint, however disagreeable it may be to take and however unwelcome it is to prescribe and to administer.

There is still a great need for moderation of consumer spending. We had a letter at the Board of Trade the other day from a man who said that two-thirds of his income was already committed to hire purchase but who complained bitterly that the rise in the minimum deposit for radio sets would prevent him committing a yet further part of his income on the purchase of one. He ended with a most melancholy reflection that he was now condemned, as a result of these restrictions, to spend his evenings in the pastime of reading.

The right hon. Gentleman asked how these hire purchase restrictions help the export trade. I should have thought that, by the easing of consumer demand at home and restricting credit buying, they help in one or other of those ways, either by diverting a greater part of a particular firm's output into exports or because, if for any reason that firm is unable to expand its own export contribution, it may lose labour and materials to another firm which can do so.

As to the easing of home consumption of these commodities, we must look at that against the background of the rapid expansion in recent years in the production of these commodities, to which reference was made by my hon. Friends the Members for Southend, East (Mr. McAdden) and for Kidderminster. Take the case of the motor car industry. In that industry, total production had dropped between 1950 and 1952, but by 1953 it exceeded the 1950 figure. In the years 1953 to 1955 production of passenger cars expanded by 303,000, and 80 per cent. of that expansion went on to the home market. During that, period the percentage of hire purchase sales was also rising. In 1953 it was 9 per cent., it 1954, 14 per cent. and in 1955, 17 per cent. In the case of commercial vehicles there was a somewhat similar story. I need not trouble the House with the statistics.

My hon. Friend the Member for Southend, East said that television sets sales gave some rise to uneasiness on the part of manufacturers, but there the production has been rising continuously since 1950, which is perhaps not a very remarkable circumstance in what in effect is a new medium. From 1953 to 1955 there has been an expansion of 509,000 sets, practically all to the home market. The percentage of hire purchase sales last year was no less than 55 per cent.

I submit to the House that these figures show this common inference; first, a substantial increase of output, secondly, an absorption of a large part of that increase on the home market and, thirdly, a significant proportion of the home market sales on the basis of hire purchase. These figures tell in very graphic terms the story of considerable and successful expansion of production, but at the same time an ebullient home market—in the case of television sets, ebullient, if my hon. Friend the Member for Southend, East will allow me to say so, almost to the point of effervescence.

My hon. Friend also raised the question of the importation of German sets. If I may respectfully say so, he was very effectively answered by my hon. Friend the Member for Kidderminster in the excellent speech he made. I would only add this point. My hon. Friend referred to the restrictions under which producers of British sets are labouring; but of course German sets are subject also to hire purchase restrictions. They are also subject to Purchase Tax, but over and above that they are subject to an ad valorem duty of 20 per cent, and Purchase Tax is calculated not on the basic price but on the basic price plus the ad valorem duty.

Photo of Mr Derek Walker-Smith Mr Derek Walker-Smith , Hertfordshire East

The right hon. Gentleman should not suggest that that is protection. He will appreciate that that is a purely incidental effect of the Purchase Tax arrangement, which is not imposed with that object.

Photo of Mr Patrick Gordon Walker Mr Patrick Gordon Walker , Smethwick

I am thinking of the 20 per cent. ad valorem duty, which is, of course, protection.

Photo of Mr Derek Walker-Smith Mr Derek Walker-Smith , Hertfordshire East

I am obliged to the right hon. Gentleman. I only wanted to make clear, for reasons that he will understand, that the Purchase Tax is not of a protective nature—at any rate not by design.

I come now to the important question of employment. The industries which are affected mainly by these restrictions are industries which have seen a very considerable expansion of employment in the last few years.

Photo of Mr Derek Walker-Smith Mr Derek Walker-Smith , Hertfordshire East

There is nothing wrong with it, but we must look at the effect of these Orders against the background of that influx of labour into these industries. In the case of the motor vehicle and cycle and accessories industries, between 1950 and 1953 there was an average of 429,000 people employed. By 1955, the number had increased to 502,000—that is, an increase of at least 17 per cent. above the 1950–1953 average.

In the other main industry with which we are tonight concerned—wireless apparatus and gramophones—in 1950–1952 the average employment was less than 100,000. By 1955, it was 141,000, or an increase of about 50 per cent., with an increase of about 18 per cent. over 1954. There has been, therefore, a very substantial intake into these industries, and the present position, which was referred to by, for example, the hon. Member for Sunderland, North (Mr. Willey), must be judged against that background.

The right hon. Member for Rochester and Chatham referred to rising unemployment, but in the vehicle industry, about which much has been written, there were only, up to the end of last week, 800 declared redundancies. There is, of course, a considerable amount of short-time working, involving about 24,000 people, and more is expected this week. Even so, 24,000 people on short-time working is only 4½ per cent. of the total labour force of the industry, and the 800 who have been declared redundant represent only one-half of 1 per cent. That is what the right hon. Gentleman calls "rising unemployment."

Photo of Sir Gerald Nabarro Sir Gerald Nabarro , Kidderminster

Would my hon. and learned Friend put that into complete perspective by confirming that in the principal area where vehicles are manufactured—namely, the Midlands—there are currently 47,000 unfilled vacancies for jobs?

Photo of Mr Derek Walker-Smith Mr Derek Walker-Smith , Hertfordshire East

My hon. Friend is quite right. Furthermore, of those 47,000 vacancies, 17,000 are in the vehicle, engineering and metal industries.

Photo of Mr Harold Wilson Mr Harold Wilson , Huyton

If it is the fact, as the hon. and learned Gentleman said, that the motor car industry, for example, has expanded at a rate which the Government do not now regard as satisfactory, so that it has to be damped down, will he explain to the House why the Government last year permitted the motor car industry to expand so much more in terms of factory building when we are told by the Chancellor of the Exchequer that it is that factory building and investment which is causing the present economic crisis?

Photo of Mr Derek Walker-Smith Mr Derek Walker-Smith , Hertfordshire East

The motor car industry, as the right hon. Gentleman will appreciate, has made a great contribution, not only in the home consumer market, of which we have been talking. It has made a significant contribution also to exports, and it is to be honed that it will increase its contribution in that direction. I ask the right hon. Gentleman to believe that we cannot necessarily attribute all of the short-time working and very minor redundancy that at present exists in the motor industry to the effect of the hire purchase restrictions. There have been difficulties with the change-over in models; there is the normal seasonal fall at this time of the year. There has recently been a significant wage increase, which may have some effect in the future.

Photo of Mr Donald Chapman Mr Donald Chapman , Birmingham, Northfield

The hon. and learned Gentleman should reconsider the figures. The Financial Times shows that hire purchase activities in motor cars are from 30 per cent. to 40 per cent, below their level last year. That reflects, and accounts for the greater part of, the fall in demand for motor cars.

Photo of Mr Derek Walker-Smith Mr Derek Walker-Smith , Hertfordshire East

In 1954, 13·7 per cent. of the total sales of new motor cars were subject to hire purchase, and 17 per cent. in 1955.

Photo of Mr Derek Walker-Smith Mr Derek Walker-Smith , Hertfordshire East

I must refer to the employment position in the television and radio industry. I shall not go into the figures except merely to say that the same point applies, that there has been relatively little redundancy, and that that redundancy has caused very little unemployment. The television and radio industry is mainly in London and the South-East, which, like the Midlands, is an area in which the existing labour shortage is most marked.

Therefore, I would submit to the House that the changes in the employment pattern are small not only by reference to the total labour force in the industry but also by reference to the influx of labour into these industries in the last few years. To demand the annulment of the Orders on that ground would be to claim complete rigidity of structure and a pattern precisely and inflexibly fixed. Such rigidity, the House will appreciate, is illogical and impossible. If we are to freeze the status quo, the question arises, at what point of time should we freeze it? Should we have frozen it in 1953 or 1955? If we had frozen it in 1953 we should have prevented all those people from coming in this industry. [Interruption.] The right hon. Member for Smethwick (Mr. Gordon Walker) says that would have been better. He had better ask his hon. Friends who sit for Midland constituencies to ask their constituents whether they would have preferred the right hon. Gentleman's principle, so that they would not have gone into the motor industry at all.

Photo of Mr Douglas Jay Mr Douglas Jay , Battersea North

Can the hon. and learned Gentleman explain what is the Government's purpose in attracting all those people into the industry last year and in pushing them out again now?

Photo of Mr Derek Walker-Smith Mr Derek Walker-Smith , Hertfordshire East

The right hon. Gentleman, with a fidelity not always to be found amongst right hon. Gentlemen opposite, has echoed the question put to me a few moments ago by his right hon. Friend, and the answer is the same as that which I have given to his right hon. Friend.

Photo of Mr Ronald Ledger Mr Ronald Ledger , Romford

The hon. and learned Gentleman has given no effective answer at all tonight.

Photo of Mr Derek Walker-Smith Mr Derek Walker-Smith , Hertfordshire East

The doctrine of employment that I have just stated is one of the principle of flexibility, and is the doctrine accepted and authoritatively stated on both sides of the House and by informed economic opinion as well. It is the doctrine which the Chancellor quoted with approval in the economic debate, and was laid down by Sir Stafford Cripps in 1949.

Photo of Mr Derek Walker-Smith Mr Derek Walker-Smith , Hertfordshire East

The hon. Gentleman must look it up in HANSARD.

Photo of Mr Ronald Ledger Mr Ronald Ledger , Romford

It was quite different.

Photo of Mr Derek Walker-Smith Mr Derek Walker-Smith , Hertfordshire East

It is clear to anybody who reads Sir Stafford Cripps's speech that he was formulating a general principle. There is not one word of qualification in the principle as he stated it. The principle is the principle of full and flexible employment, not rigid or regulated employment.

Photo of Mr Arthur Bottomley Mr Arthur Bottomley , Rochester and Chatham

It was not the idea then to expand an industry and cut it down afterwards, which is what the Government are doing now.

Photo of Mr Derek Walker-Smith Mr Derek Walker-Smith , Hertfordshire East

In the profession in which I used to practise there is a principle that people are presumed to intend the natural consequences of their acts. Whatever right hon. Gentlemen opposite intended, we all know what happened; and the presumption follows.

We have to judge this matter against the background of the national statistics. In February there were 272,000 unemployed. In February last year, before the first Order, the figure was 282,000. In February, 1954, the figure was 387,000. In unfilled vacancies the trend is the other way—February, 1954, 258,000; February, 1955, 352,000; February, this year, 368,000. So, whereas the unemployment figures have gone down, the number of unfilled vacancies has gone up. Therefore, there can be no grounds in the position of those industries mainly affected, and still less in the general economic position, for demanding the annulment of these Orders.

I can only assume that the reason for this Motion stems less from any economic conviction than from a feeling of resentment in the party opposite at their own

failure in 1951 to put duty and candour before popularity and party. We realise that these Orders cannot be popular in any cheap or easy sense of that term; and naturally, no Government would impose them except with great reluctance and with regret at the inconvenience and disappointment they may cause. They are imposed because the public interest demands it, and in that conviction I commend them to the House.

Question put:—

The House divided: Ayes 180, Noes 234.

Division No. 120.]AYES[11.28 p.m.
Ainsley, J. W.Greenwood, AnthonyOrbach, M.
Allaun, Frank (Salford, E.)Grey, C. F.Oswald, T.
Allen, Arthur (Bosworth)Griffiths, David (Rother Valley)Padley, W. E.
Allen, Scholefield (Crewe)Griffiths, Rt. Hon. James (Llanelly)Paling, Rt. Hon. W. (Dearne Valley)
Awbery, S. S.Grimond, J.Paling, Will T. (Dewsbury)
Bellenger, Rt. Hon. F. J.Hale, LesliePalmer, A. M. F.
Benn, Hn. Wedgwood (Bristol, S.E.)Hall, Rt. Hn. Glenvil (Colne Valley)Pannell, Charles (Leeds, W.)
Benson, G.Hannan, W.Pargiter, G. A.
Bevan, Rt. Hon. A. (Ebbw Vale)Harrison, J. (Nottingham, N.)Parker, J.
Blenkinsop, A.Hayman, F. H.Parkin, B. T.
Blyton, W. R.Henderson, Rt. Hn. A. (Rwly Regis)Pearson, A.
Boardman, H.Herbison, Miss M.Peart, T. F.
Bottomley, Rt. Hon. A. G.Hobson, C. R.Plummer, Sir Leslie
Bowden, H. W. (Leicester, S.W.)Holman, P.Popplewell, E.
Bowies, F. G.Holt, A. F.Price, J. T. (Westhoughton)
Boyd, T. C.Howell, Charles (Perry Barr)Price, Philips (Gloucestershire, W.)
Braddock, Mrs. ElizabethHowell, Denis (All Saints)Probert, A. R.
Brookway, A. F.Hughes, Emrys (S. Ayrshire)Proctor, W. T.
Broughton, Dr. A. D. D.Hughes, Hector (Aberdeen, N.)Randall, H. E.
Brown, Rt. Hon. George (Belper)Hunter, A. E.Redhead, Edward Charles
Brown, Thomas (Ince)Hynd, H. (Accrington)Robens, Rt, Hon. A.
Burke, W. A.Irving, S. (Dartford)Roberts, Albert (Normanton)
Burton, Miss F. E.Isaacs, Rt. Hon. G. A.Roberts, Goronwy (Caernarvon)
Butler, Herbert (Hackney, C.)Janner, B.Robinson, Kenneth (St. Pancras, N.)
Butler, Mrs. Joyce (Wood Green)Jay, Rt. Hon. D. P. T.Ross, William
Callaghan, L. J.Jeger, George (Goole)Short, E. W.
Carmichael, J.Jeger, Mrs. Lena (Holbn & St. Pnos, S.)Shurmer, P. L. E.
Castle, Mrs. B. A.Johnson, James (Rugby)Silverman, Julius (Aston)
Chapman, W. D.Jones, David (The Hartlepools)Silverman, Sydney (Nelson)
Chetwynd, G. R.Jones, Elwyn (W. Ham, S.)Simmons, C. J. (Brierley Hill)
Coldrick, W.Jones, Jack (Rotherham)Skeffington, A. M.
Collick, P. H. (Birkenhead)Jones, J. Idwal (Wrexham)Slater, Mrs. H. (Stoke, N.)
Corbet, Mrs. FredaJones, T. W. (Merioneth)Slater, J. (Sedgefield)
Cove, W. G.Kenyon, C.Sorensen, R. W.
Craddock, George (Bradford, S.)King, Dr. H. M.Sparks, J. A.
Cronin, J. D.Lawson, G. M.Stewart, Michael (Fulham)
Cullen, Mrs. A.Ledger, R. J.Stones, W. (Consett)
Dalton, Rt. Hon. H.Lee, Frederick (Newton)Stress, Dr. Barnett(Stoke-on-Trent, C)
Darling, George (Hillsborough)Lee, Miss Jennie (Cannock)Swingler, S. T.
Davies, Ernest (Enfield, E.)Lever, Harold (Cheetham)Sylvester, G. O.
Deer, G.Lindgren, G. S.Taylor, Bernard (Mansfield)
de Freitas, GeoffreyMabon, Dr. J. DicksonTaylor, John (West Lothian)
Delargy, H. J.MacColl, J. E.Thomas, George (Cardiff)
Dodds, N. N.McGhee, H. G.Thomas, Iorwerth (Rhondda, W.)
Dugdale, Rt. Hn, John (W. Brmwch)McInnes, J.Thornton, E.
Dye, S.Macpherson, Malcolm (Stirling)Ungoed-Thomas, Sir Lynn
Ede, Rt. Hon. J. C.Mahon, SimonWatkins, T. E.
Edelman, M.Mainwaring, W. H.West, D. G.
Edwards, Rt. Hon. John (Brighouse)Mallalieu, E. L. (Brigg)Wheeldon, W. E.
Edwards, Robert (Bilston)Mann, Mrs. JeanWhite, Mrs. Eirene (E. Flint)
Edwards, W. J. (Stepney)Mason, RoyWhite, Henry (Derbyshire, N.E.)
Evans, Albert (Islington, S.W.)Mitchison, G. R.Willey, Frederick
Fernyhough, E.Monslow, W.Williams, Rev. Llywelyn (Ab'tillery)
Fienburgh, W.Moody, A. S.Williams, W. R. (Openshaw)
Finch, H. J.Morris, Percy (Swansea, W.)Willis, Eustace (Edinburgh, E.)
Fletcher, EricMoyle, A.Wilson, Rt. Hon. Harold (Huyton)
Forman, J. C.Mulley, F. W.Yates, V. (Ladywood)
Fraser, Thomas (Hamilton)Neal, Harold (Bolsover)Younger, Rt. Hon. K.
Gaitskell, Rt. Hon. H. T. N.O'Brien, Sir Thomas
Gibson, C. W.Oliver, G. H.TELLERS FOR THE AYES:
Gordon Walker, Rt. Hon. P. C.Oram, A. E.Mr. Wilkins and Mr. Horace Holmes
Agnew, Cmdr. P. G.Hay, JohnNicholls, Harmar
Aitken, W. T.Heald, Rt. Hon. Sir LionelNicolson, N. (B'n'm'th, E. & Chr'sh)
Allan, R. A. (Paddington, S.)Heath, Rt. Hon. E. R. G.Nield, Basil (Chester)
Alport, C, J. M.Hill, Rt. Hon. Charles (Luton)Noble, Comdr. A. H. P.
Anstruther-Cray, Major W. J.Hill, Mrs. E. (Wythenshawe)Oakshott, H. D.
Armstrong. C. W.Hill, John (S. Norfolk)O'Neill, Hn. Phelim (Co. Antrim, N.)
Ashton, H.Hinchingbrooke, ViscountOrmsby-Gore, Hon. W. D.
Atkins, H. E.Hirst, GeoffreyOrr, Capt. L. P. S.
Balniel, LordHolland-Martin, C. J.Orr-Ewing, Sir Ian (Weston-S-Mare)
Banks, Col. C.Hope, Lord JohnOsborne, C.
Barber, AnthonyHorobin, Sir IanPage, R. G.
Barlow, Sir JohnHorsbrugh, Rt. Hon. Dame FlorencePannell, N. A. (Kirkdale)
Barter, JohnHoward, Gerald (Cambridgeshire)Partridge, E.
Baxter, Sir BeverleyHoward, John (Test)Pilkington, Capt. R. A.
Bell, Philip (Bolton, E.)Hudson, Sir Austin (Lewisham, N.)Pitman, I, J.
Bidgood, J. C.Hudson, W. R. A. (Hull, N.)Pott, H. P.
Black, C. W.Hughes Hallett, Vice-Admiral J.Powell, J. Enoch
Body, R. F.Hughes-Young, M. H. C.Price, David (Eastleigh)
Boothby, Sir RobertHurd, A. R.Prior-Palmer, Brig. O. L.
Boyle, Sir EdwardHutchison, Sir Ian Clark (E'b'gh, W.)Raikes, Sir Victor
Braithwaite, Sir Albert (Harrow, W.)Hutchison, Sir James (Scotstoun)Ramsden, J. E.
Booman-White, R. C.Hyde, MontgomeryRedmayne, M.
Buchan-Hepburn, Rt. Hon. P. G. T.Hylton-Foster, Sir H. B. H.Renton, D. L. M.
Butcher, Sir HerbertIremonger, T. L.Ridsdale, J. E.
Butler, Rt. Hn. R.A.(Saffron Walden)Irvine, Bryant Godman (Rye)Rippon, A. G. F.
Campbell, Sir DavidJenkins, Robert (Dulwich)Roberts, Sir Peter (Heeley)
Carr, RobertJennings, J. C. (Burton)Robinson, Sir Roland (Blackpool, S.)
Cary, Sir RobertJohnson, Dr. Donald (Carlisle)Rodgers, John (Sevenoaks)
Chichester-Clark, R.Johnson, Eric (Blackley)Schofield, Lt.-Col. W.
Cole, NormanJohnson, Howard (Kemptown)Sharples, R. C.
Cordeaux, Lt.-Col. J. K.Joseph, Sir KeithShepherd, William
Corfield, Capt. F. V.Joynson-Hicks, Hon. Sir LancelotSimon, J. E. S. (Middlesbrough, W.)
Craddock, Beresford (Spelthorne)Kaberry, D.Smithers, Peter (Winchester)
Crosthwaite-Eyre, Col. O. E.Keegan, D.Spearman, A. C. M.
Crouch, R. F.Kerby, Capt. H. B.Speir, R. M.
Crowder, Petre (Ruislip-Northwood)Kerr, H. W.Spence, H. R. (Aberdeen, W.)
Cunningham, KnoxKershaw, J. A.Spens, Rt. Hn. Sir P. (Kens'gt'n, S.)
Currie, G. B. H.Kimball, M.Stanley, Capt. Hon. Richard
D'Avigdor-Goldsmid, Sir HenryKirk, P. M.Stevens, Geoffrey
Deedes, W. F.Lagden, G. W.Steward, Harold (Stockport, S.)
Digby, Simon WingfieldLambert, Hon. O.Steward, Sir William (Woolwich, W.)
Donaldson, Cmdr. C. E. McA.Lancaster, Col. C. G.Stewart, Henderson (Fife, E.)
Doughty, C. J. A.Langford-Holt, J. A.Stoddart-Scott, Col. M.
du Cann, E. D. L.Leather, E. H. C.Storey, S.
Duncan, Capt. J. A. L.Leavey, J. A.Studholme, H. G.
Eccles, Rt. Hon. Sir DavidLeburn, W. G.Sumner, W. D. M. (Orpington)
Eden, J. B. (Bournemouth, West)Legge-Bourke, Maj. E. A. H.Taylor, Sir Charles (Eastbourne)
Emmet, Hon. Mrs. EvelynLegh, Hon. Peter (Petersfield)Taylor, William (Bradford, N.)
Errington, Sir EricLennox-Boyd, Rt. Hon. A. T.Teeling, W.
Farey-Jones, F. W.Lindsay, Hon. James (Devon, N.)Thomas, Leslie (Canterbury)
Fell, A.Linstead, Sir H. N.Thomas, P. J. M. (Conway)
Finlay, GraemeLlewellyn, D. T.Thompson, Kenneth (Walton)
Fisher, NigelLloyd-George, Maj. Rt. Hon. G.Thornton-Kemsley, C. N.
Fleetwood-Hesketh, R. F.Low, Rt. Hon. A. R. W.Tiley, A. (Bradford, W.)
Fletcher-Cooke, C.Lucas, P. B. (Brentford & Chiswick)Tilney, John (Wavertree)
Foster, JohnLucas-Tooth, Sir HughTouche, Sir Gordon
Fraser, sir Ian (M'cmbe & Lonsdale)Macdonald, Sir PeterTurner, H. F. L.
Freeth, D. K.McKibbin, A. J.Turton, Rt. Hon. R. H.
Galbraith, Hon. T. G. D.Mackie, J. H. (Galloway)Vane, W. M. F.
Garner-Evans, E. H.McLaughlin, Mrs. P.Vaughan-Morgan, J. K.
George, J. C. (Pollok)Macleod, Rt. Hn. Iain (Enfield, W.)Vickers, Miss J. H.
Gibson-Watt, D.Macmillan, Rt. Hn. Harold (Bromley)Vosper, D. F.
Glover, D.Macpherson, Niall (Dumfries)Wakefield, Sir Wavell (St. M'lebone)
Godber, J, B.Maddan, Martinwalker-Smith, D. C.
Gomme-Duncan, Col. Sir AlanMaitland, Cdr. J. F. W. (Horncastle)Wall, Major Patrick
Gower, H. R.Maitland, Hon. Patrick (Lanark)Ward, Hon. George (Worcester)
Graham, Sir FergusManningham-Buller, Rt. Hn. Sir R.Ward, Dame Irene (Tynemouth)
Grant, W. (Woodside)Marlowe, A. A. H.Waterhouse, Capt. Rt. Hon. C.
Grant-Ferris, Wg Cdr. H. (Nantwich)Marples, A. E.Webbe, Sir H.
Green, A.Mathew, R.Whitelaw, W.S.I. (Penrith & Border)
Gresham Cooke, R.Maudling, Rt. Hon. R.Williams, Paul (Sunderland, S.)
Grimston, Sir Robert (Westbury)Mawby, R. L.Williams, R. Dudley (Exeter)
Grosvenor, Lt.-Col. R. G.Maydon, Lt.-Comdr. S. L. C.Wills, G. (Bridgwater)
Gurden, HaroldMedlicott, Sir FrankWilson, Geoffrey (Truro)
Harris, Frederic (Croydon, N.W.)Milligan, Rt. Hon. W. R.Wood, Hon. R.
Harris, Reader (Heston)Molson, A. H. E.Yates, William (The Wrekin)
Harrison, Col. J. H. (Eye)Nabarro, G. D. N.TELLERS FOR THE NOES:
Harvey, Air Cdre. A. V. (Macclesfd)Nairn, D. L. S.Lieut-Commander Richard Thompson
Harvey, John (Walthamstow, E.)Neave, Aireyand Mr. Edward Wakefield

Question put and agreed to.