POOR LAWS COMMISSION (UNEMPLOYMENT).

HC Deb 19 May 1909 vol 5 cc484-525

At a quarter after Eight of the clock,

Mr. E. H. PICKERSGILL

rose to call attention to the recommendations contained in the Minority Report of the Royal Commission on the Poor Laws so far as they affect unemployment; and to move, "That, in the opinion of this House, it is urgently necessary to take steps for the decasualisation of casual labour and for the absorption of the surplus labour thereby thrown out of employment; also to regularise the demand for labour, to develop trade union insurance against the risks of unemployment, and to establish training colonies and detention colonies."

I need not apologise to the House for calling attention to the subject of unemployment, because this is a question which excites the most profound and, I may add, a very painful interest outside this House. In the first place, let me say that I welcome cordially the proposal to establish a system of labour exchanges, which will at least be a great gain, because it 'will save the workmen from the soul-destroying necessity of travelling the streets in search of work. I hope these exchanges will follow the model of the bureau at Berlin. If we can establish a network of labour exchanges over the whole country in communication with each other we shall at least secure that labour, and all the work which is available shall be brought together without any economic waste or friction. I believe that this proposal will be welcomed by trade unionists. We have already had experience on a small scale in regard to this question in London. The labour exchanges which have been established by the central body were at first regarded with suspicion, but now that feeling has changed, and some of the largest and most influential trade unions keep their vacancy books at the labour exchanges. I may mention as an instance the case of the Amalgamated Society of Engineers and the Carpenters and Joiners, and it is interesting and significant to note that the feeling of trade unionists towards labour exchanges runs exactly the same course in Germany. If salvation lies in the direction of labour exchanges, what a pity it is that the Government have allowed 3½ years to pass without taking action. It is all the more amazing when we remember that the Unemployed Workmen Act of 1905 made a statutory duty upon every county council and every county borough council to establish labour exchanges. The Local Government Board, however, has so far not been enforcing that statutory duty upon the local authorities that a couple of months ago the President of the Local Government Board was not able to tell me how many of such institutions were at work.

I pass on now to refer to a result which is expected from these labour exchanges different from that to which I have referred, namely, the mere bringing of labour and work together. Both the Majority and the Minority Reports of the Royal Commission emphasise the fact that what this country is suffering from is not so much unemployment as under-employ-ment. Both reports tell us with almost painful iteration that casual labour is a great evil. Now it is anticipated that by means of exchanges casual labour will be, I will not say abolished, but reduced to a minimum. It does not enter into the object of my speech to go closely into details, because this subject has been most admirably treated in a book which has been written on this Question by Mr. Beveridge, who states that by means of labour exchanges it is hoped and expected, and I share that hope and expectation, that different employers will draw on the same reserve of labour, with the result that the members of this reserve will enjoy continuous employment from a succession of employers.

Let us assume that the expectations of the Government—because this view is shared by the right hon. Gentleman who has just entered the House (Mr. Burns)—are realised, and that labour is decasualised—that is, that the casual labour is decasualised. The effect would be to throw some casual labourers out of employment altogether. Take the illustration given in the Minority Report. The work of the Liverpool docks is spread at the present time over 15,000 workmen, who are chronically under-employed. If the whole of that work was done, as the Commission submit it could be done, by 10,000 men, the social gain to Liverpool would be great, but 5,000 workers would be squeezed out altogether. I do not think we ought to shirk that result. I think it is better for the community that 10,000 men should be regularly and continuously employed than that 15,000 men should be casually or intermittently employed. But what is to become of the surplus? They cannot be left to starve. It is clear, therefore, that the decasuali-Kittion of labour ought not to be undertaken unless simultaneously we provide for those who will be squeezed out. They must not be squeezed out because that would be a cruel policy. The needs of the community may require that this surplus should be squeezed out, but the community is not justified in making this surplus a sacrifice to the rest. The Minority Report sees this very clearly, and makes proposals which will have the effect of providing for the surplus which would be squeezed out. I will run over those proposals very rapidly. In the first place the Minority Report suggest restrictions upon boy labour. There can be no doubt that the employment of boys is to some extent, at all events, responsible for throwing men out of work. The practice of employing successive relays of boys in factories and workshops is a growing evil. No one has spoken on this subject more strongly than the right hon. Gentleman the President of the Board of Trade. This is what he said:— The whole of the labour market is deranged by the competition of hoys who do men's work for boy's wages, and are turned off as soon as they demand men's wages. He proceeded to show what was the ultimate effect by pointing to the fact that 28 per cent. of the applicants under the Unemployed Workmen Act were between the ages of 28 and 30. I want to get the approval of the House to the principal of the proposal of the Minority Report, and I appeal to hon. Gentlemen below the Gangway opposite to do what they can to induce the fathers of these lads to look with a favourable eye on this Report. For my own part I am sure working men stand to gain by it. They would gain by these proposals by the raising of the standard of life, although they would lose by the little pittance their children may bring home in the shape of wages. The second proposal of the Minority's Report is to reduce the hours of railway men and tramway men and drivers. The Board of Trade Returns do not reveal the exact number of railway men; but in 1907 there were thousands who were kept on duty over 12 hours a day, and drivers and tramway conductors were kept on duty 70, 80, or even 90 hours per week. These men are absolutely cut off from all real home life. Do not let us forget from a national and social point of view that these excessive hours of labour are second only to unemployment. I may add that the proposal of the Minority's Report contains no new principles. The foundation was laid by the Regulation of Labour Act of 1903. It is not suggested that the particular work hitherto done by boys or by labour men should be given to men displaced by decasualisation. Of course it is not suggested that the most demoralised men among the casual labourers should become railway signalmen or tramway conductors. That is not the way in which the social and industrial case will be worked out. Let me give an analogous case. When a slum area is cleared it is not the old slum population which occupies the new dwellings which arise on the site.

Many years ago in the innocence of our hearts and in the enthusiasm of youth we warmly supported the idea that the old slum population would occupy the new dwellings. That is not the result We know that it is a class above the old slum population which moves into the new dwellings. Hitherto, Mr. Speaker, I have dealt with some suggestions made in the Minority Report to provide employment for the surplus population. The Minority's Report takes a wider sweep and suggests the method by which the general demands for labour may be regularised. The methods are described with admirable lucidity. It is to set up an ebb and flow of national and local expenditure for the purpose of counteracting the flow and ebb of private industry, or in homelier and humbler words, to provide that when the demand for labour by the private employer arises then the municipality should step in. Take the Government first. In every Department of the State it is clear that there is a certain proportion of ordinary public work which must be constructed, but which is not necessarily constructed in any particular year of a series of years. It is proposed then that upon such works as well as upon works which are not ordinary, £40,000,000 should be expended in a 10 years' programme. Resides ordinary works, as I said, there may be other works. It is quire clear that this programme, besides the ordinary work of a public department, could be carried out; n intermittant spells. What is all important is that these would not be relief works. The demand for labour which these works would create would be supplied through the ordinary trade channels, and the work would be executed in the ordinary way. With regard to ten years' programmes, this House is not unfamiliar with programmes extending over a period of years. We have had many such programmes. We have had public works constructed out of loans extending over a considerable period of years. There have been programmes for the construction of military works. I am aware that the practice of getting authority in an Act of Parliament to extend these works over a number of years has been very strongly opposed on this side of the House. These objections possibly do not equally apply to work of a totally different character. Whatever may be the force of the objections they are. to my mind at least, far more than counterbalanced by the advantage of this scheme, and, therefore, this is a case in which good reasons must perforce give way to better. I want to go further, and to encourage local activity and expenditure as well as national expenditure. I think the local authority should be stimulated by grants in aid. It is suggested that this might well be a ten years' programme of capital grants in aid of local expenditure on educational buildings. But you must not entertain the hope that when you have done this there will not still be periods of unemployment. It seems desirable, therefore, that the State should encourage and develop insurance against risks of unemployment. I do not desire to develop that idea now, but there are one or two observations which I should like to make upon the principle, and they are these. In the first place it seems to me the State would do well to avail itself in this matter of the organisation and the past experience of trades unions. One of the principal difficulties of working schemes of insurance against unemployment is obviously that of framing suitable regulations with regard to the acceptance or refusal of work when it is offered. Here there would be an enormous advantage in working through the trades unions, and there would be ample provision against what one might call a fraud on the fund. That would be met, and amply so, by providing that the State subsidy should bear a certain proportion to the money actually paid in out-of-work benefits by the trade union concerned.

There is a second observation I would like to make, and it is this. I would like, if possible, to make the employer bear a share of the burden of insurance. It is said with a great deal of force that it is both impolitic and inequitable that, as soon as it pays an employer to drop a man, he should be taken care of by the State until it suits the employer to re-engage him. There is much force in this argument, and if the employer were made to share the burden, it is obvious he would be under a strong inducement, so far as possible, to retain at work his men during periods of industrial depression.

Lastly, it is proposed to establish training colonies, where the men may be trained to become self-supporting. The experience in regard to Hollesley Bay is that it has been, upon the whole, encouraging, and I say, with confidence, that where it has failed it has been in the inability to finance those sections of the work which would give a man greater opportunity for earning an independent livelihood after his period of help had expired. The original idea of the Hollesley Bay Colony was not merely to give relief for a time and then to let the man slip back into the abyss of unemployment. The original idea was to pass him on into permanent work, but the Local Government Board now insist on regarding Hollesley Bay only as a means of offering temporary relief and not as a means of training. The right hon. Gentleman the President of the Local Government Board told the Central Body under the Act of 1905 that it was only intended for the provision of temporary relief, but that is not what the Act says. The right hon. Gentleman is not, at least yet, emancipated from the control of Parliament. The Act says that the central body may assist an unemployed person by providing temporary work, not as relief but in such manner as is thought best calculated to put him into a position to obtain regular work or other means of supporting himself. Unfortunately, at least I think so, the right hon. Gentleman put his foot down, and thereupon the stimulus of hope, was taken away from Hollesley Bay, and, so far as it has failed, that is the root and the cause of the failure. You want, of course, in these training colonies an outlet for regenerated men, men who have been set up in body, in whom you have put mind and heart, and skill—you want an outlet for such men. You also want detention colonies for that class of wastrels with which, unhappily, we are afflicted. I submit these proposals to the House in the aggregate. They must be taken as a whole. If you take one, it would be insufficient. Theymustre regarded as a whole, and so regarded they seem to furnish a plan for dealing with unemployment which is reasonable, comprehensive, and efficient. I need not remind the House how the majority of Members feel on this question of unemployment. They know, as well as I know, the profound disappointment felt outside this House at the pledges of the Government in this matter not having yet been redeemed. There, is just one other word which I would say. I daresay many of us must have been witnesses of those scenes which daily and nightly have been enacted on the Embankment. The tolerance of such scenes as these is a confession that the State is conscious that it has failed to discharge its duties. I say that the feeding of men and of women in that manner is a disgrace. It ought not to be tolerated for an hour, but so long as you refuse to do your duty to those men you dare not prohibit it. I beg to move.

Mr. PERCY ALDEN

I beg to second the Resolution which the hon. Gentleman has placed upon the Paper, and I desire to thank him for giving us the opportunity o? discussing this important matter. It is true that the House is thin, but the subject is of such grave and serious importance that I think our time is very well spent, and I think also that the very practical nature of the speech which we. have just heard is likely to render our discussion of more value than would other wise be the case. I should like to say a word first about this question of casual labour, because unfortunately for many years of my life I have had experience of it. As the hon. Member who represents not only the Local Government Board, but also West Ham (Mr. Masterman), knows perfectly well, we are face to face with it in many districts of East London. I recollect paying a visit to a part of London which the President of the Local Government Board knows very well—the docks—and I was amazed one morning at seeing 1,000 men waiting for work for 100, and was still further amazed by the acts of brutal violence which were put forth by men in trying to obtain that work I admit that those scenes of violence have passed away, but there is still the same profound disappointment felt by the thousands of men at their inability to obtain one day's labour in the docks. This question of casual labour, as has been pointed out by the hon. Member, and as has been pointed out in both of the Reports of the Poor Law Commission, and which has been emphasised in Mr. Beveridge's book, and which is well known to every man who has studied the problem of unemployment, this question of casual labour does lay at the root of the problem, and any attempt on the part of the Government to decasualise labour seems to me to be worthy of praise. The question we have to ask ourselves is whether the present method of dealing with casual labour is of any value. I confess, as far as the labour register is concerned, I have very little faith in it, and I have been able to see very little result from it. I think the superintendents and the clerks in charge of the labour registers have done their very best with the very poor machinery at their disposal, but there is very little that they can do, and sometimes T am inclined to think that under the present conditions the labour registry is a place where a man who is unemployed registers his name in order to demonstrate the inability of the local authority to find him work. We understand that it is the intention of the Government and of the right hon. Gentleman the President of the Beard of Trade to try to remedy this state of affairs, and we are hopeful that the labour exchanges, which will be set on foot before very long, will make it possible to decasualise labour, and, therefore, make it possible to deal with the residuum of labour, which will be found after labour has been decasualised. The hon. Member, who introduced this Resolution, has re- ferred to the fact that the Minority Report states that some 5,000 men will be left without work, after all the dock labour of Liverpool has been regularised, and after all the casual labour there is decasualised, and I think I may add, and I am quite sure the President of the Local Government Board will agree with me, that if you regularise and decasualise the dock labour of London, the probability is that you will have something like 10,000 men to deal with, and to find employment for. I may possibly refer to the suggestions of the Minority Report for dealing with these men, but for the present I should like to say that they must be dealt with, and I imagine that it is the intention of the Government, after they have introduced and carried through the Labour Exchanges Bill, to take in hand the helpless individuals, who would otherwise be thrown utterly upon their own resources. Just one word of warning, if I may be allowed to give it to the Government, with regard to this question of Labour Exchanges. I do not think, however wisely they are managed, however carefully they are controlled, that the Labour Exchanges will appreciably lessen unemployment. I do think they will ease the situation greatly. I think they will make it possible for the working man who is out of work, and for whom a situation is to be found, to find that situation quickly, and will save him the hardship of walking about week after week in search of work. But I cannot come to the conclusion that unemployment will be appreciably lessened, even when the labour exchanges are in full operation. Going to Germany for our example, I imagine that there is no place in the world where labour bureaux are better managed, or more scientifically managed than in Germany. Take the large cities of Munich, Leipsic, Strasburg, and Berlin, and examine their work most carefully and most thoughtfully planned, one still comes to the conclusion that all the labour exchanges can do is to find work where there is work to find, and to fill rapidly and easily the situations which are vacant. But more than that, they cannot possibly do, and therefore it is that we look to the Government to take the next step—to take some other step, at all events, in finding work for those who are left out after all the vacant situations have been filled up by the labour exchanges. At the same time, I do think, and I believe the House will agree with me, that the establishment of labour exchanges is absolutely a necessary first step, and until these exchanges have been established it is impossible to proceed forward with any programme which the Government may have in hand. May I be allowed to say just one word about trades unionism and the question of insurance. I do not know what the plan of the Government may be with regard to insurance. I only hope that it is not a plan which deals with labour apart altogether from existing organisations. I am quite convinced that the line of least resistance, for the present at all events, is to give subventions to those organisations—trades unions and other organisations—which are already in existence, and which are already doing a very desirable piece of work. I would suggest that, whatever may be done in the future in connection with labour exchanges to help those who are outside trades unions—and I trust some such action may be taken—I do think the Government would be well advised, in the first place, in subsidising all the existing organisations which give out-of-work pay and benefit, and thereby encourage the unions which do not give out-of-work pay and assist them to start out-of-work benefit funds. I am convinced from my own experience and conversation with various trades union leaders that it only requires the encouragement suggested in the Minority Report, and which has often been suggested before, to make trades unions immediately start such funds, and although that is not a remedy for unemployment it is a very important matter.

It is, of course, an excellent suggestion that we should try to regularise the demand for labour, and that we should ask Government Departments to spread their work over the lean years as well as the years which are full of employment, and if the. Government can, in part at all events, carry out such an idea they would appreciably lessen the evil of unemployment in times of trade depression. But I think the Minority Report expects too much perhaps from this suggestion. I fear there will still be, even supposing the demand for labour can be regularised in the way that has been suggested, a large stagnant pool of surplus labour which cannot thus be utilised, and undoubtedly this would be an opportunity for labour or training colonies to be established in various parts of the country. I do not think the labour or training colonies have been quite fairly tried. I admit that the experiment is an extremely difficult one, and that it is hemmed round by all sorts of obstacles. I admit that many men who have been sent to training colonies and labour colonies in the past are men who ought never to have been there, and who never can benefit by the kind of work that is given there, but at the same time I feel that if these training colonies on the lines suggested in the Minority Report could be established in all parts of the country, and if the men under training, who are at present useless on the labour market and unable to find work, and possibly unwilling to work even if they could find it, could be sent to these colonies and trained and you found them useful work in the future, it would lift a very great weight from the national conscience.

I desire once more to thank the hon. Member who introduced the Motion for giving us a chance of discussing the subject in this practical fashion, and I trust the Government after its Labour Exchanges Bill has become law, and after they have made an attempt to deal with the rather vexed and difficult question of insurance, will go on to take up these larger schemes which have been hinted at in the past, and which were even hinted at by the Chancellor of the Exchequer in his Budget Speech, those schemes of afforestation, and possibly land reclamation, which would give an opportunity to a large number of men who at present constitute the surplus labour of the country to find useful and lucrative employment. I beg to second.

Mr. RAMSAY MACDONALD

I have the greatest pleasure in rising to support the Resolution. I am sure the House will feel regret that this Report has not been before us before now. The Government year after year, ever since it came into office, has been dangling this Report before us, and telling us that as soon as it was presented we were to have legislation. We were told last year that we were to have legislation this year. This Session is already mortgaged. It is absolutely impossible for any new substantial measures to go through the House, and I am afraid what has to be done will be put off till next year; but there is one source of satisfaction to be found in this Report to those of us who sit on these benches. In practically every respect the Minority Report supports the proposals that we have been making here from time to time. In no sense and in no important point is the Report new to us. It describes unemployment in language which is very familiar to us. It makes proposals for dealing with unemployment which are practically the same as the proposals that we have been making. For instance, it lays down quite clearly and quite indisputably that unemployment is a continuous feature of modern society. It is not casual. It is not now and then, but always. It is made greater than it normally is by periods of exceptional distress, but even when trade is busiest, and when the volume of exchange is greatest, and is being carried on most continually, there is a residuum of unemployed that requires the attention of the State.

The Report also points out that where no work has been or can be found maintenance ought to be found. It also points out that in certain respects it would be better not to find work, but simply to maintain by a system of insurance. That is a point that we have been making time after time. I am not quite sure that the best method of dealing with this question has yet been discovered. The Resolution which is before us asks the House to declare for the development of trades union insurance. Hon. Members must be aware that in the various unskilled trades unions the unemployed risk is very great, consequently the unemployed insurance premium must be very high. But if you impose a high unemployed insurance premium upon unskilled workmen, then you are not developing trades union insurance, but you are damaging trades unionism. I am not saying that the difficulty cannot be overcome. It has been suggested, for instance, that in any particular trade where the risk is high the subvention should be equally high, or at any rate should be high in proportion, but I am not quite sure that we are prepared to face public opinion, and say we are going to give high subventions to employers of labour who may use the casual nature of their employment to their own profit and not to public use. That is a point which must be considered. I am not putting it forward at all as being an insuperable point, but it must be considered, and whatever mechanism is ultimately adopted must be of such a nature as to meet that particular point.

There is this further point which must be considered. There are other agencies besides the. trades unions which insure, or might be created very properly to insure, against unemployment. Is this House prepared to single out from a series of such agencies any one for preferential treatments? Again, I only put the point because I understand the Government is considering the matter, and I think the Government ought to consider it with the fulness of knowledge, and not with a paucity of knowledge.

There is another point. What about women? We know perfectly well that unfortunately, in spite of the enormous sums of money that have been spent for the purpose of trying to get women inside paid unionism, and in spite of the enormous amount of human effort that has been spent to the same end, with the exception of one or two trades the results have been heartbreaking in their smailness. But still, unemployed women must be considered. An unemployed woman has just as much claim upon this House and the State as an unemployed man, more particularly if she is winning her bread and dependent on her own industrial efforts. I venture to say that if this House or the Government were to go to women and say to them, "We will give you subventions to a fund to which you subscribe to protect yourselves against unemployment," it must be regarded by everybody who understands the condition of women as simply offering them a stone. In nine cases out of ten a woman is not in a position to take advantage of any such oiler. Therefore, in devising a means of insurance the Government must consider the very difficult and the very hard case of the industrial woman who is dependent on her own earnings in order to enable her to keep up her head and make her living. Where, of course, a woman is a widow with children I think you might adopt the Australian experiment of boarding the children out with their own mother.

The hon. Member who moved this Resolution dealt with the problem of casual labour. I am in favour of organising the casual labour of this country. I know that the first effect of that will be to narrow the field of employment. You will pus a small number of men into continuous employment, and throw off from that particular kind of employment the margin so long as it is within the field that casualises the whole field. In other words the Government is now going to establish upon some national basis, upon some national machinery, the very condition of labour that the dock strike of 1889 attempted to do, and as the hon. Member says, we shall then only be placing ourselves in a position to assume responsibility for the employment of casual workmen. The argument that has been offered to the various proposals made in this House that the State, as the State, cannot find any employment for the unemployed except what private employers can supply. Of course, that is a profound mistake. The State can find employment which private employers cannot find, and the Report of the Commission gives us valuable backing in that respect. I am glad that the House is coming to see more and more the truth of the argument we have been using. Take a case in point, namely, afforestation. The virtue of afforestation is not merely that it puts a few men to work and gives an opportunity to local authorities and to the State to find employment for casual labour. That is not the chief value of afforestation. The chief value is that it creates a new labour market, and creating a new labour market it creates a new market of consumers. It creates a new economic demand. It increases the economic demand that the consumers of the country make upon the producers of the country, and consequently it tends to widen the basis of your employment and to give very much better security for the mass of your wage earners who are living from decade to decade. That is the economic justification for afforestation. It has been proved that afforestation cannot and will not be established adequately by private enterprise. It requires communal and State enterprise to put it on a sound foundation.

A further point mentioned in this Resolution is that training colonies should be established, and along with them detention colonies. Training colonies have been a very familiar subject of discussion from these Benches, and I am not to-night going over ground which has already been well trodden. The Minority Report is so full in its details, so accurate in its knowledge, and so complete in the way it is drafted that it fully bears out everything we have said about Hollesley Bay. The idea that Hollesley Bay embodies is that if you get waste land and waste labour they can be put to use, and it is a most obvious conclusion that if you can get waste labour in touch with waste land, then you solve. at any rate for the time being, a considerable part of the unemployment problem. Another point which was mentioned by my hon. Friend who proposed the Motion is the question of boy labour. I do not know what the Government propose to do in regard to boy labour, but there again the importance of the problem is only equalled by its delicacy and difficulty. For instance, are you going to prohibit boy labour up to the age of 16 or 17, or are you going to establish a new form of half-time after the age of 14 or 15? Those who are in favour of the drastic treatment of boy labour are divided in their opinions on this subject. I think it is quite clear that it would be a profound mistake to dissociate young people up to the age of 18 from the ordinary processes which are required to make a living. It appears to me that the system of apprenticeship, combined with sound education, is the better way of proceeding. You get that system admirably illustrated in some of the French schools to-day. I have been in these schools, and I have personal knowledge of them. If you go to these schools in the morning you find boys and girls are being taught drawing, the rudiments of science and mechanics, and so on; and if you go to the same school in the afternoon you would think you were in the annexe of a busy workshop. They are taught the art and science of a trade in the morning, and in the afternoon they are taught to specialise in a particular trade or group of trades. I am not at all sure of the next stage we will take. I do not know whether it will be a final stage or not. I am not interested in final stages. I am not sure whether it will be a stage which will combine the dead apprenticeship system with the benefits of a still unborn system of technical and scientific education. I only offer these observations when the Government is considering this question—we have been told over and over again that it is considering I he question—so that it may have not only one point, but several points to consider. I think the most valuable frame of mind that this House can remain in at the present moment is the open frame of mind. The Minority Report, backed up by the agitation that the Labour party has conducted in the country, has made it absolutely impossible for this or any other Government to neglect the case of the unemployed any more and has also placed before the country a sufficient body of well-informed opinion, an accurate description of the problem and a sufficient number of practical proposals for the solution of the problem. The country is now bound, and the Government is now bound, to consider this question in the light of the Minority Report and the Labour party agitation. That being secured, the impact being there, the absolute necessity of treating the question being in existence, what this House ought to do is to approach this delicate problem, consider the lot of suggestions which are before us and, by the amalgamation of the good and the elimination of the bad, to present to us a series of Bills and propositions dealing with the various aspects of this problem. That, taken as a whole, will really be of substantial advantage towards the elimination of the heartrending and exceedingly difficult problem, the unemployed man or woman wanting work, but unable to find it under modern social conditions.

The PRESIDENT of the BOARD of TRADE (Mr. Churchill)

I am indebted to ray hon. Friend (Mr. Pickersgill) whose Motion occupies the Paper this evening for the opportunity which his Motion affords of making some statement upon the subject of unemployment and the measures to be taken to cope with that problem on behalf of the Government. There are three Departments in the State which are in the main concerned with the Motion which the hon. Member has brought forward. They are the Home Office, the Local Government Board and the Board of Trade, and each Department is concerned with a different part of that problem. The Home Office is concerned with the regulatory and disciplinary aspect, with the Factory Acts, and so on. The Board of Trade is concerned with the organisation of industry, so far as the Government may properly concern itself with the organisation of industry, and the Local Government Board is the Department which deals with relief, with curative and relieving processes apart from the functions of the other two Departments that I have mentioned. And it is with the organisation section of the problem that it will be my duty to deal as President of the Board of Trade and any suggestions or proposals which I may submit in the course of this Debate are concerned with organisation, and with organisation alone. They do not extend to other aspects of the problem, in some of which my right hon. Friend is deeply and actively concerned at the present time, but only with this one aspect of organisation; and the proposals which I shall venture to submit to the House must not, I ask, be judged as if they were an attempt to cover the whole field of these larger questions, but must only be judged in so far as they deal with that particular sphere which falls to the province of the Board of Trade. The first proposal which I think emerges from the argument of the hon. Gentleman is the proposal to establish a system of labour exchanges, and I hope to ask the House to-morrow for permission to introduce a Bill for the establishment of a national system of labour exchanges.

There is high authority for such a measure. The Majority and Minority Reports of the Poor Law Commission, differing in so much, agreeing in so little, are agreed unanimously in advocating a. system of labour exchanges as the first step which should be taken in coping with the problem of poverty and unemployment. Conferences were held in London the other day by delegates who represented 1,400,000 trade unionists who passed a resolution in favour of this policy. The Central (Unemployed) Body, who are equally concerned in these matters, have approved of that policy. The delegates of the Labour party who went to Germany a few months ago returned greatly impressed with the Exchanges which they saw at work in Germany. Economists as diverse in their opinions as Professor Ashley, of Birming ham, and Professor Chapman, of Manchester—leading exponents of Tariff Reform and of Free Trade—have all publicly testified in favour of such proposals; and several prominent Members of the Front Opposition Bench have in public, either in evidence before the Commission or in speeches in the country, expressed themselves as supporters of such a policy. The argument from authority is reinforced by the argument from example, because as early as 1904 Germany, Austria, Switzerland, France and Belgium all exhibited the system of public labour exchanges and public labour bureaux in full working order; and since. 1004 Norway has also adopted some application of that system. Mr. Bliss, who was sent over by the Government of the L'nited States to investigate the conditions and methods of dealing with unemployment in European countries last year, has, in the May bulletin for last year of the Washington Bureau of Labour, surveyed the whole field of unemployment organisations in European countries, and has come to the conclusion that a principal element in the methods by which that difficulty may be successfully treated lies in the establishment of public labour exchanges; and he draws great attention to the rapid and successful development in the last 15 years of the system in Germany. So we not only have the practical consensus of opinion of all authorities, irrespective of party, irrespective of the point of view in this country in favour of such a system, but we have the evidence of the successful practice of the greatest industrial community on the Continent and its continuous extension in different forms and under different circumstances to many other countries of the Continent of Europe.

With such argument from authority and example it is hardly necessary to submit the case upon its merits, but there are two general defects in the industrial position of this country which are singled out by the Royal Commission, the lack of mobility of labour and the lack of information about all these questions of unemployment. For both of these defects the policy of labour exchanges is calculated to afford a remedy. Modern industry is national. The facilities of transport and communication knit the country together as no country has ever been knitted before. Labour alone has not profited by this improved organisation. The method by which labour obtains its market to-day is the old method, the demoralising method of personal application, hawking labour about from place to place, and treating a job as if it were a favour—looking at it as if it were a favour, as a thing which places a man under an obligation when he has got it. Labour exchanges will increase the mobility of labour, but to increase the mobility of labour is not to increase the movement of labour. To increase the mobility of labour is only to render the movement of labour when it has become necessarily less painful. The movement of labour when it is necessary should be effected with the least friction, the least suffering, the least loss of time and of status to the individual who is called upon by the force of economic conditions to move. It would be a great injustice to the policy of labour exchanges if it were supposed that it would be the cause of sending workmen gadding about from pillar to post throughout the country, whereas the only result of the policy will be, not to make it necessary for any man to move who does not need to move to-day, but to make it easy for him to move the moment the ordinary economic events arise which make movement necessary. There is another thing in connection with labour exchanges. They will not to any large extent create new employment. In so far as facilities for getting labour on particular occasions sometimes leads to extra men being taken on, they will increase employment. That, however, is only a very small result. They will not directly add to the volume of employment. I never contemplated that they should. It would be to invest the policy with an air of humbug if we were to pretend that labour exchanges are going to make more work. They are not. What they are going to do is to organise the existing labour, to reduce the friction which has attended the working of the existing economic and industrial system, by reducing the friction of that system we cannot help raising the general standard of economic life.

As to lack of information, labour exchanges must afford information of the highest value in the sphere of social subjects on which we are lamentably ill-informed. In proportion as this system comes to be used it will afford us accurate contemporary information about the demand for labour, both as to the quantity and quality of that demand, as between one trade and another, as between one district and another, and as between one season and one cycle and another. It will enable us to tell workmen in search of work where to go, and it will also enable us, which is not the least important, to tell them where not to go. Over and over again at the present time men are led by the rumours of work. They crowd into a district, to find that there is no gratification of their hope, and, if there is gratification, it is wholly insufficient for the numbers who have been led to make that desultory pilgrimage. In association with the school employment bureaux which so many educational authorities are now starting in Scotland, and to a lesser extent in England, we hope that the system of labour exchanges will have, the effect of enabling us to guide to some extent a new generation into the trades which are not overstocked, and which are not declining, and to prevent the exploitation of boy labour, to which the hon. Member for Leicester (Mr. Ramsay Macdonald) has referred. So far as local and accidental unemployment is concerned, by which I mean unemployment in one place when there is a demand for labour in another, the labour exchanges will undoubtedly diminish that evil. They are, further, the only method of grappling with the evils of casual employment, which are singled out by the Royal Commission as being the original fountain of so many of the greatest evils in our social life. We hope that they will help to the process of dovetailing one seasonal trade into another, so that people who are always slack at a particular season in one trade may acquire in some cases a secondary trade which is only brisk at that season, and which will enable them to obtain a uniform average in the economy of their domestic life. Labour exchanges, by dispensing with the need of wandering in search of work, will render it for the first time possible to deal stringently with vagrants.

I am quite sure that those who know the sort of humiliation to which the genuine working man is subject, by being very often indistinguishable from one of the class of mere loafers and vagrants, will recognise as of great importance any steps which can sharply and irretrievably divide the two classes in our society. Lastly, labour exchanges are indispensable to any system of unemployment insurance, or, indeed, I think to any other honourable method of relieving unemployment, since it is not possible to make the distinction between the vagrant and the loafer on the one hand and the bond fide workman on the other, except in conjunction with some elaborate and effective system of testing willingness to work such as is afforded by the system of labour exchanges. I shall to-morrow have an opportunity of asking the permission of the House to introduce this Bill, and we present it to the House as a piece of social machinery, nothing more and nothing less, the need of which has long been apparent, and the want of which has been widely and cruelly felt by large numbers of our fellow countrymen. I said a little earlier that we might profit by the example of Germany, but we may do more, we may improve on the example of Germany. The German system of labour exchanges, although co-ordinated and encouraged by the State and by the Imperial Gove2-nment, is, nevertheless, mainly municipal in its character. Starting here with a clear field, and with the advantage of experience and of experiments in other lands, we may, I think begin at a higher level and on a larger scale than has been done in any other country up to the present time. The utility of a system of labour exchanges, like the utility of any other market, increases with its range and scope, and we propose, as the first principle of our system of labour exchanges, to adopt a plan which shall be uniform and national in its character, and in that we are supported both by the Minority and Majority Reports of the Royal Commission on the Poor Law. During the last few months a Departmental Committee has been sitting at the Board of Trade elaborating the details of this scheme, and I am glad to tell the House and the hon. Members who moved and seconded this Motion that those details are now very far advanced. We should propose, if the House assent to the Bill, to divide the whole country into about ten divisions, each with a Divisional Clearing House, and presided over by a divisional chief, and all co-ordinated with a National Clearing House in London. Distributed amongst those ten divisions will be between 30 and 40 first-class Labour Exchanges in towns of 100,000 or upwards, and about 45 second-class Labour Exchanges in towns of between 50 and 100 thousand, and 150 minor offices and sub-offices, third-class Labour Exchanges with waiting rooms will be established in the. smaller centres. The control of this system will be exercised by the Board of Trade. In order to secure absolute impartiality as between capital and labour, we propose that a joint Advisory Committee should be established in every principal centre, and on which representatives of the workers and representatives of the employers will meet in equal numbers under an impartial chairman. That is the same principle which prevails in Germany, and which has been worked successfully there.

Mr. JOYNSON-HICKS

A Government official?

Mr. CHURCHILL

An impartial officer. That is the principle that we have adopted in the Courts of Arbitration which have been established and which we adopt in the constitution of the Trade Board, which will be called into being should the Trade Board Bill obtain Parliamentary assent. I think that this balance of the contending forces under the presidency of an official whose whole interest will be to preserve the confidence of both parties, and who will at the same time be quite outside local jealousies and local difficulties, that that affords the best guarantee as to the successful and effective management of Labour Exchanges. If Parliament should assent to the Bill this Session without undue delay I should hope to bring this system of Labour Exchanges into simultaneous operation all over the country so far as practicable in the early months of next year. Temporary premises will be engaged in the first instance everywhere, but at the same time I think it very important that we should have permanent premises. A building programme is being prepared by which we will erect so many labour ex- changes every year until in about 10 years, so far as first class exchanges are concerned, we shall be permanently housed. This has been all worked out in very careful detail.

The expense of this system will no doubt be considerable. The ordinary working of the system will not be less than about £170,000 per year, and during the period when the building is going on the expenditure will rise to about £200,000 per year, not ever above £200,000 during the next 10 years. We hope that the labour exchanges will become industrial centres in each town. We hope they will become a labour market, we hope they will become an office where the Trade Board will hold its meetings as a natural course, and that they will be open to trade unions, with whom we desire to co-operate in every way in the closest and frankest terms, while preserving our impartiality between capital and labour. We hope that the trade unions will keep their vacant book in some cases at the exchanges. We hope that the structure of those exchanges will be such as to enable us to have rooms which can be let to trade unions at a rent for benefit and other meetings so as to avoid the necessity under which all but the strongest unions lie at the present time—of conducting their meetings in licensed premises. The exchanges may in some cases afford facilities for washing, clothes mending, and for nonalcoholic refreshments to persons who are attending them. Separate provision will be made for men and for women, and for skilled and for unskilled labour. Boy labour will be dealt with in conjunction with the local education authority, because we have no intention of allowing the commercial side to override the educational side in regard to young people. Travelling expenses can be advanced on loan, it is contemplated, to workmen by whom situations have been procured if the Management Committee think fit.

I do not want to go into all the details. They have been studied very carefully, and I shall be prepared when we are at closer quarters on the Bill to give the fullest information and to discuss without restraint of any kind all those special aspects and points to which I have referred. So much for the policy of Labour Exchanges. That is a policy complete in itself. It would be considerable if it stood alone, but it does not stand alone. AH my right hon. Friend the Chancellor of the Exchequer has announced in his Budget speech, the Government propose to associate with the policy of Labour Exchanges unemployment insurance. The hon. Member who moved this Motion has referred particularly to the Minority Report. He knows that the Minority Report advocates a system of compulsory Labour Exchanges, that no person shall engage any man for less than a month except through a Labour Exchange That is not the proposal we are making. We are making a proposal of voluntary Labour Exchanges. I am quite ready to admit that no system of voluntary Labour Exchanges by itself deals adequately by itself with the evils and difficulties of casual labour, but there is one reason against compulsory labour exchanges at the present time My hon. Friend foresaw it. To establish a system of compulsory labour-exchanges, to eliminate casual labour, to divide among a certain proportion of workers all available employment would absolutely and totally cast out a surplus of unemployed, before you have made preparation for dealing with that surplus, would be to cause an administrative breakdown, and could not fail to be attended with the gravest possible disaster. Therefore until poor law reform, which falls to the Department of my right hon. Friend Mr. Burns, and with which he and those who are working with him are engaged, his made further progress, to establish a compulsory system of Labour Exchanges, would naturally increase and not diminish the miseries with which we are seeking to cope. We have, therefore, decided that our system of labour exchanges shall be voluntary in its character. For that very reason there is a great danger, to which I have never shut my eyes, that the highest ranks of labour, skilled workers, members of strong trade unions, would not think it necessary to use the exchanges, but would use the very excellent apparatus which they have established themselves, that this expensive system of exchanges which we are calling into being would come to be used only by the poorest of the workers in the labour markets, and, consequently, would gradually relapse and fall back into the purely distress machinery, not economic machinery, from which we are labouring to extricate and separate it. It is for that reason, quite apart from the merits of the scheme of unemployment insurance, that the Government are very anxious to associate with their scheme of labour exchanges a system of unemployed insurance. If labour exchanges depend for their effective initiation or inauguration upon unemployment insurance being associated with them, it is equally true to say that no scheme of unemployment insurance can be worked except in conjunction with some apparatus for finding work and testing willingness to work, like labour exchanges. The two systems are complementary; they are man and wife; they mutually support and sustain each other. So I come to unemployment insurance. It is not practicable at the present time to establish a universal system of unemployment insurance. It would be risking the policy to cast one's net so wide. We therefore, have to choose at the very outset of this subject between insuring some workmen in all trades and insuring all workmen in some trades. That is the first parting of the ways upon unemployment insurance. In the first case we can have a voluntary and in the second case a compulsory system. If you adopt a voluntary system of unemployment insurance, you are always exposed to this difficulty. The risk of unemployment varies so much between man and man, according to their qualities; character, circumstances, temperament, demeanour towards their superiors—these are all factors; and the risk varies so much between man and man that a voluntary system of unemployment insurance which the State subsidises always attracts those workers who are most likely to be unemployed. That is why all voluntary systems have broken down when they have been tried, because they accumulate a preponderance of bad risks against the insurance office, which is fatal to its financial stability. On the other hand, a compulsory system of insurance, which did not add to the contribution of the worker a substantial contribution from outside, has also broken down, because of the refusal of the higher class of worker to assume unsupported a share of the burden of the weaker members of the community. We have decided to avoid these difficulties. Our insurance scheme will present four main features. It will involve contributions from the workpeople and from the employers; those contributions will be aided by a substantial subvention from the State; it will be insurance by trades, following the suggestion of the Royal Commission; and it will be compulsory within those trades upon all, unionist and non-unionist, skilled and unskilled, workmen and employers alike. The hon. Member for Leicester (Mr. Ramsay Macdonald) with great force showed that to confine a scheme of unemployment insurance merely to trade unionists would be trifling with the subject. It would only be aiding those who have been most able to aid themselves, without at the same time assisting those who hitherto under existing conditions have not been able to make any effective provision.

To what trades ought we, as a beginning, to apply our system of compulsory contributory unemployment insurance? There is a group of trades well marked out for this class of treatment. They are trades in which unemployment is not only high, but chronic, for even in the best of times it persists; where it is not only high and chronic, out marked by seasonal and cyclical fluctuations, and wherever and howsoever it occurs it takes the form of short time or of any of those devices for spreading wages and equalising or averaging risks, but of a total, absolute, periodical discharge of a certain proportion of the workers. These are the trades to which, in the first instance, we think the system of unemployment insurance ought to be applied. The group of trades which we contemplate to be the subject of our scheme are these: house-building and works of construction. engineering, machine and tool making, ship and boat building, vehicles, sawyers, and general labourers working at these trades.

Mr. RAMSAY MACDONALD

Is the engineering, civil engineering or mechanical?

Mr. CHURCHILL

The whole group of mechanical engineering trades. That is a very considerable group of industries. They comprise, according to the last Census Returns, 2j millions of adult workers. Two and a quarter millions of adult workers are, roughly speaking, one-third of the adult population of these three kingdoms engaged in purely industrial work; that is to say, excluding commercial, professional, agricultural, and domestic occupations. Of the remaining two-thirds of the adult industrial population, nearly one-half are employed in the textile trades, in mining, on the railways, in the merchant marine, and in other trades, which either do not present the same features of unemployment which we see in the precarious trades, or which, by the adoption of short time or other arrangements, avoid the total discharge of a proportion of workmen from time to time. So that this group of trades to which we propose to apply the system of unemployment insurance, roughly speaking, covers very nearly half of the whole field of unemployment. That half, on the whole, is perhaps the worst half. The financial and actuarial basis of the scheme has been very carefully studied by the light of all available information. The report of the actuarial authorities whom I have consulted leaves me no doubt that, even after all allowance has been made for the fact that unemployment may be more rife in the less organised and less highly skilled trades than in the trade unions who pay unemployment benefits—that is a fact which is not proved, and which I am not at all convinced of—there is no doubt whatever that a financially sound scheme can be evolved which, in return for moderate contributions, will yield adequate benefits. I am not going to offer figures of contributions or benefits to the House at this stage, though I should not be unable to do so. I confine myself to stating that we propose to aim at a scale of benefits which is somewhat lower both in anio'in tand in duration than those which the strongest trade unions pay at the present time. Nevertheless, they will be benefits which will afford substantial weekly payments for a period which will cover by far the greater part of the period of unemployment of all unemployed persons in this great group of insured trades. In order to enable such a scale of benefits to be paid it is necessary that we should raise something between 5d. and 6d.—rather nearer 6d. than 5d.—per man per week. That sum, we propose, should be made up by contributions, not necessarily equal, between the workman, the employer and the State. For such a sacrifice—and it is not, I think, an exorbitant one, which, fairly adjusted, will not hamper industry nor burden labour, nor cause an undue strain upon the public finances—we believe it possible to relieve a vast portion of the industrial population of these islands from that haunting dread and constant terror which gnaws out the very heart of their prosperity and content.

The relation of the insurance scheme towards the unions must be most carefully considered. We hope that there will be no difficulty, as the discussion on this subject proceeds, in showing that we safeguard all the institutions which have made voluntary efforts in this direction from anything like the unfair competition of a national insurance fund. More than that, we believe that the proposals which we shall make, when they are brought forward in detail, will act as a powerful en- couragement to all voluntary agencies to adopt and extend the system of unemployment insurance. Yes, but the House may say what is the connection of all this with Labour Exchanges. I must apologise for detaining the House so long—

Mr. JOHN WARD

This is the most interesting part of your speech.

Mr. CHURCHILL

But the machinery of the insurance office has been gone into with great detail, and we propose as at present advised to follow the German example i i insurance cards or books, to which stamps will be affixed every week. For as soon as a man in an insured trade is without employment, if he has kept to the rules of the system, all he will have to do is to take his card to the nearest Labour Exchange, which will be responsible, in conjunction with the insurance office, either for finding him a job or for paying him his benefits. I' am very glad, indeed, to have availed myself of the opportunity which my right hon. Friend has given me to submit this not inconsiderable proposal in general outline, so that the Bill for Labour Exchanges which I will introduce to-morrow may not be misjudged as if it stood by itself, and was not part of a considered, co-ordinated, and connected scheme to grasp with this hideous crushing evil which has oppressed for so long the mind of every one who cares about social reform. We cannot deal with the insurance policy this session for five reasons. We have not the time now. We have not got the money yet. The finances of this insurance scheme have got to be adjusted and interwoven with the finances of the other schemes which my right hon. Friend the Chancellor of the Exchequer is engaged upon now for dealing with various forms of invalidity and other insurance.

In the next place, Labour Exchanges are the necessary preliminary. We have got to get the apparatus of the Labour Exchanges into working order before this system of insurance can effectually be established or worked. Lastly, no such novel departure as a compulsory, contributory unemployment insurance in a particular trade could possibly be adopted without a very much fuller degree of consultation and negotiation with the parties concerned, that is the trade unions and employers, and the different trades and classes affected, than has been possible to us under the conditions of secrecy under which we have necessarily been working.

In the autumn the Board of Trade will confer with all the parties affected by the proposals which I have outlined to-night, and we shall endeavour, while not making the production of our proposals contingent upon their agreement, to secure as wide and as large a measure of agreement as possible of all these parties, in order that all our proposals may be received with as much, consent as possible when next Session they are presented in their final form. One word more. The prospect and pressure of these considerable duties has involved some rearrangement of the Labour Department of the Board of Trade. I propose that that Department should be divided in the future into three distinct sections. The first section will deal with wages questions, arbitration, conciliation, and with the Trade Boards, which will be set up under the Trades Boards Bill if it should pass into law. The second section will deal with statistics, special inquiries, and with the "Labour Gazette." The third section will be occupied with Labour Exchanges and unemployment insurance work in conjunction. One of the functions of the last section will be to act as a kind of intelligence bureau, watching the continual changes of the labour market here and abroad, and suggesting any measure which may be practicable, such as co-ordination and distribution of Government contracts and municipal work, so as to act as a counterpoise to the unemployment of the labour market, and it will also, we trust, be able to conduct examinations of schemes of public utility, so that such schemes, if decided upon by the Government and the Treasury, can be set on foot at any time with knowledge and consideration beforehand, instead of the haphazard, hand-to-mouth manner with which we try to deal with these emergencies at the present time. That is a part of the policy I have unfolded to-night, which has not reached the same stage of maturity as the other subjects with which I have attempted to deal. I have only attempted to foreshadow them in the vaguest terms. Such are the proposals which we submit in regard to the organisation section of this problem. I have carefully confined myself to that section. I have not trespassed at all upon the other no less important or scarcely less important branches of this problem, and I am quite certain this Parliament will gladly exert what strength remains to it in attempting to cope with these hideous problems of social disorganisation and chaos which are marring the happiness of our country, and which, unless grappled with, may fatally affect its-strength and its honour.

Mr. F. E. SMITH

Nobody listening to the speech of the right hon. Gentleman will make any complaint of the length at which he dealt with this extremely important subject. He dealt with it in a manner which I think all sections of the House will admit was worthy of the importance of the subject. Perhaps, representing as I do a Liverpool Constituency, in which there is a great deal of casual labour, I may make one or two observations on the subject of the Resolution before the House before I venture to address one or two remarks to the compulsory insurance proposals which the right hon. Gentleman has. outlined. So far as casual employment is concerned, the Resolution which the House has now under consideration, I think probably all Members of the House, wherever they sit, will agree that even a mere-superficial analysis would suggest the drawing of a distinction between cyclical fluctuations of unemployment which are produced by general depression, and in the second place local and sectional fluctuations produced by causes only merely local and, therefore, more susceptible of local treatment. If one gives one's attention for a moment to the case of cyclical fluctuation in trade he will at once find that he is face to face with the great question as to what is the particular system in any particular country which is best qualified to deal with the general difficulty of the depression in trade. I do not propose to embarrass this Debate at this stage with the discussion of that question. I do not seek to introduce the subject of Tariff Reform, or the subject of afforestation, or the subject of labour colonies. Everyone of these is extremely controversial, and the value of any of them, if urged as a practical contribution to the Debate, would be hotly canvassed in some particular section of the House. Perhaps, therefore, it will be better to pass by for the purposes of a limited Debate the whole general question of cyclical fluctuation of unemployment, the reason of which it is extremely difficult to discover, and, therefore, it is better to deal with the question of local and sectional fluctuation, and see from this how far the proposals indicated by the right hon. Gentleman in the Bill he is about to introduce are likely to present anything in the nature of a cure or at all events a palliation for this local and sectional fluctuation.

I come from a Constituency where casual labour is present. I have given some careful attention to the subject and to the work of the local labour exchanges in foreign countries, and I have no hesitation in accepting the view which the right hon. Gentleman has placed before the House that without undue sanguineness you may look forward to labour exchanges to furnish some considerable palliative. It is extremely important that the House should clearly understand what is the nature of the gain which they may reasonably count upon these labour exchanges to furnish. I venture to suggest, as an illustration in passing, taking first of all skilled trades which, from one point of view, are not as valuable an illustration as unskilled, taking skilled trades it is a matter of common knowledge amongst those who study statistics if you take skilled trades in good times—and this is an illustrative test—one frequently finds the employers in such trades have a difficulty in finding workmen, and taking the not very enterprising activity of such an exchange as the Metropolitan Employment Exchange, which tries to do on a small scale the work that would be attempted on a national scale by the labour exchanges, one finds they have been able to enable many men to find employment which they would not otherwise themselves find. The real pressing importance of this problem is by the admission of everyone not in skilled but in unskilled trades. What is the problem in connection with the Liverpool Docks, and I know also the London Docks for many years has been claiming solution. The problem, of course, is this: Employment can always be got. It may be said there is no economic wastage in the labourer waiting there.

Let us take a simple illustration, and then reduce it to a concrete case. Let me ask how this suggested process of decasualising labour is going to help the problem. I ask the House to consider a very simple illustration. Take the case of one employer who employs ten men on Monday and another who employs ten men in the same class of employment on Tuesday. If there is no such organisation as that contemplated by the labour exchanges the result will be you will have 20 men partially employed on those two days. The express object of the organisation and the labour exchanges is that instead of having 20 men partially employed you will have 10 men fully employed. It is quite true that the labour is decasualised, and I am one of those who contemplate the economic consequences as a whole that society gets by the decasualisation of the whole of that labour. But it is very important that all engaged in attempting to suggest remedies for unemployment should realise what would be involved in the decasualisation of that labour in order to measure the admitted gains with the disadvantages, which cannot certainly be disputed. It follows that decasualisation of the kind contemplated in this Resolution replaces] 0 half-employed men by five fully-employed men. If you are going to decasualise labour in that way, if you are going to see that the men who are doing that constant amount of labour shall have it more widely distributed, it follows that you are going to replace 10 half-employed men by five fully-employed men. The right hon. Gentleman stated very modestly that conclusion when he said that he did not claim that labour exchanges would add to employment. I think he might have stated it more strongly, because not only will the establishment of labour exchanges not add to employment, but if they are to serve the only purpose which they can economically serve the necessary consequence of their establishment must be actually to diminish employment. I recognise that, and although I do so, I still do not hesitate to say that the Bill which the right hon. Gentleman is going to produce is one well worth introducing and worthy of the support of the House. The reason which I venture to offer to the House for that view is that, in my opinion, it is far better in the interests of society as a whole that you should have ten men fully paid and fully nourished than twenty men partially paid and partially nourished. It is clear that under this system you will not be able to supply even partial labour for as large a number of workers as you find partial work for to-day, and you are bound to increase the number of men who will have to appeal for corrective treatment or outdoor relief. I think it is important that those who are pressing forward this proposal to start labour exchanges should realise that the inevitable economic consequence of establishing those exchanges will be that you will diminish the number of men who can find work of any kind, although you are going to give them a larger living wage. As the necessary result of the rejection of a number of men who cannot obtain work you are going, as I have already stated, to increase the number of men who will have to apply for corrective treatment. I think those are large considerations which are well worthy of the attention of hon. Members of this House, whatever view they may have formed as to the best method of dealing with the problem as a whole. But in spite of all these difficulties I have no hesitation myself in supporting the proposals which the right hon. Gentleman has adumbrated for the establishment of labour exchanges, because I believe that, in the interests of society as a whole, it is better to have ten well-paid and well-nourished men than to have twenty badly paid and ill-nourished.

The right hon. Gentleman has touched upon a much more difficult question in regard to compulsory insurance. Now, Sir, I do not desire for a single moment to underrate the difficulties of compulsory insurance, but I do not think that the right hon. Gentleman will find himself confronted with very serious opposition from these benches, because during the discussions on old age pensions my hon. Friends here on this side of the House pressed upon the Government that compulsory contributions would be a reasonable basis for the system. We were told that there was something un-English in such a proposal—that is, the proposal of compulsory contribution. Speaking for myself, I was never convinced by that argument, and I am un-able to see why if the working classes would never consent to a system of compulsory contributions for old age pensions the Government are entitled to suppose that they will consent to compulsory contributions to provide against unemployment. Speaking for myself, I am convinced that the true and only method lies on the lines which the right hon. Gentleman has indicated. I do not think that compulsory contribution to anything can be easily made. But I do venture to think that the proposal which the right, hon. Gentleman has suggested to the House is such that all sections of the House may unite in supporting it. It is a proposal, whether popular or unpopular, which will conduce to the interests of the working classes.

Mr G. P. GOOCH (Bath)

The speech of the President of the Board of Trade has rendered to-night's Debate not only one of the most important this Session, but one of the most important in the present Parliament, for the right hon. Gentleman has announced two Bills, each of enormous importance. I do not think there is anybody in the House who seriously maintains that the setting up of labour exchanges is useless. Where we differ is as to the degree of importance to be attached to them. My hon. Friend the Member for Poplar appears to attach rather less importance than the President of the Board of Trade to them, but if I may speak from my own experience, I am more inclined to agree with the view of the President of the Board of Trade. It is hardly necessary at this time to enumerate in detail the arguments in favour of the system. The convenience to both employer and employed is obvious. But surely, apart from the merits of the proposal in connection with the economic machinery, there is the question of human suffering in the background—the enormous amount of human suffering and misery involved in line fruitless search for work, which the setting up of a national system of labour exchanges would obviate. I was pleased to hear from the outline of the President of the Board of Trade's plan that he has a scheme likely to satisfy the three main conditions of success. First of all the system must cover a very wide area. It has failed in London because the area is small, and it also happened to be the congested district for the whole country.

The right hon. Gentleman made a reference to the German system which was hardly fair. He spoke of it as mainly municipal. But the fact is that the greater part of Germany is broken up into large units, which include country districts as well as large cities and capitals. Bavaria, with a population of seven millions, is a unit in itself; Wurtemburg is also a unit. The villages in each of these districts are in telephonic communication with its capital, and therefore I do not think it is quite fair to say that we are going to improve on the German system in so far as it is mainly municipal. They have these units which include seven or eight million people. The second condition which this scheme satisfies is that the labour bureaux not only tell where work is to be found, but enable the men to get to the place. In Germany, owing to the fact that there they have a system of State railways, they have a fourth class, which costs only Jd. per mile, and the problem of transport is consequently enormously simplified. I am glad to hear that the right hon. Gentleman has in contemplation the advancement of railway fares to men who have a prospect of employment. I only wish that, instead of transporting them at an expense of 1d. per mile, he could do it for ¼ d. per mile, as in Germany, or, as an many cases, at even one-half of that price. The third main condition of success for any scheme of Labour Bureaux was also in the President's plan. It must clearly enjoy the confidence of the employers and employed. One of the chief reasons why our Labour Bureaux have been, on the whole, the failure that they have is that the masters and the aristocracy of the workmen also have not had any great confidence in them, and they have been, on the whole, the place of refuge for the less equipped and less skilled worker. In Germany one of the main reasons of their success has been the fact that from the beginning the employers and the employed have been equally represented on them, and so entire has been their success that in many cases the German Trade Unions have ceased to carry on their Labour Bureaux, because they have found it quite unnecessary to do so. Those three conditions, so far as I understand, are satisfied by the scheme.

On the question of insurance, I have never myself been so very strongly enamoured of the Ghent system—the system of subsidies to Trade Unions. With many hon. Members the Minority Beport adopted the Ghent system, which is spread all over Belgium, and which is very much better than the old haphazard system which was begun in Switzerland and Germany many years ago. But I think the scheme of the President of the Board of Trade is even better than the Ghent system in some respects, and one is that it makes the employer take some part of the burden to be borne, while the Ghent system leaves the employer entirely out of the reckoning. The hon. Member opposite, the Member for the Walton Division (Mr. F. E. Smith), rather twitted us on our conversion to the principle of compulsory insurance, and said we were not in favour of a contributory pension system, but we were now proposing to introduce the principle in connection with unemployment insurance. My comment upon that is that the working classes would be quite right and justified in protesting against compulsion to pay into a fund from which they would only get any benefit if they lived to the age of 70—an apparently un- likely contingency; but I do not see why they should object to pay into a fund from which they are almost certain before they reach middle age to reap some benefit. In other words, the chance of getting relief during a period of unemployment is greater than that of obtaining relief on reaching the age of 70. Therefore I congratulate the President of the Board of Trade in striking out for himself and going one better than Ghent.

The speech of the President of the Board of Trade has concentrated the attentions of the House on the question with which it has to deal in the way of bureaux and insurance; but if I may revert for a single moment to one or two other issues which the Member for Bethnal Green raised in his straightforward and businesslike speech, I wish to say how entirely I associate myself with him in the tribute which he paid to the value of the constructive part of the Minority Report. As he said, all these proposals form an organic whole and each helps the other, and I believe in the long list of proposals which are made in the Minority Report, no two proposals are likely to obtain more general support than those which he mentions in his Resolution, training colleges and the detention colonies. As to training colleges, I entirely agree with him that Hollesley Bay gives us a lesson from which we have already learned much, and the lesson is not yet fully complete, and as to the detention colonies, having seen most of those on the Continent, I have thoroughly satisfied myself that we are bound to come to them in this country, and I only wonder that we have not copied the example of the foreigner in this particular long before. The Vagrancy Committee which was appointed some years ago and reported in the first year of the present Parliament, recommended strongly and unanimously the setting up of these penal colonies, and now their recommendation has been confirmed in both the Minority and Majority Reports. I hope very much the Debate we have had may help to concentrate opinion on the large body of valuable constructive proposals which are made in the two Reports.

Mr. ARTHUR HENDERSON

In rising to support the Resolution, I hope I shall be pardoned if I follow the example that the President of the Board of Trade set in keeping my remarks very widely apart from most of the points in the Resolution. I have risen for the purpose of giving a very general but a very hearty welcome to the statement which the President has made. I regret exceedingly that the House was not much fuller to listen to what, in my opinion, has been so far as the great majority of the people in all our constituencies are concerned, one of the most important, and what I believe will prove to be one of the most far-reaching statements which have been delivered during the time I have been associated with Parliament. I also rejoice at the statement made by the hon. and learned Member for the Walton Division (Mr. F. E. Smith). He concluded by urging that this question should be kept as far as possible on purely non-party lines. I think this is an excellent beginning, for there is no social question that touches so vitally the condition in which so many of our people are compelled to live as this great problem of unemployment, and I think of all questions this is the one that every section in this House should strive to keep entirely apart from party bias. It is the problem upon which we should centre the whole of our attention, in order to find the best and most practical remedy.

We on these Benches may be pardoned if we feel slightly gratified at the statement that the President has addressed to the House. I think that statement contains the germs of some proposals for which we have been striving in the Labour party for a good many years past. I think we may feel almost ready to congratulate ourselves that at last the Government has made a beginning in taking out—I will put it in a very rough form—the Right to Work Bill in penny numbers. I know the President would not admit that. It would scarcely do for him to make such an admission having regard to the attitude which the Government has always taken up when this Bill of ours has been before the House, but I think our Bill contained Labour Exchanges. It contained a form of maintenance in the absence of work. I think our Bill made some reference to insurance, and we are gratified to find that at last a beginning is to be made, if not in the adoption of the complete scheme, one which goes a long way in the direction that we have suggested for some time past. When I come to look at the two main principles which have been outlined to us to-night, I am personally very pleased to find that the Government is going to set up what I hope will be a complete system of co-ordinating Labour Exchanges. I am well aware of the objection which can be lodged against Labour Exchanges. They do not provide, in a strict sense, work for the unemployed. The only thing they do is, if there is a position going, it does not necessitate the demoralising tramping system, which, in my judgment, has done more to reduce the status of the workmen of this country than anything else I know of. I venture to say that some men have been compelled, in consequence of the difficulty of obtaining information as to the condition of the labour market in other districts than those in which they reside, to begin the tramping system, and in beginning that system they have begun the demoralisation of their own lives, and have gone so far down that they have never again been able to get back to the former standard of their manhood. The German system, which, I believe, the President of the Board of Trade is very closely following, is, in my judgment, excellent, and it is almost impossible to describe to the House the difference of the condition of the unemployed workmen in Germany and the condition that you find them in in this country. I believe that it is very largely due to the fact that they have been able to remain at home, and to ascertain the actual condition of the labour market, and that if they have to move they have been assisted to move with their families, and have thus been kept free from much of the demoralisation associated with unemployment in our own country.

As to the second proposal outlined, I must say that, whilst I give to it a very cordial welcome, I regret that the Government have not seen their way clear to make the scheme much more comprehensive. What I fear is that the scheme of insurance that has been outlined will be largely prejudiced because some of the worst trades in our present recurring periods of unemployment are not to be included. Probably I may be answered by the Government that in their scheme they have only included such trades as enable them to get proper information upon which to base the actuarial cost that would be incurred. But the Government at present especially should not lost sight of the fact that some of the trades not so highly organised, some of the trades which in days gone by were not so hard hit by unemployment as they are to-day, will feel very strongly because they are left entirely out of any provision in connection with this State insurance scheme. I should like to learn at the earliest possible moment—for I did not notice anything in the speech of the President of the Board of Trade on this point—whether this scheme that is going to be set up is going to be regarded as purely temporary, and whether there is going to be taken in the Bill provision for its easy extension, provided that there is a desire expressed on the part of other trades hardly hit by unemployment that they should be included without the necessity of going through the very long delay that often takes place in the process of passing another Bill through both Houses of Parliament.

Mr. CHURCHILL

I may state that the Government contemplate taking power for the extension of the system in the event of its succeeding—after all, that is the important point—to other trades and industries suitable for it, provided that Parlia-men approves of that extension and that money is available.

Mr. A. HENDERSON

I am delighted to hear the statement made by the right hon. Gentleman. I think this will assist in modifying very considerably the feeling of opposition that might have arisen in connection with some of the trades that are not for the moment included in the scheme. I have no doubt we will be told during subsequent discussion that this is going to be a costly scheme. Having regard to the fact that workmen are going to be included and will have to contribute, that the employers will have to contribute, and that the State itself is going to be associated with what I venture to hope will be a very generous contribution, I have no hesitation in saying that while the scheme may be to a certain extent costly, the cost is not excessive. There are other proposals that have been brought before the House for the purpose of assisting to remedy this great unemployed problem, as to which I do not say a single word of a controversial character; but I have heard it suggested in this House and in the country that we ought to go in for a larger naval programme in order to assist in solving the unemployed problem. When I consider this scheme of insurance I have no hesitation in saying that, though it may be costly, it will be much more permanent in character for good than any large scheme or programme of armaments for the purpose of assisting the solution of this great social problem. We welcome this scheme, not because we consider it is a complete remedy for this problem. We welcome it because we believe it is a beginning, and that it asserts in another form than that outlined in our Bill the recognition by the State of its obligations to make some provision for the relief and for the maintenance of those who have been suffering so seriously from unemployment in recent years, and on these grounds we shall give it a general and most hearty support. And our only regret is that the President has not seen his way to announce to the House that not only the labour exchange portion of the scheme but the insurance portion will be forced through Parliament during the present Session.

Mr. W. R. W. PEEL

When I stayed casually in the House to hear the beginning of this Debate I certainly did not expect the President of the Board of Trade to make such a very interesting statement and introduce not only the Bill he proposed to introduce to-morrow, but also the very important Bill which he proposes to introduce next year if the country affords him an opportunity of doing so. He dealt very broadly with the situation and apportioned out the duties of the three great Departments of State. He sketched his own programme and the programme of the Chancellor of the Exchequer. I was rather interested to know if he was going to sketch the programme of the President of the Local Government Board, because I rather understood that the President of the Local Government Board was not going to be so generous in his statement to Parliament of what he was going to do, but was going to ask Parliament to have the whole thing remitted to him, so that he could deal with things without any unnecessary interference of Parliament, and that if he informed Parliament of what he was doing every three months it would be quite enough to satisfy that unfortunate body of what he was going to do.

I am entirely in sympathy with labour exchanges, but I am bound to say I thought the expenditure rather large as outlined by the right hon. Gentleman; but, of course, the success of these labour exchanges must be enormously determined by the staff, and it must be largely determined by the attitude that employers take towards them. I think that if the employers find that they are receiving a very good class of men from these exchanges no doubt they will be a success; if not, if they get a bad name, if they supply only men who cannot get employment otherwise, then I am afraid that the scheme will be likely to be a failure. I have seen too much in London of unemployment; I have seen too much of the melancholy tramping of processions, not to be gratified by feeling that this kind of thing may be stopped. I was very much struck by the observation of the President of the Board of Trade that labour exchanges, apart from assisting man to find work, will be a means to prevent them from going to where there is no work. My hon. Friend the Member for the City of London may be rather old-fashioned in politics. ["Withdraw."] I do not think there is any necessity to withdraw, because I should think my hon. Friend takes it rather as a compliment. But the law of supply and demand—namely, that labour will go where it is wanted, and will not go where it is not wanted, is a proposition, like many other economic propositions, suited to a simpler state of society than now exists. When there was a simpler condition of society the simpler methods which were adopted were suited to it. But the state of society is wholly different now. I have myself too often seen that when there is a lack of employment in different parts of the country, as soon as it is known that there is a certain amount of employment to get in one place or another, such a mass of men go there and flood the whole town and the whole district that unfortunately they get no employment, and they frequently have no money to return with. As to the Bill of next year, I am referring to a rather remote measure. I am extremely glad to know that it was received so well by hon. Gentlemen on that side, because, first of all, it embodied the principle of contribution, and, secondly, the principle of compulsory contribution. I think hon. Members, speaking on that side, said that the contribution was never popular and never satisfactory, and my hon. Friend said that it was not a good way of gaining votes. But, after all, contribution is very pleasant when somebody else—one or two other people—are going to contribute at least as much or more, and when you yourselves are going to gain the benefit of their contributions. I am quite sure that after the shock of the first feeling of compulsion, the cold douche of compulsion, the method of compulsory contribution will not be so unpopular as it might otherwise be. From the statement of the right hon. Gentleman the President of the Board of Trade as to whether we should deal with a certain number of men in many trades, or with all those working in some trades, it is obvious that we could only adopt the latter alternative, and deal with all the men in sonic trades. I sincerely trust that the experience of compulsory contribution will be successful, and that it may be further developed.

Mr. D. J. SHACKLETON

I should like to say a few words as representing the purely trades union side of the question. As president of a Trades Union Congress, of course I should like to thank my right hon. Friend for having given us the speech he has delivered to-night. I can assure him that so far us I and my colleagues are concerned on the committee of the Congress, we shall give his proposals and his speech friendly consideration. In connection with the opportunity that he may seek during the autumn for consultation with us, I can assure him in advance that we will offer all the evidence and information we possibly can to assist him in bringing his proposals before the House. On the question of contributions, I think my hon. Friend (Mr. Peel) has hit the nail on the head. If the right hon. Gentleman would get contributions towards this fund big enough, as a sort of bait to the workmen to accept the system of compulsory contributions, I think that will meet all the difficulty. I do think there is another element in this matter which will encourage the British worker to accede to this request. The splendid understanding there is now, the international understanding between the trades unions of Great Britain and the trades unions of Germany, will help very considerably in getting past this little knotty point. The fact that our German brethren have acceded to this for over 20 years, and to-day admire it more than ever, and have not the slightest intention of going back on it, will be a considerable help to induce the British workman to look at it in a favourable light.

I would like also to express my thanks to the Mover of this Besolution to-night for a speech full of good advice. It may be that for myself, as representing a cotton district, it may be difficult for me to carry some of the things forward. Personally I am with him. I am in a small minority, but in a minority which in my opinion is increasing. I have the satisfaction of knowing that the whole of my executive are with me, and that the overwhelming proportion of the delegates represented at the council are with me, and that the rank and file are going in the right direction. I do ask the House and the workmen in the country and the employers in the country to seriously consider how much they can do to help in this unemployed question if they would tackle the question of child labour, systematic overtime, if they will seriously consider the question of shorter hours, and put all those things into the balance, and see what they can do to help the right hon. Gentleman in the troubles he is now endeavouring to deal with. If they do they will do something which they will be proud of hereafter. I know I am saying something for which some of my Constituents will blame me, but it is no use in dealing with the unemployed problem if you are going to have children of 12 or 13 years of age for years to come. I know we shall have to deal with it gradually, but I hope that before long we shall have the opportunity of adding a year more to the age of children going to school. There are other matters I might refer to but time does not now permit. We have had a good Labour night. I am proud to have been present, and we have heard for the first time schemes given forth to us which hold out some hope to us as Labour men—that we are going to do something in this Parliament for the relief of the oppressed worker who is unfortunately thrown on his own beam ends, without the slightest chance. We, some of UB, have gone through this experience, and we know how to feel for them, and we want to do something that will help them on the way.

Mr. PICKERSGILL

After the speech of the right hon. Gentleman the President of the Board of Trade it would be ungracious on my part to persist in my Motion, and I ask leave to withdraw.

Motion, by leave, withdrawn.