HC Deb 12 May 1915 vol 71 cc1766-90

Motion made, and Question proposed, "That this House do now adiourn."—[Mr. Gulland.]

Mr. PETO

In raising the question of which I gave notice yesterday, I desire to get information in regard to a very important statement made by the Secretary of State for War, in another place, nearly two months ago, but in regard to which we heard yesterday that the Government are not prepared to make any further statement whatever. As soon as I saw the statement of the Secretary of State for War, the House being on the point of adjourning for the holidays, I put down a question for the first day when the House re-assembled—the 14th April. I thought that by then the Government would have had time to consider the question, which no doubt had already received some consideration before this important statement was made. I was surprised that in answer to my question the Prime Minister said that he was not in a position to make any statement on the matter. Yesterday we got a little further information from the President of the Board of Trade. I do not want to pin him to the precise words which he used on that occasion, because they were spoken in answer to a supplementary question; but I would like, in passing, to call the attention of the House to those words. Before doing so, it may be desirable to read the precise statement made on a very important occasion towards the end of a speech by the Secretary of State for War. It was, to my mind, in view of the Defence of the Realm Bill, (No. 2)—now an Act of Parliament and about to be introduced into their Lordships' House—and also in view of certain difficulties which had occurred, particularly in the North, in regard to labour in certain localities. He said this:— Labour may very readily ask that their patriotic work shall not be used to inflate the profits of the directors and shareholders of the various great industrial and armament firms, and we are therefore arranging a system under which important armament firms will come under Government control, we hope that workmen who work regularly, by keeping good time, shall reap some of the benefits which the War automatically confers upon these great companies. That statement, which is obviously an important one, divides itself into two parts. The Government were actually at that time considering the subject. The Secretary of State for War, who was certainly in this matter the official spokesman of the Government—if not a great deal more, as being intimately charged with great duties of which the production of armaments formed so large a part—stated that the Government were actually arranging a system of Government control for these important armament works, and that under that system they hoped to arrange for what, in fact, was a division of these special war profits between the two great classes which are co-operating together, as they should, capital and labour, form the aggregate of the personnel of these great industrial undertakings. Surely we are right in calling the attention of the House to the matter two months after that statement was made, and after two applications in practically identical terms to the Government, on both occasions being told that the Government have no statement to make. Yesterday we find the President of the Board of Trade saying this— It is not a matter in which the Secretary of State for War is able to dictate to private firms. On that I would say this: First of all that I am quite sure the President of the Board of Trade had not in mind the precise terms of the statement that had been made, because it was coupled with the fact that the Government proposed to take some control over these industrial undertakings. If they took control obviously they could carry out whatever conditions in regard to the division of the profits might seem to them most to conduce to the harmonious working of these undertakings. Beyond that, even if that were not so, it is at present an admitted principle of the Government that no Government contracts are given to any firm which does not, for example, pay the standard rate of wages. If a condition of that kind can be imposed in time of peace, surely in a period of national emergency like the present it is not impossible to imagine that the Government, if they choose, could meet this great difficulty of conflicting interests between capital and labour by saying that at the present time, in view of these contingencies, they propose to add to that usual condition that some share of these special War profits shall be handed over to those who so largely contribute by their work to the production of the munitions of war.

That was clearly what was foreshadowed by the Secretary of State. I only wish further to say to the House that, as a matter of fact, it is a part of the programme about which the Government have talked a great deal, and about which, as a matter of fact, they have done extraordinarily little. Going back a month beyond the period when the Secretary for War made this statement in another place, we had a Debate in this House on two questions—the introduction of the Navy Estimates and the financial arrangements the Chancellor of the Exchequer was making in connection with our Allies for carrying on the War. In the second of these Debates the First Lord of the Admiralty said that he thought it necessary to remind the House that we were at war. In all these matters I have found that it is not the House of Commons, and it is not the country that requires to be reminded that we are at war, but constantly, whenever any of these cases arise which obviously require exceptional treatment, we are met by the same old routine reasons which show perfectly clearly that the Members of the Government, representing different Government Departments, do not realise for a moment that they have got outside the ordinary ruck of what would be their red-tape administration in time of peace. On that occasion the Prime Minister said:— Alliance in a great war to be effective means that each country must bring all its resources, whatever they are, into the common stock. The right hon. Gentleman was speaking of men, of finance, and of munitions of war—that each country in the Alliance was bound to produce the most they were able to produce in the most effective manner possible. Just after that we had these difficulties with labour in the north. Then we had this statement from the Secretary of State. Those of us who are interested—and there are Members on both sides of the House—in this great question of the alliance between capital and labour—which would do more towards economic production in time of peace, and which, however essential in time of peace is ten times more essential in time of war—felt that here at last was a statement made by a man possessing not only courage but the genius which enabled him to put his finger on the spot which raised all these difficulties in regard to capital and labour. That spot is this: It is the inherent jealousy between the two classes, jealousy on the one hand of what the workers believe to be excessive profits—and what in the present exceptional period I believe in many cases are excessive profits—to be made out of the national difficulties. It is that and distrust of the employing class. We felt that nothing could so absolutely remove that as to say that this was an exceptional period, that the Government were going to take control now, that they were going to teach the nation a lesson. That lesson is one which we are obliged to learn, because in a state of war you must unite the interest of capital and labour towards the common purpose of saving the country by producing as cheaply and rapidly as possible munitions of war that are absolutely essential to carry it on.

I would not raise this question if it were not that the Government admit as recently as 29th April, in a speech by the Chancellor of the Exchequer, that there is a very great problem in regard to this question of the production of the munitions of war. The Chancellor of the Exchequer explained that the problem was divided into three parts. He was anxious to show that he had not placed excessive stress upon the question of drink, which has demanded and occupied so large a part of the time of the House—and no doubt the time of the Chancellor of the Exchequer during recent days and weeks—he said this:— I was one of the first to call attention to this matter, and that was in a speech in which I put first the importance of mobilising the whole engineering resources of the country. The second difficulty I pointed out was the additional restrictions on labour—restrictions upon the production of munitions and armaments of war. In the third place I referred to drink. I only refer to that speech to show that in dealing with this question the Secretary of State was dealing with the question that the Chancellor of the Exchequer put first—the question of mobilising the engineering resources of the country. That which he put first we have done very little with. It is true, with regard to his second proposition, the Government have asked the trade union leaders to advocate the abrogation of some of the rules which for many years they have built up. I do not think in making that appeal to trade union leaders they were dealing fairly with them. I do not think it would be fair to ask any class of man to say in effect that these rules, which they had taught those who follow their lead to regard as essential to the interests of their particular section of trade, should be swept on one side in order to produce munitions of war as rapidly as is necessary.

I think it would have been very much better if the Government, at a much earlier stage, had realised what they said they realised long ago, but what they show little evidence of realising even today in a period of grave national crisis, namely, that it is the obvious duty of the Government to say this, and it is quite simple, that in order to prosecute this War successfully it is absolutely essential that every man in this country should be at his place, and should carry on the duties precisely which he is most capable of carrying on and contributing to the common stock. If they had done that they would practically have mobilised the engineering industry of the country. They would have done what they are now talking about. We should not have had 20 per cent. of our skilled shipwrights serving in the ranks as private soldiers. We should have had each man doing the work he is most fitted to do, and then, such a comparative detail as the rules under which the work was to be carried out would obviously have been put into effect most easily. The Government have proceeded in the opposite direction.

Although we have this authoritative statement from the Secretary of State for War, we find, after repeated questions, it is somehow not a convenient question for the Government to take up. They are not prepared to back up the one man in the Cabinet who is mainly responsible for the conduct of the War, and I think we are right to ask why it is that a statement of this kind can be made so authoritatively and allowed not only to drop, but that we should hear in this House, practically from the President of the Board of Trade, that it is an unauthorised statement, and that it is one that cannot be put into effect because the Secretary of State for War has no power over private firms. If that is so, the sooner the Government take power and do whatever is necessary to conduct the War on the surest and safest lines towards the quickest possible conclusion, the better it will be for the country. Therefore I cannot apologise to the House for raising this question. I can only say we feel that here was a responsibility, and that one member of the Government, at any rate, saw how some of the evils could be turned to the permanent advantage of this country; how we could gain something after all by this War, and I, at any rate, am very disappointed to find that this most hopeful suggestion is turned down on what appears to me to be mere red-tape arguments which might apply to a time of peace, but certainly have no application to the present position.

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

I think it is desirable, after the speech of the hon. Gentleman, that I should at once inform the House of the steps which have been taken to deal with some of the difficulties described by him. It appears he misunderstood the language used by me in the House of Commons, and I think he also must have misunderstood what was said by my Noble Friend (Lord Kitchener) in another place. The questions which were put by the hon. Gentleman no doubt referred to profit sharing, and questions similar to those have also been put sometimes on the Paper, sometimes as supplementary questions, by the hon. Member for Sheffield. In each case I have no doubt that they had in their mind the possibility of applying to armament firms systems of profit sharing which in some other industries have been worked with success.

Mr. JAMES HOPE

No.

Mr. RUNCIMAN

Perhaps the hon. Member will explain at a later stage, but I had no doubt that profit sharing was uppermost in his mind when he put his question. My Noble Friend in no part of his speech definitely referred to profit sharing, and I am informed by him that he even went so far as to choose his language with great care, so that he should not be in a position of declaring either to workmen or to employers that he believed that profit sharing would be one of the solutions of whatever difficulties might have arisen. He said:— We hope that workmen who work regularly by keeping good time shall reap some of the benefits which the War automatically confers on these great companies. And he used that language with the object of not binding himself down to profit sharing as one of the means of getting over this difficulty. When I was asked in the House of Commons more than once whether profit-sharing schemes were maturing for this class of labour and this kind of industry, I in each case was bound to say we had no announcement to make and could make no announcement. In our conferences with the employés of the armament companies we had discovered that, so far from profit sharing being regarded by the trade unions themselves as a solution of many of the problems by which they were faced, they could not waive any of their demands for the remuneration of labour on profit-sharing lines; that they were not prepared to divert their claims for extra remuneration to those lines; that they themselves did not put forward any demand for profit sharing; and that the one condition they made when they agreed with us to restrict some of their trade union regulations was that the profits of these firms should be limited. That at once takes away the idea of profit sharing for some other means of satisfying the demands which were made by the representatives of the big engineering concerns. It is quite true that my hon. Friend holds very strong views in favour of profit sharing, but what I am dealing with are not abstract ideas of profit sharing or the general principle. When meeting, for instance, the Amalgamated Society of Engineers, their request was based on different grounds. They did not put forward profit sharing as one of their claims; they asked that there should be a limitation of the profits of the firms, and then they themselves were prepared to waive their trade union regulations. That undertaking we gave them, and within the four corners of that undertaking we have been working. If it had been possible to institute a principle of profit sharing into the armament concerns I am sure no one would have been more pleased than myself, but it is absurd to imagine you can force profit sharing on to employers and employed if the employés do not want it. You solve nothing by doing it if they do not want it.

Mr. THEODORE TAYLOR

Are we to understand from the right hon. Gentleman that the employés distinctly declined to have a share of profits under a profit-sharing system if it had been offered in addition to other conditions?

Mr. RUNCIMAN

I am not in a position to say that, and I have not said it. What I said was that the request made to us by the Amalgamated Society of Engineers did not proceed along profit sharing lines, and if they had wanted it I suppose they would have asked for it. They never asked for it, and if we had made that a condition of the arrangements which were being made, I will not say it would have been unpalatable, but at any rate it would have been giving the trade unionists that for which they were not asking. If the hon. Gentleman who raised this question suggests that we ought to say to the employers and employed, although they are not asking for it, that they must take it, then I say that that will not make for the harmony which the hon. Member in the course of his remarks declared to be essential for efficient production. We are bound to meet the views of the employés, and in so far as our conferences at the Treasury went, I think we were able to satisfy them on every request they made. It is quite certain that they had more in mind the limitation of profits, than they had the other side of the question referred to by my hon. Friend in the House of Lords. I fear the answers I gave to a series of supplementary questions yesterday led to some confusion on profit sharing and the limitation of profits. If what I said was thought to apply to a limitation of profits, then I expressed myself very clumsily, and I would like to clear up now once and for all what I ought to have said on that point, and it is this: We have been negotiating with the large armament firms, the principal Government contractors, with regard to a limitation of profits. We were bound to confer with them, not because we are going to accept whatever their views may be, but because if we are to do this efficiently and well and effectively, it is quite clear that the circumstances of each individual firm must be thoroughly understood by the representative of the Government, whoever he may be, who is conferring with these firms. Already I think nearly all the principal firms have been interviewed. They have been informed of the Government's intentions, in so far as they can be vaguely outlined at the present time, and in a short time I hope it may be possible for the Army Council and the Board of Admiralty to make formal communications to the large firms, showing the directions in which their profits must be limited.

We have made it quite clear from the first that a limitation of profits must mean, if there is any surplus over after the limitation, it must be used either for a reduction of the price of the commodities purchased by the Government or it is to be used merely as a return to the Exchequer. As I said yesterday, we have not been able to dictate to the big firms as to the use that is to be made of the surplus beyond that, and if it inures to the benefit of the State in these two directions, we shall be satisfied. But that does not relieve these great firms from the obligation of treating their workmen well and generously, nor does it indeed run counter to the statement made by my Noble Friend that the workmen should reap some of the benefit from their regular work and regular attendance, and the assiduity with which they have applied themselves to the engineering problems to be solved in the armament establishments. I think that before my Noble Friend sat down he made some reference to the granting of medals to those who had worked in these establishments, and he referred to the awarding of the medals to be granted on the successful termination of the War. That in itself is not unconnected with what I gathered was in his mind, that some of the benefits which the War automatically confers on some of these firms should be reaped by those who have kept good time in those concerns. But that does not bind him nor anybody to profit sharing, and it does not contradict the main principles agreed to by the Treasury Department. I hope hon. Members will refrain from asking for too many figures on this point, because we shall not be able to make a full statement. The time has not yet arrived when we can make a full return of all the concerns

10.0 P.M.

that come under the Treasury agreement. The limitation of profits agreed to at the Treasury conferences could not affect every firm now doing Government work. The total number of firms now working for us runs into very many thousands. For ordnance work alone over three thousand firms are now executing orders directly or indirectly for the Government. In the course of the proceedings at the Treasury it was agreed that to apply this principle of the limitations of profits to firms which were only doing Government work as a subsidiary part of their ordinary work, or a portion of their ordinary output, would be unreasonable. The words published in the papers on the subject on 26th March have been widely canvassed, and they were as follows:— It is the intention of the Government to conclude arrangements with all important firms engaged wholly or mainly upon engineering or shipbuilding works for war purposes, under which their profits would be limited. The reason I have drawn attention to these words is that I want to avoid any misunderstanding on this question. You cannot apply this principle, as I said, to firms which are not important firms, and which are not engaged wholly or mainly on shipbuilding work, but we do intend to apply it, and we are now in process of applying it, to all the firms which come under that definition. This covers the main contractors to the War Office and the Admiralty, and I hope it will be sufficient to assure those who are now working under great pressure in these great factories or workshops that the extra amount of work which they are putting into their labour is not going merely to swell the profits of the proprietors of those concerns. Those profits will not be abnormal, but will be strictly limited by State control, and they will know that their assiduous work is inuring to the benefit of the State and those who are serving the State. I have gone outside the subject that was raised in the questions which were put to me in the House of Commons, because the two topics are certain allied. I hope I have now made it clear to the House that the principles laid down by the Secretary of State for War have not been abandoned, and I hope I have also made it clear to the hon. Member who raised this discussion, that what was stated in the speech of my Noble Friend had not been neglected or ignored. It has not been ignored, because arrangements have been made and full details in due course will be published. Therefore, the representatives of labour need have no fear that the undertakings given at the Treasury will not be carried out to the letter by the Government. Arrangements have been matured harmoniously with those who are now carrying out Government contracts.

Mr. TYSON WILSON

Will the right hon. Gentleman say whether any of the representatives of the trade unions at the Conference expressed themselves in favour of establishing a profit-sharing scheme?

Mr. RUNCIMAN

No, so far as I know, and I sat through the whole of the Conference, there was not a single statement made by any representative of labour in favour of a profit-sharing scheme. I said that earlier in my remarks. That does not mean that under other circumstances, if circumstances were more favourable, the Government is opposed to profit sharing. On the contrary, there are a good many of our difficulties that might be solved by it, but we cannot force on employers and employed a profit-sharing scheme in the middle of a great war if neither employers nor employed want it.

Mr. ANDERSON

If the right hon. Gentleman will excuse me for saying so, I think that a very large part of his remarks were entirely beside the question. There is no question involved here of large schemes of profit sharing and of the limitation of profits, and so on. It is quite a simple matter. It is a question of what was understood to be an undertaking given, and I believe honestly and honourably given, by the Secretary of State for War. It was understood in that sense, as the hon. Member who represents another Division of Sheffield (Mr. James Hope) knows, and he himself has raised the matter again and again during the past two months. It was an undertaking given that some method would be found by which the workpeople doing long strenuous and valuable work at the present time could share in the enormous profits being made by some of the armament companies. That is quite a clear, simple, and definite point.

Mr. RUNCIMAN

That is not what my Noble Friend said.

Mr. ANDERSON

If that is not so, there has been a most unfortunate misunderstanding, and that misunderstanding has been allowed to last for months since the statement was made. Not only was it-understood in that sense by the workpeople, but it was so understood by the hon. Member for Sheffield opposite when he brought this matter forward, and it has never been in any sense repudiated by the Government until the present time. There is no doubt at all, therefore, that this matter has been very badly managed. This is entirely apart from any question of profit sharing. Probably we on these benches hold different views about profit sharing. There are many dangers bound up with it. We can, however, put that question entirely on one side. The point is that the workpeople did believe without any regard to abstract principles about profit sharing that their work was going to be recognised and was going to be recognised by some monetary gift. That is not a question of limiting profits. The two questions were put together by the Secretary of State for War, the question of limiting profits and the question of finding the means of letting the workpeople see that their work for the nation was going to be recognised in a special way. I say, therefore, that it is in that sense the matter has been understood. I do think that it is most unfortunate and most regrettable if the Government is now, after two months, going to run away from that which has been understood during that time. There has been a good deal of foolish lecturing of the workpeople in the meantime.

Mr. RUNCIMAN

Hear, hear!

Mr. ANDERSON

I did not associate the right hon. Gentleman with the lecturing, and I am glad that he agrees with me. In view of the overtime worked and the stress and strain endured, it would have been well if the Government had been able to carry out that which has been understood to be the spirit and meaning of the undertaking given by the Secretary of State for War. I believe that unless something is done in the sense in which it has been understood all that time there will be confusion and disappointment and that real harm will be done. I join with the hon. Member, and with other hon. Members, in pressing upon the Government to try and carry out this undertaking in the most generous way possible.

Mr. JAMES HOPE

I should like to confirm absolutely everything that has been said by my colleague in the representation of Sheffield (Mr. Anderson). We never for one moment thought when the Secretary of State for War made his statement that he meant to impose profit-sharing schemes for all purposes upon any of the armament firms. I do not mind confessing that I thought it was a good precedent possibly for the future—I would not be frank if I did not say so—but I never thought that any more was meant than that the special war profits of these firms should be shared by the workpeople. I really cannot understand what this conference with the representatives with the trade unions has to do with it. I did not understand that the pledge was in any way contingent upon some arrangement to be made with the representatives of the trade unions. The thing is entirely apart. The statement was made to all the workpeople in the firms, whether trade unionists or not. Of course, I do not know exactly what passed at the conference beyond what was published in the papers, but I never thought for one moment that the two questions were to be balanced against one another, and that it was to be said, "You give up certain restrictions and we will give you a share of the profits."

Mr. RUNCIMAN

It was distinctly stated at the time that it was in consideration of the Amalgamated Society of Engineers, who were mainly concerned, giving up their adherence to some restrictions they regard as necessary.

Mr. HOPE

We must be at cross-purposes. All I was saying was that the statement which we understood as to the division of profits with the workpeople by the Secretary of State for War was not to be interpreted as being a bargaining counter with the representatives of the trade unions to induce them to give up certain of their restrictions. I understood that the two questions had to be considered entirely apart, and that the statement of the Secretary of State for War stood entirely upon its merits and was not contingent upon any arrangement to be made with the trade unionists at a subsequent conference. I understood that the question was simply this. Certain armament firms and other firms engaged on work in connection with the War were understood to be making great profits. The Secretary of State for War came down and said, "We will limit those profits and at the same time see that they are fairly divided among those workpeople who by regular attendance and hours of work qualify—

Mr. RUNCIMAN

indicated dissent.

Mr. HOPE

That was certainly the impression given, and I do not think that anybody could come to any other conclusion. I welcomed it, not because of the precedent, though I liked that, but because I thought that it went a good way to remove some of the difficulties in which we found ourselves at the moment. There is no doubt that a very wide impression had got abroad that certain people were getting far too much for themselves out of the needs of the nation. That impression was a very general one, and if it could be shown that those profits were not to be allowed to be excessive and at the same time that the workpeople who were doing their part and were doing it, as has now been acknowledged, with very few exceptions very patriotically and very well, were to share in those profits, limited as they would be, then I think a real harmony would be obtained between all those who were carrying on this great national emergency work. That is why I welcomed it, and that is why others welcomed it. I am perfectly certain that the impression generally created was this: Here is a great deal of national work to be done. It is now clear that nobody is to be allowed to make excessive profits out of it, and especially is it clear that employers and companies are not to make profit for themselves without the profit being shared by those who are carrying out the national work. That was understood as a perfectly definite policy, quite apart from imposing any general scheme of co-partnership or profit sharing, and quite apart from any arrangement made with the trade unions. The whole question as regards the bigger firms was the limitation of profits, and I did not understand that any division of profits was to go with it. The right hon. Gentleman has said that the workpeople must be treated fairly. But the whole gist of the Secretary of State's remarks was that they were to share in the profit that automatically goes to the employers. That is the plain meaning of the words he used. Do I understand now that these profits are to be limited, and the men are not to have a share in them? That is what the President of the Board of Trade gave the House to understand. If it is so, it is most deplorable in itself, and it is also most deplorable that, for two months, those who have taken an interest in this question, whether on behalf of their constituents or on behalf of the workpeople, or in the general interests of the country, should have been under this great misconception.

Mr. THEODORE TAYLOR

I would like to consider this question mainly from the point of view of winning the War—of getting as many munitions as we can, and as quickly as we can. The question of profit sharing is no party question. I do not think we need consider any special form of profit sharing at all. It is the principle at which we are aiming. The principle at stake is, are the workpeople to have a share of the profits over and above their wages, not in return for some concession they have made—that is not profit sharing at all—

Mr. PRINGLE

He said so.

Mr. TAYLOR

No, he said nothing of the sort. I have his words here. "The workmen shall reap some of the benefits that the War automatically confers on the great companies." Very wisely, indeed, for the interests of the country, the trade unionists met in conference the representatives of the Board of Trade and said to them, "You ask us to work very hard. We are doing so. We do not want our patriotic work to be used to inflate the profits of the directors and shareholders of the great industrial armament firms." That was a very natural, very proper, and patriotic thing to ask. Is there to be any drawback to anybody's patriotism? Would the workmen suffer anything, would the armament firms suffer, and would the country suffer if the principle here laid down were carried out? I will take Lord Kitchener's words: "The workmen shall reap some of the benefits that War automatically confers on the great companies." The President of the Board of Trade tells us that by arrangement the profits of these companies are to be limited. I have heard the figure 10 per cent. mentioned. I do not know if that is to be the limitation.

Mr. RUNCIMAN

No.

Mr. TAYLOR

Possibly the right hon. Gentleman will tell us later on what the limitation is to be. But the fact remains there is to be a limitation. We have already heard that on the authority of the right hon. Gentleman. I do not see at all why, because there is going to be a limitation of the profits, there should be no share given to the workpeople of these profits as well. It is not only morally right, but it is sound economically that the workmen should have a share in the profits. What is the case? We are continually told by the military authorities in every direction, as well as by Ministers in this House, that the question of munitions of war is an urgent one and is vital to our success in the War. What ought we to do? We ought to seek out the men and stimulate the production of these munitions. The Chancellor of the Exchequer has already brought before the public two faults or two hindrances more or less great—many people think they are less great than he has stated, but still they are things that have been admitted on all hands to have more or less affected the production of munitions of war. One is drinking. This House this very afternoon has passed nemine contradicente a third Defence of the Realm Bill, which will be an Act very shortly, and which puts greater powers into the hands of the Government to prevent the excessive use of alcohol. The trade unionists have very patriotically sacrificed, for the period of the War, certain rules and regulations they have established for the defence of their interests. They have waived them, not in return for payment, but as a patriotic act during the War. All credit and honour to them for doing it!

The real question for us to-night is, have the Government done everything, or have we done everything we can to stimulate the production of these munitions of war? I want to point out a very peculiar feature in regard to the production of the munitions of war. It is obvious to everyone, but it has a great bearing on the question of production in proportion to the machinery employed. Articles like food, fodder, clothing and transport materials are being produced always, and it is only a question, during a time of War, of diverting the ordinary sources of supply to the use of the military. The position is quite different in regard to the supply of munitions of war. Shells, rifles, cannon, and aeroplanes can only be produced by special machines erected for that purpose. There are two drawbacks in this connection; first, it takes a long time to prepare the machinery, and, secondly, we all hope that when the War is over there will be less use for the articles produced. The Government is always faced in time of war with very great difficulties. I consider that the Government have not been so far behind-hand as some people think. Those who have no connection with actual manufacture of any kind do not know how long it takes to prepare the machinery and plant for the production of these special articles. Let the House mark how important it is for this particular purpose of the production of the article that the machines should be kept at their highest possible point of efficiency. If you have special machinery to prepare it takes you a long time to get going, and you must run it at the very highest pitch while it is going. I do not at all justify the men working seven days a week. I do not believe in it. I believe special machines were necessary for making the various parts of the munitions of war—it is no good denying that we were behindhand in many respects, to my own personal knowledge—and it is necessary for the men to be kept going every minute of their time. I believe we should get more work done if the men did not work seven days a week. The men ought not to work more than six days a week in any circumstances, and Sunday shifts could be arranged.

We want to consider not only the machinery, but the human factor. I can assure the House that in the trades where mechanical invention has been carried to any great extent, that that is the case. A good many people think it only depends upon the machine, but the human factor is of very great importance as well. I know from my own experience as a manufacturer that although we get the best machinery and the most automatic machinery that we can, when we have got it we have not got everything. The greater part of good, large, correct and accurate production depends upon the individuals who mind the machines. Machines are only machines. They wear out and want watching, and get out of order. You must have people whose hearts are in it. How can we get the workmen to do their very best? We can preach patriotism. That is all very good, and those who have anything to do with this do right to get the workpeople to feel that they are defending their country by working at Sheffield, Newcastle, and these other places just as much as those who are in Flanders and the Dardanelles. But we want to do more than that. We want not only to appeal to their patriotism to work. There is this idea abroad that extra profits are being made, and it is not only right, but it is good policy and will tend to the production of the munitions required if we give the workpeople a pecuniary interest in the success of the work and the amount of production. I am certain we are not entitled to look to people who are working hard for the best they can do unless we give them something over and above their ordinary remuneration.

It is said they are earning high wages. It is not merely a question of wages. They are to reap some of the benefits that the War automatically confers on the great companies. I believe, from long experience and intimate knowledge, in the principle of profit sharing and in getting people to put their backs and hearts into their work. Evoke as much collective feeling and as much patriotism as you can. But we are all more or less selfish, and it helps a man to work better when he knows he is going to have some share in the profit that is the result of his work. I believe this principle is absolutely sound, and I commend it to the Government and the House, in addition to the other steps they are taking, as a very important and effective step in the long run for bringing home to the minds of the workers the fact that they are being considered as the human factor. I do not say take up any special scheme. This is not a cut-and-dried scheme. "The letter killeth but the spirit giveth life." This is a question of showing the people that you will give them an interest in their work. If the Government does that, and gives these people something extra based on the profits, I am certain that the country will not regret it, and when the President of the Board of Trade almost led us to believe that the workmen would object to a share of the profits on the top of something else, I cannot believe he meant that. I should object to it myself, as a workman, if I were required to give up any degree of my own liberty in exchange for a share of profits, but that is not profit sharing. It is bogus profit sharing. Sharing profits is giving a man something over and above what he would have had otherwise, and if the Government do that it will pay not only the armament firms, but pay this country, which would be best of all.

Lord ROBERT CECIL

Two questions are really involved in this discussion which are really quite separate. There is the question of what the Secretary of State for War said, or was understood to have said, and, secondly, whether the particular proposal is a desirable one or not, or whether the Government method of dealing with this subject is best, or another proposal is better. I do not want to repeat what has been said about the Secretary of State's observations, but I have the Report here and I have read it several times. I cannot conceive how anyone reading that Report can have doubted that the Secretary of State indicated that he hoped some scheme would be devised by which the workmen should have a share representing part of the benefit which was to be automatically conferred on the owners of armament firms. An hon. Member opposite said it was very generally understood. It never occurred to me that it did not mean something of that kind, and I cannot understand what other meaning can fairly be given to it. I listened very carefully to the right hon. Gentleman's speech, and I still fail to understand what meaning he thinks was in the Secretary of State's mind, if it was not that in some way or another the workmen should share in the profits which the employers made. The right hon. Gentleman seems to think that was not the meaning and was not likely to be the meaning. Questions were asked to-day as to whether certain profits were not being made by the millers. It was said that they made £700,000 and the rise in wages was some very trifling sum. The implication has always been taken, and in my judgment perfectly justly taken, that in view of the enormous profits made by the employers, if those profits are to continue, or on any case the workmen should have some share in the amount of money which has been made. It may be just to limit the proportion—that is a different proposition altogether—but in any case these exceptional profits arising from the War ought not to be put simply into the pocket of the employer. What does the Government propose? The Government say we are going to limit the profits; we are going to fix some figure beyond which the profits of the employer are not to extend. And if in fact they do extend beyond that amount, what is to be done? Either the product is to be lowered in price, or the balance is to be handed over to the Exchequer. I cannot understand why the Government should have arrived at that conclusion. I do not know what figure they are going to fix as legitimate profits to the employer. They are going to fix, it may be 10 per cent. or 5 per cent. I do not care what figure they take. Employers even so will get certain benefits out of the condition of war, and surely it is right that before you come to make up that profit the workmen should have their share in the automatic increase in the prosperity of the industry.

I share fully with the right hon. Gentleman the view that this is not the time, in the middle of a great war, to try to reorganise industry. I am a very strong adherent of the principles of profit sharing or co-partnership; but I know very well that there are many Gentlemen opposite and on my own side of the House who do not share that view. But I believe that unless that system is adopted in some form or other we shall never arrive at the solution of the labour difficulty in this country. It would be a great mistake, however, to try and impose that system generally during the progress of the War, and I do not desire to do it. But I do say that the suspicion that the whole of the commercial advantage arising from the War is going into the hands of the employers, and that the workmen are to get none of it is a very unfortunate one.

Mr. PRINGLE

Can the Noble Lord explain how the system would work fairly as between workmen employed by a firm which earns no profit and by a firm which earns large profits?

Lord ROBERT CECIL

I do not understand.

Mr. PRINGLE

There are firms which earn large profits, which will have to be limited, and other firms which earn no profits; how can a system of profit sharing be made fair as between the workmen of these two firms?

Lord ROBERT CECIL

I think it is quite clear. The point is this, that where great profits are earned by war conditions it is not fair that the whole of them should go to the employer. Where no profit is earned, then the matter obviously does not arise.

Mr. PRINGLE

Oh, yes, it does.

Lord ROBERT CECIL

If the employer does not make a great profit, there is no chance of any suspicion of unfairness.

Mr. PRINGLE

But the men will be working equally hard in both cases.

Lord ROBERT CECIL

It may be, but if that argument were to prevail it would mean that everybody is to be paid according to the work he does, and that nobody should be better off than anybody else. That is, unfortunately, an ideal which is unattainable. We do not want to go into theoretical considerations which are so dear to gentlemen that come from the North of the Tweed.

Mr. PRINGLE

It is a very practical consideration.

Lord ROBERT CECIL

We are anxious to deal with the actual difficulties which have arisen with the workmen who say in every labour journal and every paper that I have read on the subject that it is monstrous that these capitalists are making gigantic profits out of the War, and the workmen are not sharing in the amount that is being made. That is the grievance. There is no use in putting elaborate conundrums. We have got to meet a practical question. The practical question is whether the Government proposal for limiting the profits is the fairest way of dealing with it or whether some proposal for sharing the profit is not better. Personally, I believe in the sharing of the profits, but I believe still more that the Secretary of State having made the speech which he did make, and the speech having been understood for many weeks as containing a promise of that kind, it is unfortunate that the Government now announce that that is not the meaning to be attached to the speech, and that they have no intention of carrying out any part of it.

Mr. ANEURIN WILLIAMS

In the words that Lord Kitchener used in the first part he said distinctly that labour may very rightly ask that their patriotic work should not be used to inflate the profits, and in the latter portion he spoke of the men reaping some of the benefits which they were automatically conferring on the great companies. I think that any simple-minded man reading those words would think that profits and benefits referred to the same thing and that both meant cash, but the President of the Board of Trade has practically told us to-day that benefits means a medal, and I am not aware that the War or anything else automatically confers medals upon the great armament, firms. Whether you call it profit sharing or whether you call it gain sharing, or whether you stick more closely to Lord Kitchener's own words and say that it is some benefit to be conferred upon the men who work regularly by keeping good time, I do consider that it is a share of profit. The word at the beginning is "profit" and the word afterwards is "benefit," and I say that any simple-minded man will say that the two things refer to the same thing, and if a sharing of profit is to be given under one system or under another, whether it is to be in the way Lord Kitchener seems to hint at, it still remains as a share of the extraordinary war profits or benefits which are to be shared with the working men, and which share, in my opinion, has been practically promised to them by that speech of Lord Kitchener. I go further, and say that it is a perfectly proper and natural thing to recognise that if the men work well in this crisis they have earned a part of the result and they ought to have it. We have been told to-night that the trade unionists did not ask for it at the conference. Of course they did not. It is not the business of the trade unions to ask for profit sharing. That is not what they were formed for. They were formed to maintain a certain standard of life, of wages, and of conditions. But it is not right to say that they are opposed to profit sharing. Many of the greatest trade unionists have been, and are, consistently in favour of it. The hon. Member (Mr. Pringle) asked the question how are you going to reconcile the sharing of profit or benefit with the workmen in works where a rich profit is made with justice to the workmen who work equally hard in works where no profit is made. I would suggest in reply that he should ask that question of Lord Kitchener.

Mr. PRINGLE

Possibly he has not considered it.

Mr. A. WILLIAMS

Possibly not. The hon. Gentleman no doubt has considered it more deeply than Lord Kitchener. At any rate it is a question of theory which is not a practical question in this great national crisis. In the present national crisis, if the Government are wise, they will recognise in some form or other the work of these men who work in these great firms with great and unusual results, in the form of profit or benefit, or whatever you like to call it, and they will take those words in a broad practical sense and will in some form or other carry them into effect.

Mr. PRINGLE

Some allusion has been made to the theoretical ingenuity of the inhabitants north of the Tweed, but the advanced point was not a theoretical but a practical one. Anyone who has followed these matters knows that some of these firms are exceedingly prosperous, while others have not made a profit for many years. It is extremely doubtful that even with favourable conditions that those firms will be in a position to give a commission or to pay considerable dividends in the present circumstances. The Noble Lord and my hon. Friend are anxious that all the workmen who are engaged in this patriotic work for the benefit of the country at this time should reap some, special benefit. If that is the case, surely the men would be more likely to reap a just share one with another by obtaining enhanced rates of wages than by having a difference made between them by some men working for a prosperous firm and by others working for a firm which has not been profitable. The man in the firm where the masters are not making any profit at all is not likely to get anything out of it, and will have to be content with his wages. Seeing that the prosperous company is wanting workers, the man might say, "I will go to the other firm and get a share of the profits they are making."

Under those conditions you probably would have a desertion from firms which are equally necessary to the country with the works which are prosperous, and you may have the less efficient workmen segregated with the firms which have been unfortunate in the past. Surely it is better that each firm should have a fair share of efficient workmen, and that the firms less prosperous in the past may have an opportunity of reaping a proportion of the advantage with the other firms in the circumstances of the present War. I am not going to enter into an interpretation of the words of the Secretary of State for War. I agree that reading the words without careful attention to the terms which were chosen, the impression may have been conveyed which the Noble Lord has in his mind, and which has been advocated on both sides of the House to-night. I venture to submit that the consideration which I have put to-night is a practical and not a theoretical one, that the most satisfactory method of dealing with this question is first of all that the workmen, under all firms alike, should equally receive higher remuneration, and that if there is any margin in any firm the margin should not go to one particular set of workmen, but should go either in the shape of a reduction of prices or in a return which would inure to the benefit of the State as a whole.

Mr. SAMUEL GALBRAITH

I do not rise with the view of imposing my presence on the House at any length, for the one thing that I have heard censured since I came here, and I may say especially outside the House, is the man who makes long speeches. A tactful man can take a sting from a bee without being stung, and if the right hon. Gentleman the President of the Board of Trade is wise and prudent and thoughtful, and wants to get the best out of the workmen in the present crisis, he will recognise their claim to a share in the profits. We are in a special crisis and serious danger, when munitions are required, and nothing will accelerate the pace of the production that is essential for the prosecution of this War to a successful issue more than to get the workmen who produce the articles into a good temper. If you have workmen sullen, sulky, and jealous that they are not getting what is right and just, they will not put their best into the work. I have gone through all the evolutions of the trade; I know that when men are working under the impression that they are getting their share of the profits they are more efficient. If they are under the other idea, they do not produce equal to their ability. I just have this desire to say that in the special needs of the nation you will get the best out of the men if you apply that principle on this special occasion. I am not now discussing the principle as a principle, but in the nation's crisis I feel sure that you will get most out of the men if you make them to feel that they are sharing in the large profits that are now being made. All men like money as all cats like fish, but, just as cats will not wait for fish, neither will all men dig for gold. At the same time, we want the best out of everybody, and I feel sure if the right hon. Gentleman will see the thing in the light in which the trade union people see it he will have nothing to regret if in the nation's emergency he applies this principle.

Question put, and agreed to.

Adjourned accordingly at Ten minutes before Eleven o'clock.