STATEMENT BY MR. BONAR LAW.

HC Deb 12 November 1918 vol 110 cc2568-639

The CHANCELLOR of the EXCHEQUER (Mr. Bonar Law)

I beg to move, That a Supplementary sum, not exceeding £700,000,000, be granted to His Majesty, beyond the ordinary Grants of Parliament, towards defraying the Expenses which may be incurred during the year ending the 31st day of March, 1919, for General Navy, Army, and Air Services in so far as specific provision is not made there for by Parliament; for the conduct of Naval and Military Operations; for all measures which may be taken for the Security of the Country; for assisting the Food Supply, and promoting the Continuance of Trade, Industry, Business, and Communications, whether by means of insurance or indemnity against risk, the financing of the purchase and resale of foodstuffs and materials, or otherwise; for Relief of Distress; and generally for all expenses, beyond those provided for in the ordinary Grants of Parliament, arising out of the existence of a state of war. 4.0 P.M.

The last Vote of Credit was moved by me on the 1st of August, and it was for a sum of £700,000,000. On that occasion I explained to the House, and I think it met with their approval, that we proposed to take only one additional Vote before the end of the financial year. At that time I stated that the Vote would be for £750,000,000—that would exactly complete the Budget Estimate. The Vote which I am now going to ask the House to agree to is for £700,000,000, and, I may explain, that the figure was arrived at on the assumption that the War would go on, and has not been affected by the news given yesterday. The Committee will naturally expect that some change should be made for this reason, and I should myself have liked to present a smaller amount, if only as an indication of our view as to what the change means. I have, however, had the subject examined by the Treasury, and my officials tell me that the data oh which they could judge as to the extent of the saving on account of this change are so incomplete that we could not feel certain that if we reduced the amount it would suffice to last until the end of the year. I may say, however, that, personally, I have no doubt whatever that a lower amount will be spent. Of course, the Committee understands that the total amount of the Vote of Credit makes no difference to the amount of money expended. Let me explain in a few words why it is we cannot make sure that the expenditure is going to be less. In the first place, we cannot count upon any very large decrease during the time in the pay of the personnel who are now engaged. In the second place, it is obvious that if this is the end of the War, as we all think, some of the expenses of demobilisation will come for payment under this Vote. Another item which makes the extent of the decrease uncertain is in regard to the Navy. Of course, we shall at once, as soon as it seems safe to do so—and we are beginning now—diminish the expenditure of material of war. But every item of energy which is available in connection with instruments of war will at once be turned on the production of merchant ships; and I have some reason to believe, and I certainly hope, that this will go forward with so much energy that, so far from there being a decrease, there may possibly be an actual increase in the amount spent under the heading of the Navy. There is another item which also makes the future uncertain. The conditions are going to be changed with regard to food. It may be—I am not making any declaration of policy—it may be that an effort will have to be made by us and the Allies to bring food supplies to Europe; and, if so, it is quite possible that greater expenditure under this head will be necessitated; though, of course, that will not be expenditure which will be a permanent debt on the country. As I have said, I myself believe that the expenditure will be reduced. At the same time, if the Committee agrees with me in thinking it would be a mistake to have two Votes of Credit and two Consolidated Fund Bills between the time the House meets and the end of March, I think it would be a pity to run any risk of requiring Supplementary Estimates through not asking a sufficiently large sum to-day.

On the occasion of the last Vote of Credit the figures were analysed up to the 14th of July. May I say to the Committee how thankful I am that I had not to read off those figures yesterday; it would have been impossible for anyone to take any interest in them or for the House. It is difficult enough to-day, but I am sure the House will have patience with me. On that occasion the figures were analysed for the one hundred and four days up to the 14th July. Since then they have been analysed to the 19th of October—that is, for a period of ninety-eight days. Taking this later period, the result shows that the Budget Estimate of daily expenditure, on the assumption that it is spread over the whole year, would be £6,986,000. The actual expenditure was £6,398,000, or a saving of £588,000 a day against a saving in the earlier period of only £24,000 per day. I am sorry to say that that does not indicate that the expenditure in the second period was more favourable from our point of view than in the first; on the contrary, it is the other way, because in the first period the reduction in the dead-weight expenditure was at the rate of £331,000 per day; whereas during this second period there is an increase of dead-weight expenditure of £47,000 per day. The Committee will quite understand that the period is so short that it is not sufficient to give a fair indication of what the tendency of the expenditure is. I am sure, therefore, it will be much more interesting to have the analysis of the figures from the beginning of the year to the 19th of October, a period of two hundred and two days.

The proportion of the Budget Estimate for that period was £1,411,000,000. The actual issues were about £1,351,000,000, or a saving of £60,000,000 sterling. Looking at the daily figures, the Estimate was £6,986,000 and the issues £6,688,000, of a saving of £298,000 a day. Let me give a further analysis of this statement. As regards the fighting forces, the total saving was only £37,000 per day, or a total of £7,500,000. The reduction on loans to the Dominions and Allies was £55,500,000, or at the rate of £276,000 per day. With regard to Miscellaneous, on the other hand, there was an excess of £3,000,000, or £15,000 per day. Let me expand the analysis of this expenditure as concerns the fighting forces. There was an actual increase in the expenditure on the Army of £39,500,000. That was made up to the extent of about £23,000,000 by the fact that the actual strength of the Army during the year up till now has been very much larger than was taken into account at the time the Budget Estimate was formed. There is also another additional charge for the Army, one which I am sure will give satisfaction to the Committee, and it is the increase in the separation allowances and pensions.

Returning to the Navy, there is a saving of £13,500,000, and I am sorry to say this is almost entirely due to our expectations in the matter of shipping not having been realised. As regards munitions, there has been a diminution in the Estimate of something like £30,000,000. There is no special explanation of this, except that the programme, I think, was too ambitious. It has been found impossible to realise it, and perhaps some members of the Committee may recollect that at the time I introduced the Budget I ventured myself to make a prophecy that, although hitherto every Estimate had been exceeded, in this case it would not happen, for the simple reason that all possible power of production in the country had almost reached its limit and that any further demand of this kind could not be realised. That, I think, is the explanation of that falling off. The Committee is accustomed in all these Votes of Credit—where, unfortunately, I have made the same speech each time with an alteration in figures—to an analysis of the dead-weight expenditure and the expenditure which we regard as recoverable. Looking at it from this point of view, for the 202 days the deadweight estimated expenditure was £1,090,000,000 and the actual expenditure £1,081,000,000, or a saving of £9,000,000. The recoverable expenditure was estimated at £321,000,000, and the actual amount was £270,000,000, or a saving of £51,000,000.

My right hon. Friend the late Chancellor of the Exchequer on the occasion of the last Vote of Credit asked me to give him roughly the heads of this recoverable expenditure. I have had them made out on this occasion and the £270,000,000 is accounted for in this way. The amount of loans to the Dominions and Allies represents a debt of £157,500,000. Then there are payments due from the Dominions in respect of Army expenditure. That does not mean a loan, or anything to do with loans. It means that the expenditure on the Dominion Armies in Europe is paid in the first instance by us and the money comes back as the accounts are adjusted. These amounts will come back in that way. Another item which has now become a big item of recoverable expenditure is on ships. The amount is £43,000,000. The last item to make up the total is Miscellaneous, chiefly for food—the amount is £48,000,000. I should like in this connection to point out to the Committee that in this period there has been a very small increase—very small indeed—compared with every other occasion on which Votes of Credit have been moved in the amount of expenditure on miscellaneous items. That means, of course, that the sales are going on and the money spent in the early part of the year is coming back as the food is sold and distributed to the population. I have mentioned that there has been a falling off in the amount of the loans. I think it will be interesting, especially at the stage which we have reached, if I again give the Committee the full amount of these loans to the Dominions and the Allies. On the 31st March last year—I am taking the debt, and not the money actually spent—

Mr. HERBERT SAMUEL

Which year?

Mr. BONAR LAW

At the end of the last financial year, i.e., 31st March, 1918. I thank my right hon. Friend for drawing my attention to this. The amount of our loans to Allies was £1,332,000,000. There has been an increase of £133,000,000 in the current year, making the total debt of the Allies on the 19th October £1,465,000,000. As regards the Dominions, the amount on the 31st March was £194,000,000. It has been increased by £24,500,000, making the total owing by the Dominions at 19th October, £218,500,000. I mentioned to the Committee on the last occasion how the loans to the Allies were distributed. I will give them now the figures as they stood on the 19th October. The amount advanced to Russia remains the same—£568,000,000. The amount advanced to France has become £425,000,000; to Italy £345,000,000, and to the smaller States in the Alliance £127,000,000. I should have liked very much, if it had been possible, to deal with our general financial position at the end of the financial year on the lines of my Budget speech, but more fully than was then possible. I am sorry to say, however, it is not possible to get figures as to our assets and other balances of that kind more up-to-date than they were in the Budget statement. But I may point out to the Committee, as far as I can, how the position stands. According to the Budget Estimate the total debt for which we would be responsible at the end of the current financial year, after allowing for the obligations due from our Dominions and Allies, and reckoning the latter category at one half of their full amount, was £6,856,000,000. If, as we believe, the War is practically now ended then, of the money which will be spent out of the Vote of Credit which we are now asking, part will be spent on demobilisation which, had the War been going on to the end of the year, would have been war expenditure of a later year. We can now look, therefore, upon that as the limit of the debt for which we are responsible. I pointed out at that time that we had many assets which materially reduced the total burden. I have made what inquiries I could as to the present position, and I am satisfied that the value of those assets, especially those which are actually in France, is far greater than the conservative estimate which I gave to the House in moving the Budget—far greater. I shall not venture to give any figures; but the House may rest assured that, as to the general financial position so far as the debt is concerned at the end of this financial year, it will be appreciably less than the Estimate which I gave in connection with the Budget.

How will we be able to face that burden? As regards the whole debt, I do not think we need have any great anxiety; but the debt incurred abroad, as I am sure the Committee will realise, is the item which will more severely affect us in our financial position after the War. I would like to call the attention of the Committee to this fact, that that burden upon us of this external debt is largely due to the assistance we have given to our Allies. If we had merely financed ourselves we would be practically free from that burden. I think we can reasonably assume that at the end of the War the burden from this cause will not at the outside reach £1,000,000,000, which is a burden which, I think, this country can bear. As regards the general position, I have myself always held the view that the state which this country would be in, from the financial point of view, after the War, would, to a considerable extent, depend on our credit, which in its turn would depend on the nature of the peace which we had secured. That now is settled; and I have no doubt whatever that there will be plenty of work to be got—plenty of work, not only to repair the countries which are damaged and ravaged, but in those new quarters of the world largely given over to the production of food and raw material, the rise in prices during the War must have added enormously to the accumulated wealth there; and I have little doubt that there will be plenty of work, and that there will be plenty of credit to enable that work to be carried out. The real problem is one which depends on other issues. I believe I am right in saying that the total production of this country, in spite of the millions of men who have been removed from it, is greater than it was before the War. When all this additional labour supply comes back the production ought to be enormously greater. I think the work will be there, and the credit will be there. I do really believe the future prosperity and well-being of the people of this country depends upon the extent to which capital and labour can work together more harmoniously than they did in the past, having as their main object the increased production in this country. There is only one other remark which I would make in regard to finance. I have spoken of another Vote of Credit for the coming financial year before the 31st March. Of course, there has not been time for the Treasury to consider how the financial arrangements are going to be altered when the War ends. I think it is evident—and I will be surprised if my right hon. Friend (Mr. McKenna) does not agree with me—that it would be quite impossible to get back at once to our old methods. I do not think that would be possible; but I wish to say to the Committee, as Chancellor of the Exchequer—and I am sure whoever was Chancellor of the Exchequer would have said the same thing—that it is of the utmost importance, from the point of view of saving money and real Treasury control, that we should get back to the peace arrangements at the earliest possible moment; and, so far as I am concerned, I shall endeavour to do that.

That is all that I propose to say on the financial aspects of this question. But I feel, on the day after the Armistice, on the occasion of a Vote of Credit, which generally allows of discussion of everything connected with the War, that I can hardly sit down without saying a few words about the fact that the War is over. What I say will be commonplaces; but, at all events, they will be sincere commonplaces, because they will be what I feel. The first thing I want to say is in regard to the peace conditions as they affect our Allies. It would be idle to say what particular thing won the victory, and I shall say something about our share of it in a minute; but it is in the main because of the closeness of the Alliance and because of the way in which more and more, year by year, and month by month, we worked together as one united force engaged in a common purpose. An Alliance, a Coalition, is difficult at all times; but it was far easier in war, under the pressure of a common danger, than it will be now that peace has come. It is as vital for the world, in my opinion, that the close unity which war has produced should prevail while we are repairing the ravages that war has caused. It is difficult to maintain that; we are all human. There are in connection with Governments with which we are in alliance committees on whom are men of all minds constantly dealing with specific subjects; and it is inevitable that members of those committees should look at them as a business man treats another business man with whom he is making a bargain. And the impression grows up on both sides that there is too much selfishness in those arrangements. That is inevitable, and the only way, in my opinion, to cure it is that when those points come up to the heads of the Government they should look upon them, not from the point of view of their selfish interests—and I do not mean our Government, but all Governments—but fairly and justly, as if the interests of one were the interests of all. I venture to say, expressing my own opinion, that that is the best way, even from the point of view of the different national interests. I cannot put my experience against that of so many great business men; but even in business, so far as my experience goes, you get on better by treating those with whom you do business fairly, and not by trying to get the last penny out of them; and I am quite sure that in these big issues the same principle applies. What we have got to do is to think of the big things. I have spoken of the Allies; I do not see much good that can come out of this War, it has been almost all evil up to now; but one thing I do hope from it is a better understanding with the Nations with whom we have been allied. I do not know whether the members of the Committee read the speech delivered the other day by M. Clemenceau. It was worth reading. In that great speech, though it was entirely unprepared, he said this, speaking of us: "As for the English, we love them well." We have seen what France has gone through, and we can say the same thing. As regards America, it is even bigger there, because I think before the War there were some misunderstandings; and I believe it will be a great thing—and it is something I, at least, look forward to—if as a result of this War the understanding between America and this country is better than it ever was before. It would be a great thing, not only for these two countries, but for this reason, that in the main our ideals are the same, and it would be a great thing for the future peace and civilisation of the world.

I say that we think with admiration and with friendship of all our Allies. I am sure I am only expressing what every member of the Committee feels when I say that one of the things which we, the Government, and the people felt most was the suffering that fell upon Serbia and upon Belgium when we were not able to move a finger to help them. It was one of my joys, as I feel it was the joy of the whole people of this country, that in the end Serbia was able to play perhaps the biggest part in the overthrow of Bulgaria, which was the first stage in the end of the War. The same thing is true of Belgium. Under their heroic King who has done so much—as is true of our own Sovereign, and who, like our own Sovereign, rested his claim to influence, not upon some Divine right, but upon his relations with the people whom he governed—under their heroic King the people of Belgium have justified themselves and more. I am not going to speak of them all; but since I have mentioned some names, perhaps it might seem strange if I missed any. The same is true of Italy, and of Italy I will only say this. I have heard speeches made in this House which suggested that Italy was only grasping at territory, and had nothing but Imperialistic aims. Let the House and the country remember this, that when the War broke out Italy was part of the alliance of our enemies; and I, at least, believe the movement which forced her into war on our side was an ideal movement, and a desire to take part in the War for freedom and justice throughout the world.

I have spoken of our Allies. I have said that it is our business to keep good relations with them. Perhaps what I am now going to say may savour too much of national feeling, but I feel it, and I am going to say it. I think the part which the British Empire has taken in this War is a part greater than has ever been taken by this country in the past, and, in my belief, greater than has ever been played by any country in the world. That is my view. Look at our Dominions and at India. When the War broke out I thought that one of the best proofs of the justice of our cause was that the people of that great country, tyrannised over by us, as some people tell us, came forward on our side, and it was not only an honour to them, but it was a joy to the British people to realise the almost decisive part which Indian troops took in the overthrow of the Turkish Empire. As to our Dominions, what can we say? They were not fighting for the Mother Country; they were fighting for the Empire which is theirs as much as it is ours, but they threw themselves at once into the struggle in which we were engaged. They have sent their troops, and what troops they are! Who of us does not remember the long and melancholy story of our first attempt at the Dardanelles? History repeats itself. We began, as so often before, badly, but we did not end badly. We won through at the end. It was there that the Australian and New Zealand soldiers first showed their quality. That first expedition was a failure, but in my belief, so long as the British Empire lasts, it will not be a failure, but will be looked upon as one of the landmarks in our history, because of the brave men who fought and died there. As to the Canadians and South Africans, it is the same.

But do not let us forget the Mother Country. She is old in history, but, in my belief, she was never more vigorous or younger than she has been throughout this War. And I look at it all round. Take first what we have done. I have been speaking of finance. That was no small achievement. As the House now knows, we have done as a nation—as a Government—what no prudent business man would have dared to do. We went on incurring obligations in America for supplies, without which we could not have won this War—supplies for ourselves and Allies—when, literally, there were only weeks in front of us when we could see any method of paying our way. We did that, and we were right, because, after all, we thought so much of the future that we could not afford to think of the present, for we knew that, unless these supplies came, the Alliance would break down, and the War would be lost. And what would then be the value of the whole of our gold and of our securities? Look at what the Navy has done. It has been silent in its work, but it has not merely played a great part in the War; it has played the decisive part in the War. Without our Navy, the War would have been over long ago, and we should not have won it. Even at the end this sudden downfall of that military Colossus, whose feet of clay had been hidden, was not caused entirely—I doubt if it was caused mainly—by the military position. It was caused by the result of the blockade, which has sapped the whole foundations of Germany, both military and civil alike. Well, that is what our Navy has done.

Now, think of the people as a whole. Think what they have done. Really we are—if one can say that of a nation of which one is a member—we really are a great people. Just let me tell you why I say it. When the War broke out we had practically no Army. We raised, by purely voluntary means, an Army on a gigantic scale—on a scale which had never been touched by any other country in the world, and which, I believe, could not have been raised by voluntary means in any other country. And let me recall this to your minds. In the early days, what was it that made men stream to the Colours? It was not the glamour of victory. It was when the news came of the rush from Mons and the retreat.

Let me speak of something else. At home we have had four years of it. There have been threatenings of labour troubles. There have been troubles of all kinds, but how well we have come through it! And remember this, that trouble always came when things were going well. It never came when things were going badly. I remember well the time of 21st March. When we are recalling all these things, is it not a miracle that hardly more than six months ago the German people—I think their military heads knew better—were really looking forward to impose on us the terms which we are imposing on Germany to-day? [HON. MEMBERS: "Much worse!"] They cannot be worse in the completeness of the defeat, and that is the main thing. I am sure, of course, that every member of the Committee has this feeling. I met many people who looked upon the loss of our Army and the capture of the Channel ports as something which might be ahead of us in the immediate future, but I never met a man who, even looking forward to that possibility, did not say, "Very well, we will draw in our borders. We will fight on the sea. We will never allow them to win." That was the spirit.

And, now, what can one say about the Army? Words fail one even to attempt to express what one feels. That first Regular Army, contemptible in numbers, as we were told, played a great part, and I am not sure, small as it was, it was not just the little that turned the scale and saved Calais in that first conflict. Better troops than these never existed. But look what happened since. Look at the great Army we raised. It had to go through its trials, and many mistakes, I have no doubt, were made. The leaders of it had to learn by bitter experience, but they learned their lesson. Apart from all that we did in finance, on sea, and in the air in the last two years, it is not disparaging to our Allies to say that, whereas France bore the brunt of it in the first two years, in the last two years no army in Europe has done so much as ours. Is it surprising that I, for the moment the mouthpiece of the British Government, am proud of our achievements? As I speak, the words used by Abraham Lincoln at Gettysburg come back to my mind— The world will little know, nor long remember, what we say here, but it will never forget what they did. That is it. We have won the victory, but we have won it at a great price. We must not forget that.

Mr. McKENNA

The Chancellor of the Exchequer has asked for a Vote of £700,000,000, with which he is to provide the necessary funds until 31st March. I quite agree with my right hon. Friend that it would be undesirable to ask only for so much money as would carry us, say, until the beginning or middle of March, and then have another Vote of Credit in anticipation of the necessary Vote of Credit at the end of March; and I think, therefore, my right hon. Friend's policy is right in asking for a Vote now that would last him till the end of March. But I feel doutful whether he is not asking us now for more than he will need. He himself has told us that he expects to have a surplus. He places the House of Commons in a little difficulty. We are still now voting a Vote of Credit on the War principles, which, owing to the need for secrecy, and owing to the uncertainty of war itself, compel us to vote without having any details of the expenditure, or any great outlines of heads under which the money is to be expended. We are giving a Vote here, upon a pure War basis, of £700,000,000, the determination of which is covered by that list of heads which you, Mr. Whitley, have been so good as to read to us. In these circumstances, when we are voting a blind sum in this way, I think the greatest care ought to be exercised not to ask us for more than is really essential. We shall not have an opportunity for four months of reconsidering the scale of national expenditure, and in those circumstances I think my right hon. Friend would have been better advised, if I may say so, if he had given us stronger grounds for anticipating so heavy a Vote as that which is asked for. May I remind him and the Committee that at this moment he has at least £300,000,000 still unexpended from the last Vote of Credit—I should say, upwards of £300,000,000? Of course, my right hon. Friend did not refer to the fact of an Election. We all, however, understand that he could only be justified in asking the House for a further £700,000,000 on the top of the existing £300,000,000 if he required the whole £1,000,000,000 to cover the period of a General Election. And he ought not, I would submit, to ask the House for these huge sums—£1,000,000,000 in all—unless he intended, or knew, that that money would be required to cover the period of the Election itself, the reassembling of the House, the election of Mr. Speaker, and all the necessary steps before Parliament is in a position to pass another Vote of Credit. Therefore, I think we may assume that in asking the House to-day for £700,000,000, with this £300,000,000 already in hand, he has only done so because he is anticipating an immediate Election, otherwise there would be no necessity to have this Vote of Credit for at least a month; that he is anticipating an immediate Election, and that the money is required—and rightly required—to carry us over to the end of the present financial year.

Why are we entitled to examine with some care the proposed expenditure? My right hon. Friend the Minister of Munitions is the only member of the Government who has outlined any immediate policy as regards Government expenditure. In a speech last week he told us what would be the policy of his Department in the immediate future. He summarised it himself—I quote his own language—that his policy was that of "carrying on at a reduced speed." I would ask my right hon. Friend very seriously if in the present circumstances that policy is a wise policy. When we consider that all the munitions factories are consuming indispensable raw material—steel, copper, and chemicals of all kinds—and that the factories themselves are carried on only by the consumption of coal for which the general public are starving, is it wise to go on even at reduced speed making munitions which hereafter you will have to scrap? Consider, as an example, only the case of shells. Under the able management of my right hon. Friend, the Munitions Department is so well organised to-day that the shells when they are completed at the factory can be at once put into the train, taken over to France, and be shot from the guns. What is the right hon. Gentleman going to do when he carries on at reduced speed? Is he still going to send the shells over to France? If not, he will have to build new storage houses in this country to store the shells which within a few weeks he will have to scrap! I know my right hon. Friend's difficulty. It is the difficulty of labour. He would say, "Do you propose to discharge into the streets thousands and scores of thousands of men and girls who have been working so well in these factories?" I do not see my right hon. Friend's difficulty in that matter. Certainly I would not discharge them, but when you go on employing them they receive full wages, and they not only receive full wages, but burn coal and use up raw material. Give them a holiday. They have worked well; they have worked hard; they are very tired. Give them a fortnight's holiday on full pay, while my right hon. Friend considers what he will do. That would be infinitely cheaper. You would not then be burdening the railways to carry the coal. You would not be using your coal. You would be able to supply your gas factories, electric power stations and other factories, and you would be able to supply the public who to-day, and through the whole of this winter, are likely to suffer from the want of fuel.

An HON. MEMBER

Give them a month's holiday!

Mr. McKENNA

My hon. Friend suggests that the munition workers should be given a month's holiday. I begin with a fortnight. A fortnight at the expense of the State, not at the expense of the employer. The State would not be a loser, because the State would have to pay on the contract when the employer was told to carry on at reduced speed. The State has to pay for these contracts—that is to say, it has to pay the wages as well as for the raw material, which is material wasted.

There is another aspect of the question. How can the right hon. Gentleman tell the contractors to carry on at a reduced speed? That is a misunderstanding of the contracts. First of all, he has no power to tell the contractors to carry on at reduced speed. A contractor makes his contract on a certain basis of output at a certain speed, and if he is told to reduce that speed and that output whilst his overhead charges are going on his output is diminished and consequently he manufactures at a loss. It would be far better if my right hon. Friend were to face the situation as it stands and to stop at once all unnecessary manufacture by the workpeople and employ the raw material and the coal where they are most needed. I was glad to hear what the Chancellor of the Exchequer told us, that it was proposed to take the men at once from naval warships and put them on civil work—on to merchant shipbuilding. That can be done. That might be done between the night and morning. As I understand, it is not in the least necessary to finish any of the naval warships at the present moment. The men and the materials may be transferred to the merchant side of shipbuilding, where you will get an immediate return for the expenditure of capital and the labour. There is one aspect of the question which my right hon. Friend did not, I think, refer to to-day. He is asking for this huge sum. He must remember that the greater part of it will have to be obtained by borrowing. His revenue during the next four and a half months will be a large revenue—about, I believe, £100,000,000 per month. But he has got £1,000,000,000 to last him for that four and a half months, of which he will not get more than £150,000,000 from revenue, whilst £550,000,000 will be borrowed. When my right hon. Friend has asked for the money in the past the public have responded most generously and most willingly. In no respect has the general patriotism of the country better shown itself than in the willingness to supply all the needs of the Chancellor of the Exchequer. I believe that willingness will continue. But the circumstances have changed.

Every business man in the country cannot fail to be considering how he is going to use his own money in his own business. He is looking forward to all sorts of new peace expenditure. The manufacturer has got to re-establish his plant. An immense amount of repairs have to be undertaken which have been left completely in arrears. Every branch of business requires new stock, and for all these purposes the traders of this country will require their own money. Consequently my right hon. Friend can hardly expect to meet with the same response during the coming months that he has met with whilst we were in a state of war. The money is not there, or, at any rate, the money cannot serve two purposes at once. If it has to be used in the reconstruction of trade and industry it cannot be lent to the Government. That brings me to this point: the urgent need now of shutting down all unnecessary expenditure. That is absolutely vital. If we allow time to go over while Committees are sitting and the expenditure is running on—if, I say, we allow that to happen, we are postponing the real period of the reconstruction of the trade and industry of the country, and unless we reconstruct at once we shall fail in the competition with our foreign competitors. We cannot forget the fact that large masses of our foreign trade are at the present time lost to us. We have to recover that. We can only recover it by a rapid development of our manufacturing export power. If my right hon. Friend takes the money from the manufacturer, if he asks him to invest the money in War Bonds, he cannot use that necessary capital in his own trade. It is of overwhelming importance, therefore, that there should not be any carrying on at reduced speed in the construction of unnecessary articles, but that we should devote the whole of our capital expenditure and labour at once to the production of essential articles. If we do that, I do not fear that those labour troubles will follow which some people seem to have at the back of their mind.

There will be work; plenty of work. There will be wages; high wages. Prices are high, and will probably remain high. Consequently profits will be high. In fact, there is no reason to anticipate other than that, under skilful and prompt action, the trade and industry of this country will not rapidly recover. But we must not—we cannot—be hindered by the continuance of Governmental activities now when we have at length secured peace. I would only like to say, in conclusion, with what pleasure I listened to the survey which my right hon. Friend gave as to the whole course of this War and the part taken in it by our Allies and by the British Empire. We all share with him the feeling of the deepest gratitude to the naval and military forces of the Empire who have fought with such tenacity, such courage, and such sacrifice. I believe that at the right moment we, as representing the people of this country, will be willing to make the necessary sacrifices on our part to sweeten the lives and the homes of the widows and dependants of those who have fallen in our service. I hope before the election comes we shall have a statement of policy from the Government with regard to pensions which will be satisfactory to the whole country. It would be a most deplorable thing if in the coming election it were made a matter of party controversy, one side bidding against the other as to who could promise the most to the widows and dependants of our brave soldiers and sailors. Therefore I would urge my right hon. Friend to give expression to the gratitude which we all feel by making public at the earliest moment a scale of pensions for the widows and dependants adequate to the great services which have been rendered to the country by those who have died for us.

5.0 P.M.

The MINISTER of RECONSTRUCTION (Dr. Addison)

In the statement I propose to make to the House, I shall refer in passing to some of the criticisms which have just been offered by the right hon. Gentleman opposite (Mr. McKenna), and I may say that the Minister of Munitions will deal with the criticisms of the right hon. Gentleman in connection with demobilisation on Monday next. I think the right hon. Gentleman opposite has only touched upon a very small portion of the problem, and I do not think he would have indulged in such sweeping generalisations if he had more carefully surveyed all that is involved in the cessation of the War. During the War we have had our population to a very great extent changed. Their habits of life in the case of hundreds of thousands have changed, their occupations have been changed, their rates of wages are very much higher than before, and so is the price of the necessaries of life. We have, in fact, for the last four years, been living on our capital. Suddenly there is a cessation of hostilities, to be followed, we all confidently hope in the near future, by the signing of a peace treaty. From now onwards the people will return to their homes. They will have to change their war habits and get back to their old work, but I think that high prices will continue, and therefore we must have high wages if the cost of living is to be met. High wages mean that we must have great production, or otherwise it is impossible to pay them.

But the problems of demobilisation and reconstruction do not end by any means here, nor do the responsibilities in which this country is involved. We know that many classes of property have been destroyed in other countries, and they themselves are impoverished, and it is more than likely that the complex organisation which the Allies have established will have to be continued. We may be called upon to do more, and with all these changes, coming as they must in a few months' time, we must contemplate the inevitable reaction of the cessation of war. This is a problem which I am sure needs the sanity and goodwill of every citizen amongst us, and it will not be dealt with by any simple or old formula It is my business, as United Kingdom Minister, to ascertain so far as I can what steps we can take beforehand to deal with the present emergency, what steps we should take now that an armistice has been declared, and what steps we should prepare to take afterwards. All these complex matters are very nearly related to one another, but there are two governing considerations which I take it are obvious to everyone. We must aim at the restoration of our trade and industry and employment as rapidly as possible. We must aim at promoting better methods of production, better conditions of life, and the making of full use of our own resources in order that we may be able to bear these burdens. We hear a great deal of talk about certain dangers, and these have been hinted at by the right hon. Gentleman opposite. I would suggest to the House that apart from any danger which may arise out of unemployment it is my business as Minister of Reconstruction to bear in mind another matter—I mean the danger which may arise in times of peace from bureaucratic methods in the Departments of Government. [HON. MEMBERS: "Hear, hear!"] I thought some hon. Members opposite would applaud that sentiment. By recognising that danger I can assure hon. Members in advance that it is clear to all who have examined this question that we cannot promote the rapid restoration of industry by meticulous State interference.

May I say a word as to the Ministry itself which has been charged with the responsibility of advising the Government how to deal with the existing situation. I have been sometimes criticised in the papers because we have appointed a number of committees to do this and that; but the House, I think, will see in the course of this review, how complex and numerous are the problems with which we had to deal. I have issued a White Paper, which will be in the Vote Office this evening, and the House will see there who the people are who have been helping me during the past twelve months. They will see that we have called to our aid some of the best brains in business and labour from every section of the community. [An HON. MEMBER: "All Englishmen?"] No, there are a lot of Scotchmen, Irishmen, and some Welshmen. I should like to mention a weekly meeting of the chairmen of the sections of my Advisory Council, to whom I am indebted for most valuable suggestions.

To-day, I propose to refer to the arrangements we contemplate with regard to the transitional period, that is to say, the Armistice period. At the same time, I would remind the House that we could not neglect to deal with many matters which are of a more permanent character. Every citizen, I hope, has had his point of view changed on a good many important matters during the War. We have had our national weaknesses shown up as well as our national strength in a unique way, and one of the weaknesses which has been revealed is that we have not made the best use of the human material of our citizens, and, therefore, we have had to formulate and submit to the Government definite proposals with regard to such matters as health, housing, and working conditions. I do not propose to dealt with them now. We have discharged the same responsibility with regard to the provision of power supplies. In conjunction with the President of the Board of Trade, we have carried on a survey of the water-power resources of the United Kingdom, and in this connection I think it is well Parliament should remind itself that if we are going to make the best use of the resources of this country in water-power and other ways it behave us to consider our Parliamentary methods of dealing with these questions.

A Bill relating to water-power was recently before the other House, and I say nothing as to the merits of that measure, but I call the attention of Parliament to this fact: It was a Bill proposing to utilise the water-power of a great district. There had been two projects carefully examined quite of a different nature, and a body of independent engineers had reported in favour of one particular scheme. The point is that, owing to various parochial and other considerations, the proposal was never given a Second Reading. For my part, I express no opinion, good, bad, or indifferent, as to the merits of the particular engineering problems involved, but I would point out that the result of our present methods of dealing with these great sources of power is that no use is made of them whatever, and I am quite sure that an alteration of our Parliamentary methods of dealing with these matters is essential for the full utilisation of our resources.

We are making proposals with regard to the utilisation of our transport services, the co-ordination of canals, roads, and so forth, and last but not least with regard to the land. I do not propose to go into these questions to-day, because I want to confine myself to what we propose to do in the present emergency. But there is one emergency problem which has already been brought before the House and I would like to remind hon. Members of it again. We supplied a Select Committee of this House some time ago with a printed paper of twenty or thirty pages dealing with emergency legislation which somehow or another this House would have to deal with in connection with the termination of the War. This question has been referred to a Select Committee. A survey of that document convinces me that if we are to deal successfully with the winding-up problems of the War, we shall have to deal with our Parliamentary machinery for emergency legislation and improve it, because we could not deal with these problems by the ordinary rules of procedure.

When we came to examine the problems for the transitional period we did not forget that, although we all feel practically certain that the War will not be resumed, it is an armistice, and that it is not necessarily the cessation of all hostilities. We feel confident, of course, that it will be, but in reviewing what we have to do at the present period the first thing to find out was what changes have taken place during the War in employment. You will find that there are practically three groups of industries concerned. There is a group of industries like, say, the woollen industry, which is employed for war purposes on what is more or less the ordinary work—that is to say, they are making khaki and various other kinds of cloth; some are making Army boots instead of civilian boots. But you get another group, and a very big one, closed down during the War. Manufactures have been reduced to almost a minimum; and it was my business a few months ago to get created what we call the Civil Industries Priority Committee to try to keep alive at least a sufficiency of certain important industries which would enable them to keep their staffs and framework together. Then you have the great mass of war industries proper which must terminate very shortly on the cessation of hostilities.

Sir J. BUTCHER

May I ask, Has the Priority Committee reported yet, or is there a further Report? Because it is a matter of very serious importance.

Dr. ADDISON

I am coming to that if the hon. Member will bear with me. I will deal with it in its place. I shall have to ask the indulgence of the House for some little time, because it is a very big subject. I asked the Ministry of Munitions some months ago to give me a Report of the state of employment in the metal and chemical trades, these being two test trades, and what they anticipate at the end of the War. And at this point may I say that the path of the Ministry of Reconstruction has been made a great deal easier than perhaps some people thought it would be by the help the Departments have given me? The House in passing the Bill setting me up did not clothe the Ministry with any executive powers, for which perhaps I have reason to be thankful, though sometimes one has reason to regret it, but I have had to have relations with every Department in the State. We have asked them to do things for us, some of them involving great labour. Our business, of course, was to devise plans and suggest schemes in consultation with them, but on them falls the executive work, and I should like to say in face of a great deal of somewhat shallow talk about the rivalries of Departments, that it has not come my way to any material extent in the last twelve months. We have received help everywhere, Well, the result of this inquiry was surprising to me. Even in the metal and chemical trades, which are overwhelmingly concerned in munitions, 70 per cent. of the men and 40 per cent. of the women are still engaged on work of a kind for which there will be a civilian demand after the War. That is much higher than would have been expected, and it makes our problems, of course, so much the easier. When you come to round figures, it amounts roughly to this, that there will be somewhere about 1,000,000 people who will require to change their occupations with the cessation of war manufacture, of which rather more than one-half will be men. Here may I refer to what appears to be a very commonly entertained misunderstanding? I am not sure the right hon. Gentleman (Mr. McKenna), from what he said, is altogether free from it. He seemed to think you could give the people a fortnight's holiday and then switch them back to the factories. [HON. MEMBERS: "No!"] Well, that is what it sounded like.

Mr. McKENNA

I understood my right hon. Friend had a Government unemployment scheme.

Dr. ADDISON

I am coming to that.

Mr. McKENNA

The right hon. Gentleman is coming to that. In the meantime he should not misunderstand me.

Dr. ADDISON

I had the idea he would give them a fortnight's holiday.

Mr. McKENNA

Yes, because of the Government unemployment scheme.

Dr. ADDISON

The point I was making was that to turn over a factory from war work to peace work is not a matter of days but of months, and may be a matter of a year or fifteen months. We shall not solve the problem of the employment of displaced munition workers by expecting to employ them in the same factory. In the main they will not be absorbed there. What we have to look to is to restore the big basic industries of the country which have been cut down and are capable of absorbing a good deal of this labour. I was told the other day by a very large employer that he proposed to turn over one of his many shops to another kind of manufacture, and he anticipated it would be fifteen months before he could begin work on the new kind of manufacture. I want to point this out and emphasise it, because there is, I think, a great deal of misunderstanding on the subject. That is not in the main the way the displaced munition workers will be employed, for the first few months anyhow.

The House will ask, "What steps have you taken, or do you propose to take, to deal with the immediate difficulty of the cessation of employment on war work and the resettlement of civil workers and those of the Army and fighting forces?" Second, they will want to know what steps we have taken, or propose to take, to promote the rapid restoration of the trade and industry of the country and to promote it in the country by the encouragement of new industries or otherwise. I will deal with the first point first, the demobilisation of the civil war workers. Here let me say that, whatever may be done by the Ministry of Munitions, of which the Minister will give an account, to mitigate unemployment in connection with the cessation of munitions, there must come a time sooner or later—it depends on what is enacted now how soon or how late—when the work in the shops will cease in order that they may be turned over to other employment, whether it be fuses or shells or whatever it is. There must come a time when the people there employed, except those concerned in fitting machinery, must get out of the shops to give time for transformation. The extent to which people who are unemployed by the cessation of war contracts may be absorbed in other industries depends on the steps to which I will refer in a minute, but it is clear to us that we ought to contemplate that there must be an interval before, owing to shipping, tonnage, finance, determination of costs, and and other things, you have got industry restored to a more or less normal level.

There must be an interval during which these processes will be taking place when we must contemplate unemployment owing to the cessation of war work. We shall have these 1,000,000 people moving; we shall have the demobilised forces to deal with, and the first question I had to advise upon was, What machinery are you going to use to deal with these 4,000,000 or 5,000,000 of people changing their occupations? We were confronted with the difficulty that you could not set up your machinery during the War, because you were not able, of course, whilst the issue of the War was not determined, to draw men back from the Army. We had to leave in the Army a number of people whose services are invaluable in the process of demobilisation, in the process of finding work and helping the Labour Exchanges and other organisations concerned. Therefore it is clear in the event of an armistice we must fall back upon the amalgamation of those war services which were already dealing with this class of problem. It was on that account that in the event of an armistice coming suddenly upon us I proposed we should amalgamate the Labour Departments of the Ministry of Munitions, the Labour Ministry, and Admiralty and others concerned to provide demobilisation machinery on the civil side, and it has been announced that the machinery has been set up under Sir Stephenson Kent. May I say, too, that the Committee on Army demobilisation which advised on this, pointed out it will be quite impossible to cope effectively with the problems raised by the people going back to their old districts from the munition works, or the Armies, unless you decentralise your organisation—unless you have in the different districts experienced people, employers and employed, to help you in the work. That is why it is my right hon. Friend the Minister of Labour, during the past few months, has set up 260 advisory committees to help in this demobilisation and resettlement work in the different parts of the country.

The first thing we did when an armistice was practically certain was to arrange with the War Office for the withdrawal of what we call the demobilisers from the Army for service at home. These are the people who are to assist in the process of demobilisation, to restaff the Exchanges. I may say incidentally, although it has been referred to outside, that part of this scheme involves the issue of free railway passes to those war workers who have removed from home owing to war work.

On the cessation of war work I think that public opinion, and particularly the Press, can help the Government very much. There are at the present time a very large number of people in war work who are not dependent on that work for their livelihood, and I think in the event of the cessation of the work, it is fair for us to ask them to stand aside for the time being in favour of those who are dependent on industry for their living, and employer and employed should assist in this in every part of the country.

Well, it is clear that, do what we could to restore trade, we must provide for an interval of unemployment. I hope it will be very small, and personally I am disposed to think it will, but we must provide for that period. Then we came to consider—and I must pay a tribute of thanks to the Civil Demobilisation Committee, the very responsible body which did the work—we came to consider how you could deal with this transition through insurance against unemployment. We came to the conclusion that we could not do so in the event of an armistice coming somewhat suddenly upon us. In the first place, although the people in munitions work are insured against unemployment, all of those affected by the cessation of work are by no means insured. As everybody in the House knows, it is a big business. You go down the scale to raw materials affecting all manner of employments which are not themselves classified as munition work. We came to the conclusion that it was quite impossible to distinguish in any practical way munition workers from others who were necessarily thrown out of employment owing to the cessation of war contracts. Therefore, it was clear that no scheme based upon the insurance of munition workers would help us over the difficulty. The cessation of war work is a national affair. It is not the affair of any industry, or the accident of any particular trade. Therefore, it is the national responsibility, and it is not fair to saddle it upon any particular industry more than another. We have to remember that we have an insurance scheme based upon industry, and those industries which have been contributing most to the War requirements would be the most hit, whilst those industries which have not contributed anything would have no burden. That would be unfair. Finally, I felt the right course was to recommend a scheme based upon non-contributory insurance to deal with this emergency. At the same time we have under consideration a scheme for general insurance against unemployment, which, as I have said, it is the intention of the Government to press forward, but it was obviously inapplicable to this emergency. We therefore decided to make provision for unemployment during the coming months. This scheme is a non-contributory scheme and it makes no distinction between those who are employed, strictly speaking, upon munition work and others who become unemployed owing to the cessation of war contracts. The scheme for civil workers will be in operation for six months from a date appointed, during which the maximum period for which the donation will be paid to any individual will be thirteen weeks. I may say that there is a similar benefit for demobilised soldiers, but that extends over a year and covers twenty-six weeks' benefit. The rates for benefit for both ex-Service and civil workers are as follows:—Adults, 24s. per week for men and 20s. per week for women, with 6s. per week for the first dependant child under fifteen, and 3s. per week for each succeeding dependant child, so that a man with a wife and one child will get 30s. per week, and 3s. for each additional dependant child. The donation will not be payable for the first three days of any continuous period of unemployment. The out-of-work donation payable to partially disabled men in receipt of pensions will be additional to their pensions, and no deductions will be made on account of such pensions. The payment of contributions under the existing compulsory scheme of unemployment insurance will continue. As regards the receipt of benefit under this scheme, insured workpeople will not be allowed to draw simultaneously both the benefit under this scheme, and the free unemployment donation. In practice, payment under the contributory scheme will be suspended except in cases where the insured workman has exhausted his free donation. There are other payments which I will issue in a Paper.

Mr. CROOKS

Will the right hon. Gentleman explain what he means by saying there will be no benefit for the first three days?

Dr. ADDISON

That is the position at present with regard to unemployment insurance. We continue the existing practice.

Mr. HOLT made an observation which was inaudible in the Reporters' Gallery.

Dr. ADDISON

The same precautions and safeguards apply as under the present unemployment insurance scheme. I have not before me the precise technical qualifications, but what it comes to is that a man is not entitled to receive benefit if he refuses the offer of employment proper to his grade.

Mr. CROOKS

Who decides that?

Dr. ADDISON

It is decided exactly as it is decided now under the present unemployment scheme. There are precisely the same conditions with which the House is familiar. I would not like to give a reply now upon these technical points, but there are exactly the same conditions to safeguard the scheme against abuse. As hon. Members will be well aware, we had to examine the matter very carefully before we proposed anything, but we were bound to have higher unemployment benefits than the existing benefits, because of the increased cost of living.

Mr. ROWNTREE

Are the amounts fixed with reference to the cost of living; and could the right hon. Gentleman tell us the kind of average wage that the men and women will be getting before unemployment?

Dr. ADDISON

We were advised that, having regard to the existing cost of living, 30s. was a fair minimum.

Colonel WEDGWOOD

Is that for six months?

Dr. ADDISON

Yes, for six months.

Sir C. HENRY

Is it to be a flat rate?

Dr. ADDISON

Yes, it is a flat rate.

Colonel THORNE

What will happen in the case of a man and his wife, both of whom are now working and both of whom re thrown out of employment?

Dr. ADDISON

They would both get the benefit, but they would not both be able to claim for the same dependants. When we came to consider whether any contribution should be made to juveniles, we felt that there we must attach some special condition, because during the course of the War large numbers of boys and girls who would otherwise have entered upon an apprenticeship, or perhaps have stayed a year longer at school, have gone into employment, and have been earning very good wages. In view of the fact that the Minister of Education, after consultation with the Treasury, has made provision for extending facilities for technical and similar instruction, we make it a condition in the case of juveniles that they attend some instruction which is approved by the Minister of Education Juveniles are to receive 12s. per week for boys and 10s. per week for girls. A juvenile is a person over fifteen and under eighteen. The instruction may be given in the employer's works, if a satisfactory scheme is arranged and receives the approval of the Board of Education. A number of employers have informed us that they would be glad to have classes at their works in order to keep their young hands together, and to keep them in training against the time when they get their machinery re-established. They would have to be approved courses, and, subject to that, I think it is a very desirable scheme.

Lord HENRY CAVENDISH-BENTINCK

Will the educational schemes be under the direction of the local authorities?

Dr. ADDISON

I am glad that my Noble Friend has reminded me about that matter. My right hon. Friend the President of the Board of Education is discussing it with the local education authorities, and in order to get the thing working and so that we shall not be delayed by discussions with the local authorities, the Board proposes to meet the whole of the cost of the education provision for the first six months, and for the second six months the cost of the educational courses will be borne, half by the Treasury and half by the local authorities.

Although it is not closely related to continued employment, I would like to tell the House something about Army demobilisation. I propose to issue a pamphlet, which is in popular form, but I hope hon. Members will not like it any the less for that. It is intended to be read by the general public. It will be posted to every Member this evening. The pamphlet sets out the whole scheme of Army demobilisation, and it is reduced at the end to the form of question and answer.

Major HAMILTON

Does it deal with the Navy as well?

Dr. ADDISON

Certainly. It deals with the Navy and the Army. This matter was gone into at great length by a Committee presided over by my right hon. Friend the Secretary of State for India (Mr. Montagu), appointed by the previous Government, and we have adopted the principle that demobilisation must be governed by industrial requirements. It has been a most elaborate piece of work. We have had to have the Army classified into trade groups, of which there are forty-two, and the Department at the War Office that deals with this side of the question fills me with admiration. Arrangements have been made to mark down first, what we call the demobilisers. They are the people required to start the demobilising machinery. That has been done. The next group are what we call pivotal men, and here again I have issued a precise statement. You get in practically every works some men round whom the work revolves, and until they are there you cannot get the work started. Therefore, the Ministry of Labour have invited the different trades to specify their pivotal groups, and these are separately catalogued in the Army.

Sir W. PEARCE

Could the right hon. Gentleman say whether demobilisation is going to be managed by the Ministry of Reconstruction or by the War Office? It is a point of great interest.

Dr. ADDISON

The Ministry of Reconstruction is not an Executive Department. The demobilisation, whilst the man is with the Colours, will be managed with the War Office, but the order or priority of demobilisation—the arrangement for picking out the pivotal men—is undertaken by the organisation at the Ministry of Labour under Sir Stephenson Kent. The civil side is under that organisation, and the Army deals with the military side of it. Those are the two organisations which work in common, and which deal with the whole arrangements.

Mr. G. TERRELL

Will the right hon. Gentleman make that point quite clear? If a firm requires a particular man, to whom is the firm to apply in order to get him, and is there any machinery by which that man can be obtained at once?

Dr. ADDISON

The firm makes an application to the Ministry of Labour. I believe that forms have been circulated and some sent into the Ministry already. Whether the firm will get the man at once or not is a matter that will depend upon his occupation. In discussing occupation we naturally must have regard to those occupations the re-establishment of which causes the biggest amount of employment. We naturally put them very high in the scale. Therefore the priority grading of employment is based upon considerations of that kind. It must depend partly upon the time of the year, because grading is different now from what it would be in harvest time. At any rate, these pivotal men represent a group, and they, of course, will come back early. But within each group we have regard to the length of service the men have done during the War, whether a man is married, and other considerations of that kind. Another large group of the Army which has been separately marked down, and which makes our problem very much easier, is that large group of men for whom there are jobs waiting for them when they come back. I am sure we all recognise that it is a national duty to secure these men the priority of re-employment when they return. I am glad to say, according to information I have received from the Minister of Labour, that more than 60 per cent. of the men in the Army are what are called "slip" men—that is to say, men who have jobs awaiting them.

Sir C. HENRY

When the right hon. Gentleman talks of men in the Army, does he include the Home Forces or does he refer only to those abroad?

Dr. ADDISON

I will deal with that. When a commanding officer receives an order to send back a certain number of men, he knows at once which men are the pivotal men and which men have a job awaiting them, and this eases our problem enormously with regard to employment at home. Those have been the governing considerations right through this very elaborate scheme. In reply to the question put by the hon. Baronet (Sir C. Henry), I may say that the Army is one whole force. The scheme deals with the whole of the Army, whether at home or abroad. The Committee considered very carefully the rate of demobilisation. That necessarily must depend upon all kinds of military considerations, some of which are obvious, and the maximum rate of demobilisation can clearly only be attained after some time, but the general scheme contemplates that the rate of demobilisation from the forces at home will be the same compared with the rate of demobilisation of the forces overseas. That, at first, might look as if it gave some advantage to the men at home, but, as a matter of fact, the men at home, in the vast majority of cases, have seen foreign service; they have been abroad, therefore you cannot distinguish in that way, and the scheme contemplates an equal demobilisation of the two groups. The machinery by which they are to be demobilised is set out in detail in the pamphlet which I am circulating to hon. Members, therefore I need not trouble the Committee with it now. I may say that a man is sent primarily to a place that is called his dispersal station, which is near his home. There he receives a protection certificate, a railway warrant home, a cash payment of his war gratuity and an out-of-work donation policy, which lasts in the case of the soldiers twelve months and covers twenty-six weeks of unemployment, with benefit at the rate I have mentioned. He will receive the war gratuity. The precise method of the payment of that will be announced shortly. I believe it is likely that it will be paid in four weekly instalments. The man will receive twenty-eight days' furlough when he reaches his dispersal station, and will then receive pay and ration allowance during that time, and the separation allowance will also continue during that period.

Sir E. CARSON

Have you yet fixed the rate of gratuity?

Dr. ADDISON

I believe they have fixed the rate of gratuities, but it varies so enormously, having regard to the class and times of service, that I would rather refrain from dealing with it.

Sir E. CARSON

It has been decided?

Dr. ADDISON

Yes; I understand from my right hon. Friend the Member for the Blackfriars Division (Mr. Barnes) that they have settled their scale, and that it will be published very shortly. There is another class of demobilised men, before I come to the officers, for whom we have to make special provision. A large number of men joined the Army who had not completed their apprenticeship. It will be, I am sure, a waste of brains and energy if these men, after three or four years' service, have to go back to civil life and find that they have lost their skill. They were practically unskilled workmen, and we must provide some incentive to their completing a short term of apprenticeship which will bring them up to a sufficient standard of skill. Therefore we have worked out this scheme for a system of completion of apprenticeship for men who have been serving in the forces. Again, I will circulate the full details as it is a rather elaborate scheme.

Lord H. CAVENDISH-BENTINCK

Does that include officers too?

Dr. ADDISON

I am coming to the officers. It is a rather elaborate scheme, but what it comes to is this—we discussed it with the employers and the workmen's representatives in great detail—the employer is to pay wages to the apprentice during the first twelve months representing not less than seven-twelfths of the current rate of wages, and the State makes them up to the man, so that he gets in the aggregate three-fourths of the wages to which he would have been entitled at that stage of his apprenticeship, and the next year it makes up to a bigger fraction still, namely, five-sixths. That is to say, what we really do, on the basis of the employer affording facilities for an intensive form of apprenticeship, is to make a contribution in order to bring up the wages practically to the standard of what they would have been at that stage of the workman's career. The details are elaborate, therefore I do not give the Committee anything but a bare statement.

Now I come to the question of officers. We have dealt with great care with the question of officers, and the Committee, under Sir Reginald Brade, spent a great many months working on this problem. I am sure the Committee will recognise that in respect to a large number of young men of all branches of training who gave up their prospects, who have been in the Army and have become dislocated from their normal employment, we are under a very special responsibility. The Government has accepted the general principle that from the beginning of demobilisation and for a year afterwards permanent appointments in the Civil Service shall be reserved for ex-officers and ex-soldiers. As the rigid application of this rule, however, would exclude certain candidates with special qualification, it is intended that the rule should not apply (a) to the relatively small number of posts requiring special technical qualifications or involving special responsibility, and (b) that it should not apply to a limited number of cases in which men pronounced unfit on grounds of health for general service have been temporarily employed and are specially recommended by the heads of their Departments. With those exceptions, by that means we open the Civil Service to ex-officers and ex-soldiers for twelve months after the War.

Colonel Sir J. HOPE

Is that the whole of the vacancies?

Dr. ADDISON

Yes, with the exceptions I have mentioned, which do not amount to a very great number. The next thing is that a great number of officers and men in various callings have had their professional training interrupted during the War, and it would be equally, as in the case of the skilled mechanic and the apprentice, very unfortunate if we were not to recognise that we have special responsibility with regard to enabling these men to complete their professional or other training. Therefore it is recognised that the further training or education of young ex-officers in various callings, or men not officers, who have interrupted their training in those callings, is a matter in which we have special responsibility. The War Cabinet has agreed to the principles of a scheme whereby, where circumstances require, assistance with respect to fees and maintenance shall be given on the recommendation of the Training Committee to enable men in those classes to complete their training. The details of the scheme proposed will be announced very shortly.

Sir W. ESSEX

Have they taken complete powers to abrogate any restricting law with regard to the age period existing at present?

Dr. ADDISON

That is a difficult question. I hope we shall not have to take powers. I hope that every training college and authority in the country will rise to their responsibilities. I do not think it will be a matter of taking powers at all, but I could not answer the question without careful examination. There is another matter which has been carefully examined, namely, a number of persons came from overseas and brought their families, or had to bring their families, as the case may be, and we have recognised that we have a responsibility in regard to assisting in their repatriation.

6.0 P.M.

With regard particularly to a special class of case in which the one-man business figures very largely, we propose to make provision against that by continuing the Civil Liabilities Department after the termination of the War, so that assistance subsequent to demobilisation may be given in accordance with a scheme based upon the existing regulations of the Department. That covers assistance with regard to officers and men who are unable, by reason of their undertaking military service, to meet their financial obligations after demobilisation, and are thereby exposed to serious hardship; and the obligations in respect of which assistance may be granted are those arising in respect of rent, interest, and instalments payable in respect of loans, including mortgages, instalments payable under agreements for the purchase of business premises, a dwelling-house, furniture, and the like, rates and taxes, insurance premiums, and school fees. We will continue the existing scheme for assisting those cases. It will be within the discretion of the Department which deals with the civil liabilities to make a Grant, either in the form of a lump sum or by quarterly or other instalments; and if in any particular case the Department is of opinion that in lieu of assistance in respect of any of the specific obligations mentioned above it is desirable that assistance should be given for the purpose of enabling applicants to purchase stock-in-trade, or shop-fittings, a grant may be given for this purpose. These various classes of special facilities with regard to entrance into the Civil Service, facilities for continuing training and maintenance, with regard to repatriation questions, and with regard to hardships arising under the Civil Liabilities scheme, we propose to deal with in the way I have indicated.

In connection with resettlement, we have to consider another question which has been present to the mind of everyone, and that is the considerable and very right demand that in appropriate cases where they are capable of making good use of these facilities the men shall have some right of access to the land. A scheme has been worked out and examined in great detail by a Cabinet Committee, the details of which will be announced shortly, which will provide facilities for ex-Service men of all branches of Service, for settlement either on small holdings, allotments, or gardens; and I think the House will agree, when we can give the details of the whole scheme, that it is simple, expeditious, and comprehensive, and I am sure the country will demand no less.

We were confronted at quite an early stage by the physical difficulty of demobilisation. We have to contemplate the movements of hundreds of thousands of tons of stores, and masses of men coming from abroad, and at the same time we want to use our ports for the restoration of trade as quickly as possible. The right hon. Gentleman made a reference to the blocking up of storage capacity which will follow on a continuance of manufacturing. It was clear to me that the only effective way of dealing with the physical difficulty of demobilisation was to pool our storage capacity. A long time ago now the Departments concerned met, and we set to work to map out a scheme whereby the storage capacity belonging to the different Departments should be pooled. If you have a port with a large store belonging to the Admiralty, another to the War Office, and another to the Ministry of Munitions, if two of them were half full we could fill one store and leave the others empty for some other purpose if the goods were capable of being stored. This body worked for a long time under the chairmanship of Sir Charles Metcalfe, and it has now been made an executive to deal with this problem. The scheme they have worked out means the pooling of storage on certain lines of traffic, in order that certain other ports and lines of traffic may be freed as quickly as possible for commercial and trade purposes, so that we do not get a partial block on all kinds of lines of traffic; but you use a special group for demobilisation, and others will be set free for trade. Here, again, the whole question of the disposal of war stores is a problem which has occasioned very anxious thought. I am sure we shall all desire that we should not incur at the conclusion of the War any more scandals than we can avoid. I do not put it very high. I am inclined to think that with the best arrangements ingenuity can devise we shall still have some. Anyhow, let us try to have as few as possible. The first thing which was clear was that if you have all kinds of people dealing with stores without any relation to one another and without a common policy you are more likely to get blunders than you otherwise would. A body was set up, under the chairmanship of Lord Salisbury, which had to survey the different categories of stores. What was originally contemplated was that we should have a separate body of men as an executive to deal with disposal. But that does not seem altogether to be a workable arrangement apart from those who deal with the stores in their different stages. Anyhow, we have agreed that you must have one body of men responsible and not a dozen, that we must have a survey of the different categories of stores, and that before they decide on their policy in respect of a particular store your organisation must be such that you may take cognisance of the various classes of demand for the stores, and that you may take cognisance of how the disposal or alternative use of it will affect the industries of the country as well. To take the case of road-making material, the programme of the Road Board, which can be put into operation as and when required, will necessitate the utilisation of a vast mass of machinery which we have now in Franco for this purpose. Therefore this survey requires the Departments concerned—chiefly the Ministry of Munitions—to take cognisance of public requirements before they decide on a policy with respect to particular categories of stores. We shall get a common accounting system, and I hope, at all events, we shall minimise the risk of waste. We have received all kinds of estimates as to the value of stores which are surplus to the requirements of the War Departments, and if I were to take an average of the various estimates which I get, it would be round about £500,000,000. I hope we shall realise more.

Colonel COLLINS

Who is responsible to this House for the decisions of this Board?

Dr. ADDISON

It will be the Ministry of Munitions. It became clear, also, in surveying this question of stores that as it was intricately mixed up with all kinds of manufacturing processes, from the raw material to the completed article, if you are going to contemplate some common authority for dealing with this class of problem it is better to contemplate, not only in this connection, but in others, that you have a common authority to deal with our Government supplies generally. I believe a good many of the mistakes made during the War have been due to the fact that we have not had a common policy in obtaining Government supplies, and we have never had a body of men whose business it was to work out a common policy. We have never had a Minister responsible for supplies, and the result was that I found myself at the Ministry of Munitions without any guidance whatever when we had to purchase great masses of stores, and we had to invent as we went along all kinds of costing systems so as to give us some guide as to what we ought to pay, because it was quite obvious that the lowest tender was no guide whatever under the special circumstances. If you were going to have a careful and well-developed system of finance, it seemed to me that you must have one body of men responsible generally for Government supplies. Therefore, we have recommended to the Cabinet that they should accept the principle that we ought to have a Minister of Supply, and they have accepted that recommendation. It will have to be a gradual transition. It will be impossible to dislocate existing arrangements at this stage.

Mr. J. HENDERSON

Another new Minister!

Dr. ADDISON

No. He will take the place substantially of the Ministry of Munitions. That is what it comes to. I have dealt with the question of stores, of transport arrangements, and of supply. These are all related to demobilisation, and we have already got in hand the work in connection with all these various branches. Now I come to what I believe is, if possible, a more difficult side still than what we have been dealing with, and one, if possible, more vitally important to the nation, and that is the steps we have taken to secure the rapid restoration of trade. Everything depends on that in the end. Here I should like to make another tilt at my critics. I have had all kinds of critics with reference to the appointment of Committees, and I am about to issue a Paper which will show who the men are. I have found, on the most elementary survey, that the first problem we have to deal with in order to make sure of our ground is the raw material supply. That is the key of the restoration of our trade facilities. I therefore asked different groups of gentlemen, whose names are set out in the Paper which is circulated, to advise me on the different non-ferrous metals, ferrous metals, alloys, jute, hemp, flax, and all the rest of it. I should like to say how much I am indebted to the Committees which have worked so hard. We had to survey first, what are the likely requirements of the country. That has been done by these various bodies which have been brought together, and I am glad to say the position is better than I should have expected. But some time ago the Ministry of Munitions tried to ascertain for me, in February last, from the manufacturers what are their probable post-war demands for materials and equipment, and I am sorry to say the replies were disappointing, because, owing to the uncertainty of prices, and so forth, they really felt quite unable to give us any reliable guidance, so that we have to get it in other ways. These various bodies, including important Departments of the War Office, have afforded us assistance in examining this question of requirements. Here lot me say that you cannot look at it merely from the question of requirement, you must also look at it from the point of view of how to promote our own supplies. That is an essential part of the raw material problem—the stimulation of the production of raw materials. That goes hand in hand with the question of our supplies.

Sir E. CARSON

Are you dealing with Colonial raw materials?

Dr. ADDISON

Yes, all sources from any part of the world wherever supplies come from. These materials I am dealing with are all practically the raw materials we require in our trade. Some time ago I recommended to the Government that we ought to set up a body of men charged with responsibility for the promotion of the production of raw materials in our Dominions generally. That body has been at work a considerable time. It was established some months ago, and is known as the Imperial Mineral Resources Bureau. Here let me say to my hon. Friends from Ireland that the Department of the Ministry of Munitions which has been working at the development of our resources at home has made some very promising suggestions in regard to Ireland. I have passed them on to the Imperial Mineral Resources Bureau—except in one case, where we were already boring for coal. I should like the Irish Members to devote some of their attention to the possible development of the mineral resources of their own country, which, according to these suggestions, may be somewhat considerable.

Mr. H. LAW

Can the right hon Gentleman tell us what those suggestions are?

Dr. ADDISON

I will send the hon. Member a copy. I have placed in the Vote Office what I believe is a very excellent model sample scheme for stimulating the production of raw material. One of the first industries that we must depend upon for the production of employment is the building trade. It is perfectly clear that in regard to the building trade timber and brick are the key materials. Timber, in the main, we have to import, but Mr. Carmichael, Chairman of the Building Materials Supply Committee, has worked out for me a scheme for the stimulation of the production of materials for the building trades throughout the country. I would invite hon. Members to look at this scheme. I have already taken steps to put it into operation. It appears to me to be an exceedingly practicable and workable scheme. Every brickyard in the country has been mapped out, and particulars of every key man and of every brickyard in the country has already been sent in to the Ministry of Labour. The specification for every piece of machinery required for every brickyard in the country has already been set up.

Sir E. CARSON

When the right hon. Gentleman uses the word "United Kingdom," does he mean Ireland also?

Dr. ADDISON

It means Great Britain, and a separate organisation for Ireland. All this has been done with the utmost detail, and the whole thing is to be managed by the trade itself. It is not going to be managed by a Government Department. The Government Department, when they have appointed a chairman will, I am glad to say, be able to wash their hands of the whole business. The whole trade has been consulted, both employers, workmen and architects, and they are all involved in this scheme. We are, therefore, looking to the trade to work it. I believe we shall be right in inviting this industry to work the scheme, for a simple and sufficient reason that they know their own business much better than we do. When we talk of housing schemes we are wasting our breath until we have concentrated on this essential matter of the production of building material. The production of building material is the key of the whole work in the building trade. I am glad to say that we are now well ahead in our preparations in regard to that matter.

Having drawn up the requirements of the State, it has been our duty to see what we could do to provide the necessary supplies beforehand. That has been dealt with for some time past on the authority of a Cabinet Committee, presided over by my right hon. Friend the Colonial Secretary. Although I am a little anxious about some of them, in the main the position is more satisfactory than I could have expected. The Shipping Controller has been in touch with our work, and all the special Departments have worked harmoniously together in connection with the promotion of this raw material armistice programme. Sir Kenneth Anderson, the adviser who works with us in this matter, showed me a programme the other day, and they have got shipping enough to meet this programme, and all the arrangements are made to divert the shipping as and when the time arrives. The Shipping Controller hopes to issue in the course of about ten days revised freight rates, ex war risks, which I understand are very necessary in order to give security. I heard my right hon. Friend (Sir E. Carson) say that I had taken no account of the trades that have been shut down. That is not so.

Sir E. CARSON

What I did say was that I thought the calculation was very optimistic, having regard to the number of ships that had been lost, and that account must be taken of the different trades, not necessarily of this country, but of trades throughout the Empire, in coming to a real estimate. I dare say some account has been taken, but the scheme I saw seemed to be very optimistic.

Dr. ADDISON

Of course, I am not an expert. The Shipping Controller, having regard to the tonnage after the War, thinks that he can meet it. I hope that will turn out to be the case. I am not thinking now of luxuries, but only of our own internal essentials. Our tonnage programme is drawn up purely on essentials—essential raw materials.

The country will desire to know at the present juncture what stocks of raw material are available for peace production and what preparation has been made to supplement those stocks by importation during the difficult year that lies before us. I will deal first with metals, especially those which are most vital to our industrial welfare, namely, iron ore, pig iron, and steel. There has been a great increase in our capacity for the utilisation of home ore, and arrangements are being made by the Shipping Controller which will render it possible to import as large a quantity of foreign ore as was imported prior to the War. It is proposed to release iron and steel forthwith. The difficulties which may arise owing to the fact that through the exigencies of war the price of steel now stands at an artificial level have not been overlooked, and it is intended to continue Orders fixing for a period a maximum price for steel, though this may involve continuing some measure of Government assistance for that period.

Mr. ROCH

Does that mean a subsidy? Will the steel subsidy continue?

Dr. ADDISON

There are all kinds of arrangements which enter into the question of steel—coal, coke, shipping, etc.—and you cannot possibly dissociate them. With regard to other metals, I am glad to be able to assure the House that there is a sufficient supply available to render it possible to release some from control now, and nearly all the rest we hope to release within six months. I am convinced after a close survey of the position that we shall be able to meet the demands which reconstruction will make on our resources during that time, but while I am satisfied that there will be enough for all if it is equitably divided, there must be no selfish attempts on the part of individuals to secure more than their share, and for this purpose it may be necessary to take precautions against hoarding. Steps are being taken in the meantime to secure the release of much usable stock, and to grant further supplies of metals to those industries now limited to a fixed ration.

Sir E. CARSON

Will the price be controlled?

Brigadier-General HICKMAN

I also should like to know exactly what the right hon. Gentleman purports to tell us on this point. Am I to understand that the price of steel is still going to be controlled?

Dr. ADDISON

You are to understand that for the next six months we contemplate that we shall have to fix a maximum price for steel. The reason we have to do that is that we find that nobody has any security in placing their orders or in placing contracts unless they know what is going to be the price of steel. We cannot dissociate all these artificial conditions straight away, therefore we are bound to fix a price for steel, at all events for the next six months, in order that men may have a basis of security for making their contracts.

Mr. HOLT

In other words, every person who buys steel during the next six months is going to get a present from the Government?

Dr. ADDISON

That does not follow at all. It does not follow in the least.

Mr. S. SAMUEL

Is the right hon. Gentleman aware that a manufacturer always gets his steel in hand before he quotes for the manufactured article; therefore he knows exactly what the steel is going to be?

Dr. ADDISON

That may be so in regard to the existing stocks, but the existing stocks of steel are for war purposes.

Mr. S. SAMUEL

If I ask a manufacturer for a quotation for a ship or for spinning machinery he will, before he gives me a quotation, get a firm offer from the producer of steel for the quantity of steel required.

Dr. ADDISON

That is the point. We found that people were not prepared to make firm offers, and my expert advisers told me—I am not an expert in these matters—that we shall have uncertainty for two or three months unless straight away we have a fixed maximum price for steel. That is the way you will give confidence. People will have a basis upon which to fix their contracts.

General HICKMAN

Do I understand that the price of steel is going to be controlled for the next six months, and that that controlled price will be lower than the present price, so that possibly the people who get the steel may not be able to make it pay?

Dr. ADDISON

I did not say what the price was going to be. I said the price would be fixed, but I am not prepared to go beyond that statement at this moment.

Sir J. SIMON

The right hon. Gentleman says the price will be fixed. Are we to understand that new powers will be got to enable that to be done? Is not the present power for fixing the price dependent upon the Defence of the Realm Act, and is not the Defence of the Realm Act an Act which comes to an end as soon as the War comes to an end?

Dr. ADDISON

The War has not come to an end yet. All I have to say is that this is a vital necessity of the nation, and I shall have no hesitation in asking Parliament to give me any necessary powers, but we have powers at present, as the War has not yet come to an end. This is necessary, as I am advised, in order to secure to people a sufficient sense of security on which to base their contracts, and we do not want them to hang fire in placing ciders during the next few months. I am not saying what the price is going to be. I am not competent to say at the present moment, but it is quite clear that you must have a maximum price. Steps are being taken in the meantime to secure the release of much usable stock and to grant further supplies of metals to those industries now limited to a fixed ration. Great discrimination would be required in the discharge of this duty, but the various controls will call into counsel representatives of the trades concerned. My great hope in all this is to imitate the example of the building materials group, and get the trades to do it for themselves as far as possible.

If the Committee would bear with me, I would like to say a few words with regard to wool, cotton, jute, and leather—those goods controlled by, if I may say so, that remarkably efficient Department the War Office. The existing control organisations, these Departments of the War Office, have consulted with the trades concerned, and they have measures already devised for the easy transfer from war to peace conditions with regard to wool, jute, flax, hemp, and other industries. The main difficulty is the shortage of material, but the situation can only be relieved by a reduction in military orders. The reduction in military orders will not take place as quickly as it will in munitions, because while men are in the Army they will still want boots and clothes.

The position as regards timber is one of the most difficult. Clearly it will be necessary to continue felling in this country for at least the next twelve months, and we have bought trees ahead for that purpose. That is essential if we are to safeguard our supplies of timber. I have dwelt at considerable length with the raw materials question, and hope that I have not wearied the Committee, which will recognise the vital importance of the matter. In the same way we have made arrangements through the Ministry of Munitions with regard to priority in arrears of necessary machinery. I will here say a word on the vital importance of the work of the Standing Council on Priority which has been established for some little time, because it is quite clear that in some industries the demand is going to be much greater than what we can supply, and, therefore, at all events with respect to some of them, some measure of priority organisation, we hope worked in the main by the trades themselves, will have to be instituted.

I have given specific cases, which we have already dealt with, as to why we need a post-war priority organisation respecting the machinery in some trades. In France and Belgium there are whole districts devoted to textile manufacture where the machinery has been largely destroyed, and here at home, too, our textile machinery makers and our textile workers have had their machinery unrepaired and unrenewed during the course of the War. The demands on the production of textile machinery are, therefore, very great, as soon as we can get the raw material liberated and the machinery going again; but we naturally have specific and peculiar obligations with regard to our Allies in the devastated areas. The Governments concerned have already approached us on the subject, and we have to look after our home departments as well. We have set up in consultation with the trades concerned what I hope and believe will be a most satisfactory arrangement for meeting the requirements of all parties in their fair proportion, but it is clear that for some time to come in a case of this kind you will have to have some priority machinery, and the whole policy with regard to control is to use the trades themselves as much as possible. I am glad to say that most of the big trades have now become sufficiently organised, so that in due time I hope that they will undertake the responsibilities, if any are required to be exercised, in connection with priority. But still we have to remember in the coming year or two we may have a ration with regard to certain supplies, so that it is impossible to escape altogether the conclusion that some form of international allocation will be required, and while there is some form of international allocation, which would be a proper and noble work for a League of Nations, it will imply that there must be some measure of allocation machinery in the industries concerned.

The Minister of Munitions, as already announced, will make a statement with regard to the work his Department is doing in providing facilities for that work, and even for assisting in the placing of orders, on Monday next, so that I need not refer to that portion of the scheme. One matter, however, to which it is my duty to refer is the question of the national factories. I have often been asked, "What are you going to do with this factory and that?" There are a great many factories, and when you come to examine them, as has been done with great care, you find that they fall into four principal classes. There is a large number of factories which are wholly State-owned—land, factory, and administration belong to the State. There is a number of factories which are partly State-owned and partly owned by firms. There is a large number of factories that are called national factories of which the firms themselves are really the owners. We have taken somebody's place and used it. There are no fewer than 115 of that class. Then there is a class of factory which is serviceable for the purpose of storage. There are twenty-five of them. We have examined these factories with great care, and there are certain factories which, it is clear, until the issue of the War is determined with much more certainty than it is now, it would be injudicious either to part with or substantially to alter. We have preserved a considerable number—at least twenty. Then there are factories on which there has been considerable expense on land already bought, but the purchase of land is necessary to make it a real live asset, and in these cases the Department has been instructed to purchase the necessary land Then there are factories which we have investigated in reference to all kinds of public requirements, and in their case the Ministry of Reconstruction, in consultation with the Treasury and myself, have been authorised to receive offers and suggestions as to the utilisation of these factories, and a large number I know are under consideration.

I have detained the Committee too long, and therefore I will only say that it is part of our work to review opportunities for employment. We have reviewed this in terms of the projects of the housing and the building authorities, the Road Board, the authority in connection with land reclamation and other sources of employment. The labour demands have been formulated and can be put into operation if required. Also a number of gentlemen under the chairmanship of a Member of this House have investigated employment in the engineering trades, and I propose to issue in a short time a pamphlet setting out what their recommendations are. May I say that they are made entirely by men engaged in the industry, and they offer a number of most valuable suggestions for the provision of employment, many of which have already been adopted, especially with regard to the provision of employment for displaced women and unskilled workers? Then we have investigated, and taken up with the Standardisation Committee, the improvement of standardisation, particularly in railways. Also we have collected through the Department of Overseas Trade the demands, so far as we could get them, of India and the Dominions in reference to products of different kinds. They have been formulated, and we are inviting the assistance of the Ministry of Munitions and other Departments in bringing them before those who are concerned; and in connection with some particular railway material, the Ministry of Munitions is provisionally allocating certain orders in order to keep steel works going, because until the price of steel is fixed many of these authorities say that they cannot give a definite price for these rails. Therefore, in order to provide for the hiatus we have organised the industries with a view to carrying on the Orders for rolling rails and so on, the price to be fixed later.

When investigating our oversea demands, nothing impressed me more than the manner in which we allowed the German to gain ground upon us before the War. If there is any part of his industrial life in which he was better organised than we were, it was in regard to getting hold of orders. His financial methods, his Consular services and his organisation of industries enabled him to get a long way ahead of us. I notice than an hon. Gentleman opposite shakes his head, but I may tell him that that is the bitter lesson I have learned during the investigation. There may be some brilliant exceptions, but, speaking generally, I believe it to be true. The German has had a financial organisation and a combination which have enabled him more readily to get hold of foreign trade than we have been able to do. I am convinced of this that a great opportunity lies before British traders, if they will only now exert themselves, and it is an opportunity which will be best grasped by organisation among themselves. There is plenty of room for it. But all our efforts will be in vain, and whatever we do in respect of demobilisation and resettlement, of the supply of workers, of the supply of material, the clearance of lines of transport, the organisation and disposal of stores, and the allocation of orders will all be in vain unless we have industrial peace in this country. I believe that, as the Chancellor of the Exchequer said earlier in the day, the most important question before the country is the question of reconstruction.

I have explored for a long time the various avenues approaching industrial peace. Many of them simply enter a blind alley. It is quite clear to me that you cannot get industrial peace by any Government prescription. You may get the Government saying, "We will lay down certain minimum conditions of employment," but that is not industrial peace. It is not on the method of production that we vitally depend in order to maintain ourselves in the future. It is suggested we should have a meeting of Labour leaders and employers to see if they can solve the problem among themselves, but I am convinced that it is no good trying to do it in that way. The interests of one trade are quite different from the interests of another, and you cannot settle them on one single plan. Therefore it is clear that what we have to do is to try to organise in the industry authoritative representatives who may be able to tackle and settle these things by themselves. We have set up a large number of industrial councils and interim committees, a list of which will appear in the Paper to be circulated. I think there are now about fifty industries or thereabouts so dealt with. We have been doing a lot of spade work of a very unattractive kind during the last twelve months. We have not set out to create these bodies simply that they may represent the trade—an object valuable in itself—but because the two parties on the bodies working together makes them the only people who know the conditions of the industry, and this will enable them to secure better methods of production coincidently with industrial peace. I believe it is only by the utilisation of these bodies that we shall secure that essential. Let me say that many of these bodies have undertaken all manner of responsibilities outside the industrial circle, and we find nothing but good come of them. Many difficulties have been settled by them already, and as they get into full working order I have no doubt they will settle many more. I have ended on this note, as to the vital necessity of industrial peace, because I am satisfied from the review which we have made of the position that will arise in the course of the next year or so, that if we have industrial peace we shall have a unique opportunity before us to make a better country, a country worthy of the men who have fought for us. To do that we must secure in our midst industrial peace, and if we can secure that, if we can secure agreement in our industries, we can all go forward with full confidence as to the future, not only in regard to prosperity, but also in regard to an improvement in the condition, habits of life, and general welfare of the people. When we have done that, I think we shall have done something of which we shall have every reason to be proud.

Sir E. CARSON

I do not feel myself competent to deal at any length with the very important statement of my right hon. Friend, but I wish to congratulate him upon it, because I think it shows how important it is to bear in mind the very difficult problem which will arise immediately after the determination of the War. How far they will be successfully dealt with remains, of course, to be seen, but I think that this is a subject which everybody ought to approach in a way as helpful as possible to the right hon. Gentleman in the difficult task which he has before him. The right hon. Gentleman wound up upon a note with which we all agree, namely, that almost everything depends upon industrial peace. As a matter of fact, if, when we have signed peace with our enemies, we begin to have war at home, I shall despair of the immediate reconstruction of the country. If we are to have industrial peace, and I am bound to say that I think that this is what my right hon. Friend was aiming at, we must show to the people of the country, and especially those who are returning from the front, that we are going to deal with their cases in no niggardly fashion. Industrial peace will depend upon wages and on a high standard of living. Let us not forget that by reason of the War, since the War broke out, there has been an advance not merely in wages, but also in the standard of living, notwithstanding the War. My opinion is, and I think the sooner it is realised the better, that you will not be able to go back to a lower standard of living or a lower standard than people have set for themselves in the course of the War. Certainly you can never ask the men who are coming back from the front to take a lower standard of living or a lower wage than you gave those who stayed at home, while they were away fighting our battles at the front.

As regards one question which my right hon. Friend dealt with, the demobilisation of the forces, that is a matter which I think it would be better to discuss when we have seen the pamphlet he is going to send round. He has put forward many schemes which show a great deal of thought, and a great deal of consideration, and really the only suggestion I am going to make on the spur of the moment as regards that is this: I think that in the carrying out of schemes of this kind what is very often absent is sympathetic administration. Men will come home and find themselves with their businesses—small or large, as it may be—utterly ruined, and having to make a fresh start. In my experience, one of the mischiefs that have occurred in the administration of pensions and separation allowances is the want of local sympathy—the failure to bring home to the people in their own districts what it is Parliament and country has provided for them, and the failure to attempt to solve the local difficulties which they themselves have felt in an absolutely sympathetic way. I will appeal to my right hon. Friend in setting up his machinery to take care, in the first place, that the provision of his scheme are brought to the knowledge and attention of the people, so that they may understand them without having to write here, there and everywhere asking the interference of Members of Parliament and others in order to try and get this or that done, and done as quickly and as sympathetically as possible, in the reorganisation of the particular business with which they are concerned.

7.0 P.M.

I can assure the right hon. Gentleman that in my experience more good has been done by keeping people satisfied and, may I say, comparatively happy as regards what seems to us small grievances but which to them are great grievances by having a sympathetic administration on the spot. I know, myself, that for a community like Belfast I get a number of people—and I am sure every hon. Member has the same experience—who write saying that they do not know whether they are getting their proper allowance for themselves or their children and whether they get the proper grants in respect of the husband or the son who may have been killed. Sometimes they write and, after a long time, get back a printed form—a most unsympathetic document. In Belfast it so happens they have a gentleman representing the Pensions Office—I do not know him personally—but from a great many communications that I have received I know he has looked upon these things with personal sympathy and he has interested himself and taken trouble to satisfy the people with whom he has to deal. I believe my right hon. Friend would do well to keep before himself in setting up his machinery the necessity of having a strong personal note of sympathy, especially with a man who comes back from the front and who has to retrieve his position in his particular business or his particular employment. That is all I want to say as regards demobilisation. With regard to the question of the setting up and resuscitation of trade, to which my right hon. Friend naturally devoted a great deal of his attention, may I say that I hope my right hon. Friend will confine the exertions of the Government to the least possible interference with individual trade? I think the outside public, in the way of manufacturers and merchants, are really in a state of nervous anxiety at the present moment as to how far this question of control can at the earliest moment be removed. I know that it cannot be removed altogether, and no one knows it better, for I sat on a Committee when I was in the Cabinet which discussed, for instance, this question of raw materials over and over again. I know perfectly well that you cannot have a rush for raw material which will not go round without having prices put up to such an extent as to make it probable that the consumer would be unable to pay for the material produced. But the mercantile and manufacturing community are dependent upon the Government relaxing more and more from day to day all question of control of their business, and whatever you may do on the question of control on general principles as to matters like raw material, steel, or other matters necessary for manufacture, do not, above all things, interfere with the individual management of a man's own business. I believe the greatest element of success in the carrying on of business in this country has been individual effort, and the policy of the Minister of Reconstruction ought to be to restore it to the fullest extent at the earliest possible moment. I get constant complaints of delays in Government Departments where there is this interference. I am not blaming anybody for this. I know perfectly well what the exigencies of war may be, but a gentleman came to me the other day, a man of knowledge and of ability, who knew what he was talking about, and told me that he tried to get a licence to transport an amount of stuff, for which he was able to get credit, into this country. He first saw a member of the War Cabinet, who told him he must go to the Departmental head. He saw him, and that gentleman sent for his chief assistant, and he was passed on, he told me, to eight or nine different people. Then, having got, as he thought, to the bottom of the matter, so that he might really have a chance of his licence, the man at the bottom began by sending him back by the same steps up to the top. And up to this he had not got his licence, and whether he ever will I am sure I do not know.

That is the kind of thing which is aggravating to a business man, and that is the kind of thing which is going to militate against business. Where we are in the perilous condition that the country must find itself in, and where we are out not merely to make new trade, but to try and get back and recover our trade, and our trade is envied and is no doubt in competition with trade elsewhere where they have been able to make preparations while the War has been going on, everything will depend not on splendid paper schemes, which read so well and which sound so magnificent when propounded with the eloquence of my right hon. Friend, but the whole question will, believe me, depend upon administration. I do hope that in the carrying out of the administration you will give the go-by altogether to political recommendations of the people who are to carry it out and will try to get real business men May I ask you specially to do that as regards Ireland, because there is no country in the world where the business man is so much ousted from any business in Government Departments, and where the politician gets such full play. I could give, I will not say hundreds, but many instances of men being put into jobs to carry out important matters, where their only qualification was that they were extreme politicians, and I am not now talking of either one side or the other. There is one other matter I would like to ask my hon. Friend. I hope that the Government are not going them selves to act as merchants. We heard some observations that were a little disquieting about the Government taking orders and executing them in certain priorities, and about having got certain details from various traders and manufacturers, in order to see how much would be required. I understood my right hon. Friend to say so.

Dr. ADDISON

I think my right hon. Friend is referring to inquiries as to overseas trade which related to transport materials, requirements such as affect particularly steel supplies, for example, the demand for steel rails.

Sir E. CARSON

I am glad to have that assurance. I may say that a short time ago a circular was put into my hand—I do not know whether I have it still, but I think I could find it—which emanated from the Ministry of Munitions, and which was sent out to various firms in the South American Republics, and I dare say elsewhere, asking them to furnish to the Ministry what their demands were likely to be at the end of the War, in order that they might place their orders in accordance with such priorities as they were able to effect. I am bound to say that I got a communication afterwards, when I drew attention to the matter, from the Ministry, in which they said that they never intended to do any such thing as to place the orders. It was perfectly plain on the face of the circular. I am glad to have the assurance of my right hon. Friend that you are not going to interfere with the merchants any more than with the manufacturers. I think it would be, there again, a disastrous thing if the Government were to commence to operate upon their own in that direction any more than in the other direction of which I have spoken. I have made these few observations not in any wise as a carping criticism upon anything my right hon. Friend has said. I know well the amount of time and attention and anxiety that he has given, and not now but for many many months past, to this subject, looking forward to the great day which we now have, when peace would once more return. I can only say I wish him well in all his efforts, and I do not believe there is any Member of this House, wherever he may sit, who will not give him all the assistance that he can in building up once more the great trade of this country.

Mr. HOLT

I should like to express my satisfaction—satisfaction which, I am sure, everybody has felt—at the very successful result of the War and on the cessation of the horrible bloodshed which has devastated Europe for the last four years. I am rather sorry that the discussion inaugurated by my right hon. Friend the Member for Monmouthshire (Mr. McKenna) on the question of public economy was not persisted in a little longer. I think that the time has come when the whole House ought to realise that the economy of the public finance is quite as much at the foundation of the prosperity of the country as any other single thing. The right hon. and learned Gentleman who has just spoken, and the Minister of Reconstruction, emphasised very strongly the necessity for industrial peace, and the right hon. and learned Gentleman said that industrial peace would depend very largely on a high rate of wages and a high standard of living. I agree with him in thinking that those are no doubt, perhaps, the most important factors in obtaining industrial peace. But, on the other hand, after all, people can only get what there is, and if you are going to have a high standard of living, which is of course the same thing as a high standard of wages, or more or less, the same, then it means there has to be a very great deal of production. I would like to remind the Committee that the high standard of living which has taken place during the last two or three years, is very largely in consequence of living on borrowed money. It is quite easy for anybody to raise the standard of living as long as he can get credit and proceeds to overspend his income. We are now going to turn back to a stage in which we shall not only not spend our income, but shall have to spend less in order to make good the losses of the last four years. I venture to think that statesmen and persons in places of great responsibility who hold out the hope that we are going to see a higher standdard of living than that of the last two or three years, are incurring a very grave responsibility. I think you are quite as likely to get industrial unrest from holding out false and agreeable promises to the labouring classes. I would urge, if industrial peace is what is wanted, on persons in responsible positions, not to try and hold out promises which they have no real reason to believe can be fulfilled. I want to return to the subject which my right hon. Friend the Member for Monmouthshire was discussing, and as to which we got no official answer from the Minister of Reconstruction. Is it possible to ask the Minister of Reconstruction whether he can give any answer to the interrogation of the right hon. Gentleman the Member for Monmouthshire? Is the production of munitions no longer wanted going to be stopped or not? It is very important we should have an answer to that. My right hon. Friend suggested that they should have a holiday on full pay rather than make munitions that are not wanted, and that is quite obviously the right thing to do. If we do not want a man to do certain work, it is far better to pay him to do nothing than to pay him to do the thing you do not want him to do. In any case, you have to pay him the wages, whereas if you pay him to make these munitions you do not want you are wasting raw materials as well as wages, Surely we can have some assurance that the manufacture of articles not required will be stopped forthwith, and that no such manufacture will go on simply for the sake of preventing the person who does this work from having a holiday. We really ought to have an assurance on that subject straightaway.

There is one thing about the holiday which I did not quite like. I think you ought to be very careful not to give the impression to people at large that there is no very great harm in taking a holiday. I found, as soon as the Armistice began, there was a general holiday taken yesterday, and a great tendency to go on taking a holiday to-day. Everybody can see that if the people working about the docks are going to get it into their heads that there is no great harm in taking a holiday at present, there is the danger of putting the food supply in the immediate future in danger. We are nowhere near the day when people can knock off work. I do not think munition workers have any great claim upon the generosity of the public Exchequer. A good many of them were induced to enter upon this work with the idea of doing public service and making a sacrifice, and they will be glad to get away as soon as possible. They have been paid very good wages and ought to have saved against the time when work was going to stop. The position of the munition workers is totally different from that of the soldiers, and their claim for unemployment donation, or whatever you like to call it, is of a totally different character. They have had a very much better opportunity of making provision for themselves, and are, after all, only in the position of a civilian engineer who knows perfectly well that he is engaged for a definite job and that when that job comes to an end he gets no more pay until he gets other employment. I am very much afraid that if you show too much willingness to find large unemployment benefits for all these people you are going to find a great reluctance to take up other work. If you hold out the prospect of considerable pay out of the Public Exchequer so long as they do not work they will be much less disposed to find another job. We all know perfectly well that we want to get people back to work as soon as possible.

My right hon. Friend the Member for Monmouthshire also spoke about the question of shipbuilding, and I think an assurance was given that warship building would be practically discontinued and merchant shipbuilding would be pushed on full speed. I do hope the Government will not do in regard to warship building the same foolish thing that was done at one time with regard to other shipbuilding, and that is to stop the progress of work on the ships on the stocks, and thereby prevent shipyards from being used for the new work. Do let us get shipyards clear of everything that obstructs the commencement of new work. I do not understand why it is that so much thought, so to speak, is being given as to how people are to find jobs. I was under the impression that the country was full of jobs waiting for people. Whenever I go about I find there is always something which cannot be done because you cannot get the workers. You cannot load a steamer or discharge a steamer because there are no dock-workers. You cannot take away the goods because there are no carters. You cannot get things by the railways because there are no railwaymen, and roads are not mended properly because there are no road-workers. I distrust altogether the policy of holding out to everybody the general suggestion that nobody is going to get any job, and that the only thing the State has to think of is how to provide for people who cannot get work, when everybody knows that everyone can get a job to-morrow by asking for it. The right hon. Gentleman told us just now that there might be a great many jobs in which employment has been reduced to the very minimum. Surely, in the case of all those jobs, it would be easy to reabsorb labour. Before the War there was no large number of competent people who were perpetually unemployed. If after this War, with the loss of life and crippling of people, we cannot of our own accord absorb the whole of the labour available, I must say I am very much astonished.

For years the Government have been living on borrowed money, and they do not seem to think it matters whether a thing pays or does not pay, but sooner or later the nation, like everybody else, will have to face the ordinary question: Does it pay? Have you, or have you not, got a balance? If you are going to undertake in almost every department of human activity jobs apparently for the purpose of finding somebody something to do, or supplying somebody with something he thinks he wants, and never considering whether this is a profitable job which is going to leave a surplus, you are going to drive the financial position from bad to worse, and I do not think you are going to get the same easy response from taxpayers as in the War, when people were willing to pay in order to win the War. The right hon. Gentleman talked about storage. I suppose the right hon. Gentleman will be storing a great many articles which would be much better destroyed. It is an easy thing, with the idea of economising and saving waste, to store articles in the hope that some time you will want them, but an enormous amount of storage might be incurred of things which might better be burnt. You will very easily block trade. I remember quite well what happened in the early days of the War, when, with the desire to get plenty of sugar in the country, the Government got enough sugar in effectively to block everything else, and very nearly brought us to a standstill by way of storage. Storage is very often nothing more or less than a polite word for obstruction. I think it a pity the Government talk so much about interfering with the question of raw material, and look for raw material in very unlikely places, for instance, in Ireland.

Dr. ADDISON

How do you know?

Mr. HOLT

I venture to say that if there had been any reasonable prospect of working these mines in Ireland satisfactorily and profitably somebody would have done so long ago. That is precisely the sort of thing the Government will do. They will, for political reasons, in order to please certain political sections, and to prevent agitation from certain quarters, look for minerals in places where they are not likely to be found, and waste public money which would be very much better employed in paying off the financial debt.

Dr. ADDISON

I presume the hon. Gentleman refers to the operations for coal, but I can tell him they have been undertaken, so far as I am aware, entirely uninfluenced by political considerations, by a number of experts, most of whom, to my certain knowledge, are not Irishmen, nor, so far as I know, are they interested in Ireland. It is by no means a political question.

Mr. HOLT

I have no doubt the right hon. Gentleman could have got experts to undertake operations in Ireland or Kent, but what I want to see is people who put their own money in the mines, and then I shall be more satisfied as to it being a proper operation. I do not believe all this idea of controlling trade can very well go on. Trade, after all, has either got to be free or it is not to be free, and that is the whole history of what has gone on during this War. The Government starts a small element of control. It is immediately found that if you control article A you must control article B, and that takes you into C and D, and so on, and the whole of this Government control has been forced upon them by degrees, because the Government started controlling two or three articles. If, for instance, you are going to control freight, that immediately drives you into controlling the whole price of the article to be carried; otherwise you are simply putting a bonus into the pocket of the particular merchant who deals in that article. That has been the story right through. You have got to fix the price of the home article and everything else if you are going to deal with even one branch of trade.

The right hon. Gentleman talked about priority. There are a lot of very unpleasant things in people's minds about the way priority has so far been worked. It will hardly have escaped the attention of the right hon. Gentleman that any system of priority is likely to open the door to corruption. The money advantage which can be given to A by priority and refused to B is very large indeed. I do not think any person can be unaware of the fact that there is a very large element of suspicion in the public mind that where A or B gets priority it is not on the actual merits of the transaction, but from other considerations, political influences, and such like, which have decided the giving of that priority. I am quite certain that if the Government undertakes to deal in this sort of thing you will not have the pure and honest government to which you have been accustomed in England for a very long period. I want to say a word about this question of steel to which the right hon. Gentleman alluded. I want to know what is really going to happen. I was very much alarmed by an answer to a question I put to the Parliamentary Secretary to the Ministry of Munitions the other day. It reads: Mr. Holt asked the Prime Minister whether any Grant or subsidies are being given to any manufacturers of iron or steel in Great Britain so as to enable them to sell their products at controlled prices; and, if so, what is the scale and total amount of such Grants or subsidies? The Parliamentary Secretary to the Ministry of Munitions (Mr. Kellaway): As was stated by the late Financial Secretary to the Ministry on 29th May, in answer to the hon. Member for Windsor, subsidies are granted to manufacturers of iron and steel to compensate for the increased cost of production. It would be impossible within the limits of a Parliamentary answer to give the scales, but it was estimated in July last that subsidies amounting to £47,000,000 had been approved. Recent increases have had to be given owing to the further rise in the cost of coal and rates of wages."—[OFFICIAL REPORT, 7th November, 1918, col. 2297.] I confess when I came to look up the question of the hon. Member I was rather surprised It reads: Mr. J. Mason asked the Minister of Munitions whether he has taken any, and if so, what, steps to compensate by an increase of the controlled price or otherwise the producers of steel for the increased cost of production consequent on the increased cost of labour and coal, and whether he will give an assurance that no subsidy has been paid or promised to such producers? The Financial Secretary to the Ministry of Munitions (Sir L. Worthington-Evans): Certain subsidies are given to steel makers to compensate for the increased cost of labour and coal. Rebates are also paid by steel makers to the Ministry in certain cases. These subsidies and rebates enable the price of steel to be stabilised, and thus prevent the necessity of frequently revising contracts involving the use of steel."—[OFFICIAL REPORT, 29th May, 1918, col. 799, Vol. 106.] I venture to say that answer would never have indicated to anybody that the Exchequer were expected to pay £47,000,000 in subsidies. The plain implication of that answer is that the subsidies and rebates more or less balanced one another, and that the whole thing was a transaction for the sake of enabling the price of steel to remain at a fixed figure—approximately the cost of producing the steel. I am very much surprised an answer so misleading should have been given by any member of the Government.

The PARLIAMENTARY SECRETARY to the MINISTRY of MUNITIONS (Mr. Kellaway)

To which answer is the hon. Gentleman alluding—to my answer?

Mr. HOLT

No, the answer to which he referred; and I was surprised he had the hardihood to refer me to it. What I think we are entitled to know is this: The hon. Member says that approximately 2 per cent. of this steel was steel to private consumers. If that is so, apparently private consumers received a bonus of something like £940,000 out of the public Exchequer. That is the calculation, so far as I can make it, on the figures given to me by the Government. Since the 31st July they must have received considerably more, and the gentlemen to whom priorities were given must have received by now, in the aggregate, a present of £1,250,000, or something of the sort, out of the Exchequer. That is one of the reasons, I think, why the Government should be careful about priority. It is not a very pleasant thing to think that £1,250,000 of public money should have passed to people who have got these priorities. The effect of closing down munitions and of re-establishing our ordinary trade will be that the steel will pass from Government to private consumers. Are those subsidies to go on, and are the private consumers of steel at controlled or maximum prices to continue to get these very large sums of money? I think we, representing the taxpayers, ought to know all about this business, and ought to have a definite assurance that, under no circumstances, is the money voted to-day going to be handed out to persons who get priority certificates for their steel. We really ought to have a definite assurance on the subject, and a pledge from the Government that no public money will be given to anybody through this steel subsidy, or any other similar subsidies.

I want for one moment to refer to some of the matters which I should have thought the Government might have taken in hand at once with a view to the reduction of public expenditure. How about the whole staff of the Censorship? Surely we might have a stoppage forthwith of the censorship, the disbandment of their staff, and a reduction of the charge which falls upon the Exchequer by reason of the employment of that very large number of persons. There is another matter that I should like to know something about. I think we ought to be told what are the prospects of the release from the service of the Navy of the very large fleet of fishing vessels employed, not only for mine-sweeping, but for fleet attendance, and all sorts of other purposes. If we could get the fishing vessels released now, I think you would not only get substantially increased economy in the hire of these vessels, but you would get an increased supply of fish, and by putting a larger supply of fish immediately on the market, which might be done in a fortnight or three weeks, you would force down the price of all other animal food, and make a step forward in bringing down the cost of living. The removal of these craft from public service would give two advantages: first, it would save a charge on the Exchequer, and, secondly, reduce the cost of living. I think we ought also to have some assurance that the enormous consumption of petrol in connection with aviation service is going to be brought to an end. That surely might be stopped at once, and there, again, we should not only save paying for petrol out of public funds, but the general public would have the great advantage of being able to use petrol, and get about their business much more efficiently than they have been able to do in the past.

All sorts of things are going on. Only the other day, during the negotiations, I am told that the antiaircraft searchlights were being played all over Liverpool, and I have no doubt the same thing has happened in other large towns. Surely that kind of expenditure might be stopped at once. The right hon. Gentleman told us that the Defence Force was only going to be disbanded pari passu with the troops abroad. Why are we keeping on this Home Defence Force? Why should they not be allowed to go home and get work? There are all sorts of expenditure which might be discontinued without waiting any longer. There is a question to which I sincerely hope the Government will see its way to give an immediate answer. What is the position of the German mercantile marine? I understand, from the conditions of the Armistice, that the German mercantile marine is liable to capture if it goes to sea, and therefore will remain in German ports. Without prejudicing the question of what is to be ultimately done with the German mercantile marine, surely it is of vital importance to the whole world that it should be got to work at once. We are seriously deficient in transport. Central Europe, we understand, is in danger of starving, and therefore of serious revolution. Surely the Government ought to lose no time in getting work out of these ships, without prejudicing in any way the question of whether Germany is to hand over these ships or not. Surely there must be some means of getting these ships to sea and using them to supply Germany, if necessary, instead of waiting months before they are put to any use. I do feel that it is a point to which some immediate attention ought to be given, and might go a very long way towards relieving many of the difficulties with which we are face to face both at home and abroad. I do hope that the Minister of Reconstruction, who has spent nearly two hours in explaining the magnificent scheme, just before the General Election, of making presents to everybody who is likely to have a vote, may be able—or that some Minister may be able—to find some time to tell us how a present has been made to the taxpayer by reducing expenditure.

Mr. G. TERRELL

It is a matter of regret that on an occasion like this, when we have a most important Debate on Reconstruction, that no member of the Government who is responsible on this matter should be present. There are several Departments concerned. I know the Minister of Reconstruction has been in attendance for some hours, but the War Office, the Ministry of Munitions, and the Ministry of Labour, are all Departments which are very much concerned with this question. I really feel inclined to move the Adjournment of the Debate as a protest against what I think is a matter of discourtesy to this House.

There are one or two short points with which I wish to deal: How to get the men back from the Army quickly. Sir Stephenson Kent, who has been appointed Controller-General of the civil side of demobilisation and resettlement, could not give us any information as to the time it would take before the men can be got back from the Army. This, though apparently thought a matter of small importance, is really of very considerable importance. I attended last Friday a large meeting of farmers. They were very anxious now to the end of the War was in sight, to obtain some means by which they could get their men back. They asked me to bring the matter to the attention of the House. There can be no reason to-day why agriculturists should not be returned at once. They are required for food production. If you cannot return all the agriculturists at once, surely we could have the married men. Certainly the men who have only recently been called up might have their orders to go back at once to their civil occupations. If this operation of getting the men back is going to take weeks, as most of these operations have taken in the past, there will be, I think, very great discontent, and also, as a necessary consequence, a very great loss to the country. I attended an important meeting of manufacturers this afternoon. The question was raised as to how they could get important men back, men, who, by the nature of their work, would be useful in preparing work which would give employment to others. They were most anxious to have some sort of simple method by which, now that the pressure of men for the Army has gone, they could obtain the men back without any long rigmarole of going through different Government Departments.

These are two points. I do trust that the Minister of Reconstruction, in giving the whole subject thought, will give these his very prompt attention. He must be perfectly clear that priority in regard to the employment of men should be given to those men who have served in the Army rather than to those who have worked in munition works. There is just one other point to which I would refer, and that is the proposed control which the Minister of Reconstruction has indicated, he desires to exercise after the War. In a great many of these cases it will be found that that control is contained in the Clauses of Acts of Parliament, or in the Orders in Council for the purpose of promoting the manufacture of munitions of war. But the moment we cease manufacturing munitions of war, I would venture to urge upon the Government that the control should be stopped. If control for other purposes is required, that is to say, for the purpose of Reconstruction, then I think, the Government ought to come to the House and make a case for obtaining that power. But control which is obtained for one purpose ought not to be used for another purpose. There will be a great amount of discontent amongst manufacturers if the Government attempt to control them or regulate their proceedings or the management of their businesses for one moment more than is absolutely necessary. No one knows outside manufacturing circles how manufacturers have suffered by the control imposed upon them during the War, but they have submitted loyally without complaint, and now the necessity for this control, or rather the production of munitions is over, they naturally expect to be relieved of any further Government interference. The control which it is proposed to exercise in regard to priority certificates is a matter of rather grave concern. It was quite one matter to control priority for munitions of war, and if one firm was given a little priority it did not matter so much, but when it becomes the case of priority for ordinary commerce, then I think the door was opened for abuse and for all sorts of irregularities which we should by every means in our power seek to avoid. I do not want to carry this matter further.

I think the Minister of Reconstruction has really done his best in regard to preparing a scheme of reconstruction, but the one point which he seems to have missed is in the attempt he has made to create a reserve of work. We have seen nothing of a reserve on which the munition workers can be turned. He has told us to-day that he is going to get employment for some of them in the Civil Service and on the land, and that something has been done in the building trade. Of course, that is all for the good, but I think this is a direction to which more attention should have been given, and we ought to be in a better position in regard to finding work on which to turn discharged munition workers. We seem to lack some clear, definite, and tangible scheme. Such a scheme has not been put before us, and I hope we shall bear something more than what the right hon. Gentleman has in mind and more than has been stated to-day. Nothing is more dangerous in times like the present than to have a large unemployed population which has been earning high wages hanging about without any definite employment.

Sir JOSEPH WALTON

It brings home very forcibly to us the gigantic nature of this War when we remember that this is the twenty-fifth Vote of Credit for carrying it on. To-night we are asked to sanction the expenditure of a further huge sum of £700,000,000. Personally, I think that the House ought to hesitate to sanction sums of money in Votes of Credit that are not likely to be required in the period covered by the War, and I should have been pleased if the Chancellor of the Exchequer had limited his demand to a Vote of Credit for £500. We are approaching this Vote of Credit in a very different frame of mind to that in which we approached the previous one. We come full of hopefulness and rejoicing that a greater amount of world freedom has been gained by our brave Armies and our Navy than the world has ever known before; that we are taking as a world a great step forward, advancing immensely those principles of justice, and ultimately of civilisation and humanity, as the result of this most terrible War in which we have made unparalleled sacrifices of every sort and kind.

I think that the Chancellor of the Exchequer took a somewhat too optimistic view of the financial situation to-day. Including the Vote of Credit now under consideration, the House will have voted Votes of Credit during the War to the gigantic total of £8,742,000,000. It is simply stupendous, and we can hardly realise it. The Chancellor of the Exchequer, in answer to a question the other day, said that on the 30th September our dead-weight debt amounted to £6,875,000,000, and he now tells us that we have lent to our Allies £1,465,000,000, and to our Colonies £218,500,000, or a total of £1,683,500,000. I presume those items are included in the £6,875,000,000. In view of this Vote of Credit for £700,000,000 to carry us to the 31st March, in seems absolutely certain that our dead-weight debt on the 31st March next will not be less than £7,500,000,000 We are told that there are great assets in France and at home amounting, possibly, to anything between £500,000,000 and £1,000,000,000, but notwithstanding that our financial position is a serious one.

I rejoice that the Chancellor of the Exchequer has been so successful in borrowing money in the shape of War Bonds. I think it is immensely to our satisfaction that no less a sum than £1,279,000,000 has been invested by the nation in War Bonds, and £256,000,000 in War Savings Certificates, making a total of £1,535,000,000 voluntarily put, through the patriotism of the nation, into these War Bonds and War Savings Certificates. But we still need a great deal more money. The greater part of the £700,000,000 now under consideration will have to be borrowed, and what is the prospect of being able to get further huge sums taken up by the nation in the shape of War Loans? We have over £1,000,000,000 of Treasury Bills, practically none of which can be renewed because peace has come, and innumerable people put their money during the War into Treasury Bills in order to get a little interest on it, but now that peace is in front of us more capital is needed to put our works in order, to change over from the production of war products to the products used in peaceful commercial civil life, the cost of replacing our lost shipping at the present enormous prices, and otherwise. There is a need for a much larger amount of money to be invested in stocks in our various works, because if we are to have a rapid economic recovery after the War we require the productive power of this country to be double anything that it was before the War, and that means greater stocks and an immensely increased amount of working capital to carry on these businesses.

8.0 P.M.

Our home demand will be enormously increased by restorations, repairs, and extensions of every sort and kind, and if we are to have true prosperity we must seek not only to recover our export trade that has been in abeyance very largely during the War, but to very greatly increase it, if we are to meet our enormous obligations at home and abroad. I read with interest an interview which the Chancellor of the Exchequer gave the other day, in which he told us that we shall owe at the end of this year no less than £1,000,000,000 sterling to the United States of America. That came as a great surprise to me. I believe we have given security to the extent of £600,000,000, but I do not know whether that reduces the claim America has on us for the £400,000,000, or whether the £1,000,000,000 is in addition. The Chancellor of the Exchequer stated it as 5 billions of dollars. It may be said our financial situation is not so bad, because in the £7,500,000,000 up to the end of March next we have secured £1,683,000,000 with our Allies and the Dominions. This means that we are not going to receive the money now, and the chances are that we do not receive much interest on it either for some time to come. The Chancellor of the Exchequer tells me that in his Estimate he takes one-half of these loans to our Allies and our Dominions as a safe estimate of what we may possibly ultimately get back. But what is the real financial situation with which we are confronted as far as our annual expenditure goes? I want to know how we are going to foot the bill. We are asked to-day to vote another Credit of £700,000,000. The interest alone on £7,500,000,000 is £375,000,000 a year. The redemption ought not to be put at less than £75,000,000. That is £450,000,000; the cost of pensions at £75,000,000, that is £525,000,000, apart from the normal and ordinary expenditure of the country. Now, that was approaching £200,000,000 before the War. We are going, thank God, to increase the expenditure on education, we are going to have increased expenditure for old age pensions, and no one begrudges that, and we are going to have increased expenditure for housing, urgently needed all over the country, and the State is to take some part in that.

Could we, as a reasonable estimate, I ask, including that £200,000,000 pre-war expenditure, fix the normal expenditure at less than £250,000,000? There you get the gigantic total of £775,000,000. The Excess Profits Duty is to cease bringing in its yield, and where are we going to get the revenue? That is, assuming that there is no increase in the Army and Navy expenditure over pre-war years. I hope it will be less. I hope an international disarmament will be arranged, because, I think, as a safe estimate, we ought to face the fact that now, in all human probability we will not have an annual Budget of less than £800,000,000, at any rate, in the time of the oldest of us in this House, and that indeed is a huge burden to face. We are faced with this huge taxation, and yet, in looking through the terms of the Armistice I do not see any mention of indemnities. I do not see any mention of our intention to enforce the payment of indemnities upon our enemies. It is only two years ago that Germany, when they thought they were going to win the War, unhesitatingly told the world, or, at any rate, the German people, that they did not trouble their heads about the cost of the War, because they were going to get all that back in indemnities, and that they were going to claim an indemnity of £10,000,000,000 sterling from this country, which they said would place her under tribute to them for a generation to come. Now, in facing the future, rejoicing as we are in victory, we must recognise that it will require the greatest effort of co-operative productivity to bring us into smooth water in the matter of finance. I say that the necessity for the avoidance of waste in national expenditure was never so great as it is now, if we are going to have a rapid recovery and to meet all our financial obligations at home and abroad. With regard to the waste of money, I am glad to note that they have stopped calling up men for military training. That is one step in the right direction; but I should like to call the attention of the Financial Secretary to the Treasury to a suggestion that I have to make. We are told by the Minister of Reconstruction that it will take three, six, nine, or twelve months to change over many of the works of the country from war work to peace work.

But I tell my right hon. Friend the Financial Secretary to the Treasury of one business of vital importance to this country where there is no necessity for a day to be lost with regard to the change over, and that is a trade he knows a great deal about—the coal trade. Four hundred thousand coal miners volunteered to fight for their country. I ask the Government to release and bring back to this country immediately 100,000 coal miners from our fighting forces in the field. By doing that they will secure that the people of the country shall live during the winter which is near upon us in well warmed homes and in greater happiness and contentment. In doing that they will provide sufficient coal for the works and manufactories, and it will make all the possible difference in the matter of our financial and economic recovery. Not only ought they to bring at once 100,000 men, coal miners, back, but they ought to follow that with no long delay by at least another 100,000. In that way they would take 200,000 men oft the Army strength and reduce the Army Vote substantially. There are several other matters. We are bringing home skilled artisans, the managers of one-man businesses and indispensable men in various business undertakings who have been taken away and whose return would do an enormous amount to assist in the rapid getting back to peace work of the works they were connected with. Now we have a countless army of employés in the different Government Departments. I hope that drastic steps will be speedily taken to enormously reduce the number of those employés. At the same time, I say they must be treated fairly and reasonably; they must not be turned off at a day's notice without means of employment. Now, with regard to national expenditure, we are told by the Committee on National Expenditure that Parliamentary control has been especially recently, wholly inadequate, and they recommend that a standing Committee be appointed on Estimates and accounts, replacing the Public Accounts Committee and the Estimates Committee. Now, I ask, Are the Government going to give prompt effect to that recommendation? Looking to next year, I am convinced that a great saving of public money would be effected and a great deal of waste might be prevented if that Committee were appointed at once and got to work. Especially as they are to be a Standing Committee on Estimates, it is essential that that Committee should get to work and be in existence long before the Budget, say, in April next, in order that we may have the benefit of their assistance. Our financial system in this country was always supposed to rest upon the doctrine that the interests of the taxpayer in limiting expenditure should not be left to Ministers at the head of the spending Departments, but should be under the special charge of another Minister, namely, the Chancellor of the Exchequer working in his own Department, the Treasury Is proper Treasury control going to be speedily resumed? Otherwise we shall never get value for our money. We have had a long and interesting speech from the Minister of Reconstruction, but I am inclined to Bay that the less Government interference we have the better. Every trade and industry that they have touched they have hampered and injured and made less effective. We are now told that the Minister of Munitions has appointed a Demobilisation Board and certain instructions have been issued. In just glancing through them I came to this most important instruction: That systems of payment by results be temporarily suspended and that the customary notice of transfer from payment by results to time work be given. You have people working and being paid by results, and the Government actually propose to take them off payment by results and to put them back upon time-work. I should like to have an honest statement as to the reduced production when they are on time-work as compared with piece-work. It is an absolute waste of money. We are going to have allowances to unemployed, and they are to be provided by the State. It is perfectly right that the State should take care that the demobilised soldiers who cannot be taken back into their old employment, or given other good employment, do not suffer for lack of decent means of living and of comfort, but I am afraid that we shall have considerable discontent and disturbance in the country over this reconstruction business. I would ask whether munition workers will not object to leaving the piece-rate Eldorado for a subsistence rate at home. I am afraid we have probably considerable trouble in store over questions of that sort. Let me say that, I think, the hundreds of thousands of women employed in the munition works and elsewhere are entitled to very great consideration indeed. We must treat them not only fairly but generously. We have had a War Cabinet to conduct the War. We ought to have a Peace Cabinet to conduct and organise and arrange and supervise our return to peace conditions during the transition period between the present time and the time when State interference and control of our industries can be withdrawn and they can be left to individual initiative and the energy and knowledge of men who know the different businesses themselves. I should like to know what the Government have to say as to the question of a Peace Cabinet. The Minister of Reconstruction tells us that his Department is not executive. It can only investigate, consider, and report to the various Departments. We are told that the Minister of Munitions has appointed a Demobilisation Board, and that they have got certain duties. I suppose that other spending Departments of the State —possibly the Army, the Admiralty, and others—will also have Boards appointed, but if we are to get the best results, we need one central controlling body to supervise them all, such as a Peace Cabinet, including, of course, the Chancellor of the Exchequer, the President of the Board of Trade, the Minister of Labour, the Minister of National Service, the Minister of Pensions, and the Minister of Education.

Everybody knows it is a stupendous task that we have in front of us during this transition period. We have to guard against discontent arising through things not working smoothly. There are 3,000,000 soldiers to be demobilised and to be brought home and placed in work again. They deserve that all the forethought and all the most skilful organisation shall be brought to bear so that they may speedily either get back into their old employment or obtain suitable employment elsewhere. I am not discouraged with the outlook as a whole. The nation, during the more than four years that this great struggle has gone on, has shown qualities such as those that had the highest view of England did not dream that we possessed, and I hope we shall be able to avoid setting class against class and shall succeed in adjusting relations between capital and labour. It would be a great assistance in smoothing away the differences between capital and labour if we were to set up those district and national joint councils that were recommended in the Whitley Report. I hope that we shall continue during this time of final peace settlement and during the time of national reconstruction a national Coalition Government. We need a Government for those purposes composed of the best brains and the best men of all the political parties in the country. A return at the present time to party government would be nothing less than a national disaster. We need the good-will, the earnest work, and all the knowledge that the best men of all parties can throw into it; but, given that, even though we have suffered great financial sacrifices, we may expect to emerge purified, as it were, and strengthened, and to have in front of us a period of greater prosperity than this country has ever known.

Mr. BYRNE

I wish to refer to a matter which may not appear to be worthy of very special consideration, but which, in my view, is of urgent importance. I allude to the deplorable condition of old age pensioners at the present moment. A few days ago I asked the Joint Financial Secretary to the Treasury if he would not grant an increase in the old age pension. The answer he gave me was that he did not think it was necessary and that he had no precedent to go upon. I would remind the hon. Gentleman that since the last increase of 2s. 6d. was given to the old age pensioners, two increases have been made in the separation allowances. There was also an increase in the Army and Navy pensions. If he wishes for a precedent for increasing the old age pension, he could look to the Committee of Production, which has given two awards during the last twelve months definitely to meet the increased cost of living. We know that an old age pensioner with 7s. 6d. a week at present is far worse off than he was in pre-war years with 5s. a week.

The DEPUTY-CHAIRMAN (Sir D. Maclean)

The question of old age pensions does not arise on this Vote of Credit. There will be other opportunities for the hon. Member to raise that question in the course of the next two or three days.

Mr. BYRNE

I bow to your ruling, Sir. Seeing the hon. Gentleman here, I thought it was an opportune time to raise the point. I will now turn to the question of the breaking up of munition factories. That has been discussed to-day in connection with England, but in Dublin and Ireland we have two or three munition factories, and I feel perfectly certain that they will be the first to suffer. When the Government starts cutting down industries they generally begin in Ireland. I would ask the hon. Gentleman to see that whatever treatment is applied to the munition workers in this country shall be applied also to munition workers in Ireland. The munition factories will be closing down quite shortly That will throw a large number of people on the labour market in Ireland. I see no possibility of any other work being started, at any rate in the near future, unless the Government make up their minds to fulfil some of the promises they have made in the past to our country. One of our housing experts issued a report quite recently, in which he stated that there were 27,000 families waiting to live in sanitary dwellings. When you are closing down munition factories you will have a good opportunity of giving these people other work. If you will speed up the building of houses in Dublin and Ireland you would be fulfilling a double duty—first, a duty to our people who are practically homeless, and, secondly, a duty to those who will be thrown on the labour market during the next few months. Large numbers of bricklayers and carpenters who have been engaged on work in Ireland are bound to be dismissed, and unless you do something for them under the Reconstruction scheme—and do that immediately—those men are bound to be left idle. His Excellency the Lord Lieutenant of Ireland a few weeks ago made a very nice speech to the Belfast Harbour Board. He promised that there would be great opportunities for an industrial revival, building and everything else, for Ireland. I am one of those Members on the Irish Benches who have no faith in the promises made by any representative of the Government. They never fulfil their promises; in fact, the Government is practically responsible for putting Ireland in its present condition. Another matter to which I would refer is the question of restoring shipping to Dublin. You took more than a fair share of the ships from Dublin to carry on the War. Now that the War is over, I hope the Government will see that some of Dublin's shipping is restored. At the present moment, owing to the unfair treatment of Dublin, a large share of Dublin's trade has been diverted to other ports, which means unemployment for our quay workers. Unless something is done immediately for the men and women who are likely to be dismissed from munition works, our unfortunate country will be in a deplorable state. I appeal to the Government to see if something cannot be done immediately either to improve employment or to start some industries for the purpose of employing our people.

Question put, and agreed to.

SCHEDULE.
Number of Vote.	Navy Services, 1916–17. Votes.	Actual Receipts compared with Estimated Appropriations-in-Aid.
Surpluses.	Deficits.
		£	s.	d.	£	s.	d.
1	Wages, etc., of Officers, Seamen, and Boys, Coast Guard, and Royal Marines	—	16,874,302	11	7
2 to 15	Other Navy Votes	14,968,323	11	0	—
		£1,905,979 0 7