HC Deb 13 February 1919 vol 112 cc407-36

I beg to move, at the end of the Address, to add the words, But respectfully regrets, having regard to the pressing need both to increase that part of the Exchequer receipts which is derived from sources other than taxation, and to stimulate productive enterprise throughout the Empire in directions in which individual effort cannot be relied upon by itself to achieve the most bene- ficial results for the community, that no mention is made in the Gracious Speech of any policy designed to meet this important need, or of any intention to inquire whether such a policy would be feasible and advantageous. In moving this Amendment I desire to draw attention to a matter of great public importance. I have been told that the terms of the Amendment are perhaps too scientific in form, and therefore it may be desirable to define exactly what they mean in rather more popular language. Generally speaking, the policy which we advocate is that the Government should make up its mind to take such suitable opportunities as may come in its way of making profit in large-scale industrial and commercial concerns under conditions which will ensure efficient management, whether these concerns are engaged in work either in this country or in the Over-sea Dominions and territories of the Empire. We wish first to find out if the Government have any policy on this matter and, if so, what it is, and if they have no policy we hope that the effect of this discussion may be that they will consider the subject further, and perhaps institute inquiries and endeavour to make up their mind at the earliest possible moment.

A policy such as we advocate is no new policy. It has been followed by successive Governments, I will not say in a large number, but in a number of instances. I might, also say that, where it has been followed, the result that the Government have made a profit on these enterprises has been rather more incidental than fundamental. They have gone into various enterprises for various reasons, and from the point of view of profit earning have, I may say, blundered into good things. The most classic instance is the purchase by Lord Beaconsfield of the Suez Canal shares. We paid, I think, £4,000,000 for them. To-day they are worth from £30,000,000 to £40,000,000. They have earned interest for many years. If the £4,000,000 had been originally applied, as it might have been, towards the extinction of the National Debt, only £4,000,000 of debt would have been extinguished, whereas in consequence of that investment £30,000,000 or £40,000,000 could be wiped out.

Then the enterprise of my right hon. Friend, now Minister for War (Mr. Churchill), when he was at the Admiralty, I believe, resulted in what appears to be a very acute commercial transaction, the purchase of a considerable interest in the Anglo-Persian Oil Company. The net result of that transaction, I was credibly informed last week by one who knows is that we own to-day a comparatively small number of debentures, about £200,000 worth, which pay 6 per cent. and that we have got. two-thirds of the ordinary share capital, £2,000,000 of the £3,000,000. It has paid 8 per cent., and I am told that the rate will probably be very much larger in the future. In fact my friend, who holds a very responsible position in that concern told me that he looks forward to this being an investment equally successful as that Lord Beaconsfield made in purchasing the Suez Canal shares. That shows what can be done if the Government uses its opportunities and puts its money wisely into industrial concerns. Then there is the smaller example of what occasionally occurs in connection with the comparatively small sums dealt with by the Development Commissioners. They are supposed to use their money to assist small enterprises in a small way in this country to get on their feet, but in many of the agreements there are inserted provisions, as for instance in connection with some of the afforestation work, that if any profit is ultimately made the Government should get some share of it.

That is sufficient to show that the principle which I advocate is no new one, but it has never as yet been systematically pursued with the avowed object of increasing the revenues of the State by this means. In the discussion which took place on the last Amendment I was very glad to hear the remarks which fell from my hon. Friend the Member for Walsall (Sir R. Cooper), in which he alluded to the gravity of the financial position with which we are faced at this time in this country, and for that reason, if for no other, I think it absolutely essential that the Government should inquire into every possible means for lightening the burdens with which this country is faced in the future. The figure which my hon. Friend gave of National Debt after the War was 8,000 millions. I do not think that the Chancellor of the Exchequer in the last Parliament made himself responsible for as large a figure as that, but certainly I should be inclined by the time the reconstruction period is at an end, and if the very insistent demands of hon. Friends opposite are acceded to, to put the National Debt at the end of that period. at well over 8,000 millions. But I am quite content, for the purpose of my argument, to take it at that immense figure. Then, with regard to the requirements of the State by way of income, I do not believe I should be over-estimating the figure if I put it at 800 millions per annum. We have to remember that all the pre-war expenses will have been increased. I should think that for the Civil Service, and all the various old and new Government Departments which have sprung up, probably 50 per cent. at least will have to be added to the pre-war figure. Then there is interest and sinking fund on debt, expense of demobilisation, the very large expense of pensions, and all the reconstruction expenditure, of which a large portion will no doubt be capital expenditure. I do hope that of that a large proportion will be dealt with on business lines, so that it may be interest-bearing, in which event, even if it is an addition to the debt, it will not matter so much as if it were simply flung away, as vast sums have been poured out in this War. I do not complain of what has been done. War is waste, and it cannot be helped. But I hope the time well arrive when this House, and the many new Members in it who are acquainted with business and finance, will endeavour to get the finances of the country placed on a peace footing at the earliest possible moment; and that they will join with those of us who have always been interested in this matter, in insisting upon Estimates, and an the Government working to them, and generally infusing so far as is possible a business attitude into our financial policy.

With regard to the special policy I have been advocating, I have been endeavouring to discover from such sidelights as have been thrown on the matter by speeches of members of the Government, and the action of Government Departments, whether the Government as a whole—and it is to them as a whole that I am appealing to-night—has any policy or not. Such action as has been taken on the part of the several Departments as I have been able to see, has led me to the conclusion that many Departments of the Government intend and desire to engage in business. But, so far as I can discover, in most cases—and it is only natural if these matters are to be dealt with by Civil servants flushed with the brief authority they have acquired during the War—the intention is to run these businesses, not in a way in which people accustomed to commercial business would aim to run them, but at a loss and not a profit. If this is the way the businesses are being entered on, then I most sincerely hope they will be closed down at the earliest possible moment, and not allowed to attain any important dimensions. I have already alluded to the shrewd investment by the Minister of War, who was then at the Admiralty, in the purchase of the Anglo-Persian oil shares. I wish that the utterances we have had from him upon the subject of the nationalisation of railways had filled me with the same feelings of approbation. I do not propose to quote his speech—speeches are so often misreported—but the impression left on my mind was that his attitude towards the subject of transport, a subject on which, in the last Parliament, some of us spent a good deal of time considering details, was that the State must run the transport of the county, and that it did not matter how much it lost on it as it would get it back indirectly. That is not an attitude which any business man would approve, and unless you are to go towards financial disaster as fast as you can everything that is run by the State ought to be made to pay its way on its own. Otherwise, if you have a business run on lines where it is no one's interest to see that it pays, you may be certain that the loss accruing from inefficient management will be enormous, and the larger the business the greater the loss.

Now I turn to another activity, with which I think the Board of Trade is concerned. We have all heard, and no doubt all approve, that it is the intention of the Government—the Prime Minister included it in his programme—to institute enormous super-stations at the earliest moment for the provision of electrical power and light. There have been Government reports which show the saving which can be effected if that is properly carried out, and from figures which I gave in the last Parliament from my experience in South Africa—and I have every reason to believe that the figures are correct—the saving to be effected would be £100,000,000 per annum. Another estimate—I do not know if it is an official one, but it is on a high authority—is that the cost of carrying out these works and creating these new installations will be in the neighbourhood of £300,000,000. I do not think it is unreasonable to express a desire that if, by State intervention, present and future customers of power are to be saved £100,000,000 per annum, £30,000,000 of that saving should go into the Treasury in relief of taxation.


What about employment?


That is a common fallacy, if I may say so, which says that if a State runs a thing it is to run it at cost. It is a very common thing to say that anything the State receives above actual cost is taxation. That is not my view of the matter at all. I maintain that if the State runs the business the State, like any other corporation which does the same work, is entitled to profit from the business winch anybody else would receive if it did the work, and that those profits, when obtained, are not taxation, but the legitimate fruits of the labour and enterprise of the Government carrying out the work. That is, I admit, quite contentious, but it is my view, and I want to impress it on the House. Of the other enterprises of the Government, some we know must be run at a loss, but I hope that it will be at as small a loss as possible. One of these is the question of housing. There you will have an immense expense. It is admitted on all hands that there will have to be some subsidies given to enable rents to be kept low. Still, my view would be, that while this may be necessary for the moment, that rents should be brought to an economic scale as soon as possible, and that it would be far better that wages should accrue to the labourers sufficient to meet their full obligations rather than that special classes of labour should receive subsidies in respect of particular items oil expenditure. It is much better that every workman should receive enough to enable him to live properly, to enable him to maintain his family in comfort, and to pay his rent and all other charges just like any other citizen. Then there is the question of food supply. The Government have paid what was held out to us originally to be a sum of £40,000,000 a year, but which speedily swelled to £60,000,000 a year, to enable us to get cheap bread. That had to be done, at any rate under war conditions, but these war conditions will soon be over, and I hope that the business of the Government in the purveying of food at this immense loss will be closed down as soon a sever it can be. I find no evidence anywhere of any desire on the part of any member of the Government or of any Government Department to make money. It is all loss, loss, loss.

We spent a very vast sum during the War in the erection of very expensive, well-equipped, and up-to-date factories. There seems to me to be no considered plan for dealing with them. We see advertisements in the paper every other day advertising these properties; for sale, and I have not the slightest doubt they are being sold or will be sold, if nothing is done, at wreckage prices. The Chancellor of the Exchequer, on the last occasion I think when he made a financial statement, estimated that the surplus assets, or the material which the Government had acquired for war purposes, would realise, and he was very optimistic and very certain on this point, was at least £1,000,000,000. I hope that nay be so, but whatever the amount may be, my concern is that those properties should be disposed of in the best possible manner to yield the best return to their proprietors, the general public. Take, for instance, that great factory of which we have all heard, the Gretna Green factory. On that, I believe, something like £10,000,000 was spent. As one experienced in business, I should doubt very much if when that is sold it will realise more than, let us say, £3,000,000. I do not think that that would be a, bad sum to get in cash. My suggestion would be that the Government should endeavour to sell a factory of that sort, not for cash at all, but on a basis of partnership with people who understand the business in which they are going to engage, and that the Government should lake payment for the property in debentures and in ordinary stock. In a sale of that character I for one would expect that for a factory of such dimensions, a sum of £6,000,000 would be obtained, paid for, say, half in debentures at 6 per cent., a reasonable sum in these days, and half in ordinary shares. The Government have means which to private individual has, since they have got records, of estimating the profits on ordinary shares made in good industrial manufacturing concerns run on a large scale by competent people. I should be surprised myself if it was found to be less than 10 per cent. I think that would probably be a fair average, although, of course, some would earn more and some would earn less. But I think 10 per cent. profit in a manufacturing busi- ness on the ordinary shares and 6 per cent. on the debentures would not be out of the way. If that is the case, you would have effected a sale for £6,000,000 and would receive an average return of 8 per cent. Let us look at what that means from the point of view of the extinction of the National Debt. A sum of £3,000,000 paid in cash would pay off £3,000,000 of debt and would save in interest £150,000 per annum, while a sale at £6,000,000, with an average dividend of 8 per cent., would yield £480,000 per year, or, in other words, would extinguish £9,500,000 of debt instead of £3,000,000. I do not wish to be bound to those figures, but I think any business man will look upon them as a fair illustration of what can be done by a sale on commercial lines against a break-up sale for cash. There will only, of course, be a limited number of concerns which could be dealt with in that way, but there are unlimited directions in which the Government could within the Empire engage in large-scale production with not only very great benefit to themselves, but with very great benefit to any territory in which, with associates, it embarks on large-scale commercial undertakings. Our overseas territories are crying out for capital and people, and anybody who assists to obtain them is a benefactor to those territories, and is entitled to get a legitimate profit for his enterprise. I have given elsewhere illustrations of what has been done in connection with irrigation work. I do not wish to elaborate this subject to-night or to weary the House with examples, because I do not think that this is the proper place to do so.

What I desire to suggest to the Government is this: If they have not decided on any considered policy in this matter then I do beg of them to give it their consideration and to refer it to the strongest Select Committee, of both Houses if possible, to consider the whole of this matter and then, having heard all that is to be said for and against, that Committee can advise the Government as to what their policy ought to be. I do not expect the Government to-night to express any decided opinion. I admit that the subject we are putting forward is contentious, but I do think that enough is known on these matters to justify a request for the immediate appointment of a Select Committee to go into this question. If I may suggest the general reference would be (1) by what means the revenue of the State from sources other than taxation may be increased? and then (2) whether the State can advantageously engage for profit, directly or indirectly, in selected branches of industry and development at home or in the overseas territories of the Empire? None of my Friends have ever agitated for any action by the State which would interfere with individual enterprise. We believe that the Empire has been built up by individual enterprise and if it could be shown, that any proposed activity would interfere with legitimate enterprise we would not be prepared to advocate it. My third point accordingly is, (3) if so what limit should be imposed upon its activities? (4) Fourthly, what organisation would be required to provide for the efficient conduct of individual undertakings and for the protection of the financial interests of the State? I say at once that I have always held that management by Government Departments of commercial businesses is an impossible thing, and that the Government Departments are not organised and are not staffed to engage in work of this kind. I should regard it as absolutely essential that any commercial enterprises in which the State might engage should be placed under efficient commercial men and run on efficient commercial lines, otherwise I for one would be the very last to advocate any such policy as that which I am laying before the House to-night.

There is another point. The Government, I think, in these matters might perhaps beware of super-men, because an organisation based on the theory that you can get a constant supply of super-men to manage it is not possible. All businesses should be organised on the basis that you can get a proper supply of good average men, and not super-men. Where there is a will I am sure there is a way, and if we have to obtain a body of sufficiently qualified men to engage in the matters I have indicated I am quite certain it could be done efficiently. But it could not be done on war lines, because however efficient that method might be from the point of view of winning the War, as cost has never been considered in connection with such undertakings at all, such a system would, I think, prove hopelessly inefficient from a commercial point of view. It is perhaps unpopular at the present time to quote Germany as an example, but there is no doubt that many of the trials and difficulties we have experienced, which have necessitated such supreme sacrifices, have been due to the efficiency of Germany m many directions, and particularly in its organisation on the industrial side. Therefore I, for one, do not disdain to look to Germany to see what she is doing and to see if there is anything in her methods which we can copy with advantage. Before the War the most popular professor in Germany, Professor Naumann, in his very well-known book, "Mittel Europa," advocated a policy of this sort, and pointed out that the State could derive revenue with the least hardship to individuals if it book its share of production at the source before it paused into private ownership, and he advocated the investment by the Government of large sums in some of their great commercial undertakings. I was very interested to see that in a lecture given about two months ago the German Chancellor of the Exchequer reviewed all the sources to which Germany could possibly look, to pay the huge obligations she would have to meet in the future, and after stretching all the ordinary forms of taxation, direct and indirect, to the utmost, came to the conclusion that the State could not rely upon these methods to meet its probable needs, and advocated there the adoption of the very policy which I am putting before the House to right. That, at any rate, is, I think, an indication that we who have similar great necessities should inquire most closely as to whether what I suggest is possible before we reject it.

I may also mention that towards the end of the last Session of Parliament this policy was referred to by the then Chancellor of the Exchequer when discussing proposals for the conscription of wealth. They did not find favour in many quarters of this Mouse, but he described this policy as one of the alternatives which should be considered in connection with them, and I ask that the Government should now give it its serious consideration and adopt early means to make that consideration effective. I do not wish to weary the House with figures, but there are one or two to which I should like to draw attention. Very high authorities placed our pre-war national income at £2,300,000,000, and the savings of this country before the War, out of which the betterment of our means of production at home and overseas had to be carried out, were estimated at £400,000,000 per annum. The income derived from taxation in this country in the year 1913–14 was £163,000,000, and in 1911 the proportion of the taxation which was borne by the payers of direct taxes was 56 per cent., so that roughly speaking, in 1913–14, £90,000,000 was being found by the Income Tax payers of the country. The last figure which we had of the proportion of direct taxation was that it was 82 per cent., and we know that for the current year the tax income of the country will be about £800,000,000. In other words, the taxation upon the direct taxpayers of the country has increased from £90,000,000 in 1913–14 to £600,000,000 in 1918–19, or an increase of £510,000,000. I think we must assume that if £400,000,000 per annum was required for the betterment of our means of production at home and overseas in 1913–14, it would not be rash to say that you would have to add 50 per cent. to that to-day to get the same work done. In other words, £600,000,000 would have to be found, and the net result is that if the same classes are going to be looked to to provide the savings as did provide them before the War, those classes will have to find another £710,000,000 per annum, and I for one do not believe they can do it. Therefore I attach the greatest importance to our financial situation being very carefully reviewed and that every possible means should be adopted of increasing the proportion of the revenue of the State which is derived from sources other than taxation. I feel the more strongly on the point, because if this policy were adopted we should be killing two birds with one stone. We should be both improving immensely our financial position, and we should at the same times be increasing production and the avenues for employment of the working classes of this country. I be live we should do far more by carrying out a constructive policy of this nature to destroy industrial unrest than we shall by squabbling over the many matters which have been before tie House already at such length to-day.


I beg to second the Amendment. I think it must be something rather novel in our House of Commons to hear of a proposal to raise the revenue from sources other than taxation I have sat in this House for night years, and I have never before heard any such proposals. The Mover of the Amendment desires that an inquiry should be made as to whether it is possible to raise the revenue by means other than taxation. I think I may claim that I am an old-fashioned Englishman that has one dread more than another, and that is that if he is in debt, he must get out of it. We as a nation owe much to our own countrymen, and I do not consider that as a debt which must be met immediately, but when I read that we owe £800,000,000 outside our own Empire, then I say it is time that we considered some means of raising revenue or capital by means other than taxation. I remember sitting in this House and hearing Mr. Asquith boasting that during seven years he as Chancellor of the Exchequer had raised the enormous sum of £94,000,000 towards the liquidation of the National Debt; bat we have to find in one debt, to the United States, £800,000,000. And how are we going to do it? It is borne in upon the minds of many of us that we are not going to do it by the ordinary means of taxation. I hold myself to be a Member of this House as a trustee in one sense to the people of this country and Empire, and that I have a life interest in all matters relating thereto, and I have this feeling, that while I am a trustee in all matters of Empire with regard to the citizenship of the people of the Empire, I think many of us realise that we have a wider responsibility even than that. We have, I was going to say, a responsibility to the citizens of the whole world, because in our Empire we have had bequeathed to us by our forefathers a quarter of the surface of the earth, and we have control, more or less, of nearly a quarter of the people of the earth. Therefore, when we come to talk of the resources of this great Empire, and how those resources are going to be used for our own benefit, we must also take into account the possibility of using those resources in not too selfish a manner and not thinking too much of our own personal needs.

But now, after this great War, after the wonderful victory that we have had over our enemies, in my own mind I visualise the marvellous relifting of our race, and the development of this Empire of which we are the trustees. Thinking of history, it is 300 years or more since the British race overcame the Spanish Armada, and most of you will remember that it was within seventeen year, of the defeat of the Spanish Armada that the British Empire expanded in the West by the formation of the Hudson Bay Territory Company and in the East by the Old East India Company. It seems that after the Spaniards had been overthrown the great opportunity of the Anglo-Saxon race was made. So, after the tyranny of the Hun has been overthrown, I foresee a marvellous opportunity for the development of the resources of the British Empire, and it is on that ground that I am an advocate here to-night of an inquiry in this House as to the possibility and feasibility of carrying out some of the ideas which the hon. Member for Tamworth has laid before the House, and some of the ideas I want now to mention.

10.0 P.M.

During the War I was placed in control of certain of the raw products of this Empire, and although I knew a great deal before, I have learnt a great deal since. I would like to mention one or two points as illustrations. I was placed in charge of all the oils in the Empire containing glycerine for the manufacture of cordite, and during that work I found we had a monopoly right of the whale fisheries of the Antartic Ocean. From those fisheries I purchased in 1917,on behalf of the British Government, 600,000 barrels of whale oil. What would that mean in meat if we had been able to utilise it? Scientists to-day say it will be possible to take the meat of the whale, and with careful treatment make an excellent human food of it. There is an enterprise for the Nation! You have in the oceans of the Southern Seas a fabulous quantity of product which is boiled down for manure, when scientists tell you that with proper care you can use it for human food. It is a suggestion, and out of it grows a greater suggestion, that we in the British Empire should make a fortune out of the food-fish of the world. It has never been developed in the quantities that are possible. One authority tells me that the seals of the Northern Oceans consume 6,000,000 tons of fish per annum, and no impression is made on the total supply. We in this country eat before the War 600,000 tons of fish in a year. Such a small quantity many of us estimate might be multiplied by four, and still we should only be eating the reasonable quantity of 6 tons of fish food per day. The idea has occurred to some of us that this is a question that should be inquired into. Let me give you one or two facts. On the British Columbian coasts we have 6,000 miles of ocean front. We have the most wonderful fish there in the world. Some of us have been to inquire of the Pacific Railway run to Prince Rupert as to the cost of delivering this fish in the United Kingdom markets so far as transport goes, and the estimate we have received from the authorities is that if the British Government, or anybody of sufficient authority, would guarantee 3,000 tons per week the railway company would put special trains at our service, build special steamers and deliver that fish from Prince Rupert to Liverpool at a cost of ld. a lb. It opens up a wonderful vision of the possibility of feeding our people by State enterprise.

Then there are the enormous possibilities with regard to the Newfoundland Fisheries that have never been half developed. There is the possibility now that our Admiralty will have at least 2,000 vessels for which they will have no use now that the War is over, and that we might make a national fishing fleet to go out and fish in the waters of the Empire to feed our own people at a most reasonable price, and that the Exchequer should participate in the result and a certain portion of those profits go to pay our War debt. I have gone into the matter, and I am bold to make this statement, that in 30 years from to-day, with development, with expenditure rightly governed and guided, I believe that from these fisheries we could shall 10,000,000 tons of fish per annum, and that, at the paltry profit of 1d. a lb. you would have millions of pounds going into your Exchequer of which you had never dreamt as possible revenue, the people would obtain a food cheaper than they had ever known, and the fishermen would have great opportunities by a system of bonus payments not to stultify individuality, but to increase it, and we as a State should see that the ships in which the men went to sea were the best that could be found, that all the scientific appliances possible should be used, that the newest research with regard to propagation of fish should be followed, that many advancements should be made in the building of harbours and in the erection of enormous cold-storage plant; and there should be developed in this country a system of transport by which these fish could be preserved and delivered into the market towns of the country as perfectly fresh food. I think this is a picture almost such as a wizard might wave with a wand, and say, "You men in the British House of Commons are trustees of an estate of untold wealth." The wealth is untold, and I want to use those resources not only for the production of wealth, but as a weapon in the defence of our working classes that we have heard so much debated in the last two days. I know no means of fighting the battle for labour and the safeguarding of the wage limit if you have no weapon in your hands.

Some of us were Members of this House when the matter of the Treaty of Great Britain with her ally Japan was talked about. The result of that discussion was that we got the worst terms possible because we had not a weapon in our hands. The resources of the British Empire should be a weapon of the British House of Commons in business arrangements with all other countries where they have Parliamentary government. Then we shall have in our hands a weapon, because we have more to bargain with in the raw material of our Empire as a means of bargaining than any other of our civilised competitors. Having that power in our hands I, for one, want to use it with reason and common sense to open the doors of possibility for the products of our artisans that they do not possess to-day. I say we can do it. I say that with that weapon in our hands we can open doors which have been closed. We can make opportunities for our workmen. We can build up in this Empire an enormously increased productivity which shall give to the workers in our home markets an enormous increase of employment, and employment of a kind that cannot be taken from them. By that I mean that we increase the productivity of our own Empire under such conditions that the warp and woof of commerce and trade will continue, and we need not fear having a too high rate of wages in this country for able and good work.

Another thought is in many minds brought about by the War the difficulty of the foreign exchanges. After the War this is going to be enormous. We are going to have to barter goods for goods, because in many cases we will not be able to work our business in the old way as we did through bill brokers and bankers. Atone time in my experience, acting for the British Government, I was buying produce for them in a country in Europe. That country wanted gold. With the greatest difficulty I arranged with the Treasury to pay in gold. Then that country demurred even to taking gold. Why? They said there were two things they wanted. One was coal and the other was wool. Gold, they said, was valueless to them when they had neither coal nor wool. It came to my mind that this difficulty of the exchanges is bound to be solved in the last issue by barter. If we can increase in our own Empire this possibility of barter we are going to reduce the necessity of paying the United States in cash, because we shall be able to increase the produce all over the Empire which can be given instead of money. Let me give hon. Members one instance where we could vastly increase the possibility in one of our Colonies. That Colony has a greater area than Great Britain. The part of it that is under cultivation to-day is less than half the size of the county of Kent. The fertility of its soil is so great that experts say we can grow 2,000,000 tons of sugar there, in addition to that this Colony had enormous resources in timber land minerals. I claim that by giving Imperial preference you can build up the trade of British Guiana which will produce 2,000,000 tons of sugar per year, and in payment for that 2,000,000 tons of sugar you will have a constant demand in this country for all kinds of machinery, railway plant, hardware and textile goods of all kinds.

I remember the time when America gave Cuba a preference of £2 per ton as against the sugar grown in the British West Indies. The result of that was a demand in Glasgow within a short period for half a million pounds' worth of sugar-crushing plant. The effect was instantaneous! Imperial Preference, not in terms of the 44 millions of people in this country, but of a preference given within the British Empire to 400 millions of people to grow certain articles within their own Dominions—I say that the men of this country will never realise what it means! Canada has set us an example. She has said: "We will give a preference on sugar grown in the British West Indies as against sugar grown in Cuba." That has arisen out of the mutual interests and trade between the British West Indies and Canada. I say let us do this here, not on a scale of 44 millions but with the idea in our minds of a preference given to 400 millions of people in the British Empire. Then will be realised all that will be meant by Inter-Colonial and Dominions trade under our flag. Another thing will be realised. If you want to make money you can conjure and make money in this way. Our present Prime Minister talked to us many years ago in this House, till some of us were tired, about unearned increment in land. I believe, and have come to believe, that increment on land is something which the State has a right to participate in.

On this great State of British Guiana the land is under the jurisdiction of the local government in regard to its ownership. Let us on reasonable terms make an agreement with them that if we spend millions of pounds in irrigation and transport and the work of opening up their place that we will give them a share in the profits in consideration of them giving us that land. Then let us let it out to those who will till it on reasonable terms, and at the end of eight years let it be sold, as we sell land in Ireland, for a long term of forty years. Let us own the town sites of the towns which will come there, and I say that this great debt of ours will vanish, and we may out of the British Empire not have to find taxation but be receiving money on the balance from income over our expenditure. This may be a fairy tale to some people. I have been studying this matter for months. I claim that the possibilities of a reasonable exploitation of the British Empire on behalf of the taxpayer and on behalf of the whole Empire for its good is a matter that does need probing into. I may be told that I am too sanguine, and we shall be met with all kinds of criticisms, and to meet them I have jotted down two or three. One criticism may be that what I suggest will prove an unfair exploitation of native populations. I claim that in this House and in this country we have such a sense of justice and love of freedom that all our settlers all over the world carry with them that same measure of justice and freedom, and they have shown this spirit amongst those to whom they have gone and whom they have ruled, and I think there is no fear of any exploitation of native populations by any action that may be taken in this House.

There is another objection which may be raised, and that is the question of monopoly rights to concessionnaires. My hon. Friend who proposed this Amendment laid down that we were going to have hard-headed business men to handle these matters, who will see that no unfair monopoly rights are granted. My hon. Friend replied to the question of the curtailment of individual rights which was raised from the benches opposite. It is constantly argued that collectivism is to take the place of individualism. Now, I have been an upholder of individualism all my life, but I find after careful analysis of many matters, that there is a place for collectivism. I think we may safely say that in matters where there is no landlord or previous ownership or vested rights collectivism may fairly take the place of individualism, but where vested interests already exist the State must be very careful where it put sits hands. I want it to put its hands where there are no inhabitants and no cultivation. There are vast areas in our Empire which come under that category. I am delighted to find that the Indian Government have solved this matter, and they have decided to spend Government money on desert land and make it blossom. We will not give it to the people, but we will allow them to have it at a reasonable rental. There are already properties in India where there were no inhabitants, and by State enterprise a vast change has been brought about, and in one case I am creditably informed 33 per cent. income on the capital expended is being received.

Then there is the principle established in regard to the Assouandam which enabled the population to irrigate the land from the waters supplied. That may be a right policy for the future, and it may be that we must change that policy, but I want those who are listening to me and the people of the country to consider where that policy can be changed to this effect. I think the time has arrived when we should appoint a Committee to consider where there are conditions and circumstances where this new policy may be developed so that the State may participate in the results of that enterprise. We may be told that we are wrong and that this would be subversive of our long 300 years history of individual ownership in the building up of this Empire.

I admire, read and know the wonderful results that have followed great individual efforts, but there is something in the character of the Anglo-Saxon race that loves adventure and enterprise, and I believe that the opening up of the resources of our Empire will create an enormous number of opportunities for individuals. I heard the other day of a vast cedar forest in Central Africa worth £17,000,000. No individual can get near it, no individual enterprise can touch it, but the State could open it, and then give opportunities for individual effort under that State enterprise. There are many things in this Empire that have never been touched, and cannot be touched by individual effort to quickly bring them into a state of productivity. There are vast forests in the north of India that have hardly been touched. When I was in New York a year ago I heard that an American had been prospecting timber tracts in British Honduras for turpentine and resin. Why has this land not been touched? It is because there are no means of communication between the forest and the sea, and somebody must build a line. I was told it was only a distance of twenty-eight miles, but no individual will go to the cost. Surely there are things in our Empire that are worth inquiring about, worth looking into, and worth considering by this House as to whether they are feasible and possible, and whether we, as a State, should appoint commissioners or authorities to undertake these great developments! I submit that the Amendment proposed, while we do not mean to put it to a Division, is one that deserves from the Government the closest scrutiny and the most careful consideration.


This is the first time that I have had the honour of addressing the House of Commons, and I hope, if I transgress the Rules, that you will deal indulgently with me. I have very great pleasure in supporting this Amendment, and I want to show that we are nearer to the proposals outlined by the hon. Member for Tamworth (Mr. Wilson-Fox) than a good many of us realise. I would like, first of all, to call attention to this matter from the labour point of view. I believe that there are great possibilities in it for labour. May I point out the enormous debt which the War has left upon the country has caused very serious consideration even among the ranks of labour. As I understand the figures, the cost of the upkeep of the country before the War was something less than £200,000,000 per annum, whereas the cost for the upkeep of the country when the War is finally settled will be something between £750,000,000 and £800,000,000. Where are we going to get this extra £550,000,000 or £600,000,000 per annum? That is a very great problem. It appears to me it will be impossible to raise that gigantic sum of money by the ordinary pre-war methods of taxation. The Government will have to go further afield in order to find something to relieve the present taxation without adding other burdens to the shoulders of the taxpayers. From that point of view I think the suggestion that the Government should participate in developing the resources of the Empire is most admirable, not only for raising revenue, but also for finding employment and increasing the wealth of the country. When I get into difficulties on these matters I like to go back to first principles. The position is this: We want more wealth. At the same time we have wealth in the shape of raw material in the British Empire which is beyond anything ever contemplated. It is something stupendous. On the other hand we have an enormous number of people wanting employment. There can be no difficulty in organising both the resources of the Empire and labour and bringing them together to produce wealth such as this country never dreamt of in pre-war days. Looking at it from that point of view, I suggest there is a good deal in it both in regard to raising money and in respect of finding employment.

I am a very strong believer in the recommendations of the Whitley Report. Sooner or later those proposals will be put into operation. During the recent election I advocated them very strongly wherever I went, and I was met with two kinds of opposition. In the first case my Free Trade friends said that if we carried the Whitley Report recommendations to their logical conclusion it would mean that every industry would became a monopoly, because the employers and the workers would be combined, and the two together would be able to exploit the public. On the other hand a good many of my labour friends told me I was anxious to speed up labour on purpose to produce more profits for the employing classes. There is a good seal in both those contentions, but my suggestion for overcoming them is a very simple one. First of all, if we are going to have an increase in production to help us pay our way, there must be a better understanding between employers and employed. That is provided for in the machinery laid down in the recommendations of the Whitley Report. There is just one thing lacking, and that is an incentive to labour with regard to labour's share in the extra produce through the two sides co-operating together, and my view is that to get both sides to put their backs into it and produce more wealth the first charge on the cost of production ought to be a proper rate of pay for the workers, from the managing director down to the humblest worker. The second charge ought to be the ordinary establishment charges which all industries have to bear, and the third charge should be a fair rate of interest to those who have put up the money to make the thing possible.

The next point is that so far as the profits made are concerned they should be divided between those who have done the work and made it possible. Here I want to bring in a representative of the Government to protect the consumers' interest. If capital and labour, working together, are allowed to exploit the public, there will certainly be an outcry against it. If we are going to develop along the lines upon which I hope there will be development, I want to see the Government come in and give all the assistance possible to both capital and labour in building up each particular industry and then taking a share of the profits. In that way all the profits, after labour, capital and management have been provided for, should be shared between the workers—that is, from the managing director downwards—the shareholders, and the Government. The Government would take their share for the assistance they would lend in the shape of research and that kind of thing. Then we should have a very happy trinity.

If you apply that principle to the development of the enormous resources of the British Empire, then we are going to get the wealth that the country so much desires at the present time. Take some of the instances that have been mentioned by the hon. Member for Tamworth (Mr. Wilson-Fox). There are certain things which private enterprise alone could not possibly undertake. Take the case of Canada. Canada is a huge country and one of the richest in the world. It is computed that there is sufficient coal under the surface of Canada to heat and light for 1,000 years 1,000 millions of the human race. That country wants developing. The ordinary enterprise of capital cannot possibly do it. A scheme has been suggested by a committee, with which my hon. Friend and I are associated, under which, instead of people going out to Canada and being dumped down upon small plots of land, where they have to do the clearing, where there are no roads, no railways, and no buildings, that the Government of Canada and the Government of this country, combined with the Government of any other of our self-governing Dominions, should work together and put up sufficient capital, first of all, to clear the land, make roads and railways, and then the land would rise in value from practically nothing at the present time to anything from £20 to £40 per acre. That would mean an enormous increase in the value of that land. I am told there would be no lack of people who would willingly go to Canada and live there, and cultivate the soil, provided that all this very hard, laborious and tiresome work were done on the lines suggested. That is a suggestion which cannot possibly be carried out by ordinary individuals, whether capitalists or workers. It must be a scheme in which the State itself takes a very great part.

The same argument applies to Australia, New Zealand, Newfoundland and many other parts of the British Empire. It means that if we are going to develop this Empire and make this old country worthy of the heroes who have saved it, the Government must come along and assist both employers and employés. If we work on those lines, I have not the slightest fear that we shall produce all the wealth we want or even double and treble it. I have no anxieties with regard to the weight of debt that will be left on this country after the War is over. That to me is a mereflea-bite. If we only get going and develop these enormous resources, by so doing we shall not only find the money to pay off our National Debt—which can well be done within a quarter of a century—but in addition to that we shall find enormous avenues for employment. If, in addition, we apply all the labour-saving machinery I believe it will be possible for us to establish even a six-hours working day as has been suggested by Lord Leverhulme. All these things are possible provided capital and labour work togather with the hearty co-operation of the Government and with the assistance of unlimited machinery.

I also believe that we are going to find avenues of employment by reducing the hours of labour and by this increase of wealth, and in connection with the in- creased use of machinery. As soon as we get an eight-hours day or a forty-eight hours week we are going to open up new avenues of employment that we little dream of at the present time, because as soon as people get leisure they will go about and enjoy themselves, and that fact alone is going to open up new channels of employment. For instance, it has been suggested that the people of this country could take a couple of month's holiday every year. That in itself would find an enormous amount of employment. I am one of those who are sanguine enough to believe that the time will come when the ordinary worker will be able to take his two months' holiday every year, like many others. That is going to create an enormous amount of employment. It can easily be done. As long as we all work together, instead of pulling one against another, as we did in pre-war days, all these things are possible. In pre-war days capital on the one hand sought to get as much work out of the worker as it possibly could, paying as little wages as possible. On the other hand, labour retaliated by gutting the highest wages possible through its trade unions, giving as little as it could in return. In addition to that, it had a very great antipathy to the introduction of too much labour-saving machinery, because it thought too much labour-saving machinery was going to deprive their comrades of employment. I believe the whole of that was a great fallacy. We are now finding out that it was. Low wages are a fallacy, for the simple reason that people cannot buy the commodities that their own labour has created. That is the position. High wages mean better trade all the way round. I hope the House will not be frightened at the suggestions which have been made by my hon. Friend, because we are steadily leading, in my opinion, to that position I want to see new avenues of employment created, not for the sake of employment alone, but for the sake of getting the money to pay for all the things we require.

The UNDER-SECRETARY of STATE for the COLONIES (Lieutenant-Colonel Amery)

I frankly regret that a larger House has not been present to listen to the very suggestive and, I think, valuable speeches which have been delivered by the Mover and Seconder of this Motion, and also by the hon. Member (Mr. Jesson). Certainly I myself feel a very large measure of sympathy with them, and I am glad to say the Leader of the House, whom I have consulted, has authorised me I to say that the Government will certainly give careful and sympathetic consideration both to the general suggestions made by the Mover and Seconder, and also more particularly to their request for the appointment of a Select Committee to investigate the matter further. What I think commends these proposals to the careful consideration of the Government and the House is that they deal directly with what is perhaps the most vital and urgent of all the issues which face us in future, namely, how this country is going to cope with the immense burden of debt. Whatever may be the outcome of peace, there will still be a great burden of debt to deal with in this country, and it rests with us to create a new economic life, and to lay the foundations of new prosperity in this country and Empire to sustain it.

The suggestion which my hon. Friend (Mr. Wilson-Fox) has made falls in a sense into two parts. It is in one sense a technical suggestion for a better or a more convenient method of levying taxes. He says that there are advantages from the point of view of the nation, possibly also of the taxpayer, in tapping production at the source, in being able at the dock, at the factory, at the generating station, on the railway, and on the banks of canals to find revenue for the country, without having to worry the individual citizen by demanding taxes, and subsequently interfering with his activity. That, I have no doubt, has much to commend it. Of course, there are many difficulties, as my hon. Friend well knows, in any form of State enterprise. Still undoubtedly there is an element which does deserve very careful consideration in the suggestion that, as we have come near to the limit of the ordinary method of raising revenue, we should inquire whether the system of partnership with industry at the very outset has not its uses. But I think there is a second and more important consideration which the hon. Member has made clear. It is not merely for a better system of taxation of existing wealth that he lays these proposals before the House, but it is a suggestion for the co-operation of the State in the creation of new wealth. That is the real, vital and essential thing. If new wealth be created it does not really matter in the long run whether it be tapped at first hand by the State as the owner or controller or whether the State shall get it through taxes. What is important is the idea that the power and resources of the State with the organising ability at its command might be able to create new sources of wealth, more particularly in a direction where individual enterprise might not be tempted to create that wealth or might be far slower in doing so. The hon. Member who has just spoken (Mr. Jesson) gave one instance in co-operative land settlement between the Dominion Governments and the British Government. That is one of the essential conditions of creating wealth in regions of immense possibilities, where, without such co-operation, the undeveloped wealth would be worthless. That is obviously one direction where private enterprise can do little, though bodies like the Canadian Pacific Railway have certainly done relatively great things. Undoubtedly there is a great field on the importance of which the State might well ponder. Then there is the other important question of communications. Communications from the point of view of private companies are a matter of the direct dividends which may or may not be got from a railway or a steamship. From the point of view of the State those communications are valuable, not only to the particular line, but generally if that line brings wealth and population into a territory. Undoubtedly we have reached a stage in the development of the British Empire and in the development of the industrial system of this country when the State will very carefully have to consider whether there are opportunities for using its power to create wealth quickly, and to create conditions in which other people can make wealth quickly—certainly more quickly than if they themselves were left to the ordinary course of the market, the hesitations of capital, and the fears of labour, in embarking upon industry. Certainly those suggestions must fall on sympathetic, and as far as they were practical, on responsive ears.

The hon. Member for Birkenhead (Mr. Bigland) threw out some fruitful suggestions. He suggested that the people of this country should invert the story of Jonah, and become eaters of the whale; and from what he told us I gather that the same consequences will not ensue. Undoubtedly there is vast wealth in the sea which has not been fully utilised, and whether its utilisation be taken in hand by the State or encouraged by the State is certainly a matter which deserves the fullest consideration. He spoke of the question of State development not only in the self-governing Dominions, but also in the dependent portions of the Empire, and he used a phrase as to which I think I should utter a word of warning. A word like "exploitation" has its legitimate and its dangerous' sense. Members of the House know that the bedrock of our Colonial administration all over the world is that we govern the natives of those countries which we control as trustees for their interest, and that the whole policy of Government in any of our Colonies, I mean those which are not self-governing, is directed solely and singly to the point of view of the welfare of the natives. We have to be very careful—and I just utter this one word of warning—that we should not put ourselves in a position where there would be any conflict of interests between the Government of this country, which has the Colonial administration under its thumb, and the interests of the natives, or where our Government would be tempted in the direction of making a profit for the taxpayer here as against the interests of the natives for whom we are trustees. I do not think that there is necessarily any conflict between the two conceptions of utilising the development of the vast resources of the Empire in order to help forward trade in this country, and at the same time to help these peoples. But I do wish to put in a word of warning that in any particular methods which we apply and any particular measures taken we have to watch very carefully all the time to see that we should not be put, as an Imperial Government., in a false position as between our interests as representing the taxpayers of this country and our interests as trustees for millions of people on a lower plane of political development, who look to us for their welfare and their elevation.

The hon. Member referred to the immense help which the principle of Imperial Preference might be in the development of those places. That principle, which caused bitter party conflict for many years before the War, has, I think, now reached a position where it stands above and to one side of party conflict. We are all agreed that in so far as the interests of the revenue—industrial interests, or whatever they may be—of this country necessitate any particular duty being imposed in any particular direction, that duty should be lowered as regards the produce of the Empire. That imposes no obligation on the country to tax itself in any way for the benefit of anybody. It is only the assertion of the general principle that we regard our fellow countrymen of the Empire as on a different plane from that on which we regard others. The hon. Member for Walthamstow really crystallised the whole issue which the Mover and Seconder to this Amendment laid before the House when he said that we want more wealth, and that we have boundless potential wealth in the British Empire. It is only a question of bringing the people of this country into direct and fruitful contact with the immense undeveloped resources which the Empire contains, and of utilising the brain-power and organising capacity of the country to see that these sources of wealth are opened up for the benefit of the country and of the inhabitants of every part of the Empire.

The note of hope that the hon. Member has struck is, I am sure, the right note in which we have to enter upon the period following the Great War. Do not let us start a period that contains many seeds of difficulty and many dangers in a spirit of despondency We have come out of this War with heavy burdens and many difficulties upon us, but we start this period with opportunities such as no nation in the world's history has ever had. I would ask hon. Members to look back upon the history of the United States during the past century. One hundred years ago the United States were left with a population of 5,000,000 or 6,000,000 in a, great area. Within the century they rose to a population of over 100,000,000 with that area still only half developed in the economic sense. We realise more truly to-day that we have ever realised before that the United States is the greatest economic phenomenon of the nineteenth century. I say that if the nineteenth century was, economically speaking, the century of the United States, the twentieth century is to be the century of the British Empire. We start with regions three or four times as great as the territory of the United States, with a far greater nucleus of a capable industrial population. It will be our fault, and our fault alone if, in two or three generations, the progress of this Empire in well-being of every sort, as reflected in every home, in every part of it, will not be the outstanding factor in the world's history since the great War.


My hon. Friends and I who have been responsible for putting down this Amendment—


The hon. Member is not entitled to make another speech.


After what has fallen from the hon. and gallant Member I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Main Question again proposed.

Debate to be resumed To-morrow.

Whereupon Mr. Speaker, pursuant to the Order of the House of the 12th February, proposed the Question, "That this House do now adjourn."

Adjourned accordingly at Six minutes before Eleven o'clock.