CONSOLIDATED FUND (No. 1) BILL.

HC Deb 19 March 1919 vol 113 cc2121-202

Order for Second Reading read.

Motion made, and Question proposed, "That the Bill be now read a second time."

Mr. G. LAMBERT

No one can view the future of this country without grave and anxious disquietude, and I think the House may well warn the Government to face the facts of the financial situation. We are to-day upon a slippery slope, and the Government appear to be taking the line of least resistance. Where there is a difficulty, they contrive to solve it with a Government Grant. It is so much easier to say "Yes" to demands than "No," and to spend money than to save it. It is not my desire in the smallest degree to criticise the Government in an unfriendly spirit. I want, if possible, to help them. The Government have control of the destinies of the country, and I trust, as every other inhabitant of the Empire trusts, that they may succeed in solving the difficult problems before them. But I must call attention to a few features which it would be well for the Government and the country to ponder over.

The Chancellor of the Exchequer, in his Budget statement on 22nd April last year, gave us to understand that the pre-war expenditure in this country, exclusive of the Debt, was £173,000,000. He considered that pensions and other incidental matters would take £97,000,000, and therefore, exclusive of the Debt, he put our expenditure after the War at £270,000,000, or, including the Debt, which he put at £380,000,000, it would be £650,000,000. When we look at the truly colossal estimates that have been produced by the Government this year, one cannot help being appalled at the situation. The Army is to take £440,000,000, the Air Service—I am giving round figures—£65,000,000, the Navy £150,000,000, Civil Service £495,000,000. That makes a total expenditure of £1,150,000,000 for services, exclusive of the Debt, as against what was estimated by the Chancellor of the Exchequer last year—£270,000,000. If you add £380,00,000 Debt charge to £1,150,000,000, we arrive at a total sum for which the Chancellor of the Exchequer has to Budget this year of something over £1,150,000,000. That is a position which may well alarm the country, especially as this expenditure is from the period 31st March, 1919, to 31st March,1920, and therefore it includes a period which would have given the Government something like live months since the Armistice to have liquidated many war charges.

I confess candidly that I do not know how the Chancellor of the Exchequer is to meet this burden. He cannot, I think, meet it with taxation. Last year the estimate of the Chancellor of the Exchequer for after-the-War taxation was about £650,000.000. This year the Chancellor's task, if he does not resort to borrowing, would be to find something like £1,500,000,000, or two and a-half times as much as the Revenue estimated to be received for necessary expenditure last year. If the Chancellor of the Exchequer is to raise this enormous sum of £1,500,000,000 by taxation he will have to increase the Income Tax from 6s. to 15s. in the£. I do not think that is a very pleasant prospect. The Sugar, Tobacco, and Tea Duties, and all taxes on necessaries, will have to go up more than double. I am afraid that the Chancellor of the Exchequer will have to resort to borrowing, and this borrowing is a danger to the country. We have been warned about it over and over again, and in the Report of the Currency Committee, which was issued last year, we have this very impressive warning from the bankers and other business men who constituted that Committee: If a sound monetary position is to be re-established and the gold standard to be effectively maintained, it is, in our judgment, essential that the Government borrowings should cease at the earliest possible moment after the War. It goes on: It is essential that as soon as possible that the State should not only live within its income, but begin to reduce its indebtedness. We accordingly it commend that at the earnest possible moment an adequate Sinking Fund should be provided out of Revenue, so that there may be a regular annual reduction of capital liabilities, more especially those which constitute local debt. And they make this very obvious remark: In view of the commitments of the Government, we should remark that it is of the utmost importance that such repayments of debt should not be offset by fresh borrowings for capital expenditure. These conclusions seem to me to be eminently sound, but I would like to know from the Chancellor of the Exchequer whether he proposes to follow the advice given to him by this very representative and capable Committee, and meet his expenditure in the coming year out of the taxation for the year. In all these questions we are at a great disadvantage, because there is so much uncertainty in our minds. We can have no certainty until those gentlemen who are debating in Paris come to some conclusion as regards peace. To my mind, and I wonder that it has not been reflected more in this House, there has been too long delay in these peace negotiations in Paris. We do want to know where we stand with regard to Germany. I saw in the papers this morning the very welcome announcement that the Prime Minister was asked to stay two weeks longer, and that then we might have some definite conclusion or signing of the preliminaries of peace. I hope profoundly—I am speaking not politically at all—that there will be no industrial disturbance in this country that would bring the Prime Minister away from that supremely important work in Paris. I do not speak as a supporter of the Prime Minister. I have no right to do so, I was not honoured with the Prime Minister's support at the General Election; on the contrary, I was honoured with his opposition, but that does not preclude any man who has the interests of his country at heart and knows the great sacrifices that have been made by the country in the War, from hoping that the Prime Minister may be allowed to remain in Paris, free from all domestic worries, and that he may reap the fruits of that victory which has been won by so much sacrifice and bloodshed on the part of our country.

4.0 P.M.

I hope that the Government will be good enough to tell us what is to be the policy, military and naval, of the country during the next few years. We do want a little clear speaking on these matters. The Army Estimates before the War came to, I think, about £30,000,000. This year, including the Air, it is £500,000,000. What are you going to do with this great force? Who are you going to fight? We have large forces in Russia, some of them are beleagured, some of them are even in danger. Is it intended to continue these Russian expeditions? I think we have a clear right to some knowledge on these points. It is not now a question of giving information to the enemy. During the last four years we have been told over and over again that we cannot have information, because it would be giving information to the enemy. That time has gone by. The responsibility for policy must rest with the Government, and, as was stated by a very distinguished Conservative statesman, expenditure depends on policy. If you propose to engage in expeditions all over the world, our expenditure will go on. No one knows how far our expenditure will go. The question of economy is one of the gravest we have to face, and it must be the special responsibility of the Government. The House of Commons is not an economical Assembly. Whenever the House makes a proposal it generally means expenditure of public money. The Government must instil economical principles into the whole series of Departments under its control. Economy, rather than extravagance, must be the watchword. We have to repair the waste of the War, and it can only be repaired by industry and frugality. Sometimes I wish my right hon. Friend the Chancellor of the Exchequer would change places with the Secretary for War. Wherever the Secretary for War is, that office certainly will always hum. We do not want the War Office to hum at this moment. We want it rather to hibernate. I can imagine what would have been the feelings and language of the Secretary of State for War if the present Chancellor of the Exchequer had come to him to find something like £500,000,000 for the Air Service and the Army. It would have been very vigorous indeed.

I come to another point of the Government policy. There seems to be a mania for establishing new Government Departments. Sometimes it is an old one called by a new name, but it always means a few score of extra officals appointed. Then there are many new offices coming into the field. They will all have to be staffed and manned. As was well said by my right hon. Friend the Member for Peebles (Sir D. Maclean) the other day, and it was echoed in all parts of the House, what we want in this country is production; but does any official or Government Department ever produce anything? [An HON. MEMBER: "Paper!"] I agree. [An HON. MEMBER: "And delay!"] Government Departments do not produce. We want houses. There is not a single Government official that will be able to set to work in the actual building of houses, but there will be plenty directing others. If you want coal, Government officials are not going to dig coal. We have had the example, quite recently, of the latest new Government Department—brand new—with a very able Scotsman at its head, a gentleman belonging to the Labour party, as the Secretary at the Labour Department. It is up to date; it is paying out something like £1,200,000 a week in unemployment donation. This is being paid out of borrowed money. As it stands to-day, it is a vast pauperising dole, for, despite what the Under-Secretary told us just now, I do know that there is, especially in agriculture, a crying need for labour. If any of us want anything done, if we go to any tradesman, he says, "I cannot do it, I have not got any men." Surely it is the right thing for the Minister of Labour to endeavour to bring the employers and the would be workers together. Instead of that, they seem to have got friction and all sorts of worries within the Labour Exchanges themselves.

There is a great deal of futility in Government Departments when they endeavour to bring workmen together. I am saying this in no hostility to labour. There is no man who has a keener or deeper sympathy with labour than I have. We want to see workers well employed at good wages, but that cannot be done when there is a large portion of the population consuming the products of industry and only another portion of them producing. We cannot have in this country loafers and idlers, and we shall not want them. Controllers are gentlemen we can do without. There are too many controllers; they do not produce anything. Unless the Government will take this question in hand, I foresee a long and dreary vista of unemployment, and it is a most terrible nightmare to any worker who wants to work and cannot get it, and if he has a family he may be driven to desperation, and then there will be grave disturbances. What I want to put to my Labour Friends and the House generally is this: We have to import food and raw materials into this country. They must be paid for, and can only be paid for by industry or services rendered or manufactured goods exported. The capital of this country has been vested in foreign countries, and has been sadly depleted. The export of manufactured goods is being hindered and checked by absurd Government Regulations. We must restore the equilibrium, otherwise we shall have a continuance of high food prices, which lead to unrest and to irregularity.

The CHANCELLOR of the EXCHEQUER (Mr. Chamberlain)

What are the absurd Government Regulations which check export which you have in mind?

Mr. LAMBERT

The Regulations of the Board of Trade generally preventing free export of our cotton and other goods to foreign countries—to China, to India, and other places of that description. [An HON. MEMBER: "No, no!"] My right hon. Friend will get a little information from the representatives of those towns, but it is no good to come down and say he did not know anything about it.

Mr. CHAMBERLAIN

I beg pardon. I certainly did not intend any discourtesy to my hon. Friend by the observation to my colleague near me, which I did not intend to reach him, and I should be sorry if he thought I was intentionally rude to him. What I intended to say was that I did not think my hon. Friend's information was up to date, or that he was aware of what had been done in regard to these matters.

Mr. LAMBERT

I hope the Chancellor of the Exchequer will be able to satisfy the House that he has withdrawn these restrictions. If the right hon. Gentleman imagines that the statement made by the Minister of Reconstruction is satisfactory, then I think he will be gravely mistaken, for we do not know what it means. I followed him very closely, and I do not really know what his statement was meant to convey to the House. I am simply trying to explain that the high cost of production which must ensue by high food prices will hamper our export trade. That, at any rate, will not be disputed, and it is no good our trying to go into foreign countries to supply them with articles unless we are able to supply them with a better and a cheaper article. The financial policy of the Government has a great deal to do with it. High taxation must hamper production. If a man wants to build a new factory, to instal machinery, he has to look at the taxation of the country. If he makes a gain with the Income Tax at 6s. in the £1 he will gain 14s. in the £l. If he makes a loss lie will lose £l. Therefore every increase of taxation which the Chancellor of the Exchequer imposes is certainly a restriction on the enterprise of capitalists in endeavouring to extend our trade. Cannot the Government give us something like security? We hear over and over again about the review of their trade facilities. I believe that they are to be reviewed in September. That again hampers manufacturers in this country, because there is nothing that manufacturers fear so much as uncertainly. Let us have a clear indication of the Government policy. I appeal to them not in any critical or hostile spirit to take their courage in both hands. They have a huge majority and can afford to be unpopular if they want to restore confidence in the country, but you cannot restore confidence by promising everything to everybody. The Prime Minister told is this country was to be. "a country safe for democracy," but up to now it has been the policy to make it safe for bureaucracy, and bureaucrats will not increase the production of the country. I ask the Government now to be resolute in restoring our export trade. So far as I am concerned I am not a pessimist. I have a firm faith in the future of the British people and the British Empire, but that British Empire and our prosperity have been built up by private initiative and private enterprise. What I fear is that private enterprise may be blighted by the extravagance and the restrictions of bureacratic control.

Sir FREDERICK BANBURY

The right hon. Gentleman who has just spoken has, I think, performed a very great service in calling the attention of the House to the extravagant expenditure which is going on at present. Like the right hon. Gentleman, I have great faith in the British nation, and I believe that we shall come through the crisis safely and soundly, provided that we recognise the old principles upon which the prosperity of this country has been founded. It seems to me that for the moment we have completely lost sight of those principles. The right hon. Gentleman said that the most extravagant place in the United Kingdom is the House of Commons, and that to a very great extent is true, because there are always a certain number of Members who are interested in a particular expenditure and they forget the other groups who are also interested in some expenditure, and they concentrate their attention upon their own ewe lamb. That might be all very well when we have a National Debt of about £640,000,000 and an Income Tax somewhere about 8d. or 9d. in the pound. But now that the National Debt is something like £7,500,000,000 and our expenditure in times of peace—because we are now practically in a time of peace—something like £1,500,000,000, that ewe, lamb must wait until we get more prosperous. We must, in fact, cut our coat according to the cloth. There are many projects in contemplation which involve large expenditure, and it is quite impossible for us to go on in the way in which we are going unless we intend to become a bankrupt country. For the last three years I have endeavoured to inculcate economy, not only upon the Government, but when I was deputy-chairman of the Unionist War Committee I, on more than one occasion, drew the attention of the Committee to extravagance that was going on. But there were some excuses for it during war, and it might be held that, in order to get certain articles which were absolutely necessary, that it was justifiable to pay any price for them. I do not know myself that that was a very sound argument, and I believe that some articles could have been obtained at lower prices. But still, in the face of a great crisis, you have got to take any means to attain your end. But having obtained your end, and we have now attained our end, surely we ought to begin to retrench and endeavour to get back to a sound financial position. If a private individual, with an income of £1,000 a year, has for two or three years to spend £1,500 per year, and to borrow in order to do so when the crisis is passed, if he is a prudent man instead of spending £1,000 a year, he will spend £800 per year and save £200 in order to help to pay off the debt contracted. That is not what the Government are doing. We never have a Minister coming down here and telling us that though certain things are good we cannot afford them. On the contrary, we have Ministers coming down here and bringing in Bills day after day every one of which means a greatly increased expenditure.

Let us look at the financial position of the country. The Financial Secretary to the Treasury will correct me if I am wrong, since the figures are so enormous and the opportunities of private Members to get them exactly are so very difficult that I may possibly make some error. I believe that the National Debt at the end of the financial year will be something like £7,500,000,000. From that you have to deduct the money which has been advanced to our Colonies and the money which has been advanced to various other countries. Some of that will take lime to recover. That amount of debt means something like £400,000,000 per year for interest and sinking fund, even if you put by only a very small sinking fund. When I first came to Parliament I remember the then Chancellor of Exchequer saying that if there was a Budget of £100,000,000, it would be a very serious thing for the country. Now we are face to face not with a Budget of £100,000,000, but we are obliged to provide £400,000,000 for the National Debt alone. The Army and Navy were alluded to by the right hon. Gentleman, and he asked "who are we going to fight?" I do not know who we are going to fight, I hope no one, but I venture to say that it would be a tall order to say that we were not going to fight at all. We cannot tell whether or not we may have to fight. There is another point which the right hon. Gentleman has forgotten, and that is as to an indemnity. It must be remembered that Germany cannot do what France did in 1870. In 1870 France paid £200,000,000 to Germany in gold and silver, spread over, as far as I can remember, a period of two or three years. Germany cannot pay anything in gold or silver because she has not got it, and all that she can pay is by goods spread over a period of years. If we are going to do that, and I hope we shall do something of that sort, it will be necessary for us to have an Army of Occupation, because if you merely get an undertaking or a treaty from Germany, as soon as Germany is sufficiently strong she will tear up the treaty if we have not got a strong Army of Occupation or a strong Army in this country so that Germany will know that if she attempts to tear up such a treaty she will be resisted successfully. Therefore, and in this I hope I am not extravagant, this is a matter as to which I am willing to incur some expenditure. I should like to point out that extravagance does not mean efficiency. Far from it. Most efficient concerns in private life and in business life are not those which are conducted extravagantly, but those which are conducted economically and efficiently, and the two go together. Therefore, I myself am in favour of a strong Army and a strong Navy, and I think that that is absolutely essential to the country. Whether is it essential to spend such enormous sums upon the Air Force I do not know. It seems to me to be, as far as I can remember, more than we spent on the Navy before the War. We are certainly spending an enormous sum on the Air Force, and I understood that it was in such a condition that it would not be necessary to spend much more on it at the present moment. I think we could possibly spend less on the Army and Navy than is now proposed, but I do not think we can hope for airy great decrease in the expenditure on the Army and the Navy.

I have pointed out that the sum required for interest on the National Debt and Sinking Fund would be something like £400,000,000 a year. Then we have an expenditure, I believe, on the Army of something like £300,000,000 and on the Navy of £140,000,000, while the Civil Service expenditure reaches the huge amount of £450,000,000. What on earth they are going to do with it, or why it is necessary to have vast hordes of officials in the Civil Service, I cannot conceive. We are accustomed in these days to talk about millions as if they were only thousands or even hundreds, but a sum of £450,000,000 for the Civil Service is really enough to take one's breath away. Then, according to the statement of the future Minister of Ways and Communications, there is a deficit of £100,000,000 on the railways, which is more than the total expenditure of this country in the year 1893–4. It is true that the Minister told us that we are going to have some economics, but I do not attach any very great importance to that statement. Some no doubt may be effected, but it must not be forgotten that the railway companies during the last four years have been working together, and that all those reforms in wagons have taken place. The railways have been working under private management, and it must not be supposed that it has been done by the State. It would not have been so successful if it had been. The railways were conducted by the directors and officials, and the executive committee, which is composed of the eight general managers of the eight principal railway companies. There is that sum to be added to those I have mentioned. There is an unknown sum for pensions, which will be, I suppose, about £70,000,000. There was introduced yesterday a Housing Bill, and, so far as I can understand, the State is to make up the loss or to recoup the localities. With the enormous cost of building at present, what that is going to be I do not know. I am not arguing that it is not a good thing to have houses. It is a good thing to have a fur coat on a cold day, but if you have not the money to get it you must go without it. It seems to me that on the top of our other expenditure we will be adding an enormous amount by this Housing Bill. There are any quantity of Bills all going in the same direction. I do not think there is any Member here who will challenge me when I say that I do not see the slightest indication or any action on the part of any Minister which tends to economy or to the curtailment of expenditure. The sums I have mentioned total, in round figures, £1,500,000,000 per year. The Revenue is estimated to be £800,000,000, and that includes the Excess Profits Tax, and as far as I can infer—and I think the general run of people in business and the majority in business say—if that tax is continued it will be very difficult to compete with foreign countries. As the right hon. Gentleman said, the first thing we have got to do is to increase production. Unless we do, we are, to use a slang phrase, "done," because we cannot live on bits of paper called currency notes, such as I have in my pocket. We have got to produce, and we have got to produce on such terms that someone outside this country will buy of us, and unless we can do that we cannot go on. We are a small country with a large population, which has been dependent for the last fifty or sixty years entirely upon what we have produced and upon having been at one time the foremost producing country in the world.

I have forgotten to mention the unemployment donation, and I was sorry to see in the paper that the amount of money spent on that was put at £1,300,000 in a week, which means something like £65,000,000 a year. That is a premium upon idleness, and, human nature being what it is it is a very great premium on idleness. Let us see what is going on at the present moment. I will give my right hon. Friend full particulars of the names of everybody if he requires. A person I know was written to by a man who had been in his employment before the War as a farm labourer, and he asked if this employer would write to his commanding officer and say he was willing to take him back. The employer did so, and presently received a note from the Labour Exchange saying, "We understand you are prepared to employ so-and-so as a farm labourer, and that you were good enough to say you would keep his place open for him. Will you please fill up this form." He filled up the form, and the man came back from the Army. For the first four weeks he stayed in the village and did nothing. The employer was very short of labour and wanted men, but could not get anybody. At the end of the four weeks, instead of coming back to the farm, the man took a job at a railway works. In that case there was one man for two jobs. He could have got work on the farm, for which he had been released from the Army, but he took work at a railway works. Men do not choose to take work when they can get this unemployment donation, and this at a time when, as the right hon. Gentleman says, if you go to any tradesman or manufacturer and ask for an article to be made, he says he cannot make it because he has not got the men. I may be asked, "What is the remedy for this?" One remedy is, first of all to inculcate economy in the spending Departments. I remember in the early days of the War going to a meeting at the Guildhall, where Mr. Asquith and the present Leader of the House spoke, and both of them were very strong in impressing economy on the City men who were present. I was suddenly asked to propose a vote of thanks to the Lord Mayor, which I did, and I took the opportunity of saying that I was very glad to hear that the then Prime Minister and the present Leader of the House had inculcated economy. I thought it was a most excellent thing, and I ventured to say, on behalf of the City, that when the Government set the example they would follow. But from that day to this the Government have never set the example of economy. On the contrary, they have set a bad example of extravagance. The first thing to do is to inculcate economy in the various Government Departments, and the next thing to do is to abolish all Government control and interference with trade. The first thing that would result from that is that you would get rid of a lot of officials and save money in that way; and, secondly, you would, allow traders and manufacturers and business men to do their own business in their own way, which they cannot do at the present moment.

Before I sit down I would like to draw the attention of the House to a very serious feature in the financial situation. I have never said anything about it publicly, although I have endeavoured privately to draw attention to it, not to the present Chancellor of the Exchequer, but to other Chancellors of the Ex-chequer, and that is the great increase in the issue of currency notes. The "Times" of two days ago gave the figure of currency notes at £321,000,000, against which the only reserve is £20,000,000 in gold. I am not quite certain that I am absolutely accurate, but I think I am right in saying, at any rate within two or three millions, that £320,000,000 is the highest figure that these currencynotes have obtained since they were first issued. The very first thing we ought to have done when the Armistice was concluded was to reduce the currency notes. I went into the City shortly after the American Civil War, and at that time the American Government did something in the same way as we have done with these currency notes. They issued what came to be called greenbacks, and a large number of American Government securities were in those days payable in greenbacks and some of them in gold, and when I first went into the City there was a difference of about 12 per cent. in favour of the gold bonds as against the greenback bonds. That difference gradually disappeared altogether. Why? Because the American Government the moment the War was over set itself to reduce the greenbacks issue and to go back to a sound currency. We are doing absolutely the reverse. We are not in any kind of way endeavouring to reduce these bits of paper which I have in my pocket, but rather we are keeping them at the same figure and even possibly increasing them. May I draw the attention of the House to what happened in the French Revolution. They issued currency notes, which they called assignats, and finally you could buy a pound note for two francs, if you had two francs in your pocket. I commend that to the attention of the Labour Members. It is very easy to have fictitious prosperity, which we have at the present moment. You see people buying all kinds of articles, furs and jewellery, you see them, going to theatres, and crowding on to the railways. One hears about increases in fares. On the Great Northern Railway last January we had more passengers than we have ever had in our lives, notwithstanding the increase in fares, and all that is going on, what on? On a little bit of paper which intrinsically is worth nothing; and there comes a day of reckoning. You cannot go on issuing a printing press if you wish to keep up the ultimate prosperity of the country. I was told on Friday, when I went home, by a man who works for me that he had been talking to a soldier who said, "There is no reason to be economical; we have not touched the Bank of England yet." There is that sort of idea about, that everybody has plenty of money and therefore you need not think about economy. The matter is really very serious, and I earnestly trust that the House, which, if it chooses, can do anything, will insist upon economy at the present time.

Lieutenant-Colonel PICKERING

On rising for the first time in this House, I would like to say that this Debate has a very important bearing on the industry to which I happen to belong, and also on my Constituency. I am sorry that some of the Departments for which some of this money is being voted have not as yet been demobilised, and I think one of them in particular, the War Trade Department, is having a very deterrent effect on the commerce of this country. I have put down questions about facilities being offered for the exportation to neutral countries of goods that have been purchased and paid for in many cases by the people of Scandinavia and Denmark, but the goods have not been allowed to be shipped owing to the fact that the War Trade Department have insisted on licences being given and have made other requirements. That has had the effect of allowing the Americans to compete in those countries, where hitherto they have not attempted to compete in textiles and cottons, and I think it is a very unfortunate thing that these merchants should be unable to realise and clear their warehouses of these goods, which were made at probably much lower prices than they could now be produced at. That sort of thing is conducive to a lack of confidence, which I fear very shortly will cause much unemployment in the woollen and cotton industries. For the time being, many of the markets of England being empty by virtue of the fact that the country has been engaged in producing military goods, they can keep the mills going to some extent, but we are getting to the time when the home market is becoming full, and we shall then have to look round and find that our other markets have been entered by the Americans. I think the time has come when we can safely remove and do away with all those unnecessary Departments, which are adopting an absolutely obstructive policy. There is one other thing which is also greatly hampering trade and penalising the working classes of this country, and I would like to illustrate the effects of the Excess Profits Duty on the working man—that is to say, the consumer. I think everyone will agree that there has been a good deal of looting and profiteering in the country even since the Armistice, and in this connection the Government has to a certain extent set the lend in many commodities. I will take the case of wool. The Government issues wool to manufacturers and takes a very handsome profit out of it. The Bradford worsted spinner then says to himself, "I am going to help my-self now to 1s. a lb. profit. The Government take 80 per cent., and therefore I will put on a 5s. margin." That pushes up the price of his yarn, which is the raw material for all the hosiery manufactures of Glasgow. Those men are having to utilise a very large quantity of capital to-day to do the same volume of business, owing to the presence of this Excess fronts Duty. The man-in-the-street, who has to buy various necessary articles of apparel, is paying a very much higher price than there is really any necessity for him to do, and the same thing applies to cloth. These are all necessaries of life, and, whilst the Excess Profits Duty was a very necessary thing during the War, and the Government being the chief purchaser it did not make very much difference, now, when we have to take it for our own markets, and also to compete with the Americans in the neutral countries, we find ourselves very much out-beaten in price. The result is likely to be unemployment.

There is no one in industry who has any objection to paying a share of any profits they are getting, but the present method of collecting it by the Excess Profits Duty merely means that it is a direct tax on the consumer. I am of opinion that there will not be any great objection by those who are making profits to any tax on profits if it is put up in some form other than this. The capitalists are loath to expend any capital at present, until there is some definite statement made from the Chancellor of the Exchequer as to what the financial policy is going to be, and where there is any lack of confidence on the part of employers and capitalists, the same thing is bound to affect very largely labour. I would strongly urge the Chancellor of the Exchequer to make an early statement as to what is going to be the future policy of taxation, in order to re-establish the confidence of business men and to enable them to realise at what period they will be safe in buying certain articles, and when we have got more or less stabilised the values of these various commodities. At present, everything is highly inflated. The whole country is, to a great extent, in a fool's paradise. If any controller of any Department has made what might appear to-day, in present circumstances, a dear bargain, which he made, thinking it was in the best service of the country, during the War, there is no one will grumble, whatever else that entails now that the War is over; but any maintenance of high prices for the purpose of not revealing these bad bargains is handicapping the whole country, and, whatever it is, let us absolutely arrive at what is the proper basis, and cut our losses here and now, instead of having a lingering illness. It is going to be a very, very serious thing for the country unless we do get on a sound basis. The shillings have been almost inflated to pounds, and this sort of thing, to my mind, can only be a prelude to a certain financial crisis.

Sir DONALD MACLEAN

It is amatter of great satisfaction to those of us who have been rather lonely during the last few weeks in endeavouring to draw attention to economy to find that the House is now thoroughly alive to it, and that Members in all parts of the House are endeavouring to take part in the Debate to reflect a feeling, which is certainly very widespread in the country, of the serious position in which the whole nation is now placed in order to find sufficient funds to meet the demands made by the various Government Departments upon the Treasury. We welcome here to-day with very great satisfaction the Chancellor of the Exchequer, because hitherto we have only been really faced with the great spending Departments, and when appeal has been made to us on patriotic grounds that the safety of the Empire is at stake, it has been a very difficult task indeed to meet with any carping note the proposals which have been placed before us. But I am quite certain that my right hon. Friend, although I know nothing about it, has been passing through a very trying time in the past few weeks when these Estimates have been placed before him, and so far as the House of Commons can find it in its duty to do so, let me tell him of a certainty that it will back him up in any effort he makes to cut out unnecessary expenditure. I do not want to weary the House, after what has been so well said by my right hon. Friend sitting beside me and my right hon. Friend opposite, but there is one figure of which I will remind the Chancellor of the Exchequer, because it will carry to him in a more vivid sense than to anybody in the House at the present moment, at any rate, what the position is. For the armed services of the Crown, the Estimates amount to no less a sum than £650,000,000, which is within £1,000,000 of the total National Debt when the War broke out. I am very glad indeed that the Leader of the House the other day, in response to a request which I ventured to make to him, gave what amounted to a half-promise that these Estimates should be revised. I am hoping that my right hon. Friend in charge of the Treasury will be able to go further than that. I am inclined to press it, on recent developments, to go further than that, and give on behalf of His Majesty's Government a clear and definite undertaking that, in accordance with the precedents of the Crimean War and the end of the Napoleonic Wars, when peace has been declared they will come back to the House of Commons and submit those Estimates to us once again, so that we may know what the policy is and shape the expenditure in accordance with it.

Let me just very briefly refer to only one of the great spending Departments. The Secretary of State for War budgeted for the large amount practically of £400,000,000 and for an Army of 950,000 men. Of that great total, 400,000 men were to be for the Army of the Rhine, and 550,000 for what I may call other services. Let me just say a word or two on the question of the Army on the Rhine What will that force, linked up with the other great forces of our Allies, have to face? I hope—and I am sure it is a hope which one can express with confidence—that the conditions which are now being laid down in the Peace Treaty will be carried out. Three or four months hence they will have to face an Army of 100,000 men in Germany recruited on a voluntary basis on the long-service system, with their artillery disorganised, the whole of their war material in a state which need give no unnecessary alarm to a thoroughly equipped force facing it, and a Navy which has practically disappeared. They will be allowed a few battleships later on, and some cruisers and some destroyers, but no submarines. Here is what is going to be undoubtedly a clear-cutcase for a revised Estimate. And I may add that we all know they are going so to discourage the military spirit there that they are not even going to allow Boy Scouts. If anything approximating to that is the real position in three or four months, this House should demand from the Government—though I hope it will give it—an opportunity of revising, not only the Army Estimates (including the Air Estimates) and the Navy Estimates, but also the Civil Service Estimates. The whole Estimates of the country can and ought to be re-submitted to this House not later than the middle of June next.

5.0 P.M.

May I turn from that to say a word or two on general expenditure and the control of the Government Departments as at present existing? After all, a concrete case, although it sometimes may be very much exaggerated, is often quite typical of a general condition. I will refer to the question of the Slough Motor Depot. Now the Secretary of State for War said to-day that, to-morrow or the day after, he hoped to announce what was the Government policy with regard to that. Let us hope that the Government have at least made up their minds to cut the loss, and stop a grave public scandal. What are the facts? Those of us who were Members will remember the discussion that took place in June last with regard to that project, and the revival of that discussion in August, and bow clean-cut it must have been in the mind of the Government Department that the House of Commons was very anxious and gravely concerned about the matter. What happened? Preparations of a kind were gone on with. The Armistice was declared on 11th November, and we now know, in a letter to the "Times"—and that great newspaper has performed a great public service in connection with this particular matter—the contractors, McAlpine and Company, gave away the whole case, so far as the Government is concerned, by admitting that they began work there six weeks after the Armistice was declared. If that is indicative, as I believe it is, of a condition of affairs which is rampant in Government Departments, I say the public unrest on this matter is fully justified. No matter what decision the Government announce to-morrow or the day after with regard to that, that sort of thing should be the subject of a public inquiry, and we are going to press for it. The contractors themselves say they started on that work six weeks after the Armistice was declared, which shows a condition of mind in the Government Department which constitutes a grave public danger, and nothing but a public inquiry, where all the evidence is heard in public, will meet the case. Let us take this one thing, and have a genuine public inquiry, and I am quite certain, if that is held swiftly, it will do an immense amount of real good. The cancer is there. Let us cut it out while there is yet time to prevent it spreading over the whole of our system.

Let me turn now to include, in what I desire to say, the question of exports and imports. I am glad to see my right hon. Friend here, who is representing the President of the Board of Trade. I regret the latter right hon. Gentleman is not sufficiently restored to health to be with us. The other day I asked what was the policy of the Government in regard to exports and imports. We wereinformed—and one is glad enough to have any sort of an answer—that on 1st September the whole position would be reviewed; meanwhile steps were to be taken in regard to taking restrictions off one industry or another.

The MINISTER of NATIONAL SERVICE and RECONSTRUCTION (Sir Auckland Geddes)

Excuse my interruption, but what I said was that the position in regard to imports was to be reviewed on 1st September. The export position is simple enough.

Sir D. MACLEAN

Well, with regard to imports was to be reviewed—I am sorry. But in respect to the question of imports, I should like to know whether an advisory committee or a consultative council has been set up on the question, and how that advisory committee or consultative council is composed? If such a body is to be of any real use and to carry with it the confidence of trade and of business men, it ought to be as impartially selected as possible. I want to know whether that consultative council is dominantly composed of men interested in matters of import or the subject of imports? Are the manufacturers and others dominantly represented? If that be so, all I can say is that such a consultative council will not carry much weight with the public. Such an advisory committee, or whatever it may be termed, ought to be composed of men who are not vitally and deeply interested in the principal businesses which are being arranged. Obviously their interests must be individual and not wholly placed at the disposal of the great consuming public?

As to the question of exports, every business man who has any knowledge of actual trade knows that there are millions of pounds' worth of cotton goods, cotton piece goods, yarns, woollens, and textiles lying in the Lancashire warehouses ready for export, but licences cannot be granted. I do not know what the real reason for this may be. I assume that perhaps one of the reasons—if not the main reason—is the question of the blockade. I trust we may have some information on this point. The blockade, of course, affects some countries like Scandinavia and Denmark which, to some extent, are the gateways of commerce for our enemies. That I grant. But I really want to know what reason there can be for maintaining that policy now. Surely the time has come to ease the restriction of the export of these goods lying in Lancashire, and which, by their remaining there, proves a great cause of unemployment, which to-day is rampant in Lancashire! The mills are going idle almost every other day. Thousands of men, and yet more thousands of men and women, are becoming unemployed. The time has come, I am quite certain, when these vast quantities of goods stored up and ordered, with the markets waiting, can safely be let go.

It is said, "Will you commence to trade with Germany?" I do not know what knowledge the Departments concerned have that these goods are going to Ger- many. If they are going to Germany, I do not see why Germany should not be supplied with our cotton and textile goods. If in the process of sending our goods we clothe others—well, we get the neutral money, which is much better tendered to us than German money. It is all the better for our British manufacturers. I rather press this point upon my right hon. Friend. I remember a great deal about the Board of Trade Department in its early days. It may be that the trouble is there. In those days the trouble was with the Foreign Office. I quite understand these may be matters of high policy, and that they are very difficult. But I am quite certain that the view of the House of Commons would be, so far as it can, to urge a resumption of normal business, and to go where you can trade with an amplitude of certainty that the national interests are not in danger. I suggest that the time has come when we should allow these goods to go out. If we do not, we cannot hold these customers of ours to their bargains. They will—and I do not know that they are not already doing so—arrange to get goods from the United States, where they have no sort of trouble about the blockade. So far as France is concerned, they look to Scandinavia and Denmark with regard to certain classes of trade. They are not, I imagine, very energetic on the subject. The real trouble, however, about it is also this: We have borne—I will not say the major share of the burden of war—but something very near to it, and we are going to bear, quite obviously, the major portion of the incidence of the burden of peace. I put these points to my right hon. Friend as one completely outside what is going on. I repeat again we are delighted to see him on the Treasury Bench, as well as the Secretary to the Treasury who has done the work in his absence. We are thankful not only for his courtesy, but we admire his ability. After all, it is a relief to the House of Commons, and, I am sure, to the country, to find the Treasury, which is the watch-dog of national finance, represented in the House of Commons once again, and I am sure we shall be glad to have any information the right hon. Gentleman can give us on the topics of Debate.

Mr. A. CHAMBERLAIN

I beg to express my thanks to my right hon. Friend opposite for the kindly welcome he has given to me on my return, and no less for his acknowledgment of the admirable work and the great ability, as well as the uniform courtesy, of my right hon. Friend the Secretary to the Treasury, who has represented the Department in my absence. The Debate has ranged over a wide field and touched on topics of great importance. I am the last man to complain of an effort by Members of the House of Commons to fix the mind of this House or the mind of the country on the serious and immense financial obligation which we have already undertaken, and the burden which these obligations necessarily impose upon us, and to a scrupulous regard for economies which are imposed upon us as a first necessity under such conditions. I would not have any Member of the House think that in which I am now going to say I am in any way palliating extravagance or encouraging expenditure on even good objects of a kind, which is reckless because it is beyond our means. Let the House, at any rate, and let the country, realise what is the problem. My right hon. Friend who opened this Debate and others who have spoken, for instance my right hon. Friend the Member for the City of London (Sir F. Banbury), has spoken as if you could take the Estimates which have been presented this year to the House as being the normal Estimates for a normal year. I want to say that I almost regret that in deference to the strong wish expressed by the House of Commons last year we have brought in Estimates of this kind now instead of proceeding for a further period by Votes of Credit. It will be in the recollection of those who were in the last House of Commons how widely expressed was the desire that we should bring the system of Votes of Credit to an end as early as possible. My right hon. Friend the Leader of the House, who then held the office of Chancellor of the Exchequer, shared that desire and expressed the hope that it might be possible to see it done.

When I took up the office, the business of preparing this year's financial programme was already proceeding upon that basis. I think it was the right basis on which to proceed, if it were possible. If, however, the House assumes that what we do in these Votes represents recurrent expenditure of normal years and nothing else, then the effect of putting it in the form of Votes instead of Votes of Credit is to mislead the House and the country as to the extent of the problem which we have to meet. My right hon. Friend and others spoke about the Army and Navy and the Air Force Estimates. I should not sit here if it had been suggested to me by my colleagues in these Departments that by accepting these Votes for this year I was committing the Treasury or the Government to an expenditure on that basis for years to come. No, Sir, it is no guide to the expenditure of the years to come. It is a remnant to War expenditure. Apart from that, though it is true we are no longer engaged in active operations against Germany, peace has not yet been made. The situation over much of the world is disturbed and disturbing. It is quite impossible to get back within n few months to the normal circumstances of post-war expenditure, or even to ascertain with any precision what the normal post-war expenditure will be. I agree with my right hon. Friend who has just spoken that our Naval, Military and Air Force expenditure must be examined further in the light of the peace terms, and of the consequences which those terms involve.

Sir D. MACLEAN

And the Air Force Estimates similarly?

Mr. CHAMBERLAIN

I will come to that in a moment. For the present I am dealing with the Army, the Navy and the Air Force as military forces. We hope, and in other countries it is hoped as strongly as here, that as a result of the awful sacrifices in this War we may lay the foundation of a lasting and abiding peace that will admit, and not merely admit, but will cause and uphold the demilitarisation of Europe. If Europe is demilitarised our whole programme must be different from that which would be the case if the old conscripted Armies remain. But it is not possible for my right hon. Friend the Secretary for War, or the First Lord of the Admiralty, still less for the Chancellor of the Exchequer, to give hon. Members post-war Estimates of the Army and Navy until we know something of the terms of peace and of the military situation thereafter of Europe.

My right hon. Friend asked me, very fairly, to speak on the Civil Service Estimates. I do not go into the details, because that was done at length by the Financial Secretary to the Treasury. It is of a special character, and we shall bring it to an end as rapidly as we can. It is not, however, part of the normal recurrent expenditure of the Government. Do not let us exaggerate. The situation without any exaggeration is quite grave enough. The charges which we have to bear are enormous, and will remain enormous, and there is every reason why everyone in this House and out of this House should study economy. For my part—and I am sure I speak the mind of the Government—we shall welcome help from any quarter—friendly help and honest criticism—in assisting us to establish and maintain economy. But it is not possible during such a great struggle as we have just passed through, or indeed during any war, to maintain those checks and restrictions on expenditure which ought to be maintained in peace.

It is very difficult in any war, and the greater the war the greater the expenditure, the more difficult it is to go back to the sober ways of peace, and to re-establish the control of expenditure which under the necessities of war have passed out of your hands. All the help that the House can give we gladly welcome. We need their support, and if they will bear in mind the need for economy not merely in discussions on Bills like the Consolidated Fund Bill, which provides the money, but also in discussions on the Votes and discussions another Bills which spend money, they will greatly facilitate the task of the Treasury, and I think that criticism will be more effective. The right hon. Gentleman the Member for the City of London (Sir F. Banbury) said this House had never been an instrument of economy. I am afraid that my opinion to the same effect is on record in the appendix to the Report of the Committee on Public Expenditure.

Sir D. MACLEAN

Some days ago, when my right hon. Friend was not in the House, I made a suggestion on that point, and it was that a Committee of Members of this House specially interested, and who had special experience in great businesses, might be invited by the Government to assist them in the grave financial position in which we are placed. This House contains a large number of men who are exceptionally qualified for business, and I threw that suggestion out before, and I repeat it again.

Mr. CHAMBERLAIN

I am not quite certain of the exact scope which the right hon. Gentleman would give to this Committee, but I shall be very glad to talk it over with him. I venture to say that you may also have too many committees, and you do not want a series of committees inquiring into the same thing, or overlapping. The Committee on Public Expenditure is to be reappointed, and I hope that will give us some assistance. But in the House itself the trouble largely is that the House which controls expenditure is not representative of the House which meets when money is voted and spent. We have a discussion to-day which in many of its aspects is not less important than any of those that have preceded it during the Session, but you do not find when economy is the subject of the Debate that it exercises the influence or draws to the House the attendance which is brought by a great Bill like that of which we passed the Second Reading yesterday.

There is every reason for economy. I say also that when you have exercised all proper and due economy, your expenditure may still be large, and you cannot face the great problems which now confront us in many spheres with a simple negative. The right hon. Gentleman the Member for the City of London spoke of the housing problem. I do not know whether my right hon. Friend meant to imply that the Government ought to have left the housing problem to be dealt with at some future period, when our financial difficulties had been overcome. I would have been glad if it had been possible, but expenditure of that kind adds to the complexity of the problem with which we have to deal and the difficulties in which I am placed. I would not take the responsibility in a matter of social order and stability of imposing a blank refusal to the programme of the Government in favour of better housing of the people. There must be reason and there must be consideration of all sides of the problem, and that consideration is required from the Government and the House itself. I feel confident that the House will not expect me to anticipate the Budget statement which I shall have to make later. They will not expect me to give my forecast, or any forecast of expenditure, or to say how much taxation has to be raised, or by what methods I propose to raise them. Those are matters which must be left to the Budget speech, but there are some particulars of policy which have been raised in this Debate about which I should like to say a few words, and to which the House will expect me to refer.

The hon. Member for Dewsbury, in an interesting maiden speech, and I congratulate him upon the character of it, spoke of the restrictions which are still enforced as regards exports. Let me say at once, first in broad terms, the object of the Government is to get rid of control and Government interference as quickly as it is safe and possible to do so. Let me say that much progress has already been made upon those lines. I asked the right hon. Gentleman who opened this Debate to what restrictions he referred, and he said the restrictions on cotton. The export of cotton goods is free to every part of the world except the blockade countries. The hon. Member for Dewsbury who spoke of restrictions on woollen goods spoke of restrictions in the blockade countries. That is kept up for reasons of international and inter-Allied policy, for which this House would hardly take the responsibility of taking action apart from or in opposition to our Allies. He suggested that the Americans were sending their goods, and ours were refused admittance. I am informed that that is not so. The Americans have been booking orders and giving long credit for goods to be delivered when the blockade is raised.

Sir D. MACLEAN

They are getting the markets.

Mr. CHAMBERLAIN

If my information is correct, the Americans are not sending any goods against the blockade any more than we are. It is open to our merchants to do what the Americans are doing, that is, to book their orders for a period when delivery can be made. It may be necessary in order to secure those orders, in competition with the Americans, to give the same credit as the Americans are willing to afford. The sooner that blockade can be raised the better we shall be pleased, and if Germany can draw some of her supplies through neutral countries, the better I shall be pleased for the reasons my right hon. Friend has put. The hon. Member for Dewsbury seems to think that the policy of the Government was, or it might be the policy of the Government, to maintain the prices of articles of which they hold stocks above their present natural level in order to make a profit out of them or to cover losses which they might have incurred. That is not the policy of the Government at all. It was necessary to buy these things, and secure supplies while the War was in active operation. If we have sometimes had to pay more in order to be certain of our supplies, and contract ahead, and if we now have stocks which are above the post-war normal prices, so far as I am concerned, I think it is fair to assume our first losses should be cut, and we should get to the natural prices as soon as possible, and remove the uncertainty which would continue hanging over the market if it was thought that the Government were holding up prices above their natural level in order to dispose of stocks which they have on hand.

As fast as we can in all things, we want to get back to the normal course of business. We cannot do that everywhere at once. My right hon. Friend and other critics have hardly realised the extent of the progress made in that direction, even within the last few weeks. Another hon. Member spoke about the burdens we have to meet. Our expenditure, as has been pointed out, is going to be greater than the capital of pre-war days. How, and how alone, can the country bear the burden which it has to bear? It can only bear it by increased efficiency, increased production, and a greater export trade, and we want to do all that we can as a Government to help forward those great results. We trust, in spite of the dark clouds which hover over us at this moment, that we may not have the whole industrial community plunged into strife, and trade arrested and stopped by disagreements amongst ourselves at a moment when in the highest interests of the State, and in the interests of every individual, all parties, capital and labour, ought to be co-operating to improve their efficiency and to increase their production in order that the State may come safely through the perils which lie in its path. I say as my concluding words, as I said at the beginning, that I do not wish to exaggerate or to encourage exaggeration of the difficulties of our position, but it is difficult. It does call for economy, for strict economy, and I welcome, every disposition on the part of the House to see that such economy is secured and maintained throughout the public service.

Sir CHARLES SYKES

I intend to follow the good example of the new Members who have spoken up to the present, and to confine my remarks within a very short time. I may say that previous speakers, and especially my hon. Friend the Member for Dewsbury (Lieutenant-Colonel Pickering) has saved me one trouble. As a rule, a Member who rises for the first time in this House sits down having left unsaid a good many things that he should have said. The hon. Gentleman who opened this Debate made some reference to controllers and directors. I happen to have been in that unfortunate position for over two years. I have been a controller or a director in the service of the War Office, and I stand here this afternoon to emphasise all that my hon. Friend the Member for Dewsbury has said—that it is high time we resumed our normal conditions. Personally, I am very dissatisfied with the reply which the Chancellor of the Exchequer has made to the various criticisms, and I must gravely warn the Government—I think that is the phrase which the right hon. Gentleman the Member for Derby (Mr. J. H. Thomas) has used on several occasions—that unless they tackle this problem with regard to the removal of the restrictions upon the imports of this country, they will bring upon us very grave disaster. I speak for a large section of the population in the West Riding of Yorkshire which produces woollens and worsteds.

At the present time the jute trade in Scotland and the cotton trade in Lancashire are in a very deplorable condition, and I warn the Government that unless something is done to restore confidence—which is absolutely the first essential in business—we shall certainly be having ruin in our industries. We must resume, and resume at once, confidence. It is quite within the knowledge of the Members of this House what confidence means. I remember, at the outbreak of war, being in an out-of-the-way place, where I was refused change for a £5 Bank of England note. That emphasises what confidence means. At the present time the Americans are taking orders in markets which we always had exclusively for textiles. I would also emphasise the fact that, in addition to a large quantity of cotton held by the makers in Lancashire, over £10,000,000 sterling worth of stuff is to-day held on behalf of neutrals. I grant that a lot of it is paid for and that the people who hold the goods have had their money, but we do not live in this country by what we sell to each other. We have had the most artificial trading for three or four years that any country in the world has ever known. We do not live and make profit by what we sell to each other, and we must give all the encouragement that we can to our export trade.

I ask the Government, therefore, to remove at the earliest possible moment all restrictions and to give facilities for money to be put into business. Let us develop business in every conceivable way. I speak as a manufacturer and as one who has been interested in manufactures all my life. I am sorry, but I had forgotten the point. I want to emphasise that as business men we have been accustomed to regular channels of trade—that is the point—and whatever little success I made in connection with my Department I made by recognising that all regular channels of trade should be kept up during the War. The War is ended, and I hope that war will never return again. It is no use wasting time on platitudes; we must come down to hard, stern facts. We have got to realise that the Government must open all regular channels of trade at the earliest possible moment. If they do not, they will have in the West Riding of Yorkshire, in Scotland, and in the West of England, that terrible thing that we have got to-day, namely, out-of-work pay. We have a saying in Yorkshire, and a true saying, that "There is nothing for now and very little for tuppence." If we in this country realise that we are going to get nothing for nothing, we shall have a better country and a happier people. I am an optimist, and I believe that we have a wonderful future before us in this country. We are going to see the finest revival in trade that we have ever had in the history of the world, but we can only have it if the officials will act as business men and not as officials.

Mr. CLYNES

The few remarks that I have to make in a discussion which has covered so many questions regarding economy and public expenditure may seem to be very much out of place, but my reason for intervening is that hon. Friends with whom I act on this side of the House desire me to refer to the subject of the railway fares of Members of this House, and the expenses incurred in connection with Parliamentary service, which received some brief consideration in one of our discussions about a fortnight ago. I would like, first of all, to offer a few observations on the general discussion. I can assure my right hon. Friend the Chancellor of the Exchequer that my sympathy with him is very real, and I hope he will find, as I believe he will, during the discharge of the very difficult duty which he has undertaken, that the criticisms from every quarter of the House will be helpful and constructive, suggesting ways and means for effecting economies to meet the enormous financial troubles with which we are faced. Heavy expenses have been inevitable. We had to incur them as the necessary means of bringing the country successfully through the great trial of the last five years, and it does not help the Ministers for any of us to talk about the swarm of Government officials and about the large number of men employed in these numerous Departments of the State in different parts of the country. We are continually asking the Government to do this and that and the other. The Government can only act through officials. They can only act through their appointed representatives, many of whom are known to be overburdened, overworked, and in arrears with their service, because it is so heavy. I do not find fault, at any rate so far as the War is concerned, with any action which I have been able to understand or investigate on the part of the Government with regard to the establishment of these numerous undertakings. They were the mere manifestations of the instruments of government, and they were called into being in response to public necessity and Parliamentary clamour.

The larger issues of policy upon which the right hon. Gentleman has touched do, however, fill us with great concern, and I hope before long it will be announced that the policy of the Government is to be one which will establish enduring peace and give us a sense of security against a recurrence of war, because it is only by the establishment of conditions which will guarantee peace throughout the world that we can procure relief from these enormous burdens which expenditure upon preparations for war has continually entailed. Before the War the principal countries of Europe, leaving America altogether out of account, spent more than £1,000,000,000 on preparations for war, and the enormous expenditure incurred in the prosecution of the War proves that we cannot avoid these frightful costs unless the policy of the world in respect to the relationship between nations is altered from one of preparing for war to one of establishing means for guaranteeing peace. On that account I would like to express frankly what I think is a delusion in the working-class mind of this country. It is that, as we could and did spend so many thousands of millions in a few years in the prosecution of this War, we have unlimited financial means for meeting any kind of demand which maybe made upon the financial resources of the nation. But the fact is that we were able to spend so much in that comparaticely brief period because in that time we were able to lend so much. But we cannot indefinitely go on lending and spending at that rate, and bankruptcy for the nation will be reached unless a halt can be called in that lending and spending.

In the course of the War we conducted an enormous volume of trade under artificial conditions, which left us seemingly in a state of wealth but did not actually provide us with wealth at all. The working classes, in their own interest, ought to understand that it is an enormous burden of debt which the War has left us, and not an enormous collection of wealth made in the period of war. A nation cannot continue to live upon its indebtedness, and I think that what ought to be in this country more of a commonplace is the accepted general fact that our escape from these conditions can be found only in a greatly increased volume of production. Without production it is impossible to provide work. We are all hoping that the crisis of the present week will end in a state of industrial peace, and I feel that if it were not so ended the dislocation of trade and the loss that would be involved, and the general burden of a severe industrial struggle in this country would ultimately fall with greater severity on the shoulders of the masses of the workers than on the shoulders of any other class of the community, with the result that the things we want to have done in respect of housing, and in respect of the provision of those amenities of life's needs which the working classes are very properly so urgently calling for—these things will be further delayed, and greatly increased difficulties will be placed in the path of the Government in its efforts to meet the demands that are being made. Whilst I would have the workers turn their minds to the really fundamental facts as to the sources of wealth and as to the causes of national impoverishment, I would also ask the House not to call upon the workers to offer to solve these financial difficulties by being alone the class in the country which must make sacrifices for their solution. In other words, if we are to have this newer social order, if we are to have the phrases of platform speeches and election addresses translated into actual deeds, we must have a mingling of sacrifices by all classes in the community, and a common enjoyment of the life needs which we all require.

Ministers must make up their minds to face this problem, that the workers will not submit without some form of resistance to the conditions of life which prevailed during the War, and that they will insist on a higher standard of existence. That higher standard, I suggest, can come to us only by increasing the purchasing powers of the masses of the wage earners and, consequently, giving greater ease and contentment in their general conditions of living and, in exchange for the solution of their industrial and financial problems upon these lines, it would be a good thing for the workers to turn their minds to new ideas of development, and show themselves willing to accept changes which, while they do not make their own position worse, certainly will assist very greatly in increasing the national volume of wealth, and give them a chance of receiving a larger portion of it.

There was one point in the speech of my right hon. Friend which I failed to follow, regarding the Government policy on the subject of the blockade. The right hon. Gentleman, told the House that much had been done to relieve the tension and, as I rather gathered, that we had reached a stage where what we termed the blockade could be raised. It is an important and very urgent matter for those who represent trade and business interests in this House to seek the earliest freedom that can be given for the free play of the agencies of trade in different parts of the world. But as I gather such has been the pressure, resting upon international necessity and the life conditions in the conquered countries, that the Government has had to raise the blockade in respect of the supplies of food. I have no information other than that which has appeared in the Press, but I see that our Food Controller has been busy visiting France and other parts of the Continent, and his representatives, I gather, are now there, together with the representatives of Food Control in the Allied countries, and steps have been taken by the Allied countries, through the medium of what is known as the Supreme Council, to feed the hungry populations of the defeated countries. If I am right in that conclusion, I want to ask how, if it has become essential in the interests of stability of government and in order to establish a state of order in those different countries, and to prevent the destruction of life by conditions of famine—if for these reasons it has been necessary to raise the blockade in respect of the supplies of food, how can we be justified in the retention of the conditions of blockade in regard to trade and industry? That is a question to which I should like to have some answer.

There is another point to which I should like to refer. It has not been touched upon by the right hon. Gentleman. It is the very serious loss of wealth to the country due to the failure, partly of individual employers of labour and partly of the Government, to find fitting places in industrial and civil life for the hundreds of thousands of men who are returning from our Army and Navy. We have already from these benches strongly criticised the Government policy, or lack of policy, or, at any rate, want of statesmanship, in offering even a temporary solution of the conditions of unemployment which inevitably followed on the signing of the Armistice, by making a considerable advance of State money to a very large army of the unemployed. I believe we have 800,000 persons, mostly women, now unemployed living at a national cost of £1,200,000 a week. I have a proposal to put from this side of the House, and it is that even if that number of workers could not have been employed in commerce profitably, they could somehow have been fitted into some of the useful services at a loss less severe than is now incurred by the State in the weekly expenditure of such an enormous sum. Once you begin that sort of expenditure as an act of national policy you cannot stop where you like, because you have created more than an expectation—you have established in the idle man's mind the idea, that whenever he is unemployed he has a right to turn to the national purse for protection. We suggest it is far better so to organise your trade and industry as to make not relief but work a certainty. Guaranteed employment is far better than guaranteed doles. To illustrate my point, let me ask the attention of the House to a report which I see of the conditions existing in Manchester this very day. There a demonstration of ex-soldiers is taking place—as I understand this afternoon. Of the number of persons in Manchester who are receiving this Government Grant on account of unemployment, one-half are ex-soldiers and sailors, totalling something like 6,000 men. It is reported that some of them frankly declare that they are not going to begin work on such wages as they can earn—onwhat they say are pre-war terms of pay, which certain employers are offering them, when they can remain in a state of idleness, receiving for themselves and their families an income even, in excess of what they could earn if they were employed. That is a matter which requires immediate attention. The men who went out and did their duty so magnificently in all the theatres of war ought to be better treated by a higher form of State organisation than has yet been set up.

6.0 P.M.

As I said in the opening of my remarks, some of the comments I have to make on my last subject may seem rather out of place in a discussion which has mainly turned on the question of national I economy. I suggest that saving is not always economy. Expenditure may be wise as well as good. I ask the serious attention of Members of the House on all sides to the view which we put forward from the Labour Benches with regard to the expenses we incur in travelling to and from our Parliamentary work, and the payment we now receive for our Parliamentary services. I accept the personal statement of other Members of the House who do not belong to the Labour party that they, too, feel the burden of which I am going to speak, although they have not frequently given expression to their opinions upon it. We are not putting our case forward as a pauper point. It is not on account of personal impoverishment that this plea rests. It is on a very much higher plane. The fares and the expenses which as Members of the House we have to incur in the performance of our labours are much heavier now than they were, and that for two great reasons: first, the railway fares have been increased by 50 per cent., while everything else that is incidental as a travelling cost has gone up; and, secondly, the duties of Members of Parliament are much more exacting. The visits for all kinds of matters, meetings, and circumstances, errands to constituencies, and so on, are much more now. Our duties, as every Member knows, have enormously multiplied. Service in the House of Commons has not ceased to be an honour, but it has certainly become a very great burden, which can only be discharged by incurring considerable expense week by week. I am sure every Member of the House will agree with me when I say that it would not pay the country to have as Members of this House only those men here who were wealthy enough to be able to pay for the Parliamentary services they rendered. In these days, when Parliamentary institutions are subject to ever-increasing criticism, it is advisable that we should, if we can, lift the level of our usefulness and attract a greater degree of confidence, if possible, from those we represent by such assiduous attention to our duties as it is possible to give. Indeed, in these days we do not represent merely the particular constituency which might elect us; we are rather national than local representatives, obliged to consider not merely the affairs of our country but the affairs of the world. These duties require that we should travel, not merely from our homes to our constituencies, but that we should frequently go from place to place in the discharge of these ever-increasing State and Parliamentary duties.

In face of the heavy railway charges, and of the reduced allowances for Parliamentary service on account of the increased taxation, these things have become a rather serious burden, almost an intolerable load to some—indeed, to many of the poorer men who have been honoured by being returned to this House. These expenses are always on the increase. The post-bags of some of the Members of the House are getting almost too heavy to lift in the morning, and with the increased postage there is a considerable addition to the expenditure of hon Members of the House. When I was a Minister—indeed, when I was but a Parliamentary Secretary—I can assure the House that I felt very much the relief of the payment of my weekly postage bill. Now I share with so many other Members of the House the very considerable cost which has to be paid under this head week by week, in addition to the increase of Parliamentary burdens. I trust it will be represented in the proper quarter as a subject that requires not only sympathetic attention and treatment but change.

I do not want to leave altogether untouched the larger question of what is termed the payment of Members of Parliament. As a fact, there is no such thing. At very best it is a contribution from the State towards the payment of the expenses necessarily incurred by the Members of the House of Commons in the discharge of their duties. I am not going over the history and the whole range of the topic, but I will recall especially to the older Members of this House what we heard in 1911, when it was decided that the payment of £400 a year should be made. The doleful prophecies of that time were the main arguments adduced to scare those who were inclined to vote for this change. We were told that the House would be filled with adventurers; that carpet-baggers, as they are termed, would be more common than ever; that insincerity would become a dominant influence in the direction of our public affairs, and that men who were failures in everything else would be able so to inveigle the constituencies as to secure return to this House for the sake of £400 a year. Not a single one of those forecasts has been fulfilled. Even in the presence of those who hear me, I dare to say that the level of fitness demanded for public duties is not less now than it was when, the payment of Members of Parliament was instituted Every other State in the world which is governed by Parliamentary institutions, with but one exception, and that not, strictly speaking, an institution of democratic Government, pays for the services which are performed. Many of the countries with whom we have been allied in this War have paid and pay now a far higher sum to cover Parliamentary expenses than is paid in this country.

The only argument which I recall as being used by the Leader of the House when this subject was last under discussion is that it was a highly inappropriate topic to bring before this new House, for the reason that this matter was not submitted to the electorate, and that it was not brought forward and put to the test of the opinion of the different constituencies. That is a very feeble but venerable argument with which to answer a case of this kind. I am sure this House of Commons would do little if it did nothing but what had been put to the test of the constituencies. When a little later the Chancellor of the Exchequer comes forward to make the great proposals that will have to be made, and that will be the features of this Budget, could we not answer him by saying that not one of those things had been put to the test of the electorate? Many of the things which have already been discussed and settled in this new House were never submitted to the electorate when the votes were cast last year. The Leader of the House, therefore, ought to adduce something more formidable if he is not going to lend a friendly ear to the claim that is being put from these benches. The public service, as it is expressed through the municipal bodies—the work of the town, city, and borough councils—is work which must be paid for to a considerable extent. The great and regular deputations visiting this House and interviewing Members rest upon the payment provided by the ratepayers. The payment for which we ask ought to rest upon the shoulders of the population generally, because it is national work in which we are engaged. In view of the increasing burden, in view of the fact that Parliamentary and public duties cannot be performed efficiently unless this burden is relieved, I suggest to the Government that the country would accept and would approve of the relief to those who feel these burdens very heavily in order that Parliamentary work might be more efficiently discharged.

Mr. CLOUGH

As this is the first time I have addressed this House, I would ask you, Sir, and hon. Members, to be none too critical of my initial effort. I have listened with a great deal of interest to the whole of the discussion to-day, and, while I have been immensely impressed with almost everything said, the principal object of my rising is to support the plea put forward by the hon. Member for Dews-bury (Lieutenant-Colonel Pickering) and the hon. Member for Huddersfield (Sir C. Sykes) for a lessening of the restrictions on trade. Before I do that, may I say how much I appreciate and would praise the sound statesmanship of the Chancellor of the Exchequer in asking Members of this House to be a little more consistent, and to remember economy on other days than those when this particular subject is being discussed. Since I have had the honour of joining this House, I have often felt at Question Time that if every hon. Member could have his request acceded to, the taxation of this country would rise to figures altogether beyond those mentioned by the right hon. Baronet the Member for the City of London (Sir F. Banbury) to-day. I listened, too, with interest to right hon. Gentlemen opposite, and was delighted to hear them say that they hoped for a peaceful solution of the industrial crisis which faces the country at the present time, and, bearing in mind the immense influence they have in the labour world, I trust that such hope may be based on inside knowledge.

When the result of the General Election was announced I was one who fondly hoped that this Parliament would in future years be known as the "Business Men's Parliament," but if war restrictions are to be continued in peace time, we who represent commercial constituencies cannot possibly do ourselves justice and assist trade so as to help the workers to help themselves. The people who sent us here did so to hasten reconstruction, and not to tolerate restriction for one moment longer than is absolutely necessary. The time for the removal of these restrictions has already arrived. I have been appalled, as other Members have week by week, to hear announced in this House the ever-growing number of the unemployed, and of the consequent increase of the out-of-work pay. Is it either sound business or common sense to be borrowing money at a high rate of interest in order to pay unemployment benefit at a time when large portions of the world are urgently needing the very goods which Britain can best supply? For generations this country has been named a nation of shopkeepers. It is a title of which the business men who sit in this House have no need to be ashamed. What I fear to-day is that if our present officials are allowed to continue these restrictions, it will give our foreign customers the impression that we in Britain have shut up shop. If they once get that impression, then our foreign competitors will get such a chance of booking orders in those markets which were formerly supplied by British manufacturers as they never had before. Nothing could be more foolish than continuing these restrictions and the difficulty in obtaining export licences at the very moment when industry has to changeover from war orders to peace conditions. May I illustrate my reason for complaining of the continuance of the restrictions from the experience gained from one of my own businesses. Before the War 90 per cent. of all the goods we made were shipped abroad and only 10 per cent. were sold in the home market, whilst now, since the Armistice, the position is almost completely reversed, as we are only able to send 10 per cent. of our manufactures to customers overseas, and I think it will be accepted with absolute unanimity that this country depends on a prosperous export trade if we are to carry out all the vast reconstruction proposals to which the Government and its supporters are committed. If and when these licences for export are granted, British ships will need to be so set at liberty that they can deal with our trade, rather than be occupied in carrying American troops home to their own country, whilst American ships are engaged in developing American trade. I believe work is a good thing in itself, quite apart altogether from the financial benefit to be got from it, and I am equally sure the vast majority of the industrial classes in the country would much prefer to be employed at their own jobs, in either mills or workshops, rather than loaf round Labour Exchanges most of the week so as to be eligible for out-of-work pay at the end of the week. If this Parliament is to have the respect of all right-thinking people, it must insist on the rapid removal of export restrictions, and thus restore to Capital and Labour alike a chance to reconstruct the awful damage done during fifty-one months of war. I associate myself with the remarks made by the hon. Members (Lieutenant-Colonel Pickering and Sir C. Sykes) in appealing to the Government with all the force we can to take off the restrictions which are now hindering the export trade of the country.

Mr. FRANCE

I thank the right hon. Gentleman (Mr. Clynes) for his statesmanlike speech with regard to economy and production, and I should like to associate myself with him on the subject of the extra expenses which now bear upon Members of Parliament, particularly those who travel long distances to attend to their business in the House. It is not a question which is affected by the personal means of the Member under consideration. This House knows nothing of that sort of thing, and has no regard except for the personal qualities and character of the man who is a Member of the House, and in legislation or administration of this kind it is a matter of dealing equally and fairly all round. The proper way to meet this matter would be to do during peace-time for Members of Parliament what was done during wartime for all those who are engaged on Government business and give them warrants to travel upon the railways when in pursuit of the business of the State. That would not really be under existing circumstances a payment out of the Exchequer, except as in so far as the accommodation is granted upon the railways, which the Government in continuing to control for two years, and it would seem to me to be a very fair way of meeting the difficulties which press upon every Member who comes to the House, especially from a distance. The way to meet the other expenditure is to extend to Members of Parliament upon the letters which they have to write—and the number is increasing terribly—free postage, at any rate when they are from the House of Commons. I think hon. Members may be fairly trusted not to abuse a privilege extended to them in the interests of their public business. I should like to join with those who have expressed their satisfaction at the return to the Front Bench of the Chancellor of the Exchequer, but I was disappointed with his reply to the discussion, especially on the point which was raised with great emphasis by the right hon. Baronet (Sir F. Banbury) as to the lavish and extravagant hand with which the Government is spending in every direction. Although agreeing with the right hon. Baronet in his general conclusions, I part company with him to some extent as to the direction of the economies which may be effected. He said several times that his breath was taken away, and although he had that sad experience we were glad to notice that it did not interfere with his natural flow of eloquence. His breath was completely taken away by the £450,000,000 upon Civil Service Estimates. I differ from him in detail to some extent. He would sacrifice the ewe lamb of social reform—a new massacre of the innocents—but he would swallow with only a gasp, without total loss of breath, the £660,000,000 for war services. He would sacrifice the lamb but he would not slay—he would merely turn aside from the roaring lion of the war services, which seems to roar all the louder at the prospect of peace. When the Chancellor of the Exchequer said these Estimates were only for this year and that they would be controlled and shaped by the policy of the Peace Conference, I would remind him that the policy of the Peace Conference, and of those at the Peace Conference, will probably be to a considerable extent affected by the size of the Estimates in this country this year, and by the speeches which are made in putting those Estimates before the House. Therefore one part of the speech really in that way reacts upon the other.

The discussion to-day has gone along two branches. The House appears generally to feel that the depression, the anxiety, and the uncertainty that exists to-day are caused partly by the heavy expenditure, and secondly, by the restric- tions upon trade, which prevent trade from rising with its natural buoyancy to help to meet the expenditure. It has rather been the fashion lately to talk about hands, and we heard from the right hon. Gentleman (Sir E. Geddes) of the dead hand. I do not quite know what he meant, but I think it was something to do with Government control. I want to refer to two hands that are very much alive. There is the open hand of extravagance and there is the heavy and fatal hand of restriction, and while the open hand of extravagance is lavishing forth, the other hand is on our throats preventing us from resuming our normal activities to help to pay off the debts we have incurred. They both really affect the situation in the same way. They both give the same reason for their existence. We are told we must have these heavy expenditures for the war services because of the grave danger which may possibly lie ahead of us. They are indefinite, and hopes are expressed that they will never appear, but we have to be prepared to spend in anticipation of what may happen. Then the restrictions on trade are still to be maintained for fear that goods which go from this country may in some way assist our enemies, and therefore the same reason is given practically for the existence of both these elements which are depressing us at present. Both these weapons which we are using are very much in the nature of a boomerang, and they will very likely on their return journey do much more harm to those who throw them than to the person they are supposed to be aimed at. I should like to ask the representative of the Treasury a question about this. The increase of expenditure on the war services is £800,000,000 above the pre-war figure, and a year ago the right hon. Gentleman (Mr. Bonar Law)told us he expected that in the first post-war year it would be about £170,000,000. I should not complain of the right hon. Gentleman having made a miscalculation to a small extent, but there must have been some change in policy or some change in the whole situation to cause such an enormous difference as that in the balance-sheet and accounts of the nation. There is an old saying that those whom the gods wish to destroy they first make mad. I do not know what view the gods take of the Treasury Bench in a Coalition Government, but there seem to me sometimes, in the matter of extravagance in expenditure, to be signs of incipient madness. It may be that those mythological deities have some idea of the destruction of the present Government and an eye on the Treasury Bench themselves. We have been told recently that the League of Nations was fantastical nonsense. The League of Nations, if it were a success—and it can only be a success if those who talk about it and take part in considering it are in earnest and mean to make it a success—would, at any rate, do a great deal, if not all that is expected of it, to reduce armaments and to help to do what we thought this War was to do—to end war. That does not seem to me to be such fantastic nonsense as to go on spending vast sums of money which we cannot afford to spend in anticipation of dangers which we can easily prevent if we will pursue and insist upon a real policy of peace.

I welcome the invitation of the Chancellor of the Exchequer. I was grateful to him for saying he welcomed from the House of Commons support in the difficult task of cutting down expenditure, but I wish he and responsible Ministers would take the country a little more into their confidence with regard to the serious position in which we find ourselves, not in order to encourage pessimism and not to produce fright, but to let the country, as a whole, understand really what we are doing and where we are going in the matter of financial expenditure. I should like them to take a leaf out of the book of the Finance Minister in France, M. Klotz, who, only a few days ago, expressed his sense of the seriousness of the financial situation and the terrible position of their finance unless very definite steps were taken. I think everyone agrees that this expenditure is not going to be met by taxation. The way to prevent further borrowings, therefore, is to exercise rigid economy. Now I come upon common ground with my right hon. Friend, because this tendency to extravagance undoubtedly goes through every Department. We shall have to borrow. Apparently under the present conditions that is absolutely necessary. We shall have, increased borrowings if we increase expenditure. I sometimes wonder when the Chancellor of the Exchequer is driven to that course whether we might not substitute a vowel and change "borrow" to "burrow"; because there is a tendency on the part of those who pursue this policy to imitate that wild feathered fowl of the desert, which, when chased or fearing approach, buries its head in the sand and refuses to look facts in the face. If we have to borrow we have either to borrow from ourselves at home or to borrow from abroad. In either case there is the same obligation to repay, and there is the same burden of interest upon the debt incurred. There in a great danger in this, for if the habit of borrowing, and the habit of borrowing to meet the obligation upon former borrowings is indulged in, we shall really revert to and adopt the methods of the spendthrift, who desires to be regarded as a well-dressed man, and who visits his tailor with the object, although he cannot afford it, of ordering clothes, and when there is painful pressure upon him to pay his bills, he assuages the ruffled feelings of his anxious tailor by ordering another suit. So he goes on and goes out and is looked upon by the world as not only a well-dressed but a wealthy man until he finds himself at last at the doors of the Bankruptcy Court.

If we pursue the policy of borrowing indiscriminately in increasing amounts, we shall have to face the natural and definite effects and consequences of such a course. Something was said just now, and no answer was given by the Chancellor of the Exchequer, about currency notes. The right hon. Member for the City of London (Sir F. Banbury) told us that he had some in his pocket. I hoped that he would have adopted the method I have seen in this House for the last ten years of passing round specimens, so that hon. Members might have looked at them. I find the difficulty in these days is to keep them in my pocket. The question of the effect of the continued resort to currency notes is a very serious matter. I wish it were possible that the Government could in their Department of Propaganda or through the Board of Education, or in any way that may be open to them, do something to try to convey to the country as a whole information upon some of these matters, with regard to the effects of borrowings, with regard to the effect on the diminution of our exports, and with regard to the effect of the increased inflation of currency by the issue of these notes. Before the War I think the amount of notes in circulation was 46,000,000. That was in 1913. In 1918 the notes in circulation in the ordinary sense were 122,000,000. Upon the top of that there are currency notes to the amount of 323,000,000.

It is not a difficult thing to understand how it is that this inflation of currency must of necessity raise the price of goods and commodities. The laws of supply and demand cannot be rescinded by the laws of this or any other House. If people are rushing about with pieces of paper in their hands—which the right hon. Gentleman says they think are worth so much money and really are not worth more, but probably worth less, than the Order Paper of this House, which, by the way, is a very expensive document, because we are told that every question costs a guinea—and they are only too anxious to have more of these pieces of paper, and so long as the present standard of purchasing value exists, they must have more; and if with these pieces of paper they are all pursuing and competing one with the other to buy what is at the present moment in the world a comparatively limited quantity of goods, and if people all want one thing, whether in the abstract or actually, and they have the power and the means to obtain it, it is inevitable that the law of supply and demand will increase the price of the goods they are pursuing and lower the value of the paper in their hands. We have a proof of that in what is happening in Europe, and we see what is the consequence of that kind of thing. There is a very good object lesson as to currency, and the effect of inflation of currency, in Russia. In Russia the production of paper money is so considerable and so rapid that the printing presses are almost red hot. In the mad whirl to produce wealth it has been said that a scarcity of paper has been caused. One right hon. Gentleman, who spoke in the earlier part of the Debate, said that Government officials produced nothing, I interjected—and I hope not at all disrespectfully—the word paper. About the only thing they do produce is paper money, and some sections of the country are apt to believe that in that way wealth is being produced.

All this comes back to the first great essential, motive spirit, which is actuating the House of Commons to-day. Without there is rigid and strict economy, which will reduce the necessity for borrowing, which will thereby help to encourage trade and cheapen the cost of production—I do not mean by paying cheap wages, because I do not mean that low wages mean cheap production, but by the legitimate and proper cheapening of production help to increase healthy production, help to make export trade possible, help in the redemption of our indebtedness, help to reduce the balance of trade which is against the country at the present time, and also help to reduce the necessity of the Government resorting to these artificial and unhealthy methods, which have resulted in the inflation of currency. Then prices will go down, the cost of living will be lowered, the export trade will be encouraged and we shall have a chance to meet the very heavy expenditure—which I hope will not be increased but will be reduced—and whatever burdens may properly be laid upon us.

I should like to answer in a few words the question as to what restrictions are still on trade. There has been some valuable information given by hon. Members for Yorkshire, notably, in the speech by the hon. Member for Huddersfield (Sir C. Sykes) who spoke for the first time to-day in a frank and manly fashion, and who having been a controller himself, and who knows the evils of control, advocates the abolition of all such persons in future. There are certain restrictions still being put upon imports. A question was asked as to the constitution of the Committee which is to decide these questions as to raw material and as to the manufactured articles that are necessary for this country. There are still certain interferences with trade, of which I would like to give an example, which is not of an ancient date, but only a few days old. It relates to a firm who have during the War, at the request of the Government, been assisting in the production of an article which was formerly made in Germany, and which has been developed in this country by this firm and other firms, largely at the request and with the assistance of the Government. This firm applied to the Board of Trade on 11th February—this refers to export of goods and not to import of goods—for a general licence to export. They were told and assisted by the Board of Trade to make application to the War Trade Department. They did so on 14th February and asked for a general licence. They wrote a letter explaining that it was impossible for them to give all the details, as they had not yet sold the goods, but they were anxious to proceed to get orders somewhat on the same lines that we have heard America have been able to do during the last few weeks.

On 20th February they received a form, headed "Application for a General Licence." After you have read the title you would fail to recognise in the rest of the document that it related to a general licence. They asked for all kinds of details of the transaction; the name of the forwarding agent, the name of the agent abroad, the name of the firm to whom the goods were sold, the purpose for which the goods were going to be used, the price, quantity, and weight of the goods, and the description of the consignor's business; full details of the consignee, business, the postal address, and every kind of detail that could be required, if you had actually got the order and were prepared to execute it. In this particular business it was absolutely impossible to get orders on these lines. The firm were anxious and were encouraged to get from the Board of Trade a general licence to enable them in that particular area to ask for orders, to quote at a definite price and to execute order sat that price. When they explained this to the War Trade Department they were told that they must fill up as much of the form as they could. That was on the 24th February, after considerable correspondence. They applied again on 1st March, and yesterday It was told that they had received no reply from that Department in regard to the licence. That is a definite case. I do not want to mention the name, for certain reasons, but I am prepared to give it to the Minister in confidence, if he desires to have it. There is another very serious case from the same firm. We were told to-day there was no restriction on export to other parts of the world but the blockaded area. On 4th March—it may have been changed since then—the agents of this company, a firm known to be the agents of the company, and who had been working with the Government for the production of a class of article which they were told had formerly been made in Germany; a firm which has put from £40,000 to £50,000 in the development of trade with the object of securing trade formerly done by Germany, applied to the War Trade Department for the opportunity to send some of their goods to South America, and they received a reply that permission could not be granted. I invite the right hon. Gentleman's attention to those cases, of which I shall be glad to give further particulars. It is really playing with the House and the country, And not realising in the slightest degree the gravity of the situation, for one right hon. Gentleman the Chancellor of the Exchequer, who could not possibly know the particular circumstances, to make a statement from his place to-day, with the full authority of the Ministry and the Government behind him, that there are no restrictions with regard to export trade throughout the world, and that really we are not doing anything to hamper trade.

Sir A. GEDDES

I am sure that my hon. Friend would be only too pleased to have a misunderstanding removed. The Chancellor of the Exchequer—I was present—did not, I am sure, intend to convey that there were no restrictions. What he said was that the restrictions on export trade were those denned, it so happened by me, last week. But the point he was making at that time was that the restrictions which had been referred to by, I think, the hon. Member for Dewsbury (Lieutenant-Colonel Pickering), were restrictions upon goods going to the blockaded area. The policy, as announced on Monday of last week, was quite different—that export was free to all parts of the world other than blockaded countries, except under three heads: goods which we could not afford to let out of the country because the supply is so short, goods of a naval or military type, and goods which this country had financed or subsidised. It so happens that one of the articles referred to—we have not heard what the exact article is—belonged to a class of which there are certain members extremely short in this country at the present time.

Mr. FRANCE

I do not want to misrepresent anybody, but I am in the recollection of the House, that in this respect the Chancellor of the Exchequer—I am not wishing to pin him to something that he may have said inadvertently—said quite definitely that outside the areas not affected by the blockade export at the present time was free.

Sir A. GEDDES

In respect of cotton goods.

Mr. FRANCE

I did not hear that. I am sorry if I made a mistake in that respect; but these goods are not free, and I do not think that what the right hon. Gentleman has said can possibly apply to them, because this firm complain that they have got goods and do not know what to do with them. They could employ 100 more men, and are anxious to do so. They have got to stop here and cannot get them away, and the answer which the right hon. Gentleman has given now only applies to a particular branch of chemical goods, and cannot apply to this case. It must be really a case of misunderstanding, and of a desire to retain powers of a Department which ought long since have been taken from them. We have heard to-day definite concrete cases from the woollen trade of Yorkshire and of the difficulties which they still have with regard to obtaining permission to export, and also as to the importing of certain goods. These are very important details, and they are given in response to a request for details made by the Government.

There is only one more case. It is with regard to imports, and is rather serious, too. This same firm that I have been speaking of have during the War set up extra plant at the request of and with the encouragement of the Government, and have gone to great expense, but have not been allowed to export their goods, and they now find that certain goods are coming into the country exactly similar in character to those which formerly came from Germany. At present these goods come here from Holland, and the firm, with their expert knowledge, know that the raw material from which these goods are produced does not exist in Holland, and therefore they deduce from that that the raw material is coming from Germany. They addressed the Board of Trade on the subject, and the letter which they wrote is of so splendid a character that I will read an extract from it: I find myself in a position of exceeding difficulty in knowing how to handle this business at the moment"— this is written by the managing director of the firm— because my firm have gone to a great deal of expense in putting up plant to manufacture these chemicals, which hitherto have been the monopoly of Germany. We are prepared to meet any reasonable competition by neutrals, but the Government have made known their future policy with regard to the authority for the free import of these chemicals to be permitted, and the onus of proof as to whether they emanate from Germany or not is thrown on the trading community. I am afraid that the result, certainly in the case of my own firm, will be that we shall have very reluctantly to discharge from our factory numbers of men who have been taken on since the Armistice was signed and curtail the policy of expansion to which we have committed ourselves. It is with great reluctance that I am writing this letter. I believe absolutely in the policy of free trade so far as established manufactures are concerned, but I am totally at a loss to understand how a British industry, launched out in a new direction, will be able to meet unrestricted import in these special lines and at the are time be hampered with a system of licences for export which involves endless delays and consequent lose of orders. They sent that letter on the 20th January. On 27th January they wrote again. On 11th February they received a reply that inquiries were being made as to the possible origin of these goods, but that they were to continue to inquire, and if possible to give information. On 27th February they wrote to the Department to say that they had themselves purchased this particular article, and that 2 tons of it were available for inspection by the Department, so that they might send their experts to assist in trying to find out where those goods came from, and whether they had actually come from Germany. The gentleman who wrote that letter saw me yesterday, and told me that up to yesterday the firm who bought these goods, and bought them to help the Government in trying to keep out, from Germany, something which we have been trying to make in this country, had not had a reply or any further communication from the Department with regard to that transaction. That is a definite example. I do not know how far it is a fair specimen of what is going on all over the country and in all kinds of trades.

Speaking for myself, I am absolutely in favour of as far as possible general freedom to import goods into this country, but I do not want in any sense to suggest to the Government that they should depart from the policy which they laid down in the General Election in this respect. At the General Election they did not depart, so far as I understood, from the general position of Free Trade as a whole, but they certainly made some promise that they were going to try to protect these industries, and to try to prevent what is definitely proved to be dumping. But they are not doing that. They are continually hampering exports, and they are not allowing to come into the country things which should properly come into the country, and they are allowing to come into the country the very things whose import is detrimental to the country, and which we have been endeavouring to manufacture in this country during the past four years. I know that their difficulties are very great, but I do sug- gest to the Government that they are not really looking at this thing with the seriousness with which people in this country look at them. There is this tremendously heavy burden of expenditure on industry, which this House, I hope, will insist shall be reduced, and I hope that they will also insist not only on the removal of the restrictions but on the removal of what a right hon. Gentleman, speaking from that bench and speaking of Government control, only two days ago described as the dead hand, and what we think is the paralysing hand of State control.

The PARLIAMENTARY SECRETARY to the BOARD of TRADE (Mr. Bridgeman)

I have to apologise again to the House for the absence of the right hon. Gentleman the President of the Board of Trade (Sir A. Stanley). Some points have been raised in this Debate which require an answer on the part of the Department. I will first refer to the criticism of the War Trade Department by the hon. Gentleman who spoke last. He did not mention the names of the articles to which he was alluding, so that it is not possible for me even to inquire into the correctness of his statement. But I am quite willing to take his word for it. The only thing I regret is that, if these matters occurred so long ago, he or some other Member of Parliament did not bring them to my notice, or that of the President, at an earlier date. But if any cases of that sort arise, it would be a very great advantage to our Department, or to any other, if they were brought to our notice at the earliest possible moment, so that delay can be shortened. With regard to the number of questions which, he said, were on the form for general licences, that already has been very largely reduced. With regard to the other points, I hope that he will tell me exactly what they are, and I will do my best to see that his wishes, if possible, shall be met. I ought also to say, as some other Member, I think, referred to some, criticism of the War Trade Department, that after the last day of this month that Department will cease to exist independently, as it has done up till now, and will come under the Board of Trade, and I hope that it will be easier to keep in touch with that side of the work.

7.0 P.M.

The right hon. Gentleman who opened this discussion spoke as many other Members did about the restrictions on export and he chose a particular instance which was replied to by my right hon. Friend the Chancellor of the Exchequer. One of his charges was that there was no way of finding out what these restrictions were. He said he wanted to have them in black and white. They are in black and white, but possibly not in the best form. They are published fortnightly by the War Trade Department and brought up to date. Here is a number of this publication dated the 7th March. This gives the list of articles the exportation of which is prohibited except under licence, and in front of each there is the letter A or B to show whether its export is prohibited to all countries or only to countries outside the British Empire. There is also published in the "Board of Trade Journal" a free list of exports to all countries, and any article which is not on the free list and not on this other list to which I have referred, comes on what is called C list, of which there is prohibition to the blockaded countries. But if there is any clearer way of making this known, or of drawing up a list we should be very glad to consider it. The general expression of opinion has been in favour of taking off restrictions at the earliest possible moment. Everybody has said that, and that is exactly what the Government want to do. But nobody, I think, has said that it is possible to go at once from war conditions to peace conditions in this particular matter. I do not think everybody has fully recognised the number of relaxations that have actually taken place. As was mentioned in the Debate last week a number of countries were exempted from the prohibition attaching to List C, and a considerable number of restrictions have been taken off. People have spoken a great deal about controls, as though they had all been kept on. I have here a very large list of controls which have been removed, and there are a great many others the removal of which is imminent and will be announced before very long. Among some which have been removed are: Tramways Committee Control, Horses Orders, Lighting, Heating and Power Order, Raw Cotton Order, Cotton (Restriction of Output) Order, Timber Control will end by the 31st March, except on pit wood, and that will be very much relaxed at that date though probably not taken off altogether. As every- one knows, the Paper Restrictions have been very largely modified, and Paper control will end at the end of April. The restrictions on tobacco are gone. There is a list of Admiralty restrictions, many of which are gone, and a certain number of controls, including railway material, have also been taken off.

Colonel WEDGWOOD

What has been kept on?

Mr. BRIDGEMAN

I said there are a great many others which will be taken off at the earliest possible moment, and an announcement will be made as soon as it is possible to do so.

Mr. FRANCE

May I ask the hon. Gentleman what steps he is taking to make the alterations in the list fairly well known, because just now he said that he thought nobody realised what goods were being released? If nobody realises that, how can they act on it? It is a fact that they do not know, and they are very anxious to know. Will he tell us how the Government propose to make this known generally?

Mr. BRIDGEMAN

Of course, they are published in the "Board of Trade Journal." I was speaking of hon. Members of this House, who did not seem to have studied that book, and to realise what a great many restrictions have been taken off. But I quite agree that it would be advantageous to publish them if we could in a form or place where they would be more public.

Mr. LAMBERT

Send them to the Press.

Mr. BRIDGEMAN

They were published in the Press, and the Chambers of Commerce are notified of every alteration that is made. There is one other question which was raised by the right hon. Gentleman the Member for Peebles (Sir D. Maclean), which was in regard to the composition of the Imports Committee, the Committee which is to sit and decide what restrictions should be kept upon imports, and if it is necessary to put any new ones on or to modify those which do exist. One of the instances which my hon. Friend the Member for Batley and Morley (Mr. France) raised is a matter which may be considered by that Committee. He mentioned some articles, the manufacture of which have been started here during the War, and which are now suffering through competition from abroad. That is a subject which should be referred to this Imports Committee.

Colonel WEDGWOOD

In order to protect it.

Mr. BRIDGEMAN

Well, they would settle that, but the hon. and gallant Gentleman must remember that this Committee is dealing with the transition period, when there are a great many manufactures in this country which have not got back to pre-war conditions. That is what this Committee is considering, and also other trades which, owing to the War, have started some new line which is not yet so established as to make them quite certain of being able to continue it. But the charge against the Committee made by the right hon. Gentleman opposite was that its constitution was overloaded with people whose interests were specially concerned. It is not very easy to say how a Committee of this kind could be composed, but I would like to give the House the different representatives which have been placed on the Committee. There are three to be nominated by the President from the Board of Trade Advisory Council, one of these being a Labour representative: three to be nominated from the War Trade Department; five by the Association of Chambers of Commerce five by the Federation of British Industries; one by the Advisory Committee of the Department of Overseas Trade; two to be nominated by the Board of Trade; two to be nominated by the Union of British Manufacturers; two to be nominated by the President of the Board of Trade; four to be nominated by the Ministry of Labour as representatives of the Whitley Councils; that is to say, two typical employers and two typical workmen on Whitley Councils.

Colonel WEDGWOOD

Do I understand that they all represent the vested interests?

Mr. BRIDGEMAN:

I do not know what the hon. and gallant Gentleman means. I do not know what vested interests.

Colonel WEDGWOOD

The interests of the, people who are manufacturing the goods, and not the consumer.

Mr. BRIDGEMAN

The Board of Trade officials do not represent any particular vested interests, and the hon. and gallant Member must be aware that the manufacturer of one kind of thing is the consumer of another, and that, therefore, they act with regard to each other as checks one upon another. I said there were five members nominated by the Association of Chambers of Commerce and, I think, the Committee includes at least four merchants. There is a representative of the Treasury—perhaps my hon. and gallant Friend calls that a vested interest. There is a representative of the Association of Trade Protection Societies of the United Kingdom, a representative of the Co-operative Congress Committee, and three representatives of the Trades Union Congress Parliamentary Committee.

Colonel WEDGWOOD

No representatives of this House at all?

Mr. BRIDGEMAN

Yes; there are several Members of this House.

Colonel WEDGWOOD

Who are they?

Mr. BRIDGEMAN

I think I will wait until the list is ready before it is published, because some associations who were asked to nominate have not sent in all the names. Objection has been taken that a number of these are manufacturers. It is quite true they are. [An HON. MEMBER: "Almost all!"] No; the largest part, I think.

Colonel WEDGWOOD

Would the hon. Gentleman excuse me one moment—

Mr. SPEAKER

We cannot continue the Debate if the hon. and gallant Gentleman keeps firing these questions at the hon. Gentleman. The hon. and gallant Gentleman has not heard the earlier part of the Debate. The Minister is in possession of the House and is entitled to make his speech free from constant interruption.

Mr. BRIDGEMAN

What I was going to say was that this Committee does contain, as I believe, about a half who are manufacturers, and I do not consider that there is anything to complain of in that. After all, the manufacturers of this country put their works at the disposal of the country for war work, at great inconvenience to themselves. I consider that the Government owes it to them to see that they shall not suffer, during this transition period, because they have been patriotic, and have done good work during the War, and I am not prepared to apologise for the number of manufacturers who have been placed on the Committee. They are all well-known men, and I think they can be trusted to take a patriotic view of the question. Without them I do not know how you are going to get at the real facts which you want about these restrictions.

Do not let anyone go away with the idea that because the Committee is composed as it is other interests are not to be consulted as well. The way they would probably work, I should think, would be that they would divide into sections. Provision would be made that any industry which has got an industrial council, a reconstruction industrial committee, or trade board, will have the right to be heard when the industry in which they are concerned is being considered, and the committee, or its subcommittees, will have an opportunity of calling anybody who is a special expert, either as merchant, manufacturer, retailer, on whatever the conditions in that trade are, to be heard if they have not got on their own body men sufficiently expert to go into the details of that particular branch of trade. That is the position of the Committee, and I hope very much that it will get to work soon. [An HON. MEMBER: "When?"] The sooner the better; but the hon. Gentleman must realise that if you have got to send invitations to eight or ten different associations, and have to wait to get answers from them; if you find that several of the people who answer say that they can only meet once a week or so, and that then you have to ask them to nominate somebody who can come a little oftener than that, it is impossible to do this immediataely. After all, it is not ten days since this Committee was promised, and you have got practically all except about three names. That is as good work as any Department could be expected to do in the time. I hope when the Committee get to work that they will go through the work as quickly as possible. It is to all our interests to settle these things as soon as possible, and I can only say, in conclusion, that I beg to assure the House that it is the desire of the Board of Trade, as much as it is of any hon. Member who has spoken here, to get rid of all restrictions which we can dispense with without doing harm to the country or harm to our Allies.

Lieutenant - Colonel Sir SAMUELHOARE

I desire not to follow the hon. Member who has just spoken so much as to develop in somewhat greater detail some of the points made in the very inte- resting and valuable speech by the right hon. Gentleman opposite the Member for one of the divisions of Manchester. He devoted a good deal of the time during which he addressed the House to what seems to me to be one of the most urgent questions at present, namely, the question of unemployment. From every point of view that appears to be a question of the most acute urgency, first of all because of the very large sums of money that are being paid out in unemployment benefit, a sum of money already amounting to £l,300,000 per week, or almost £70,000,000 per year, which is more than we used to spend on the Navy in times of peace, and three times as much as we used to spend on public education in times of peace. But I think that the financial side of it is by no means the most serious side of unemployment. A more serious side even than that great financial charge is the side alluded to by the right hon. Gentleman opposite, namely, the demoralisation that increasing unemployment is bound to bring upon labour. I do not mean by that that many hundreds of thousands of men and women who are now receiving unemployment benefit are shirkers or prefer to be unemployed than to be employed, but I do say that to compel something like 1,000,000 men and women to spend day after day going round the Labour Exchanges looking for jobs and hanging about must have a most demoralising effect upon those hundreds of thousands of men and women and boys and girls. Thirdly, it seems tome that until the Ministry of Labour comes to closer grips with the whole problem of unemployment one of the principal causes of labour unrest will still continue to exist. If I were a member of a trade union I should regard unemployment as by far the greatest danger to the status of labour in the future.

For all those reasons I venture to think that it is worth the while of the House to consider in some detail the various factors of the problem. First of all take the case of the increase of unemployment. On 31st January of this year there were 678,703 men, women and children drawing unemployment benefit. On 28th February, only four weeks afterwards, that number had increased to 948,620. So that what are known as the Live Registers of the Unemployment Exchanges show that whilst at the end of January there were 270,000 men's names upon them, that number almost doubled in the course of four weeks, whilst in the case of women the number increased from 453,000 to 549,000. That is not the whole picture. Side by side with the increase in the number there has also been a great reduction in the hours of labour. During those five or six weeks the hours of labour, according to the "Ministry of Labour Gazette," have been reduced by something like 20,000,000. That means, therefore, that without such a reduction in the hours of labour, and I am very glad to see that reduction, those figures would have been far more serious than they appear at present. Besides that I do not think that the House can assume that the evil has become stationary. It looks to me as if it will become worse, and for this reason. There are still something like 2,000,000 men to be demobilised from the Army, and between two or three hundred thousand women who are at present employed either by the War Office or the Admiralty or the Air Service or Government offices, and who will have to be demobilised probably in a very short time. I think those facts show how very serious the position is at present and how in all probability it will become much more serious in the future. I pass from that to ask what measures the Ministry of Labour are taking to deal with this very serious situation. First of all, the Ministry of Labour is continuing to pay the unemployment donation. I should like to ask the representative of the Ministry of Labour whether the present rate is to be a permanent rate, and whether the present period of paying unemployment donation without contributions is to be the permanent policy. I think the time has come for this House to know what is the permanent policy in this respect of the Ministry of Labour. I do not object at all to the payment of unemployment donation, and in fact I was so much in favour of it that I inserted it in my election address as one of the necessities for the transition period from war to peace, but I do object to it if the administration of it enables it to be used by men and women who wish to shirk employment. Secondly, I object to it if the Ministry of Labour does not concurrently with the payment of it bring all its weight to bear upon other Government offices to encourage employment, and by that means to make the need for the unemployment donation much less necessary. I should, therefore, like to ask the Ministry of Labour upon what principle the amount of the unem- ployment donation is based. Is it meant to be a subsistence allowance while men and women are unemployed? If it is meant to be a subsistence allowance, I do not see on what ground the Ministry of Labour has considerably reduced it during the last two or three weeks. If it is not to be a subsistence allowance, I should like to know what is the principle upon which the present amount is calculated. It looks to me very much as if the assessment of the amount has been, done haphazard. A few weeks ago it was found that the rate at that time was having a disastrous effect upon the labour markets, and apparently at haphazard the amount was reduced. I should like to know upon what principle the present amount is based, how long it is intended to continue it, and whether the Government intend to abandon what appears to me to be a temporary system of paying the donation, and instead of that to bring it into harmony with the Unemployment Act of 1911 and to put the whole system of unemployment benefit upon a permanent basis? That is the first point I desire to bring to the attention of the House with reference to the administration of the Ministry of Labour.

I turn to the second point. It seems to me that the two cardinal organisations of the Ministry of Labour for dealing with unemployment are the Appointments Board of the Ministry and the Unemployment Exchanges. I think that neither of those organisations are at present dealing effectively with the problem. First of all, as to the Appointments Board, the information which I receive with regard to it makes me think that the considerable expenditure of money, amounting to over £400,000 per year for the Appointments Board alone, is leading to very small results. I am quite aware that the Appointments Board had a very extensive correspondence with officers and men who were searching for employment, but the information that I have received makes me think that that correspondence has led to very little, and that, as a rule, where an officer in the Army or Navy has obtained employment he has obtained it by his own exertions rather than by the exertions of the Appointments Board. Take, again, the Employment Exchanges. They have done a great deal of extremely valuable work. At the same time it seems to me that the Ministry of Labour has not realised how big and important their work is. In the winter, when the Armistice was signed, the Ministry of Labour delayed until the very last moment extending the organisation of the Employment Exchanges, and even to-day my impression is that they are under-staffed, that the staffs are underpaid, and that altogether you are attempting to make an organisation do an immense amount of work which, both in regard to staff and in regard to its status, is not capable of doing it. Let me give the House a single example.

Take the question of domestic service as it relates to the employment of women. I have no wish that the Employment Exchanges should be used for foisting upon bad householders women and girls as domestic servants, but, short of that, you have, on the one hand, a universal demand for women and girls as domestic servants, and, on the other hand, you have 53,963 women who were in domestic service on the books of the Employment Registry and without jobs. That makes me think that there is a gap between the employer and the employed in one very vital part of the province of women's employment. I see, for instance, in the Report of the Advisory Committee of the Ministry of Reconstruction on Domestic Service that it has been calculated that only one domestic servant per week has been put into employment by the Employment Exchanges for each clerk employed. I see also in the evidence that a single restaurant, employing a large amount of domestic service, is still paying £5,000 a year in advertisements for the men and women that it wishes to attract to its staff. That makes me think that, rightly or wrongly, the Employment Exchange is not playing as effective a part as it should in bringing employés and employers together in the matter of domestic service. People tell me who have been following this problem closely, that that is leading to very disastrous effects, and I would commend to the Under-Secretary for Labour the recommendations made by Dame Katharine Furse in the "Times" of today. Domestic servants, in her contention, need something more personal than can be obtained in the Employment Exchanges. For instance, there is the question of character, which, both from the point of view of employer and employed, is absolutely necessary in service of this kind. Her suggestion, and the suggestion of several of the ladies who served upon the Advisory Committee with her, was that the Ministry of Labour should encourage the formation of, I do not know whether to call them clubs or, anyhow, associations of the women who have been working, for instance, under the War Office or under the Admiralty or other Government offices, and by means of these associations to give the members information as to openings in domestic service, to put them in the way, if necessary, of getting training, even to provide hostels in which they could live when they are without employment, and to prevent them drifting into the streets, and becoming demoralised by hanging about the Labour Exchanges, and, as the figures show, not obtaining employment. I would ask the Under-Secretary to say something about that suggestion—the formation at once, or perhaps I should say the continuation at once, of what has been done in the matter of welfare in the munition works during the War, to finance it from the Ministry of Labour, and to prevent these many hundreds of thousands of women and girls drifting into the streets and hanging about the Labour Exchanges. I think that such organisations could be kept in close touch with the Employment Exchanges, and I think that so far would they be from interfering with their work that they would really supplement them in what is admittedly one of the great deficiencies in the present organisation. I think that that suggestion might also be extended to the large number of boys who who are at present unemployed. According to the labour statistics, there are something like 30,000 boys now unemployed. It would be a tragedy if, at the most critical time in the lives of those boys they drifted away and made it much more difficult for themselves to become profitable members of the State in future.

I pass from these two points that I have raised in connection with the administration of the Ministry of Labour to a third point, which seems to me to be almost equally important. I said just now that I objected to the unemployment donation if at the same time the Ministry of Labour are not taking every step in their power to make the chances of employment both by private employers and Government offices better. As far as I can see with the information that is available to an ordinary private Member, the Ministry of Labour is not carrying out its full duty in that respect. I am not satisfied that the Ministry of Labour is bringing its full weight to bear upon the other Govern- ment offices to ensure that work of public importance should be put in hand at once, and should be so spread over the labour market as to lessen the present serious state of affairs. I should like, for instance, to ask the Under-Secretary what the Ministry of Labour have been doing with the Local Government Board to hurry on the scheme of housing, purely from the point of view of labour? Hon. Members opposite could possibly calculate more easily than I could what would be the amount of labour that an extensive, housing scheme would immediately absorb. As far as I can see, since the election not a single new house has been even started to be built by either the Local Government Board or any local authority. I should like to be satisfied that the Ministry of Labour is worrying the Local Government Board day after day, from the point of view of labour and of the employment market, to get those schemes started at once. I should like to see the Ministry of Labour pressing day after day the President of the Board of Education to set on foot an extensive scheme for building more schools, and particularly for increasing the number of schoolrooms and consequently reducing the number of boys and girls in the classes. There, again, an extensive educational programme for increasing school accommodation would absorb a very considerable amount of labour; and, thirdly, to take another similar example, take the case of the amount of labour that might be absorbed by a big programme of road improvement. There, again, I should like to feel that the Minister of Labour is day after day at the door of his right hon. Friend the Minister of Ways and Communications insisting that a programme of road improvement should, from the point of view of the labour market, be set on foot at once.

The only comfort I have had in this connection in the last few days was an answer given by the right hon. Gentleman the Leader of the House when he said that it was proposed at some early date to embark upon the Channel Tunnel as a means, amongst other things, of employing labour. I should like to see schemes which in my view are more practical than that, such as those that I have mentioned, set in hand at once, and I venture to make the hon. Gentleman a humble suggestion. It seems to me that at the present time there is not the close connection between the Ministry of Labour and the great employing authorities, such as the Local Govern- ment Board, the First Commissioner of Works, and the great local authorities, that there might be; and I would suggest to him that it might be worth setting up joint committees under the Ministry of Labour with the big employing Departments of State and also with the big local authorities. Those committees would have before them all the latest statistics of the labour market. They would also have before them all the various schemes of building and employment both of the Departments of State and of the great local authorities. I believe without some organisation of that kind you will have one Department doing one thing and another Department doing another thing, quite irrespective of the conditions of the labour market. That is a very important point, because I think I should be right in saying that the orders of the big employing Departments of State and of the local authorities would have a very material effect upon the problem of unemployment. Even before the War Professor Bowley, a very well-known statistician, calculated that the amount of employment in a good year and the amount of employment in a bad year differs much less than most people would think. He calculates the difference as between 2 per cent. and 11 per cent. of the labour employed under the 1911 Unemployment Act, or to put it in another way, he calculates that even in a bad year of trade, 95 per cent. of the aggregate amount spent in wages in a good year in spent in a bad year. To put it in another way still, in a bad year of trade, according to his calculations, no less than fifteen-sixteenths of the total labour of the country still finds employment. Those statistics show that the margin between a good year and a bad year is not very great, and that if Government Departments and local authorities spread their employment orders in a co-ordinated and reasonable way, a great part of even that small margin would be reduced. That was true according to statistics before the War.

Much more is it true to-day, when almost every Government Department is embarking upon a programme that will mean extensive employment of labour, and I am inclined to think that, if the Ministry of Labour went fully into this question, set up the Standing Committees I have suggested, and put its whole weight into insisting that employment programmes should not be entered into regardless of the labour market, most of the factors that now lead to bad employment in years of bad trade would disappear. It is because I feel that the Ministry of Labour has not realised the greatness of this problem that I have made these remarks, and I hope that the Ministry of Labour will act up to the very extensive powers it has got, make itself first of all the central statistical department with reference to all labour questions, and, secondly, make its power felt, so that all the great spending Departments of State, and the local authorities as well, may spread their orders so as to tide over bad times, and not drain the labour market in good times with employment which could be better used in other services.

Major EDWARD WOOD

I am sure hon. and right hon. Members who have heard my hon. and gallant Friend's speech will agree that he has done a useful service in inviting the attention of the House to this subject, and I could wish that more Members of the House had had the opportunity of hearing what he had to say. I can assure my hon. Friend who will reply for the Ministry of Labour that those of us who have introduced this matter have not done so in any spirit of criticism, or with any other desire but to give him an opportunity of making a statement that I think is rather needed at the present moment, in view of the circumstances in which we are. We entirely appreciate, of course, the difficulties in which his Department is at the present moment, and I can say of myself and my hon. Friend that we would not have invited him to spend an evening in the House of Commons if it were not for the fact that opportunities of discussing these matters in the House are so few and far between, that one has to take them when one can. I do not think my hon. and gallant Friend exaggerated when he said that the situation was an anxious one. He referred us to the numbers who are at present in receipt of the unemployment donation, and I suppose every one of us has had information—I certainly have had from various sources in my part of the country—all going to show that in various trade centres of population there is a reasonable expectation of an increased measure of unemployment over what we have today. It is not necessary to remind the House that, at present, unemployment is one of the danger points of the country and of society, and, therefore, I consider there is no question upon which it is more vital for Members of this House to seek for information. Nor can I conceive any subject in which it is more important that, the Ministry, as the hon. Member said just now, should take the country frankly into its confidence.

But this would not be the occasion, nor I the person, to discuss the large causes at work which are producing this state of affairs. I leave on one side—although, of course, they are vital causes arising from the War—questions of policy like the continuance of the blockade, the arrival of raw material in this country, the effect of labour unrest, to what extent labour unrest is the parent or the child of unemployment—those matters I leave on one side, and I want to direct my hon. Friend's attention to some aspects in which his Department is more closely concerned, and ask him, if I may, a few questions. First of all, let us keep clear what we expect the Ministry of Labour to do. It is not responsible, as I see its functions, for the existence of unemployment, nor can it provide employment, but, as my hon. Friend said, it can very well act as a controlling and a driving force of all the energies of organised labour. Now, the Ministry of Labour depends for its success upon two factors. The first is that that central administration should be well and intelligently directed; and, in the second place—and this is not less important—it should be able to enlist, and utilise and inspire the local knowledge and the local effort on which at must always largely rely. As to the first—the intelligence of the central administration—I would only suggest, in passing, that I am not sure the time is not coming when those responsible for our affairs will have to consider the question whether it may not be desirable that the Ministry of Labour should take over a large part of the work of the Board of Trade, and that for this reason. As is becoming more and more apparent to every one of us, each day the whole question of our trade, especially our foreign trade, depends, and will depend, more and more directly upon questions of labour here at home, and I am inclined to think that it will not long seem satisfactory to have what is really one subject divided between two Government Departments. That I only suggest in passing, but, with regard to the second point, I think my hon. and gallant Friend was perfectly right when he said it was possible for the Government to give quite definite assistance to the labour demand. I do not suppose that many of us before the War realised how elastic the labour demand of a nation was. We can apply, I think, to the conditions of peace a great deal of what we haves learnt under the conditions of war, though we shall not use the same methods.

It really comes back every time to this: Is the knowledge, which the Ministry of Labour has got, and collects by a unique machinery through the country, pigeonholed in a Government Department, or is it really made effective and given to Departments? I happened four or five days ago to meet at a mutual place of entertainment a Northumberland miner, whom I sat next at dinner, and I showed him round the House of Commons the other day, and, among other things, took him to see the Coal Commission sitting. While we were there, what was going on was what happened not infrequently on the first two or three days of that Commission, namely, a Government official being turned inside out by one of the miners representatives. My friend and I watched this for a few minutes, and, after coming out, I asked him what he thought of it. He said, "the only impression that it leaves upon me is this, that these Government officials have been busy all their lives poring over figures and never thinking about them. We have been busy thinking, but have never been able to get the figures to think with." I am not sure that that is not going on too much in Government Departments. I hope my hon. Friend will be able to assure me that the figures his Department collects—and I think there are no better figures collected than his—are put to an effective and a practical use. Therefore, I would ask him, is it anybody's job in his Ministry to see that something is done to make the information really effective? I am not sure that in this matter, perhaps, as in others, the suspension of hostilities did not catch us a little bit unprepared.

8.0 P.M.

With regard to one other matter which my hon. and gallant Friend has touched on—the question of unemployment donation—I think that every one of us must have complete sympathy with the demand that was made, I think, at a large meeting at the Albert Hall, and has been made at several other meetings up and down the country, for work instead of doles. We all admit the necessity of the policy at the moment, but I am convinced, as was my hon. Friend, that it is a bad permanent policy. It is as low a conception of the policy of the Ministry of Labour as the advice to "feed the brute" is a low idea of the state of marriage, and it is not enough as a permanent policy. In this, as in many other matters, I am convinced that laissez-faire, as understood years ago, is dead and will not return, and in this, as in other matters, the State must be prepared to intervene at an earlier stage than hitherto it has-been willing to do. Up to now the State has been willing to provide some doles for those unable to work; now it must intervene before it gets to that stage. One word more and I have done. Let us all recognise, what is an obvious truth, that unemployment is, and is going to be, more and more a national problem. In that connection may I suggest this to my hon. Friend. The present practice is to pay unemployment donation. During the War there were various schemes to which, as I very well know there were, on various grounds, great objection, and by which it was possible to transfer a man to work in another part of England. In return for signing some form of contract such a man got subsistence allowance. That, as a great many hon. Members know, was on several grounds objectionable. But I would put this to my hon. Friend: Would he not consider the possibility of introducing into our peace system permanent machinery by which a man who wished to go to work away from his home, and to where work was, should not draw his subsistence allowance himself—because that makes trouble in the place where the man is working—but that the subsistence allowance should be sent out direct to his dependants in the home from which he has gone? From the point of view of the State it would be infinitely cheaper than paying unemployment donation because the man would be producing. I should be very glad if my hon. Friend will say that he is prepared to consider that policy as a permanent part of our peace machinery. When he has done that it is not less important to enlist the sympathy, co-operation, and support of the people on the spot who have to do the work. The Department has got invaluable machinery in the shape of local advisory committees and in the shape of divisional councils. If the Department desires good work to be done by that machinery it must get the best people to serve on these committees and councils, as I believe it has, but it will not get the best people to remain on them unless it so decentralises its work that those concerned will feel that the work they do is really effective, and of a responsible nature.

I have heard many complaints from responsible people serving on these committees that they are rather too apt to be considered as only of an advisory nature. Resolutions that are passed are, it is said, turned down at Whitehall. They feel that it is really too much to ask a busy man to waste time, and to come, it may be, a long way to attend committee meetings unless rather more weight and authority is given to the work and to the resolutions carried when they have done that work and carried those resolutions. Uniformity of administration is, however, a thing very dear to the official mind. Still, it should be remembered that it has a tendency to cramp and paralyse local initiative and local effort. Therefore, I think what is needed, and what on every ground is essential, is that the Ministry should be content to reserve for Headquarters merely the widest questions of policy, while transferring in fact to the provinces as wide a control of administration as it is found practicable to do. In conclusion, let me ask my hon. Friend to answer the two questions put by my hon. and gallant Friend on my left, and—if I may do so—I would ask his especial attention to one to which I have directed his attention: Whether he can give an assurance that he will be able, as he gets his machinery developed and extended, concurrently with that to carry still further the process of decentralisation outside in order to give the fullest possible scope to the energy, interest, and initiative of those whose services on the outside are desired and are invaluable?

Lieutenant - Colonel MEYSEY-THOMPSON

The hon. and gallant Gentleman who has just sat down, and others, have drawn attention to the disadvantages of unemployment pay. I agree with them to a very great extent. But there is one aspect of the question to which I have not heard attention drawn. I should like hon. Members on this side of the House to study the few remarks I am going to make. Firstly, I would endeavour to show how unemployment leads to unemployment, and how the reverse is the case. Take the coal mines as a first instance. Suppose the hewers were all receiving unemployment pay. You would have no loaders, no pony boys, no surface men, and a large number of other men would be thrown out of employment, because those at the head of the department were receiving unemployment pay. Take the instance of a small town or village where there are a very large number of people receiving unemployment pay. What greater benefit could there be than for some good organiser to start, say, a brewery or a cocoa manufactory, or some other business? The first result would be to employ those people now receiving unemployment pay, and the further result would be that not only those people would be employed but a vast number of other people—carpenters, saddlers, box makers, barrel makers, and so on. Therefore, the mere fact of the employing of people now getting unemployment pay would not only keep them in work but would prevent others, as I have pointed out before, from coming on the State or encouraging those people to remain unemployed; it would also be causing a large amount of remunerative employment for a great many other people in the district who otherwise would find it difficult to get that employment which is so necessary in times of demobilisation.

A great strike, or strikes, will cause unemployment for the time being to enormous numbers of people all over the country. I wish I could make hon. Member realise this point as well as I myself realise it. I have been in the Colonies. I have travelled in almost every part of the British Empire. I wish I could bring it home to all what a danger there is in driving trade permanently out of this country. I do not think it is half understood how sensitive trade is, and how important it is to this country to preserve our trade and to have sound finance. A strike here lasting any length of time would not only result in people being thrown out of work, but there would be a very grave danger of driving our manufactures and our trade overseas to our Colonies and to America. While we may wish our own Colonies to succeed—and none of us, I am sure, wish otherwise—and they do not themselves wish to succeed at our expense—yet they do want to succeed and develop alongside the Mother Country. When we talk lightly of fixing rates of wages and of fixing one con- dition after another upon our trade here, let us think. And I am one of those who wish to see wages kept up as far as it is possible to keep them up to a standard which shall ensure comfort and well-being for all our workmen. Still, we must remember Æsop's fable of the Dog and the Shadow. Do not let us grasp at the impossible and lose the real.

America, as we all know, has come forward during this War and has lent us very large sums of money. If it had not been for that we should have had very great difficulty in financing ourselves during the latter days of the War. When I lived out in New Zealand and Australia I can very well remember what was the argument always used when it was a question of financing the country: "Go to England and borrow some extra millions." That money was the means of keeping, in very many instances, the wages of, say, a particular trade above the standard which that trade could justly bear. The result was, as I have seen over and over again, industries started in New Zealand or Australia which had every prospect of success, but were so overburdened by expenditure that they came down, and those concerned had to emigrate to America, where they found a better market for their labour. It was not so bad perhaps as it might have been, because the Colonies borrowed from the Mother Country, and they had a sympathetic parent to nurse and look after them; but do not let us borrow from America to such an extent that we burden our industries here to a point which they are unable to bear. If we do, the inevitable result must be to drive our trade and our manufactures from this country to America. Our working people will then have no choice but to live on a very much lower rate of wages or run a very grave risk of constant unemployment, or emigrate to America, which, I am sure has the wish—as it is the wish of all of us—to keep them here, and to keep them well employed, and to improve their condition to that certain standard which all of us wish to see. I would urge upon the Minister to keep this point in view. I would ask that, as soon as possible, he should get those who are now receiving unemployment pay profitably employed, to remove as speedily as possible all those restrictions on our industries which are now going to be so heavy a tax on them, and which make us run a very grave danger of driving trade out of this country. I am certain what I have said will be received in good part by hon. Members on this side of the House. I can only say, in conclusion, that I hope and trust, bearing these things in mind, we will not delay taking the necessary measures which I have indicated.

The PARLIAMENTARY SECRETARY to the MINISTRY Of LABOUR (Mr. Wardle)

I must apologise for the Minister of Labour not being able to be present to take part in this Debate. Neither he nor myself have the slightest cause for complaint in regard to what has been brought before the House. On the contrary, we welcome the discussion that has taken place. We agree that the question of unemployment is a very grave problem at the present moment, and it is growing. Therefore, I am very glad indeed that this discussion has been initiated. I do not think anyone can accuse me or the Minister of Labour of any want of sympathy with the unemployed, or any want of desire to see this problem solved in as complete a fashion as possible. There are, however, some indications that show something is being done, and much more than has already been suggested. We have at present 992,000 unemployed donations. Of this total 495,000 are women and 435,000 are men. Of the men about 165,000 are soldiers and 227,000are civilians. The House will be interested to know that out of the soldiers already demobilised 79 per cent. have been actually placed in employment. No less than 637,000 have been so placed and of the civilians 45 per cent. have so far been placed in employment. In regard to the women we cannot say that we have been quite so successful, but I will deal with that point in a moment.

The questions which have been raised in this Debate are exceedingly important, and they are mainly with regard to the question of the administration of the Ministry of Labour and unemployed donations. Some larger points have been raised, but first of all I should like to deal with the question of the administration of the unemployed donation, and answer the questions put to me so far as I can. First of all let me say that the problem of unemployment has undoubtedly largely arisen as the result of turning over from war to peace, and large numbers of women who had never been engaged in industry in the same way before were brought into employment, and the difficulty of putting them into other employment was very great. The largest percentage of unemployment is just exactly in those centres where the munition factories were placed, such as Birmingham, Glasgow, Sheffield, and districts of that kind. The largest percentage of unemployment in regard to the men is in the engineering trade, and this has risen to 14 per cent. Those are the only figures with which I desire to trouble the House, but I think they prove that the Ministry of Labour so far as machinery is concerned is doing a great deal to settle and solve the problem.

With regard to the question of the unemployment donation. I have been asked, first of all, whether the policy of donation is a permanent policy or not, and whether the present rate is a permanent rate, and whether the present non-contributory policy is permanent. The whole question, including both these points, is now being considered by the Sub-committee appointed by the Provisional Joint Industrial Conference which was held the other day, and a satisfactory settlement depends on the acceptance by both employers and employed of whatever policy may be adumbrated by that Sub-committee, and eventually accepted by the Ministry of Labour. Therefore it would be premature for me to announce a policy when the matter is being considered by that Committee.

Sir S. HOARE

Will this Committee report before the expiration of the thirteen weeks? I believe the present rate of donation goes on for thirteen weeks.

Mr. WARDLE

I think we are expecting a Report by the 6th of April. That is the expectation, and then there will be a further large Conference. The Reports of the Sub-committee will be given at that Conference, and then, I presume, they will be made public.

Mr. CLYNES

May I ask whether it is intended that the Sub-committee will make recommendations to the hon. Gentleman's Department which will affect the financial relief now being given?

Mr. WARDLE

I do not think the Subcommittee is considering the present rates which are being paid. They are considering the question of the policy which ought to be pursued with regard to this question of contribution, and the question of the permanent policy of the donation pay. I do not think the Committee is considering the present rate. I have been asked a question about the amount of the donation and how it was fixed, and whether it is a haphazard figure. It certainly is not a haphazard figure. It is difficult to say exactly that it was fixed upon any particular cost of living in any particular area. It must be remembered that it is a flat rate. I think the House will agree that the policy which had to be pursued had to be somewhat hastily improvised. No machinery which the Ministry of Labour could set up in the time at its disposal when the Armistice came so suddenly could have dealt with any other system but a flat rate.

Major WOOD

The War has lasted over four years.

Mr. WARDLE

Yes, I know; but I am speaking now of what has been done since the Armistice, and when that came about this matter had to be dealt with in this form. The policy was to make a flat rate because no other measure could deal with so big a problem as that at the moment, and therefore it was fixed. I have been asked whether the rats fixed was a subsistence allowance. Certainly it was considered a sufficient allowance for the time being, and this seemed to the Ministry at the time to be the best system which could have been devised and put into operation quickly. My hon. Friend then asked with regard to the machinery of the Appointments Branch and the Employment Exchanges. I think his criticism of the Appointments Department was rather harsh. The Department was created after the Armistice, and it has had to deal with a tremendous problem. In my opinion it has been dealing with it very effectively. While it is perfectly true that a great deal of correspondence has taken place, a great many appointments have beet, made, and I gather from the information which I have received that many of these appointments have been the result of the correspondence. According to the information which we have received, the Appointments Branch of the Ministry, in dealing especially with officers and men of exceptional educational qualifications, is doing really good work and is proving very effective.

Major MORRISON-BELL

Can the hon. Gentleman give the number of these appointments?

Mr. WARDLE

I cannot give the number at the moment, but I have given them from time to time in answer to questions, and I shall be very glad to give them again. They are changing from day to day, and it is impossible for me to give them at this moment. It is perfectly true that there was great difficulty in expanding the Labour Exchanges to deal with this problem in it, fullest capacity as it ought to be dealt with, but my hon. Friend knows perfectly well that the whole machinery of the Ministry of Labour has had to be largely created during the War, and it is not so easy to get a suitable staff for this purpose as some people imagine. These Employment Exchanges have to be staffed by people with certain qualifications, and certainly by people possessing sympathy and tact, and it is not easy to improvise a service of this kind during such a period as we have been passing through. In addition to unemployment itself, they have had to deal with this unemployment donation, and you must make some allowance for the difficulties under which they have had to work. I quite agree that in some of these exchanges there has been a little too much overtime, but that has been because of the difficulties. The matter is being gone into thoroughly, and we hope before long that the exchanges will be put on an effective foundation.

My hon. Friend referred rather critically, and perhaps sarcastically, to the work that the Exchanges are doing with regard to domestic servants. Before the War the Exchanges were prohibited from dealing with domestic service and during the War there was little or no business of that kind doing. The whole work with regard to domestic service has, therefore, practically had to be built up since the Armistice. Arrangements are in hand at the present moment for developing this work in certain directions. I could not agree, as the hon. Member seemed to suggest, that one clerk has secured only one servant, because, as a matter of fact, during January, 13,750 were placed in domestic service by the Employment Exchanges, and certainly the clerk at the particular Exchange through which one servant secured a job would have many other things to do. I quite agree that the problem of domestic service is a very difficult one. It has been receiving the consideration of various committees of all kinds, including the local advisory committees which have been set up by the Ministry of Labour, and a great many reports which have now been received will be considered, so that we may get some policy which, it is hoped, both from the point of view of the domestic servants themselves, the country as a whole, and the employment of women as a whole, may bring this problem to a satisfactory solution. Surely the House realises that girls or women who before the War were in domestic service were during the War transferred to munition factories and to other industries in which they had more freedom, and in which they secured very much larger wages. The disposition to go back into domestic service is not very great, and there is no wonder that we have this problem as acute as we have it at the present time. I believe it to be a passing problem, and I believe that the measures that are now being considered, and that will eventually be taken, will be found to do something to mitigate the worst effects, and to bring it to a satisfactory conclusion. I will consider the suggestion which the hon. Member has made. I will see how far associations of the kind he suggests can be fostered. Already throughout the country in the advisory committees this thing is being considered, and I know from my own personal knowledge that in many parts of the country meetings are being arranged by the advisory committees between mistresses and maids, or those who desire to be maids, with the object of seeking a reasonable solution of the problem. We are therefore doing something to bring together the people who are concerned in this great problem.

I share my hon. Friend's view as to the seriousness of the position in having a large number of boys unemployed. We are, through our local advisory committees which we have set up to deal with juveniles, doing all that is possible on our part to solve this very great problem. In certain districts the local advisory committees are sending both the boys and the girls to attend schools rather than that they should be walking the streets and doing nothing, and they are receiving extra education in that way. The other main point of criticism was the question of the Ministry stimulating other Government Departments and bringing them into touch with the problem of unemployment. It will be generally agreed, in fact it must be agreed, that it is not the business of the Ministry of Labour itself to develop industry directly. That is not its business or its policy, but it is constantly and regularly pressing the other Departments of the Government concerned to vigorously develop schemes such as housing and works of all kinds for the provision of employment. That is being done constantly, and the local advisory committees are asked for, and are constantly sending in, schemes of employment in their particular districts. We have sought, as my hon. Friend has suggested, to bring the local advisory committees and the town or county council together so that they can work in harmony, and that pressure can be brought to bear upon the council actually to start work and develop opportunities for employment in their respective districts. I look upon the local advisory committee to which reference has been made as one of the most valuable pieces of machinery connected with the Ministry of Labour. It stimulates local interest, and has very large powers now. At first its powers were only advisory. One of its main businesses was to deal with the Employment Exchanges. It exercised a certain supervision over them, and itself directly approached the Ministry if it considered there was anything wrong with the local Employment Exchange. Therein it performed a very valuable duty. In addition to that, it has had to deal with the question of demobilisation and with pivotal men.

Now it will have the duty of dealing with all renewals of the unemployment donations. After the original thirteen weeks to which people out of work are entitled to receive the donation have expired, everyone who desires to have the benefit of the unemployment donation for a second period must send his or her case to the local advisory committee, where it will be considered. There are no keener critics than those who live in a place and have local knowledge, and therefore it may be expected that the advisory committee on this question will be able to do good work. I think I have dealt with almost all the points which have been raised. But I should like to add a word about the stimulation of local authorities in the provision of works to tide over the time of difficulty. The provision of works is a palliative and not a cure. The great thing we want in this country at the present moment is a revival of trade and an expansion of our industries. I will not enter into this in any detail however. I will only say that for my part I hope we may see confidence restored and an end put to that unrest which undoubtedly exists, so that people may be satisfied in some reasonable form, that wages may be improved high prices decrease, and unemployment vanish. But nothing will bring that about so quickly as a complete revival of our trade.

Mr. KILEY

I rise to express a certain amount of dissatisfaction with the speech to which we have just listened. I was looking for something of a constructive policy to be announced to deal with what must be regarded as the appalling problem of unemployment. As far as I can gather there is not the slightest suggestion in the speech of the right hon. Gentleman that his Department has any definite or tangible proposition to put forward in order to cope with it. Surely there must be some thinking people in the Department of the right hon. Gentleman who are looking round to see what can be done. Let me suggest one matter which came to my notice a week ago. A very large manufacturer in my district wanted a number of women accustomed to machine labour, but was unable to get them. He could obtain 300 women, but he was not prepared to pay them the full standard rate of wage, although he was quite willing to pay them something for their services while being taught—a process which would occupy some weeks. He wanted assistance, or, rather, these people wanted assistance in order to enable them to live while they were learning this particular industry. The suggestion has been placed before the Ministry of Labour. There may be some trade union objection to this policy being pursued, and if there is objection then, I think, some action should be taken to get over an obstacle of that kind. I understand that in Ireland, when the Government wish to cope with the unemployment problem in any part of that country, they do not set up technical schools, but they go to an employer of labour and arrange with him that, if he will take a number of untrained people into his factory, they will pay these untrained people a small amount per hour for the time they spend in the factory, and I believe they also contribute something to the cost of management, and, instead of engaging a professor to teach the students, they pay the manager of the factory a certain amount so that lie may teach the people a trade or business and thus relieve the unemployment problem. One would have liked to have had some suggestion from the Department in this direction.

We are told that these matters are being dealt with by advisory committees. I know a little of these committees, and I think if the right hon. Gentleman will inquire into the constitution of some of them he will not be quite so satisfied as he expressed himself a little while ago. In my own district the merest fraction of the members of the advisory committee live in the district. I do not know who appointed them. It was certainly not the local authority, which was absolutely ignored when the committee was set up. I am glad to know the right hon. Gentleman now contemplates consulting local people. I can assure him if he does that they will be able to give far greater assistance than they have done in the past because they have local knowledge as to the best methods of providing work for the unemployed in their district. If they had the responsibility of appointing the committee, or of controlling it, and dealing with the unemployment difficulty they would in turn feel some responsibility for looking after the committee. Hitherto the local authority has not regarded the Labour Exchange as coming within its province. This is the only part of the speech of the right hon. Gentleman in which he stated something tangible as to what he is going to do, and I am sure that if he does consult the local authorities his action will have nothing but beneficial results. The hon. Gentleman might consider the suggestion I have just outlined of taking unemployed women, if they are unskilled or have had only one experience, and letting them be taught. I am sure that many manufacturers would be quite willing to take these women provided that all the responsibility of their pay did not rest upon them while the women were being taught the industry.

Mr. CAPE

I am rather disappointed by the statement made by the Parliamentary Secretary to the Ministry of Labour. I quite believe that what he said with regard to what the Department has done in trying to get work for people who are unemployed in their own particular localities is to a large extent true. He pointed to the fact that all the efforts of the Ministry of Labour and of the Board of Trade had been directed to making arrangements through the Employment. Exchanges to get employment for these people with private employers. Looked, at in that aspect it is to be admitted that the Ministry of Labour has undoubtedly done a good deal of work. But I would suggest to the hon. Gentleman that during-the War, because of necessity, the Government created gigantic works. I am not complaining of that having been done because it was absolutely essential to the prosecution of the War that every effort should be made to produce as much munitions of war as we possibly could. The Government organised all these large establishments and employed hundreds of thousands of people, who were paid for the results of their labour out of the National Exchequer. That work was not of a conscripted character, but, because the necessities of the country demanded that it should be done, the Government put all its energies into it and consequently these people were employed. If they did that for these legitimate purposes, I would suggest to the Parliamentary Secretary that they Ministry of Labour might direct its attention to utilising some of these works and employing some of the unemployed in a productive manner for the well-being of the nation. I believe that industries could be commenced in some of what I might call the derelict factories and workshops belonging to the Government which would be of a productive character. That would give employment to the unemployed, and would be spending the country's money in a better way than in paying unemployment benefits. The 25s. or 29s. allowed to people who are unemployed is nothing like an adequate sum to meet the requirements of to-day. It is quite true that it is higher than anything that has ever been given in the history of this country; but, notwithstanding that, it is nothing like adequate to meet the demands of these people. The money which is being spent by the Government in that way is practically bringing in no return. It would be far better for the Government to spend more money with a view to bringing in some return, and besides enabling the people who are so employed to get more money for themselves it would give them a chance of obtaining a higher standard of life.

One hon. Member this evening referred to the housing question. The Parliamentary Secretary, in his reply, did not give us any outline of what the Ministry of Labour was doing towards pressing forward a housing scheme. I believe that if a housing scheme were inaugurated on a large scale it would absorb a great number of our unemployed people. There is a national necessity, not only to employ these people, but to house those that are employed. Housing is a crying evil throughout the length and breadth of the land. Every town and every village is crying out for powers to commence a housing scheme. Under a housing scheme you would not only employ the people who build the houses, but also the people who produce the necessary commodities to build the houses. One can hardly calculate how many people would be employed in the building of houses on a large scale. I suggest that the Ministry of Labour should do all they possibly can to urge upon the other Departments the absolute necessity of inaugurating this housing scheme at the earliest possible moment. I would also respectfully suggest that the Ministry of Labour should turn its attention to commencing industries under State control with a view to absorbing men and women at present unemployed. If a country like this, which has shown beyond shadow of doubt that it is the richest country in the world, could finance this gigantic War, and if it could spend a huge amount of money such as it has spent, and yet cannot find ways and means to create national industries in order to absorb the people who are unemployed to-day, then something has gone wrong with the thinking powers of the Ministry that now controls the government of the country. I suggest that these things might be given attention to, and a real genuine effort made to try to relieve this pressure of unemployment, not merely by paying so much per week unemployed benefit, but a genuine endeavour to employ people who are now unemployed.

9.0 P.M

Mr. ROBERT M'LAREN

The question of unemployment is one that, I am sure, exercises the mind of every man who values the interest of his country. My purpose in rising is to bring before the right hon. Gentleman an instance whereby the direct result of the policy of the Government is bringing about unemployment. Like the other supporters of the Government who received the coupon, I insisted in my district, which is a very large industrial one, that the Government would protect certain industries, especially key industries. The Prime Minister, in his letter to the right hon. Gentleman (Mr. Bonar Law), initimated that these things would take place, and I was perfectly entitled at my meetings to say I was quite satisfied that the Government would carry out to the letter all the promises they had made. I have here some letters received last night and this morning from a very important industry in my district, namely, the paper milling industry. It appears that matters have come to a crisis there, because recently the Prime Minister has decided to allow free imports in connection with paper manufacture. The result is, that instead of these people receiving the protection they expected, the price has been reduced 40 to 50 per cent., and the statement given to me is that things are so alarming in the various paper milling districts that a question will arise in a very short time as to whether or not they will be able to keep on the persons at present employed, and the result will be that a large percentage of the people there must go without employment. During the War these mills were taken over by the Government, and they did very good work. They were crippled, like other people, in having to send away a large number of their men to the War, but notwithstanding that, with the shortage of labour, they were able to keep their supplies pretty well up. Before the War the mill I refer to, which is situated in Lanarkshire, between Airdrie and Calder Cruix, used to put out 219 tons per week of paper, but during the War they had to reduce their output to 36 per cent. They employed 784 people, and now they employ 633. Things have become so alarming that they have recently had a meeting of all the paper manufacturers of the district, and they are asking, that a deputation shall be received by the Board of Trade to try to see if matters cannot be settled. I am told, on this great question of unemployment, the Government cannot afford to do anything with any industry which will bring about the state of matters that they want to avoid. It is perfectly true that the trades-people are very much alarmed. The trade unions have taken up the matter, and they have asked me to bring it before the House to see if a remedy cannot be obtained at once before it is too late. The supplies of paper come to us through Scandinavia, and it is believed that a good deal of it comes from Germany, so that, after all, I think the Government must adopt such a policy as will prevent these people dumping their stuff down as was done in pre-war times. We have heard from Ministers that we cannot revert to the old pre-war conditions. I trust we shall never return to them but shall do things far better, for it is feared that, having given that promise, we are now faced with the fact that if any difficulty occurs the Government is perfectly ready to start a different policy, and thereby the country will suffer. I want to impress on the right hon. Gentleman that this matter should be dealt with at once. Already some of the mills have been closed, and unless it is dealt with quickly many others will be closed and we shall have a large body of decent men, who have done good work during the War, who have returned from the Army and who are expected to be started at work again, thrown out of employment, and it will be a very sad business for many parts of the country. Throughout Scotland there are very large paper mills, in Edinburgh, in Linlithgowshire, and in the West, and it will be a sad business indeed if, through a mistaken policy on the part of the Government, without thinking very much of what they are doing, by reducing the price of paper they produce the result that so many men will be thrown out of employment through no fault of their own. I appeal to the right hon. Gentleman to get the matter put right at once so that this decent body of men will not be thrown out of work and cause more unemployment, the very thing the House is anxious to see abolished as soon as possible, and that the country may go on to prosper.

Question put, and agreed to.

Bill read a second time and referred to a Committee of the Whole House for To-morrow.