§ I should like to turn to another side of the operations of the Exchequer in the course of the year which are very material to this point with which I have been dealing. In addition to the expenditure required in the ordinary way for the service of the year, it was necessary to meet maturing obligations of a very large amount. There were Exchequer Bonds issued in this country falling due for repayment in the course of the present financial year to the amount of £103,000,000, and there were also external debts due, mostly in the United States and Canada, amounting altogether to £80,000,000. In the course of the year up to now we have succeeded, by the issue of loans, in meeting or providing money to meet the whole of the £103,000,000 and we have also provided for the £80,000,000 of external debt by the same means. That is an operation about which I am sure the House will be gratified to learn. It strengthens our position. Of course it has converted an external debt into an internal debt. But nevertheless it has an effect upon the position in the exchange of the world. It enhances your credit and gives you much more control over your financial situation. Both these things have been done in the course of this year, and something has been left over. How much it will ultimately turn out to be I cannot predict, but there is something over from these borrowings which will enable us to deal with at least a portion of the £60,000,000 which has to be found for the meeting of these Sinking Fund charges. It is quite certain it will not all have to go on to the Floating Debt and I hope all of it will be provided in the shape of Funded Debt. That, again, is a matter for satisfaction and gratification.
§ I ought to say, in connection with the topic we have been debating for the last fortnight, that the increasing supply of money from the City has come in the course of the last 6 weeks to 2 months almost entirely. There has been a very marked increase in the support which 458 Government issues have obtained from the City and while there are other factors which are responsible for that condition of things, I am well assured that one of the causes of the additional help which these loans have been obtaining in the City recently is the fact that people who have money to lend have now become confident that we are more anxious to save than to spend and that wherever we can save we shall do so. There is a Committee sitting at present upon expenditure, which was received with some marks of derision at the time it was first set up, but I do not think there is the slightest question that that Committee and its actions have been the cause of very great confidence in the financial world, and I am equally confident in my own mind that the result of its operations will conduce very greatly to the stability and soundness of the financial situation.
§ I have been dealing with the current financial year. What I have said I think prepares us to throw our minds forward to next year, because undoubtedly the Revenue of next year will be much less than the Revenue of the present year. One reason is obvious. In the present year Income Tax is being paid upon the average of the past three years. When you put the present year in with the immediately preceding years you are going to produce a very different result in Income Tax from that which you are obtaining to-day. Excess Profits Duty also will be less in yield, and miscellaneous receipts will be gradually disappearing, and we must look forward to a period in which we shall have to strive with all our energies to prevent any form of expense which sometimes, out of sympathy, this House is very ready to incur and sometimes is encouraged even by those who have been most eloquent in their diatribes against expenditure. But the House will require to harden its heart in the coming year and, to use the expression which has so often been used, to "cut its coat according to its cloth." There is an additional expenditure next year which I do not think has been sufficiently envisaged yet. The debt which we owe to America is still owing and the interest upon it has been postponed during the three last years, but according to arrangement interest would begin to be paid next year. That will be a considerable charge.459
§ Sir R. HORNE
£25,000,000 interest for each half-year at present rates of exchange. Of course that is on the assumption that the postponed interest is not treated as interest due, but is in some way funded with the debt. Whether any operation of that kind can be made or not one cannot yet say. I hope this remark about the debt we owe to America will not be made the occasion of any discussion of inter-allied indebtedness. It does not conduce to the friendliness of feeling between the great Commonwealth of the United States and ourselves to discuss that matter at all at present. Any careful reader of the Press of America will discover how much harm has already been done by the suggestions which have been made. Our attitude towards our debt must be, as it always has been, that what we owe we shall be prepared to pay, that we shall meet our obligations, however difficult the circumstances may be at the time.
I have presented to the House a picture which is not a very cheerful one. On the other hand, looking to the vicissitudes through which we have come, it might have been a very much more gloomy picture. Already things are brighter than they were when I last spoke on the subject in the House. There are certain signs of trade revival in this country. There is already an increasing interest in our large export credit scheme. The applications are immensely more numerous, and it is quite obvious that far more business is going to be done in the immediate future in connection with that scheme. The inquiries with regard to the arrangements for the Government guarantee of loans show that many people are prepared now to take risks which before they were not prepared to take. These things certainly give us ground for hope, and we must all remember that this country has a wonderful resilience. Through all our history the British people have shown their best qualities in times of adversity. Courage, tenacity, and resource are characteristics which have pulled us through all our troubles, and I am sure they will not be wanting now.
§ Sir DONALD MACLEAN
The Chancellor of the Exchequer said his state- 460 ment was a rather gloomy one, and I am not at all surprised that hon. Members, having heard it, have in considerable numbers already left the House. They do not wish the gloom which has already spread to be deepened as far as they are concerned by any remarks of mine. I entirely sympathise with them. But we have a duty to perform in this matter, and that is as far as we can, without party animus or taking petty points, to face what are the facts. That is the real duty this House ought to discharge today. I think it would have been much better if the right hon. Gentleman had faced the facts earlier in this year. I remember that he administered some almost paternal rebukes to me in July for the vehemence with which I attacked the statements of the Government in regard to the financial situation when I said, rather rhetorically, that the Budget lay in ruins at his feet. His reply to me was:Not at all. Once it is looked at with knowledge and apprehension the difficulties do not present themselves at all.Later, he said:Accordingly I do not look on the current year's position in the gloomy way in which some of my hon. Friends are apt to do.Now we have a complete obliteration of any idea of surpluses, and it is the intention of the Government to borrow £60,000,000 in the market to meet the necessary arrangements for the sinking fund. I think the Government must see, if they had the same express advice then that they have now, that it would have been better for the whole country if the position had been faced more frankly a good deal earlier this year. There are Supplementary Estimates for the amount of £117,000,000, considerably more than half the total Budget of pre-War times. My right hon. Friend has spoken with a certain amount of pride of the £20,000,000 that have been saved this year. For every pound saved they have spent £6.
§ Sir R. HORNE
That is not quite fair. The right hon. Gentleman will remember that on the Budget statement it was said that certain contingencies were not provided for—the cost of the coal strike, the cast of railway agreements, and the War settlements. It was said that extra Estimates must come which could not be exactly estimated at that time.
§ Sir D. MACLEAN
I do not see how that affects my point. This contingent expenditure was provided for in the surplus of £84,000,000 on ordinary expenditure, which included the coal stoppage, while the surplus of £93,000,000 brought in the question of war agreement contingencies and the cost of the railway agreement. Therefore the right hon. Gentleman's statement does not affect my point in regard to the Supplementary Estimates. One or two satisfactory statements have been made by the Chancellor. Let us see how far they need to be qualified by the probabilities of the future. He said that it is quite remarkable how the Income Tax payments have been made. It is certainly a matter for comment as to the way in which the demands upon the taxpayers have been met by citizens of this country. It shows that there is an amount of steadiness and confidence in the average citizen on which we have reason to congratulate ourselves. At the same time, let us, in examining our actual position, realise how these payments are made. There is scarcely one hon. Gentleman who does not know, either from his own practical experience or his knowledge of how business is at present being conducted, who would not agree with me when I say that the taxes, so far as Income Tax is concerned, have been very largely financed by the banks. Very large payments have been made, and will continue to be made, contingent upon receiving the returns due to the taxpayers from Excess Profits Duty. How is the Chancellor of the Exchequer and the Treasury going to meet that situation which cannot, unless there is a very marked revival of trade, be carried on indefinitely?
On the question of the Excess Profits Duty, I should have thought that to have estimated £120,000,000 as payments to be made within the third financial year was an exaggeration, and I am sorry to say that circumstances have much more than justified some of the most pessimistic fears expressed in regard to this matter. Experience has shown that the Excess Profits Duty ought to have been taken off at least a year earlier. I expressed my view very strongly, and there was a very large amount of opinion in all parts of the House in regard to it. Immediately the War was over, notwithstanding the tempting ease with which that tax was being paid, the Government ought to have faced 462 the inherent vice of the tax in peace time. By carrying it on from year to year they have landed themselves in for repayments by tens of millions, which they might have avoided. I am glad that it has been taken in hand. It is another lesson in this sound doctrine, that the ease with which taxes are paid is by no means any guarantee of their essential soundness. The temporary conditions were all in favour of getting large amounts, but the Government ought to have taken a much longer view in regard to the basis upon which post-War taxes should have proceeded.
My right hon. Friend expressed satisfaction in regard to the returns from the Excise and Customs Duties. It is remarkable that, with unemployment rampant as it is to an extent, so far as loss of trade is concerned, of which there has been no parallel for the best part of 50 years, the sums paid to the Treasury in respect of duties on tobacco, alcoholic liquors, tea, and sugar are fully up to all expectations. So far as tea and sugar are concerned, one is delighted to know that the people are being fed, at any rate, in so essential a matter as sugar, and with a qualification in regard to tea. It is, however, rather depressing that the people of this country, not what one would call the luxurious classes, must to-day be spending on sheer luxury immense sums of money which ought to be saved for the hard days which are upon us, and which should be saved and spent in things of real necessity. Hundreds of millions of pounds must be spent on alcoholic liquors and other forms of non-necessities.
What is the Chancellor of the Exchequer going to do next year? I hope the position in regard to unemployment will not get worse. I will not say that I am confident, but I have some hope that we have touched the bottom. I heard the view expressed the other day that we were bumping along the bottom, and that sometimes we are off it and sometimes we are on it. Whatever hopes there may be for a revival of trade, there is no real confidence in regard to it, and no Treasury Estimate should be based on the kind of confidence that there is going to be a general revival of trade within the next six months. Let us hope that we are all wrong in regard 463 to that. But that is the way to look at the position. The House has been engaged during the past few days in a financial endeavour on the part of the Government to meet the expense of unemployment, but there is a very serious factor which we have to face in regard to that, and that is, that the unemployment grants have been supplemented hitherto by very large subventions from trade union funds, and the pinch of hard circumstances to that extent has been lessened upon the individual and the family. In the future, assuming, as I must, and as I hope the Government do, that the right view to take is that employment is going to maintain the same figure for the next six months, we must face the fact that the resources of the great trade unions will have disappeared. Many of them have gone already, and others are in process of such swift depletion that the end cannot be very far distant.
The alternative, undoubtedly, is a further heavy charge upon national and local funds. It is a matter which we ought to face, and face now, because this one thing has come clear out of the War, that the conditions of physical suffering to which the people of this country were accustomed, and to which they submitted in other times, when trade was slack and unemployment rife, will never be submitted to again. It is a fact which I am glad to recognise that all classes of society are practically agreed upon. The old idea in regard to what was right and proper for a man out of work has gone. A much higher standard is being insisted upon by public opinion through out the length and breadth of the country. Therefore such cheerfulness as may be derived from the maintenance of the Customs and Excise duties in the present current financial year cannot be relied upon for the first half of the new financial year which starts from the 1st April, 1022.
My right hon. Friend left the other side of the balance-sheet, the expenditure side, largely for us to deal with. From the very early days of this Parliament voices have been raised from this Bench and from other parts of the House pointing out insistently, in season and out of season, that no matter what might be the apparent prosperity of the national finances, and of the individual, it was a 464 wholly illusory position. The real necessity was to try to get down to the facts. The facts were that we were at least £1,000,000,000 poorer in 1918 than in 1914, and no matter what the trade returns might be, and no matter how people might be living in apparent luxury, the facts did not justify national finance being based upon those appearances, and out first duty, having got through the War, was immediately to set national expenditure on a sound rock basis. The charge against this Government always will be that they recognised that sound doctrine too late.
What is the position as revealed in the statement made by the Chancellor of the Exchequer to-day? He hopes that the operations of the Committee which he has set up will result next year in the saving of about £130,000,000. But that Committee could have been set up last year or the year before last, and instead of telling us that his surplus on the ordinary and the extraordinary had disappeared, and that he had to borrow money to meet an obligation to which we are committed, namely, the Sinking Fund (if he can save the £130,000,000 next year he could have saved it last year) he would have been able to present a surplus to the people of this country instead of a deficit. When one looks at the situation it seems extraordinary how the actual state of affairs was not grasped. I remember that on the 16th March, 1920, when as a minor demonstration I moved a reduction in the Vote on Account by £100,000,000, I was received with good-humoured—I will not say contempt, but with a general disregard by the Treasury Bench as to the predictions which I then made, and the demands which we made for necessary economy. The Leader of the House, who was then Chancellor of the Exchequer, said in reply:I invite them to tell me any method, either by the abolition of a service or otherwise, by which I can save what they consider to be an adequate sum. I would be content if they would put their finger on a practicable means of saving £500,000. I would be most grateful."—[OFFICIAL REPORT, 16th March, 1920; col. 2073, Vol. 126.]The present situation is a condemnation of the policy that was pursued. We were asked on the 16th March, 1920, in the full tide of prosperity and expenditure to say were the saving of £500,000 465 could be made and the Chancellor of the Exchequer to-day says that next year we are going to save £130,000,000. All that we are going to do next year, with the saving of £20,000,000 saved this year, could have been done very much more easily last year.
§ Sir D. MACLEAN
We did not. We voted for the abolition of the Ministry of Munitions and the Ministry of Food; we voted against increased expenditure by the Board of Agriculture, and we voted against the policy of the Government in Russia and in Mesopotamia. Through the whole gamut of the Government policy we voted against their expenditure. They could have made this saving two years ago. It is more difficult now for the reason laid down by Mr. Gladstone and many other economists. Wasteful unnecessary national expenditure creates its own burdens as it goes along. It develops interests which are very difficult to shift, and claims which are made by those who take service under the State, and its stealthy immoral influence is extremely difficult to get rid of. The difficulty I am sure is face to face with my right hon. Friend and those who are working with him, anxious to cut down expenditure. These things could have been done with moderate facility in the early days. Whatever may come of this Committee—and I gladly welcome any reduction of national expenditure, however achieved—yet the setting up of such a body outside this House is not in consonance with the traditions of the House itself. Whatever their recommendations, what hope have we, with our experience of the past, that they will be carried out?
I hope that they will be. The whole finances of the country call for economy not only here but on the part of every citizen in the land. National economy is not a matter only for Governments. Governments ought to set the example, but, in view of the very serious statement which the Chancellor of the Exchequer has made to-day, I hope that all classes of citizens will realise its significance in their own personal expenditure. The time is ripe for all unnecessary luxury to be cut down and for national finances to be conserved, and such a state of affairs which we read of in the papers, with the huge sums spent 466 on motor cars and matters of luxurious personal comfort and accommodation, is not the way in which the financial state of the country can be improved. I do not regard it with any satisfaction and hope. Satisfaction and hope will come only from a whole-hearted co-operation of all classes of society to meet an urgent vital national need.
§ Mrs. WINTRINGHAM
From my experience of this House I know that I shall not appeal in vain for an indulgent hearing in addressing this Assembly for the first time. I am sure that hon. Members will be tolerant with me. I feel rather like a new girl at school, but perhaps I may recall what an elector in my own constituency said when asked for which of the three candidates he was going to vote. He said:I am going to vote for the woman, because she is the least harmful.My reason for intervening at this time, when the House is very pressed to get on with its business, is that the question of economy appeals very much to women. I feel that, when there are so many Scotsmen around me, it is perhaps impertinent for me to mention it. Still I think that we all agree that economy is necessary, and that true economy is the most necessary of all. True economy is not a question of how little one can spend, but of how wisely one can spend it. Just as the woman is the housekeeper in the home, I look upon Parliament as the housekeeper of the nation. Expenditure always depends upon policy. If the wife of the man earning £3 a week spends £2 on some extravagant ornament, or something of that kind, she has only £1 left with which to buy the week's clothing and necessaries. The same thing, I think, applies to a nation. Thus the spending of money links up politics and the home. Women, when they have to pay heavy taxes, either direct or indirect, on tea, sugar or other household commodities, naturally begin to look for the cause. At the same time they do not like to see the reforms on which they are keen, such as health, housing or education, curtailed. If they wish to curtail the expenditure on the home, they do not immediately begin by saying they are not going to have a doctor. They do not think they will have inferior food, or limit their clothing, and certainly they do not think, if they have a leaky roof, that they will let it go on leaking.
467 All those things women would consider to be not wise economy. They feel that the best investment for the nation at the present time is good education and good health. The saying of Ruskin,There is no wealth but life,perhaps fits the point. During the War everyone was asked to put forth as much energy and effort as he could in the matter of economy. The housewives were asked to economise in every possible way they could, and I think they did. I have no doubt that a great many hon. Members here suffered in some of the dishes that were put in front of them. Still, women did their best, not only in the home, but also, for the purposes of housekeeping; they tried to produce out of their allotments and ground everything that they possibly could in order to help. Economy associations and societies were formed all over the country, particularly in the country districts, and their object was largely to help the women to help themselves, and to practice economy.
This did not end with the War. Women's interest was aroused in the subject, and they are now asking, "Why these heavy taxes?" They gained confidence, and realised their own capabilities. And now, when they have a voice in the spending of the nation's money, they want to know how and why all the expenditure, which causes these taxes, has been incurred. The feeling of women, I am sure, is a constructive, not a destructive, feeling. At present a big step forward is being taken by the calling of the Washington Conference. No greater measure of economy could be effected than the success of that Conference. The result will be not only an economy in money to our own nation, but an economy also to other nations. Any change of policy which will permit a reduction of armaments is a step in the right direction. I am voicing, I am sure, the feelings of very many women in this country when I say that we desire the success and the advancement of the League of Nations through the Washington Conference.
§ Sir PARK GOFF
In the first place, I desire to congratulate the hon. Member for Louth, who has just spoken, upon the excellence of the speech to which we have all listened with the greatest interest. With her width of practical knowledge and wealth of experience we 468 all hope her interventions in Debate will be frequent in the future. We are very proud to welcome the hon. Member as the first British-born lady Member to enter the Mother of Parliaments. My only reason for venturing to intervene in the Debate is that, as far as unemployment is concerned, the constituency which I have the honour to represent stands in a unique and exceptional position, and as such I think it deserves special consideration. Cleveland represents the largest ironstone mining industry in this country. We have no coal mines there at all. We have 19 ironstone mines, four large and well-known steel works, and large shipyards. The ironstone miners in the district have been out of work since 12th February of this year, through no fault of their own except that, rightly or wrongly, they were attached to the Coal Miners' Federation. As far as my information goes, they have never once been out on strike on their own account. The ironstone miners did everything they could to assist the mine-owners, and they accepted without any demur all the reductions asked for, amounting to over 8s. a day. The shipbuilding and engineering industry 'accepted reductions of 6s. per week in two cuts, and also the withdrawal of 12½ per cent. and 7½ per cent. War bonuses, making a total of 16s. per week. These were unselfish and patriotic and practical steps towards reducing the high cost of production.
During the coal strike—[HON. MEMBERS: "Coal stoppage" and "Lockouts."] I beg hon. Members' pardon. During that striking cessation of coal production which resulted in so many lock-outs, I had the privilege, on six separate occasions, of visiting the whole of this area, and again only a few weeks ago, during the shipbuilding and engineering crisis. There were no demonstrations of any sort or kind, because our workers do not believe in demonstrations. During all ray visits there I was profoundly impressed with the dignified calm, the patience, and the pluck of every class of worker. I never heard any grumbling of any sort. Their one unanimous desire was to get the works and industries restarted as soon as possible. The restarting of the Cleveland ironstone mines would have a vary far-reaching effect upon all the industries in the North of England and also upon Scotland. At present in that district we have 469 over 10,000 miners and quarrymen out of work, and over 7,500 in the steelyards and in the shipyards. The guardians of one Poor Law union, that of Guisborough, have paid out £25,000 already, and are relieving now at the rate of £2,000 a week. In some parts it is 3s. 6d. per capita of unemployment on the rates. Out of the 19 ironstone mines, there are only three in work at the present time, and they are working only three or four days a week, and the men ballot for the chance of having that work. Taking all these things into consideration and the appalling distress and poverty throughout the area, I consider that the twopenny levy is an iniquitous and inhuman imposition.
As to the steel works and shipyards, which are entirely dependent upon the ironstone mines, in the month of September last, which I am told is a record, the imports of pig iron amounted to 130,829 tons, at a cost of £688,601. Pig iron at the most favourable cost is £5 16s. a ton, while Belgium and France at present are supplying it c.i.f. on the Tees at £4 11s. a ton. Scotland was formerly the best outside market for Cleveland pig iron, and the cost now is £6 16s., while the Continent is delivering in Scotland at £5 a ton. Many Scottish customers have said that they are perfectly willing to pay 10s. a ton above the Continental price for Cleveland pig iron, but even with that concession Cleveland costs must be considerably reduced. If pig iron costs can be brought down, steel costs will automatically be reduced to a competitive level. It is, therefore, necessary that we should concentrate on bringing pig iron costs down. What are the causes of our difficulties? The causes at present are undoubtedly the present price of coke and coal and the very excessive charges for railway rates. I am convinced that the charges for railway rates, for dock dues and transport, are to-day keeping up the price of coal and the cost of production, and consequently causing unemployment. I might also add the means of communication, by which I mean the prices for postage, telephones and telegraph. I think we are all agreed that until the cost of coal and freight comes down to a figure nearer Belgium and France and the United States, and until the burden of taxation is very considerably reduced, British trade must remain under a very heavy handicap. No man can give of his 470 best if he is being continually harassed by the tax collector.
I should welcome some scheme of differential rating which would cover the fat and the lean periods of wages. The question is, what are the remedies? In the case of Cleveland the men are entirely dependent upon the industries there for employment, as there are no other industries, apart from the staple industries of the district. Another point is that if the coal mines were doing full work tomorrow it would take the ironstone mine another three months to be in full employment, and after their full employment it would take the steel works another three months for them to be in full employment. It may be that the shorter working week may have resulted in increasing costs and prices, but, on the other hand, it has to be remembered that cutting down wages decreases the purchasing power of the larger portion of the community, and this weakens home industry, and, indeed, some say the productive power of the workmen themselves. It has been estimated that last year the increase in the cost of British products was, with the shortened week, £200,000,000. In any normal year to reduce that £200,000,000 without affecting the weekly earnings would be the best stimulus for our industries. I am aware that in some industries wages have become so artificially inflated that employers have come to the end of their resources. Just lately, I notice, many Chambers of Commerce have stated that the restriction of hours is perhaps the most important interference with economic production.
Our workers in Cleveland are only too ready and willing to help those who want to help them. They do not want unproductive or inefficient employment while their mines and steelworks and shipyards are lying idle at their doors. The workers do not want that and they do not want subsidies because they know full well that they are only a temporary measure. What they do want is not so much the relieving of unemployment as the provision of employment. In my humble judgment, from what I know—I speak only of my own district—the workers should always be taken into the full confidence of the employers and should be allowed some share in the management and control of the industry, 471 thus making a real partnership entirely unfettered by any interference from Government Departments. I believe that the Whitley Councils could accomplish a great deal in this respect. The assurance of a living wage, whether employment is good or bad, on the lines of the blast furnace men's agreement, is necessary if we are to have a contented and economically productive factory population.
The agreement to which I refer is an agreement made in October, 1919, between the blast furnace and coke oven-men and the Cleveland Ironmasters' Association. It is called, "Payment by Results and Bonus Scheme," and a summary of it in a few words is as follows: The men were to receive weekly advances varying from 10s. to 15s. a week—part obtainable by way of revised or increased base rates, and part through a bonus system of payment by results, increasing by steps. That has worked most satisfactorily up to now. As a logical proposition the science of economics is largely a matter of abstract thought, and as such is liable to variable deductions. But there are fundamental economic laws which are analogous to the laws of nature. If they are interfered with disturbances detrimental to the community at large arise. So, in the case here, such interference arises from Government legislation and sometimes from the act of financial combinations. For instance, consider the fundamental fiscal fact that one per cent. increase in the bank rate will throw 300,000 people out of employment. Here in this restricted area we have four different industries running short time or not running at all.
I suggest that the representatives of the mines and the blast furnace men, together with the mineowners and the ironmasters, should meet in conference with my right hon. Friend, the Minister of Labour, and, armed with his suggestions and advice, should proceed to a conference with the coalowners of the district, and after they have had that conference, they should then, together, proceed to have a conference with the North Eastern Railway Company. Our miners are broadminded, sensible men. They have always been open to reason, and all they ask for is reasonable treatment. On all those grounds which I have most inadequately placed before the House, I most earnestly 472 and most seriously appeal to the Minister of Labour to use all his influence and energy in trying to arrive at some arrangement or agreement, whereby these great national staple industries can be set upon their feet again.
§ Mr. W. GRAHAM
It so happens I am the first Labour Member to address the House since the hon. Member for Louth (Mrs. Wintringham) intervened, and I desire to associate myself with the tribute which was paid to her speech by my hon. Friend who spoke last, and to say that on this side of the House, irrespective of any party feeling, we cordially welcome her contribution to the Debate. The speech of the Chancellor of the Exchequer has probably surprised some of us, at least to this extent, that we were prepared for a much gloomier pronouncement. Many Members in all parts of the House were prepared to hear the Chancellor of the Exchequer say that in all probability either before April next, or when the Budget came to be presented, very drastic steps would be required. No doubt the steps which so far have been indicated are exceptional. They make it perfectly plain to us that we shall require to consider with very great care the financial position of this country up to the time of the next Budget, and do everything in our power in industry and commerce to improve the situation. The Chancellor of the Exchequer indicated that he foresaw a substantial diminution of revenue under three heads, the first being Stamp Duty, the second being the very great drop in the returns to be obtained from the sale of assets, and the third being the undoubtedly great drop in the expected yield of the Excess Profits Duty. Taking this matter of revenue, and considering for the moment more particularly Income Tax and Excess Profits Duty, I wish to make one or two points as clearly and simply as I can. It will be agreed that under present conditions, while we deplore the very high taxation which prevails, it is our duty to see that the taxpayers fulfil their obligations strictly under the law as it stands. We must see that we get the maximum revenue. To that end, some of us in previous Debates repeatedly asked the Chancellor of the Exchequer whether he was prepared to do anything in the direction of trying to put into operation the full recommendations of the Royal Commission on Income 473 Tax, to see that evasion of Income Tax was reduced to the lowest possible limit.
I have never exaggerated the amount of evasion which takes place year by year in this country, but I have reminded the House that perfectly impartial and, indeed, official witnesses before the Royal Commission, placed the annual evasion at anything between £5,000,000 and £10,000,000, and they inclined to the view that that was, on the whole, an underestimate of the position. If it were only £5,000,000 or £10,000,000 at the outside—and I personally believe it is much more—it would still be the duty of the State to try to collect that money, not merely from the point of view of ensuring that we get everything to which we are entitled, but as performing an act of elementary justice to the other taxpayers who make bonâ fide returns, and pay bonâ fide imposts. No steps of that nature, practically speaking, have been taken. It is notorious that the officials of the Inland Revenue Department at the present time are working under the severest pressure, and cannot possibly, with the best will in the world, investigate all the returns which are sent in, or do more than touch a corner of the great volume of work which falls annually to their Department. I respectfully suggest that even at this date something should be done to find a remedy. The Chancellor of the Exchequer—and this is really bearing on the same argument—referred to the great drop in Excess Profits Duty, or in the estimated yield therefrom. Many of us on this side of the House have made it plain that we never believed in the Excess Profits Duty as a fiscal device. We had other methods of appropriating for the country the great gains of the War period, but this method was adopted by the Government, and again we are compelled to ask whether strict justice is being done. I think it is not incorrect to say that the staff of the Inland Revenue Department is so inadequate that, in a very large number of cases, the repayments are being made with little or no investigation, and that the Department has practically to accept in many cases the figures which individual firms and others supply. That statement I hope will not be regarded as an exaggeration. I think it is just possible that repayments are being made at the present time to such an amount as to 474 involve injustice to other taxpayers, and give industrial and other concerns concessions to which they are not strictly entitled. I should like to hear some explanation upon that point—which is not without official foundation—when the Financial Secretary to the Treasury comes to reply.
In the present condition of our national finances, however, these are comparatively minor points. By far the most important duty lying to our hands is the duty of trying to restore the trade and commerce of Europe and the world. We depend upon that to see our national finances restored. This Bill includes the extra provision which is being made for the wider scheme of Export Credits. We on these benches, I think without exception, welcome the extension of that proposal. We recognised that the old scheme was so limited in scope and so hampered by conditions that the great majority of traders could never work it. The scheme is now extended, but I put it to the House that it does not very much matter what we do by way of extension of Export Credits; it does not matter what other steps we take in this country to see that greater facilities are given for the export of goods, unless in Europe, at the present time, we, as a country, are prepared, along with other countries, to face the monetary situation. I trust it is not irrelevant in this Debate, but hon. Members in all parts of the House have probably had their attention directed to the very important proposal which has been put forward by Professor Ernest Cassel, of Sweden, and other economists. We are compelled to remember in this connection that when we discussed the terms of the Cunliffe Committee's Report in the House, a good deal of attention was devoted to one of their recommendations, namely, that at the earliest possible moment the internal currency of each country should be put upon a sound basis. It seems to many of us that otherwise there can be no real recovery of the foreign exchanges. Broadly speaking, the memorandum which has been presented by Professor Cassel is an amplification of that point, and he argues with great force, and indeed with great courage, that what we require in Europe at the present time is some kind of conference of currency or monetary experts, who can deal thoroughly with this problem and make 475 definite recommendations to the European countries.
The importance of that may be illustrated by the present position of German trade and industry and the probable effects of a quite possible German collapse upon our recovery in Great Britain. They have had the advantage, in export, of their depreciated exchange, and if one pays attention to the reports of German economic conditions at the present time, one must be impressed by the boom in speculation which is now in progress. Internal prices in Germany have bounded up, and increased wages are regarded as inevitable at a very early date in many departments of German industry and commerce. That should be a great encouragement to us in our financial position in this country, having regard to the continual emphasis which we are laying upon a low cost of production as compared with other countries. But it is a very great danger from another point of view, namely, from the point of view of a possible collapse in Germany which will hit is in this country, in all likelihood, just at the time when the recovery of our trade and commerce is beginning to be a reality. I hope I have not conjured up any fantastic picture. Everything I have said has been said with very much greater weight and certainly with greater clarity in economic and other journals which are considering the European position, and which are sincerely anxious to relate the steps which we take, financially, in Great Britain, to a sound financial program for Europe itself. Would it be irrelevant to ask the Government what is to be their attitude towards a proposal of that kind? Do they seriously believe that, short of some definite step on the lines which Professor Cassel and others have suggested, there is any real hope for the success of the Export Credits scheme or any real hope that it will contribute materially to the solution of the problem of unemployment in Great Britain?
There is only one other point which I wish to put, very briefly indeed. My hon. Friend who has just sat down referred to the importance of a low cost of production, to the influence of taxation upon that, and to its bearing upon industrial efficiency. If I had any criticism to offer of a good deal of the argument which is led, both publicly and privately, 476 against the demands and against the position of labour, it would be this, that we are just in danger of concentrating too much upon any possible value or return from a mere reduction of wages. As a matter of fact, over a very large part of British industy wages have fallen substantially since the present year opened. The latest return indicated that about £4,000,000 or £5,000,000 weekly had been taken from the aggregate wages of about 6,500,000 British workers, and I do not suppose for a moment that it would be disputed that in certain of the important industries of Great Britain wages are either now, or will be at a comparatively early date, at a level which will astonish most people when they have regard to even a poor pre-War standard. It would be irrelevant to pause to consider the causes which have led to that situation, but I am going to say this, that it seems to me to be impossible to get the good will and the support of the great body of workers in Great Britain for sound financial measures unless we can find very much better methods of dealing with the wages problem.
My complaint against the Government is this, that the policy of the Ministry of Labour in this respect has been singularly weak. Perhaps it does not fall to a Government to give us any very definite leadership on such issues, but it seems incredible in many ways that, while in America and in other countries, even in the midst of crisis, they have been discussing the possibility of making dear labour cheap, or, well remunerated labour cheap, by the introduction of scientific devices, by improved industrial methods, and all the rest of it, we have heard comparatively little of that in Great Britain, and that is going to be the real safeguard of a sound remuneration in this country in the future—the stricter relation of output under schemes of that kind to remuneration, and above all, the adoption of many of the devices which are now being investigated by industrial fatigue research boards and other organisations whose funds day by day the Treasury is either taking away or is threatening at some future date to discontinue. These appear to me to be the real safeguards as far as industry is concerned. I have always tried to make it clear that in those safeguards the workers themselves have very grave obligations 477 and responsibilities, but I am perfectly satisfied that, with the change of outlook which is coming over millions of people, in view of the great reduction in wages, and the new attention which is being given to a proper method of reducing the cost of production, we have an opportunity in this country not merely to safeguard remuneration, but to take real steps towards maintaining our place in the markets of the world and in building up also better financial conditions than the Chancellor of the Exchequer has been able to outline to the House tonight.
§ Mr. WISE
The essence of the unemployment problem is to endeavour to get as strong a financial position as possible. The problems before us are indeed great. In fact, I think practically every country in the world is in some difficulty with regard to finance in one way or another. In September, 1920, a conference took place at Brussels, at which 35 nations assembled, to discuss the financial position. The only suggestion that was forthcoming was the Ter Meulen credit scheme, which up till now is not working, and appears to me to be very difficult to organise throughout the world. After a great war you are bound to have a huge inflation, and when you realise that we were spending up to £7,000,000 a day, that inflation is greater than we appreciate That all affects the unemployment in the country. We are indeed a peculiar country, for we cannot feed ourselves, and we are dependent, except for coal, on the raw material coming to this country, which we can only pay for by manufacturing goods and exporting those goods. In pre-War days the total export of manufactured goods throughout the world was £1,500,000,000, of which we and Germany exported manufactured goods to the extent of £700,000,000. If you look at the figures of our imports and exports on a tonnage basis, you will find that the imports into this country in 1913 were 56,000,000 tons, and in 1920 they were only 45,000,000 tons, showing a decrease in imports of 11,000,000 tons, but our exports were even worse. In 1913 we exported 91,000,000 tons and in 1920 only 35,000,000 tons. There is the basis to show where the unemployment exists, and until we increase our exports by the trade of the country we cannot possibly get this ques- 478 tion of unemployment satisfactorily settled. The Chancellor of the Exchequer referred to our external debt, and I am very pleased to be able to congratulate him on having paid off £80,000,000 of our external debt. That debt is a far greater danger to us than our internal debt; this payment is all the more important, especially as he stated that in this coming year, 1922, we will have to pay £50,000,000 for the interest on our debt to the United States of America. There is one point we must consider, and that is that for seven months our expenditure has been greater than our revenue by £55,000,000. That is a large amount, but I quite agree with the right hon. Gentleman the Chancellor of the Exchequer that the fat months are to come, and we sincerely hope that when the Budget is presented the expenditure will be met by the revenue.
One of the essential features of unemployment conditions is, as the hon. Member for Central Edinburgh (Mr. W. Graham) has said, the European situation, and especially with regard to Germany. One weakness in that country is the political situation. You have no stability there. The Ministers who are in command only have command for a few months, possibly, and they have not a chance of endeavouring to reconstruct their country. I do not think I need refer to the exchange position, as probably all hon. Members know the position of the mark, but with regard to the Floating Debt—and I may say that this all affects the unemployment situation—the amount at the time of the Armistice was 48 milliard marks; to-day it is 250 milliard marks. From 1st April to 10th October the German Reich spent over 68 milliard marks, against a revenue of 21 milliard marks, or an increase of 46 milliard marks, and if you take the mark on the gold basis the amount comes to £2,300,000,000. That shows in a few figures the position of that country and the impossibility of being able to get from that country all we should desire in the shape of reparation. One thing, I think, should be considered, and that is that the Treaty of Versailles should be gone into again. It is not a business problem—£6,600,000,000 indemnity is a vast amount. The only possible way in which that could be paid is by the whole of the industries of the world, except in Germany, being idle, and if there is one thing we do not want 479 it is to be idle in this country. Germany has been buying a considerable amount of raw material recently, and perhaps I might just refer to the cotton that that country has bought. In 1919 Great Britain bought 315,000 bales of cotton, and Germany bought 411,000 bales of cotton; in 1920 Great Britain bought 154,000 bales of cotton, and Germany 245,000 bales; from 1st August to 20th October Great Britain bought 107,000 bales, and Germany 681,000 bales of cotton. Think of the difference! Is she buying that with manufactured paper marks? What would be the position if those marks were cancelled? It would mean that she would have got this cotton for nothing. It is a point that wants most carefully considering, and we need to be most careful in handling these paper marks.
Take the trade of Germany. It is all affecting our unemployment, and that is why I bring it up now. In May, June, and July of this year the imports were 5,282,000 tons and the exports 4,206,000 tons, showing that Germany was not meeting her way except by the issue of this gigantic paper currency. The bubble has got very big, and we have got to be most careful that it does not burst, for if it does it will affect this country as much as any country. With regard to Poland, again that is affecting our unemployment. We have had a great trade with Poland. They have got there a new Finance Minister, and I should like to take these few remarks from a speech by him.
The hon. Member will have to direct his arguments to show that the British Government either omitted to do something or can do something to meet the evils arising.
§ 6.0 P.M.
§ Mr. WISE
Perhaps the best way I can argue that point is by leaving Poland alone, and mentioning a suggestion that we should care-fully consider the stablisation of the exchange, which, I think, would help us in unemployment here, and the only method one could consider in this most difficult subject is the possibility of a new unit. Gold was the old standard. Gold only varied a farthing or a half-penny in pre-War days. To-day that stability has gone, and, until you get some unit which will give you the stability, it 480 affects the trade of this country and, in fact, the trade of the world. There is also the possibility of considering the cancellation of debts. The cancellation of certain debts which countries owe to us might be gone into with the idea of getting, perhaps, a quid pro quo. Supposing it were France or Italy, you might consider the cancellation of the debts, subject to British goods getting a preference into those two countries. There is plenty of money for certain schemes. There is plenty of money for short-dated schemes, but the difficulty which countries are having is in placing their short-dated schemes on to a permanent loan. I consider that a matter of this sort should be gone into on broad lines, and I suggest these few considerations to the Chancellor of the Exchequer.
§ Mr. HOLMES
Following the hon. Member for Cleveland (Sir P. Goff), on behalf of the party opposite, and the hon. Member for Central Edinburgh (Mr. W. Graham), on behalf of the Labour party, I should like, if I may, on behalf of the party which was particularly interested in the return at the recent by-election of the hon. Member for Louth (Mrs. Wintringham) to congratulate her very warmly upon the substance, humour and manner of delivery of her first speech in this House. Bitter experience is slowly hut surely bringing home to the Government and people alike certain economic facts. The first is that we have lost an incredible amount of wealth as the result of the War, and that the only way in which we can maintain a satisfactory standard of life is by conserving what remains with the utmost care, and by utilisinfi it with the utmost wisdom. If it had been possible for anyone to have gone to sleep on the 1st August, 1914, and to have remained dormant and ignorant of the world happenings until the end of 1918, and had then, on awakening, studied the measures and actions of the Government, and had seen the way in which Government extravagance had been followed by individual extravagance, he would have jumped to the inevitable conclusion that by some dispensation of Providence the industries of this country had been flourishing, and were flourishing, in an unexampled manner, and could bear any and every burden of taxation which might be put upon them. The unemployment from which we are suffering at the present time is largely due to national 481 and individual extravagance since the end of 1918. The burden of taxation acts as a deterrent to the development of trade, and the extent to which Government expenditure can be reduced will pro tanto assist in the revival of industry.
It took a long time before the Government were able to see, or, at any rate, were prepared to admit, that the effects of heavy taxation were so disastrous, but the Chancellor of the Exchequer himself a few days ago emphasised this matter with no uncertain voice. He seemed to have joined the ranks of the economists with all the enthusiasm of a convert, and now that he has acquired the right state of mind, one would venture to suggest to him that, while ruthless economy all round is a necessity, there are in one or two places exceptions in which niggardliness would be worse than extravagance. The problem facing us divides itself into two parts. The first is to provide temporary expedients for those who are in want and distress. The Chancellor of the Exchequer is right in that particular direction in keeping an iron hand upon expenditure, because any long continuance of it, and any undue extravagance in administering it, will only add to the number of those seeking for that assistance, until at last the funds which provide the relief dry up, and there will he no help for anyone. The second part of the problem is concerned with a permanent cure, and it is in this connection I want to suggest that too tight a hand upon the national purse-strings may do more harm than good.
Let us remember, as the hon. Member for Ilford (Mr. Wise) has just pointed out, the extent to which we depend upon foreign trade, and consequently upon the system of credit upon which the even flow of international trade depends. That system of credit was chattered by the War, and it will be many years before it can be built up again in its entirety. To build it up again is an essential feature in finding a permanent cure for our present evils, and it is undoubtedly our duty, as well as an act of the highest wisdom, to back our national trade with national credit. There are many people abroad to-day who are prepared to buy our goods, and if we reduce the cost of production—the necessity of which I dwelt on a fortnight ago, and which has certainly been dwelt on by two speakers this afternoon—there will be still more willing purchasers for our goods; but the 482 foreign customer cannot pay for the goods forthwith, and a bill of exchange drawn upon him cannot be discounted. The British manufacturer cannot carry on unless he gets immediate cash for the goods he sells. The Government have already endeavoured to meet this difficulty by guaranteeing a sum of £25,000,000, and I would express the hope that, if this Measure appears to be working well, the amount of the guarantee should from time to time be increased. Such guarantees are remunerative. They may not, in the long run, mean any loss to the Exchequer, and by enabling manufacturers to get going, and to keep going, they will give employment to thousands of men, who otherwise would become a burden to the Exchequer in some other way. During the War, orders came to everyone without seeking. Money making was easy. The imposition of Excess Profits Duty caused extravagant administration; and there was no incentive for energy or enterprise.
§ Mr. HOLMES
I do not want in any way to go beyond the scope, but the Bill includes a vote for unemployment. What I have been endeavouring to show up to the moment was that if the Government would help credit they would reduce their Votes in another direction, and the point I am now endeavouring to make is on similar lines.
I do not think the vote for export credits would come under the Consolidated Fund Bill. A Bill was passed for that purpose.
§ Sir G. COLLINS
May I remind you, Sir, that in the Estimate passed yesterday there was a sum of £5,500,000 for the relief of unemployment, which sum was to be spent by various Government Departments, including the money required for the Trade Facilities Bill.
I do not think that it had reference to the exports. Anything with which the hon. Gentleman can connect his argument with the Unemployment Grant will be perfectly in order.
§ Mr. HOLMES
I am going to try to show that if this Government will take certain measures, they will reduce considerably the amount they will have to 483 pay for unemployment. I will just say that the hard experience of the last few months is beginning to tell, and that we are all realising that hard work and efficiency are the essentials of successful business, and we are once more going to assume the rôle of venturous enterprise. Many a man is willing to mortgage everything he possesses so long as he can obtain money to carry it on. Many new businesses would be started, many old businesses would be extended, thousands of men would obtain employment, if only the capital required could be obtained. The creation of credit, which would serve the same purpose, is of the utmost importance. Admittedly it will cause inflation, but one of the ills from which we are suffering to-day is too rapid deflation. A doctor does not attempt to reduce the temperature of a patient from 105 to normal within a few hours, and it is unhealthy after six years of inflation to have complete deflation in almost as many months. If a system of Government guarantee can be worked wisely and well, deflation would take place gradually and satisfactorily. The man who is enabled to resume his business with his foreign customers by Government guarantee must understand that these guarantees will be gradually withdrawn. His only course will be to set aside a portion of his profits every year, and re-invest them in his business, and so be able to finance himself; and a point I want to make is that his ability to do that will depend, to a certain extent, upon the call made by the Exchequer upon him so far as taxation is concerned. That is one important reason for the cutting out of unessential, unremunerative Government expenditure.
My hon. Friend the Member for Ilford has just referred to the question of the exchanges. He appears to think that we cannot expect to recover our trade and get our people back to work until they have been dealt with. I quite agree that the exchanges in their operation at present have hit many of the industries in this country very hard, but I am in full accordance with the Chancellor of the Exchequer when he says that they are a symptom and not a cause. Any attempt to deal with them in an artificial manner will in the long run be harmful to the resumption of the regular course of international trade, and will be, therefore, ill-advised so far as this country is 484 concerned. I ventured a few moments ago to refer to the effect of the War upon initiative in business. Whatever you may do in the way of Government credits and the reduction of taxation, or by Government economy, and even if you could deal with the question of exchanges, it would all be for nothing unless the cost of production in almost every industry is brought down. I want to conclude upon this: The only way we can increase the employment of labour is to reduce labour costs on every article we produce.
§ Mr. BIGLAND
The subject-matter of our Debate this evening is, as I understand it, to make suggestions to the Financial Secretary to the Treasury and to criticise Government action—what the Government have done and what they have not done in regard to our finances. The world at present almost universally is suffering because the ability and power of the parties who have traded with us in the past is so small that they cannot take the volume of goods they used to take, hence unemployment is almost universal. We have to consider what has been suggested—whether the Chancellors of the European nations might not meet and perhaps evolve some plan to help the matter. The hon. Member for Ilford said that after weeks and weeks of discussion at the Brussels Conference no solution was found except a further desire to revert to the gold standard. It seems to me that that is impossible. The gold of the world is distributed away from the countries which had it prior to the War into the coffers of the United States. The latest figure I have shows that in the world to-day, in gold currencies, there are £2,000,000,000. Of that £900,000,000 is lying in America, and the other £1,100,000,000 is scattered about in London, Paris, the Argentine, and different countries all over the world. There is the same amount of gold in the world to-day as there was in the year before the War, but before the War that gold represented what we called liquid credits. To day those liquid credits have been turned into what the bankers call "frozen credits." The consequence is that that money is not liquid and we look round the world to see how the life-blood of the world's trade can be brought back into circulation.
How are we to get this life-blood to circulate? Where is it to come from? All 485 kinds of remedies have been suggested in regard to stabilising the exchanges and the betterment of fiscal and financial conditions. It seems to me that what really happened during the War was this: That we actually used up the life-blood of the commerce of the world to such an extent as to suggest that in the ordinary course of trade we have got to go through, shall I say, 20 or 30 years of gradual and hard saving to replace in the commerce and finances of the world the money which has blown up during the War. Is it possible as business men for us to suggest a remedy as to how this money is to bring back into the finances some new life-blood which shall re-energise the trade and commerce of the earth? I think there is a solution, and I put it to the Financial Secretary to the Treasury. At this present moment when a Conference is sitting in Washington of the representatives of many of the great world Powers, our principal representative there, the senior Member for the City of London (Mr. Balfour) might be asked if he could not rightly approach the other great world finance Powers and ask them to consider if it would not be possible to put back into circulation, for the benefit of the world's commerce and trade, some of the life-blood that has gone by re-establishing silver as a unit, as we did in 1873.
§ Mr. BIGLAND
My hon. Friend asks at what price. That is for a commission of international experts to fix, but if the hon. Member asks me at what price, I should say at the same price as the British Government paid America for the vast amount of silver used in the War and which we sent to India to save our credit and finances there. We paid to America one dollar per ounce for a fabulous amount of silver, and that figure is somewhere about, I should say, 20 ounces of silver to one ounce of gold. The old stabilised position was 15½ ounces of silver to one ounce of gold. For 60 years that maintained an equality of exchange between China and London. If you are going to stabilise the exchanges, for goodness' sake begin with hard metal and stabilise something that will remain stable; and if we say, or if the financiers of the world say, "We will revert to the same basis," then I think 20 to I would be reasonable—20 ounces of silver should be equal to one 486 ounce of gold all the world over. You have accumulations of millions of ounces of silver lying in China and India. This would immediately flow out to buy the goods and employ people of this country and of America and in all the other countries. There is a vast hoard that is used to-day as ornaments. If the world said, "This is money and from to-day forth shall have a fixed basis," it would immediately spring into existence and the trade of the whole world would be galvanised into fresh life. That is my opinion, and therefore I say that this is a particularly bright moment for our Government to consider the advisability of asking the senior Member for the City, who is a great international expert, to ask the other Powers to consider the possibility of using silver as money—to bring it up after the other matters of the Conference have been concluded.
I would also suggest, in all seriousness, as a man with wide knowledge of the commerce of our Empire, that if that proposition to America and France is not accepted as to whether we dare not in relation to our own Empire say that as the gold standard has ceased to exist in our pockets and in our currencies that we will revert to a silver unit in the world's commerce with the British Empire and that we will fix a basis where silver will be accepted for the payment of the products of the British Empire on a fixed basis of its value in gold. That would instantly give us the whole of the trade of China and India. You would also have the great Continent of Africa. There are portions of that continent I know where it has been decided by law that goods must be paid for in silver. At these factories the man brings in his products at one end of the building and receives silver payment; he goes through the building and spends his silver on products that are on the counter at the further end, and the silver is again returned to the counter at the first end. That is a barbaric state of affairs in Africa to-day, but as civilisation progresses, as it will rapidly, there will be a vast field in Africa for a real silver basis, as there has been since the days of Abraham, and when the money is put away and saved direct barter is not a necessity. That you should receive something and barter it another time when the necessity arises, that you can take something for the product of your labour and keep it until you need it—that 487 is, as I understand it, the value and use of money. The man sells the product of his labour and keeps the hard metal by him until the hour comes when he wants something and then he puts the money into circulation.
§ Mr. BIGLAND
I am dealing with the international currencies by which the nations of the world can purchase commodities, and I say this, positively, if silver is reinstated, we will save the sufferings of millons of people for 10 or 15 years; we shall get back, by sound finance, to the position we were in in 1914. By the effect of hard saving for 20 years we can bridge that gap and the sufferings which must of necessity be gone through in this and other countries in this great world-wide matter. I see almost as in a vision, that if this is done the wages of the world will be stabilised and kept up; the worker will get more money. Hon. Members will say that is inflation. It is inflation, but deflation, as the last speaker said, has been carried to an extent almost criminal. Where deflation was attempted, deflation of trade has forced enterprise to such a pitch that unemployment in a vast and cruel way is upon us to-day. These things must be attended to if the trade and commerce of the world is to be revised and this awful suffering owing to unemployment has to be lifted. We are all of the same mind that we must do all we can to lift it. Every effort of the Government is needed. I congratulate the Government heartily on the Bills that have been passed through the House during the past six weeks—the very fact that they said: "We must have £25,000,000 more credit," is a proof that there was not enough money—and we want more money to circulate in the world. We need the 700,000,000 of people who use silver to-day, 400,000,000 in China and 300,000,000 in India, buyers who have the means of purchasing and whom we have blotted entirely out of existence since 1873. The House probably does not remember how easy it was for a man in Lancashire to make a contract for machinery, to be fulfilled in China over five years. He did not think about the price of silver or the 488 exchanges. The ratio was fixed by the Governments of the world.
It was established that 15 ounces of silver was worth one ounce of gold, and it would remain that, and it did remain that for 60 years. Why cannot we start that again? My hon. Friend the Member for Farnham (Mr. A. M. Samuel) asks me what is going to happen to the hoard of silver which has accumulated in different parts of the world. Once you start the system I have suggested, you stabilise the exchanges in those countries which have gone almost bankrupt. There is no hope of them ever getting any gold to start as a basis of their note currency. In the United States it has been proved that by a Federal state of banking 8 per cent. of the metal used is quite sufficient as a reserve. This is provided the nations of the world will agree that they will part with their commodities which raised all that silver as full payment of the money. As for the relief of debt here, if the Chancellor of the Exchequer can pay his interest every year for the next 20 years in either silver or gold or the equivalent, I say it would be an enormous national saving to us.
Up to 50 years ago we were a great creditor nation, and it was to our interest to receive all moneys due to us in the equivalent of gold. To-day we are a debtor nation, and it will ease our taxpaying people to have the option of paying in either silver or gold. While I know that. I should receive very great opposition from many of the bankers of the City, I say that this is a question for labour to think over and a question for men of commerce and trade to consider. We must not allow ourselves or our Government to be absolutely dictated to by bankers who simply loan money and take interest on their loans. If some possible way of reducing this awful amount of unemployment can be found, it is our duty to consider the different suggestions that are made. We have to consider the suggestions made in our Debate, and I believe we shall gradually eliminate one after another as being unworkable and unsound, and we shall come back to consider that the reinstatement of silver as it existed from 1814 to 1873 will be the best solution of the difficulties which we have to face.
§ Mr. MILLS
When we hear a speech made by an admitted authority on commerce and finance, such as that which 489 has been made by the hon. Member for Birkenhead (Mr. Bigland), and the speech of the hon. Member for Ilford (Mr. Wise), who I think is equally well known in the realms of finance and commerce, and we hear them suggesting remedies which in the ordinary days of pre-War prosperity would have been laughed out of court as the copying of some stunt orators of the United States, it gives us an idea of how far the House of Commons has depreciated from its admittedly prosperous outlook in the roseate days before the War. We are about to celebrate the Armistice, and, looking around at the whole of the countries of the world, victorious and defeated, and considering those who live by trade and those who are looking to work as a means of living week by week, we are willing to consider as seriously as this small band any scheme, however fantastic, that will give us some encouragement and hope for the future of the world.
On these Benches we have been accused of taking a parochial view, and of not adopting a policy which is for the good of the country. We have been following world events. We know that we are a debtor nation to America, that America does not want our goods at the present time and requires our gold. We know that America in turn cannot get rid of her products in the near Eastern countries because of the chaos in the currencies. Such countries as Poland and Austria are nearly in pawn, and there are more shops open in those countries for the sale of marks and kronens than there are shops doing real business. When the workmen of the victorious countries are told that after winning the War they are to come down to the level of the workmen in the defeated countries it is well to consider what are the alternatives. I will suggest one alternative, although I know I may be howled and jeered at, but it will be uttered all the same—I refer to the fact that in Eastern Europe there is a continent which has been dismembered and cut up by a man who knew very little of ethnological problems, and it is a country split up by a Treaty of Peace founded on the principle that the spoils go to the victors and the defeated pay the penalty.
I welcome the utterances of the hon. Member for Ilford, and I listened with no little pleasure to what he said to us. It was quite different to what he had to 490 say on his election platform, but a conversion at the eleventh hour is better than nothing. When we find men who have given utterance to all sorts of optimistic thoughts actually admitting what has been stated outside this House—because largely the economic and political brains of the country are outside the House of Commons at the present moment—we have moved forward a lot in the understanding of world problems, especially when hon. Members admit that huge and terrible blunders have been made. The hon. Member for Birkenhead said that unless some drastic experiments are made in a vital question affecting the whole of the money values of the world he can see no hope for a couple of generations. If, arising out of this Debate, there comes next Session a Motion from the "Die-Hards" to recast the Treaty of Peace, and if there comes a recognition of the right of individuals to insist, no matter what may have been the crimes of their rulers, upon the right to live, then possibly this Debate will have served a useful purpose.
I rose to quote the remarks of a man eminent in the affairs of the world and well known for his broad humanity, and one who has endeavoured to add to the wealth of the world by his discoveries and researches over the whole of the globe. Therefore I make no apology for quoting Dr. Nansen in that respect. In an interview in London on the 6th October, dealing with the question of the millions of people who are kept out of the markets of the world—some will say by the viciousness of their own Government, and some will say by the determination of other Governments to have nothing to do with them—and who have been kept out of any participation in the production and distribution of the commodities of the world, a country which was admittedly one of our best customers and one of the largest contributors in the keeping down of the prices of raw material in the matter of foodstuffs, this gentleman, speaking with regard to this particular famine and its effects, says:If Russia is saved from starvation the unemployment problem throughout the world will be solved.That is what Dr. Nansen says. He continues:Food is wasting in the granaries of the earth while millions of men, women, and 491 children in Russia are dying for want of food. The workers can see enough of the effects of famine in this important market and this important source of wheat supplies to realise that it is as much their duty to alleviate suffering as it is to protect themselves from starvation. From an economic point of view, too, the business men of the British Empire will say that the way to protect Russia from further disaster is to open up a wider field for their goods, and thus provide more work for the workers.I am a member of a trade union, and coming to this House to-day I was approached by a neighbour. My neighbours for several houses on each side of my house are unemployed, and they have been unemployed for a number of months. I was approached to-day by one of these neighbours who asked me if I could do anything in the matter of an empty Health Insurance card in regard to which he had received a notification from his trade union that unless he could send back his card fully stamped he would be disentitled to any further insurance benefits for some time to come. He has been unemployed for about twelve months, and he expects that there will be a fillip in the engineering trade when wages have come down to what the employers are pleased to consider "a handling proposition." We are hoping when the engineers have been forced to accept a wage far less than the wage value of 1914 that the orders which are in hand will be executed and something will be done. These men, fathers of families—and thousands of others from Land's End to John o' Groats—are not men who in the main are content to accept relief or to see their trade unions which they have so laboriously built up and financed brought to utter bankruptcy. They are not willing to continue in enforced idleness if it is possible to get work.
The Prime Minister in asking us to deal with this question of unemployment told us to tell our people the truth. What are we to tell them? Are we to tell them that the Government has spent almost as much on unemployment pay without solving the unemployment problem as they have spent in preventing materials going into Russia without in any way relieving that problem? Are we to say that this Session has ended, and what has been done has been by stress of taxing the poor and hard-driven employers in the poorer areas to tide over a portion of the unemployment for the next six 492 months? Or are we, by pressure on the Government, going to ask them to accept schemes not less fantastic than that of the hon. Member for Birkenhead, put forward with so much seriousness? Are we to tell them that if they will only go into negotiations, if they will only consult with those who represent the people of Russia at the moment, if they will only consider the question of granting them part of the Credits which have been asked for by Dr. Nansen himself, we believe they will unload a part of the surplus so many manufacturing Members of this House have talked about, and again start people on some kind of productive work?
I know exactly what will happen. I know the amount of prejudice, deep-seated and deep-rooted, against the Bolshevist Government, is of such a character that no man is willing to consider such a proposal for the moment. But let me put this to hon. Members: I have been in Russia since the adjournment of Parliament in August, and in going through that country I have been down in the famine area, and have been able to talk with those who were employers of labour before the Revolution. I have been able to discuss matters with men of letters, with composers and others, very vehement critics of the Bolshevik Government.
§ Mr. MILLS
I feel on this matter as seriously as any man in this House. If the hon. Gentleman wants any proof of what I am saying, here are proofs by the dozen—proofs from Members of the Canadian Parliament, Members of the American Senate, from Dr. Nansen, and from Miss Elizabeth Fry, one of that group of practical Christians—the Quakers—who have done more to uphold the standard of Christianity since 1915 than any other established religion in Christendom. This lady can speak with authority for those who have been responsible for the efficiency of the relief work. She says:The public is keenly interested at this moment in the question of the safety of the goods sent to Russia. Dr. Nansen's personal experience, referred to in the "Times" this morning, is especially useful, and I am going to add the experience of my Committee, which is similar. For the last year and a half we who have been the only foreign relief agency in Russia have sent in 493 461 tons of goods of the value of £42,600, and the loss in transit has been practically negligible—about one half of 1 per cent. in 461 tons! This is not greater than our loss in transit in any other field of our work. One consignment went astray, and for this we received a cheque for £1,396 in full payment.This statement is signed by Miss Ruth Fry, the General Secretary of the Emergency and War Relief Victims Committee. I have seen these ladies at work in Poland under appalling conditions as to cleanliness, such conditions as one would hesitate to expose an ordinary decent English or American girl. I have seen them cheerfully carrying on their work under these conditions. There is destitution in Poland far worse than any you can see in Russia outside the famine area. There is destitution in Austria, again by reason of the Peace Treaty. Can anyone controvert the statement that 31,000 children in one city in Austria are being kept alive by the charitable contributions of British and American Quakers? Is that a fact that can be greeted with any kind of satisfaction by any Member of this House? I ask as a man honestly believing what I have seen, as one who has had personal observation on the subject, that you will for one moment forget your prejudices, and accept the word of one who, although he may be a Labour Member, is at least sincere, that the Bolshevik Government no longer exists or functions as a Bolshevik Government. It has abandoned its economic theories, and is welcoming the capitalists of the world into Russia—they are there whatever may be the difference of opinion on that point, I am merely stating the facts, which are there for any man to read, learn and understand—if this country fails, if because of its hide-bound prejudice against this Government it refuses to take any steps at all, then it will be stranded high and dry in the markets of Russia, just as it is stranded high and dry in the markets of many other countries.
It is for that reason I would like to see Russia included in the Export Credit scheme. It is true that £250,000 worth of medical supplies have been sent, but there are condemned to death in Russia to-day, as a result of natural phenomena, more than 10,000,000 people over and above the total of those who were killed during the War, if we include the 5,000,000 Armenian Christians massacred by the Turks. There are still 10,000,000 more 494 people in that tragic area condemned to destitution, starvation and ultimate death. If we can alleviate that problem without doing injury to our own national finances, then I submit hon. Members ought not to persist in their attitude of unbridled prejudice to this problem. I have stood in one of the 36 clearing stations in the city of Samara. I have stood in an enclosure where there were children too weak to stand or even to brush away the flies that were crawling over their eyes and mouths. I have gone into a house where 46 children were suffering from typhus and were lying four in a bed, and some on window-sills and others on forms ranged around the walls. In another room I found 32 cases of dysentery and there were not enough medical stores in that one clearing station to cover a sheet of paper. The doctors and nurses were hungry. Thirty-six clearing stations were in the same condition, and millions of people are being condemned to death because of it.
It is said they are Bolsheviks. They are not. They never were. They are never likely to be. The peasants in that country are individualistic, as they are in Great Britain. Their task is to get raw material out of the earth, and that precludes them from knowing anything about the theories of society. They know nothing about Socialism, Communism, or any other ism. Yet the fact remains, because you are willing to assert that their Government is responsible, you are going to condemn 30,000,000 of people to absolute starvation and death. I should like here to quote a statement made by Dr. Nansen. No one will accuse him of being a Bolshevik or anything else than a white man. He is acting on behalf of a society that was viewed with the utmost suspicion by the Bolshevik Government, and he exacted terms by which relief must be administered which won respects for himself. He was speaking before the Assembly of the League of Nations, and he said:There are at this moment between 20,000,000 and 30,000,000 people threatened with starvation and death. If help is not forthcoming within two months from now, their fate is sealed. Everything that is needed to save them is only a few hundred miles away. The necessary transport can be available at a month's notice. Agreements have been made for traffic. … The methods for the execution of these agreements are ready. There has been raised in 495 Committee no valid objection against these agreements or the methods proposed for their execution, and no more is necessary to avert appalling disaster than the provision of a relatively small sum of Government money. It is not a great sum we ask for. We have only asked for £5,000,000, and we ask that from the whole Assembly of the League of Nations. We are only asking Great Britain to participate in one part of that £5,000,000 grant. If we get that we think, indeed we are convinced, it is possible to carry out very important work before Christmas and to save the situation to some extent. The Governments have said that they cannot do it. Let me remind the Assembly that from the very beginning the charitable organisations have urged their absolute incapability to deal adequately with this disaster. A Conference has been called in this city, in which I act as High Commissioner, representing 67 charitable or voluntary organisations and 13 Governments, and that Conference said the same thing. The first resolution which was placed before us pointed out the necessity of Governmental action if anything really adequate to the disaster is to be done.I think the Prime Minister of Great Britain said the same thing in this House in August. Dr. Nansen continued:We are doing all we can to provide charity, but even our charity is being seriously impeded by the campaign of misrepresentation which is being carried on. There are any amount of lies being circulated. I am reminded of one story that went to the papers, namely, that the first train Mr. Hoover sent in to feed Russia was looted by the Soviet army in Russia. It was a lie, but still the same story was repeated over and over again. I was abused for having sent an expedition to Siberia, and it was said I was bringing arms for the revolution. That was another lie. All that has been done was to carry agricultural machinery to Siberia, and that surely was not a very dangerous proceeding. Suppose our action does strengthen the Soviet Government. Is there any member of this Assembly who would argue that rather than help the Soviet Government we should allow 20,000,000 to die of starvation? I challenge this Assembly to answer that question.7.0 P.M.
Those who have been through Russia—and there are many in this House who have gone through it under far more fortunate circumstances than. I did—who went through it in the heyday of the Czar's rule, well know that the primitive methods of agriculture in Russia up to 1917 were the methods of the Romans before the birth of Christ. Those who were in Russia up to 1917 will know that then, as they had for a thousand years, they used wooden spades and wooden implements. In 1921, 496 in all the long procession of refugees, when some of them dragged their carts, when some carts were dragged by camels, by oxen and by horses, there was not a cart that had even a lynch-pin made of metal. They were all made of wood. Every plough and every spade was made of wood, yet in each area they have model farms to bring home to the peasantry what could be done if they utilise machinery. We spend £30,000,000 on battleships in order to prove our sincerity for peace. Might we not help in this appeal, even to the extent of the sum asked for by Dr. Nansen, and put men into work, or even use up the surplus of the agricultural machinery which is keeping the mechanics of Ipswich and those of Gainsborough, idle? Cannot we use the ships that are causing mechanics to go inland to compete with the inland workers for jobs? Cannot we utilise the machinery and implements which are rusting for want of use?
All that the world wants is a new will; a will for peace. If a generous attitude is taken up it will sweep away any Government. No Government can endure unless it has behind it the consent of the people, after it has had an equal opportunity with other Governments. No hon. Member here can get up and say that the Government in Russia which you would like to dismiss, and the population you are willing to condemn to death because you will not recognise them, have had an equal chance. All your money has been voted in this Parliament to prevent any agricultural machinery reaching that country. If you are going to make reparations for all those years, during which you prevented that theory of economics having a decent chance, you should give the people of Russia an opportunity on equal terms. Then, after five years, if that theory of government is exploded, and if after an equal opportunity its merits are found wanting, no thing in the world can prevent every workman with a capacity for reasoning in Great Britain and America denouncing them as useless in their application to any present-day society. Until you do that, however, you cannot denounce them. I ask you to take this attitude in order to contribute something towards solving the question of unemployment. The Government's Measures are not alleviating it, and, admittedly, they are not an attempt to solve it. If we are going to 497 solve the unemployment question we must obtain new markets in the East, for we have not got them in the West. The only way to get them is to give those people—who merely want a little opportunity and a start in the world's affairs—all the miles from Berlin right to Asia, a chance which will demonstrate to them that there is a real will for peace that is not based on orders for battleships but on orders for production.
§ Sir GODFREY COLLINS
The House has listened, as it always does with close interest to any hon. Member who speaks with first-hand knowledge, to the hon. Member for Dartford. He portrayed to the House a true and correct picture of the situation in distant Russia. It is time the Government reviewed their attitude, not only towards Russia, but also toward the Continent of Europe as a whole. There is no doubt that until the Continent of Europe is on its feet again prosperity cannot return to this country. I suggest to the Government that enlightened self-interest and the best and deepest instincts of the British people demand a new spirit in their international outlook. The people have no desire to see the situation develop as it is developing to-day under our eyes. We appeal to the Government, during the later months of this year, to revise their foreign policy as they have revised certain aspects of their home policy. We ask them to endeavour, during the coming months, to frame a policy which will put Europe on its feet again.
§ Sir G. COLLINS
I think the situation in Russia, for instance, demands certain credits for food stuffs. If Russia is unable to buy from the Dominions, the Dominions are unable to buy from Great Britain. If Russia were on her feet again the price of food stuffs and of raw materials in this country would be decreased, and Great Britain would thereby be enabled to manufacture larger quantities of goods at lower prices. The hon. Member for Farnham (Mr. A. M. Samuel) asked me what else I would suggest. I suggest that the vindictive Clauses in the Peace Treaty, which is hanging over the heads of the German people to-day, are artificially depressing the industrial position in that country. Until Great Britain realises that the whole world is 498 a complete entity, and that you cannot shut off one part of the globe from the other, we shall have millions of people out of work in this country. Our foreign policy needs alteration. If the hon. Member for Farnham is in agreement with me on that one point, that the world is an entity and that you cannot depress conditions in one country without doing so in Great Britain, in Australia, and in India, I suggest that he will support me in my appeal to the Government that, in view of the depressed industrial conditions, they should, during the coming months, review their whole international outlook.
I rose, however, to deal with the speech of the Chancellor of the Exchequer. What, in effect, was the admission of the Chancellor this afternoon? It was a message to the British public. Although they are being taxed to-day on a higher level of taxation than continued during the War; although the Treasury is receiving, by way of Income Tax, the tax levied on the largest profits which British industry has ever known, owing to the tax being levied on the boom period of 1919–20; although his War commitments are only £65,000,000 this year and he is receiving a larger sum from the proceeds of War stores, yet his message to the British public is that he has spent the nation's money. Not only so, but that he is unable to repay any debt, and has been forced to borrow to meet certain liabilities which he will be obliged to do because of certain duties being paid in bonds or in stock. That is the record of the Government, and if this be the last Session of the present Parliament, let it go forth to the public that Great Britain has been taxed to this extreme degree, and that we are to be faced with an empty Treasury and with over-burdened taxpayers. The Chancellor of the Exchequer dwelt on the drop in revenue from stamps. That is a clear indication, again, of the depressed industrial state in the City of London and in other places. He also referred to the fall in revenue, so far as Customs and Excise were concerned. Whether that is due to larger reserves in the pockets of the nation or, as has been mentioned to me, to the reckless expenditure of the people owing to the uncertainty which the present Government is causing, I do not know. It is an undoubted fact that high taxation tends to develop recklessness amongst the people. 499 If you tax the people too highly you remove the incentive to save, and you thereby check the development of the country.
I should like to carry a step further the comparison which certain Ministers have made between the present situation and the time after the Napoleonic Wars. Three years after 1815 Consols rose from 54, in that year, to 72 in 1818—a rise of 33 per cent. In 1918 the price of Consols was 60, to-day the price is 49—a drop of 20 per cent. Three years after the Napoleonic Wars the financial credit of the British Government had risen by 33 per cent. Three years after the Armistice in 1918, the financial credit of the British Government had fallen 20 per cent.
§ Mr. A. M. SAMUEL
If the hon. Gentleman will permit me, I should like to point out that after the Napoleonic Wars only Consols existed. After this War we had £6,000,000,000 or £7,000,000,000 other securities. They all tended to depreciate our Consols.
§ Sir G. COLLINS
I agree, but that does not vitiate my main contention. Through the policy of economy at home practised from 1815 to 1818 by the Government of the day, Consols rose from 54 to 72.
§ Sir P. MAGNUS
I should like to point out that the productive condition of all European countries has fallen very much more since this War than it fell after the Napoleonic Wars.
§ Sir G. COLLINS
I agree. The Prime Minister and other Ministers have invited a comparison between the conditions today and those of a 100 years ago. I am 500 carrying that comparison a step further, and I suggest that a policy which 100 years ago raised the credit of the British Government by 33 per cent. should be compared to-day with a policy which has depressed the credit of the British Government by 20 per cent. The financial credit of the British Government has fallen so low that to-day it is lower than the credit of certain municipalities. The City has such little confidence in His Majesty's Ministers, or rather it has more confidence in certain municipalities than in His Majesty's Ministers. I would not dare to make that statement on my own authority. The Minister of Health, speaking in this House a few days ago, said that it was nonsense to talk of the local authorities being bankrupt, and that as a matter of fact they had better credit in the money market than the Government. That is the position to-day of the financial credit of the British Government. They have promised economy—to-morrow or next year. "Too late" is a fatal policy both in peace and in war. I hope they will at any rate economise so that the credit of the British Government will not fall below the credit, say, of Poplar. To-day war taxation continues, the Treasury is empty. The Government have promised economy to-morrow; but in this vital matter, affecting the well-being of every citizen and every business man, their policy to-day is "too late."
Let me return to the statement of the Chancellor of the Exchequer. In the early days of this Session, the surplus of the Budget was a certain figure. Month by month since that date we have pressed the Government to revise their printed statement. We now know that the surplus has disappeared, and that the Government will be forced to borrow to meet certain of their liabilities. Only a year ago the then Chancellor of then Exchequer stated in this House that, when you came to make up the Budget, you should set aside £110,000,000 for the reduction of debt. No reduction of debt is to take place this year; and, further, the Government are living on the proceeds of borrowed money, because they are bringing into their national revenue account the sales of war stores. The Chancellor of the Exchequer stated that it was not fair or accurate to take the first six months' revenue as a criterion of the year's revenue, and he 501 pleaded that he could not publish to the House of Commons a complete statement of the estimated revenue for the present year. That statement has always been published in April in every year, and why the Chancellor of the Exchequer should refuse to publish a complete statement to-day is a little difficult to understand. If he had taken the House more fully into his confidence in the earlier months of this year, he would not have found such extreme criticism against his speech this afternoon. Let me remind him or certain of his words on the 16th August last. Speaking on the financial situation, he said:I do not look at the present current year's position in the gloomy way in which some of my hon. Friends are apt to do."—[OFFICIAL, REPORT, 16th August, 1921; col. 1335, Vol. 146.]Why not? Why did he not in August last look the true facts in the face? What is the object of disguising from the public the facts which have been apparent for many a long month, and which have now been stated to the House by the Chancellor of the Exchequer himself? Take, for instance, his attitude on the sale of war stores. Speaking in this House on the 29th July, he said:I certainly am hopeful that we shall realise the full amount which we put in the Estimates."—[OFFICIAL REPORT, 29th July, 1921; col. 863, Vol. 145.]His statement this afternoon does not bear out that hopeful spirit which he mentioned to the House on the 29th July, and on that point I am anxious to ask him a question. Does he anticipate any further sum being received from Germany towards the national balance sheet? He mentioned in the course of his speech that a sum of about £40,000,000 would be received. Is that the total sum which this nation is going to receive from Germany this year? Perhaps the Financial Secretary, when he comes to reply, may give us some information on that point. I am anxious to direct the attention of the House to the right hon. Gentleman's optimistic spirit and outlook with regard to the revenue to be received from the sales of miscellaneous stores. The total sum which it was estimated would be received during the present year was £180,000,000. Up to the present moment only £75,000,000 has been received, and I think it is a fair suggestion to put to the House that the present rate of sale of these stores will not grow more during 502 the next five months. If that be so, there will be a heavy deficit in the estimated revenue under that head—as much, probably, as £40,000,000 to £50,000,000 this year. If that statement be at all accurate, the right hon. Gentleman's estimate, or rather his hope, that he will not be forced to borrow to meet the present expenditure may not mature. I will not touch on the Excess Profits Duty, because reference has already been made to it.
I now come to the Chancellor's forecast for the coming year. The Treasury Circular of May last was based upon the principle that the total revenue to be received by the State was estimated to be £950,000,000. It is now quite apparent that that is an excessive figure. By no possible means, even if taxation is increased, will the revenue of the State for the coming year equal that figure. What will then be the position of the Government? The Chancellor of the Exchequer has held out hopes of an estimated reduction of expenditure of £130,000,000. He will be forced by sheer necessity to reduce his expenditure by a larger amount than that, or he will be forced to borrow. What course he will follow will naturally be decided in course of time, but a £130,000,000 cut in our expenditure next year will not be sufficient to enable this country to live on its yearly income. The Government are being forced to borrow this year. The results of borrowing are indirectly apparent. They retard our recovery, they check the fall in prices, they place a further burden upon every indirect taxpayer in the country. Borrowing and inflation are in the interests of certain owners of commodities, who gain through the fall in prices being checked, or through prices rising; but an indirect burden is placed upon every wage-earner in this country. The far-reaching effects of inflation are now apparent. The position in Russia has been largely brought about through inflation. Germany is paying to-day the price of inflation; she is not living on her annual income. I hope the British Government will not follow the example of those foreign countries. Their tendency to-day is to fall back on borrowing. Borrowing is such an easy matter. The Chancellor of the Exchequer said he was more able to sell his Treasury Bills to-day than a few months ago; money was more plentiful. My plea, as a 503 Member of the House of Commons, is that, regardless of any particular interest, the Chancellor of the Exchequer in the coming year will so direct his Department as to secure that his income will be spent, and no more, by the spending Departments of the State. He has called in the aid of certain business men outside. I have in this House protested against that method.
§ Sir G. COLLINS
I think it is quite a new situation that business men outside the purview of Government should revise the Estimates to be presented to the House of Commons. That is the first duty of Ministers. It shows quite clearly that Ministers have no idea of the cost of their particular policy. They have had to invoke the aid of these able and capable men. The Prime Minister and the Chancellor of the Exchequer should know quite clearly beforehand what is the cost of a particular policy. It is for them to say whether a particular policy should be carried out, with full knowledge of the facts. To invoke the aid of these well-known and capable men outside is, I suggest, a slight not only on the present House of Commons but on the House of Commons that will follow it in the days to come. I hope we shall not have any more repetition of that method of Government. The House of Commons and the Cabinet are responsible for the Estimates of the year. The duty of Members of this House during the Recess is to invoke the assistance of their constituents in paying the taxes levied by the State, and they can do it more readily if they are partakers and sharers in the responsibility in this matter with the Government of the day. The Government have failed to secure economy. They have lived on the proceeds of borrowed money. The art of government with a full purse and with a prosperous nation behind you is not a difficult one. Most political problems can be solved by the outpouring of public money. It tends to soften the burden and check discontent. In the years which are ahead of us the nation cannot be governed on that policy. We must live within our early income. The Chancellor of the Exchequer has been too dilatory in securing national economy, and until the last few weeks has kept from this House a full 504 knowledge of the situation, and it is for those reasons that I have spoken this afternoon.
§ Lieut.-Colonel WILLEY
An outstanding remark of the hon. Member who has just sat down was that most political problems can be solved by the outpouring of public money, and in connection with the review to which we have just listened of the extremely interesting statement of the Chancellor of the Exchequer, with regard to the financial position of the country, I think a good many of us will be impressed with the fact that the Government have had to live on borrowed money largely as the result of the pressure put upon them from those benches for the expenditure of money on objects which, to use the words of the Chancellor of the Exchequer, were prompted by sympathy and not by expediency. We listened with a great deal of sympathy to the speech of the hon. Member for Dartford (Mr. Mills) because it denoted personal knowledge of facts abroad which are too infrequently the subject of debate in this House. Particularly as far as Russia is concerned, I suppose a large amount of the speechmaking in this House is on theory and not on personal experience, and one is glad to hear the first-hand experience of one who has so recently been there. In regard to the appeal that money should be advanced in the way of credits to Russia, I find myself in special sympathy with the remarks of the last speaker, who made an appeal to the Government that they should in the Recess do their best to bring about more stable conditions in Europe, and in that way attempt to solve the unemployment problem. If any criticism may be made by one outside the House of the Debates which have taken place on this question of unemployment, it is that they have been too domestic, and perhaps indeed parochial. The palliatives that have been discussed are not such as are likely to meet unemployment. It is the wider action in connection with relations internationally to which reference has been made. To revert to the appeal that assistance should be extended to Russia, those of us who, in business and banking circles, are in touch with hard facts come straight away to the question, "What about the risk which is being taken?" and I think that question may be dismissed quickly by saying no one who is defending the public nurse is justified 505 in encouraging money being advanced in any way to Russia as long as the existing situation with regard to her indebtedness incurred before the War still remains unsolved.
That point brings me to a matter which should probably be raised in this Debate. Unemployment is accentuated in many trades as the result of delay in the traders becoming possessed of money owing to them as the result of pre-War debts. It is undeniable that in many trades, perhaps more particularly the textile trade, which has its export organisation more widely flung than other trades, there are many firms who could increase employment were they in possession of funds which they are entitled to receive. It is for that reason that the feeling exists that the Government should be more aggressive in its actions in securing payment of debts owing to British nationals as the result of credits extended pre-War to Continental countries. Those debts may be classed under three heads—debts due from Germany, debts due from Czecho-Slovakia, and debts due from Poland. It is from those three countries that the largest amounts are outstanding. The matter has been raised very often by questions. It was raised even this afternoon, and there is a feeling that the balance in the hands of the Greuhaendler, in the case of the German debts, between the amount which he is acknowledged to have received and the amounts which he is reported to have paid represents a sum which if accelerated in its distribution would be of great assistance to this trade. The case of the Greuhaendler presents this fact, that whereas it has been reported that should action be brought before the mixed arbitrament tribunal a decision can be obtained and the money promptly paid, experience has proved that decisions are very tardy in being given and they are expensive, particularly in the case of small debts. I heard the other day of a case where a sum of a few hundreds was outstanding. It had cost £70 to date and a decision had not been obtained. It is a serious hardship in the case of small creditors. We believe greater pressure should be brought by the Government to see that cases tried before the tribunals should come to a decision. With regard to debts outside the Grerthaendler there is equal delay, and I believe that pressure brought by the Government would accelerate them. Owing 506 presumably to some omission in the terms which established an independent CzechoSlovakia, no provision was made for the recognition and proper payment by that Government of pre-War debts. That is past now, but it is the belief of many traders that if the British Government could, in its negotiations, such as must necessarily take place in Czecho-Slovakia with regard to finance, produce in some way prompt liquidation of these debts at least it would remove the obstacles which are placed in the way of Czech nationals to the payment of debts due to British nationals.
With regard to Poland, that is a more difficult case. There it is well that emphasis should be laid on the fact that the debtors for the most part are firms who had regular dealings with this country before the War, who are willing to pay their debts, but their assets, both in liquid cash in the Russian banks or in the shape of raw or manufactured materials, were entirely requisitioned by the Germans and due receipts were given against them. It is the belief of these traders that action by the British Government insisting that the German Government should directly or indirectly see that the allocation of funds was made to the Polish Government equal to the amounts represented by the value of the receipts given by the German Government would put those Poles in possession of funds with which they could readily pay their pre-War debts. It is therefore justifiable to say that employment in this country might be substantially increased were these sums set at liberty. In the textile trade it is made clear that as the result of the losses which have been sustained in the last 18 months, and the delay in paying these debts, there is no distributive machinery to take the products of the factories and distribute them throughout the world, and it is alleged by those who are competent to speak, that that has had a direct result upon accentuating unemployment. One ground among many why action should be taken by the Government is that the Treasury itself is interested. The sympathy which has been shown by the President of the Board of Trade is not producing results rapidly enough. The Treasury are more particularly interested, because obviously if these moneys were received by the Treasury substantial amounts would go 507 in the form of taxation to the Treasury, and it would have the double effect of setting trade in motion more rapidly and of substantial payments being made by the traders to the public purse.
§ Mr. MOSLEY
When my hon. and gallant Friend commended the speech of the hon. Member for Dartford (Mr. Mills) I was puzzled at the sudden access of extreme philanthropy in a quarter where I had not recognised it. When he extended his observations to the question of the pre-War debts of Russia I was once again within my depth. Addressing myself to the opening speech of the Chancellor of the Exchequer, it might be unkind to ask the right hon. Gentleman at this stage of affairs who to-day he estimates was more correct last summer, the optimists or the pessimists, with all the accompanying adjectives of that period. Perhaps the Financial Secretary to the Treasury will be able to give us his views on the subject in view of his own even more remarkable record in that connection than that of the Chancellor himself. He was, if anything, even harder on the pessimists, more exuberant in his determined optimism, last summer than even his illustrious colleague. The Chancellor of the Exchequer has to-day addressed a stern admonition to the British people, recognising that in times of adversity and hardship they always display the most tenacious and most admirable qualities. He has at length decided under such circumstances they are always at their best and he determined to reveal to them the true facts. Last summer when we suggested that it was always better to tell the British public when they were in a tight place and then they would exert themselves, as they have at every crisis of their history the Chancellor of the Exchequer deployed our extreme pessimism. He said, "You are shattering trade to its foundations by the speeches you are making foretelling disaster to your country. Why should we always cry stinking fish about our own doings?" Those were the expressions he used. We were looked upon as criminals engaged in a deliberate attempt to shake the credit of our country. What a change of tone. I was greatly puzzled as to the reason of this change of tone and the only reason I can find is that after all a General Elec- 508 tion is now less imminent than it was at that period. I can think of no other adequate explanation. I should like to remind the Secretary to the Treasury of some of his remarks of that period when, two or three days before the House adjourned, I criticised the speech of the Chancellor of the Exchequer on the Consolidated Fund Bill and expressed the opinion that a deficit on this year's Budget amounted to a virtual certainty. The hon. Gentleman in reply said:Let me caution the House against the repeated use of the word 'deficit' in the observations of the hon. Member. There are no deficits in sight.Less than a month afterwards, at Glasgow, on 12th October, the Chancellor of the Exchequer said:It is perfectly certain that we are not going to have any surplus upon this year's Budget. Indeed, what we have to look forward to is that we shall have a deficit.Within two months of that statement of the hon. Gentleman, his colleague admits the whole truth in a speech in the country. When the hon. Gentleman replies, I hope he will be able to afford us some slight idea of why he so gravely misled the House at that period, and why the expert Treasury staff was unable to foretell or prophesy what was obvious, not only to the most inexpert mind, but to every member of the business community. Perhaps we shall have some explanation as to why the country was so gravely misled on that occasion.
I would also ask my hon. Friend specifically to deal with the question which has been raised by my hon. Friend the Member for Greenock (Sir G. Collins), namely, the success, or rather the lack of success, of the Treasury Circular requesting a reduction in next year's Estimates. The Chancellor of the Exchequer gave me a specific pledge that he would deal with that question on this occasion, and he has omitted to do so in his speech. As my hon. Friend has observed, the Chancellor of the Exchequer on a former occasion stated that a reduction at any rate of £130,000,000 would be necessary to balance next year's Budget. In reply to a question which I addressed to my hon. Friend the Financial Secretary to the Treasury, a few days ago, he stated that a reduction of £75,000,000 only had been effected up to date. Therefore, an additional reduction of at least £55,000,000 must be effected 509 if, on the Chancellor of the Exchequer's own estimate on the 16th August last, the Budget of next year is to be balanced. Not taking into account any deterioration in the financial position since that date, and not considering any of the new factors that have been introduced, an additional cut in next year's Estimates, over and above that which has already been effected, of not less than £55,000,000 must be secured if, on the Chancellor of the Exchequer's own estimate, we can have a balance on the Budget of next year. I shall be grateful if the Financial Secretary will address himself to that topic when he replies.
I should also be grateful, if I might revert to the question of this year's finances, if he will state whether the £30,000,000 or £40,000,000 which the Chancellor of the Exchequer has stated to-day that he hopes to secure from the German reparation payments under the agreement which has not yet been ratified by Parliament, is the money to which he referred in the House on 16th August, when he said:The House may take it from me that whatever happens there will be what I may fairly describe as a very substantial sum available out of German reparation payments to help our revenue.I shall be glad to hear if that is the sum referred to, and whether the hon. Gentleman is so confident of securing that amount as he was at the time of the speech. The position in next year's Budget will be even more serious than it is at the present time. Our Income Tax returns are made on the triennial basis, and this bad slump year will be reflected in next year's revenue returns to a far greater extent than it has been in the present year's revenue returns. It is reflected in the present year's decline of revenue, and will be reflected a great deal more before the end of the year in the fat quarter that the right hon. Gentleman anticipates, in the further decline of the Excess Profits Duty, and in the decline in the Income Tax returns, because, although the Income Tax this year was computed on the basis of the three years prior to the slump, the effect of the slump will probably render a good many people defaulters in this respect. Even if the Estimates of the right hon. Gentleman are realised in the present year, and I rather anticipate that they will not be, the position next year, when the full 510 force of the slump is felt, will be correspondingly greatly aggravated.
One has only to reflect on the actual trade figures—and they cannot be too often reiterated—to understand the kind of position with which the country is confronted to-day. When we reflect that in the first nine months of this year, as compared with the first nine months of last year, our imports declined by 44 per cent., our exports by 48 per cent., and our re-exports by 57 per cent., in other words, that the volume of the trade of this country has been almost exactly halved in less than one year, it is not necessary to emphasise the financial dangers of the country or the seriousness of the position in which we are placed.
A position such as that cannot be countered by merely negative economy. You must also have a real, determined, concerted international effort of positive economy. You must have negative economy to enable you to bear the actual maintenance of your own employed in these serious times; you must have negative economy in order to cut down the overhead charge of taxation, which is the most serious of all the incubuses upon our trade to-day in competing in those markets which still possess purchasing capacity; but you must also have a positive economy to restore your former markets and to rehabilitate the economic machine of the world. In the case of negative economy, I would once again put it to the Government that you cannot ask the working people of this country to-day, destitute as they are, refused proper maintenance in times of unemployment, asked to accept reduced wages, asked to abandon those great schemes of social reform on which the present Government was returned to power, you cannot, when asking them to do all these things, continue to point to great Imperial excrescences in Iraq, Palestine, and other foreign adventures and say: "We put this before the welfare of our own people." In a time such as this we deliberately embark upon a policy of Imperial expansion, and neglect entirely not only our Imperial stability, but the welfare of our own people. It seems to me that we are in the position of the man, if the analogy was physically possible, who is draining the very heart's blood in order to grow abnormally long and fragile finger nails.
511 In a time when the whole fabric of our State is in danger of collapse, to pile these unproductive foreign commitments upon the tottering social fabric appears to be little short of madness. Apart from its merits it is naturally and obviously a policy which infuriates the working people, who are without houses, without proper maintenance for their wives and children in times of unemployment, through no fault of their own, to be asked to contribute the money which they raise in taxation, directly or indirectly, to the preservation of order amongst the tribes of the desert. Such a policy can only result in grave disorder in our own country. I beg of the Government in all the economies they are about to introduce to keep their minds fixed upon these matters, and not to exasperate the people of this country by continuing their precarious tenure of commitments upon which they should never have embarked. If they are to ask the people to accept the abandonment of all programmes of social reform, and the utmost rigour in our domestic life, first of all, let them cut down these indefensible commitments abroad.
Apart from this negative economy, we must have positive economy in the truest sense of the word if mankind is to survive. It is useless to ask labour to increase its output, it is useless to lower the cost of production, if the great world markets upon which, before the War, we were dependent, still remain in the position of not being able to purchase our commodities, at whatever price we can put them upon the market. One hears in this House the cost of production emphasised eternally as the root basis of all our evils. It is the root basis of all our evils, it is true, in those markets that still possess purchasing power; but in that case even it is not entirely the fault of labour and its low production; for the high overhead charge of taxation is also one of the largest factors in the high cost of production, and in these markets we are also faced with novel and abnormal competition. In markets that have no purchasing power of any kind, it is obviously not the fault of labour that we have lost them, it is not the fault of the system, and it cannot be remedied by any action from this end of the map; it can only be remedied by concerted international action which will set those 512 countries on their feet again and restore the economic machine of Europe.
I have heard it suggested lately in the most eminent quarters in matters of economics that we can, to a certain extent, turn our eyes now away from Europe and concentrate our attention upon the development of our great Imperial resources, and the creation of fresh markets in the Empire. I welcome all such schemes; they are admirable, and they should probably have been undertaken a long time ago, but they are useless to meet the immediate situation. These new markets can only be created and built up out of our great Imperial assets in the course of years and generations. It is a case of building the entire machine from its very foundations. In Europe, however, you can restore the economic position on which this country is dependent in a comparatively short time. There, it is not a question of building the entire machine. The machine exists. It is a question of restoring its vital parts, and the part lacking is credit for the purchase of raw materials and machinery. The economic basis exists in all these countries. There are great assets, there is great potential wealth, and the prospect of producing wealth there in a very short space of time, with comparatively little exertion either of fresh capital or labour or time. It is a very different thing in regard to the great undeveloped tracts of our Imperial possessions.
8. 0 P.M.
How are we to face this great problem of restoring the economic machine of the world, a task that should have been undertaken three years ago, as the first duty devolving upon statesmanship, and the most obvious obligation? The three years that have elapsed have proportionally aggravated the difficulty of the task. The measures contained in the Bill which we are discussing are an attempt, a feeble and entirely ineffective attempt, to deal with the situation. I feel that not only are they ineffective in that they are obviously inadequate to deal with such an immense problem as that with which we are confronted, but they represent essentially the wrong method of meeting that situation. These schemes of export credit, financing individual traders in this country in any export schemes they may suggest, is the 513 wrong way to do it. Personally I infinitely prefer, and I am convinced that in the end statesmanship will be driven to, the methods of the Ter Meulen scheme adapted to our requirements. That is not a scheme in which individual countries subsidise exports, but one which enables the derelict countries themselves to raise the credit to purchase the raw material and machinery essential to their developments practically by pledging their potential assets which cannot be realised immediately. Some such scheme as that will, I feel, have to be adopted.
Many such schemes have long been on the board. None of them have as yet been adopted. A scheme such as this export credit Bill, which will subsidise exports to markets whether normal and prosperous or derelict, obviously does not touch the fringe of the problem of these prostrate countries. This scheme will merely subsidise exports, involving second-class business, to more or less prosperous countries, and will not be applied in any degree to the countries that are entirely devoid of purchasing capacity where a really speculative risk is involved. That was admitted by the Parliamentary Secretary to the Overseas Trade Department when the Bill was being passed. This problem will be met only by international action, concerted action, of the great creditor countries to afford credits to those parts of the economic machinery of the world which are to-day without purchasing capacity of any sort, and will remain in that condition of prostration in which the Armistice left them until by some artificial means they are raised to their legs again and enabled to set to work.
I hope that either at the Washington or some subsequent Conference this problem will be raised. Attention to it is long overdue. Its results are afflicting the prosperous countries of the world in proportion almost to their prosperity. America to-day is one of the greatest sufferers of all, and it is a question which every day is being forced upon the reluctant vision of European and world statesmanship. If these great countries, in whose hands to-day rest the entire credit facilities of the world, devote their attention at these International Conferences, not only to the provision of credits, but to the employment of their economic position for the break- 514 ing down of the tariff barriers which have sprung up all over these new small States, and for the enforcement of disarmament and world peace on the basis of "no disarmament, then no credit or assistance," if they will undertake that great task in the world spirit, realising that for economic purposes the world is a unit, realising that in the end we are all utterly dependent for our prosperity on the prosperity of others, and that unemployment in this country can never be remedied until the machinery is once again set in motion—if they will in that spirit face this great task, I feel that there is some hope in the future. If not, I have very little hope from the suggestions which are laid before us, not only as to the position of this country, but I have very little hope of the survival of mankind.
§ Mr. S. WALSH
Examining the Bill providing for the sum of £16,000,000, one has to take note of the fact that two items alone constitute about 70 per cent. of the sum required. The War Office is responsible for £5,700,000 and unemployment for £5,500,000. A great deal has been said this evening as to the policy of the Government, and I submit with great respect that it is the policy of the Government against which this party protested that is responsible to a very great degree for these high figures. The Defence Force stands for £3,800,000, and the addition to the Regular Forces for £1,800,000, and these items, with £5,500,000 for unemployment, make over £11,000,000 out of the £16,000,000. I cannot help referring, even in the closing days of the Session, to the advice which we gave from the fulness of our experience to those responsible for the Mines Department, entreating them not to pursue the policy that they had then adopted. We said, "It is as certain as night follows day that the action you are taking will involve this country in a grave social disaster." We repeated in every possible way those entreaties and warnings, and every warning and every entreaty was treated with contempt or, when they were not treated with contempt, they were slighted and scoffed at as though we were simply wasting time and trifling with the House. The Minister of Mines stated, "All these dangers that you are portraying will never happen. You and the employers are really good friends. Within a few 515 days of decontrol being adopted both sides will have come together and everything will proceed as happily as before."
In this House and in the Committee room upstairs we repeated our warnings. Not a single warning produced the slightest effect. We told you later, even when the stoppage took place, that there was no necessity for any Defence Force, but of course the fear of Bolshevism, those horrible dangers that are magnified by the Press, dangers which do not exist if the people are trusted, loomed very largely in the mind of the Government, and emergency regulations more drastic, more far-reaching and more destructive of the liberty of the subject than anything ever known in British history, were passed in this House, and a Defence Force numbering hundreds of thousands was organised. The ostensible reason, I suppose, was to prevent the miners from interfering with the social order of the nation. But even Ministers themselves will have to admit that never was a struggle conducted on such a vast scale in which the breach of civil order has been so slight.
All over the country and even from Ministers themselves compliments have been paid to the miners for the wonderful forbearance and admirable restraint which they showed all through the struggle, in a time of intense suffering so far as its effect on the households of the people was concerned, and yet this vast body of men and youths numbering 1,500,000 exhibited a greater restraint and a finer sense of order than the world has ever known. I am not exaggerating the facts, and yet in the closing days of the Session £4,000,000 is to be voted for the maintenance of a force for which there was never the slightest necessity—£1,800,000 in addition for the regular force. If that could be dissected it would be found that even that addition was largely due to the fear that was in the mind of the Government. It is impossible to say how much of that great unemployment grant of £5,500,000 is due to the action taken by the Government last March.
§ Mr. SPEAKER
I must point out that, the policy of the Government was approved at that time by the definite decision of the House. Therefore we cannot at this time reopen that question, but I imagine that the hon. Member's remarks 516 have been only in the nature of a preamble to what he is about to say.
§ Mr. WALSH
I must of necessity accept your ruling, but I should point out that it is impossible to lead up to the special points to which I ask the attention of the House unless, as you say, by a preamble. It must be remembered that this industry that was so gravely threatened then is fundamental to all other industries. At this very moment we have probably 180,000 people out of employment altogether. We certainly have three times that number in partial employment, and either from the actual £5,500,000 provided in this Vote, or from the rates of the various authorities must come the relief for the people who are unemployed or for people who with their wages are utterly unable to maintain life for themselves and their families. It may be of interest to the House to state that a deputation waited on the Prime Minister to-day to see how far this industry which is threatened now with almost total collapse could be assisted. During the evening the hon. Member for Cleveland (Sir Park Goff), in a speech in which I was somewhat interested, spoke in a rather limited way, it seemed to me, as to the condition of the blast furnaces and the miners connected with that industry in the constituency which he represents, and he spoke of the Whitley Council and of a living wage in the industry, and went on to say that in his opinion lessening wages meant loss of efficiency on the part of the worker and loss of the home market.
I do not want to decry the necessity of securing foreign markets, but I do honestly believe that it would be better policy for a Government to secure the home market. If a Government embarks upon any policy which reduces the physical efficiency of the working people, that will certainly reduce the home market to a considerable extent and it will bring depression and distress in trade. That is exactly what has happened to the Government policy. The hon. Member for Cleveland spoke about a living wage. It is important that the House and the nation should know the wages that the miners are now receiving, following upon what the Prime Minister described as "the greatest profit-sharing scheme ever applied to any industry." I will trouble the House with only three or four illustrations to show how far the living wage has been established in an 517 industry upon which every other industry depends. The Forest of Doan miner, the man who actually gets the coal at the coal face, is to-day receiving a wage of 7s. 5d., or 1s. an hour. That is for a skilled coal hewer, who daily risks his life, and the wage represents a reduction of almost 50 per cent. on the wages paid four months ago. In South Wales, a district that has made vast fortunes for those who put their capital into the industry, an area that is the finest coal-producing area in the world, the coal hewer receives to-day a wage of 9s. 1d., or a little over 1s. 3d. an hour. In Cumberland the coal hewer receives nearly 1s. 1d. an hour.
So I could go on throughout the coal areas to point out to the House and to the nation that never in the history of labour have such conditions been thrust upon bodies of men. These men are risking their lives day by day, but they are receiving wages utterly inadequate to maintain soul and body together. The wages would be bad enough if the miners were given an opportunity of working for five or six days a week. Under "the greatest profit-sharing scheme that has ever been applied to industry," wages have gone down in four months by 60 per cent. in many cases, and the money received by the miner is not nearly equal to the amount required to keep a poor person in the workhouse. Men with families are dependent on these wages. Talk about securing foreign markets and about stabilising the rate of exchange, and lots of other things which in themselves may be very good, but surely it is much more important to stabilise the condition of things at home and to make sure that any man who works for his living in the mine shall have at least a fair wage. There is nothing fair here at all.
§ Mr. DEPUTY-SPEAKER (Mr. James Hope)
It would be in order to call attention to unemployment in the coal industry and the means whereby employment might be increased, but it would not be in order to discuss the working of the coal agreement or the actual wages paid.
§ Mr. DEPUTY-SPEAKER
There are certain Estimates put forward. These are Supplementary Estimates. Whatever is in order on the Supplementary Estimates is in order on the Consolidated Fund Bill. There is a Vote for the partial relief of unemployment. It is in order to argue that that Vote is insufficient or that some better plan might be devised to provide more employment, but discussion of the actual wages in the coalfields is not in order.
§ Mr. WALSH
Under that ruling it is very difficult for me to carry on my line of argument. It is a fact that the policy of the Government has resulted in a large addition of miners to the ranks of the unemployed. I am sure that this Fund of £5,500,000, which is to be applied to dependants relief and other schemes, will be impinged upon to a great extent by the unemployed miners because of the policy of the Government. We have been urging the Government to come to our assistance because we recognise that much of this unemployment has its origin in the conditions of the coal-mining industry; but we failed to satisfy the Government of the necessities of the case. We believe that if the Government had not gone into reckless adventures, against which we have protested on many occasions—adventures in Russia, for instance, when, however hopeless the prospect seemed, the Government somehow—
§ Mr. DEPUTY-SPEAKER
That clearly is out of order. The hon. Gentleman can discuss unemployment and the remedies which the Government have suggested, and he can argue that the remedies are insufficient or that other remedies ought to be applied, but he is not in order in going back two or three years to the history of transactions.
§ Mr. WALSH
I understood that the general line of argument I am now pursuing was admitted by your predecessor in the Chair. During our Debate continued reference from both sides of the House has been made to the wider issue and to Government policy in Ireland, and in Russia, Peace Treaty reparations, and so forth. The whole subject has been discussed on a very wide scale, but I do not for one moment want to traverse your ruling.
§ Mr. DEPUTY-SPEAKER
It is quite in order to discuss remedies, but I do not think it is in order to discuss causes.
§ Mr. WALSH
It is quite clear I cannot pursue that line of argument without coming seriously into conflict with the opinion which you, Mr. Deputy-Speaker, have expressed, and I have not the slightest intention of doing that. I bow to your ruling. We on this side of the House, and those of us who are directly associated with the great mining industry, can only point out, in the closing days of this Session, that this Vote of millions would not have been required had our policy been adopted. We can only point out to this House, and through this House to the nation, what a terrible condition has been brought about by the policy of the Government. It is impossible for us to suggest remedies now. A scheme has been thrust upon the miners and the country by the Government for a period of 18 months, and it is out our power to suggest any deviation from, or any alteration in that particular agreement. These are the results of the policy of the Government, and having said that I need not trouble the House any further.
Mr. T. THOMSON
When we were discussing these Votes previously we were told by each individual Minister that we must regard what he was asking for as merely part of a great programme, and that the other schemes must be taken into account when we were considering his particular Vote. The Minister of Labour said the insurance scheme, though it might be very small, was a part of the great programme and the Minister of Health on the other hand said we must consider the grants to local authorities as part of a great programme. So, with regard to Export Credits. Each one in its turn was described as a part of the greater whole. This evening we have the whole scheme before us and I submit the criticisms made as to each particular scheme apply to the whole programme, namely, that it is totally inadequate to deal with this big national problem. The point I wish to stress is that instead of dealing with it on broad national lines the Government have sought to deal with it in sections and to place upon the localities concerned, burdens which they cannot possibly bear. Take the question of insurance. No one suggests for a moment that the amount allowed by this House is sufficient to keep a man and his wife and family when he is thrown out of work. We were told, however, that the man could get relief work or go to the guardians but if he gets relief 520 work or goes to the guardians that involves a charge which falls very heavily on the particular locality—a locality which, it may be, is almost bankrupt and unable to face added burdens and responsibilities. The Prime Minister in his speech on the original Financial Resolution said this was a national question and should be dealt with on national lines. He made reference to the Napoleonic Wars and what followed them, and suggested we should draw a lesson from the mistakes made then when the Government of that day left the problem to be settled by each locality instead of dealing with it in a comprehensive way. One would have thought that learning from the experience of the past, and knowing the mistakes that were made after the Napoleonic Wars, we should have attempted to deal with this question on national lines.
I submit the localities which are charged with the cost of the various schemes initiated or outlined by the Government, have a cause of complaint. I had a letter to-day from the Middlesbrough board of guardians, which is not a Labour body nor a Socialist body, but is representative of the whole public life of that town. That letter protested in the strongest terms against the cost of unemployment being added to the local rates. At the beginning of this year they were administering unemployment relief to the extent of about £400 per week, which was much above the normal pre-War rates. To-day the sum is over £4,000 a week, and it is absolutely impossible for any locality to bear a burden which is ten times greater than it was at the beginning of the year. The Minister of Health, in combating a similar point, suggested that in the days of prosperity industrial districts had made large fortunes, that trade would revive again and that they would then be able to meet these heavy charges. There is a fallacy in that argument, because local rating is not on an income tax basis. It is not based on the profits which have been made, but purely on the amount of space which buildings occupy. That is an entirely different matter from the profits earned by any particular industry in any particular district. In the old days when industry was self-contained and when the proprietors of an industry lived in the district, and the whole profits were made and spent in the district, there might be some equity in comparing one 521 district with another, but in these days of limited companies, when the share-holders, the owners of the works, are scattered throughout the length and breadth of the land, the profits are also scattered throughout the length and breadth of the land, and intsead of being taxable in that district, are not touched by the local rating. You have owners of works in industrial areas living in the South of England and in health resorts, altogether away and apart from the particular area where their profits are made. The fortunes which are being made do not come under the rating of that area, and therefore the burden of unemployment falls heavily upon the district. Those who have shared in the prosperity do not share in the depression.
I would emphasis once again the crying need to local industrial areas that this burden should not be placed entirely upon them. Cities and towns of a residential character, like Bournemouth, Eastbourne or Oxford where the rates are 10s. to the £ should, through the national taxation, contribute their share to the industrial district where the rates are now 20s. to the £ and will soon be 30s. to the £. What is the good of telling a local board of guardians that they may borrow money when they are already borrowing beyond the limit which they can stand. Merely to borrow money to be paid back in one or two or three years' time is of no practical assistance whatever. Though we may separate to-morrow the Government will realise before many weeks or months have passed, the total inadequacy of this programme to meet local conditions. There will be representations from these local areas showing that they are suffering under burdens which they cannot possibly bear. When all is said and done, this money has to come out of the public purse, and surely it would be more equitable that whatever is spent on these matters should be raised on the broad basis of national taxation, out of the profits which have undoubtedly been made in the past, and not by putting a tax on industry and crippling that revival of trade which is so essential if we are to get the wheels of industry going again. Therefore I appeal to the Government and to the various Ministers who have charge of the administration of these various schemes, that we should have regard to the urgent claims of the industrial 522 areas and should endeavour to lessen those burdens which otherwise will bring such areas to bankruptcy.
§ Lieut.-Colonel POWNALL
The hon. Member for Ince (Mr. S. Walsh) was, I think, hardly fair to the Government in regard to the cause of the heavy expenditure on the Defence Force. He sailed, I think, a little bit near the wind as regards the question of order. I do net wish to answer his arguments at any length, but I should like to remind hire of this, that there was a miners' strike just about a year ago which lasted about a month or five weeks. There was no question at that time of calling out the Defence Force.
§ Mr. DEPUTY-SPEAKER
The hon. and gallant Member is not in order in discussing the original action of the Government in calling out the Defence Force. That was ruled by the Deputy-Chairman, when the Estimate was before the House, to be out of order, and the hon. and gallant Member must not pursue that subject.
§ Lieut.-Colonel POWNALL
I am sorry, but my hon. Friend made rather a lengthy preamble, and I thought possibly I might be allowed to answer it. I will, however, say a few words in regard to the Chancellor of the Exchequer's speech to-day on our national finances. I am very glad indeed he made the statement that he did make, because I think the public mind was unduly depressed by a speech, which he himself alluded to, which he made some three weeks ago in Scotland, in which he used the rather unfortunate word "deficit." I listened very attentively to-day to what he said in regard to that word "deficit," and, as he admitted, it is not so much a question of a deficit as a question that the £170,000,000 or so which he had hoped in his Budget speech to have had on the right side this year for the redemption of debt will not materialise. That is entirely a different thing from having a deficit, and when the hon. Member for Harrow (Mr. Mosley) tried to stir up our feelings and compared the speech of the Chancellor of the Exchequer in October to that of my hon. Friend the Financial Secretary to the Treasury in August, I did not think he could have listened very carefully to what was said by the Chancellor to-day. It is always very delight- 523 ful, to one who has had a good deal of business experience, to hear the hon. Member for Harrow speaking on what is obvious to the business community, of which he has had so long an experience. With regard to the general state of out national finances, what has always seemed to me to be the barometer in a large measure are duty payments on account of Customs and Excise. They respond very quickly indeed to any shrinkage in the spending power of the public. They respond very quickly if there is more money available for beer and other dutiable articles.
§ Lieut.-Colonel POWNALL
If the hon. Member who interrupts takes the trouble to do what I have done, he will find that the figures for beer are larger than they were at this time last year, and the Customs and Excise figures are very satisfactory indeed, in view of the fact that in the case of a good many articles, as I know to my personal knowledge, large stocks had accumulated duty paid, and the duty payments in the last nine months have been very much less in consequence. There is another reason why we should not be too pessimistic with regard to the state of lour national finances, and that is this: One sees in the Press that there are large claims for repayments on account of Excess Profits Duty. I see that there was one firm which was repaid about £1,000,000. A great many people do not realise that that £1,000,000 will count as regards income for Income Tax purposes, that 6s. in the £ will have to be paid on the whole of that, and that those shareholders who are fortunate enough to be Supertax payers will also have to pay their Super-tax on the proportion of their dividends which is represented by the repayment of Excess Profits Duty. Therefore, it is not, I think, an unfair argument to say that if £30,000,000 or £40,000,000 have been repaid to firms on account of Excess Profits Duty, at least one-third will come along afterwards in the form of Income Tax-and Super-tax. Furthermore, the Chancellor of the Exchequer stated that next year we should feel the effects of 1921 being a poor year for revenue purposes. I suggest, with some little knowledge of these matters in 524 business affairs, that it only comes in in the following year, that there is a lag behind of a year more than the Chancellor mentioned, and that it is only in 1923 that we shall feel the evil effects of any lack of income in 1921.
§ The FINANCIAL SECRETARY to the TREASURY (Mr. Hilton Young)
Did he say that applied to all industries, or only to certain industries?
§ Lieut.-Colonel POWNALL
That applies to Schedule D of the Income Tax. A very large proportion of Income Tax has been received, and there is a lag behind of a year more than the Chancellor indicated, and he will not feel the adverse effect of 1921 being a bad year until the Income Tax due on 1st January, 1923. Furthermore, I suggest to my hon. Friend that the scheme which was prepared last year to make one year the basis for Income Tax purposes instead of three years had very much better stand over, not till next year, but some time ahead, until we get more stability in Income Tax matters. If the Chancellor wished to make 1921 as the standard year, it would not be in the interests of the Inland Revenue. It might be in the interests of individual taxpayers, but it is a very important point that that scheme should not be started until trade has had a chance of recovering, and the one year would be a reasonably fair year from the Income Tax point of view, which it would not be in 1922 or 1923.
Another point is with regard to the exchange. I think we all appreciate how impossible it is for a good many of our principal foreign customers in pre-War days to buy from us, but I wish to stress the fact that while there have, of course, been fluctuations in the exchange with our Dominions overseas, the fluctuations have been relatively very small indeed compared with what they have been in Continental countries. I mention that in order to show the all-importance of its bearing on the development of trade within the Empire. At the present time the Australian exchange is only about £1 per cent. in favour of England as against Australia, and the Canadian exchange is much more in our favour than in that of the United States, whereas the exchanges of the Continental countries in many cases make it impossible for them to buy from us. I suggest that it is of importance, in these next few years, when 525 many of the foreign countries will not be able to deal with our Colonies, and in the same way they cannot deal with us, because of the exchanges, and it gives us a wonderful chance of strengthening our position with regard to our colonial trade. My last point is this, that we are hoping that what is called the Super Axe Committee may recommend very great reductions in—
§ Mr. DEPUTY-SPEAKER
It is not in order to refer to the finance of next year. Finance is only in order on this Bill at all in so much as the extra Supplementary Estimate disturbs the finance of the present year. It is only in that way that it becomes in order at all, because this is not the Second Reading of a Finance Bill, in which case it would be entirely in order.
§ Lieut.-Colonel POWNALL
My only reason for mentioning it was that the Chancellor of the Exchequer had given some figures with regard to next year, and I thought possibly I might follow him and say that a number of us who are very keen on economic matters hope that, in the few months between now and the presentation of the Budget, everything possible will be done to reduce expenditure in every possible way.
§ Mr. G. BARKER
It is a truism to say that through unemployment this country is faced with the greatest peril in its history. That statement has been made in this House many times during the last few months. The complaint on these Benches is that the Government proposals for dealing with unemployment are altogether inadequate. We know from figures supplied by the Government that the number of unemployed to-day is about 1,750,000. The House was specially called together to deal with the case of these unemployed, but instead of our dealing with it as a deliberative Assembly we were confronted by a formula drawn up by the Chancellor of the Exchequer which has rendered the whole of these Debates practically a farce. We have been hampered and fettered from the moment we assembled, we have been told over and over again that there is no money in the Exchequer, and that therefore the claims put forward on this side of the House for adequate relief for the unemployed could not be granted. In the mining industry there are, in round numbers, 200,000 unemployed. These men will have 526 to be maintained very largely out of this fund; but I think there is a better way of dealing with the question. In face of the rulings of the Chair, I find it difficult to deal with the matter with the freedom I should like to have, but I intend to try to keep within the ambit of the Debate. The remedy that I would apply, and that the party I belong to would apply, would be, in the first place, a revision of the Reparation Clauses of the Peace Treaty. We have been told many times that the Peace Treaty is largely responsible for the present unemployment, and therefore, if I or my party had to deal with the problem they would proceed at once to rectify some of the blunders registered in that Treaty. They would try to do something to give us a fair and equal chance with Germany in the markets of the Continent.
Before the War this country had fair competition. To-day, through the Clauses in the Peace Treaty, free competition no longer exists, because during the 10 years from the signing of the Treaty Germany is compelled to supply France with 7,000,000 tons of coal per annum. One of the first remedies to rectify the present unemployment in the coal trade would be the elimination of these Clauses, so that we could have fair and equal treatment in the markets of the Continent. The same remark applies with equal force to Belgium, because we know that Belgium also is to be supplied with coal under the Clauses of the Peace Treaty. I have the Treaty in my hand, and if I were in order I should like to read the Clauses out, but I will try to quote the Clauses without wearying the House with reading them. If any hon. Member wants to see the Clauses he will find them on page 112 of the Peace Treaty. Belgium is to receive 8,000,000 tons of coal for a period of 10 years, and Italy has to receive from 4,000,000 to 8,000,000 tons of coal, and all this is German coal. We are debarred from this. If we could restore the coal trade to a fair and equitable basis we should prevent our rivals on the Continent from having the unfair advantage over this country which they have at the present time. Through getting this coal our competitors on the Continent are able to make cheap steel, and by making cheap steel they put our furnaces in this country out of blast, and they have reduced the steel trade of the country to a greater state of ruin than the coal trade. If we 527 could rectify and re-establish the coal trade we should find coal for our ships that are lying stagnant in harbour, and this would give increased employment to the men working on those ships and to the men in the dockyards; and, in fact, in my opinion, the languishing condition of the trade of this country is due to a lack of revision of this Treaty. If we are to have employment re-established we must revise this Treaty, which is so largely responsible for the chaos and ruin in the mining industry at the present time. I have not heard anything from the Government with reference to this.
I should like to know from the representatives of the Government what they are prepared to do; it is no use playing the ostrich policy, we must have the question faced. This question is responsible for the conditions of the country to-day, and we must have it remedied, and it is the function of this House to find a remedy for the terrible state of things at the present time. I notice the Secretary for Mines is in his place, and this is not the first time that this question has been ventilated, either here or in Committee. We have never had any satisfactory statement from him in regard to this matter. As I remember, he stated once before that this coal is coal that is paid to these countries to indemnify them for losses during the War. That is not the fact. This coal is plus the coal paid for indemnification. No one on this side of the House would quarrel with the Treaty giving an indemnity of coal to these countries, but we do say that the Government have gone far beyond this, and have practically ruined the coal industry of this country by these clauses in the Treaty. To remedy that they must apply this revision that I have suggested. The coal trade of this country is indispensable to the prosperity of the country. It is no use on the eve of the Adjournment of this House, for some indefinite period, with inadequate preparations made for meeting the unemployed problem, for the Government to remain silent in face of the evils that are confronting them, arising out of their own folly in making this Treaty. It is essential that this Treaty should be revised.
There is another point on which I should like to say a few words. I refer to the 528 inadequacy of the relief under these provisions. £12,000,000 is a mere bagatelle to deal with a question of this character. It is no use putting the excuse before the House that the more money you find to relieve the unemployed the greater will be the amount of unemployment. The Government are spending very much larger amounts of money on other purposes than they have attempted to spend in relieving the greatest peril that has ever confronted this country. It has been stated as to what are the wages in the mining industry. I do not intend to go into that other than to say they are very inadequate for the people to live upon; therefore they are bound to come under this scheme of the Government. The scheme in itself is entirely inadequate. It may be news to the Government that in the Bedwellty area wages are so low that men in full employment are not able to maintain their family and have had to apply to the guardians for relief. A man gets 38s. per week for a full week, and about half that amount if he works three or four days, as at present. Therefore we say that the provisions of the Government made in these Bills are entirely inadequate. Then there is the question of those living in necessitous areas. Many of these areas are bankrupt; this is because the Government have not faced their national liabilities, but throw them upon the localities. The Minister of Health has promised us nothing for these areas except the power to get more loans. What is the use of offering facilities for loans for bankrupt municipalities and boards of guardians? We want a more definite guarantee from the Government that they will contribute out of the national funds for the relief of the unemployed. Not a day passes but what Members of the House receive resolutions from county councils and boards of guardians protesting against the burden of unemployment being thrown upon their shoulders. We want a more satisfactory statement from the Government in respect to these necessitous areas.
I can only repeat that we consider these provisions are entirely inadequate and that we have been brought together here, not to discuss a real solution for this evil, but to discuss a formula which was drawn up by the Chancellor of the Exchequer before ever we assembled in the House. The Government have a responsibility upon them. The winter is coming upon 529 our people. No one dares to think how these destitute people, without any relief for the last eight or nine months and their resources gone, are going to live. Yet there is nothing in this meagre, miserable, pittance for these people to exist upon. The proposals show the bankruptcy of the Government so far as statemanship goes. The Government are simply living from day to day. Their policy all the time is, "Sufficient unto the day is the evil thereof." There will be the strongest condemnation in the country of this Government whose most wretched item of policy is the miserable method they have taken to deal with this grave unemployed evil.
§ Major GRAY
As I have ventured twice to criticise the details of the proposals of the Government during the last two or three weeks I will ask the indulgence of the House while I say a few words on their policy generally. Let me first remark that I noticed with interest the declaration made by the hon. Member for Harrow (Mr. Mosley) that an international system of credit would be the most substantial method for setting the wheels of industry going again. I agree; but it seems strange, if that be his policy, that he should condemn the Government for taking what appears to me to be the first and preliminary step in that very direction. If the scheme to which the House has given its approval of national credits by our own Government proves a success—and one may hope it will—surely that will be a step towards the establishment of an international system of guarantees, probably by all the nations subscribing to the League? From that point of view, therefore, the policy of the Government should be free from criticism. I listened also to the suggestion from the hon. Member for Middlesbrough (Mr. Thomson), who urged that the burdens should be thrown to a larger extent upon the national Exchequer to the relief of the local rates. I sympathise—all of us who have had any part in local government must sympathise—with the ratepayer in the continually increasing burden thrown upon him, but I must say that it has always seemed to me, in a study of this question, that if the ratepayer is to be relieved, and the charge thrown upon the national Exchequer, then the control of the expenditure must be centralised too. You cannot possibly have local adminis- 530 tration of a burden discharged by the taxpayers. The duty of the ratepayer must be twofold. He must find the money; he must control the expenditure. I did not understand from my hon. Friend's speech that he was prepared to transfer from the locality the control of expenditure to some central authority. His was a plea for the relief of the ratepayers at the expense of the taxpayer without any suggestion that there should be a rearrangement of control.
Mr. T. THOMSON
I was referring to the abnormal charge of unemployment and not to the normal charge in ordinary times.
§ Major GRAY
If the difficulty of the local authorities be abnormal I am afraid the temptation to spend other people's money would also become abnormal, in fact it would become irresistible. The greater the local demand, and the knowledge that money can be received in a grant from the State would produce an overwhelming temptation to the local authorities to spend with a perfectly free hand regardless of the consequences. They would not have to bear the consequences at the November Election, and the whole responsibility would be thrown on the Government. Until we have a revision in regard to the question of local taxation, I am afraid the ratepayer must bear the consequences of local administration, and if the local authority controls the expenditure then the ratepayer must be prepared to foot the bill.
I know of nothing more demoralising than State grants in aid of the expenditure of local authorities unless those grants be accompanied with stringent regulations, and even then I know what is the real temptation. I am not satisfied with the proposal to vest the control in a Minister of State. I can conceive of constant conflicts between the Minister of State and the local authorities in regard to the expenditure of the money raised from the local rates. Surely it is a fundamental principle in all local government that control and expenditure must go hand in hand, and that so long as the local authority spends the money they must accept responsibility for the raising of that money.
I would now like to offer one or two comments upon the two theories which have been bandied across the floor of this 531 House—perhaps I had better not call them theories, it would be more correct to call them assertions. On the one hand we have been told that the whole of this charge for relief should have been met by the Government, that they must find work for the unemployed, and the responsibility must be shouldered by the Government. On the other hand we have had the exact opposite suggestions made with very great skill and often full of charm by my hon. Friend the Member for Mossley (Mr. A. Hopkinson), who has said frequently that the whole responsibility should be met by private charity and that the State ought not to interfere at all, and he further states that it is no part of the duty of the State to be generous with other people's money. In other words he says that those who have money should assist the have-nots, that the employer and his workmen should take common lot together, and in times of distress the employer should help his workmen over the period of trouble; that the responsibility rests with the individual, and that it is economically wrong for the State to take any hand in the matter at all.
That is the theory, but, if I may quote an old phrase, "Methinks the lady protesteth too much" in urging that the entire responsibility should be borne by the individual. That is a theory which breaks down in practice the moment it is applied to human affairs, and inevitably so because the human element comes into operation, and that element is variable. Therefore a theory which may fit one set of circumstances fails altogether when applied to another. The theory of the hon. Member for Mossley would be admirable if all employers of labour were charitably disposed and prepared to bear the suffering along with their workmen, but that is not the case. There are those who are willing to assist and those from whom you will not get a single penny to assist distress. If my hon. Friend applied his theory the whole way round, if the State took its hand off, and the local authority bore no part of the burden, what would be the result?
We have seen the result in past days. The good employer seeks to help his workmen. He provides them with good wages and reasonable hours of labour, 532 and then he finds himself at a disadvantage in the market as against the bad employer of labour. I recollect a large firm on the banks of the Thames, the managing director was, in my judgment, one of the most humane of employers, though many people regarded him as a great crank because he would insist upon paying a high rate of wages, and adopting conditions of labour which he regarded as model and as essential for the prosecution of the industry. What was the result? He had no work in the yards, because the bad employer secured the Government orders, and they went to other parts of the country. It is invariably the case that if you leave this question, as my hon. Friend suggests, to the private individual to bear the burden, then charitably disposed and large-hearted people are placed at an inevitable disadvantage as against their more austere competitors in the market. Trade collapses, and the workmen suffer.
These economic theories may be pushed much too far. They sound all right in Debate, and they look all right on paper, but they fail in their application to human affairs, and I am perfectly certain that if the control of relief were in the hands of my hon. Friend the Member for Mossley, and he sought to apply the principles he has expressed in this House, there would be a complete collapse, and he would be the first to be driven to acknowledge the collapse of his own theories. Those theories will not now stand the test of application. While I consider the hon. Member for Mossley was wrong in pushing his anti-Socialist principles to an absurd extreme, may I say that I think the other assertion, to the effect that the whole of this misery and lack of employment is due to the capitalist system, is equally absurd? In the first place, it is not a system. It is only a custom, although it is usual to describe it as a system.
§ Mr. DEPUTY-SPEAKER
The hon. Gentleman is going rather wide now when he proposes to discuss the system responsible for unemployment.
§ Major GRAY
I am sorry I cannot press that point. I was not proposing to pursue it at any length; I merely wanted to suggest that, while one doctrine had been pressed to an absurd extreme, the other doctrine, as to the cause of unemployment, is equally unsub- 533 stantial and would not withstand criticism. The main argument brought forward, apart from this comment as to the causes of unemployment, has been that the whole of the charge should have been borne by the State and shouldered by the taxpayer. As a matter of fact, the Government have taken neither line of action. They have not followed the suggestion that the matter should be left to private charity or private enterprise. I think, when the Session was resumed, the Prime Minister described that proposal as the State standing aside and doing nothing—an impossible position. Neither have the Government taken the line of throwing the whole of the burden on the taxpayer. They have adopted what appears to me to be a medium and justifiable course, under the circumstances. They have provided that part of the charge shall fall on the taxpayer, part on the ratepayer, some on the employer, and some on the workmen themselves. When I have listened to the suggestion that the employers should find relief for the unemployed, I have always had at the back of my mind the question, "Why should not the fortunate workman assist his less fortunate brethren?" Is there not a similar obligation on the fortunate workman as on the fortunate employer? I see no reason why the burden should be thrown on the employer and the fortunate workman always escape. In the Government scheme part of the charge will fall on the men who are fortunate enough to retain their employment, and I believe that they will willingly meet the charge—as willingly as the best of the employers. I believe they will contribute such small sums as are set out under various Bills quite gladly if it will do something to relieve their less fortunate brethren.
That appears to me to be the Government scheme. It is a scheme distributing the charge upon those who are able to bear it—it may not be in proportion to their ability to bear it, but surely the burden is being distributed among those who can, to a certain extent, bear it. If it had fallen entirely on the rates it would have been objectionable, because the rate-payer is not the same person as the tax-payer, although people very often assert, that he is. The old idea that if you are not paying from one pocket you are paying from another, is not sound. Quite a different set of persons are met by the tax-collector to those who are met 534 by the rate-collector. That is a system, and not merely a custom. Thus, the burden is to be borne by the tax-payer, the rate-payer, the employers, and the workmen, with an amount much smaller from the State than I would gladly have seen granted. I cannot resist the statement of the Chancellor of the Exchequer. One cannot resist the impression which has gained ground among the manufacturing classes of the country that we have now reached a very critical stage, and, although I am optimistic enough not merely to hope but to feel sure we shall get through, yet we are bound to realise that if taxation be increased unemployment will also be increased. There is no shadow of doubt that, beyond a certain point, the country cannot withstand the strain of taxation. The moment that point is turned, then the very first to suffer will be the unfortunate workmen of this country. The Government have had to face a very difficult problem and to undertake an exceedingly difficult and troublesome task, but on the whole, having regard to the resources available, I think their method of distribution is wise, and probably the best which could have been adopted in the circumstances.
There is only one word more I should like to add, and it is with regard to the future. I hope that the lesson of the present is not going to be thrown away. When the House breaks up at the close of this week, will the Government then dismiss the unemployment problem entirely from their minds? I sincerely hope not. These periods of unemployment are recurrent. We may expect them again. Will the Government be prepared with some scheme either to pervent them, or, if that be impossible, to deal with unemployment the moment it arrives, and not wait until it has become acute and then call the House of Commons together to pass legislation almost under panic conditions. That has been the case up to the present. If there be a recurrent disease medical science immediately directs its attention with a view to an early cure. The more virulent the disease the greater is the intensity of the research with which medical science faces the problem. If it realises it is not preventable, then it is prepared with an immediate remedy—with something which can be applied the moment the symptoms of the disease are shown. 535 They do not wait until the patient is in extremis and then call in a consultant to find out what is best to be done. They prepare for what they know is a practical certainty. Will not statesmanship take the same attitude with regard to unemployment?
§ Major GRAY
This is a recurrent disease in the body social, and ought not therefore the Government to be prepared with measures either to prevent its arrival or to minimise its effects? It should be prepared to apply such measures automatically, so as to alleviate the disease at once. I do not think that this problem ought to be trfled with year after year, decade after decade. I am old enough to recollect some of the periods of bitter depression in the years gone by and the feeble efforts made by the Governments of those days to deal with the problem. I cannot bring myself to believe that the remedies now being applied are sufficiently strong to meet so great an evil, but I hope that when this Debate closes and the House breaks up and our doors are shut that the doors of the Government offices will not be closed to a consideration of this problem. They must face the future with a firm determination to do all that is humanly possible to prevent a recurrence of such a terrible disaster. If it cannot be prevented, and in the nature of things there must be these fluctuations in trade, then there should be well organised and well ordered schemes already in existence which could be applied at once in order that the great distress through which we are now passing may not be repeated. If this be a real lesson, not merely to this Government but to all Governments, and to all who are responsible for the care of State and for the well-being of our people from whatever quarter their leaders may be chosen; if the present period of distress shall teach the lesson that means must be found for dealing with the trouble immediately it arises, then the misery through which we are now passing may eventually prove a blessing in disguise.
§ Mr. LAWSON
The hon. Member for Central Cardiff (Mr. Gould), who is a well-known shipowner, perhaps one of the best known in this country, as well as a well-known supporter of the Govern- 536 ment, said, in answer to a question by myself, that every ship that comes into this country by way of reparations means a ship less for the workers-of this country to build. That means, as is well known, that when the German tonnage became due the ships that were on order in the shipyards of this country were cancelled. The result was less work for the shipbuilders, for those who were preparing the steel, less work for steel workers, for iron workers and for miners. That argument applies equally to the miners' position. As my hon. Friend the Member for Abertillery (Mr. Barker) has said, 29,000,000 tons of coal for ten years is coming on to the markets at simply the cost of the transport, France, Belgium and Italy are getting the coal which formerly, to a great extent, they had to buy from the coal owners of this country. They are not only getting that coal themselves, but are actually going into the markets which were formerly ours. I come from a county in which it is not possible to divert the mind of a working man from this question, because he knows that the coal which he produced previously went to certain markets, but that to-day those markets are being occupied by German coal, coming by way of France, Italy or Belgium, at a merely nominal price.
The Government know of this fact. One of the outstanding things in the Debates in this House during the last few weeks has been that even supporters of the Government have stated, and have made speeches in support of the argument, that the Indemnity Clauses of the Peace Treaty constitute one of the great causes of the unemployment in this country, and that until we deal with them there is no hope at all of meeting the situation. One of the most significant things is that while a few supporters of the Government have spoken in that direction there has been no attempt to meet the argument from any side of the House, least of all from the Government side. What I want to know is, if shipping is to come in and to be thrown on the markets; if 20,000,000 tons are to come in for five years and 15,000,000 tons for the next five years, what is to be our position next year, the year after that, and at the end of ten years? We shall be in the position of paupers.
It is absolutely untrue, and those who make the statement are either ignorant 537 of the facts or are deliberately misleading the people, to say that Labour is responsible, either by having increased the costs or by industrial trouble, for the present situation. However those things may have added to or aggravated the situation, everyone must know that fundamentally the Peace Treaty and the Indemnity Clauses are the cause of the actual situation. I want to know when the Government is going to meet it? They will have to do it. No man in his senses can sit down for five minutes and think of what the state of this country is going to be next year, and the year after that if the Indemnity Clauses are to be allowed to work out the full value they contain. The only argument used is that we have our obligations to the French. Were I a statesman I should handle that very delicately. If that is the only argument, why do not the Government tell the House and the country that that is the real situation? I cannot think that the people of this country would support any Government, or any alliance or any entente, if they were prepared to carry the agreement with the French to an extent which would damage the people of this country beyond words. We are going towards a state of pauperism simply because we will not admit to ourselves what is the real result of the logic of our own position in the making of that Peace Treaty. We have got beyond the stage when people say, "You simply want to be kind to the Germans." I come from a family which has a right to speak on a question of this kind. It is a question of being kind to our own people and to people who are suffering almost beyond description at the present time.
Even with the situation as it is, I think it ought to he dealt with from a national point of view. The hon. Member for Accrington (Major Gray) said that the best method has been followed by sharing the burden as it is now being shared. I think the nation itself ought to have borne the present burden of unemployment, and the State directly. What is more, I believe the State will have to bear directly almost the whole of the burden which the local authorities are at present carrying. What is the position? During the War all kinds of arrears were created. There were arrears with regard to roads, hardly a local council in this country can meet its obligations as to its roads. Reservoirs had to be made, there was the need for 538 water, and other things. The local authorities cannot meet the arrears of the War, to say nothing of undertaking developments, in the present financial circumstances. That is a war position. It is a position created by the War, and the Government ought to have met it as a war charge, just as they did the war obligations during the last five or six years. It is said that the State is not in a financial position to meet it. Of course it is not, and it never will be if we are prepared to spend millions for battleships and for standing armies at the present time. I do not know whether the Members of this House are aware that the cost of the standing Army and Air Service at the present time is six times what it was in pre-War days. Our enemies have been defeated; the people who were used as a means of building up armaments in pre-War years are trodden under foot; we are Allies with everyone that is worth speaking about; and yet our Army is costing us six times what it did, and we are going to build four battleships which will not be worth a snap of the fingers, according to the best authorities, when they are built. We are spending £40,000,000 upon that, and we are always met by the statement that the Exchequer cannot meet this, that and the other, in spite of the staggering burden that the local authorities of this country have to face.
It has been assumed, during the Debates which have recently taken place in this House, that the work that is going to be done is a sort of charitable work—like digging holes and filling them up again. Only those who are ignorant of the actual needs of local authorities and of the actual position in which they find themselves can think anything of the kind. The local authorities of this country could spend millions for roads, for preparations for reservoirs, and a great many other things which they feel the need of doing at the present time, and it would be to the advantage of the State if a great deal of the money that is being spent for destructive work were spent in the direction of constructive work and of relieving the local authorities. I want to ask the Government representatives if they have anything to say upon the question of reparation. That is the real thing for this House to deal with and for this country to deal with. All the time that we are dealing 539 with anything else, we are simply talking round the subject. The people of the country cannot be drugged always. It is coming home to the villages as well as the towns, and this Government cannot for ever continue silent on the subject. I know that the Press is largely silent, and there is in this House silent assent. It may be that some of us have consented to a policy which we cannot exactly swallow for the moment, but hunger and want and suffering are going naked through the land, and will ultimately have the effect of compelling this or some other Government to face the situation. I do not believe that the French people, as a people, will refuse to face it. It may be that some of the diplomats may refuse, but, if they will not face it, it is time this country told them what the situation is and that they must bear the obligations themselves—that we have a situation to face, that our people are starving, and that we cannot stand upon ceremony. It is time that this House and the Government appealed to the French and our other Allies to face this question.
§ Mr. HILTON YOUNG
Since the speech of my right hon. Friend the Chancellor of the Exchequer the Debate has followed a not unprecedented course. The critics of the Government on the Budget have, in regarding the picture, darkened every colour that was dark and obscured those which were bright. Let me not complain of that; it is well that we should realise to the uttermost our difficulties. On this occasion, however, I take comfort from the fact that the effect of gloom was somewhat spoiled by other Members—I would instance the hon. Member for Central Edinburgh (Mr. W. Graham)—who found the picture to their liking and more cheerful than they had expected. What is it that, as I understand, is the central current of criticism against the Government in respect of those observations of my right hon. Friend? It is, I take it, that we should have faced the facts earlier. [HON. MEMBERS: "Hear, hear!"] Never has a barb of criticism fallen more bluntly, in my opinion, upon the armour of the Government. I should have ventured to propose to the House that the financial history of his year was distinguished from that of preceding years, was distinguished from the normal 540 by, above all other facts, the constant review in the presence and on the Floor of the House of the financial position of the year. Let me remind the House that, after the Budget Statement, a full and detailed account of the financial state of the country was given to the House at the end of its last sittings. To the extent to which it has been necessary to add to or supplement that, a further review has been given to the House to-day by my right hon. Friend.
Such steps are not usual. They are warranted by the grave circumstances, the great difficulties, the unprecedented nature of our financial position this year. I think, however, that it should be recognised, in the face of that, that there has been a most unusual and a most just[...]able willingness to face facts as they occur, and to take the House into the full confidence of the Government on the subject. If I may say so, the critics of the Government in this respect seem to me to have taken for their political example a character well known in fiction—the White Queen in "Alice in Wonderland." It was her habit, as the House may remember, to raise her voice in lamentation before she was hurt. The criticism of the right hon. Gentleman the Member for Peebles (Sir D. Maclean) against the Chancellor of the Exchequer appears to me to have been always based on the ground that he does not meet the desire of the right hon. Gentleman in calling out before he is hurt. I believe that the truer political wisdom is, while making every preparation and evry effort to avoid the hurt that is feared, not to cry out before the hurt comes. To wait to cry until the hurt comes is more consoling to yourself and less needlessly alarming to the by-standers. The criticism is repeated today that the Budget has fallen in ruins, but I think it is repeated in rather a half-hearted manner. I notice less conviction and less oratorical emphasis upon that criticism in to-day's Debate than has previously been brought to bear upon it. Surely the facts as narrated by my right hon. Friend are a vindication to the full of the structure of the Budget. Let me remind the House of the two central figures. First of all, there is what I may call the first rank of possible surplus, of £97,000,000. It was said in the original Budget that this £97,000,000 would probably have to be written off 541 against contingencies to be provided for in Supplementary Estimates. That is precisely what has occurred, to an approximation which would be remarkable were it not usual in the forecasts of the experts who advise the Government.
There is a second rank of the surplus of £80,000,000. At the time of the introduction of the original Budget it was hoped that that would be available for the redemption of debt. The ascription of such ultimate surplus to the redemption of debt is always a contingency. Owing to the recognised depressed state of trade, the coal strike, and all other events, that fortunate contingency will probably not be realised, and that £80,000,000 odd will not be available for the redemption of debt. What is the result? What does it all come to? Is it necessary to deepen these colours of gloom and to preach financial cataclysms of the sort to provoke nerve-shaking headlines in the daily Press? Surely not. What is the worst contingency to which my right hon. Friend has referred? Only that if all that he prophesies of adverse is realised, it may be that we shall redeem no debt this year. There is a reasonable prospect that the actual dead weight of debt this year may be reduced by a substantial number of millions owing to the redemption of War Bonds, and so on, and actually on balance, and on the contingency described by my right hon. Friend, it may be that there will be an actual reduction of dead-weight debt at the end of this year of a substantial number of millions. He would be unwise who would prophesy that that would be so or not, but it is still possible. It is still not improbable. Supposing that were not done, what is the worst result we have to contemplate? That in this year, the year of the great trade depression, the year of our difficulties, of the coal strike and so on—[HON. MEMBERS: "Lock-outl"]—the year of the coal stoppage—there will be no actual redemption of debt. Is that a result of which we need talk in words of catastrophic gloom, of which we need be ashamed? Surely, considering the disastrous nature of the condition of trade this year, all over the world as well as in this country, considering that we are passing through one of the greatest periods of national depression, of disruption of industry, through which this country or any other has ever passed, 542 that we should maintain a balance between revenue and expenditure is achievement enough, and surely also, were we to call on the taxpayer in this year for any great sacrifice for the redemption of debt, with these burdens which are already cast upon us in such overwhelming magnitude, it is then that we might indeed expect to be liable to the most severe criticism.
I find one other main line of criticism which has been advanced against the Government, or rather, not a line of criticism, but a point of criticism, which perhaps needs meeting. It is rhetorically asked, "Why, if these great savings, for which you hope and for which you are working, are to be made this year, were they not made long before?" This argument on the point of time is one to which people attach such weight as that to which it is entitled. The argument front the point of time is one which has perhaps not so much weight in the practical affairs of the world as some others. But this question of the time at which great national economies can be made deserves some more careful and discriminating consideration than that rather shallow criticism, "If you are going to make the economies next year, why have you not made them long ago?" There are two regions of economy. There is the region which consists in saving wasteful, nugatory, unnecessary expenditure. For postponing that economy to any future time there can never be any shadow of excuse. That region of economy can, and should be, undertaken wherever, whenever, and at the earliest moment the possibility is detected. But there is another region. There is the region of economising which may well come upon a nation when it is sorely beset financially, which consists of the suspension of services which, though useful in themselves, are not essential, and must be spared in order to deal with the unfortunate financial circumstances of that nation. In that second region I would ask the House to consider that economising cannot be an act. It must be a process which takes time. In the first place, you are not justified in suspending such services, useful in themselves, until it is essential that you should do so, until the moment at which it becomes really impossible to go on, and in the second place, in order to get such economies effected, it is impossible that you should 543 move ahead of public opinion. In order to carry out this further region of. economy, and to induce the country to deal with a temporary crisis by, let us hope, the temporary sacrifice of services which are in themselves useful, it is impossible for the process of economy to be effected unless the opinion of the nation as a whole, as represented in this House, is behind the Government. That is a question of time, and it is idle to say that this process of persuading the country and the State to reduce its standard of living can be accomplished in a single act and by a stroke of the pen.
There are two aspects of the financial situation. There is this aspect of expenditure, and there is the other aspect of revenue, and an opportunity appears to be provided to me of saying a word which I would fain say on the question of revenue by some observations of the hon. Member for Central Edinburgh. He emphasised the importance, in these days in which it is so hard to make both ends meet, of improving the machinery of the Income Tax in order to avoid evasion. That is certainly a matter of grave importance at present, and it has occupied, and will occupy, and needs must occupy, the gravest consideration in order to ascertain whether it may not be possible, on the lines of the Report of the Royal Commission, to increase the efficiency of the Income Tax machinery with that end in view. That leads me on to say that it has to be recognised that at the present time the collection of taxes casts the greatest possible strain upon the taxpayers of the country. They are tried more highly now than ever before. I would say, also, that in view of the great increase of the revenue collected, and so forth, it casts a strain of another sort, the strain of overwork upon the tax collecting machinery, upon the officials of the Inland Revenue. They are good men struggling with adversity. The word which I desire to let drop is this—it does appear to one in my position who sees something of the working of that machinery to be a needed word—to remind ourselves in this new anxiety, and this new stress which has come upon us all with the great burden of taxation, that the collectors of taxes, the machinery for the collecting of the taxes, the Inland Revenue, and all that branch of the 544 machinery of the State, is, after all, a useful and beneficial one, and that when we feel inclined, as we do feel inclined at times, to look upon the whole of that part of the organisation of the State as something essentially hostile, as an enemy of the human species, it has to be remembered that that point of view is not one that can be reconciled with our public duty. When it is necessary to make appeals for the efficient carrying on of that great service, I am sure that we shall all be ready to remember that it is a service carried on with high traditions, and that it is more essential for the proper function of the State than any of the other branches.
A word needs to be said upon one or two criticisms that have been advanced, not upon the general financial position but upon the particular contents of this Bill; the schemes proposed by the Government for dealing with unemployment, and the manner of spending the money which, under this Bill, is finally being appropriated. The comment has principally centred upon that most novel part of the Government's programme for dealing with unemployment, the allocation of the credits, and particularly the allocation of the £25,000,000 of credits for capital works. The criticism was advanced with substantial force by the hon. Member for North East Derbyshire (Mr. Holmes), whose criticisms on financial matters are always so full of force, that the amount to be devoted to this purpose for the guaranteeing of loans for the raising of capital works was inadequate for the purpose which it was intended to achieve. I do not think that the contention has ever been made from this bench in connection with this matter that the amount of£25,000,000 was all that could be usefully employed for this purpose; far from it. What has been said is, that the financial structure of this scheme involves the raising of real investment money from the investor to put behind these works. That is what it ought to do. By doing that, it meets the criticism advanced by the hon. Member that this scheme may involve inflation. It cannot involve inflation in so far as it is confined by that condition, that money for the capital works is to be raised from the investor. Let me point out, as has been pointed out before, that that condition limits the amount which it 545 is possible to devote to this purpose. You must consider how much you hope to get in the investment market. If you cannot get any more than the £25,000,000 in the investment market, to fix a higher amount would inevitably lead to inflation, with all its consequences, good or evil.
The region for the application of State assistance is, undoubtedly, experimental. No such measure has ever been taken as a part of the financial measure of a European State before. It is, undoubtedly, highly experimental, but hopefully experimental we believe. Let us see how the experiment works, let us see the nature of the applications for help which are granted under this scheme; let us see what form they will take and the employment they will give, and then, if it is found that the guarantee is achieving the purpose that it was intended to achieve, and if it is also found that it is possible that there may be money available in the investment market for further investments of the sort, it is possible that on a future occasion when this House meets, further authority may be asked for, and may be given, to increase the amount.
I approach with diffidence, and will say only a few words, about a side issue as regards the Debate, but not a side issue as regards its importance, that has been raised by the hon. Member for Ince (Mr. S. Walsh) and the hon. Member for Abertillery (Mr. G. Barker). I would have more hesitation in referring to the matter were it not for this circumstance, that I know on a very recent occasion there has been an opportunity for a pronouncement and an explanation of the attitude of the Government upon many of the subjects raised. Therefore, I know that hon. Members, so far as it is possible to inform them, have no lack of information as regards the attitude of the Government. To what was said on that occasion I do not think I can usefully add anything in the course of this Debate. Reference was made, particularly by the hon. Member for Ince, to the effect upon the miners, and upon the coal trade in this country, and, therefore, upon the whole trade of the country, and upon all phases of national life, of the Treaty of Versailles and the Reparations. It is a question with which it is impossible to deal in a summary manner. In this region 546 we move not unrestrained by ties and obligations which cannot be ignored.
Another region of the general programme for which means are now finally being found in the Bill before us has excited a great deal of comment, and not only comment but suggestions of an interesting nature. The hon. Member for Central Edinburgh first raised the matter by asking what I imagine to be a rhetorical question on the subject of export credits. "Was there," he asked, "any use in the policy until a conference had been held on the question of exchanges?" If we are to postpone export credits until a conference is held and we arrange the exchanges, there would be little hope for any scheme of the kind. Admittedly while exchanges are in a state of violent fluctuation, as at present, the utility of any scheme of export credits must be enormously reduced, but nevertheless there is a distinct region of utility and benefit to trade in which the scheme can operate in spite of the fluctuating nature of the exchanges.
As to the utility of holding any such conference, I should be more firmly persuaded if I thought that there was the least doubt about the bedrock and true remedies for fluctuating exchanges. I believe that there is no doubt in the minds of all of us as to the real remedies for fluctuating exchanges. They are that the nations of the world should make their budgets balance and stop the use of the printing press in producing money. A conference of the world's greatest experts was held in Brussels and they expressed no more elaborate and no more obscure wisdom than that. [HON. MEMBERS: "No!"] The other things with which they dealt were of minor importance. [HON. MEMBERS: "Free Trade."] They laid down the broad, simple principles which are in the minds of all of us. I believe it is true that the world knows the remedies for fluctuating exchanges, and no conference can teach it now very much more about it.
But there was another question about a conference which it was proposed should be held on the subject brought forward by the hon. Member for Birkenhead (Mr. Bigland) as to the restoration of silver to its lost pride of place in the currency of the world. About that it will be difficult to say anything without saying much. There is possibly one 547 observation which may be made, which may be useful. Reference has been made to the importance of getting something that will remain stable as a standard of value, and to the utility of hard metal for that purpose. It is to be feared that at the present time hard metal is as unstable as a standard of value as anything else. We have had calculations made by those well qualified to make them as to the fluctuations of gold value in its power to purchase commodities during the past two years and if gold so fluctuates how much more shall we have silver fluctuating also? These are, I think, the principle topics of criticism and the most interesting suggestions that have been made in the course of this long and continually interesting Debate.
There is one topic which I referred to on a past occasion, and to which I wish to refer again, in order to deprecate the use of the word "deficit." In this connection the hon. Member for Harrow (Mr. Mosley) poured on my head a vial of invective or of irony—I know not which it was. In a previous debate on this subject I said that there was no deficit in sight. It is for this that I was criticised to-day. The explanation and my defence are very simple. I was right on that occasion. There was no deficit in sight then, and there is no deficit in sight now. Hon. Members who have had the advantage of listening to the Chancellor of the Exchequer will have heard the full account and explanation of this. Let us above all things avoid the use of such panic words which bring discredit upon our national finance and on our country. They are unjustified, and their use is mischievous. What is in sight to-day in what may be, perhaps, the worst year through which this great nation has passed, is a budget balancing its revenue and expenditure with no deficit of any kind. Let those who prefer to look on the dark side of the picture in their duty do so, so that they do not misrepresent. The use of such words is unjustified and mischievous.
§ Captain W. BENN
If the Financial Secretary thinks that observations made in Debate go to the root of the fall of the credit of this country, I think that he looking in the wrong quarter. It is deeds and not words that affect the credit of our 548 country. The hon. Gentleman's speech seemed to me, as so many of his speeches do, to attempt to prove too much. I heard him say in Debate only a few months ago:We are practically back to, if not below, the standard of expenditure for Civil Services purposes before the War.The hon. Gentleman is always completely satisfied with the situation. He is always quite sure that those who criticise him do so from some distorted party motive. He has told us that the great feature of the financial situation this year was the way in which the Government had taken the House into its confidence. He said that the position was constantly under review by the House. I submit that I heard that opinion with very great surprise. I have never heard of any Government from which it was so difficult to extort replies on questions about finance. Does the Financial Secretary to the Treasury remember the famous circular issued to allay public anxiety on 30th May, in which all the Departments were invited to reply by 1st July as to the reductions they intended to make? On 1st July or 31st July we began to ask what replies had been received, Not an answer—not one. Every question directed to the Departments was gathered into a basket by the Financial Secretary to the Treasury and answered with some form of cliché. This, after all, is the House of Commons. The effort in every Debate was to show the complete entente between the Government's plans and the opinions of the House of Commons. The Financial Secretary now tells us that the feature of this year has been this close touch between Government and House. Yet at this very moment, in some remote castle in Scotland, a committee of gentlemen, only one of whom is a Member of this House, is actually deciding the Budget of next year.
§ Captain BENN
I read in the Press that the Chancellor of the Exchequer has decided that if he cannot get £130,000,000 off the Estimates, we are to be bankrupt. That was the expression used by the right hon. Gentleman, and I direct the Financial Secretary's attention to it. There was never a time when the House was so completely flouted in the matter 549 of its own control over finance, as it is to-day. The Financial Secretary was pleased to say that the great feature of this year has been this actual touching confidence which the Government has shown in the opinion of the House of Commons. The fact is, that all the time since this agitation for economy began—it began on these Benches and not yesterday—the Government has met it in two ways. I tremble to draw the attention of the Financial Secretary to such expressions after his censorious criticism of an hon. Friend who spoke to-day. The Leader of the House spoke about the ex-Prime Minister as "ranting about expenditure," and I think "epileptic screaming" was one of the phrases used, because people criticised the ruinous rate of expenditure; and the Minister for Air, when he was tackled about the subject said:I must say that up to now"—that was a year or 18 months ago—no specific case of extravagance has been made out against the administration.The Secretary of State for Air is a Member of the Cabinet.
§ Captain BENN
He is a Member of the Government and in a very distinguished position. He said that no specific case of extravagance had been made out. If that is so what is the Super-Axe Committee doing at the castle in Scotland? What is the use of it?
§ Sir R. HORNE
What my hon. and gallant Friend the Secretary of State for Air said was that no specific case had been made out against the Government. Nor has it.
§ Captain BENN
If that be so, the old-time challenge for us to point out some item that ought to be reduced still stands. The items are to be discovered by the Committee of supermen who are not members of this House. That seems to be the Government's case. First they declare, that no reduction is possible and then that if a reduction is not made someone must go. That was what the Prime Minister said. I will take a specific case. We have constantly complained in this House about the excessive expenditure on Government staffs, not because it is a cause but because it is a symptom of extravagant policy. When we had our last Debate I referred 550 to the staff at the Admiralty, and the Financial Secretary got up and announced that in a staff which was 10,000, there would be a 20 per cent. reduction. He states that by 18th December there would be a 20 per cent. reduction. There is a specific case of a promise made in response to criticisms from this side but instead of a 20 per cent. reduction on a staff of 10,000 there has only been a two per cent. reduction up to date and we are within sight of 18th December. There is in an instance—not a very important instance perhaps. I do not suppose for a moment it affects the Chancellor of the Exchequer because he has just stated that the Government is not extravagant. It is an instance of which the House will take note, however, that there was a definite pledge to make a 20 per cent. reduction on 10,000 men and the actual reduction so far is only about 218 men.
That is an example of the Government's policy—to promise economy, to issue circulars, to appoint committees, to get super-men to supervise, and in the end nothing at all is done. The Financial Secretary has explained that. He says economies are of two kinds. First, he says, there is expenditure of a nugatory kind, which it is proper to lop off or reduce. What about the expenditure, since the Government took office after the Armistice, on its agricultural policy? Is that nugatory? Or is it expenditure of the kind or in regard to which it is permissible to wait for a little gentle pressure—I will not say pressure—but to wait to get the country into line with the economical instincts of the Government? What about the expenditure in Russia? What about the £100,000,000 distributed there by the Government themselves? Is that nugatory or is it there also necessary to wait for the public to come into line with the keen enthusiasm of the vanguard of economy? What about the expenditure in Ireland? Perhaps £30,000,000 would not be an excessive estimate of what has been spent in Ireland in coercion since the Armistice. Is that nugatory? If so, how can the Financial Secretary stand there and say that nugatory expenditure is extravagant and should be reduced at any time, but that such did not exist? That, I gather, is his defence. Then we come to another extraordinary item in his defence, and that is that the real reason why the Government did not economise was because they felt they had 551 not the public behind them. As soon as they could bring public opinion up to the level of their own high ideals of economy, then they would proceed to economise. It will be news to very many overburdened taxpayers to find that their mistake has been not to make their desire for reduced taxation obvious. The people who are struggling and borrowing money to pay their Income Tax and treating, with all the respect they can, those very useful officers eulogised so earnestly by the Financial Secretary—the mistake which these people have made is that they have not come into line with the Government. The Government have simply been waiting in order that public opinion should be firmly behind them before they make the necessary reduction.
This is a Coalition Government, and, of course, one does not expect that there shall always be complete harmony. If it be true—and this was the special pleading of the Financial Secretary—that what was required was public opinion behind the Government, why did the Prime Minister say on 19th August to the heads of Departments that if they could not reduce expenditure they must make room for somebody who could. He seemed to imagine then that the moment was ripe, but the Financial Secretary, who has looked at this matter from all points of view, is only discovering now that the great thing is not to go in advance of public opinion and not to let public opinion wake up at some moment in intense annoyance to find that the Income Tax has been reduced or the burden of taxation relieved. The hon. and gallant Gentleman went on to say that his complaint against the hon. Member for Peebles (Sir D. Maclean) was that he cried out before he was hurt. He compared him to the White Queen. There is another character in "Alice in Wonderland" to which one might compare the Government and the Government's policy—not the White Queen! He complained because my right hon. Friend said the Budget was in ruins. He said the public knew quite well that this surplus was never to be realised, but when the Budget statement was made and the Press reports appeared, it was understood that it was to be a surplus this year. There is no surplus. I may not use the word "deficit," but the fact remains that we are borrowing £60,000,000 552 this year to pay off debt. Is that so? That is the Chancellor's own statement, that we are actually borrowing money to pay off debt, a form of finance which I thought was long ago abandoned in the finances of this country. The Financial Secretary says this Budget is the Budget which we have got in one of the worst years we are ever likely to face, and it is a great triumph of our finance that we should raise all this money and get out of the year without a deficit, although we have to borrow £60,000,000 to pay back debt. Is that a perfectly accurate description? Is this the worst year? Surely he does not think there is an increasing taxable capacity of the country. Surely he knows that the limit has been reached and that you cannot possibly impose new taxes on the people. Surely he knows also that some of his taxes reap the fruits of some of the most prosperous times through which we have passed. He is still getting Income Tax on the three years' average and getting the advantage of all the boom years we have just passed through, and although he has omitted from his statement, much to my surprise and regret, the large influx of revenue from the dolls' eyes and musical boxes, and which no doubt will go a long way to redress this unfortunate Budget, it is not true to say that my right hon. Friend is at all using the language of hyperbole when he describes the Budget as being in ruins.
The Budget is in ruins. The surplus which was anticipated is not realised, and we have to borrow £60,000,000 in order to pay back debt according to our obligations. The right hon. Gentleman spoke of this year as being the worst year, but what about next year? What is going to happen to the Budget next year? I wonder what the Treasury have estimated the revenue to be for next year. In the Treasury Circular it is estimated at £950,000,000. I suppose the Financial Secretary would not put it at anything higher than £900,000,000, and suppose we take it at that for next year. First, there is the Consolidated Fund Services to be taken out of that, £370,000,000; then there is the payment of debt to the United States, £50,000,000; then bills from the railway companies, £30,000,000—a grand total of £450,000,000 out of the £900,000,000. Then there are pension 553 charges, £110,000,000, so that we get a total of £560,000,000 to be taken out of the possible £900,000,000, which is the most generous estimate anyone can make. We must take it, then, that all the Supply services added together next year have got to come within the limit of £340,000,000. How is it to be done? I do not know. It certainly cannot be done if you are laying down four battleships, the charges for which are always increasing. I do not know about next year's programme. This year's involves a trifling item in this year's Estimates, but as the building of these ships progresses, the item next year must be a very much larger one. Further, I have left out of account any financial commitment that may be involved in an Irish settlement. So when the right hon. Gentleman says we have got through the worst year without a deficit, and that this is a triumph of the policy of waiting for the public to come up to your own ideals in the matter of economy, I do not think he has really touched the point. The point is that next year we are faced with a very serious financial position indeed. Whenever the question of the taxable capacity of the country has been raised the Financial Secretary has always said in reply that it is very difficult to estimate the income of the country and to say up to what limit it can be taxed. But it must be obvious that there is some limit beyond which you cannot go. Some people think 15 per cent. and some people 20 per cent., and the suggestion of Mr. Cramond, made to the Institute of Bankers in June, is that this limit is already entirely exceeded. He pointed out that in 1907 the amount of national income put by for maintenance and for capital for new investment was about 23 per cent. He goes on to show that this year, with the reduction of the national income involved in falling prices, the taxation will be 32 per cent. and the margin for saving will altogether disappear. Need we look much further for an explanation of the large amount of unemployment which prevails? The truth is, if people cannot save and are not permitted by the tax gatherers to put any money by for their businesses or for investment, how can the trade of this country possibly survive? I congratulate the Financial Secretary rather on account of his cheerful optimism than on account of his correct judgment.
§ Mr. ROBERTSON
The Financial Secretary to the Treasury said an unprecedented course had been taken in discussing this Budget. He said the critics had darkened every colour that was dark, and that, like the White Queen in "Alice in Wonderland," they cried out before they were hurt. I cannot imagine the Financial Secretary to the Treasury, or anyone else, having a darker picture than the unemployed in the country at the present time. I cannot imagine anyone suggesting the unemployed are crying out before they are hurt. To say that may be the attitude of the individual who is comfortable and well fed, but it is not the position of the individual suffering outside. He also said there was a complaint that this problem ought to have been dealt with earlier. No one who is a fair critic will deny that the unemployment problem ought to have been faced earlier. We went on holiday and were called together only when there were grave threatenings on the part of the unemployed. I am prepared to admit that any government—even a Labour Government had it been in power—would have had after the War a difficult problem to face, but what I complain of is that the same steps have not been taken since the War to build up industry as were taken in order to carry on the War. I could not imagine this House going on holiday for three months in the autumn of 1914, with the Germans knocking at our gates! To think of it, the unemployed have been knocking at our gates—at the gates of Palace Yard—and are still knocking. Let me read to the House what I saw on a scroll in a miner's home—a miner whose two sons fell in the Great War, and who himself has been out of work for several months:He whom this scroll commemorates was numbered amongst those who at the call of King and Country left all that was dear to them, endured hardship, and finally passed out of the sight of men by the path of duty and self-sacrifice, giving up his life that others might live in freedom. Let those who come after see to it that his name be not forgotten.When we wanted men for the War we had a comb-out. I contend that if the Government had been as anxious to look after the unemployed as they were to prosecute the War there ought to have been as keen a comb-out of the surplus wealth of the country that is being spent at the present time.
555 But the purpose for which, as an old coal-miner, I have risen is to draw attention to the position in the coal trade that has already been referred to by the hon. Member for Chester-le-Street (Mr. Lawson)—to draw attention to the Reparation Agreement. The coal that is being supplied by Germany under the Agreement would have meant in pre-War normal times full employment to 100,000 miners in the British coalfields, and these and their families mean 500,000 souls. This Agreement is going on for ten years. What, then, is going to become of these 700,000 miners and their families? Are they to emigrate? Many of them in the early days of the War answered the call. Is that the reason the Government have made arrangements for an emigration scheme—that they can live beneath the flag in one of the Colonies? These men do not want doles. They want work. Are we to tell these men, many of whom fought through the War, many of whom I know, that they are to emigrate so that they may live beneath the flag in the Colonies. These men can live under the flag in their own country. If the Government have more in common with the French people than with their own then there will be some nasty things to square with the Government in this country. Some hon. Members sneer at that and they seem to rely more on the policeman's baton and the bayonet of the soldier, but there comes a time in the life of men who are starving when even those things are of no avail. No less than 100,000 more men could be found full employment in the mines of this country, thus saving national taxation, and we have a right to demand from the Government that they should see to it that no other nation benefits at the expense of the people employed in the coal mines.
§ Lieut.-Commander KENWORTHY
I want, if possible, to make one or two constructive suggestions, and I will do so as rapidly as possible. This is practically the last opportunity we shall have of putting forward any scheme for saving us from ruin. I want it to be put on record that I consider the expenditure on these relief schemes is wrong. In 1919, when the Government introduced their housing scheme, I pointed out that I thought they were going on entirely wrong lines, because they were putting 556 too great a burden on the local authorities, and too little on the State, and events have proved that I was right. The onus of carrying out the housing scheme was largely thrown on the local authorities, and only a few houses were built by the Government. If the Government are going on the supposition that land improvement, drainage, forestry, light railways, and roads are the only practical schemes for providing work for the unemployed, that policy will be found to be false and mistaken. Land improvement and drainage, afforestry, light railways—these are all things that are urgently required whether we have unemployment in the country or not, and the fact that we have 1,750,000 wage earners out of work is only an added reason why these great schemes should be taken in hand. Why should we have to import so much when there are such large tracts of suitable land running to waste? Then take the roads. They are a disgrace to the country, and specially in Wales. Talk to the farmers about the means of conveying their produce to the markets, and they will tell you there is a scandalous lack of light railways in this country. There are many other matters which should have been taken in hand long since. I have been trying to get some information from the Ministry of Transport as to some system of bridging or tunnelling the Humber—a thing talked about for the last 30 or 40 years. Here is a golden opportunity for it. And so too with the Channel Tunnel. What has happened to the Severn barrage for producing cheaper electricity? Has it been frightened out of the mind of the Government by the Anti-Waste Press? We ought to look upon all these great undertakings as necessary and not merely as a means for providing work; otherwise if the policy of the Government is carried out we may get a trade boom, we may get out of the depression and the commercial slump, and then I suppose these schemes will be left half finished.
I wish to deal with another side of this great subject. I refer to the extraordinary spectacle with which we are faced in Germany. Of course we can now speak of Germany without undue prejudice. The mark is falling at a catastrophic rate. Are we really facing 557 the situation there? The position in Germany to-day is that they are simply having to close their factories owing to their inability to purchase the necessary raw material from abroad. I have had actual evidence of that during the last few days, and it means that unless something happens a collapse is upon Germany. Some hon. Members have spoken as if there were a plot by German industrials to depress the exchange. There could be no argument more hollow or Ill-informed than that. What would be said if Wall Street financiers told our friends in America that we were deliberately depreciating our pound sterling in relation to the dollar? Meet a Frenchman, and he will probably deplore the depreciation of the franc; but tell him it is being deliberately brought about in Paris, and see what he will reply. The suggestion is perfectly absurd. In Germany people of all classes were deploring the terrible fall in the mark when it stood at 450. Then the unfortunate Silesian solution was produced which, I regret, we have had no opportunity of discussing, and I do not intend to discuss it now, as it would be out of order. That came, and down the mark fell another 200 points to 600. Since then it has been going steadily down to 1,100. One of the greatest financial authorities in Europe, certainly in Germany, told me that the mark, standing at 1,000, would mean the ruin of Germany, because she could not possibly finance her imports. That is what is happening to-day. This affects us most vitally. If Germany crashes down to financial ruin, Russia is down also, and then what is the outlook for us and for out trade? What is the use of the Government discussing its Budget next year, and the question whether they can get out of their financial difficulties by borrowing a little money or a great deal of money? Not only will they not be able to do that, if such a thing happens, but they will have the greatest difficulty in financing the expenditure of the country. Germany, to-day, whether we like it or not, is the lynch-pin of the industry of Northern Europe. These things may sound like platitudes, but they are being said by business men going up to their offices in the morning, by working men in their clubs and institutes, and in every village.
558 What is the way out? Of course, in the first place, that perfectly absurd document, the Treaty of Versailles, must be remodelled. It has been largely modified in conference at Spa and elsewhere, and we must complete the process. I am not at all pessimistic about carrying the French people with us in that matter. Much more important than that is the active co-operation of this country with Germany, and any other country which cares to come into the compact for economic mutual trade. The Germans cannot afford, owing to the collapse of their exchange, to buy raw material. They cannot buy wool in Australia, and we cannot sell our goods to Australia. They cannot buy cotton in India, and the result is that India does not buy the fine calicoes of Lancashire, whose spindles and workpeople are idle. Already we have large supplies of raw materials which we cannot dispose of, and we must supply these things to Germany, America, and other countries. You have the rubber growers openly and deliberately preventing the production of rubber to the full on their estates because they cannot sell it to Europe to-day. That is very unhealthy, and must be changed. It can only be done by a bold policy such as I have hinted at in very inadequate language.
With what object and for whom do we want Germany to manufacture? To compete in our own markets? Not at all. We want her to manufacture goods, as we want to manufacture goods ourselves, and as we want the American factories to work in producing goods, for no other purpose than the assistance and development of Poland, Czecho - Slovakia, Rumania, and Russia. All the belt today is doing only a fraction of the trade it could do with the rest of Europe and with America. If we could join with America, Germany, and France to-day to produce the transport, machinery, food, and raw materials required for the development and assistance of Russia, we should solve our problem. I am certain that if we approach this matter in an honest and—if I may use the word—a non-political way, we shall get the cooperation of the Russian Government and, what is much more important, of the Russian people.
The greatest possible vacuum—it is not a market—for every sort of manufactured goods to-day is Russia. The greatest 559 potential producer of raw materials today is Russia. The greatest possible cure for the unemployment troubles which assail us and America, and will presently assail other Western nations, is the Russian market and its development. I wonder if the Government are considering this matter. It is being considered by some of the best financial brains in the City of London. It is a much more important question than, perhaps, any other to-day with the exception of the Irish problem. If the matter is not settled, and if Russia is not brought into the economic life of Europe, I do not see any future for Western Europe. If Germany is allowed to collapse through not being able, from the causes I have sketched, to assist in this development of the Russian market, then we may wash our hands of any hope of indemnities or of trade recovery. Those who say that we can turn our backs on Europe and trade with South America, with our own Empire, and so on, are blind to the economic facts of the situation.
Without the European market our Colonies cannot dispose of sufficient of their raw materials to buy from us the goods with which we can supply them. Brazil cannot buy our manufactured goods because she is not selling her magnificent coffee crops to the great coffee-drinking countries of Europe, with the exception of France. Germany, Hungary, and the rest cannot afford to buy. We may ask what that has got to do with us. One effect has been that a certain old-fashioned firm in the North of England, who for years have been trading with Brazil, are now paying off their men, for the simple reason that the Central European countries are not buying coffee from South America, which would pay for goods from Lancashire or Yorkshire. In other words, the trade of the world is inter-dependent, as we, surely, must recognise, and you cannot cut out Europe without breaking the circle and destroying our trade with our own Colonies and with other parts of the world. I do hope that the Government are looking into this matter—not, for once, from the political point of view, but from the economic point of view. The political treaties ignore the economic facts, which have brought about the present trouble. The trouble can only be cured by dealing with the matter from a 560 non-political point of view—from an economic point of view. Economics have been neglected, but must be studied to-day, if we are to pull through the present trouble.
Sir J. D. REES
My hon. and gallant Friend the Member for Leith (Captain W. Benny of whom I may say, Militavit non sine gloriâ called up his horse, foot and artillery and smote the Government hip and thigh, and, as I rather like a good hater I bear him no sort of ill-feeling. When, however, he was concerned with the preparation of next year's Budget, it occurred to me that there was some balm in Gilead, and that my hon. and gallant Friend might not so soon be called upon to prepare the Budget, and, therefore, might be less troubled in that behalf than he seemed to feel when he was addressing the House. I really came down in order to refer to one or two points which it would be impossible to get on to the Paper so late in the day, but I may say that I heard with the utmost satisfaction the statement of the Financial Secretary that he was not going to be obsessed by that financial purism which dicates that people who have been bled white, whose pockets are empty, who have been called upon to make sacrifice after sacrifice in their day, and have done it well, are to be called upon to pay off debt irrespectively of present conditions, in order to save posterity from some of those overwhelming burdens which they have so splendidly shouldered themselves. I hope and trust that the Government will persevere in that course—that they will put the National Debt aside for the present, and realise that, with an Income Tax such as that under which we are groaning, it is quite impossible to pay off the debt until trade is improved and until something like normal conditions have been restored.
My hon. and gallant Friend was concerned about Supplementary Estimates. I ask him, now that he has doffed his uniform and come back to the dull and drab pursuits of private life, has he been concerned in any business of any sort or kind, and if so, does he know of any contract or any concern in which he has been engaged, in which he has not been faced by one Supplementary Estimate after another? It has been quite impossible to carry on any business, to 561 make any provision for doing anything, without being faced with Supplementary Estimates. How then is the Governments which is concerned with all these things, and is a kind of epitome of the concerns of the nation, to be exempt from those incidents which fall upon everyone of us who are concerned in any business under the present serious conditions in which we are living? I felt that the hon. and gallant Gentleman was led away by that consuming hatred of his opponents upon which I have congratulated him as a public man, but which I think does not do so much credit to his reasoning forces.
I want to appeal to the Government at once to reduce the Income Tax. That is far more important than paying off debt, because the Income Tax absorbs the capital of the country which is required to put into business to restore that normal state of things which is going to enable the country to face its present difficulties. We all suffer intensely from the perpetual persecution of the Income Tax, but there is one injustice above all others, and that is the gross and scandalous injustice of charging a man not only upon the income he actually receives but on one-third more which he has not received, namely, the Income Tax which is added to his receipts before his account is struck for Super-tax. Super-tax is itself the grossest injustice. It is the consumption of the capital of the country, looking at it from a public and not a private point of view, though I am not ashamed to say I regard it as unjust from a private point of view. But from a public point of view it is the consumption of the capital of the country at the rate of £500,000 a week—money which should go into the business of the country in order to restore it to its normal prosperity. I appeal to the Financial Secretary to endeavour to remove this injustice.
I wanted to ask the hon. Gentleman, and I have been lying in wait day by day, is it or is it not the case, under the Trade Facilities Bill, that no assistance is to be given except by guarantee? Are no funds to be provided? Is the modus operandi to be that a concern is to come to the Treasury and say, "We want, help to carry on business," which will mean that immediately or eventually it will reduce unemployment. Then are they to receive a certi- 562 ficate from the Treasury, upon which they will no doubt be able to raise money more easily and at a lower rate of interest than would otherwise be possible, or in cases where it would not be possible to raise such money, which surely must very often be the case in the present conditions when enormous numbers of businesses which are really solvent are pressed for cash, will there never be a provision of money? I am not saying that it shall be provided, but I only want to know whether the promised guarantee of principal and interest means nothing but the guarantee pure and simple, and whether in no case money will be provided.
Sir J. D. REES
I am much obliged for that information. I must answer one statement made by one hon. Member, who referred to the injustice or impropriety of maintaining a standing Army of the present dimensions. Unless the pay of the standing Army is to be reduced very largely, to which, I am sure, he and his friends would never consent, because high wages is the breath of their nostrils, there can be no such reduction on present lines. If that is done we shall be faced again with the position which happened, and with the terrible consequences which have already been experienced through the fatal economies which were practised and which led to the late War. Had we not been regarded as too weak to join in an European War, the Germans never would have made the War in which we were subsequently involved. That came about through the fatal economies in armaments that were effected at the instance of hon. Members opposite.
Will the Financial Secretary, during the period which elapses before the House meets again, consider the following specific economies, which I have urged repeatedly, and which could be effected? Will he consider whether women police are required? They are, at any rate, a counsel of perfection and not of necessity. Will he consider whether this counsel of perfection is necessary? Will he endeavour, 563 even now, to put an end to what I regard as the scandal of charging the tax-payer for educating large numbers of officers at Oxford and Cambridge?
§ Mr. SPEAKER
The hon. Member, I am afraid, has mistaken the occasion. This is not a Ways and Means discussion on the new Budget. That will come at the beginning of next year.
Sir J. D. REES
I will cease from my recital which indeed only included packs of hounds and play parties for schools. It was not extremely long. There are some items in it which I have always felt very keenly were not fair to the tax-payer, and which I have endeavoured, as you know, Mr. Speaker, to get upon the Order Paper, in various ways, without success. I apologise to the Chair for having been out of Order in this respect. I will say one last word about Russia, which is not only in Order but without which no Debate in this House is now in Order. I would appeal to such common sense as may exist and does exist in all quarters of this House utterly to disregard the fetish and the obsession which possesses hon. Members opposite, who have, since Russia changed one benevolent autocrat for two malevolent tyrants, desired nothing so much as to tax further the suffering people of this country in order to relieve the suffering people of Russia.
§ Mr. J. WALLACE
I intervene reluctantly for a minute. I would not have done so but for the speech of the hon. Member for Bothwell (Mr. J. Robertson). He represents in this House a mining district as I do, and he made certain statements which should not be allowed to go unchallenged. It is an easy thing to make statements about the Government in reference to unemployment,_ but his statements were quite inaccurate. He said that the House had taken a three months' holiday with a total disregard to unemployment. The Government last year appointed a Committee, which has been sitting continuously since dealing with the question of unemployment, and but for the fact that the Government took that line, in my judgment, the state of unemployment in the country to-day would have been very much more serious than it is. The hon. Member ought to remember 564 that the present state of unemployment in the mining areas all over the country is not the fault of the Government, but the fault of the policy of the pool pursued by the miners' leaders themselves. It is a great pity that these things are not stated more explicitly and more frequently in this House. There was only one point of substance in my hon. Friend's speech. He stated truly that under the reparations scheme France is getting from Germany a considerable quantity of coal every year—I believe something like 2,000,000 tons per month. Before the War we supplied France with something like 20,000,000 tons of coal per annum.
§ Mr. WALLACE
As the right hon. Gentleman is not certain, I shall adhere to my own figure, subject to correction. Even 12,000,000 tons is a very large quantity, and the loss of orders for that quantity must cause unemployment on a great scale in mining areas. There is no place in the country that I know of at present where unemployment is more serious than in the county of Fife, where you have got those large coal-bearing areas. I would ask the Secretary for Mines, who has always been most sympathetic in reference to questions concerning mines, whether something cannot be done by our Government to revise the terms of the Treaty under which this enormous quantity of coal is sent from Germany to France. Treaties are not like the laws of the Medes and Persians. It is clear that in some form that Treaty will have to be revised in this particular regard so far as coal is concerned. We must think, first of all, of the interests of our own people at home. There is no doubt about the very serious condition of the coal mining industry in this country to-day. If by some modification of that Treaty the position can be altered and more employment provided, I do think 565 that that point ought to be urged upon the Government by my right hon. Friend. I hope that that particular aspect of the question will not be overlooked.
§ Mr. W. GREENWOOD
After the speech of the Chancellor of the Exchequer, the two speeches that interested me most were those of the hon. Member for Birkenhead (Mr. Bigland) and the hon. Member for Dartford (Mr. Mills). Though the speech of the hon. Member for Dartford followed that of the hon. Member for Birkenhead, I think that the first speech was in reply to the second. The speech of the hon. Member for Birkenhead was a well-reasoned argument showing that we were in need of a far better system of fluency in our currency. The speech of the hon. Member for Dartford showed that in some parts of Europe the people are in great need of goods and there are in other parts of the world goods which could easily be transmitted if the means of exchange were available. I think the whole Debate has turned on the question whether the policy of the Government 18 months ago, of excessive deflation, had been carried too far or not, and whether a change in the policy of the Government in deciding for a temporary inflation was right or not. I hope the Government will give very careful consideration to the views expressed by the hon. Member for Birkenhead. We are short of currency. We are using a standard of currency that is almost prohibitive. It is confined now almost entirely to the wealthiest countries. If the suggestion that a ratio between gold and silver should be decided, could be adopted, it might help to increase our currency and by so doing help to bring along the means of exchange and allow trade to flow in its usual channels.
It has been said that we are bound for 20 years to hard work and starvation before we can get back to normal times. Hard work is not in any sense derogatory, and it does not follow that those who work hard have to starve. I hope the Government will take no note of the suggestion that Germany should be treated better than hitherto on the reparation question. I believe that the policy of Germany in depreciating her currency has been followed for the set purpose of making us believe that she is poorer than she 566 really is. We are told by some hon. Members that Germany is not able to buy goods. On the same evening we are told by another hon. Member that Germany has made very large purchases of raw cotton for her trade. The hon. Member who stated that did not tell us that Germany completed her purchases of raw cotton for the whole of this season at a time when the mark stood at from 300 to 350 to the £. We ought to remember that before we begin to sympathise too much with Germany. It is a great satisfaction that, in general, the Members of the House are coming to realise that the policy of trying to keep straight and to pay off our debt, too soon is wrong. Hon. Members must realise that in finance they cannot have the halfpenny and the gingerbread. We cannot borrow money, and, if we are to lend money to other people, we must borrow it, because we know very well that we have not money of our own. We are owing £8,000,000,000, and any borrowing must of necessity depreciate our currency. Thus we must make up our minds as to what is to be our policy. It is said that the Chancellor of the Exchequer, who would increase the Income Tax would be a very courageous man. I ask the House to believe that the Chancellor of the Exchequer who would reduce the Income Tax would be a much more courageous man, and that is what we want. We want a man of courage who will restore confidence, and I would suggest, not only reducing the Income Tax by 10 per cent., but reducing all taxes pro rata. and giving industry and those engaged in it a chance of showing whether they cannot put forth greater returns and whether there would not be a greater revenue as a result of the reduced taxation. What would be otherwise paid in taxation will be transferred to wages. When we realise there is £1,500,000,000 going in wages per annum and roughly £1,100,000,000 in taxation it will be seen that a transfer from one to the other would do a great deal to solve the very great problem of unemployment.
§ Question, "That the Bill be now read a Second time," put, and agreed to.
§ Bill read a Second time; and committed to a Committee of the Whole House for To-morrow.—[Colonel Leslie Wilson.]