HC Deb 04 August 1924 vol 176 cc2581-603

In the first part of the right hon. Gentleman's speech, in which he dealt with the burden thrown upon local authorities by unemployment, he announced two concessions, and those who are affected will be grateful for them so far as they go, but I am afraid that they do not got very far. I should like just to be sure if I have understood them aright. Do I understand, with regard to the first mentioned, that the Government will increase the proportion of the sinking fund charges on special loans from 65 per cent. to 75 per cent.—


indicated assent.


—but that they will not make any concession as to time, but will only allow half the time as at present?


Half the time with a maximum of 15 years.


Therefore, the Government are not on that point meeting the view put forward by the hon. Member for West Middlesbrough (Mr. T. Thomson). Then, with regard to the wages question, I understand that they will increase from 60 per cent. to 75 per cent. the grant on the amount of wages, but that they will do nothing with regard to the cost of materials. Do I understand that there is no concession an that point?


No; it is the workers' wages only.


These two concessions are something, but I am afraid that, in those areas which are most seriously affected, they will go but a very short way, indeed. I am afraid I am bound to take exception to one phrase which the right hon. Gentleman used. He said it was not the business of the Government to pay for the ordinary work of municipalities out of taxes. I am sure that that is not what any of us ask, but we do ask that something should he done to relieve the extraordinary burdens in certain areas, and I cannot believe that the last word has been said when the Government say that discrimination between these areas is impossible. In certain of these areas the post-War conditions have imposed an almost intolerable burden. The machinery of the Poor Law has very nearly broken down under it, and, apart from that, it has been quite impossible to collect anything like the total amount of the arrears, simply because it is contrary to public policy, and it would be impossible, to sell up so many ratepayers who simply cannot pay the demands made upon them. This state of things especially prevails in certain places—I presume that Middlesbrough is one of them, and Sheffield is certainly another—where the War attracted of necessity a considerable extra population for War industries. There was an urgent call for workers. Workers came from all parts of the country, and there they remained. For a time the effect was not felt, because there was a certain post-War boom, but that post-War boom has now ceased, and people remain there who came from all parts of the country. As it was a national cause that brought them there, as it was owing to that response to the need of the nation that the difficulty in those places arose, it is only fair to ask that the nation should do something, and should not leave it to the people of those areas to bear this burden alone.

I quite understand the difficulties of the question; I quite understand the difficulties of this discrimination: but are they really so impossible? It is perfectly true that you cannot simply take expenditure as a test, or you might be encouraging extravagance; but there are certain tests that you can take. You can take the poverty of the rateable value, as is done in some degree in connection with the extra grants to necessitous areas for education. That is one test. Then you might take the proportion of unemployed to the total working population. That is another test. In the third place, you might take—and I believe that in certain instances this would be the fairest—the proportion of increase in post-War population over the pre-War as compared with the rest of the country. What I would ask the right hon. Gentleman to do is this—I am quite sure that these unfortunate areas will not take his words as final—I do ask him to get together with his colleague the Minister of Health, and to persuade the Treasury, as I am sure, with the blandishments of his eloquence and with his experience in these matters, he can, to appoint a committee of these three Departments. I believe that if they go at that problem with good will, they will be able to find a formula which, without involving the State in anything like a bottomless pit of extravagance, will, by concentrating their attention on the worst areas affected, be able to bring to them a real relief, which I am afraid the right hon. Gentleman's present proposal will not do. The municipalities and the guardians in these places have been put to a very grievous strain. The difficulties, in particular, of guardians of the poor in some of these areas have been almost heartbreaking. They have stood the strain up to now. Municipalities have done their best, and it is really up to the Government of the nation, in whose cause these difficulties and this strain first arose, to find a means of relieving it.


I should like to associate myself with what has just fallen from the right hon. Gentleman the Member for Central Sheffield (Mr. Hope), more particularly in regard to the area which he and I have the honour of representing. As far as I could make out from working the figures out roughly, these concessions which are being made are going to mean really a very small difference indeed. The Sheffield area has, perhaps, been hit as hardly as any area in the country in consequence of the depression which has followed upon the War. Not, only has there been the increase in population to which the right hon. Gentleman has referred, but during the War an immense amount of expenditure was incurred in the way of putting up new factories by the armament firms and by other firms, upon which they are now called upon to pay rates, the cost of which is very seriously affecting the possibility of their recovery, and is affecting the prices of the commodities in which they deal. I would remind the Government that, shortly after the War, when there was some suggestion on the part of some of these firms to transform their plant to other than armaments purposes, they were requested by the Government to keep their plant in operation. Therefore, I think that from that point of view they have some claim upon the Government which cannot be made in certain other areas.

I want to deal now with the way in which this particular area is attempting to meet the difficulties of unemployment amongst its half million of people. So far as Government schemes are concerned, schemes have been approved to a total amount of £1,635,000, but we have to remember that the burden involved by those schemes is going to exist for many years to come, and is going to result in increasing the cost of manufacture. Towards that total cost the Government's contribution, so far, has been £650,000, but it seems to me that the Government—not only this Government, but previous Governments to whom appeals have been made—have entirely lost sight of what the areas themselves have been doing. The guardians of Sheffield and Ecclesall have spent £1,978,000 in unemployment relief, and in addition they have had to borrow £2,500,000, which has got to be repaid over a series of years and must remain a burden upon industry during that time. Then, while there has been a Government contribution in the way of unemployment insurance benefit during the last three and a half years, the total unemployment insurance benefit during that period was rather more than £3,500,000. Of the various sums to which I have referred, amounting to £9,700,000, the total Government contribution in all forms has been only £1,500,000; that to say, out of every £1 that has gone in consequence of the condition in which we find ourselves, the Government have only contributed 3s. 2d. We regard that as altogether too small when we consider that our unemployment is very largely due, as the last speaker has pointed out, to the War and to what the city did during -the War. On a previous occasion reference was made to the serious increase which the rates caused upon every ton of steel, and that still applies, probably in a more acute form, or, at all events, quite as acutely as was the case then.

The hon. Member for West Middlesbrough (Mr. T. Thomson) made reference to the question of arrears of rates so far as Middlesbrough was concerned. In a Report from the Ministry of Health's own auditor it is stated that the arrears of rates in September last in Sheffield amounted to £520,000. This 2520,000 is 70 per cent. of the total rates in the year 1913/14, and it is a very serious burden indeed. The auditor goes on to say, in the course of his Report, that half the ratepayers were paying rates by instalments. I pointed out, in a question which I addressed the other day to the Minister of Health, that during the last three years 112,000 summonses for non-payment of rates have been issued, and that during that period six rates were issued. That means that one ratepayer in six is being summoned for non-payment of rates. That is the very serious position in which we find ourselves, and I venture to suggest that it is one to which the Government should pay some attention.

Now I want to refer to another aspect of the matter. The Brightside and Car-brook Co-operative Society, operating largely in the east end of the city, where the armament firms are more particularly situated, report that, while their sales per member in 1920 amounted to 20s. 5d. per head per week, last year they dropped to 10s, per head per week. That is some indication of the position of affairs. In the past three years they paid, in the form of withdrawals from share capital, dividend and interest, and penny bank withdrawals, rather more than £750,000. I merely mention these figures because they afford some indication, in the case of a society which is doing a very considerable trade, of what the state of affairs is, and it must be remembered that other tradesmen are suffering to an equal or probably to a larger extent. Again, the secretary of the society says: Thousands of our members, owing to unemployment, have been compelled to withdraw their life savings down to the last sovereign, and it will be impossible for them to recover their former position. As far as we have been able to learn from co-operative sources, the East End of Sheffield has been worse than any other area in this country as a result of the War. May I refer to one or two individual eases, of which I have a large number here, showing the condition in which these people find themselves, and showing that there is need for something more than the Government have yet done for them. Here is the case of a man and his wife, with arrears of rates amounting to £11 5s., and that man in seven months has earned only £19 17s. 8d. When you have provided for rent, there is not more than 4s. a week for each of them to live on. Here is the case of a man, wife, and three children, aged 16, 13, and 10 years respectively, an engineer, which is one of the skilled trades, whose total earnings, with the family, are 35s. 6d., working out, after rent is allowed for, at 5s. per head per week, owing £21 13s. 4d. for arrears of rates. Then there is the case of a man, wife, and six children, whose ages vary from 18 to five years, earning 35s., owing £22 1s. 10d. for arrears of rates. There are quantities snore of the same sort of cases, indicating the position in which very large numbers of these ratepayers find themselves.

A request was made some few months ago for a Government grant of 75 per cent. of what was required for local work, and that, I think, is what the Ministry are suggesting to us that they are going to give to-day. [An HON. MEMBER: "For 15 years!"] The request was made, so far as loans were concerned, that the State should raise the money and that the municipalities should contribute 25 per cent. In regard to schemes and works, the Minister said just now that the schemes are very largely exhausted, but the suggestion was made that there was a great deal which might he done in our own neighbourhood, with a number of small authorities through whose districts important roads went, and with county councils concerned. None of them wanted in any way to spend money, and there was a suggestion from the Sheffield Corporation that there was a great deal that might be done in regard to the improvement of these main roads, that machinery was wanted for dealing with obstructions that at present arose, and that some means might be found for more quickly dealing with cases where land had to be purchased. I am sure I can appeal to the Parliamentary Secretary of the Ministry of Health, who is present, because he, together with certain other Members of the Government, was responsible for a Joint Committee on Unemployment which reported in January, 1921. In the course of that Report, we find these words: Local authorities can build neither houses nor schools, nor anything else, without money, and the policy at present pursued by the Treasury of hampering borrowing by local authorities is throttling their initiative. We should certainly not maintain that all local authorities showed the enterprise and vigour which the circumstances render necessary; but the restrictions of the Treasury are all direct inducements to supineness, and prevent the energetic local authority from taking effective action. We, therefore, recommend the removal of the Treasury embargo on borrowing by local authorities, and suggest that the Government should put the credit of the State at the services of the local authorities by raising and advancing money to them through the Public Works Loans Board, or otherwise. Lastly, we may here point out that increased grants-in-aid are necessary, and have repeatedly been promised by the Government, to enable local authorities to play their part in forwarding schemes to meet the present crisis. I seriously commend those words to those who are responsible for that Report. There is one other point, and that is that, in response to a question that I asked in March last, as to what had been done in regard to the Krupp Works, I received this reply: The War Office is in possession of detailed information on this subject, and a special Committee of the Inter-Allied Military Commission of Control in Germany has been living in the works in question for four years. Nearly all the special apparatus for the production of war material has been destroyed and replaced by machinery for the production of peace products."—[OFFICIAL REPORT, 7th March, 1924; cols. 1785–6; Vol. 170.] Whether we are going to have partial or complete disarmament—and, certainly, we all, in this House, desire a great deal less expenditure on military matters—the time will come when this matter will have to be dealt with, and I want to ask whether it is altogether out of the question for some assistance to be given by the Government to the armament firms in Sheffield, in the way of converting their plant and machinery into peaceful purposes. Sheffield, in pre-War years, was largely an armament centre, and much more so during the years of war, and if there is going to he this much less amount of armaments required, as we all hope, something has to he done in the way of providing for those whom we do not want to see permanently thrown out of employment. I suggest that, seeing what has been done abroad, there is something that certainly might be done here in the same way at the present time.


I have a few words to say in support of my hon. Friend the Member for West Middlesbrough (Mr. T. Thomson) on the question of relief for necessitous areas. He and I come from a district that has been probably harder hit than any other district in the country. It is entirely dependent on one trade, and one trade alone, and that trade is in such a parlous condition that it is unable to afford employment for anything like the number of men who are usually engaged in it. Indeed, in our town, there are between 7,000 and 8,000 people who have been out of work, many of them, for some years, unable to find employment, and who have lost nearly all hope of ever getting back into work again. We want to appeal to the Government to make some special effort to provide these men with work. It is quite true that they are to some extent provided for by means of unemployment benefit and also by allowances from the guardians, but that is not sufficient. There are great schemes afloat for the establishment of a dock in the River Tees. The North Eastern Railway Company have, I believe, completed a scheme for the establishment of large docks at the mouth of the river, and I understand, from the Chancellor of the Exchequer's speech, that £19,000,000 is to be spent by the North Eastern Railway Company during this winter in providing work for unemployment. I would like to ask the Minister in charge whether it is the intention of the Government to press the North Eastern Railway Company to get on with that dock scheme, which is urgently wanted in the district. All the local authorities, I believe, are in favour of it, the shipping interests and the manufacturing interests are in favour of it, and there are in it possibilities of very great development for the Port of Middlesbrough. It is within a very short distance of this great reservoir of unemployed labour, which could be absorbed in the building of these clocks, and you would at least have something to show for the money which has been spent during these times of depression. You would have a huge dock there, instead of having nothing but the degradation of your people to show for the expenditure of millions of money. That, I believe, would be a real benefit to our district; it would be a practical solution of our unemployment problem, and it would take up the labour which cannot find work in its own industry.

I would appeal to the Government to give back some of the money which they have extracted from our industry during recent years. They have taken very large sums by way of taxation, in Income Tax, Super-tax, rates, and also taxes which are charges on industry, such as workmen's compensation insurance payments, both for health and employment. Again, the Excess Profits Duty has taken from people who were engaged in industry very large sums, and we are asking now that some of that money should be returned into our district. The problem is a very urgent one. If we have such a winter as we had last year—and it looks almost as if the volume of unemployment was going to increase rather than diminish—I venture to say that it is quite likely that the whole of your present system will break down, and that your guardians will be unable to finance the problem which they have before them. Already the ratepayers cannot pay their rates, and the guardians dare not proceed against them, because already, practically, they have proceeded against the whole of the ratepayers in the district. I appeal to the Government to try and give us work rather than doles.


I do not think anyone who listened this afternoon to the reply of the Minister of Labour will be wanting in sympathy for him when he discusses the difficulties of dealing with the various strikes that have broken out during the last six months, since he assumed office, but perhaps he will allow me to carry the matter a little further than dealing with disputes when they occur, either in the form of so-called lock-outs or of strikes originating purely from the men's side. The points that interest me in this connection are far more than those. Why do we have these strikes, and is it not possible for this Government to do something towards lessening the possibility of these strikes in the future? At first sight, it would seem an impossible problem to deal with. It is manifest that no employer of labour works his factory for short hours or engages in a lock-out if he can possibly help it, and no men, I believe, engage in strikes because they like strikes. They engage in strikes because they believe that the conditions under which they are labouring are not satisfactory, are not reasonable, and are not giving them a proper return for their labour. It is to that point of view, I want to draw the attention of the House for a few moments. Labour, like everything else in this country to-day, is up for sale. Labour is not getting a bigger return simply and solely because industry in this country cannot afford to pay the wages which labour believes it ought to receive. The problem, therefore, becomes quite simple. Can labour secure a greater share, or not? I do not think it is unreasonable to consider this matter, nor do I think it is engaging in an inquiry which will bring no practical results.

6.0 P.M.

As I listened to the speech of the hon. Member for West Woolwich (Sir K. Wood) on the subject of strikes and to the hon. Member for West Middlesbrough (Mr. T. Thomson) on the subject of the difficulties of the local bodies, it seemed to me difficult for anyone not to realise how these things are mixed up. The difficulties of the local bodies everyone can understand. What is the use of increasing taxation in providing unremunerative work, which again increases the taxation upon industry and so creates a vicious circle? What, on the other hand, are the difficulties which the Government have to face? They have to face the problem of finding work when, as the right hon. Gentleman said, he has already anticipated almost everything that the Government can see for the next five or 10 years ahead. The President of the Board of Trade has, in the last few weeks, set up a Committee which, I trust, will give wonderful results. I have not the slightest intention of suggesting that it will not be valuable, but, in reality, does any Member of this House need the findings of a Committee to tell him what is wrong with industry in this country? We know it without any inquiry.

What are the facts? The population of this country has increased enormously, while, on the other hand, our customers, the whole world over, are poorer. We have not only to get back our pre-War trade, but we have to get a larger trade. We have 1,000,000 men unemployed, in addition to the same number of men at work as was the case before the War. That means that we have to get a larger trade than in pre-War times. It is a truism to say that the only way in which we can get an increase of trade is by peace throughout the world and by improving our trade with foreign countries and with our own Dominions. But when we consider the conditions prevailing in foreign countries, it is useless for us to look at those conditions and then to say that we are likely to get such revivals of trade with them as will bring about changed conditions within the next few months or the next year or two. It is impossible, and we had far better look round and consider the matter from a wider standpoint.

In this country we are about holding that trade with all parts of the world, in which we had in pre-War days, if not a monopoly, at any rate a start over our competitors. The Chancellor of the Exchequer the other day referred to the question of cotton. He said that we were suffering from the fact that our customers were impoverished and could not buy. He also referred to the advantage it would be if the Chinaman would wear a longer shirt. No doubt that would be a great advantage, but in other respects, taking the point of view of the cotton trade, I do not entirely agree with the right hon. Gentleman. Our largest customer in the cotton trade is India, and India is not in a state of poverty. She is in a condition of wonderful prosperity, comparatively speaking, from a trade point of view. This is, I think, the fifth or the sixth good monsoon, and it is impossible to say that the people of India are so impoverished that they cannot conduct their ordinary trade. That is not the case. The real fact is that the prices which we have to ask for our goods, owing to the short supply of cotton, are such as to make the demand very much smaller. It is natural that the man who ordinarily buys a piece of cloth at 3d. or 4d. will not consume or increase his usual consumption when the price he has to pay is 2s. or 2s. 6d. That is the case of the cotton trade. It is not there a question of the impoverishment of our customers, but of the fact that the cotton supply of the world is short and, as a consequence, the raw material is so clear that the prices of our goods have to be raised very considerably. The cotton trade, however, is one rather apart.

In most of our other trades we are faced with the fact that the high prices of our goods are not so much due to the high costs of raw materials, but largely to the high cost of labour. That brings me back again to the question, can labour secure a larger share in the results of industry? The mere raising of wages does not alone increase the consumptive power of the country. In the report of a committee which was appointed by the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) in 1919, of which the present Home Secretary was a member, a resolution was passed drawing attention to the necessity of a rise in wages and pointing out that it would increase the consumptive power of the country. Everybody agrees with that. The more money a man earns the more he can spend, and, therefore, the greater the consumption. That is true, but it does not go far enough. It is not the slightest use increasing wages unless you increase the earning power of those wages. A very good illustration of this was the position that arose when the slump of 1920–21 occurred. When the slump came, wages were higher and prices were higher than they have ever been. Therefore, high prices and high wages do not necessarily bring about prosperity; quite the contrary. I am not sure that both employers and workmen were not to blame to some extent for the slump. Prices were, perhaps, pushed too high.

The real cause of the slump, however, undoubtedly, was the influx into this country of goods from abroad at cheaper rates than we could manufacture them. The consequence of that was that there was a loss of confidence. Buyers held off, waiting for lower prices, and so the whole thing collapsed. That position arose because we had to compete with countries abroad with labour on a totally different standing. The position of the British working man to-day is this, that he has to face one of two alternatives. Either he has to consider a lower standard of living, longer hours and lower wages and compete with countries where people work longer hours than he does and under conditions which, thank God, he has not had to face yet, or, on the other hand, he has to stand on a higher plane and put himself n a position to get a higher output, better wages and a higher standard of living all round. The problem can be perfectly simply stated.

I was struck with the remarks of the hon. Member for Stirling (Mr. T. Johnston) the other day when he referred to the influx of foreign goods and the necessity for having a fair wages clause. I do not think he will consider that I am unreasonable when I say that it struck me that he was coming slowly towards the truth. He seemed to be approaching a time when he would say, "It is impossible to go on with this enormous influx of foreign goods." He seemed to me to be very anxious to avoid even the least breath of Protection, and yet to be preaching Protection all the time. I do not want to preach Protection; I only want to face facts as they are to-day. We cannot get a higher standard so long as we have to compete with the conditions that exist abroad. There are one or two examples of special interest in this connection. The other day we had a very interesting account published in the Press of the condition of the glass workers. The gentleman who represents the glass workers stated that 60 per cent. of the glass workers were out of work, walking the streets, and yet the Government were giving Government contracts for glass abroad which, in his opinion, only enabled the country to make a saving of £13 in every £1,000. That saving was infinitesimal compared with the sums that have to be paid in doles to these very men. These views are put forward from the trade union standpoint and not simply by the representatives of the employers. They point out that these men are unemployed because of this influx of goods from abroad, and that the Government are even supporting that influx of foreign goods.

The mere putting down of relief works is no solution of the unemployment problem. The municipalities, obviously, cannot go on as they are. If they go on increasing their rates, the charges upon industry become heavier and heavier. What I would have liked the Government to do before the recess, if possible, would have been to point out to us not how well the Minister of Labour is dealing with strikes and lock-outs, not how well he is carrying out the Measures of previous Governments in connection either with relief or with overseas trade facilities, or any of those things, but I would have liked him to tell us, looking ahead for two or three years, how the industries of this country can prosper under present conditions. They simply cannot do it. We have to take our stand on one side of the line or on the other. We either must degrade our labour—I use the word deliberately—or else we must, by increased output and improved standard of working, get it to such a position that it can take quite a different place in the world of trade. I do not want to go into the fiscal question, and therefore I will leave it there.

It is no use tinkering away with the problem of the next two months. The problem will be as serious six months hence as it is to-day. This is a problem with which this Government claimed to be able specially to deal. I am not blaming them that they cannot deal with it, because I never expected them to do so. Whatever Government is in office, the problem with which they are faced is, how is the country going to meet this one outstanding fact, that unless a change in the conditions of industry takes place there will be more closing down of works, more men thrown out of industry and lower rates of wages? Surely in that connection it is not too much to suggest that there might be, as it were, an offer made to the British working man. It might he possible to say to him, "Supposing we do away with the thing that is more dangerous and more objectionable from your point of view even than unemployment itself—namely, the danger of unemployment. Supposing we get rid of that. Supposing we give you a reasonable standard of life. Supposing we give you a policy, whether it be a thrift policy, an all-in policy or whatever it may be called, which gives you reasonable insurance against unemployment, old age and all the rest of it. In return for that, can we not get from you real work, real output, larger output, which will enable us to compete with other countries?"

Cannot we get also an undertaking that for a time, at least, there will be in times of dispute or disagreement a pause during which from both sides arguments may be heard which will prevent the possibility of strikes and lock-outs? The difficulty in regard to strikes and lock-outs is really one of the greatest problems with which the Government has to deal. An industrial dispute of any kind represents not only the loss of working days and the loss of wages, but it means I hat no manufacturer can safely take a contract, because he never knows what is going to happen. There is no security for his output. There is no security for his works. He does not know when he takes a contract whether he will be able to fulfil it, and the result is that our customers are lost. We are suffering very severely from this sort of thing, and it might be got over by a certain amount of good will. The country has arrived at a stage when a great national effort is needed to put these matters right. It is not childish to look at it from that point of view.

A national effort of some kind is needed, and could be made. Just as big an effort is required now as in the War. To get this thing right we have to get both sides to realise the position. We have to get some form of security in the shape of a guarantee for employment such as will ensure that while the worker, on his side, will be certain of a rate of wages for some time ahead, the employer will be equally certain that there will be no disputes of any kind immediately crippling him. For five solid years this country was engaged in destroying everything. It is a much harder job to build up than to pull down. Surely to-day, of all days in the year, there is no one in the country who would not say that, by a national effort, everyone should combine to do away with this constant handicap of industry and give our trade a real chance. If we did that we should remove one of the greatest of the causes which are holding our industry back, and before very long, perhaps, it would be possible for the Government to look at the thing from the broadest point of view, and consider what is in store for us in future, and if that entails varying our fiscal policy I hope that they will even approach the consideration of that matter without any prejudice in their minds.


We have had a somewhat, perhaps, desultory discussion on various points connected with the Ministry of Labour, and I would ask the indulgence of the House for a few minutes while I try to get from the Parliamentary Secretary to the Ministry a reply on certain points as to which we on this side feel strongly, and on which we feel just as strongly, after we have listened to the speech of the right hon. Gentleman. Referring to necessitous areas the right hon. Gentleman said that the Government had come to the conclusion there could be no such thing as special grants to necessitous areas with regard to unemployment. He did not explain that that attitude runs directly counter to what has been the attitude of every hon. and right hon. Gentleman on that bench for the last 12 months or two years or even longer. On that point we have a statement made by the Parliamentary Secretary to the Ministry of Health which dates back to 1920. But I am not going to criticise the Minister of Labour for the statement that the Government have decided that there can be no such thing as special grants to necessitous areas. We came to much the same conclusion last year. It is undoubtedly difficult. But when my right hon. Friend the Member for Ladywood (Mr. N. Chamberlain) a year ago practically announced the same conclusion as the Minister of Labour announced this afternoon, he at any rate did announce a Measure which was some palliative for the immediate necessities of these areas, namely, the increased facilities for obtaining money on loan. But the Government to-day have given no indication that they have in mind any plan for dealing with the problem of the necessitous areas.

The Parliamentary Secretary to the Ministry of Health knows as well as I do that that problem cannot be left where it is. It cannot be dealt with merely by increased grants, but it is a problem which in its scope is much more circumscribed than is often supposed. My recollection is that if you take the average expenditure of Poor Law authorities in this country per head of the population, necessitated by unemployment, you will find that only about 10 per cent. of the boards of guardians throughout the country are above that average. Within that 10 per cent.—these 60 odd boards of guardians—are all the black spots in the country. Within the 60 are those towns that cannot hope, humanly speaking, so far as we can foresee, to cope with the problem of unemployment in the next generation. We have got to deal with those areas as a special problem, and I wish that the Minister of Labour had given, and I hope the Parliamentary Secretary may give us, some indication that the mind of the Government is working on that problem, because it is the worst problem which has to be faced in connection with any reform of the Poor Law. The Minister of Labour has said that there is a difficulty in discriminating between local authorities. Certainly you cannot discriminate between local authorities until you have done one thing—that is, seen that the local authorities are more or less on the same rating and assessment basis, and we have had no indication from the Government of what they are prepared to do about the draft Rating and Valuation Bill which we left behind us, and which, if we had remained in office, we had intended to introduce, though perhaps not precisely in the same form as that in which it was circulated last year. But we have had no indication that the Government are going to take this first step towards a reform of local government by dealing with rating and valuation.

Now I might say a word as to the policy of the right hon. Gentleman with regard to the alteration in the percentage rates of grants towards the three classes of unemployment schemes. His policy has this effect, that whereas we last year introduced a now provision for the purpose of encouraging local authorities to get on with revenue-producing schemes, the Government this year are going back, and giving much better terms to non-revenue producing schemes. I am inclined to think that that is a retrograde step. That there should be discrimination against revenue-producing schemes looking at it merely from the point of view of getting employment, is most short-sighted. It is, if I may say so with great respect, a thoroughly short-sighted Treasury view of the matter, and I regret, speaking for myself at any rate, that the effect of the Government proposals should be to increase discrimination against revenue-producing schemes.

I should like to say one or two words about the subject which was referred to at the beginning of the Debate. That is the subject of strikes. Hon. Members must have been struck more than once in the course of our Debates by a feeling as to what would be the view of the man in the street if he could hear certain speeches. That thought crosses my mind often when I am making speeches myself, but I confess it crossed my mind this afternoon when I was listening to the exposition by the Minister of Labour of the functions of his Department in regard to industrial disputes. The right hon. Gentleman made what I can only call a very conservative speech in explaining his methods of dealing with industrial disputes. He stated that it was unnecessary to have any addition to the machinery at his disposal, and that he had all the machinery that was required, and it was also explained that all that machinery did not come to very much after all. I could not help thinking what the man in the street would think of that speech. What does the Ministry of Labour exist for? What actual results does it produce when dealing with industrial disputes which would not be produced quite as well by the ordinary machinery of the various industries supplemented by that old body, the conciliation department of the Board of Trade? What is the reason for the new Ministry if that is all it can do for industrial disputes?

Then the Minister seemed too complacent as regards the state of industrial disputes. He accentuated the progressive diminution during the last two years in the number of days of work lost owing to industrial disputes, but he forgot that what we are anxious about on this side of the House, and what we think the public outside are anxious about, is not the number of days lost, and not the number of actual disputes, but the nature of the disputes, and the industries in which the disputes occur. I think that the public suspect that in recent months there is an increase in the number of strikes that cannot be ascribed to adequate industrial causes. They are strikes in key services, services on which the community depends, strikes which appear to grow out of very small disputes, from the point of view of conditions of work and wages, and they are disputes in precisely those industries of which political subversive movements would tend to lay hold, as the industries which were to be disturbed.

We were informed in this House by the Home Secretary that influences of this character were at work in connection with the recent dispute in the power stations and the Underground. We have not heard anything more about that. I would ask the Parliamentary Secretary to the Ministry of Labour what is the view of the Government as to the amount of influence exerted by Communism or by definitely subversive movements having political aims and not merely industrial aims? What part did they play in that recent dispute and in other disputes? What part are they playing to-day, if any—I am making no accusation—in the threatened tie-up in the whole of our electrical services? I am making no criticism and no charge, but my hon. Friend the Member for West Woolwich (Sir K. Wood) has read out a threat of a general tie-up which, at any rate, is ominous, which is a threat just as much to the public as to the employers, and the public are wondering how far the men who threaten like that have only industrial ends in view, and how far they have political ends in view. That is a matter which the Government are bound to watch and to inform the House about. They are responsible for public security. That is a danger which touches the whole public security of this country.

Let me say one word in regard to the building trade dispute. I shall follow the advice of the Minister of Labour and say nothing which might be construed as criticism of either side in the dispute. But there is one circumstance in regard to the building trade to which it is necessary to refer. It is just as much the fault of the employers as of the workers, I have no doubt Anybody who was responsible for the administration of the Ministry of Health last year knows this—that the output had never been better in the building trade than just before the introduction of the Housing Act of last year. From the moment that the Housing Act of last year came into force the output of the bricklayer tended to fall steadily month by month, and it has been falling ever since. It has been the old state of things in the building trade, worse and not better. Since the negotiations that the Minister of Health had with the building trade, since the terms of the increased subsidy were made known, the position in the industry has been worse and not better. I mention what happened last year so that what I am going to say may have no party point at all.

Whatever the advantages of subsidies may be, they have this very great disadvantage. You do not by a subsidy, by bribing an industry, by making promises to Workmen or employers, increase the self-reliance of that industry or its efficiency as a body which can reconcile the interests of employers and employed. Yon tend to immerse them in a sort of Turkish bath of promises, which must inevitably loosen the whole fibre of the industry. That is one of the difficulties which we are facing now. I hope that the Minister will not go away with the feeling that he has in any way secured the future of the building industry by the promises that he has made to the industry, or by his attempt to give guarantees to the building industry. Guarantees of that kind, as has been amply proved and is being proved now, tend to sap the sense of responsibility of the industry and to throw it into a condition in which it is now, when, after all that has been done or attempted by various Governments for the last 18 months, the result is that the industry is less in a position to secure the output of houses needed than it was at the beginning, solely because the industry has mismanaged its own affairs.


I do not wish to follow in any detail what the Noble Lord has said about the building industry, except to say that I disagree almost entirely with his analysis of the situation. It is not true that the position of the building industry is worse than it was when the present Minister of Health took office; nor is there any connection whatever between the present dispute in the industry and the housing schemes that are now before Parliament. They are quite unrelated. The present dispute has arisen out of a special set of circumstances with which the Housing Bill has nothing to do. The figures supplied to the hon. Member for West Woolwich (Sir K. Wood) do not hear the interpretation that he put upon them. Had he cared to take those figures further back to the point when the previous Government was in office, he would hare found months where the cost of houses stood higher than, or as high as, at any point in this present year. One cannot from those figures deduce anything from month to month, because the average prices are the prices of houses in schemes where tenders have been let and the cost has therefore come to the knowledge of the Minister, and if it be, in any particular month, that those figures are swollen by a relatively large number of houses to be built in an area where building costs are high, then the average is more; but if it happen that the bulk of the houses sanctioned that month are in an area where building costs are low the figure then falls. One cannot, therefore, draw any such conclusion as the hon. Member drew.


Can the hon. Gentleman state what steps, if any, are to be taken to protect the Government housing schemes in the course of the present strike. Is anything being done? Is the Minister giving any advice to the local authorities as to the course they should take in connection with their building operations.


We have made it perfectly clear that we were not going to intervene in this dispute on either side. In view of the enormous shortage, left largely by our predecessors, a few weeks' dispute, if in the end it leads to reasonableness, may even be worth while. I would like to refer to the question of necessitous areas. The case for necessitous areas has been put very strongly by Members on both sides. There is no Member of the House who does not feel very considerable sympathy with those particular black spots which, during the long trade depression, have suffered very acutely. It is true that many of us on this side of the House believed in some special treatment for necessitous areas. It is an open secret that there has not been a Minister of Health since the War who was not favourably disposed towards some special treatment of that kind, and who, having examined the problem, has not come to the conclusion that the practical difficulties in the way of any formula are almost insuperable. The right hon. Member for Central Sheffield (Mr. Hope) admitted the difficulties of discrimination, and urged that it should be possible for the Government to agree upon a formula which, without laying local authorities open to the temptation of extravagance, would bring relief to areas which were really necessitous. It is not because this Government and previous Governments have not tried that this question has not been solved by a formula. I am convinced that it is quite impossible to devise a formula which would be in the best interests of the necessitous areas. I have seen more than one formula which, when worked out and applied to a particular place, yielded the most fantastic results in the way of special public assistance. It would seem, therefore, that that is not the way to deal with the problem.


Has not the Education formula been applied to necessitous areas, the penny rate, and so on?


That is perfectly true, but the President of the Board of Education would know better than I do. It is a relatively unimportant contribution in the total, and I am not at all sure that everyone would agree that the present formula does absolute justice. It is much more difficult if you are trying to measure what is the poverty of a district—poverty that may be due to one cause or many different causes. I can assure the right hon. Gentleman that it is not for want of goodwill that the formula is not forthcoming, but it is that so far no formula has been discovered which would be a workable formula. One reason—I do not say the only reason—is the present rating and valuation system. In fact the question of necessitous areas raises the whole, problem of the relations between national and local finance. Until that problem is overhauled it is quite hopeless to expect that we could deal with necessitous areas as necessitous areas. Therefore, the Government has pursued the policy of extending the grants that it makes to all local authorities in whose area there is unemployment. The announcement made by the Minister of Labour will be of very substantial assistance to local authorities, more particularly when that is reinforced by the new rates of benefit under the Unemployment Insurance Act. While those benefits will not relieve the municipalities they will relieve the rates levied by the boards of guardians, and, therefore, will relieve the local ratepayer.

The Noble Lord the Member for Hastings (Lord E. Percy) criticises the Government for doing nothing about revenue-producing services. It is true that the late Government did something to improve the terms offered to local authorities in respect of revenue-producing services; they increased the period during which assistance would be given, from five to 15 years, and in doing so in a sense gave an advantage to local authorities who were establishing revenue-producing services. The Noble Lord attempted to give the House the impression that the effect of our readjustment would be to put an inducement before local authorities in the direction of non-revenue-producing services. I doubt whether that is so. Moreover, I think it is right that there should be a distinction made between revenue-producing services and non-revenue-producing services, because, in fact, the assistance which is at present being given to local authorities in respect of revenue-producing services seems to be quite sufficient to insure them against loss until those services are producing a revenue. Therefore, proposals are made for dealing with non-revenue-producing services. The increase in the rate of assistance from 65 per cent. to 75 per cent. of the interest and sinking fund charges means that now the Government contribution amounts to over 50 per cent. of the cost of such schemes. Therefore, we are within the same range of State grants as is being made by the Minister of Health and by the President of the Board of Education for other services.

As I said, the new grants for non-revenue producing services will amount to rather over 50 per cent, of the total cost of the schemes. This proposal will assist necessitous areas in common with all other areas, not merely because of the assistance they will derive themselves directly, but because of the practice of the Unemployment Grants Committee in approving schemes even in areas where unemployment is relatively light, where as a result of the operation of those schemes and of orders being placed, employment will be forthcoming in those areas where unemployment is serious. In that way, distressed areas get an additional benefit, because they reap the advantages of the schemes put into operation in other places. I am sure we never imagined that the proposals made to-day would be received with enthusiasm, because the representatives of the necessitous areas will continue to ask for more, but I think, when hon. Members examine these proposals together with the additional help forthcoming to local authorities from the Unemployment Insurance scheme, they will find we have made a substantial contribution towards assisting local authorities and particularly those local authorities in areas where depression exists.