Motion made, and Question proposed,
That a sum, not exceeding £8,560,339, be granted to His Majesty, to complete? the sum necessary to defray the Charge which will come in course of payment during the year ending on the 31st day of March, 1925, for the Salaries and Expenses of the Ministry of Labour and Subordinate Departments, including the Contributions to the Unemployment Fund, and to Special Schemes, and Payments to Associations and Local Educational Authorities for administration under the Unemployment Insurance Acts; Expenditure in connection with the Training of demobilised Officers, Non-Commissioned Officers and Men,' and Nurses; Grants for Resettlement in Civil Life; and the Expenses of the Industrial Court; also Expenses in connection with the International Labour Organisation (League of Nations), including a Grant-in- Aid."—[Note: £5,500,000 has been voted on account.]
§ The CHANCELLOR of the EX-CHEQUER (Mr. Snowden)
I understand that this Vote for the Ministry of Labour has been asked for by the party below the Gangway in order to afford the Government an opportunity to explain their policy in regard to unemployment. I think the Committee will agree that, before we have a discussion and criticisms or approval, the Committee should be in possession of the statement of the Government. It is no part of my job as Chancellor of the Exchequer to put before the House of Commons proposals for the expenditure of public money. The 2092 function of the Chancellor of the Exchequer, as I understand it, is to resist all demands for expenditure made by his colleagues, and, when he can no longer resist, to limit the concession to the barest point of acceptance. However, I find some consolation for the duty that I have to discharge this afternoon in the fact that I have always held and advocated that there is a form of public expenditure which is remunerative to the Exchequer—There is that seattereth, and yet increaseth; and there is that withholdeth more than is meet, but it tendeth to poverty,and I am hopeful that the proposals that I shall submit this afternoon, while they may involve the expenditure of large sums of public money, will add very greatly to the productive capacity of the country and to its wealth and taxable capacity.
The Government welcomes the interest which is shown in this question by all parties in the House. I am going to make neither apology nor excuse for the record of the Government upon this subject. Neither do I object to our political opponents trying to make party capital out of the fact that we have not, in the first six months of office, completely solved the unemployment problem. I have no doubt that we shall be reminded in the course of the Debate this afternoon that the Labour party at the last election declared that they had a positive remedy for unemployment. We have a positive remedy for unemployment, but the positive remedy for a chronic disease does not effect a cure in a day and a night. The more positive the remedy the slower is its effect. I hope, apart from these little pleasantries, that we are going to discuss this question this afternoon, not as a party issue, but as a grave national problem demanding the co-operation of all parties in the House.
There are two features of the unemployment problem. There is the abnormal unemployment to which, unfortunately, the country has been subject during the last three or four years, and there is what I may call the normal unemployment, which has been a permanent feature of our industrial system. It is interesting to note that an analysis of the unemployment returns shows that if unemployment could be reduced in three of our great industries, then the average un- 2093 employment would not be higher than the figure which was considered normal in the days before the War. It is significant in that connection that these three trades are trades which are mainly or very largely dependent on foreign trade—the shipping industry, the engineering trade, and the greatest of our manufacturing industries, the cotton trade. It is also very interesting to note that, although the body of our foreign trade is smaller, we are maintaining our proportion of the world's trade. I have recently had an analysis made which shows the very vital interesting and significant fact that the price level of our exports is 90 per cent, above the pre-War level, whereas the price level of our imports is only 50 per cent, higher. That seems to me to lead to the conclusion that the cost of production in this country is very high, and that that is one of the things on which we must concentrate attention and effort. If we are going to maintain and increase our foreign trade, we must secure a reduction in the cost of production. All these three trades, as I have said, are dependent, or largely dependent, upon the export trade. Shipping depends entirely on foreign trade. Engineering does so to a large extent, and so does the cotton trade. An hon. Member who sits on the other side of the House, and who takes a very prominent and always effective part in our Debates, I understand some time ago made a suggestion for a solution of the unemployment problem. That suggestion was that we should get the hundreds of millions of Chinamen to wear their shirts two inches longer. That may appear to be very ludicrous, but there is a great truth in it and a great fact as well, for so vast is the population of the world using cotton goods that the slightest individual increase on a large scale in the consumption of cotton goods makes all the difference between prosperity and depression in the cotton trade. There is another fact in this connection, and it is that those vast populations are poor, and have a very low purchasing power, and the slightest decrease in their purchasing power has a tremendous influence upon the country of production. I mention these points to show the importance of our foreign trade, and the importance of doing everything we possibly can not only to maintain it, but to increase it.
I am hopeful that the inter-Allied Conference now sitting in London—and I 2094 am sure we are all hopeful—may result in such an agreement as will lead to an improved condition of affairs in Europe, and enable the great markets of that Continent to be open to us and to the other commercial nations of the world in a large and an abundant measure. There are facts, however, which we must not ignore. We are bound to have to face an intensified competition in the world's trade in the future. Therefore we are bound to do everything we possibly can now by cheapening our methods of production and by improving our methods in every possible way, so that when the revival of trade comes, this country will be able to secure its full share of that improvement.
May I say this in passing, although I express no very definite opinion on it. I wonder sometimes whether in some of our manufacturing industries we have not a larger number of people dependent on it, or hoping to be dependent than the industry can or is ever likely to be able to support. I am expressing no definite opinion about that, but am inclined to think that in one or two industries there has been a larger influx of labour during the last 10 or 12 years than the industry is able to support. If there be anything in that point, it leads to this conclusion. It is a very big question whether we should continue the policy of the minutest sub-division of labour, training men for highly-skilled jabs and for nothing else but a particular job, or whether it would not be much better if we turned our attention to the training of all-round craftsmen, so that if in particular classes of employment, through changes, a particular kind of labour no longer became necessary, then, without any great dislocation, that labour can be easily transferred to other channels. I put that forward as a suggestion possibly worthy of consideration.
We are an industrialised country, and if we are to maintain our population, we shall have to remain an industrialised country. But that is no excuse for neglecting to develop our national and natural resources. On the contrary, it is a reason for us to make ourselves as far as we can economically self-dependent. Therefore the solution of the unemployment problem, in the opinion of the Government, is to be found in the full development of all our national and 2095 natural resources, and in the scientific organisation of production, ending with the elimination of waste in every sphere and every department. We must cheapen the cost of production. May I say that cheap production does not necessarily mean cheap labour. It ought to mean the very opposite. The cheaper the cost of production, the more ought there to be to share. That is a fact which is admitted by all the great intelligent captains of industry.
What are the causes of the present high cost of production? They are many. There is taxation, and especially local rates. I think the burden of local rating is heavier even than the burden of national taxation. High taxation is to be deprecated when it is not used for productive purposes. Waste in the cost of production and distribution, and unnecessary expense, which enters into the cost of production and distribution, is to be found in two phases, transport and power. With regard to transport, there are various forms which go to make up the problem. My right hon. Friend the Member for Carnarvon Boroughs (Mr. Lloyd George), when he was President of the Board of Trade, now a long time ago, appointed myself and others on the Royal Commission to inquire into the waterways and canals of the country. We sat on that Commission for about five years, and the results of our labour are to be found, I believe, in some volumes buried somewhere in the cellars of a Government office. We had not been long pursuing these inquiries before I became convinced that we could not consider the problem of transport properly by looking only at the canals and waterways. What was necessary was inter-communication, the dovetailing of the various forms of transport, water, rail and road.
As regarding canal development, I will be perfectly frank, and will say that in my judgment I do not believe that there is any great future for transport by canals and waterways in this country. This country has not the natural advantages that many Continental countries have for that purpose. The great waterways systems of the Continent are, in the main, canalised rivers. We have not the water supply in this country for large artificial waterways, but there are one or 2096 two canals which might possibly be profitably developed. The right hon. Gentleman the Member for Ladywood (Mr. Neville Chamberlain) has for many years taken an interest in the Worcester Canal and the development of the waterways round about Birmingham. I believe if there is any canal scheme which might be, I do not say financially profitable in the sense of paying a dividend, but remunerative in the sense that it was an aid to the industry of the district, this is one, and I understand that negotiations have been going on for a long time, but there is yet no result. What I have to say on behalf of the Government is that we shall welcome the continuation of these inquiries and negotiations. We hope they may be successful, and I am sure it will not be for lack of willingness on the part of the Government if something fruitful does not result from them.
Now may I say a word or two about railways? We have not yet seen—at any rate it is not obvious to the general public—the full advantages from the amalgamation of the railway companies which took place a year or two ago, and I regret to have to say at this point that the railway companies are not showing much enthusiasm for re-conditioning and re-equipping their lines. I can well understand the position of the railway companies. One reason for the opposition is that the railway engineers have been trained in what one might call the "steam age." They are conservative. They believe in the thing to which they have always been accustomed. They do not like these modern, new-fangled ideas, and I believe the reluctance of the railway companies to electrify their lines to a greater extent is due in some measure to the reason I have just mentioned. But of course there is another. The railway companies, and particularly the Southern railway companies, are doing something to electrify their suburban lines. The reason they are doing that, and not electrifying their main lines, is that over small areas, where you have a very large traffic, the return on the capital comes in very quickly. It would not be so in the case of the electrification of the main lines, because a large amount of capital would have to be invested, and the whole electrification would have to be completed before the capital that had been invested became remunerative, What is the 2097 moral which I and my friends behind me would draw from that? I say I can understand the position of the railway companies. They have a responsibility to their shareholders. They must provide a dividend. I believe, consistent with that duty, they do the best they can for the convenience of the public service, but the other thing comes first. The moral I want to draw from all this is that if the railways were under national control, the position would be entirely different. The railways would be run with a different object and a different purpose, and the State could afford, having no shareholders who were expecting a dividend in cash, to do what the railway companies either cannot or will not undertake at once, that is, to invest capital in the belief that it would be for the benefit of the trade and industry of the country, and the community could afford to wait until it became a financial success.
§ Mr. SNOWDEN
I am simply amazed at the hon. Member. May I ask him who found the capital when the 127 railway companies were amalgamated into four about 18 months ago? Not a single penny of capital was found. The only thing that happened was that each shareholder in a railway company received a notification that, in place of his existing stock, he had been given new stock in one of the groups. The Government have not given up all hope of inducing the railway companies to do much more in the way of the electrification of their systems, and we are continuing to put on them all the pressure we can bring to bear, and we are hopeful of some practical results.
May I turn to the question of roads—the other important means of transport? The coming of motor transport has completely altered the situation. Our roads were unfitted for this new form of traffic. I wonder if the Committee is aware of the enormous sum that is spent every year upon the maintenance of roads? We spend every year—I mean the local authorities mainly, with what assistance is given from the Ministry of Transport—no less than £40,000,000. May I remind those who are inclined to complain about motor taxation of this fact. The railway companies have to 2098 invest a vast amount of capital before they can run a train. I have not got recent figures, but, speaking from memory, the revenue of the railway companies is about one-twelfth of the amount of their capital expenditure. But those who use the roads for the same purpose as railways are used, for the transport of goods, have to pay nothing beyond a licence for the capital expenditure which has been put into the roads. I hope those who are inclined to complain about the heavy motor taxation will remember that fact. Having said that, I want to come more to details about these two important factors of cheap transport and cheap power. Cheap transport must involve ample facilities for transport, and not merely low rates. This is a big problem. It will be costly at the outset, but it is an expenditure which will have to be incurred, and which will be the salvation of the country. It is a pity—I am not blaming anyone—that a bigger attempt was not made immediately after the War. There was a more favourable atmosphere then, and because it was not done, we have had to spend hundreds of millions of pounds in the intervening years in the maintenance of the unemployed. It would have been far better if these hundreds of millions had been spent in the re-organisation of industry.
If I have any criticism at all to make about past policy and past methods of dealing with unemployment, it would be that we have never looked sufficiently far ahead. I have sometimes put it in a somewhat paradoxical form like this, that the time to deal with unemployment is when there is no unemployment. You cannot deal with such a problem as unemployment when an acute and a grave crisis is upon you, and you cannot improvise great schemes at 24 hours' notice. They must be prepared when Governments have, leisure, and they must be got ready to be put into operation as soon as ever the need arises. Further—this may be regarded as a criticism of past efforts of palliation and the measures which this Government have continued—you are never going to settle the unemployed problem, you are never going to mitigate it to any extent by making work.
Take, for instance, the schemes under the unemployment grants for the acceleration of work. That sort of thing must be done when you have not got other big 2099 schemes of a remunerative character on which to put men to work. But I hope, although we realise the need of doing this as a measure of temporary alleviation, that we are not under the illusion that we are doing something to solve unemployment. We are not. As a matter of fact, in a sense we are agravating unemployment, because we are making unemployment in the future. Therefore, while the Government, under necessity, will continue to do as much as they possibly can on those lines, I want it to be distinctly understood that we do not regard that as a means of solving the unemployment problem.
What have we done on schemes of that kind? Unemployment has gone down during the last six or eight months. The figures are very much lower than they were this time last year. On 21st January, about the time we took office, there were 1,251,000 unemployed. The figures on 9th July, a year ago, were 1,223,000, and on 7th July this year, 1,024,000, so that they have gone down by about 200,000. I would not put the export credits in the same category as the other works with which I was dealing a moment ago. Export credits are of a much more defensible character. We have sanctioned up to the end of June last export credits to the extent of £28,000,000, and of this amount credits amounting to £10,600,000 have been actually granted. The remainder has not yet been taken up, but we are prepared as soon as the credits are sanctioned to make grants to the full extent of the remaining £18,000,000.
§ Mr. A. M. SAMUEL
As a member of the Export Credits Committee, may I say that the right hon. Gentleman's figures are right in principle. But although we 2100 have undertaken to grant these credits, the sad thing is that these millions of credits agreed to and not taken up will not be taken up. The relative orders are not forthcoming, although credit has been granted. The trouble is the lack of orders for export. The right hon. Gentleman must not assume that these £18,000,000 of dormant credits will ever mean live trade.
§ Mr. SNOWDEN
I said that the amount which had been sanctioned by the Committee is £28,000,000, that over £10,000,000 have already been granted, and that there are £18,000,000 waiting to be taken up.
§ Mr. SNOWDEN
The hon. Member will have an opportunity of putting his point later.
Now I turn to the question of trade facilities. The Committee will remember that the contingent liability of the Exchequer was £50,000,000 but under the new Act it was raised from £50,000,000 to £65,000,000, and the guarantees have been raised since this Government came into power from £38,000,000 to £48,000,000. The Committee have at the moment before them applications for more millions. The Unemployment Grants Committee since February have approved 750 schemes, to the value of £5,500,000. and they have under consideration at the moment schemes to the value of £3,400,000. These are so far advanced that it is hoped and believed they will be ready to start in the coming winter About a month or six weeks ago we sent out inspectors of the Unemployment Grants Committee to visit various municipalities throughout the country, and to urge upon them the importance of putting in hand work which they thought they might be able to carry out. We have had their returns, and at the present time there are schemes for the coming winter amounting to over £3,000,000, while at the corresponding date last year the amount was only £500,000.
Certain Government Departments are also accelerating their contracts. Since February, the Air Ministry has accelerated work upon the building of aircraft and engines which will mean employment for 15,000 additional men. The Ministry of Agriculture has certain drainage schemes under consideration. [Laughter.] Do hon. Members opposite 2101 object to that? I should have thought that the party opposite, interested in agriculture, would have welcomed any proposals for improving land, at the expense of the, State, for the benefit of the landlord. I have given the authority of the Treasury to the support of a scheme, which will be a very big one, for the drainage of the basin of the Great Ouse, and negotiations, which have reached a fairly advanced stage, are now taking place between the various parties interested. That will be an important and extremely useful piece of work.
I come to the roads. The present Government have approved a further road programme of £13,500,000, and the Government contribution to that will be £10,400,000. I am told that the House of Commons have heard on more than one occasion something about the Liverpool-Manchester Road. I believe it figured in every one of the speeches of Sir Montague Barlow during the last two or three years. The Liverpool-Manchester Road has not yet been begun, but we have made up our minds, and we are quite determined that two and three years more shall not elapse until this scheme is either off or on. I might say, and I think it is only justice to Sir Montague Barlow to say this, that the fault is not entirely the fault of the Government. There have been difficulties with the local authorities, and I believe there have been differences of opinion as to the route that the road ought to take. We have sent down Sir Richard Redmayne to report upon the merits of certain alternative routes. There is some little difference between the local authorities and the Government as to their respective shares of the contribution, but I do not think that that will present any insuperable difficulty, as soon as it is shown to be practicable that the road can be constructed.
We have also agreed to spend £5,000,000 on the reconstruction of main trunk roads. There have been several conferences with the county councils. The Minister of Transport has sent out all his divisional road engineers, who have now presented reports, and the conferences with the county councils have been resumed. The work will, I believe, be well in hand before the winter has passed. I am happy to be able to report that we have been much more successful in 2102 regard to the Glasgow-Edinburgh road than were our predecessors in regard to the Liverpool-Manchester road. This project has got so advanced that in the next week or so the Minister of Transport will cut the first sod. I will not detain the Committee by reciting other schemes which the Ministry of Transport have on hand, beyond saying that the scheme for a tunnel under the Thames has been considerably advanced. Experiments have been made on several sites, but some of them have been found, from the engineering point of view, to be absolutely impossible. One of the difficulties, from the political point of view, is this, so I am informed by my right hon. Friend the Minister of Transport, that every Member of Parliament who represents a London constituency is determined that one end of the tunnel, at least, shall be in his constituency. I have also the authority of my right hon. Friend to say that he will accommodate all these hon. Members as far as it is physically possible. We have also—though perhaps this is not at so advanced a stage—under consideration the question of a big road to the docks, which is, perhaps, the most important scheme for the relief and improvement of London transport that could possibly be conceived.
I am a great enthusiast for roads. When I was on the Canal Commission I made a public speech in which I said I believed that the best investment the country could make would be to spend £10,000,000 at once upon the improvement of the main roads of the country, and I shall never forget the satisfaction that I derived when I discovered that the "Spectator" had said that this was the first sensible suggestion that had ever emanated from the brain of a Socialist. I would like to see—and if I remain a Member of the Government sufficiently long I shall press it upon the Government, because I believe it is essential in any scheme of national reorganisation—that magnificent great Western road carried right through to Penzance, and a main road from London to Aberdeen, and another through Carlisle to Glasgow. I believe that that will be taken in hand by somebody some day, and the sooner the better. We have had under consideration the question of a bridge across the River Tay, and have undertaken to pay the preliminary expenses 2103 for the necessary engineering investigations to be made. If the report be satisfactory, we shall begin to negotiate with the local authorities who are interested. I think I may go so far as to say that we shall not be hard upon them, and that if we can get a moderate contribution from them, and if the engineering report be satisfactory, this big scheme will be started, and it will, as Scottish Members will agree, be a tremendous fillip to communications between the South and the North of Scotland.
We have been in communication with the different railway companies, and they are prepared to put in hand a great deal of work. The Great Western Railway Company expect to spend £13,000,000 on capital account, maintenance and renewal; the London and North Eastern Company expect to spend £19,000,000; the London Midland and Scottish Company are engaged on a programme of £13,500,000; and the Southern Railway will carry out a reconstruction programme which is estimated to cost over £10,000,000.
Hon. Members no doubt have seen the report which has been issued by the Mines Department in regard to the conservation of coal, and my hon. Friend the Secretary for Mines has asked me to say this. His Department believes, and I think that the Committee will agree, that the development of our industrial processes with the best aid that the best scientific research and management can give is one of the best methods of dealing with unemployment. Members of the Committee will remember the figures given in the report published in the newspapers a day or two ago about the great waste of fuel, and the possibility of doing something by which it might be better utilised. The problem is to devise means by which this can be done on a commercial scale, so that as much as possible of the 140,000,000 odd tons of coal burned in this country every year may be so treated as to reduce waste. If the 35,000,000 tons of domestic coal burned on the hearth alone were treated by some process, 450,000,000 gallons of fuel oil would be produced.
If this problem were once solved, there would be not only an immediate relief of unemployment in the construction of new plant, but the ultimate effect would be even more far-reaching. The best brains 2104 and most of the expert knowledge in this country are now engaged upon this problem. They are investigating the fundamentals of the problem, which include a survey of the coal seams of the country by means of chemical and physical tests, and the Government have agreed that additional funds should be devoted to that purpose. I have dealt with what I may call the minor points of unemployment, and if the Committee accept the view that a solution of the unemployment problem lies in national reconstruction, the utilisation of power in its various forms and the elimination of waste, then I think that they will agree with the suggestions which I am going to put forward towards that end.
Of course, all these schemes aim at national reconstruction, and at attaining cheap production. I come to the possibilities of electrical development. We find that intensive development of electricity on sound business lines will help probably more than any other way in achieving the objects which we have in view, and it will also help in a way indirectly in dealing with the unemployment problem. The idea which we had in mind was not to treat the provision of work primarily from the point of view of finding work for the unemployed, but to find big schemes which would be useful. Then you do find work, useful work, and in that way you are helping to lessen the volume of unemployment. But I want to warn the Committee that these schemes will be expensive. You cannot have large schemes of electrical development in this country unless you are prepared to put your hands into your pockets to find the money. It will be the best investment which the country could possibly make, and it may be necessary in doing this to depart to some extent from what have been regarded in the past as the principles upon which State assistance should be given to local authorities, or even to private corporations. But the essential thing is to get the work in hand, and to get these schemes of electrical development in hand, too.
Very often it is said that Great Britain is very much behind other countries in the matter of electrical development. That may be so. There are causes for it, and one of the causes is the absence of water on any great scale in this country. 2105 Electrical development in this country will remain on a fuel-fire basis. You cannot expect that we shall be able to produce electricity upon any very large scale by water power unless we are able to develop such things as the Severn barrage, and I hope to have a word to say about that before sitting down. The cost of production of electrical power in this country is cheaper than it is in other countries where they have to rely upon fuel. It is only where electrical power is produced from water that they have any advantage in other countries in that respect.
Another reason why electrical development is backward in this country is the failure of the industrialists themselves to appreciate the value of it. May I mention this as an illustration of the conservatism of the English manufacturer and captain of industry. Not long ago a man who is the head of the largest electrical undertaking in the world called upon me. He is a foreigner, and he told me this extraordinary story. He said that just before the War he came to this country, and interviewed a number of our large engineering and manufacturing firms, and he said that he made this offer to them. "I will entirely re-equip your works with electrical machinery and electrical power, and I will not charge you a single penny for it. All you shall pay me is the saving in your working expenses at the end of five years." And he said, "I could not get a single English firm to take that offer." But the reason for that is, I think, to be found most of all in the mistaken policy, after 1888, of allowing generation to proceed on parochial lines, with small stations all over the country. The electrical industry has grown up in this country as it were piecemeal, without any order or plan, and it is going to be an expensive thing to put it into an ordered condition. There are, I am told, no fewer than 532 electrical stations in this country, and 42 per cent, of them produce less than a million units in the year. Two-thirds of them are very small stations.
Let me put a little light into this rather dark picture. There has been considerable development during the three years since the passing of the emasculated Act of 1919. Since 1922—I have not the figures—the capital invested in electrical undertakings in this country 2106 has risen by 43 per cent., generating plant by 60 per cent., and units produced by 24 per cent. The opposition to progress comes not only from the private companies, but from the municipalities, and I do not know that the municipalities are not to some extent even greater sinners. They are frequently very parochially minded. They do not want to surrender their own control over the generating stations, when very often it would be greatly to the advantage of the consumers if that were done.
If electricity in Great Britain is to be in advance of other countries, it will be necessary to obtain greater power of co-ordination of effort, and far greater subordination of local interests to national interests. The Electricity Commissioners by legislation; and we propose, remember the limited powers which they have had. They have been very much hampered by the lack of compulsory powers, which were proposed in the Bill of the right hon. Gentleman about five years ago, and, in spite of the considerable progress that has been made in co-ordinating systems in different parts of the country, the Government are of opinion that the powers proposed in 1919 should be given to the Electricity Commissioners by legislation; and we propose, possibly in the Autumn Session, certainly early next Session, to introduce a Bill to restore these powers.
I spoke just now about the chaotic way in which the industry had developed in this country. There is no more instructive illustration of that than the variety of frequency. I am afraid that if I were subjected to a technical examination as to what "frequency" means I should fail. But I understand that the "frequency" is the number of cycles in a second. Unless the power be produced of the same frequency, it is not possible to interchange between one station and another. The idea is to keep the power at a standard frequency in all the large stations from the Clyde to the South of England, and then to have inter-communication by great arterial schemes.
The frequency in some cases may be 100, in some cases 50, in some 33⅓, and in some 25; and the change over to one standard of frequency will be a very big work, but the Government are going to recommend that the State should undertake that work. It will not be done 2107 unless the State does undertake it, because it is not to the financial advantage of the authorities to incur that expenditure. The advantages of standardisation would be that the manufacturers would be able to reduce the number of their patterns and their stocks, and there would be a cheapening of the cost of production. I understand that if there were the one frequency, say, a frequency of 50, all over the country, the manufacturers of electrical apparatus would be much better able to compete in the market than they are at the present time, and I think that the inter-communication between the great generation stations, resulting from having the one frequency, would be to cheapen the cost of production very considerably.
The Government, on the advice of their experts, are convinced of the extreme importance of this point. We have authorised one of the greatest experts on electricity in this country to enter into negotiations with the municipalities and the power companies, and to offer to them certain suggestions. I will be quite frank, and state what we are proposing. We are proposing that this expert shall be empowered to hold a conference of the various electricity concerns in the country, with a view of securing their support in making a uniform frequency, and also with regard to transmission lines. If we gather, in the course of the Debate to-day, that the House of Commons approves of the Government proceeding on these lines, then as soon as we have got the report of this expert, we shall feel that we are empowered to embark on the work of standardising the frequency of the current. It will be a big job, which will take probably three years. I hesitate to give a figure about the cost, because I cannot at the moment say what it would be. It can be stated approximately, but not accurately. It may perhaps be something like £10,000,000, spread over the three years. So much for frequency.
Now I come to transmission lines. To produce electricity cheaply it is necessary to concentrate the generation of the current in large stations, and then distribute it at high tension to substations. The high cost of transmission lines is the great obstacle to development, 2108 and tends to delay the work until it is absolutely necessary that it should be carried out. If electrical development is to be accelerated, cables should be laid down well in advance of immediate requirements, and this is a field suitable for State enterprise. I am told that there is hardly a case in existence where transmission lines have been laid in country districts, and through long distances ahead of requirements, in which the expense has not been either wholly or to a great extent borne by the State, and we are convinced it will not be done in this country unless the State shoulders at least a great part of the financial burden.
This in a more definite form is what we propose in regard to transmission lines: We suggest that the Electricity Commissioners should be authorised to hold a conference of the Incorporated Municipal Electrical Association, the Associated Power Companies and the Provincial Supply Company of Great Britain, with a view to securing the maximum possible development of a main transmission system, on terms to be outlined in the following scheme. The work must be of a kind which the undertakers have no intention in the near future of carrying out with their own resources, and must not be accelerated work in the ordinary sense of mere additions to, or extensions of, schemes already in operation. The financial assistance to be given is a system of grants to those authorities undertaking approved works individually or jointly, sufficient in amount to make up the net revenue (after allowing for depreciation or sinking fund) attributable to the particular work, at a rate of interest to be fixed by the Treasury, on the expenditure incurred, until such time as the net revenue is sufficient to meet the charges, but not more than ten years.
A word or two about the development of electricity in rural areas.
§ Sir L. WORTHINGTON-EVANS
What would be the cost of the scheme just outlined by the right hon. Gentleman?
§ Mr. HERBERT MORRISON
When the grants have been made, and the transmission lines laid, to whom will the transmission lines belong?
§ Mr. SNOWDEN
That will come in later. There is no instance, either at home or abroad, of any scheme of rural development which has been self-supporting. That is owing to the large amount of expenditure which has to be incurred for a small amount of revenue. You hear of cheap rural supply abroad. The explanation is that the electrical power is generated by water power, right away from the industrial centres, in some cases naturally adopted, and it has to be transmitted to the places where it is consumed. By that means they are able to give a cheap supply to the villages or houses along the line of transmission. We believe that this is a very important thing. Everyone agrees that it will add to the amenities of rural life. It will prevent the flow of population from the country districts to the towns, and, what is perhaps more important, it will encourage the transfer of industries from large centres of population into the healthier country districts. In regard to the improvement of the amenities of country life it will serve for the lighting of cottages; it can be adapted to electrical domestic apparatus, and it will lighten the work of a household. In several other ways it will be a great advantage to the countryside. I feel that in this connection there must be some organisation for the distribution of the electricity. It might be possible, and I think it would be necessary, to form some subsidiary organisation, but that will have to be, to some extent, subsidised by the State. There might, for instance, be wiring of a house on something like the hire purchase system. Our great idea is to adapt and adopt everything which may be necessary in order to achieve electrical power in the country districts for power purposes and domestic use.
I promised to say a word or two about the Severn barrage. The Water Power Resources Committee, in 1920, drew attention to the desirability and the possibilities, from the commercial point of view, of utilising the tides of the Severn. During the economy campaign, the consideration of the Committee's proposal was postponed. We have decided to revive it. But if this scheme were carried to a successful issue, it would be one of the most difficult engineering feats which has ever been achieved in the history of the world. We must not rush 2110 into a thing like this without very careful preliminary investigation, and the Board of Trade have formed a Committee, to seek advice as to the nature and scope of the inquiries which will be necessary. That is being done; it has been done. The Treasury have agreed to the necessary expenditure. We are told that it will take two or three years to complete all the investigations that are necessary. Apart from the necessity of the engineers finding the proper foundation, it will be necessary to investigate and to take note of the tides, probably over a period of two years. We have sanctioned the whole of the expenditure necessary for carrying out full investigation, and this, it is estimated, may cost about £95,000. At the moment I cannot go further than that. I am quite sure that the Committee will agree that the preliminary investigation is necessary before we rush into a big scheme.
I want to say a word or two upon a matter on which I have promised information to the House on more than one occasion. That is the question of sugar beet. The Government have accepted the principle of Exchequer assistance, for the sugar beet industry. [HON. MEMBERS: "Protection!"] A foolish observation like that, if it has any effect at all, is calculated to make me sit down now, and not say another word. It was an extremely foolish observation, because hon. Members might have waited to hear what I had to say, and then they would have had sufficient knowledge to criticise the proposals of the Government. Members of the Committee will see, after I have made my statement, that the question neither of Free Trade nor of Protection is involved. The beet sugar factories which are in existence in this country have already received assistance from previous Governments. They have also had the advantage of freedom from Excise Duty, equivalent to the Customs Duty on imported sugar. I reduced the Sugar Duty very considerably in the last Budget. Then representations were made to us that it was impossible for the British beet sugar factories to carry on in their initial stages unless some further assistance were given. The effect of the present arrangement, freedom from Excise Duty, is that they get an advantage of 11s. 8d. a cwt. Before I made a reduction in the Sugar Duty, the advantage was 25s. 8d. a cwt., or some such figure. They could just struggle 2111 along with that advantage, but they cannot do so With the advantage of 11s. 8d. a cwt. The other members of the Government and I have given the matter very full consideration.
I should not have referred to the question of Free Trade or Protection at all had it not been for the observation of the hon. Member opposite, but I will say this: If I believed that, in the proposal I am just going to make to the Committee, I violated the principles of Free Trade, I would not make it. This is what we propose. We propose that there shall be an Excise duty, equivalent to the existing preferential Customs duty, put upon sugar manufactured in this country. Of course, the sugar will get the advantage of that preference. Therefore, an Excise duty of 9s. 9d. would he put upon beet sugar manufactured in this country, and we propose that they shall get a subsidy of 19s. 6d. per cwt. The advantage of that, from the Exchequer point of view, is that it leaves the Chancellor of the Exchequer entirely free in the future to deal with the Sugar Duty. He may reduce it, or abolish it altogether, but there would not arise this question which has arisen as a result of the recent reduction in the Sugar Duty.
A very crucial matter in this connection is being able to get a sufficient supply of beet at prices which will encourage the farmer to produce. And we have come to the conclusion that it will be necessary to fix the subsidy at such a figure as will enable the manufacturer to give a price for the beet which will be an encouragement to the farmer. We have considered the question of a possible subsidy to the farmer, but after looking at the question from every point of view we came to the conclusion that there was grave objection to that course. Representatives of the National Farmers' Union, and others who take a good deal of interest in this question in various parts of the country, were of opinion that a price of 54s. per ton would be necessary to attract new growers to a district. But we have come to the conclusion, after weighing all the evidence, that such a high figure as that is not necessary, and that the subsidy which we propose to give will enable the price of 44s. per ton to be given to the beet grower.
There is not, so far as we can discover, any case in the world where a beet sugar 2112 industry has been developed except with the assistance of the State. Holland has an exceedingly flourishing beet sugar industry, which supplies the whole of Holland's needs, and leaves a considerable surplus for export, and that industry received assistance in its early years, though for a long time back it has been entirely self-supporting. Therefore, after full consideration, we have come to the conclusion that a period of 10 years is necessary during which State assistance is required to enable the industry to get upon its feet, and develop sufficiently to stand alone. There are many reasons why that is necessary. We all know what a conservative lot the farmers are, and it will require a long time to induce them to adopt new methods. We believe, however, a period of 10 years will be sufficient for that purpose, and the subsidy might be upon a diminishing scale during that period. That would have the further advantage of supplying an incentive for the erection of factories in the earlier years, when the subsidy is higher.
§ Sir LEONARD LYLE
May I ask the right hon. Gentleman whether that subsidy is to be given on the refined sugar, or merely on the raw sugar?
§ Mr. SNOWDEN
I think it is going to be given on all sugar which is produced in this country. We suggest the rate of 19s. 6d. should be subject to a falling scale. It might be reduced to 13s. in four years, and again reduced to 6s. 6d. after a further three years. And at the end of 10 years, it might he removed altogether, and, as I said before, Excise duty at the appropriate rate would be charged from the outset, so that the net cost to the Government would be only 9s. 9d. per cwt. when the subsidy is being paid at the full rate. Legislation will, of course, be necessary to carry out this proposal. I may say a word or two as to the possible effects of the proposal. We are assured that if this subsidy were granted, about half-a-dozen new factories would be started almost at once, which means the employment of a great deal of labour in the production of the machinery. I am told a new factory costs about £200,000, representing the employment of a great deal of labour, and this expenditure would be incurred in this country. A good deal of labour would also be employed in growing the beet, and bringing 2113 it to the factories. I understand that a, sugar factory at present employs between 500 and 600 men in the winter, and a smaller number in the summer.
May I take the Committee so far into my confidence as to say that I approached the consideration of this question, I will not say with hostility, but certainly not in a favourable or sympathetic frame of mind. I have given very long consideration to it, and the more I see of its possibilities, the more enthusiastic I become. I believe it is one of the very biggest things that can be done for British agriculture. I believe it will revive British agriculture, and restore rural England, and I am confident, so successful will the early stages and the early experiments be, that the areas devoted to sugar-producing purposes will extend until this country is in a position to produce a great part of the sugar which it requires. I think it is necessary, if the scheme we are going to propose is to be carried through, that it should be carried through, I will not say with the unanimous approval of the House of Commons, but at least with a certain measure of agreement among all parties. Whether we shall be able to secure that agreement or not I do not know, but I believe very strongly in its possibility, and I should very much regret if this proposal were not carried into effect.
I most sincerely apologise to the Committee for the long time I have occupied, but my statement has been necessarily long, and I want to assure hon. Members in this connection that I have taken the earliest opportunity of making it. As I stated at the commencement, I do not object to these little party pleasantries. I do not object to being reminded that we had a positive remedy for unemployment because, after all, the country will not judge the Government, when the next Election comes, on what it said at the previous Election, for the simple reason that there was no Labour Government at the previous Election. What the country will do will be to judge us, not on what we have said years ago, but on what we have done here and now. I, at any rate, have not the slightest fear. When the achievements of the Labour Government have been honestly and dispassionately 2114 examined, I shall await with the utmost confidence the verdict of the country.
§ Dr. MACNAMARA
The Committee has listened to a very interesting speech, which has manifestly made a profound impression upon hon. Members. I make no complaint of the many sound economic propositions as to the importance of foreign trade and so forth with which the right hon. Gentleman opened his remarks, and do not suppose anybody will complain of them. Indeed, so fascinating was a great deal that the Chancellor of the Exchequer said in the earlier parts of his speech, when he enunciated those profoundly admirable economic doctrines, that while listening to him I forgot that what I wanted to know was: "What do the Government propose to do immediately to find work for the workers?" I shall not be guilty of a partisan speech, but I propose to apply a severely practical test to the right hon. Gentleman's speech, namely, to inquire how it is going to help immediately the people who are out of work? You can do that, and at the same time add to the productivity of the nation, and develop its resources. The most pregnant and far-reaching part of the right hon. Gentleman's speech was that in which he outlined his proposals dealing with the development of electrical power. That is a very important statement, in my opinion, and as far as I am concerned, and I think I speak on behalf of others, generally speaking I wish the Chancellor of the Exchequer "God speed" in the endeavour to which he has now put his hand.
If the remark is not regarded as being too partisan in character, I should like to say that I do not propose to refer to the fact that the Labour party declared that they had the only positive remedy for unemployment. I have said it often before, and I need not repeat it. But I would point out, and the Chancellor of the Exchequer and the other occupants of the Treasury Bench know it, that in-their appeal to the nation last year the Labour party urged the immediate adoption of measures—and I lay stress on the word "immediate"—to provide work for the people who are out of work on national schemes of a productive character. The statement of the right hon. Gentleman comes within hours of the close of the Session, and a great deal of the proposal which he has outlined 2115 cannot be entered upon for a very long time. It is quite impossible to do so, and the Chancellor of the Exchequer never suggested otherwise. We have got this statement within a few hours of the close of the Session, and those of us who have wanted the Government to get a move on—as we have—may be prompted to take comfort from the fact that our importunity has produced this belated statement. I venture further to point out to those who joined me in getting the Government to get a move on, that our task is not completed yet by a long way.
Before I come to the statement that we have just heard, let me call attention to the unemployment figures I think the Chancellor was rather too optimistic. To me they are rather disappointing and disquieting. We began the year with 1,250,100 persons registered as wholly unemployed. We moved fitfully, but generally, in the right direction to the end of May, when there were 1,002,900. But the Chancellor rather overlooked the fact that during June and July the figure's have gone in the wrong direction. That is very curious at this time of the year. There is no question of seasonal depression. The 1,002,900 at the end of May had become 1,041,800 on the 21st, July—38,900 more than at the end of May That is very disquieting at this time of the year, and it does seem to me that it is very difficult indeed to get below that million. I wanted to get there many times, but drifted away again in the wrong direction. Here we are, at this time, going in the wrong direction. We all sincerely hope that that will not be maintained. We have to remember that, although we have over 1,000,000 unemployed, we have still as many people at work as we had in 1914. There is nothing for it but Trade recovery and expansion. There is nothing for it but the development of our national resources, and I would tell the Chancellor how cordially I agree with all he said in this respect. There is nothing for it but a more active policy, if I may say so, although it has not been mentioned here to-day, in regard to the use of the Empire Settlement Act. I am sorry that so little has been done in that direction.
To get the Chancellor's statement into its right place and in line with all the endeavours of the past, in this work-finding, work-making policy, you have 2116 really go to go back to precisely a year ago, or rather a year ago on Friday the 1st August. Let me say how glad I ant that my right hon. Friend the Minister of Labour has brought the Chancellor into this. He is the man, after all, who has got the money. He is the man who can make paper schemes real live actualities. The Minister of Labour may labour in vain unless he gets the Chancellor alongside of him with the cash. In the Debate initiated on the 1st August last year by my hon. Friend the Member for Bow and Bromley (Mr. Lansbury) the late Government laid before us—in "first broad outline" I think the phrase of Sir Montague Barlow was—its plans for the coming winter, the winter then before us, 1923–24. Hon. Members who were here then will remember that it is not too much to say that the House was greatly disappointed We believed that what was laid before us were the schemes which, in fact, we had left behind us when we went out of office in October, 1922. There were one or two comments made on the 1st August that I think I would like to recall to the Chancellor. The President of the Board of Trade, I remember, held up a pamphlet, which pamphlet contained the report of the joint conference of the representatives of the Labour Party Executive and the Trade Union Congress, on which he said:Here is the Labour party's policy on unemployment which was published in January, 1921, and which sets forth the extension and the development of railways, waterways, docks and works of that kind"—and he told us it ran into 45 pages of print. It is a fact. He said you could get £100,000,000 as soon as you liked, and you could do the work which was required if there was any desire to do it. I wonder if the President of the Board of Trade has ever mentioned his aim of securing £100,000,000 of work for the unemployed to the Chancellor of the Exchequer! He told us that here was the programme, three years old, that you ought to raise £100,000,000 to get on with it at once. I remember that my hon. Friend the Member for Bow and Bromley, who initiated the discussion, said: "I think we might easily appeal to the country for a great public works loan for the purpose of spending it on works of a necessary and productive character." The statement we have heard to-day does not get down to brass tacks as much as I 2117 should like in regard to its finance. It was an admirable proposition, economically, and a splendid conception of the development of electrical power, but what is it all going to cost? Is there any money there now, so that this thing may begin, because these men have been unemployed for a very long time? I am glad my right lion. Friend the Member for Colchester (Sir L. Worthington-Evans) is here. He was one of the Ministers who told us how far the plans of the 1st August had, in fact, been expanded. We were then told—and the finance was much more precise than we have heard to-day—that, in fact, £50,000,000 was going to be made available by the then Government for giving work to the unemployed, and the then Prime Minister told us, or, rather, told the country shortly afterwards, that by far the greater proportion of that £50,000,000 would, in fact, be spent during the winter of 1923–24. The General Election intervened—and I cannot say that it had a very useful effect in securing an active prosecution of those work schemes, because it did not.
in that General Election, the Labour party became the very special champion of the unemployed man. I do not suppose anybody will deny that; I hope it is not looked upon as a partisan statement. They had had plans ready those three years, according to the President of the Board of Trade. This is what I want to put to my hon. Friend and the Chancellor of the Exchequer: Supposing any man had got up then and said, "Well, that may be so you have got the plans there all right, they have been ready three years, and yet six months after a Labour Government has been in office there are still 1,000,000 people unemployed!" Is there a Member of that Front Bench who would'nt have made that man sorry he spoke—well, when I talked like that my socialist friends made it very doubtful to me. as to whether I ever ought to have been born! Let us assess this statement properly and get it into its right place. I certainly do not underestimate its importance when looking at the White Paper, issued last Saturday and entitled: "Provision of work for relief of unemployment." That, I think, was the right thing. It shows how existing schemes are progressing. I am glad the Minister of Labour is here. That White Paper is rather illuminating. It takes. 2118 first of all, the Unemployment Grants Committee awards to municipalities who put in hand relief works and the schemes under which the Unemployment Grants Committee pays 60 per cent. of the wages bill. I will take it first. Let the Chancellor follow these facts. Quite unintentionally, I think, he rather misled the Committee. Under that first heading—schemes where the Unemployment Grants Committee give assistance to the extent of 60 per cent. of the wages—it shows that this Government has had 223 schemes submitted to it. I will give my right hon. Friend the page. Page 5 of the table. It has approved 177.
§ Dr. MACNAMARA
A lot have come in since then, but it has approved of 177 in four months. It has allocated £144,000 in grants, according to that Paper, in the four months. It is in the table. But in the previous 10 months, when the late Government were in office—and they have been denounced on the ground that their schemes were wholly inadequate—[HON. MEMBERS: "No!"] Yes, certainly they have been denounced, as not seriously tackling the problem. In the 10 months, if you will look at that table, you will find that the late Government were responsible for 703 schemes, and they allocated £616,000. Let us be quite fair. The progress here, according to that table, is not so fast now as it was last year.
§ Dr. MACNAMARA
Well, I will make any comparison my right hon. Friend likes. I think his point was that the figures carried us beyond June. If that be so, I have nothing more to say. I am dealing with the printed document. I will take the grants which the Unemployment Grants Committee make towards the interest and sinking fund charges of works covered by loans. Five hundred of these schemes have been submitted to the present Government. Four hundred and two have been approved. New loans to the extent of £3,750,000 have been approved in the four months, according to the document—although there is a footnote to say that other provisional sums have been granted which will provide work of, say, over 2119 £4,500,000. In the previous 10 months £16,500,000 was approved for grants. Again, the pace is not so fast as last year. I want immediately to help the workless man, and I do not care who does it. Unless I do not understand that document at all—and the Minister of Labour will correct me—I say that, according to that document, the Unemployment Grants Committee is not getting ahead with the rapidity which it was doing last year, and I am bound to make that point when I come to consider the prospective value of the schemes, the remarkable schemes, put forward with such sincerity by the Chancellor of the Exchequer. I want to see how they are going to be applied, how they are going to get on with them. I will tell the Chancellor of the Exchequer why it is going a little slower. The fact is that municipalities have found the task of financing relief work year after year increasingly onerous. That is the trouble. They do not find it more difficult to find the men to take the work. They find it more difficult to make work and finance work. Next winter is going to be the fifth winter in succession. I really do think—I say this with great respect and not as a partisan at all—the Chancellor ought to consider if he is going to get the co-operation of the municipalities in these great electrical schemes, with grants which do not seem to me to err on the side of generosity.
6.00 P. M.
I do think he has got to consider whether his grant to these municipalities, who have so finely co-operated with us, ought not to be on a rather more generous scale. I am quite sure they will go on doing splendidly, and I hope, as I have no doubt, they will throw themselves into the electrical power development schemes. But do not let us make it too hard for them. The Chancellor spoke of the excess of local rates, but the interest on the loans which have been piled up has increased these local rates very heavily. I come to the Chancellor's roadwork. Take arterial roads. We were told on the 1st August last year—unless I have got it all wrong—that £7,500,000 would be found last year from the Road Fund to be dispensed to the local authorities that put in hand repair work on arterial roads; and, further, in October, we were told that, over and above this £7,500,000, which was dispensed on the 50–50 2120 Principle, there would be a direct Treasury grant of £14,000,000 for new roads and new bridges. The figures in the White Paper bear no relation whatever to those facts, if I have got them right. The Road Fund appears only to have contributed £2,884,000 last year, instead of £7,500,000. The answer may be that the amount has been hypothecated, and that the whole balance will be absorbed in later years. I hope it is. I admit this is much more a matter for the late Government than the present Government. As regards the £14,000,000 of last October to find work for these workless men, all-the information I can get about it is this. Paragraph 3 says:There are not yet sufficient data upon which to base a forecast of the rate of expenditure, but the grants promised represent a Government contribution of £7,100,000. and the whole of the balance has been hypothecated to definite schemes. The cost of this programme will fall largely on future years, and the actual disbursements up to 31st March, 1924, were approximately £32,000.I do wish the late Prime Minister had been present to hear these words, if he has not read them already. It must not be forgotten that the great proportion of the £50,000,000 was to be spent last winter, and we get clown to an expenditure last winter of £32,000. The next paragraph entirely perplexes me. It is: