UNEMPLOYMENT.

HC Deb 26 March 1925 vol 182 cc675-813

Sir JOHN SIMON

A little over a fortnight ago, in the Debate on the Vote on Account, which was initiated by the hon. Member for Nottingham West (Mr. Hayday), we had a discussion on the administration of the Labour Ministry. In the course of that Debate, a great deal was said on the subject of the prevailing unemployment, and by common consent many useful speeches were made. But the whole Debate tended to treat the subject of unemployment as it exists in our country at the present time rather from the Departmental point of view. There was a great deal of discussion about a circular—I think Circular 8213—issued by the Ministry of Labour. There was a discussion as to how many people would be denied benefit by the application of that circular. There was the question of what would happen when we reached 1st October, when the present power of the Ministry of Labour to exercise an indulgent view in respect of certain claims for relief will cease, and there were a number of other points of that sort raised and debated. No doubt those are very important points and very proper to raise and discuss fully. But the details, because they really are details, pale into complete insignificance beside the broad features of the unemployment situation, and, as it seems to me, the complete absence up to the present of any declared and definite policy on the Hart of the Government for dealing with it or amending it.

There is a real danger that discussion of details and expedients may obscure our view of a problem which is not only tragic, but is very nearly desperate, and that, by becoming habituated to a continuance of the situation itself, we may lose interest, the Press may lose interest, and public opinion at large may lose interest, and even hope, in searching for an adequate remedy. Therefore, I make no apology for introducing to the House on the Third Reading of the Consolidated Fund Bill the question in a much larger aspect. I am not going to attempt to make partisan points. I doubt very much whether there is any party in this House that can be entirely satisfied with all its proceedings on this matter, and I feel that the subject is itself so grave that we ought to be ready to support any Administration that shows it can tackle and does mean to tackle the disease.

I am glad to see the Minister of Labour and the President of the Board of Trade present. My question to them is—and we want satisfaction before the Debate finishes—Have you got a policy in order to deal with this in its wider aspect, and, if so, what is that policy? The central fact it seems to me is this. When the Armistice was signed, and the Government of the day were providing as best they might for a post-war situation, a postwar symptom of exceptional unemployment was at that time thought to be a passing phase requiring, no doubt, treatment, but requiring temporary relief, whereas it turned out, when you look over the intervening years, that it was no passing phase, but a situation which has continued and is continuing from year to year and gives no sign up to the present either of adequate improvement or effective remedy. I think that must- be admitted to be the plain truth about the way in which the problem was faced. But we have reached the stage when it is of the greatest possible public importance that we should not continue to be content with a further application of measures which are of themselves merely measures of assuagement or temporary relief if the assumption upon which these measures were adopted be false and the phase with which we have to deal instead of being merely temporary be continuous.

I do not propose to spend more than a few minutes in reminding the House of the scheme of the Unemployment Insurance Act, but it is important to insist on this distinction. It is a fundamental distinction between the original Act of 1911 and the amending Acts which were carried during the War and the situation in which the Act of 1920 was passed. The Act of 1911 was passed by the Government Of that day in a time of very good trade. It was in the true sense of the term an insurance provision. It is true that it began by only covering 2,500,000 workers in some six trades, but, since it started in a time of good trade it was able to do what on true principles of insurance ought always to be the object, namely, it was able to build up a fund at first in order that it might be available when the pinch came. The same thing is true of the extensions of the Act which were carried during the War. But it was unfortunate that the Act of 1920—and as I say I am not engaged in distributing blame, not even to any neighbour of mine—that it was not introduced until the storm of the corning slump had begun to rumble. It was introduced, I think, in April, 1920. At that moment, the Insurance Fund which had been built up by previous Insurance Acts stood at the tremendous figure of £22,000,000. It is on that fund really and on borrowings which have filled temporarily the coffers of that fund that a very large part of unemployment relief has been financed ever since. To-day, instead of there being an insurance fund which is in credit to the extent of £22,000,000, there has been an exhaustion of that fund and there has been the exercise of a power of borrowing from the Treasury which at one time involved borrowing as much as 13,000,000. It was reduced, I think, at one stage to as little borrowing as something over £4,000,000, but it is going up again, and the fund at present is in debt to the Treasury to the amount of £6,500,000. You cannot borrow from the Treasury for nothing, and the reason that the Treasury has been comparatively complacent on this subject is that when it advances money to finance the Unemployment Fund it charges interest. I think I am right in saying that the actual sum of interest which has been paid in account to the Treasury for financing the Unemployment Fund now reaches a figure of something like £820,000.

It was the great misfortune of the Act of 1920 that it was only introduced when the storm was rumbling, and it came into operation in November, 1920, or thereabouts, at a moment when there were brought into the scheme for the first time immense numbers of people who had to begin their experience, not by paying contributions to the fund, but by drawing money out of it. It is really a case of paying, as it were, for loss which should have been insured against, a loss has already happened, in the hope that in the near future premiums will be collected which will go to reduce the debt. It is the expedient—very necessary in the circumstances and not at all to be criticised, but none the less unfortunate—of spending money to-day in the confident hope that you will have an income to-morrow.

The situation then became this. The number of insured was increased from something like 3,750,000 to 11,750,000. The benefit was raised, and very properly raised, to 15s. for men and 12s. for women and, side by side with the great and splendid extension of the scheme on its permanent side, there was an emergency side under which benefit was payable in advance of contributions. The whole point to my way of thinking is that those arrangements which used to be called uncovenanted benefits and are now called extended benefits, were originally made in the belief that by such methods we should tide over a temporary emergency, namely, the special, urgent, passing difficulty of getting the ex-soldier back into industry. It was thought that the storm would pass, that normal conditions would re-assert themselves, and that there would be a revival in trade and a reduction of unemployment as the unemployed were absorbed into industry. A temporary problem of that sort was, quite naturally and properly, tackled by what was admittedly a temporary expedient, ha the real problem is very much bigger than any Departmental problem. It is probably the central problem of the social life of our country. The real problem which we have to face is that the expectation that we were merely tiding over a temporary difficulty has not been fulfilled. Let me remind the House of some figures. I have taken these figures so that they cover the Coalition Government, the previous Conservative Government, the late Labour Government, and the present Government, because my object to-day is not to endeavour to score small points as between one body and another. At the beginning of 1921, that is to say, within a few months of the coming into operation of the Act of 1920, the registered unemployed in Great Britain were just over one million. By June of 1921 they had grown to 2,500,000. That, of course, was due to special circumstances. By March, 1923, that figure dropped to 1,250,000.

Undoubtedly, in the general view of informed opinion, that was a dropping back after a wholly exceptional time and it was thought that we should see the temperature chart as it were going on from month to month showing a more or less continuous drop to something which was within more ordinary experience. It did not happen. Take these four dates and take these four figures. I take first of all the date when the previous Conservative Government went out of office, 7th January, 1924—at any rate that is the nearest week. If I take the new set of figures—they are all, as far as may be, on a common basis—when the late Conservative Government went out of office, the number of registered unemployed in that week was 1,267,675. Take the next date. In the course of the life of the late Labour Government they were challenged, on the Vote for the salary of the Minister of Labour, to fulfil the confident expectations which they had undoubtedly raised in a very large part of the population. That was in May, 1924, and the figure then was 1,021,000. Take the date when the Labour Government went out of office and the new Government came in, which was 10th November, 1924. At. that date the figure was 1,218,392. Take the official figure last week—because, after all, the present Government has been in office for five months. On 16th March, 1925, the figure of registered unemployed was 1,219,200. I know very well that we may have chaffering and an exchange of arguments pointing out that one figure is a little smaller and another figure a little bigger, arguing that, on the one hand, there had been the abolition of the gap or, on the other hand, there has been an attempt to put some people on to the guardians who were formerly receiving unemployment relief. For the purpose of looking at the problem in its big aspect, what does that matter? The big fact—explain it as you may and cast the blame where you choose—is that, while Governments may Change, there has been over an alarming length of time this startling situation, that with a variation of a few thousands week by week, approximately 1,100,000 or 1,200,000 unhappy people are receiving unemploy- ment weekly allowances solely on the condition that they have no work to do.

It is not, I think, true that the gap has made a material difference to the figures, and for this reason. As the House knows, the abolition of the gap in February last year, though it allowed unemployment benefit to go on continuously, did not, except very indirectly and very slightly, affect the register. The register is not a register of people who are drawing benefit, but of people who are registered as unemployed and seeking work. No doubt a poor man whose spirit was broken and Who knew when the gap came that he was not going to draw his pittance that week, might in some cases abandon all chance of continuing to register in order to avoid marching three or four miles in the cold and wet, but except to that extent, which I apprehend covers only a matter of thousands, I do not think the figure has been affected thereby. On the other hand, they have admittedly been affected by elements in the other direction which the Minister of Labour was asked to explain and justify a fortnight ago. Admittedly, his new Regulation, whether justified or not, has a tendency to put on to the burden of the guardians of the poor some people who were previously drawing unemployment benefit. But for my part I think it is much more important that the House should face the big fact and not attempt to distribute blame or praise. That fact is all the more alarming for this circumstance. I have seen estimates, which I think are trustworthy, that half, perhaps even two-thirds, of those drawing unemployment benefit are persons who could not individually show that they or their employers or the State, in association with them, have paid any sums which are actuarially calculated to make them members of a true insurance fund. That is a very formidable fact indeed. Most of them were at the beginning people who were looking eagerly for work. They are men and women who become necessarily less and less inclined to carry on the search; ex-service men, trade unionists, decent citizens who throw up the sponge as time goes on, not indeed content but acquiescent in the miserable pittance, and with the capacity for work oozing and draining out of them.

Of course, it would be a great error to imagine that this ragged army of 1,100,000 or 1,200,000 is always composed of the same individuals. That is one of the tragedies of the situation. This army is, as it were, demobilised in our midst and the actual individuals who make up the total may form and reform and shift and change to a certain extent, but the central, tragic fact remains. There is a second consideration which makes that fact doubly alarming. A speech was made in this House a fortnight ago by the hon. Member for Bow and Bromley (Mr. Lansbury) which greatly affected us all and roused a feeling of great sympathy in other quarters of the House besides his own. He called attention to the situation of the young people. I have been at some pains to ascertain what proportion of this great mass of 1,000,000 or 1,200,000 really consists of quite young men. Let us cut out the women and confine ourselves, for the moment, to the men between 18 and 24 years of age. A special survey was made last November according to which, if we confine ourselves to the young men between 18 and 24, there are included in this terrible total no less than 181,600 such. The very fact that they are there goes to show that most or many of them have had no possibility of obtaining skilled training. A great many of them are probably men who in the later years of the War, at the very first possible moment, were taken into the Army. It is not a subject for beating the air or empty rhetoric, but it is worth while insisting that one does not appreciate the real gravity of this problem unless one remembers there is this immense mass of quite young people who are being steadily depressed and deteriorated and degenerated under the system under which they are living. I know it is the fashion of the hon. Members above the Gangway to say, "Oh, yes, but that is all due to private enterprise." I know it is the fashion in some other quarters to say, "Oh, yes, but that is all due to Free Trade." Do let us be candid with each other and admit that this situation is something new. We have had Free Trade in England before; we have had private enterprise before, but this is something new.

Mr. WALLHEAD

Not unemployment.

Dr. SALTER

There was always a quarter of a million

Sir J. SIMON

I think my hon. Friend will find if he observes the figures over a series of years that there have been years when the figure was a great deal less than that. I do not think we shall get over it by making a general statement. It is perfectly easy to find the figures year by year of unemployed, but there have been times when it has come down to something very small. At any rate I am not going to argue that point now. All I say and I think the hon. Gentleman will so far agree with me is that we should realise that this is not only a very big figure and a terrible difficulty, but that it is something which, in its scale, is quite without parallel. Indeed, I think you would have to go back behind the Poor Law of 1834 to get any situation which is in the least comparable with it. It is perfectly true that the Poor Law of 1834 applied a very savage surgery to the situation with which it had to deal. I think it is not without use to bear in mind that the system before the great Poor Law reform was a system under which public funds were being used to supplement sweated wages in order that the employers might, as they said, be able to provide more work through gathering to the support of those they employed the funds so contributed. I think that was a bad system. I think it is necessary to bear that in mind, because in a crisis like this all sorts of suggestions have to be carefully analysed. Even that is not quite all. Side by side with this army of which I speak, there is another army which is being supported by the contributions of the public. One person out of every 34 in the population of Great Britain and Northern Ireland, according to information given me from the Ministry of Health, is at present in receipt of relief from the guardians, and that is a very serious addition to make. So you are faced with these two gigantic burdens of non-productive expenditure, and mere prudence, apart from any question of sympathy or policy, makes it, as I submit, absolutely necessary that the House of Commons should demand from this Government, sitting there in its great strength and security, what it is that the Government really thinks is the policy by means of which this can be cured.

Let me just give to the House some figures with which I have been supplied. I take the period from the Armistice to the end of February, 1925, and I gather, together three things. The unemployment benefit that has been drawn, whether it be in the form of covenanted or uncovenanted benefit, between the Armistice and the end of February, 1925, is no less than £194,000,000. In addition to that, there was that very large alleviation, justified, I think, and necessary, known as out-of-work donation, both for ex-soldiers and for others, which has meant between those dates—it has ceased now—an addition of £62,448,000. There was an answer given not long ago by the Minister of Health, from which it would be fair to infer that the outdoor relief which has been found through the guardians of the poor, from the Armistice down to the present time, is something like £35,000,000. Add those three figures together, and it means this, that whether under the head of unemployment benefit drawn, or out-of-work donation, or outdoor relief from the poor rate, £291,448,000 have been expended since the Armistice was signed.

Of course, it is perfectly true that the unemployment benefit which has been drawn, this great sum of £194,000,000, has to a very large extent been financed from the contributions, not only of the State, but the contributions of workmen in work and of the employers employing them. It is a somewhat curious circumstance that, if you take that part of the unemployment insurance scheme which has really been concerned in gathering in these contributions from workmen employed and from employers employing them, with the State addition, you get a total which is very nearly the same as the £194,000,000. The employers since the Armistice have paid into the Fund £73,500,000, the employed have paid in:£66,750,000, and the Exchequer has contributed £51,500,000, and if you add those three figures together, they come to almost the same, namely £192,000,000. But it is a complete fallacy to suppose that the people who have been relieved are the same individuals as the people who, directly or indirectly, have been contributing.

The truth is that a very large portion of unemployment relief since the Armistice, though it has been drawn out of a fund, has, as a matter of fact, been drawn from a fund which has been made by others, and which, if it had not been for this temporary expedient which we have adopted, would have entitled the original members of the fund either to a reduction of contribution, or to an increase of benefit, or to relief in some other form. It is not very unlike what would happen in an insurance company, if you had, as you do have in a company of that sort, one fund separately earmarked from one set of contributors, and another fund which you hoped one day to create for a second set of contributors, and then you were to draw on the fund already made for the benefit of both. I do not say that it is unnecessary or unjustified, but what I do say is that it could only have been adopted as a passing and temporary expedient, with the confident expectation of improvement, and, as things stand, it seems to me that the Government and every Government in turn has got this as the primary problem with which they have to deal.

I take, if I may, the previous Conservative Government. The Prime Minister, a year and a half ago, declared boldly that he refused to be responsible for the administration of this country unless he could get authority to try his remedy. There are a great many people who think that his remedy was wrong, and the country refused to authorise him to try it, but his appreciation of the disease was right. He was right, I think, when he said that, unless some real remedy can be found, in a famous phrase, "We shall go pottering on to the end of time." We are told—and nobody tells us with more force and eloquence than the right hon. Gentleman the President of the Board of Trade—that, whatever anybody may suspect or fear or hope, Protection is barred; far be it from him to touch it even with the end of a barge pole. Since that is the case, one wants to know, as the Government appreciates the gravity of the problem, what is their contribution, what is the result of their thought towards its solution?

May I refer for a moment to the Government which preceded them? I am not going to bandy words about promises and all the rust of it, but it is quite unquestionable that the Labour party obtained their support and obtained their chance of office very largely because they had confident hopes, which they expressed in very generous terms, as to what they might be able to do. That is quite beyond dispute, but may I remind the House what happened, because it is very often forgotten? The Labour party came into office without previous experience of Government Departments. I shall not, I hope, be thought to speak offensively if I say that the Members of that Party in office had a great deal of departmental knowledge to collect and learn. In four months there was a Vote of Censure, moved from the Conservative benches, on the salary of the Minister of Labour. Why? Because, to use his cheerful expression, he was not able to produce rabbits out of a hat, and I have the plainest and clearest recollection of the reproaches which were poured upon the head of Liberals like myself because we took the view that it was much too summary a process to say to a Labour Government that had been in office for four months that they must instantly leave office because at that time they had not produced adequate plans. Whether or not that decision brought about the electoral result which reduced the number of Liberal Members in this House, I do not know. [Laughter.] At any rate, that is what happened, and if the great battalions opposite are disposed to be amused by it, allow me to sober them by reminding them that the Government they are supporting has been sitting on the Treasury Bench for more than four months, and has not up to the present produced anything whatever—[An HON. MEMBER: "Not even a rabbit!"]as my hon. Friend remarks, not even a rabbit.

I think it is fair to make this further observation. But for the fact that the Labour Government was condemned on other grounds, it may well be that plans which they said they were working at might by this time have produced some fruit. [Laughter.] I do not think there is any reason for hon. Members opposite to laugh at that, but what I know is this—and the hon. Member who laughed will perhaps think before he laughs again—that in the last Conservative Government there was a Minister of Labour called Sir Montague Barlow. I well remember the grandiose plan—millions upon millions—which the last Conservative Government announced that it was in a position to set before the country as the way of assisting the solution of unemployment. It is all very well to say it is difficult, and that it needs consideration, but really it does not rest with hon. Members opposite to laugh too cheerfully when they consider the confidence with which these things were said by the last Conservative Government before them.

There was an answer given to my hon. Friend the Member for South-West Bethnal-Green (Mr. Harris) the other day. He asked the Minister of Labour to tell him how much public money had been spent by the Government in providing money for work for the unemployed, either through grants from the Road Board or through local authorities, how many men had been employed in work as the result of this expenditure, and how those figures compared with the corresponding figures for December, January, and February, 1923–4. My right hon. Friend gave an answer, as he always does, and as his Department always does, which was quite fair and candid, and I am not saying that the figures did not show, as they ought to show, some improvement on the previous year—I should think so—but can anybody really be content with the figures he gave? I find that when he, for instance, is asked what has happened to all these miscellaneous schemes which from time to time bulk so largely in the policy of the Government of the day, all he said was "Miscellaneous schemes? A number of Departments are concerned, and particulars of expenditure in the months mentioned in the question are not at present available, but I will endeavour to obtain them if the hon. Member so desires." Surely, we are entitled to say, apart from export credits—because, after all, they were instituted by my right hon. Friend here—apart from trade facilities, apart from the Unemployment Grants Committee, all of them expedients which have been in operation for years, what is there which justifies the view that the new Government has really got a conception of this problem and is working towards a solution of it?

I will not delay the House much longer, because many others wish to speak, but let me put, in a concluding sentence or two, four points. I see my right hon. Friend the late Chancellor of the Exchequer sitting on the Opposition Front Bench, and it may be that he is going to take part in the Debate. I remember that in the last Government, after the Minister of Labour had made one or two attempts to explain either what he was doing or what he was going to do, the Government of that day thought it wise and right and proper that the principal spokesmen of the Government, the Prime Minister and the Chancellor of the Exchequer, should come to Debates like this and should make, from the broad point of view, a declaration of Government policy. The Prime Minister, I ought to add, very kindly told me the reason why he is not able to be present here this afternoon, and we all of us appreciate the multitude of burdens that fall upon him, and I make no complaint at all, but, at the same time, it is not satisfactory that a Debate of this sort should be answered from the Government Bench by right hon. Members, however authoritative and eminent, who necessarily are speaking, not as superior to the Treasury, but as subject to the correction and the starvation of the Treasury. The Prime Minister, at any rate, can declare policy as a whole, the Chancellor of the Exchequer can speak with all his responsibility for public funds, and I think that the answer to the question: "What is the Conservative Government intending to do about this?" is an answer which has to be given and, I hope, to be given very soon, by those who are in supreme authority to answer. Take electrical development. The late Chancellor of the Exchequer made a speech about it, I think, on 30th July of last year. He described the inquiries which were being made by the late Government, and he said, on behalf of the Government: We find that intensive development of electricity on sound business lines will help probably more than any other way in achieving the object we have in view, and will also help in a way indirectly in dealing with the unemployment problem. He proceeded to describe how that Government was of opinion that the powers proposed in 1919 should be given to the Electricity Commissioners by legislation, and, speaking of the late Government, he said: We propose, possibly in the Autumn Session, certainly early next Session, to introduce a Bill to restore these powers. I think we are entitled to know, have the new Government, after their five months of office, yet reached a conclusion on this simple point: Do they agree with the late Government in their view as to what should be done on the subject of electrical development; and, if they do, what have they done? The question has been asked two or three times in one way or another, but, as far as I have seen, we have had no informing answer.

Take a second question—an immense question in itself, but I will mention it in only one or two sentences, namely, housing. The late Government, through the Minister of Health, did make a great effort—and it is no good pretending they did not—in negotiation between the employers and the trade unions to secure an addition of skilled labour by a freer system of apprenticeship. We had an answer, I notice, just before public buiness began, from the Minister of Health on the subject to-day. Nobody will pretend—I am quite certain that the late Chancellor of the Exchequer will not pretend—that we are satisfied, or that he is satisfied, with the present available skilled labour for building houses. We are entitled to know from this Government what is their view. Is their view that there ought to be the use of Government money and Government authority to train young men in order that they may become skilled members of the building trade, or is their view that they have to accept and sit down under the non possumus of a particular trade union, and that there is to be no relief secured under the head of finding outlets for training and for employment in the building trade, except for those who are already members of the trade, or who had the good fortune to be apprenticed before the age of 20? Surely it is a perfectly fair question for the House to require the Government to answer.

I take a third subject, one which was dealt with, if I may be allowed to say so, most admirably in a speech by the hon. Member for Finchley (Mr. Cadogan) in the Debate a fortnight ago, namely, juvenile unemployment. Here was a thing in which, as it seems to me, the late Labour Government in the first instance were prepared to go entirely wrong. They brought in a scheme for the compulsory insurance of these unfortunate children between the ages of 14 and 16. It is a great satisfaction, I think, to everybody, and I am sure to the Labour party itself, that when that scheme came to be examined here, a Member of this House—and I think it is a great loss to the new House of Commons, that he is not here now: I refer to Mr. Masterman—moved that that should be excluded. He moved it with such success and with such universal approval that ultimately the proposal, brought in by the Labour Government, was defeated by 359 votes to three. There were three people who voted for it—none of them Labour Members. [An HON. MEMBER: "What has happened to them?"] Whatever has happened to them, it is not right to proceed on the basis that you are going to get further contributions to the Unemployment Insurance Fund by starting compulsory insurance for children between 14 and 16 years of age. I would far sooner see, not the Education Estimates cut down, but the use of the resources of the country for fighting what is the real enemy of our country. I would far sooner see our resources used in that way than that we should attempt to finance an insurance fund by dragging into it children after the age of 14.

Further, I would ask this. What about all those great schemes which have always made the peroration of Ministers of Labour—roads, reclamations, afforestation, waterways, and drainage? I remember the Minister of Agriculture in the last Government informing a gratified House that 200 persons, I think it was, were being employed in re-claiming the Wash. Is anything being done now, or is the situation merely that the Government, secure in a great majority, are taking these things easy, confident that they cannot be removed, it may be, for years to come, and are allowing what was really a method devised to meet a passing tragic accident to be treated as though it were the indetermined method of solace to people suffering under a terrible menace?

Lastly, let me point out this. It seems to me that when the social history of the present time is written, this will be regarded as the most striking of all the curious facts about Our age—namely, the extraordinary calmness with which the country has borne the continuance of this terrible complaint. There is no age in past history in which such a thing could have happened. You would have had marches of the unemployed, demonstrations in Trafalgar Square, barricades at the entrance of Downing Street, deputations once a week, and adjournments of the House once a fortnight. How is it that it has not happened? It has not happened because really, if we tell the truth about it, the dole is dope. What we are really doing is that we are engaged in chloroforming a large part of the body politic which is suffering from a terrible complaint. We have dulled their pain and we have dulled their sense of crying out and resistance by a continual application of doses of chloroform, which really, like all such methods, unless they are used for a merely temporary emergency, sap the vitality and undermine the powers of useful work of everybody made a victim of it. I think it is well worth while that we should use a portion of the debate to-day in asking the Government whether they agree that this is the central problem of the social life of Britain, and to say to them, as we are entitled to say to them, and as we said to the Labour Government, or to any Government sitting on those benches, "Take the responsibility which is yours, and tell us now what it is that you really have in mind as something more than a mere palliative for this terrible disease."

Mr. SNOWDEN

The right hon. and learned Gentleman who has just sat down has dealt with a subject which can hardly be described as new to the Members of this House. The frequency with which this question enters into our discussions is evidence that it is a problem of urgency and difficulty. I hope I shall be able to subdue party feeling this afternoon to the extent of following the example of my right hon. Friend and deal with this important question as one which is entitled to be considered above all party recrimination and which is urgently entitled to receive the most serious consideration of all parties in this House. The temptation to do otherwise, I admit, is rather strong, because 12 months has not been sufficiently long to have effaced the recollection of the criticism to which the Labour Government were subjected by the party now in office. My right hon. Friend mentioned that we had not been in office four months before we had to meet a Vote of Censure because in that time we had not solved the unemployment problem. I remember that we were taunted long before we had been in office for four months. However, I shall not emulate the example of hon. Members opposite, and I hope to be able, in another respect, to follow the lines laid down by the right hon. Gentleman who has just sat down. He said at the opening of his observations that he proposed to deal with this question on broad lines. I shall endeavour to deal with it on lines perhaps broader than those which have been followed by my predecessor.

The right hon. Gentleman anticipated the statement that might be made from these benches, that the existence of this unemployment problem is the outcome of the industrial system under which we are living. We might say that all this is due to private enterprise and to the capitalist system. The right hon. Gentleman said that the unemployment problem, in the gravity in which it is to-day was something quite exceptional. He was met by interjections from some of my hon. Friends behind to the effect that we had always had the unemployment problem. It is quite true that in the days before the War it fluctuated from, perhaps, 9 or 10 per cent. to occasionally as low as 21 per cent.; but those figures purporting to register the number of unemployed were not so comprehensive as the figures we have to-day, and I think I should be justified in saying that upon the average in the days before the War, we had unemployed numbering not less than half-a-million.

5.0 P.m.

Although it is something of a digression, may I make a reference to the very interesting observation made by the right hon. Gentleman in his concluding remarks. He referred to the very extraordinary absences of ocular demonstration of the existence of a large army of unemployed. That is a fact which has deeply interested me, especially during the first year of the present period. I have known, during the last 30 years, of more than half-a-dozen periods of exceptional unemployment. I have never known one like this. There have been no demonstrations of the unemployed. Why, we are not able even to get a meeting of the unemployed. There are many reasons for it. The right hon. Gentleman gave one—the payment of what I think is offensively and erroneously called the "dole." The second point is the fact that a sum about equal to the amount paid in unemployment benefit has been paid in war pensions. And may I venture this: acute as the housing problem is and disastrous as the shortage of housing is, one curious thing about it is that it has helped to prevent demonstrations against unemployment. It has driven families together, and by driving families together it has increased the aggregate income within a house and therefore lessened the amount of privation. I am not using that, as hon. Members, of course, will know, as any reason why we should not bring all our energies to a solution of the housing problem.

To go back to the point with which I was dealing before that digression, the anticipation of the right hon. Gentleman that we might say, "This is the result of your capitalist system." That statement cannot be denied. Whether you take what you might describe as normal or abnormal unemployment, it is anti cannot be otherwise than the outcome of the system under which this country and the countries of the world live. Charles Booth, in that monumental work of his on the life of London, says: The capitalist system cannot work without a margin of unemployment. This unemployment problem has always struck me in this way. People have needs, constant needs. Take their primary needs—shelter, food and clothing. I can understand that people would starve or people would be out of work provided there was a famine or provided nature did not supply the raw materials necessary for the satisfaction of these primary physical needs. I could understand it, too, in a community which has not developed a command over natural resources. But the curious thing about modern industrial conditions is this, that the more highly developed a country becomes in the way of its command over productive forces the greater becomes the problem of unemployment. Therefore it seems to me that this unemployment problem resolves itself into this demand: The organisation of natural resources, and the organisation of labour in order to supply the permanent and staple needs of our population. If we accept that as the duty we have to discharge, then it must follow that our industrial system, as we have it in this country and in other countries to-day, has lamentably failed to solve that problem.

Take housing. If we had no raw materials with which to build houses, if we did not know how to build houses, if we had no skill in the making of houses, then one could understand why there were no houses. We are short of houses to-day, not through the lack of raw materials. There may be a difficulty in getting bricks, but that is not the original form of the raw material; the raw material is there, we know how to build the houses. Why have we not got houses? [An HON. MEMBER "Trade union restrictions."] There is one answer to that, and that is that you do not organise production for that purpose. It is not my business at the moment to deal with that interjection. I am simply stating a fact. If there be difficulties in that way, if there be certain parties, then it is the duty of the Government to take steps to see that there is such an organisation of the productive power needed for houses as will give the people the houses they require.

Mr. J JONES

Not sardine tins!

Mr. SNOWDEN

So I might go through the list. I might take any other of the primary needs of the community. There is another very curious thing about the present state of unemployment, the interesting one mentioned by the right hon. Gentleman. Look at our streets, at our shops, at the places of amusement, at the dividends which are being paid by the great distributors. Nowhere will you find any obvious signs of exceptional prosperity. This is a curious fact. We have, I understand, 200,000 more people employed to-day than we had in the year 1913, and yet we have a million and a quarter of people out of work, therefore we are forced to this conclusion, that that abnormal unemployment of which the right hon. Gentleman spoke is very largely caused by the decline in our foreign trade. I think the right hon. Gentleman the Minister of Labour might have put the figure very much higher than he did in his speech a fortnight ago, when he said that the decline in our foreign trade was responsible for probably half a million of our present unemployment. I should be inclined to put the figure very much higher indeed, and I think if we could restore our foreign trade to the pre-War figure we should have reduced un- employment to what was regarded as its normal condition in the days before the War.

The right hon. Gentleman asked the Government to say what they were doing or proposed to do in regard to what have come to be known as relief schemes. Perhaps the House will permit me, before I deal with that matter, to just say a word or two on the question of maintenance. The Labour party were pioneers of the demand for maintenance, but we always coupled that with a demand for work. We have always been alive to the possibility of abuse in any system of maintenance for the unemployed. It could not have been otherwise, with human nature what it is. Where you have three, four, or five millions of people passing through the unemployment insurance office during the past four or five years there must be cases of abuse. But I think it is a slander upon the working class of this country to say that any but an insignificant proportion of them like to go. They would very much prefer to be employed in honest work. Maintenance, by all means, provided there is no work. But the unemployment problem is to be solved not by maintenance but by work.

I come to that point in regard to what has come to be known as relief work or palliative methods, and I should say upon that very much what I have said in regard to maintenance. I make bold to make this statement, that the great part of the money which has been spent upon relief works, though it has supported the men employed upon them, has been from the economic point of view almost wholly wasted. There are only certain forms of public works which, from the economic point of view, do any real good at all. A great deal of the money which has been given to the local authorities under the unemployment relief grants has been spent on accelerating work which in the course of a year or two would have been done; therefore the work has had the effect of creating unemployment in two or three years' time. The way in which public grants can be given for public work or State money expended on public work, if it is going to fulfil sound economic conditions, must be that it is employed upon work which will be productive and remunerative, that will be recurring in its remuneration. Expenditure upon roads, where roads are necessary, is an expenditure which falls within that category.

I turn now to follow the right hon. Gentleman in another part of his speech. I shall wait until I get on the election platform, and especially in the West Riding of Yorkshire, when I shall have the opportunity of contrasting the speeches delivered during the last Election by the right hon. Gentleman the Member for Spen Valley (Sir J. Simon) with the speech that he has just delivered.

Sir J. SIMON

And I shall do the same about you.

Mr. SNOWDEN

I shall not be afraid of that, for the proposals that, if the House will permit me, I intend to submit are some of those which I advanced when I was a Minister of the Crown, and are proposals which I have been advocating on public platforms for the last thirty years. They are proposals which I venture to say if adopted would strike at the very roots of this unemployment problem. What we have been doing up to the present, if considered as more than palliatives of distress, are little more, I am afraid, than an imposture. The right hon. and learned Gentleman in the earlier part of his speech said that probably there was no occasion to anticipate at a time following the Armistice that there would be in the future such a terrible industrial condition of things.

Sir J. SIMON

I am sorry I cannot accept that. Nobody really said so. I was very much alive to some of the aspects of the case and to the proposals put forward by the Industrial Reconstruction Committee.

Mr. SNOWDEN

I accept without hesitation what the right hon. and learned Gentleman says, but at any rate what he said conveyed to me the impression that the industrial depression was not anticipated or that it was not expected it would be quite so bad or continue so long.

Sir J. SIMON

Yes.

Mr. SNOWDEN

I was reminded when the right hon. and learned Gentleman was making those observations that I have always been a very close and an interested—I do not know whether I should say a profitable—student of the speeches of the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George). I remember one statement that he made. The right hon. Gentleman need not be afraid nor need he be ashamed of what he said. He said at the time to which I refer that we were enjoying very great prosperity, but that he anticipated that in two years' time we should be in a very severe period of unemployment. That was expected. At that time no proper steps were taken to deal with what the right hon. Gentleman believed was going to happen. The right hon. and learned Gentleman the Member for Spen Valley just now in his interjection referred to the report of the Industrial Reconstruction Committee. If the recommendations of that Committee had been adopted and carried into effect we would have had an industrially reconstructed England. Though two or three Governments have come along since then, I think it would be well worth the while of the present Government to go back and to see if it were not possible now to begin to do something on those lines. The proposals that I suggested a few moments ago I would submit more in summary than in detail. I believe—indeed I am perfectly convinced—that if we adopted them they would not only get dawn to the roots of the unemployment problem, but it would achieve various other things which the Reconstruction Committee hoped would be achieved after the War.

In a sentence, industrial recovery means relieving the nation of waste. It should be the purpose of those who are engaged in industry to effect the greatest possible economy by eliminating every waste. It should be the purpose of the Government to join in eliminating waste in our national and public administration. I venture to say that this is one of the most wasteful countries in the world. There is another striking feature of modern industry and it is this—the growth in this country of a class which does no productive work. I do not mean by that a class that necessarily does not work at all. Many of its members work very hard indeed. In 1910 there was published a Report of the census of production—the figures in it were for 1907—and there were certain facts disclosed in that Report which I am surprised have not received the attention of economists and social workers which I believe those facts deserve. One striking fact is this, that notwithstanding all the wonderful development, scientific and mechanical, of the previous century, the output per worker was only £110 per head, and that a very large and increasing proportion of our people are employed in unproductive work. In addition, there are the distributive trades and the like, and all these have to be supported by industry. If we could limit this non-productive work we should have reduced in one step what is I believe the greatest volume of waste in existence. All this, as I have said, is a burden on industry. What can the State do? The State I say can use the powers which it possesses to remove these burdens on industry—I am not going to talk about the burden of taxation, for we shall have plenty of opportunity to do that later. In dealing with the land monopoly, I expect that I shall have the sympathy of the. right hon. Gentleman the Member for Carnarvon Boroughs.

Mr. J. JONES

Sing the Land Song!

Mr. SNOWDEN

We are told by prominent Members of the party opposite, by Lord Ernle and Lord Bledisloe, that this is the worst farmed country in the world, and we find what obtains here in British agriculture contrasted to our disadvantage with what takes place in Continental countries., What is the main reason for this? The main reason is that there is no country in the world which has to bear the burden of idle landlordism as this country has. A century ago we were employing on the land a working population which produced food for 26,000,000 of our people.

Mr. H. WILLIAMS

What about the standard of life?

Mr. SNOWDEN

If the hon. Gentle man the Member for Reading is incapable of taking part in the Debate except by interjection he had better remain silent. He is a comparatively young Member of this House. When he has been here sufficiently long, he will learn that debate is conducted by speeches; if he is incapable of making a speech, I would suggest to him that he should remain quiet, and then he might get an undeserved reputation for wisdom. Take another aspect of the land question—one which I suggest the right hon. Gentleman the Chancellor of the Exchequer might consider in connection with his Budget. The right hon. Gentleman the Chancellor of the Exchequer has told us that he has made speeches in support of the taxation of land value by the mile. In the long and interesting Debate we had in this House on the Budget of the right hon. Gentleman about 15 years ago the party opposite then sitting on the Opposition side of the House never for a moment disputed the argument that the economic value of land was caused by social improvement. Surely the society which creates that value is entitled to receive it? The value of urban land doubles on an average every 30 years, due solely to the expenditure of public money and the industry of the community which lives within that area. A sum of probably not less than £200,000,000 a year is being taken by those who under our system of private ownership of land are able to put into their own pockets this social increment in land. The country cannot stand it. Instead of talking about reducing the wages of the workmen we should talk more about docking the increments of those who do nothing whatever either by their labour or by their administrative capacity to create it.

Mr. DEPUTY-SPEAKER (Mr. James Hope)

I have been reminded by Mr. Speaker that it would not he in order on this occasion to discuss proposals requiring legislation.

Mr. SNOWDEN

Of course, I do not for a single moment dispute your ruling, but the right hon. and learned Gentleman the Member for Spen Valley in the latter part of his speech suggested certain things which would require legislation.

Mr. DEPUTY-SPEAKER

It would be in order for the right hon. Gentleman to reply to suggestions already made; but it is a Rule of the House that on the Consolidated Fund Bill legislative proposals may not be discussed.

Mr. SNOWDEN

I will endeavour to conform to your ruling, Sir, and I think there is plenty of scope to continue my speech for a little longer without coming into conflict with it. The right hon. Gentleman the Member for Spen Valley put certain questions to the Government. He asked them what they were going to do, particularly in regard to proposals made by the Government of which I was a Member 12 months ago. We left behind us certain schemes in a more or less advanced stage. We had an electricity scheme for the change of frequency, and schemes for extending the supply of electricity into country districts. What are the Government doing about those? This is a way in which one could, while alleviating unemployment, at the same time give British industry the means by which it will be able to compete more successfully in the markets of the world I do not see any Minister present who is in a position to deal with those questions, because this matter, I believe, falls within none of the Departments of those Ministers who have honoured us by their presence this afternoon, but I hope, before the Debate closes, some Minister will speak who is in a position to tell us what the Government are doing upon this important matter.

There is one other subject which I think it will be in order to discuss. At Question Time this afternoon the Chancellor of the Exchequer was asked whether he proposed, before Easter, making any statement on behalf of the Government in regard to the currency question. It is very difficult indeed to deal with such an abstruse and abstract question as that in a speech; it is a subject far more suitable for an article, or discussion in a lecture. I am not going to say very much about it, beyond this, that there is the most intimate connection between our monetary policy, currency and credit, and unemployment I believe that unemployment has been maintained at its present figure during the last two years largely because of the monetary policy begun in 1920 and 1921 and continued up to the present time. The right hon. Gentleman the Member for Spen Valley quoted figures in regard to the number of unemployed at the beginning of 1921 and in July of the same year. When he made that statement, I asked an hon. Member behind me to go into the Library and get me the figures of the cost of living at those two periods, because I felt quite convinced in my own mind that the difference in the cost of living, in other words, the very rapid deflation which was begun at that time, was responsible for that enormous increase in the number of unemployed within the period of six months. The figures are these. In January, 1921, the cost of living was 178 points above pre-War figures, and in six months it had hem reduced to 103 points. Now that very rapid deflation is quite sufficient to account for the enormous increase in the same period in the number of the unemployed.

Sir J. SIMON

There was the coal strike also.

Mr. SNOWDEN

That does not affect the point at all. The Chancellor of the Exchequer stated this afternoon that the Government could provide no opportunity for discussing this question before Easter. It was, he said, a matter requiring the very serious consideration of the Government, but he intimated that the Government would decide it without first asking the advice of the House of Commons. The Government are compelled to decide this question very soon, because the Embargo Act expires at the end of this year, and if nothing be done to renew that. Act then we shall automatically go back to a free market in gold and convertibility of the note issue.

It is very seldom indeed that I agree with anything said by the Federation of British Industries, but a day or two ago they sent to the Chancellor of the Exchequer a memorandum upon this monetary question, and asked him three things, all of them very important, and with all of which I heartily agree. The first was that art early announcement ought to be made of the intentions of the Government. This uncertainty is undoubtedly having a more or less disastrous effect on trade. What trade wants more than anything else is to feel that there is a condition of stability and security for at least some time to come, and I hope the Government will take an early opportunity of announcing that, if they do not propose to go back to the gold standard before the end of this year, they do not intend to renew the Act when it automatically expires at the end of this year I am not in favour of inflation. I think that deflation from the high figure at which prices stood in 1919 was necessary, but I think experience has proved that the remedy that was applied to cure that state of high fever was much too drastic, and that if it had been applied a little more mildly we could have achieved the same results without the same disastrous consequences.

In this connection I want to say only a word or two about the recent rise in the Bank Rate. It is quite true that about two years ago the policy of deflation was arrested, but a rise in the Bank Rate has the same effect as a restriction of credit and currency. I quite admit that it is not so drastic. There has been a good deal of controversy in this House in the last fortnight or so upon the statement made by my right hon. Friend the late Minister of Health as to the effect which the increase in the Bank Rate would have upon the cost of housing. I do not associate myself with the extreme statement that was made by my colleague. I think the Bank Rate has an effect upon the cost of short-term money, but that it has very little effect upon long-dated loans, and we have seen that illustrated in what happened during the last fortnight. The renewal of Treasury Bills has cost nearly one per cant. more than it did before the rise in the Bank Rate, but during the last few clays we have had two or three issues of Corporation Stocks practically at the same figure at which they could have been floated before the Bank Rate was raised.

But, mark you, the rise in the bank rate has an effect on and does increase the cost of short-term loans and short-term borrowing, upon which our trade has very largely to depend. Therefore, this rise in the bank rate is bound, I think, to have the effect of deflation, and the effect of further deflation will be to cause an increase in the number of unemployed. The Chancellor of the Exchequer, in reply to a question as to when the rise in the bank rate was anticipated, said there had been informal consultations between the Treasury and the Bank of England upon it, but when my hon. Friend the Member for Merthyr (Mr. Wallhead) put the same question about a week later, the Chancellor of the Exchequer said it was an independent action of the Court of the Bank of England. Of course, both answers cannot be right, and I am betraying no secret which ought to be confined within the walls of the Treasury Chamber when I say, and everybody knows it, that there is always the closest consultation between the Treasury and the Bank of England upon these matters, and if it were not so it ought to be so. Not even the Bank of England, which is a sort of semi-State institution, ought to have the power to control credit by manipulating the bank rate when the Government are so very deeply interested in this matter, not only as a borrower, but also as having a responsibility for the consequence of any depression in trade.

In regard to the restoration of the gold standard I am not going to argue the question, because, as I have said, I understand there will be an opportunity for doing so before very long. I am not blind to the dangers of the restoration of the gold standard, but upon the whole I think the advantages far outweigh the possible disadvantages. I agree with the suggestion that was made by the Federation of British Industries—one which many of us had urged before—that the possible dangers of the restoration of the gold standard could be averted by an understanding with the United States of America. I think that such an understanding is absolutely necessary if the gold standard is going to maintain the parity of exchange when once it has been arrived at.

My main point has been that, although relief and maintenance may be necessary they are no solution of the problem, they are hardly even palliatives. The time has come, and the time is long past, when the Government should courageously face this issue, get down to the root causes of it, and formulate a policy which will re-establish British industry, basing it upon grounds of efficiency. If the Government will do that, then I am not pessimistic in regard to the future of British industry. I was speaking only two days ago to one of the greatest captains of industry in the North, and he said he expected that within two years time every factory in Great Britain would be closed down. I do not share that view. This country of ours is not yet played out, but we must set to work to reorganise ourselves, and by the employers getting the co-operation and confidence of the workmen. That is the essential condition of the prosperity which it should be the purpose of this House to promote by all means in its power.

The MINISTER of LABOUR (Sir Arthur Steel-Maitland)

I welcome this Debate because at last we have got away from what I might call the trimmings of the matter and on to many of the prin- ciples that lie underneath—got away from the clothes right down to the body and the bones of the business. Clothes are very necessary and very important, but they may pinch a bit here and there, or the absence of them may leave one exposed to pneumonia and other evils; but we have got to get down to the structure of the body industrial and commercial in order to see what the future may be. Therefore, I welcome the speeches of the right hon. and learned Gentleman the Member for Spen Valley (Sir J. Simon) and the right hon. Gentleman the Member for Colne Valley (Mr. Snowden), and I notice that both of them at the beginning of their speeches started with the exordium that they would not deal with this subject in any spirit of criticism and that they would subdue all party recriminations. Nevertheless, I think a little of the old Adam crept in before either of the right hon. Gentlemen to whom I have referred had entirely finished speaking.

If I might make one criticism of the speech made by the right hon. and learned Gentleman the Member for Spen Valley, I would say that it is easy to administer interrogatories, but the answers are a much more difficult matter. He may retort with the usual phrase that the physician does not prescribe until he is called in; but even so, there were few if any suggestions in his speech. I hope the right hon. Gentleman who has just spoken will not expect me to follow him into the general question of socialisation. I know he raised that question the year before last when in opposition, but I also noticed that it was not raised during the year he was in office. He was too wise to do that.

I wholly disagree with one statement he made, namely that, speaking generally, the greater the command over productive forces the greater is unemployment. If the right hon. Gentleman will analyse that statement he will find that it is not borne out by the facts. It is quite clear, if you get a thoroughly agricultural community, provided that the development of its communications is right, it is not subject to the strain and stress of a highly organised industry, but if you go to the nation which has the greatest command over productive forces, like the United States, you will find that there unemployment is being reduced to a very small amount indeed instead of being large. That is a fact which is shown from the actual reports I have received from the United States within the last fortnight.

I will not follow the right hon. Gentleman the Member for Colne Valley into that matter, but I will deal generally with the two speeches which have just been delivered. The right hon. and learned Gentleman the Member for Spen Valley went back into past history, but what happened after the great war a hundred years ago? It is quite true that from some points of view there is a striking resemblance. You had the same great dislocation for the moment, and you have the fact that after the last Great War we lost our markets. But the differences are very fundamental, because we had then a much smaller Army to disband than we have had to deal with recently. Not only was it a smaller Army, but it was smaller in proportion to the population. I tried to get some guidance from those times as to the lines to follow or avoid, and I was struck by the difference between those clays and the present. Supposing we calculated on the present basis of population in the days I am referring to, the Army would have only been about 750,000 for us to absorb, and not something like 5,000,000 or 6,000,000. That in itself makes a vast difference between the two cases, even though we have to-day all the advantages of better transport and, what is even more important, better credit to aid in the task of absorption.

Similarly, we have a difficulty to-day which they did not have in former days. The right hon. Gentleman who has just spoken referred to our foreign trade. It is quite true that the collapse of our overseas markets is one of the most serious features with which we have to contend. Markets collapsed overseas after the Napoleonic Wars, but with this difference, that we had practically a monopoly of oversea trade in those days. To-day we have to deal with rivals as industrialised as ourselves. The other point I would submit to the House is that the difficulty of to-day cannot properly be understood unless you analyse the position of industry. I take the same comparison of a century ago. There was a rapid evolution in industry then, but it went on continuously. The Napoleonic Wars did not interrupt it. At that time we had not a whole nation in arms like the French had and like we had during the last War, and as one new process was introduced after another in industry the country was able to absorb the men who were thrown out of work. I am not discussing all the evils of those days such as child labour. All that was due to lack of experience and knowledge.

The whole trouble on this occasion has been that we have had an amazing evolution in industry during the last 10 years. It has been going on in industrial relations, and it has also been going on in mechanical appliances. But owing to the War, instead of going on steadily, it has come upon us with a great spasmodic burst. [...]ome 5,000,000 or 6,000,000 men were taken for the War, with the result that labour-saving appliances were installed, and, instead of those 5,000,000 or 6,000,000 men having been gradually absorbed they came back after the War to this country without any work to go to, and this burden, thrown upon it suddenly, could not do anything but give the industrial machine a jolt. I say, quite frankly, that it is not a question of whether this has happened under a capitalistic or any other system, because any system would have suffered from that jolt.

I apologise to the House for going into the economics of this question. I know the dangers there are ahead, and I remember that in a Debate a week or so ago one hon. Member opposite said to me that Ministers of Labour had been on the whole very short-lived. I admit the impeachment, and I agree that the official rate of mortality has been very high indeed in this respect. I have always thought that in regard to Ministers of Labour it is true what has sometimes been said of an economist, that, "no one is sorry when an economist is dead"; but, if any Minister of Labour be also an economist, I tremble to think what his obituary notice would be. I can only suggest that the epitaph applied to him would be that which was applied to the Corn Laws by Disraeli, "He was not only dead, but damned."

I have been asked if we are going on with extended benefit. It depends upon what hon. Members' view of the problem is and what the future effects are likely to be. I say, with all humility, that I wish the Prime Minister was dealing with this subject, but I will try and give as ample information as lies in my power and which belongs to my status to do. It is a rash thing for an Englishman to prophesy, but it is crime for a Scotsman to prophesy, and, therefore, I do it with some hesitation. [An HON. MEMBER: "What about a Welshman?"] For a. Welshman to prophesy is all right, because he has got second sight. Let no one make any mistake as to what is the size of the present problem. It is talked about, generally, rather vaguely, but may I be allowed to get down to the facts. The size of the problem of unemployment to-day is about the same as it was in 1908 in actual amount, and it was for that reason that I had a chart put, up in order that hon. Members might make their comparisons.

The right hon. Gentleman the Member for Colne Valley stated that before the War unemployment amounted to about 500,000, but I think that is a little in excess of the actual figures. I myself should have put it at about 4½ per cent. of the employed population. It was sometimes above and sometimes below, and it must be remembered that out of that figure you always have about 1½ per cent. sometimes more and sometimes less which does not really represent unemployment at all. Although it was put into that figure, it really represents change over from one occupation to another; during such change a man is caught like a bird in transit, and he figures in the unemployment list. I think that is true now. If you have to take this into calculation in relation to one type of industry, you have to apply it to others, and you must do this in order to arrive at what is true unemployment and you must make allowance for sickness and the turnover of men from one job to another. I have said that the amount of unemployment is not greater than it was in 1908. It is not the actual amount of unemployment at this moment that is so critical, but the fact that it comes at the end of three years of more or less continuous unemployment when men have used up their resources and their savings derived from the amount of employment that has gone before. That is where the harmfulness of it rests.

I have been asked what is extended benefit? That was an extemporisation to meet the actual slump as it came upon the country in 1921. Some people anticipated the slump, but it was only a very small fraction who realised that it was going to come with so much severity. Extended benefit was based on the assumption that men after a due length of time would be back at work again, and for that reason it was purposely based on the insurance principle to avoid worse results so far as they could be gathered from the history and the experience of the country. That type of benefit will become less and less satisfactory as the years go on unless there comes a really marked improvement.

6.0 P.M.

I get complaints from both sides, and multitudes of statements appear in the newspapers and elsewhere asserting that people are getting benefit who ought not to get it and I get equally voluminous postbags saying that people are not getting benefit who ought to get it. I generally find that about 95 per cent. of the complaints have no foundation. I will take the case of the most prolific of my correspondents, the hon. Member for Govan (Mr. Neil Maclean). I have analysed the letters which he has written recently, and they have run into three figures. Even though I assume that he has selected these cases as most requiring to be, reconsidered, the total of those in which there is really any substantial room for criticism is under 5 per cent. The hon. Member for Govan is most prolific from the literary point of view. If I may say so without offence, where other hon. Members breed like hares, he does so like rabbits.

Mr. PALIN

Does not that apply to your own side?

Sir A. STEEL-MAITLAND

Of course. I was talking about those on my own side, and some hon. Members opposite, as the hares, but he is the rabbit. Of course, extended benefit is unsatisfactory from other points of view also. It is unsatisfactory to have this system alongside the present Poor Law. The Poor Law is a burden on the local rates, while this is a burden on the national funds, and the precise incidence between the two is open to debate. It is also hard on the young men, and it is peculiarly hard on the old. If this were going to be a permament type of unemployment, then I think the question of extended benefit would indeed have to be revised.

Now let us examine the future, as both the right hon. Gentlemen have done. It has been assumed by some—I think it was assumed by my predecessor (Mr. T. Shaw)—that we are always going to have a burden of this extent with us. I de not know whether the right hon. Gentleman is still of the opinion that we are always going to have a million unemployed—

Mr. SHAW

Certainly, if you remain in office.

Sir A. STEEL-MAITLAND

Then the right hon. Gentleman must have been speaking with the fear of political death upon him at the time when he made that statement in the last Parliament. I am glad to know that he anticipated his demise and has succeeded in combating his fears as adequately as he did then. See what such a view really implies. It means that the productivity of the country is not going to support the growth of population. That means that we are falling behind other countries, either in our men or in our physical resources. If you take that view, you are driven to the conclusion that either you have to emigrate the surplus or accept a lower standard of living. Even if you distribute the whole of the surplus wealth to which the late Chancellor of the Exchequer has alluded, you ultimately come down, if you take that view of the future, to a low productivity. You assume a million men unemployed, and you come down to a lower standard of living. I want to say perfectly frankly that I take the other line. I do not believe that all the factories are going to be shut in two years. I think that there is a maladjustment, if I may so call it, which is occurring at the moment, and which I think is duo to certain main causes. I will enumerate these, and then I will give my reasons for what I think should be done.

First of all, you have the labour-saving machinery which was suddenly brought in while the men were away at the Front. That has meant that you can produce the same amount of iron or steel with 70 per cent. of the men employed. You probably get, I should think, a saving of 25 per cent. of labour in the chemical industry, and so on in other industries in the country. Then take the question of foreign trade, with which I will briefly deal. Our foreign trade has sunk by a quarter, and, on the productivity per man before the War, that would mean 750,000 out of work, but on the productivity of the present day you cannot be sure that it is much over 500,000, or possibly 600,000. This maladjustment is also indicated by the extreme inequality with which this unemployment has fallen on different industries. You have, for instance, the shipbuilding industry right down in the depths, and the iron and steel industry also down in the depths, though not quite so bad as shipbuilding; but electricity and other industries are not only holding their own, but are progressing rapidly. What is more, you have an industry like electricity, in which we were of practically no account before the War as compared with our great rivals in the United States or in Germany, but where we have gained for ourselves a place in the industrial councils of the world, so that they have to take account of the British electrical industry to-day just as much as of their own.

You have, therefore, inequality in the incidence of unemployment in industry to-day. Lastly, as I have said before, you get the effect due to had housing—not merely from the point of view of giving employment, but from the point of view of preventing the population from being mobile and able to go from one place to another. I have tried to obey the precept, though not entirely the practice, of previous speakers, in not making any party recriminations, and, therefore, I would point out as placidly as I can the answer to what was said to us on this side of the House with regard to schemes when we criticised the late Government, and why we have no great schemes ourselves of the kind so often talked about. When a party puts in the forefront of its programme the fact that it has schemes by which it can set men to work by hundreds of thousands, when it says that it has the remedy for unemployment, when it says that it had its schemes ready docketed two years beforehand, surely, it stands in a different pair of shoes from ourselves. I, for one, at the last Election, said perfectly candidly that, apart from electricity and one or two proposals as to which I quite agree with the right hon. Gentleman the Member for Colne Valley, I did not believe in all these multitudinous schemes for setting people to work. What is open to criticism is the great display that was made of these promises on election placards and in election programmes.

But how is the gap to be bridged? agree that you want to bridge the gap, for one thing, in order to preserve the industrial quality of the men as much as possible, and, for another thing, if there is useful work which is going to be an asset to the country, you want to do it by going on with that. Apart from forestry, which is good so far as it goes, though no one can pretend that forestry is going to play a great part, and apart also from roads to a limited extent—if you have any roads to make, make them, but if you make them broader and bigger and longer and more expensive than you need, they come to that extent within the category of schemes, which the right hon. Gentleman the Member for Colne Valley condemns—apart from that, the real scheme which is justifiable on every conceivable ground, as employing men and as bringing this country up to the standard of efficiency in other countries, is the electricity scheme. The right hon. Gentleman will not expect me to go in detail into a scheme which I have not under my charge, but I must say that I think it was not received by us from our predecesors in quite such a state of forwardness as he himself, perhaps, imagined. At the same time, he will agree with me that, when you get a scheme like the electricity scheme, involving an immense number of local authorities, and involving all the complicated questions of frequency—I am not going to answer for another Department, although I know the intricacies of the question fairly well—it is of such a type that a scheme of a tenth of that magnitude, in the hands of the most efficient of ordinary concerns, would take a year or two actually to get under way, because it is so complicated. Here you have a scheme like this applied to the whole country, and it must take some time, but I can asure the right hon. Gentleman that it is being pressed forward as rapidly as it can be. No human being could possibly get through a scheme of this elaboration within a short time, and, therefore, while I pay a tribute to the advocacy of it by the late Chancellor of the Exchequer, I must point out that we are doing our best to push it forward with as much diligence as ever he could exercise himself.

Mr. LLOYD GEORGE

Does that mean that the Government propose to take steps to restore the compulsory powers?

Sir A. STEEL-MAITLAND

As to that, I am afraid I cannot say; it is not within my scope to give the right hon. Gentleman an answer. It is, perhaps, a question that ought to be put to the Prime Minister.

Mr. LLOYD GEORGE

The scheme is no good without that.

Sir A. STEEL-MAITLAND

There is one other scheme which I have always thought ought to be examined, and that is the question of, say, water sites in this country from the point of view of manufacturing. There may or may not be something in it, but I am comparing in my mind the position in this country with what is costs to bring material, say, to Rotterdam, to carry it in 2,000-ton barges up the Rhine into the Ruhr, and put it straight into the works. If there be found to be anything in it, it would be a scheme somewhat of the same order of magnitude as the electricity scheme. Apart from that, I agree with the right hon. Gentleman that these other schemes are palliatives at the best, and that you pay for the other schemes, which are only palliatives, or, as I said the other night, stimulants, at the cost of the patient's vitality when he gets over the crisis. As regards housing, I shall look to the right hon. Gentleman the Member for Spen Valley (Sir J. Simon) to support this Government perhaps more than he has done in the past, in any struggle that we may have over housing. The building scheme with regard to apprentices was put forward by the Coalition Government soon after the War, and it was not, until it met with opposition from the building trades that it fell through. When the right hon. Gentleman tells us that in a question like that of housing the Government should have forced it through, I put it to him whether he would have forced it through himself? He knows quite well that he would have had to ask himself whether he would like Lo have a conflagration, perhaps, with the trade union body as a whole—whether he would like a body like that to think that we wanted to make a frontal attack upon them when, as he knows quite well, what we want is peace.

There is one other scheme to which I desire to refer—and I am nearly finished—and that is the question of subsidising industry out of the unemployment fund. I read a speech made last night by the right hon. Gentleman the Member for Carmarthen in which he suggested that there should be a subsidy from the unemployment fund. That takes me back to my old school-days, when the Justices of Berkshire met in the old Pelican Inn at Speenhamland and subsidised the agricultural workers. Immediately afterwards the subsidised workers from the poor-house drove out the independent workers, and, in its crudest form—

Mr. MACLAREN

You must be much older than we think you are.

Sir A. STEEL MAITLAND

I thought I said those were the days when I read about it Let me, however, ask what would happen if you subsidised industry by some crude method of this kind. Suppose that we said to a shipbuilding company—I do not care which, say the Fairfield Company—"We will contribute such and such a sum. "The next shipbuilding company, it might be John Brown and Company, might come along and ask for the same thing, and they would have an equal claim. Then an engineering company would come along and say, "John Brown's overhead charges are being reduced by the subsidy given from the point of view of shipbuilding, and, therefore, you are helping them to compete with us and so we must have the subsidy." So it would spread from one firm to another, like wildfire, and it would to tend to be a subsidy in aid of wages. I am certain that no trade unionist would like what would happen.

On the other hand I know well that a contract may go abroad that would have given employment, direct and indirect, in this country, and the difference between the price of the successful foreign tender and the unsuccessful British tender may be a sum less than may be spent in unemployment benefit through one failure to secure the contract in this country. That is true. It would seem, on the face of it, to be absurd that for a difference of, say, £20,000—I am not speaking of specific contracts which have been in everybody's mind—between the foreign contract and the British tender, and for the lack of that £20,000 that you should have men out of employment to whom in the end you will have to pay, perhaps, £40,000 or £50,000 in unemployment benefit.

If anything is to be done along those lines, I would say, quite clearly, that the ways will have to be thought out in order to avoid the possible results which we all know so well.

Sir ALFRED MOND

If the right hon. Gentleman will take the trouble to study the scheme that we reproduced when we were in office, and in my Department, he will see that we avoided those difficulties quite successfully.

Sir A. STEEL-MAITLAND

My apologies are due to the right hon. Gentleman. I will try to study that scheme. I have studied a copy of a report, which was an examination of the right hon. Gentleman's later pronouncement, and it pronounces definitely against it. I would gladly send him a copy of the report if he would like it.

Sir A. MOND

I have a copy.

Sir A. STEEL-MAITLAND

In the latest edition, at any rate, we have seen nothing which would enable us to get the advantages and avoid the drawbacks. The road to permanent improvement lies in several directions. In the matter of foreign trade the markets have collapsed, but, although the whole of the foreign export trade of the world is much less than it was, we have rather more than our pre-War proportion of the whale world's trade. It is not, therefore, true that we are falling behind in the export trade of the world. Take the nature of the markets. Some of them are markets which have internal trouble, like China. Some of them are markets which started to manufacture for themselves in the War—Brazil, for example. Then there is the question of Europe. If there is a settlement of Europe, which is coming, we hope, but very gradually, there will be a reaction on the neutral markets. Brazil is largely dependent on coffee. This coffee goes to Central Europe, and an improvement in Central Europe reacts on our own market in Brazil at once.

What is absolutely needed is the elimination of waste, and that we should get a maximum productivity, either in quality or in quantity. It is possible in those countries which are beginning to manufacture for themselves that we shall have to keep our trade, just like the Lancashire trade is kept, by continuing to make a finer article, or it may be by larger quantitive production. In this country, I believe there are prospects of great extension, and particularly if the electrical scheme proves a success. I do not believe for one moment that the growth of population here is such a bugbear as people think. It was said so a hundred years ago by Malthus, and it was said during the last century by people who complained of the growth of population. The population does grow, but I believe the country is capable of bearing its present copulation and more.

I hope for increased productivity in many forms and directions. Let me give one instance in my own suffering experience of how trade is hampered. I tried to get certain decoration work done in a house that belonged to me and the workmen who came to do the decorations, or some of them, were not allowed to bicycle to their work because that was in my time; but they were graciously allowed to push their bicycles in front of them ready to take them home in their own time. That is not an aid to productivity. I had, a certain amount of money to spend on the decoration, and the result was that only two rooms were done, where four or five rooms might have been done, and more wallpaper, and more paint would have been used. I hope no one will think that I am trying to pretend that the fault is only on one side; it is not. It is everywhere. That is the reason why I said on the last occasion that I spoke on this subject, that it is so vitally necessary to make industry truly economic.

I do not believe for one moment that any Government. whether by electricity schemes or otherwise, can provide the cure for industry; but it can do all that it possibly can to make the way smooth so that industry can cure itself. I wish the Government could cure it. I should then, perhaps, have a chance of earning the fame which happened to my earliest predecessor. When I was on holiday last Autumn I came to a little town in Greece called Paros, and there to my amazement I found that something like 2,000 years ago they had an official "agoranomos," or market director, somewhat corresponding to a Minister of Labour. They paid tribute to him because of his efficiency, and they praised him, in an epitaph, because In respect to those who work for wages and those who hire them he saw to it that neither should be treated unjustly According to the laws "— I am not certain whether hon. Members opposite will like this— he compelled the former not to break their agreements but to go to their work, and the latter to pay the workers their wages without litigation. If we could cure our evils as easily as that, then, perhaps, my present job might have a longer life, and its duties would be easier to fulfil.

The main thing is to get down to business, and to get more and more done. There are signs of improvement in the position at the present time. The late Chancellor of the Exchequer shakes his head. The Bank Rate may be 5 per cent., but what has been the Bank Rate in Germany? They are paying 9 per cent., probably at this moment. The main thing, as I have said, is to get down to business and not mercy indulge in pious aspirations. Shipbuilders are discussing the general situation now. The same is true with regard to the coal-mining industry. I am glad to say that negotiations were resumed between employers and employed in the engineering trade this afternoon. We need to eliminate economic waste everywhere. We must get the best brains possible into industry. The right hon. and learned Member for Spen Valley is an instance of economic waste. I do not wish to depreciate the law, but the right hon. and learned Gentleman ought to have put his brains not into dealing with other peoples' disputes, but into productive industry. I hope the restoration of industry will not be long delayed. I say quite frankly that the real remedy will be applied by those who, looking to the future, are determined wherever possible to use the opportunities for the development of industry. That is the way that the rehabilitation of industry will come.

Mr. LLOYD GEORGE

I think the House and the country is indebted to my right hon. and learned Friend the Member for Spen Valley (Sir J. Simon) for initiating one of the most important Debates in, this Parliament—a Debate which has got rid of the discussion merely of machinery and has brought us down to fundamentals. It is not for me to reply to the attack upon my hon. and learned Friend's profession. He belongs to the least productive branch of the legal profession, and therefore the most remunerative. I confess to some disappointment that the Minister of Labour has not been able to give a more complete answer to the direct and searching questions that were addressed to him. I am not complaining of him so much, because I know his difficulties. He is, as my right hon. and learned Friend pointed out, subject to authority. He has delivered a very interesting speech, and a very suggestive one, and one that showed that, at any rate, he has a full knowledge of the problem; but he has his difficulties. This is a question which cannot be settled by a Minister of Labour alone. It is a question upon which the Government as a whole must come to a conclusion. It was evident from the right hon. Gentleman's speech that they have not done so yet. They have not grappled with the question at all. I hope that before the Debate is over the President of the Board of Trade will give us the considered judgment of his advisers upon the position. He delivered a very remarkable speech when he was President of the Board of Trade before, which was of a pessimistic character. It was a very courageous speech, because it it not so very easy to tell unpleasant truths. All the mandarins are against unpleasant truths. I had some experience of that two days ago. They do not like it. It was a very courageous thing for the right hon. Gentleman to do, but it turned out that he was right.

I take a very serious view of the present trade depression. My right hon. Friend the Member for Colne Valley (Mr. Snowden) was good enough to quote a speech of mine delivered in 1919, when I predicted very severe trade depression for two years later. I am sorry to say that it was an accurate prediction. I have ever since taken an extremely grave view of the position. As the right hon. Gentleman the President of the Board of Trade knows very well, traders as a rule do not. All those whom you consult at the time, whether traders or bankers, say, "It will only last six months. Wait for the autumn, and you will see a turn." Then when the autumn comes they say, "You will not get much until the spring." I hardly ever met a great banker or a great captain of industry who at that time anticipated any prolonged period of depression. In fact, I think that about only one whom I met who took a serious view was the late Lord Pirrie, who, certainly, had second sight in these matters.

I have always taken a very serious view of the matter. In 1119 things were going fairly well. In 1920 there was a considerable improvement. But it was a very dangerous thing; it was largely a matter of price. Our foreign trade was not 50 per cent. of what it had been. That fact ought to have warned everyone that the ice would not hold. If cracked very badly, and trade is clown, and it has not yet been rescued. I ask the President of the Board of Trade what is his view of this with regard to the present position of British industry I cannot myself see any symptoms of a real restoration of trade. The Minister of Labour gave very faint hopes, but he was using language which, I think, we have all used from time to time on the basis of advice given to us: "Things are improving this year here and there." That is more or less what we always were informed, in 1920–21- and '22. I have no doubt that the Government of 1923 were told the same thing, and Minister after Minister has said that, and nothing of the kind has happened.

1922 was the last year when I had to deal officially with the matter. There was a very considerable improvement during the last few months of that Administration. I am not attributing it to the Administration. I am not foolish enough to believe that a change of Government makes all that difference in trade, and I am certain that this has to do with something more fundamental than that, but there was a decrease of unemployment during that year of about 600,000 persons. Since then, though nearly in years have intervened, and you have had every sort of Government, including the Government of the right hon. Gentleman, we have only bettered the position by something like 100,000. We are worse off than we were this time last year, much worse off than in June of last year. That is the position, and I think that the Government ought to grapple with this. They are, on the whole, in a better position than almost any other Government. The Government of which I was the head was there at a time when we had very great trouble. We had to make the best settlement we could of the peace. We had great industrial trouble with 2½ million people unemployed, which was very largely the result of one of the most terrible industrial struggles of modern times, which lasted about four months.

Mr. BATEY

You were responsible.

Mr. LLOYD GEORGE

That does not matter now. If I am to be drawn into matters of that kind, it is quite impossible for me to discuss this problem properly. I do not think that it is relevant for the moment. There was the dispute. I am not blaming anyone. I am giving the facts. Unemployment went up to 2½ millions. That was abnormal. I do not think that it was really representative of what the facts were. But looking at the unemployment figures to-day there is no real movement. If hon. and right hon. Gentlemen have taken the trouble to read them, they will have seen in the last few days the trade supplements to three papers of very different character. The Supplement to the "Times," the Supplement to the "Manchester Guardian[...]" and articles in the "Daily News," all exceedingly pessimistic in regard to the future. And there was the very amusing speech delivered by Sir Walter Runciman the other day, addressing the shipowners, in which he said that this silver lining to the clouds was all moonshine. He is a very great captain of industry, and was not speaking without a great deal of knowledge of the prospects.

I do not believe the captain of industry quoted by my right hon. Friend when he says that all the factories will be closed. That is nonsense. Nevertheless, it indicates that there is something which ought to be gone into very thoroughly to ascertain what is the real prospect. The late President of the Board of Trade appointed a Committee of Inquiry. I do not know how they are going on, but I do hope that they are really searching out the prospects of the future, and on that I would like to know from the President of the Board of Trade what are the prospects of their reporting, and when, and also with regard to the evidence. All that is very important. There is no more important question for this House to consider than the question of the trade and industry of this country, because the livelihood of the people depends upon it, and, if the present position continues, I do not know what will happen. The right hon. Gentleman's speech was a very significant one. I do not agree with him that the existing evils are attributable to the present system of capitalism. I never thought so. But unless a remedy is found for them, the working-classes of the country will believe that unemployment is due to the system of capitalism, and therefore it is vital for those who believe in the existing system to make every effort to put the thing right, if they want to save the system in which they really believe.

Let us look at fundamentals. I am not very much of opinion that currencies make all that difference. I agree that they retard a little here or they may expedite there. But, apart from a general inflation like that of Germany, which is bound to have very catastrophic effect, I do not believe that the mere alteration here and there is affecting the realities of the situation. It may delay, it may aggravate, it may improve, but those are not the realities with which we have got to deal. What are the fundamental facts? Our foreign trade is 25 per cent. worse than it was before the War, and there is very little perceptible movement. I have called attention to this for the last two or three years, and it was the view which I took when I was at the head of the Government. I always took a very grave view as to the prospects in dealing with this question.

We have only 75 per cent. of our former foreign trade, and this is a country which depends more on foreign trade than any country in the world. It is a trading country. We are a nation of shop- keepers, which means that we depend on selling our goods. Our national income is down by from 15 per cent, to 20 per cent. I am not referring to the income of the capitalist class. I am including all incomes, including those of the working-class. According to Sir Josiah Stamp, who is, on the whole, our greatest authority on this subject, our national income is down by from 15 per cent. to 20 per cent., and we have an increased population of 2,000,000. We are producing less. We have more men and women at work by 200,000. If we produced more I do not know whether you could say anything, but the fact is we are producing less.

One great test of that is to take the raw material of trade. I have some remark able figures which you can get by digging up the returns of the Board of Trade. Take cotton. In 1913 we were importing 21,000,000 of centals of raw cotton. Last year it was 15,000,000. Take iron ore. In 1913 we imported 7½ million tons of iron ore; last year we imported 6,000,000 tons. The same thing applies to coal. Whether we are importing it or whether we are hewing it out here, we have less of this raw material of industry. We have not the census of production yet, but I hope that we shall get it. By the way, I was rather interested to find that nobody has any suggestion except to carry out Acts for the passage of which through this House I was responsible. One is the Census of Production Act. The other is the Electricity Act of 1919. That is the answer to the remarks made by my right hon. Friend in the close of his speech. It is very flattering to have people looking up my Acts with the object of carrying them out afterwards.

In the absence of the census of production, that is the only test which we have, and that is a very serious state of things with an increased population of 2,000,000. What is more, our overhead charges are infinitely greater than they were before. I know- that there are grave pundits who say: "These debts do not matter. They make no difference. This huge burden of taxation really does not cripple industry." They can prove it by all sorts of quotations from political economists. I do not care. Common sense teaches that there is a vast difference between people who work under a huge burden of debt, and people who do not, and that is one of the fundamental facts with which we have to deal.

What are the other factors of difference, of position? Take the coal position, which I think is a serious one. There are fundamental differences between the coal position in 1913 and the coal position to-day. I wonder whether hon. Members have looked at the difference in the ships which to-day are run by oil and the ships which were run by oil in 1913. They have increased thirteen-fold. That is the case with regard to the Mercantile Marine in this country run by oil. In the case of the Navy, you have only one-sixth run by coal compared with what you have run by oil. That is one change. Another change is the increased utilisation of water power by the continent of Europe countries that were purchasing from us, or countries that were producing coal themselves and competing with us, and which therefore have more coal to spare—France, Germany and Italy; and a. third thing is the enormous increase in the production of lignite in Germany. It has gone up by about 40,000,000 tons. These are some of the facts that are making a real difference in the position. I would like to know from the President of the Board of Trade what is his real view now as to the position of trade and as to its prospect in the coming few years?

My view of the matter is that we have to reconsider the whole of our industrial position, I will not say by legislation, but by the leadership of industry, capital and labour. We have to go through the process of complete reconstruction, just as we did after the war of 1815, when industry was completely reconstructed from top to bottom. We have been depending too much upon being a successful manufacturing country, to begin with, and depending too little on developing our natural resources. Just as the industrial situation of 1815 drove people away from the land, so the industrial situation to-day ought to drive people more back to the land. That does not involve a tax upon any class or system. The common sense of the nation ought to be applied to these problems, and if that were done boldly, in the spirit indicated by the Prime Minister, we should be able to find a solution. I have never known this country fail when it came to a pinch. We have all seen it face very great crises. We have seen it very slow to realise the facts always, as it is to-day, but once it has done so I have never seen the nerve, the resources, and the skill of this country fail, and I do not believe they will fail now. I am not taking a pessimistic view. I am only taking the view that unless we do something we shall inevitably have a disaster. But if we realise that fact in time, I believe that we can recover, and put this country in a position of greater prosperity and of greater common happiness than it has ever enjoyed in the past.

What are the suggestions which have been made? I would like to examine one or two of them. The Prime Minister made a very great appeal—I am sorry I was not here to listen to, it—for co-operation between classes. That is no good unless it leads to something Being proposed. What we are waiting for is the next word of the Prime Minister. What does he propose? is he going to carry out his Albert Hall programme, which I liked? I have said so in this House and—I do not care for anyone—I will support it. If he means that, if he means that in order to set right the evils of society he is prepared to cut his way through vested interests, he will rally such a support in this country that no vested interest and no partisanship will stand in his way. But it is no use simply saying, "Little children, love one another," if one set of children can get nearly all the toffee and the others have very little. If the Prime Minister really means that—I am not doubting his sincerity, not in the least, for I am sure he is sincere—if he is going to follow this up, then he will put right, I think, the most serious thing from which this country is likely to suffer, more even than from the old poverty and misery of unemployment—demoralisation, from which it will not recover for a whole generation.

I am not going to make any attack upon my friends of the Labour party, but I did honestly believe, and I said so before they came into power, that they would grapple with the problem on those lines. They had am advantage which none of their predecessors had; they were not so tangled with a great many vested interests. They could have done it, and I believe they would have done it if they had not trusted too much to their intellectuals. I have seen that in operation not merely in their party but in other parties. The intellectual is all right in a team, but do not put him on the dickey. They trusted too much to the late President of the Board of Trade. He convinced them that he had been thinking of the subject since he was so high, that he thought of nothing else. He had the opportunity to put these great ideas into operation. He stored them up in great batteries, and all he was waiting for was a plug to connect them with the machine. He got to the Board of Trade and we expected a, great lurch forward. Nothing happened. The right hon. Gentleman looked very surprised, and he has had that look of surprise fixed on his countenance ever since.

I will say this of the late Prime Minister. He is not an intellectual—I am not attacking him—although he talks their jargon. But he shows quite clearly—this is to his credit—that he does not understand it. All the same, it was very disappointing, for I thought something would have been done. The right hon. Gentleman said that electricity was the thing. He discovered that in June or July, I believe. He said that the right thing was to restore the compulsory powers. Why did he not put through a Bill then? It really would have made a difference. If there and then, when he came to the conclusion that compulsory powers were the right thing, he had put through a one-Clause Bill—it would not have required more than that—the position would now be different. He could have put such a Bill through before the Recess, and even supposing that the Recess had been put off for a fortnight or three weeks in order to carry such a short Bill, who here would have begrudged the time?

Mr. DUNCAN GRAHAM

All of you!

Mr. LLOYD GEORGE

There and then we would have declared that we would support the Government in getting the Bill through all its stages, and I do not believe that there are many Members on the other side of the House who would have opposed it, because in 1919 it was only a very small minority that opposed it, and it was the House of Lords which threw it out. I am very sorry such a Bill was not put through. That is by way of retort to the right hon. Gentleman, who in his non-controversial speech gave me a little dig, and in a true Christian spirit I thought I would return it with interest.

Mr. HARDIE

What about the Recon struction Report?

Mr. LLOYD GEORGE

That is a perfectly fair interruption. One of the most important things in the Reconstruction Report was electricity. The first thing we did was to carry through a gigantic scheme of reconstruction in electricity. The right hon. Gentleman in his speech admitted that one of the effects had been to double the production. He was perfectly fair in what he said at that time. If the compulsory powers had been kept in—but they were not! We carried the Bill through here, but it went up to the House of Lords, and, although a Coalition Government may be a first-class instrument for some purposes, it is the worst instrument in the world for dealing with the House of Lords. I know that. We could not have really started a great row with the House of Lords with all my Friends opposite in the Government. That is a fact; I am very frank. Therefore, the provision was left out of the Bill. We could not carry it. But at the time I have mentioned the Labour party were spoiling for a row with the House of Lords. Why the late Prime Minister exchanged a row with the House of Lords for Zinovieff's letter I do not know. It shocks all my experiences as an electioneerer. Ah! He missed such an opportunity.

The right hon. Gentleman went on to say, "You must have something which is more fundamental." Here I appeal to the Members of the Government. I am not going to put forward anything which would suggest legislation, because I know Perfectly well that on the Consolidated Fund Bill you cannot do it. When I first raised this question of unemployment here in November, 1922, I suggested to Mr. Bonar Law, who was then Prime Minister, that the only hope in dealing with the question of unemployment was to consider once more whether we are making the best use of the resources of this country, and I particularly referred to the question of the land. I am so glad to get such a distinguished convert this afternoon. It has taken three years for him to get that right in his mind. I proposed that in 1922; I asked for an inquiry. There was an inquiry; Mr. Bonar Law promised it, and. it was set up. I am not complaining that it was not done in a way which at the time I thought satisfactory, but I must say that I did not think the report was very satisfactory.

I do not know whether the President of the Board of Agriculture is here, but the Prime Minister is in the House, and he is responsible for them all, and that is a very great responsibility. I am very glad to see him bearing it so well. I ask him again whether it is not possible for him to think out the question of unemployment from the point of view of making a better use of the natural resources of this country. I am not now proposing any legislation attacking classes. I am perfectly sure that all classes are ready to do something, provided the State will take the initiative. There is no doubt at all, looking, as my right hon. Friend puts it, at the condition of agriculture in places like Denmark and Belgium, that you can really double the produce of the soil and can increase enormously the labour upon the soil. We are buying £350,000,000 worth of goods, food and material, which this climate is capable of producing. A very large quantity of that could be produced here, employing British labour under conditions which would be very much better than many of the conditions under which labour is employed now.

7.0. P.M.

What I suggest is that the right hon. Gentleman should first of all try his hand. He could do it by means of persuasion and by means of appeals. Let him examine what was said by one of his Ministers, the Parliamentary Secretary to the Ministry of Agriculture. He bears out everything which the late Chancellor of the Exchequer said, in a very remarkable statement which he made to the British Association as to the possibilities of the Situation. If something is done on those lines you will begin to find something that workmen can fall back upon. A quarter of a million were unemployed, according to my hon. Friend, in the best time; I think it was more. As a matter of fact, I remember going into it. Hundreds of thousands chronically out of work even in the best days! Is there one man—and I asked the question in 1922 when I was urging this—who will say that the number of unemployed on your unemployment register a year from now will be much below one million? That is a serious thing. The hon. Member for Bow and Bromley (Mr. Lansbury)—I am sorry I was not able to hear him—made one of the most daring, and, from his special position, most brave speeches ever delivered, when he asked, "Why are these people not sent to work on the land?" The hon. Gentleman lives in the country, and he knows that although you have a million and a quarter on your unemployed register you may ask for six workmen in any village to do a piece of work in a rural district and you cannot find them. It is not a question of paying low wages. The difficulty is not with the wages, but very much more to get the men. It is a question of the mobility of labour. It is all very well for any hon. Gentleman to say that you want to control it. He knows the much greater difficulties with the mobility of labour. In Russia they tried to settle it by compulsory powers over labour, but you could not do that in this country. I do not care whether it is a Socialist, a Conservative or Liberal or any other sort of Government, you could not do it.

Therefore I put it to the right hon. Gentleman, there are our coal reserves, our waterways, of which we make less use than any country in Europe, our hills have been denuded; and there is our land, the richest in Europe, and infinitely richer than either that of Holland or Denmark and certainly of Germany. Let the right hon. Gentleman consider whether we cannot inaugurate a policy which will find employment in the healthiest conditions for the workmen of this country. If he does so, I dare tell him he will find more support in every quarter of the House than he anticipates.

Mr. BOOTHBY

I ask for the indulgence of the House as I am addressing it for the first time. It is necessarily somewhat an anxious business, particularly when one has to follow so great an orator as the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George). I only intervene in this Debate because the state of industry in this country to-day does cause those of us who run the risk of having to live for another 30 or 40 years a certain amount of apprehension. Before I go any further I should like to put myself on somewhat easier terms with the House by making one short attack on the right hon. Gentleman who has just spoken, because he did proclaim in very eloquent language the advantages of a reconstruction of industry, and a reconstruction programme generally. I cannot help remembering that he himself set up a Reconstruction Committee which drafted reports on various questions and various industries, and those reports were thrown over one after another wholesale by the right hon. Gentleman at the dictation, practically, of the "Daily Mail," because they called him a "squander-maniac." These reports were on all kinds of schemes, housing schemes and many others, and were cast aside by the Coalition Government after this Reconstruction Committee had reported.

I find myself in a position of great difficulty just now because, if you regard it as axiomatic that an increase of trade will decrease the amount of unemployment, then you are at once confronted by the fact that you have to deal with almost every sphere, financial, industrial and international, and it is very difficult to confine oneself within any limits at all when dealing with this very grave question. But if you do regard it as axiomatic and as true, and I think it is indisputable, that if you are to decrease unemployment, you must have increased trade, then I think there are only two methods by which you can do it. The first is stabilisation, and the second is increased efficiency in industry. I just want to deal with the first question for a moment. I think the Minister of Labour and the right hon. Gentleman the Member for Carnarvon Boroughs under-estimated very grossly the effects of credit control by the Bank of England in this country, because it is a fact from which you cannot possibly get away that, if the Bank of England chose to inflate to an unlimited extent at present, the whole of the unemployed in this country could be absorbed within 24 hours. That is quite indisputable, though it would he a disastrous course to pursue, and it would be at great cost. But it cannot be got away from, and therefore it is ridiculous to say that it is not very important to consider the question carefully in all its aspects. I am perfectly certain that we are suffering to-day very largely from the credit policy pursued between the years 1919 and 1922 by the directors of the Bank of England. I am sure that they did their best, but I believe they started to deflate much too late after the boom period was over, and they then carried on deflation right into the depression period, and consequently vastly increased the difficulties from which we are now suffering.

I think we shall have an opportunity for discussing the whole question of currency and the stabilisation of currency later on, when the Chancellor of the Exchequer is in a position to announce the policy of the Government. So I will not make any further observations on this question just now, except that I should like to say that the Genoa Resolutions which the Secretary of State for War will remember did contemplate a meeting of the Central Banks in Europe to stabilise the currency of Europe by means of a gold exchange standard; and I feel it is absolutely fundamental that the sooner that meeting which was contemplated is called, the better. It can be called as soon as we come to an agreement with the United States Government in regard to the question of the gold standard. I would ask the Government to expedite their financial policy and try to come to some agreement with the Federal Reserve Board in regard to the gold standard. Then we shall be able to get this meeting which was contemplated by the Genoa Resolutions, and be able to stabilise the European exchanges on a gold exchange standard, which would be of more value from the point of view of the trade of this country than almost anything else.

There is one other question in regard to stabilisation; that is the control of prices of raw materials. I think that is most important. Every single basic manufacturer in this country is agreed that in some way or another the prices of raw materials will have to be kept steady if they are to be able to carry on, and that they must know at what prices raw material will be standing six months ahead. It would be of immense assistance to them, and should be done. It was done by the Cotton Control Board during the War. That Board worked remarkably well, and I think it is a great pity that it was ever disbanded. The cotton people did not want it to be disbanded nor did the cotton manufacturers, and if the Cotton Control Board could be reinstituted once more in order to go into the question of marketing and buying of raw materials and raw cotton all over the world, and if the Government themselves would back up that Cotton Control Board, as was done during the War, I believe it would assist our industries to a very great extent. It is the only way in which we can stop violent fluctuations and speculation in raw materials. I believe that all industries which are subjected from day to day and from month to month to violent vicissitudes and fluctuations in prices must form of themselves some control board in order to try to stabilise the prices of raw materials. In this they could be enormously assisted by the Board of Trade; it was done during the War and it could be done again.

That is all I want to say about stabilisation. But I should like, if the House will bear with me, to touch upon the second point, namely, the increase of efficiency, which means lower cost of production and more production, and which seems to me the only way in which we can cure the unemployment problem. The right hon. Gentleman the Member for Spen Valley (Sir J. Simon) gave us strings and strings of figures of unemployment for months and years past, but he never touched on the important part of the problem, and never made a constructive suggestion of any kind. He dealt with absolutely nothing but figures, and left it at that. The right hon. Gentleman the Member for Colne Valley (Mr. Snowden) did maintain that it was the capitalist system which was the cause of the trouble. Of course, we on this side join issue with him on that point, but it was, at any rate, a constructive suggestion, such as did not come from the right hon. Gentleman who opened the Debate. Before I go on to deal with this question of greater efficiency in industry, I think it is necessary to make a very rapid survey of the industrial situation in this country at the present time. I think that one of the explanations of the great unemployment at the moment is that we are passing through probably the greatest industrial revolution that has ever taken place in the history of the world. That, to a great extent, the Government cannot control. What we have got to do, as the Leader of the Opposition said the other day with regard to foreign affairs, is to ride with a tight rein and try to see that we do not come to any disaster, or crash in any way, because we are making an extraordinarily rapid transition in industry at the present time. Combines and trusts are arising on every side, and that involves combinations on the part of banks, for it is an inevitable consequence, when you get big combinations in industry, that you must get big banks in order to finance them. That involves big combinations of trade unions. Therefore the situation is precarious and very difficult, and we must go very carefully indeed if we are to get over our difficulties.

Internal competition has to a large extent gone, and international competition has taken its place. There is another important aspect of this point, namely, the value of competition, because industries can still only make money and profits if they make articles which other people want to buy and at a price cheap enough for them to afford. So you have still got the element of competition in industry, though it is international instead of internal. The problem is how to accomplish this transformation of industry without revolution or any form of violent upheaval. I think it was unfortunate that, just after the War when, after all, clear thinking was vitally necessary, and we had to consider what forms of Parliamentary control should be retained, and what forms were wasteful and impracticable, the politicians of this country decided to turn the economics of industry into their battlefield. That was absolutely disastrous, because you got orators and politicians making speeches and flooding the country with manifestoes and literature and the Dons of the Universities of Oxford and Cambridge massed behind them, spreading propaganda all over the country. The whole of industry was shrouded in a sort of fog of theoretical propaganda in which it was almost impossible to disentangle the truth. As a result of that we had two Elections, fought mainly on industrial issues, and the countryside was plastered with pictures of elderly gentlemen with beards dripping with blood representing either the employers or the employés as the case might be.

The only truth to which one could cling during that period—which I think is passing from us now—was that em- ployment in this country depended entirely on demand. We can only support our population by selling manufactured goods to foreign countries at prices at which they will buy, in order to obtain the raw material and the food that we require. We must never forget that fact. Whatever theorists may say, it remains. Now that we have entered the arena of international competition there is only one way to pull through, and that is by regaining once more our position as the greatest exporting country in the world, and we can only do that by lowering the cost of production and manufacturing goods which the rest of the world desires and requires, at prices which the rest of the world is able to pay. If we do not do that, I do not think there is any hope for us at all. The right hon. Gentleman the Member for Colne Valley (Mr. Snowden) said that the nationalisation of the means of production, distribution and exchange was the only way out. I have never known what this expression means, but I take it up because it is used so frequently. I have never found two people in the world who can explain to me how that process is to be effected.

I remember listening to a speech by the right hon. Gentleman the Member for Shettleston (Mr. Wheatley) who is one of the ablest exponents of the Socialist doctrine, and he said that to establish a Socialist State you must do it internationally. He said it was necessary to have Socialist States established everywhere else. I defy even the right hon. Gentleman with all his powers to achieve that end. He cannot go out into Trafalgar Square and say, "I declare that all other States as well as ours shall be Socialist States, and international competition must cease because it lowers the standard of living." We have to face international competition because other countries have taken it up, and there is an end of the matter. The only way in which we shall be able to do it is by getting confidence in industry. That is what the Prime Minister realises and that is the fundamental truth of the present economic situation. What is the Government doing at the present time to attain his end? Not, I am afraid, a very great deal. What are they doing to alleviate unemployment They are taxing the country to the tune of 800,000,000. That is too much. We cannot afford it, and I hope the Chancellor of the Exchequer will be able to reduce taxation. The policy of doles is a temporary expedient. We shall have to reorganise the whole system of insurance and get it on to an industrial basis and see that industry takes its share in insurance. I do not believe in the Trade Facilities Acts. I think they are thoroughly bad because they subsidise one private industry at the expense of others. If the State is to undertake the subsidising of industries, or is to give loans or credit to industries, it should accept the responsibility for the management and running of those industries. It should create a capital asset for the taxpayers of this country. It should accept the responsibility for seeing that the industries so helped are industries which involve some service to the State. That, I think, is very important. Nothing can justify the present system of trade facilities. One has only to read carefully the speeches of the right hon. Gentleman the Member for Central Edinburgh (Mr. W. Graham) to see how this policy is turning out. We have contingent liabilities of £70,000,000, and we have not got a single guarantee nor any capital asset of any kind under this scheme.

All legislation of this class will have to be swept away. Export credits are good, but they do not go to the root of the problem. The root of the problem, as I say, is to get confidence in industry. You will only do this by raising the economic status of the workers of this country. Somehow or other this must be done. If you do it, they will work as long as you like and as hard as you like; until you do it they will not work, and we will not be able to produce cheaply and efficiently. It seemed to me that the great significance of the Prime Minister's speech, which, I understand, has had a tremendous effect in the industrial centres of Scotland and the North, was that he definitely laid down that the Government of this country should not be a partial Government, and should not stand for employers as against employés. That is vitally important. If we are to deal with this industrial problem and assist industry as a whole, workers and employers alike, the Government of the day, whatever it may be politically, must be impartial. The danger two years ago was that we were headed straight for a class war. We had the two sections of industry facing each other, one with a Government of its own at its head, and if we had gone on like that, without any impartial neutral Government, I do not see how we could have come to anything but complete disaster. If we do get class war, if we do get a class fight, it does not matter who wins. We shall all go down to destruction together. The importance of the Prime Minister's speech is that he avoids that issue. Various suggestions have been put forward as to how this question can be dealt with, and how the Government can act. All I would say is that if the Prime Minister chooses to take the suggestion of the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) and attack the monopolies and trusts and vested interests, which are battening on the community as a whole, he will have the bulk of this House behind him.

That is the first thing that must be done, but there are others. We can encourage the setting up of industrial councils. I ask the Minister of Labour to go carefully into the question of the extension of the Whitley Councils, and of the industrial councils. What has happened to the National Industrial Council of 1911? That was an admirable body for settling disputes, securing agreement in industry, and reporting decisions to the Government, and then asking assistance. It seems to have disappeared. The whole question of industrial councils must be reopened, and the Government should be prepared to give those councils its support. The Cotton Control Board when they suggested to the Government of the day that a levy of 6d. per bale on cotton would materially assist the development of Empire-grown cotton did a good work, and their suggestion was carried out with enormously beneficial results. I think all hon. Members would like to see our industries functioning as a whole with an Industrial Council at the head representing both employers and employed, making recommendations to the Government of the day and receiving the backing and assistance of an impartial and neutral Government. The hon. Member for Linlithgow (Mr. Kidd) has written a book which is fairly well known. He is always advocating schemes of co-partnership and fellowship in industry, the investment of trade union funds in industry, and all those things. Such questions will have to be carefully taken up by the leaders of the trade unions. I would draw the attention of the trade union leaders to the operation of the Brotherhood Bank of the United States. One of the phenomena of the industrial situation in this country is the extent to which the banks control credit and therefore control industry, and the trade unions of this country have a great deal in their power if they choose to use their finances wisely. The Brotherhood Bank has been an extraordinary influence in controlling industry, and it is open to the trade unions of this country to do that if they wish.

I share one thing with the right hon. Gentleman the Member for Carnarvon Boroughs. I am an optimist and an opportunist. I believe in compromise, and so do all of us. It is the one thing that has pulled us through up to now. I do not know why people should be ashamed of believing in compromise and opportunism, because unless we are all opportunists in regard to these problems I do not see that there is any hope for us. Englishmen have always shown a faculty for being as it were ashamed of opportunism. They like to believe them selves men of rigid principle, and anything else seems to them to be slightly immoral. As a matter of fact they are the finest opportunists in the world, and every time up to now that they have been in a tight corner, they have got out of it by opportunism and compromise in the best sense of the words. If we are all united together—workers, employers, and even financiers—in that spirit of compromise which seizes every opportunity of getting out of a mess, we shall pull through.

Mr. MacLAREN

I wish to congratulate the hon. Member who has just sat down on accomplishing a task which is usually a very severe test, and I do so the more obviously because I am sure the House was impressed by the earnestness with which he spoke and the deep conviction behind his words. I wish I might use the same form of language in congratulation of a much older Member of the House, the right hon. and learned Member for Spen Valley (Sir J. Simon). His speech was meticulous and was loaded up with detail. It was interesting in so far as it showed by means of figures the amount of unemployment from time to time in the country, but I, like most Members of the House, waited for him to come to a positive policy, and I, like most others, felt deeply disappointed that he remained in his meticulous atmosphere and did not come down to concrete facts. He asked what the Government were going to do regarding unemployment. The Government, speaking through the Minister of Labour, were rather timid—almost as timid as the right hon. and learned Gentleman himself. I endorse heartily all that was said by the late Chancellor of the Exchequer. In fact, this Debate has taken a turn which I did not expect. It may be characterised as a Debate which has driven the House back to fundamentals. This House is often preoccupied by Debates in which the Government are entertained either to criticism or suggestion as to ways of dealing with social troubles in patchwork fashion. To-day, we have had a Debate which has set aside palliatives, and brought us back to the fundamental causes of the disease of unemployment.

The last speaker attributed to the right hon. Gentleman the Member for Colne Valley (Mr. Snowden) the statement that the cure for unemployment was the national ownership of the means of production, distribution and exchange. I heard the whole of the right hon. Gentleman's speech, and he did not use such language. The same mistake was made by the Minister of Labour himself, when he said that he would not follow my right hon. Friend into the field of socialisation. I think the right hon. Gentleman the Member for Colne Valley was quite clear and definite, and if I may be excused for reiterating what he said, it was in effect this "What do we observe? That on this great earth of ours there are all possibilities for making life healthy and man independent; that over a series of centuries the human mind has accomplished vast enterprises, the inventive genius of man has come to the aid of labour and to-day man no longer suffers from inability to conquer the forces of nature but stands the master of the forces of nature, able to conquer them, and bring them to his will." That is what he said, but the irony of it is this, that side by side with this progress of the human mind and inventive power of man, you have this constant growth of poverty and unemployment, and then he asks the question, What is the solution to this enigma? Is there a solution to it?

I suppose I may be excused if I deal in rather an elementary way with the beginnings of wealth production. So far as I can see, the two primary factors in wealth production are land and labour—land the passive factor, and labour the active factor. Later on in the development of society, you have the third factor, known as capitalism. If it be true that the inventive genius of man is developing, it must also be true that, by that very inventive force of the human mind, there must as society develops be a greater amount of capital in the control of labour to produce more wealth. We have not yet come to a point when this universe of ours has reached the point of diminishing returns, and there is still in this earth all that is necessary to produce more wealth than we have ever dreamed of. Then why is it that we have this unemployment stalking the land and insecurity amongst the working people of this country?

Hon. and right hon. Members opposite have their cures. They believe one day in Protection and another day in emigration. My negative friends on the hack benches below the Gangway have spoken of Free Trade. I am an unqualified champion of Free Trade, and, indeed, I was somewhat depressed when I heard some of my own colleagues on these benches casting some doubts on Free Trade as a principle, but I think that the waning faith of many of my colleagues in Free Trade is due to the fact that the Liberal party, while advocating Free Trade and pointing out that Free Trade was a necessary condition in order to keep trade flourishing between nations, were always singularly quiet when the question was asked, Why is it that, despite your Free Trade, you have this constant and steady growth of unemployment? The Liberal party refused to answer that question, with the result that to-day Free Trade is freely spoken of as a merely negative policy.

Free Trade would have been a positive policy and a policy well understood by my colleagues on these benches if the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) had linked up the free exchange of goods with the free production of goods, and had carried through his famous ideas that lay behind the People's Budget of 1909–10. But here he was to-day, somewhat strange, standing in his place, telling the House what it might do, and asking Ministers why they did not do this, that, and the other. I do not know of any man who has had greater opportunities of accomplishing much, and who has thrown the opportunities away from him, than the right hon. Gentleman. He spoke about the land, about Denmark, about the enormous possibilities in the agricultural development of England. My reply to him is this: It is not in his mouth to ask other Ministers why they are delinquent when they have the power. What did he do when he had the power, and when he had the working people from the South of England, to the North of Scotland singing, "God made the land for the people"? Yes, but when he had them singing like that outside, he compromised with the enemy inside, and we buried his famous land taxes but a few months ago in this House.

Although politicians may be opportunists—and, indeed, you have evidences of it all round—and although the right hon. Member for Carnarvon Boroughs enjoys drawing up indictments against others and forgetting his own delinquencies, it is nothing more than interesting. I want to come down really to the bedrocks of the Debate, and I endorse, as I said at the outset, everything that the right hon. Member for the Colne Valley said this afternoon. Here we are to-day, with a power to produce, with the land here, from which we can produce everything we want, and outside a world which is becoming more efficient as time goes on, a world which is not depending upon us to produce commodities in the manner in which it used to do, faced with, as it were, a shut-down international market with an increasing population in our own country. What, I ask is the only alternative to this constant, chronic weight of unemployment fixed upon industry, other than that of turning round and opening up the great possibilities in our own country? I do not know.

Some hon. Members think that the only way to get round the difficulty of an enormous population is to send it out by emigration. Why do we send people to Canada? Why do we send people to South Africa? Why do we send people out of this country at all? Merely to get at land, to get land somewhere. Is it not a thing obvious to anyone? I know, speaking for myself, that I go from London to my own constituency in the Potteries almost every week-end, and I am no sooner out of London than I am passing, at almost 60 miles an hour, through the most magnificent agricultural country in the world, lying there practically untouched and unused. Why do we ask our people to go to the furthest ends of the earth in order to get land, when this magnificent land of England is lying here, derelict and badly used?

No one more than I would welcome a condition in this House in which we could set aside our petty prejudices, and, in the spirit of the speech delivered by the Prime Minister last week, exhort all men in different camps to come to a common agreement for the solution of these perplexing problems which are impressing themselves so drearily and so harshly upon society, but when I listened to the Prime Minister's speech of last week, to his appeal for co-operation, that men should think in terms more of the happiness of life than of dividends or advantageous position, the one thought that ran through my mind was this: If the Prime Minister is going to pursue the policy which that speech indicates, and the testing time comes—I mean that moment when the Prime Minister must of necessity act upon the intuitions of his mind—will he have the courage so to act? I want to put this to the Prime Minister. We could settle this question of unemployment, we could settle the question of housing, we could settle many questions in this House, were it not that outside there are hard-hearted vested interests who will cede no ground to sentiment nor to poetic appeal. I believe the Prime Minister could, and I have no doubt will, use his power to try to ask advances from the vested interests outside, but I cannot help feeling that the vested interests who have held the land of England for centuries, who have held the land of Scotland for centuries, will not cede one inch of ground until they find that you are going to make their hold upon that land an economic impossibility.

While one, would like, and, indeed, he tempted, to enter into a field of contention, it is the heart's desire rather to accomplish things by a common understanding than by mutual distrust and hate. While that is our feeling this afternoon, I want to ask the Prime Minister, through you, Mr. Speaker, if there should come within his experience, in trying to deal with this problem, a clear conviction that this unemployment which is stalking our land will bring any form of society to disruption the longer it lasts, if he really sees the enormity of this problem and begins to appreciate its influences on society, and if he also sees that it is this land monopoly which blocks the way to the development of this country, and keeps this constant weight of unemployment stalking the towns, driving the agricultural labourer from the country side, and pouring himself and his family into the towns, if our Prime Minister comes to see that, will he have the courage to deal in no uncertain way with the land monopolists of this country?

If he will, there is no man in this House who would follow him more gladly than I would. It may be that the Prime Minister may be another Peel. I do not know. If ho would take the side which I would like to see him taking, and use the force and power of his Government to remove certain heavy burdens of taxation on industry and on the food of the people of this country, and place that taxation in other directions—I know I am getting dangerously near to the point of suggesting legislation—but if he would remove the taxation from industry and from the food of the people, and throw that taxation upon these vested interests which block the way outside, then, indeed, he would not only carry the Labour party and the Liberal party with him, but, if he had a divided party behind, the split in his own ranks would be well compensated for by a good rallying of the Members on this side of the House.

Mr. AUSTIN HOPKINSON

It is the custom that when an hon. Member of this House has made a maiden speech, the speaker following should pay a few conventional compliments to him. But in the case of the maiden speech that came from the hon. Member for Eastern Aberdeen (Mr. Boothby) this evening, I think all those who were present during it will agree with me that it is no mere convention when we congratulate him on that speech. I should like, however, if I may do so, to join issue with him on one or two minor points, and then possibly, again if I may, carry his speech perhaps a little further than he cared to do in a maiden effort. The two points upon which I join issue with him are these: First of all, he suggested an extension of the control of the prices of raw material, and he instanced, in support of his argument, the Cotton Control Board which existed during the War and, indeed, for a short period afterwards. It seems to me that to do away with all speculation in raw materials would be, on the whole and in the long run, rather a disastrous thing. That speculation, with all its evils, has at any rate this very useful role to play, that it does enable you to know what is the world price of any given commodity at any given time. The efforts of speculators to enrich themselves, at any rate have that most beneficial effect, and therefore, we may well find it desirable to put up with the evils of speculation in order to get that benefit.

The other point upon which I join issue is a point which I approach with some diffidence, Mr. Speaker, with you yourself in the Chair. He suggests the extension of Whitley Councils. There, again, there is something to be said on the other side. If we consider the root cause of unemployment at the present time, surely it is the fact, as he very well pointed out himself, that the cost of the things we produce at present is so high that we cannot get purchasers willing or able to buy them. Under those conditions, surely, one of the most natural ways out of the difficulty—one of the most natural ways to the reduction of costs—is by the increase of competition and not by any measure which reduces the keenness of competition in any industry. The system of holding conferences in which representatives of the employers in any given industry face across a table representatives of the wage-earners in that industry seems to be a system based upon a complete and utter fallacy—the fallacy that there is a common interest between the employers in one branch of industry and a common interest between the wage-earners in that branch of industry: that those two common interests are opposed to one another, and that it is necessary to have councils to reconcile those divergent interests.

If we look at the matter carefully, we shall see that competition in industry is not a competition between employers and capitalists on the one side, and the workers in that industry on the other, but that it is rather a competition between teams, if I may put it that way, each of which consists of the capitalist, the employer, the brainworker and the manual worker in the particular business concerned; that these teams enter into competition within the boundaries of their particular industry, and that the keener that competition is the more efficient will become those industries and the less waste will be created from time to time.

I wish particularly to insist upon, if I may term it so, the vertical cleavage of industry rather than the horizontal cleavage which is at the base of this demand for conferences and councils between the representatives of employers and the representatives of the workpeople in the various industries. I have the honour to be captain of a team, and a very delightful and efficient team it is. The person I am out against in industry is not the man I employ, but it is the other employer with his team in the same branch of industry in which I am engaged. It is not warfare; it is not our business to destroy him, but it is our business, as far as we can, with the assistance, as I say, of a very able and willing team, to show that we can play the game Netter than he can. And playing the game of industry surely is this. It is showing that we can produce better and cheaper stuff than our opponents in the industry can produce. At the end of the contest we show, not only the silver-plated toast-rack, or whatever the material prize may be, but we show a team which is happier, more efficient, and better than the team of our opponent. I do claim that we should do well to dismiss from our minds any sort of idea that there is a common interest between the employers in any given industry and the wage-earners in any given industry. It is not the truth. I believe myself that the complete failure of the great conference which was held after the War was due entirely to the fallacious idea of what competition in industry really means.

Those are the points upon which I join issue with the hon. Member who made such a very remarkable maiden speech to-night, and I think perhaps in dealing with that last point I carried his speech in the direction in which he would like to have it carried. When he spoke of confidence in industry, he was really dwelling upon one of the greatest questions which we have to face. It is a question with which politicians cannot very well deal. So far as they can deal with it, the Prime Minister himself dealt with it the other day and gave the right direction to our thoughts in this House, and also, I may say, to the thoughts of those actually engaged in industry outside it. If we get firmly fixed in our minds what I call the team conception of industry, it seems to me that that confidence which we so much lack at present may very likely be re-established, and that the results may be beneficial not only to the industries which adopt that spirit, but to all the industries of this country.

Turning to the main question which is under debate—the question of unemployment—many speakers have urged the Government to take up this matter. I have heard many Governments urged during the last few years to take it up and to propound some policy which is going to free us from the evil of unemployment, but the speakers have failed in every case, and they have done so to-night, to make any sort of suggestion to show a way by which any Government possibly could solve this appalling problem. Surely the root of the matter is this—that it is not within the capacity, indeed it is hardly the function and it is certainly not within the capacity, of any Government, no matter how brilliant the units of which it is composed, to solve this problem of unemployment. It is a problem from the economic view which resolves itself entirely into the problem of costs—the question as to whether we can produce goods at a cost which people are willing and able to pay. No Government under any conditions can help to reduce costs except in so far as they can reduce the amount of taxation. What particularly impresses many of us is that every action that has been taken by successive Governments to, deal with this problem of unemployment has undoubtedly increased the difficulties of the situation. In every case it has been a spending of public money which has been advocated, and which has subsequently been put into practice. The spending of public money in one way or another cannot possibly in any way alleviate the sufferings of the unemployed, for the simple reason that every pound which the Government spend has to come out of the productive workers of the country in the long run, and to that extent puts a burden upon those who are actually engaged in productive industry to find the money in order to put some other person into employment. The burden of finding the money to put the other man into employment inevitably puts out the man who is at present engaged in productive employment. That is the root of the whole question. No matter how you discuss it—whether you discuss it as Trade Facilities or Export Credits, or relief works, or any of those ingenious devices for avoiding facing the truth, whatever happens, if the Government spend the money they put at least as many people out of as they put in employment. There is no solution, except the reduction of the cost of production on goods which we produce in this country and sell abroad.

Mr. MacLAREN

Can the hon. Member tell us how it was that Robinson Crusoe was not faced with the cost of production?

Mr. HOPKINSON

Because he did not depend for his food upon imports from other islands. We have to devote our minds to the reduction of the cost of production. Hon. Members who were Members of this House in 1919 and 1920 will possibly remember that at that time, when unemployment discussions came before the House I incurred a certain amount of unpopularity from the Benches above the Gangway by suggesting that one of the first things we had to do was very drastically to reduce wages or we should be running into a crisis of unemployment. I still maintain that point of view. I maintain that the wages which were being paid in industry in 1919 and at the beginning of 1920 were out of all proportion to the value of what was being produced. It was that boom period, that period of inflated profits and inflated wages, which has made the present depression infinitely deeper than it need have been if we had tackled the matter sooner. I still maintain in one sense that we have got to have a reduction in the wages paid, but I should like to qualify it to this extent. When I talk of reduction in wages, what I mean is an adjustment of the relation between the wages paid in an industry and the amount of the product which is produced in return for those wages. Supposing, for instance, that the wages of the coal-miners are maintained at their present level, and the coalminers, by one means or another, are able to produce very considerably more per shift than they do at present; that is equivalent, really, in an economic sense, to a reduction in their wage rate, inasmuch as their production as compared with the wages received has gone up by the proportion of the extra output. That being the case, and in view of the fact that in most of the productive industries—largely owing to the burdens placed upon them by the sheltered or protected industries of this country—wages are extremely low at present (they are very low for the colliers and very low for the shipbuilders and engineers), I do not think it is any use to argue that actual money rates should be reduced at the present time. What we want, and the only thing that can really save us and make an end to the present unemployment crisis, is a greater production with the same wage.

I have taken the trouble during the last few years to try an industrial experiment in order to see whether it is possible, even in depressed trades and even at present prices, to give men a better standard of living than they had before the War; and I find that it is possible even in the depressed industry of engineering, on certain methods, to induce men to give such a willing and such a skilful return for their wages—such an excellent output in a word—that one can give them a comparatively high standard of living as compared with most of those engaged in industry. But to do so one has to face what has been a problem in industry ever since industry was invented, namely, that the employer, confronted with his men, says to his men, "Now, you do more work and I will give you more wages." The man at, once replies, "All right; you give me more wages and I will do more work." And there the question has rested, so far as I am aware, from time immemorial, and nothing further has ever been done. I think the hon. Member who made his maiden speech to which I have referred will agree with me that where you have two persons, one of whom is in a position to give orders and the other of whom is in a position where he must obey those orders, it is essentially the duty of the one who gives the orders to make the first move if it is a question such as the question I have propounded. There ought to be no doubt whatsoever in the employer's mind that it is his duty to take the first risk and that it is his duty to give higher wages. Then it will be the duty of the man afterwards to give a bigger return in exchange for those wages. I think the most hopeful sign at the present time is that I find a very large number of employers of labour at the present day are beginning thoroughly to understand that principle of aristocracy, which is that the man who gives the orders has greater duties to perform than the man who merely receives them.

Captain EDEN

My first feeling while listening to this Debate this afternoon, and to the previous Debates which we had last year on the same subject, was a certain sense of pessimism. We seem to hear very much the same argument, very much the same lamentations and very much the same expressions of hope, and yet we seem to have very much the same number of people out of work. The right hon. Gentleman the Member for Spen Valley (Sir J. Simon) who opened this Debate did so with a series of questions. I notice that hon. Members who occupy the two benches below the Gangway are falling quite easily into the habit of asking questions from a detached point of view. There are, no doubt, advantages to be obtained from belonging to a party without any hope or aspirations to office, because they are able to question categorically, and without responsibility, the acts of Governments of recent years.

8.0 P.M.

I am afraid I did not find, and I do not think the House was able to find, anything in the way of a constructive suggestion in the questions which the right hon. Gentleman put. And then we had the speech of the right hon. Gentleman who was the Chancellor of the Exchequer in the late Government, who was in a very different position. He gave us—and we should have been disappointed had he not given us—the explanation that the present social system was the root of all the trouble. We expect that from the right hon. Gentlemen opposite, and should be very disap- pointed if we did not get it. But I am sure that the right hon. Gentleman nor any hon. Member on that side of the House is going to suggest that the country recently, or even in the immediate future, is likely to give a verdict to change our social system, and I am equally sure that they will not expect this Government officially to introduce socialism on a drastic scale. His other complaint was as to the non-productive work, but I do not quite know where he draws the line between non-productive and productive. It seemed to me rather a dangerous doctrine. I suggest to him that it is an extremely difficult matter. We all agree with his sentiment that this is no time—

Mr. HARDIE

The hon. and gallant Member talks about it not being easy to draw the line. When the landowner sells land, is he a producer of land?

Captain EDEN

We will come to the landowner in a minute. It was not only the landowner that the right hon. Gentleman referred to. There are very much idler people in this country. The right hon. Gentleman must realise that. Everybody in this House wants each individual in the community to pull his whole weight. The trouble with the idler is that he always appears to be the busiest person. A certain gentleman usually pictured in black always finds work for idle hands to do. We must have some better definition than that. As far as landowners are concerned—I am not one, I do not own any land—they should render, and in many cases do render, useful service of the community, and it is for the community to decide whether these services are effective. It. is certainly no remedy for the present unemployment to bring in land legislation. What I want to put for the moment to the House is this. Any of these alternative suggestions are not reaching or even touching the heart of the evil. The truth is, as I think we all begin to realise, that during the last few years there has been in progress in industry throughout the world an evolution we were slow to appreciate. In part the War was responsible for the fact that we were slow to appreciate it. Just at the time when this country was beginning to realise that there were new competitors in the world who were beginning to manufacture against us, and that the virtual monopoly which we had in the latter half of the nineteenth century was slipping away from us, the War came, and the consequence was that our industries were turned away from their normal occupation and a stimulus was given to those very competitors to compete against us. The result is that we are now in this position, that at the very time when our industries should have the lightest burdens placed upon them and should have the easiest chance and the greatest assistance from the Government of the day to compete with their new rivals who are challenging them in every field, it is at that very moment that our industries are, as a result of the War, most heavily burdened by taxation.

I suggest to the Government most respectfully that the means, and perhaps the only means by which they can help industry to-day, is to economise and to take away some of the burdens of taxation. It is easy enough to give lip service to economy, but we all know very well that in our heart of hearts we may make some reservation for our own particular hobby horse. There are many social reforms that we should all like to see carried through, but it is no use to put the cart before the horse. We have got first of all to lift the burden from industry which is going to make these social reforms possible. There is very little hope for the future of industry in this country if we cannot do this in the present Parliament. Just now, and within the next four or five years, as anyone who has been out of this country knows, we are going to have the most critical time of all. Just before the War we were approaching this period of crisis. Now Europe is gradually settling down in its new forms and organisations, and as it does that and becomes more established, its competition will grow greater and it is largely a question of who can get control of and keep the markets. Indeed that will determine who will have these markets later on. It is a case very much of now or never, and I feel it is for this Government to reduce direct taxation and assist our industries in the course of the next two or three years to get established in the new markets.

The last Government were admittedly in a difficult position. They had not got a majority in this House. The present Government have a majority and their prospects are better than that of Governments that have preceded them for many years past. They have a unique opportunity to give the country a lead, and I do hope that in this matter they will not look so much at what the effect will be at the next General Election. The country wants to be led. Governments tend to look from day to day with one eye on the electorate outside this House. I do hope that the Government will pursue a policy that they know to be best. That is the only way they can render real service to the community. The only other observation I would make is that apart from the subject of assisting our industries, and establishing them in the new market, there devolves upon the Government a duty of finding further markets which have not yet been explored. In this country we should, presumably, whatever our social system, have found ourselves developing to a one-sided degree, developing industrially at the expense of agriculturally. Consequently, we are living on a false basis, and we have got to continue to exist, to find more markets for our goods. I do ask the Government by all means to do what is in its power in the next four or five years to go ahead with the development of our Imperial market. They know full well the possibilities that exist for the development of our Imperial market. We have lost our balance in this country. We are overtopped. We are too much industrialised and too little agricultural for the size of the country. To get that balance back we want to bring in the Dominions and Crown Colonies that make up our Empire. I would suggest that by that means that we can get the people of this country to look upon the Empire not so much as a series of units but as one unit.

The difficulties which did exist are rapidly slipping away, and as your communication gets easier, and gets facilitated by the progress of science, your distances become less. We can get to-day, on a journey to Canada, in the time it took to do a journey to Edinburgh 200 years ago. As communications improve, so quite certainly will the Empire seem closer to us and these markets be more usefully developed. It is a great opportunity for this Government in the next four or five years to make use of the possibilities of developing the Empire. If they will do that, and the House and the country will follow the lead the Prime Minister has asked for in better relations in industry, if the Chancellor of the Exchequer can reduce our taxation directly to assist industry in its present struggle, if we can make use of our Imperial development before other countries get in ahead of us, it follows that, if we get these three things, there is a chance for us to find more employment in this county,}. It is no use to go on only with the schemes that the late Government left or that the Coalition Government left or that the present Government may have. Schemes alone are of no earthly use when you take a broader or a more distant view. Schemes are in exactly the same position as they were two or three years ago. This Government has the opportunity, and I hope and trust it will not fail to make use of it.

Mr. MACKINDER

I have listened to the whole of this Debate, I think, with the exception of a portion of one speech, and I have been trying to imagine myself for these past four hours to be an unemployed man waiting to get some hope from the Government, and all that I could see for the unemployed man as a result of this Debate is, "he must wait." There will be nothing done at the present moment. The hon. Member for Mossley (Mr. A. Hopkinson), who spoke last but one I remember, last year when I made my maiden speech and I referred to the policy of the Primrose League, and their cure for unemployment, as set out in their printed slip, which was that you must work longer, you must work harder and you must work for less wages, interrupted me and asked if I really suggested that that was the policy of the Primrose League. He did not think it was. But to-night the hon. Member for Mossley has suggested that the only cure for unemployment is that you must work longer, you must work harder and you must work for less wages, exactly the same principle he objected to my attributing to the Primrose League. I feel to-night, if I may say so, as the speaker did this morning, when he said that a long number of speeches could be made by the Front Bench Members lasting sometimes an hour and a quarter, and which would probably contain as much matter as a backbencher would deliver in 10 minutes. I confess that when I heard the speech of the right hon. Gentleman the Member for Carnarvon Boroughs I could not find anything substantially useful in it, except in the way of rhetoric. He advanced some figures. He told us some history. He told us that in the cotton trade production was less, that in the iron-ore trade production was less, and that in the wool and textile trade production was less. Of course it is. Anyone knowing of these districts can tell you it is less, because there are thousands, if not hundreds of thousands of people unemployed who ought to be employed. Unemployment increases and, of course, production goes down. I cannot, however, see the use of reminding the House of statements of that kind.

I was extremely sorry to hear the Minister of Labour hold out no hope whatever to the one and a quarter millions of unemployed, except the hope that electricity, and the progress of electricity, would eventually help to solve the problem. I think that, irrespective of what 'the hon. Member for Mossley said, some sections of the employers and workmen, and the Government will have to set to, and see what can be done. We are losing the markets of the world. I have been reading the "Yorkshire Observer" of yesterday, and I find that the values of wool have descended 20 to 25 per cent. The result of that is that in my own shire and textile district large holders of stock of that wool cannot put their wares on the market because they cannot sell their stocks, even manufactured, at little above the price that the raw material is making to-day. The result is that the cost price of raw material has gone down—for which the worpeople are not responsible, or the unemployed. Because of that fact there will probably be one or two more thousand people thrown out of employment, and the only remedy the Government can find is: "I am sorry for you." I fail to see why the Government should not take some steps to try and stabilise, if not the finished goods, at least the price of the raw material.

Anyone who takes interest in business knows that when there is a fall in the cost of any part of production the people who ultimately purchase the goods hold on till bottom is touched. I myself have noticed it in the trade union movement. When the slump in wages was on, instead of the industry benefiting as a result of a reduction in wages, industry got worse, because the people who bought the manufactured goods were waiting, and waiting in the hope of another reduction in the cost of production. Hence they withheld their orders until the cost of production reached what they thought it ought to be. But when bottom was touched in the cost of production the people who needed the goods were too poor to buy them, with the result that things got worse and worse. I make this suggestion to the representative of the Government as one worth consideration. I believe the Government ought, at all events, to explore the possibilities of stabilising the cost of the raw material upon which this country must live, and which this country must have if it has to get hack to prosperity, and continue it.

We find in all parts of the world action is being taken which is materially affecting hundreds and thousands, nay millions, of people in this country. In the shire where I come from we estimate that there is about a quarter of a million wool and textile workers. We find that in the trade papers that the producers of wool in Australia have decided to limit the amount which they are going to offer for sale. I do not know whether that is "ca'canny," but "ca'canny" is a weapon which may retaliate upon the heads of the people who devise it in Australia. There is such a thing as a strike of purchasers. I am inclined to think that the mere fact of holding back this raw material in order to inflate prices artificially will lead to people refusing to buy the goods, and so cause a slump in the price. That may be a false method of deduction, but if true the net effect will be that our people in the West Riding will suffer as a result of that policy.

I want to make an appeal to the representative of the Government. Let us follow what is daily explained to us by the chaplain of this House, and put aside all pride and prejudice. I want to make this suggestion: it will be heterodox on the opposite side of the House, and, possibly, not too orthodox on this side, but the hon. Gentleman who has just spoken and other hon. Gentlemen have suggested that we have got to get and keep the foreign market. I agree that we should get all the foreign markets we can—not select some markets, and leave other markets untouched. Let me give a case in point. In the same "Yorkshire Observer" that I have quoted, I find that Russia has bought 287,000 kilos of merino wool on five months' credit at 8 per cent. interest. This wool could easily have been bought in this country. It is probably Australian wool, because Australia produces the greater proportion of merino wool produced in the world. Czechslovakia has bought this Australian wool, and sold it to Russia on five months' credit at 8 per cent. interest. That wool, as a matter of fact, could have been bought here just as well if we had been right in our heads. We should not have been selling Russia the raw wool: we should have been selling miles and miles of British cloth, if we had done what we should have done, instead of allowing our pride and prejudice to affect our material interests.

From the same "Yorkshire Observer" I learn that Russia has bought recently from Czechslovakia 200 wagons of cotton, costing 120,000,000 kroner. She has also bought large quantities of linings and of linen. These goods have been purchased with the credit of the Anglo-Czechslovakian Bank. This, I say, is in the Yorkshire paper and is public property, and I say if the Anglo-Czechslovakian Bank can advance credit to Russia to the extent of this enormous sum for purchasing such great quantities of goods. I suggest that we ought to drop our pride and prejudice, and let this trade be done from this side of the water instead of allowing other people to do it. I find also in the "Soviet Review," 7th March, 1925, that a Mr. Rabinovitch stated, which is very important, that the Soviet credits in this country have reached the amount of £8,000,000. He proceeds: Ever since the successful carrying through of currency reform a year ago the capacity of the country to obtain credits has been considerably strengthened. Last year about 30 per cent. of all purchases by the Sovie[...]. Government were credit operations. May I say to the Government that at this moment arrangements are being made almost every day to obtain credits whereby we can export goods to Russia and receive in return those goods which we need. The "Daily Mail," that well-known Socialist paper, said on 14th February in a telegram from Riga: The Soviet Government has decided to place large orders for cotton goods, agricultural machinery and other materials in the United States. One of the largest New York banks is extending a year's credit to the Soviet Government institutions for the financing of their American purchases. I have been in industry and the trade union movement long enough to know that trade with Russia will not solve all our unemployment problems, but if trade with Russia will place a thousand people in the factories again to do useful work, it is worth while to try to get that trade. Anyone who looks at the new map of Europe which has been issued under the auspices of the League of Nations will find that in Russia there are hundreds of miles of virgin forests. I venture to prophesy that in a very short time, when Canada has been entirely denuded, as the United States has been entirely denuded, and when the Norway pines can no longer come to this country, that there will be a scramble to buy wood in Russia. I believe that in pre-War days half the sawn timber used for the building of houses came from Russia. There are those enormous forests, and the Russian Government are anxiously waiting for credits in order to place orders in this country for wood-pulping machines, and they can also deliver wood-pulp to this country. I say, in no party spirit, that I wish the Government, and the representatives of the Government, would drop their unholy prejudices arising from the cases of a number of pre-War bond holders, and think of the people who have got a stake in this country and nothing coming into the house. I want the Government to take counsel with the manufacturers of this country. I believe the real reason why our manufacturers do not demand trade with Russia is because it would hardly be respectable, but I believe their real desire, if one could but discover it, is to do some trade. I think the President of the Board of Trade would recoil in horror if he could see some of the letters I have received from manufacturers in my own district. They ask: Can you tell me how we can participate in trade with Russia? They are people who want to export cloth that our people are longing to produce. The only reply I can give is that until the Government will make a Treaty with Russia, and until we can extend some credits to her, there is not the slightest hope or prospect of getting any trade with that country.

I wish to ask the Government very sincerely and very hopefully, Will they be prepared to try to negotiate a treaty with Russia? It would be absolutely certain to provide some measure of work for some number of people. I put that as a specific question, and I hope it will be answered. In the city of Lincoln the workpeople are waiting and the factories are waiting to make the agricultural machinery of which she is so justly proud and which Russia so urgently needs. In Keighley, the neighbouring division to mine, at the time when the War broke out, the millyards of the machinery producers were piled high with cases of spinning and weaving machinery for Russia. The War came and those machines were dispersed all over Great Britain, and Russia is still waiting for that textile machinery, the orders for which would bring some work to the people of Keighley. I want to see Russia placed within the terms of the Trade Facilities Act. As a duty to the unemployed people, to the unemployed mechanic, to the skilled man who is losing his skill through unemployment, we ought to put that country under the Trades Facilities scheme, and thus attempt to find some work for those people. Barrow and Glasgow could immediately secure orders for shipbuilding. I do not want to be too much of an optimist—I never was a pessimist, because I am told that a pessimist is one who of two evils chooses both—but I think it is useful to suggest to the Government a method whereby we can take even a thousand people off the unemployed list.

The other week I was speaking to some friends of mine in South Wales on the subject of Russia. One rather importantly-placed man said: "If we were not too adjectively respectable, we would immediately try to get some of our coal market again." I got these figures on the subject. In 1913 we exported 7,000,000 tons of coal to Russia. In the first two months of 1924 we exported 8,000 tons, as against 1,000,000 tons for the same period in 1913. In the first two months of this year not a single ton of coal was exported to Russia. It is no wonder the coal trade of this country is going down, and that the moral courage of the collier of this country is going down.

I do not want to take up too much of the time of the House making statements of which no notice will probably be taken, though I hope notice will be taken of them, but I make this appeal to the Government urgently and very sincerely, and not from the party point of view, not because I admire the things which it is taboo to mention in this House, but, because I am thinking of the unemployed, man. Probably I am thinking of him no more than hon. Members opposite, but perhaps I see him in a different light. When I am at home and going to my office, which is about 200 or 300 yards from the workhouse, I sometimes see the casuals coming from the casual ward. I have been unemployed. I have tramped the streets. I have lived in a dosshouse. I have lived in a Salvation Army shelter. All the time I was unemployed my courage was going down, and down, and clown, as my heels got nearer the pavement, as I see these men from the casual ward going down. They are helpless, they are homeless, they are hopeless. There is not the slightest possibility of their ever getting a job, with a million and a quarter respectable people unemployed. In the case of every unemployed man in this country, the longer he remains unemployed the nearer he approaches the level of those casuals whom we see every day in every town. To-night they are sleeping in Bradford, to-morrow night in Manchester, the night after in Liverpool; and sometimes we read in the papers that they have fallen into the canal, or that they have been suffocated while seeking a little warmth round a limekiln. Every man unemployed is a potential casual instead of being an asset to this country.

I do not want to be too denunciatory. I do not want to suggest that the sympathy for the unemployed is all on this side, but I want to say to the Government that any scheme is worth exploring if it is likely that any good will come of it. The Government cannot say to those engaged in industry, "You must do this or you must do that." In some cases perhaps two individuals have to consider this great problem, and sometimes permanent officials, but it is not a problem for one or two men to deal with, and it will have to be dealt with by the whole nation, by employers, workmen, and by the Government, and not by any one member. I want the Government to take its courage into both hands and explore the possibilities of trade with Russia. I do not say that an agreement with Russia would provide work for all the unemployed, but if it would provide work for only 1,000, which is not provided for as a result of the Government refusing to sink their prejudices, then the Government has failed in its duty.

Mr. HAMMERSLEY

I ask for the indulgence which the House invariably affords to a maiden speech. I have listened to the various speeches in this Debate, and I have been impressed with the uniform sympathy which has been shown to what almost seems now to have become the permanent burden of the unemployed on the industries of this country. In a matter of such wide scope, I think no apology is needed, because I intend to limit my remark to the industry with which I am most closely associated, namely, the cotton trade. I would like to say how much I agree with the hon. Member for Aberdeen (Mr. Boothby) in his statement that industries require staple prices for raw materials, and further I agree with his contention that it is a great pity that the Cotton Control Board was disbanded, and I think if it came into existence again it would lead to a great improvement in the cotton trade.

Since 1921 the cotton trade has been passing through an acute depression, so acute that we have to go back to the time of the cotton famine to find its equal. We have had four years of continuous employment and under-employment, and to-day the situation, after prolonged periods of under-employment to the extent of 50 per cent. of the work-people in the trade to-day the situation is, that we find the cotton trade is stabilised upon a 75 per cent. basis of its normal production, with a 48 hours' working week. I want to suggest that although it may be almost, a necessity in some other trades due to existing circumstances of the world, it is my conviction that in respect to the cotton trade, of which I speak with some knowledge, there is no real necessity for underemployment to exist in the cotton trade to-day.

Even greater is my conviction that if the employers and employed in that in- dustry are going to sit down with folded arms waiting for the return of pre-War conditions then for many years to come there is going to be grave unemployment in the cotton trade. The pre-War conditions, with respect to Lancashire at all events, are gone and will never return. I would like to point out to the House the existing conditions in respect to the cotton trade to-day. It is probaby within the knowledge of every hon. Member of this House that the broad basis of the cotton trade rests upon the purchase of American cotton. Some 15 years ago we bought American cotton, and that formed what I might describe as the staple trade of Lancashire, which was based upon the purchase of American cotton.

To-day, just as 15 years ago, Lancashire is making a demand on that same type of cotton, and it is doing so in face of the fact that since the war America has altered its economic position in relation to ourselves and to the rest of the world. There is now no possibility of the price of American cotton returning to its pre-War basis in respect to other commodities, and yet knowing that in the future American cotton cannot bear the same relation to other commodities as it did in pre-War times, Lancashire makes no effort to alter the position. I state with the greatest conviction that if Lancashire is sitting down and waiting in the hope of a return to pre-War conditions in respect of its staple industry, it is doing so in a very idle hope.

May I summarise the cotton position with regard to pre-War years and today? It is that there is to-day 3,000,000 bales less of raw cotton available from America than there was in pre-War years. That figure, which is an approximate one, is not arrived at and is not altered by a consideration of whether the crop is large or small. If we have a larger crop America uses more, and if there is a smaller crop, then America uses a smaller amount of cotton. In pre-War years there used to be an available export of cotton from America of approximately 8,000,000 bales, but to-day the available export, taking the average of the last few years, is approximately 5,000,000 bales. We find that the position to-day is that Lancashire makes great demands on American cotton in respect of which we have to enter into competition with the most well-paid people of the world and people with a high standard of living.

On the other hand, there is in existence a crop on which Lancashire makes scarcely any demand. I refer to the Indian cotton coop. The figures of the average for the last five years of the Indian cotton crop show that it amounted to about 5,000,000 bales. These figures do not include last year; they are the average for the five years prior to 1924. The average crop in India was 5,000,000 bales, and, of that quantity, India used for home consumption 2,000,000 bales. She exported to Japan 1,750,000 bales, to China 250,000 bales, and to this country only 100,000 bales. If the question is put to Lancashire, "Here is a huge field from which you may draw your cotton supplies," the answer is given straight away, "This is a type of cotton which Lancashire is not in the habit of using. It is a short-staple cotton; it is dirty cotton; it is cotton which our operatives object to using; and it is cotton, moreover, for which our machinery is not laid out." I can summarise it, perhaps, more briefly by saying that Lancashire says, "We are not accustomed to spin 24's to 26's yarn from Indian cotton of ¾-inch staple, but we will spin you as much as you like from fully 1-inch staple American cotton." When I tell the House that the difference between the prices of these two items of raw material is no less than 3d. per lb. they will realise why it is that Lancashire to-day is unable to do that quantity of trade which she did in former years. Nevertheless, on the basis of this cotton which Lancashire rejects, this ¾-inch staple Indian cotton, India, Japan, China, Italy, and to a smaller extent Spain, are building up a very great trade.

I should be very sorry to exaggerate to this House, and through this House to the country, the extent of the competition with which Lancashire is faced to-clay, because it must be realised that, of the total spindles in the world, over one-third are in Lancashire. But, be that as it may, we cannot get away from the fact that in Japan and in Italy, our two greatest competitors, they are working more than full time—they are working overtime, they are working excessive hours, and we in Lancashire are working short time. If we in Lancashire are not going to alter in some measure the direction of our policy, there is this very great danger. This cotton, which is being used by our competitors, this short-staple cotton, is easy to grow, and there is a very optimistic probability of its being grown in the future in greater quantities. The resultant effect will be that the American cotton, on which we make such very great demands, will, in relation to other world commodities, become dearer and dearer, while the cotton which is being used by our competitors may become cheaper and cheaper.

It is impossible, of course, for me to over-emphasise the danger should such a contingency arise. In respect to cotton material of which millions of yards are used in the world, Lancashire says, "We do not make it." I want to suggest that the proper answer for Lancashire to make at this time is, "We will try to make it." I myself have instituted experiments, and I am closely associated with experiments which are being made on a small scale in connection with this ¾-inch staple Indian cotton, and I have every confidence that Lancashire will not only be able to produce the requisite material, but will be able to produce it in competition with Japan and Italy. But these little experiments are not enough. It is a very big question, a very vital question. It is a question which should be tackled in a big way. It requires the co-operation of every section and of all interests. It requires the co-operation of manufacturers, spinners, bleachers and dyers, and, moreover, it requires the co-operation of the employés with the employers.

In this matter I think no more vital service could be rendered to the community by the Government than by their bringing the parties concerned in such a vital matter as this into close association, so that it can be discussed in a round-table conference. It affords, to my mind, a very excellent opportunity for putting into practical effect the ideals which were expressed in the Prime Minister's speech. By the suggestions which I have outlined, namely, the greater use of the existing supply of ¾-inch staple Indian cotton, and the bringing together of employers and employed, we could get that co-operation in industry which, as has been agreed, is necessary for the greater prosperity of this country. It is impossible for me, nor do I desire it, to make a speech deal- ing with the broader prospects and problems involved in a greater use of Indian cotton. A greater use of Indian cotton will, as can be easily realised, bring together the Empire, and increase those Imperial bonds which we find so necessary. I do say that if a section, say 20 per cent., of the Lancashire spinning trade could be brought to use this existing ¾-inch staple Indian cotton, the existing push on American cotton would thereby be lightened, and there would be a very great probability of the Lancashire cotton industry being able within quite a short space of time to resume full time working, and by this means encouraging the employment of the people, which is the subject of this Debate.

Major Sir ARCHIBALD SINCLAIR

It is my enviable privilege to be the first to congratulate the hon. Member for Stockport (Mr. Hammersley) on his admirable speech. All of us who have had the good fortune to listen to it will hope that before long he will give to a larger House the benefit of further contributions to our Debates. I make no apology for referring, for this is the first time during the last two Debates that any speaker has referred, to the question of unemployment in the Highlands, but, as I know that several other Members want to speak. I will undertake to be brief. The problem in the Highlands is a very special one, in more respects than one. It is a far more important problem, I think, than is recognised by many Members of the House and by many officials in the Government Departments, because, whereas in large cities it is quite easy to ascertain the number of unemployed by referring to the hooks of the Exchanges, in Highland townships and villages the men and women who are unemployed do not go and register on the books of the Exchanges. Moreover, one of the most serious aspects of the problem up there is not so much sheer unemployment as a tremendous amount of under-employment. It, therefore, follows that the problem in the Highlands is far more difficult and far more serious than is revealed by a study of statistics in the Employment Exchanges. Moreover, there is this further aspect, that in the Highlands you have a task which you could deal with far more easily than you can deal with it in the cities. You can give people useful work to do there in exchange for the unem- ployment benefit that they draw. You can give them work in addition to their unemployment benefit, which will leave behind it an asset of permanent value to the community. I would like to refer to a few directions in which this work could be provided.

There are two main industries in the Highlands. The first is the fishing industry. This industry has been heavily hit since the War, mainly owing to the fact that it has been deprived of its foreign markets. Eighty per cent. of the herring catch was formerly cured and exported, and the fact that the Highlands have lost their herring market in Germany and Russia has been mainly responsible for the difficulties with which the industry is faced. Last year there was some recovery in those markets, but the difficulty we have had is that there have, been so many lean seasons and so many difficult years that the fishermen cannot afford to buy the necessary nets and gear in order to put to sea. In Wick we have fine crews and splendid ships, but the men cannot afford to buy the gear necessary in order to put to sea. In these circumstances the last. Government came to our rescue, to some extent. They introduced a scheme—I gave them all credit for it at the time, and I have given them credit for it in my constituency—by providing £150,000 to enable the fishermen to replace their lost and damaged gear; but I warned the Government at the time that unless they modified certain of the conditions, particularly the payment of 5 per cent. the payment back of the loans within three years, and, above all, the condition that the men—and it must be remembered that the men whom it was intended chiefly to help were the poorest and had been the hardest hit—were to provide 50 per cent. of the money in cash. These conditions killed the scheme.

In these circumstances, what did the new Government do? Instead of modifying the scheme and making it more useful to the fishermen, they said that the scheme had been a failure, and they abandoned it. I am not going to argue as to how far that attitude was justified, but I wish to say that if the Government will reconsider their decision—and I think it ought to be reconsidered—and if they will give us an improved scheme on the lines of the scheme brought forward by the last Government, with the objection- able features to which I have referred removed, they will not only help the herring fishery in my constituency, but all up and down the North and East Coast of Scotland, and they will not only help the men and women directly engaged in the industry, but all the various ancillary trades, coopers, transport workers who handle the fish, the net makers and, incidentally, the cotton industry; in fact, ancillary trades over a very wide range will get a little help from such a scheme.

Mr. B. SMITH

We shall get cheaper fish.

9.0 P.M.

Sir A. SINCLAIR

Yes, and there will be cheaper fish for the consumer. The next point is in regard to the harbours. There are a number of large harbours round the coast, such as Wick and Thurso, all of which could provide better and larger accommodation if, as in the case of Wick, the applications now before the Treasury received favourable consideration. I hope the Secretary for Scotland will use his great influence favourably to these applications. Then there are the small harbours. They are of particular importance, because round each one of these small harbours is gathered a little community of fishermen. In these little communities are some of the finest fishermen in the world, and some of the best seamen who served in the Royal Naval Volunteer. Reserve and the Royal Naval Reserve during the War. Therefore, I do impress upon the Secretary for Scotland that it would be an enormous benefit to the fishing industry generally if he would give some help to these small harbours. When one goes along the east coast of Scotland in the train, one can see from the carriage windows that these small harbours are falling into a state of decay. I ascertained from a Report issued by the Minister of Agriculture that there was a body in existence called the Small Harbours Committee, but the Secretary for Scotland, in reply to a question, has stated that the committee has been dissolved since 1920. I would ask him to give his attention to the question of repairing these mall harbours, and I suggest that that committee might be usefully called together again. There is also the question of trawlers. I hope the right hon. Gentleman will consider putting into operation as promptly as possible the recommendations of Lord MacKenzie's Committee on trawling. It is very important now. The herring fishing has been a failure during the winter, and this is the time when the herrings are spawning and the small fish are coming into the nurseries in the Moray Firth, and in other ports. I hope that no delay will take place before the recommendations of Lord MacKenzie's Committee are put into operation, particularly those with regard to closing the Moray Firth against trawling and seine net fishermen.

One word in relation to what has been said as to the importance of restoring trade with Russia. Why cannot we get the Exports Credits Scheme in operation for Russia? It would be going outside the purview of the Debate if I suggested a Treaty with Russia, but why should not the Exports Credits Scheme be extended to Russia, so that a simple transaction such as exporting herrings from Scotland or England in exchange for hides or timber might be dealt with? A transaction such as that, financed by the Treasury, would give a, great impetus to fishing and other export trades. With respect to the industry of agriculture, the difficulty in the Highlands is that of under-employment, due very largely to the small size of the holdings and the condition of the soil. The soil all over the Highlands is badly in need of two things. What it needs more than anything else is drainage and limeing.

I suggest that the most important thing which we can do practically, without legislation, at the present moment is to make these existing holders self-supporting, to give them the outrun and grazings required, and not to turn down schemes for the enlargement of holdings and for providing grazings for these townships merely because all the men unemployed are not ex-service men. It has to be remembered that the great majority of first preference ex-service men have been catered for, and now it is most important that schemes should not be turned down, involving a very large number of families, merely because there is not the necessary proportion of ex-service men. The Minister of Labour, speaking in the early stage of the Debate, said that there were certain kinds of schemes which were particularly good because they provided useful employment and left behind assets which were of value to the community, such as electricity and the provision of cheap water sites, and he said that, apart from the things which he mentioned, there was nothing else. There is something which would give useful work to people on the spot, and improve the soil permanently, and enable them to make a decent living where now they are only able to get enough to keep alive themselves and their family, and we should go forward energetically with a policy of drainage and liming.

Up to now we have had only relatively small grants for drainage. The right hon. Gentleman has refused, though I have repeatedly requested him, to restore the lime-kiln at Loch Erribol. The land in Caithness, Sutherland and Orkney is being starved for want of lime at the present time. You can increase enormously its productivity, by proper drainage and liming. I would appeal to the right hon. Gentleman to consider if he cannot have restored the lime-kiln at Loch Erribol, which is lying now a wreck on Government property, and which would be of enormous assistance to the people living in that district. Liming would be of the greatest assistance to agriculturists all over the Highlands. One other point of great importance to the Highlands of Scotland is the helping forward of the small crofters, who are paying from £3 to£5 rent by making them eligible not for under-employment benefit, but for employment under the unemployment scheme. There you have these men paying £3 rent in these townships in Sutherland, not able to employ labour, hopelessly unemployed, with not enough to employ them in the slack seasons of the year, and they would be benefited tremendously if you could allow them to work on liming and draining the land in the neighbourhood.

The right hon. Gentlemen the Members for Colne Valley (Mr. Snowdon) and Spen Valley (Sir J. Simon) both said that this Debate should be conducted on a level above all party issues, and that the subject is worthy of the serious attention of all parties. That has been done by all speakers, but—and I say this without in any way wishing to introduce an element of party bitterness—great hopes were held out by the right hon. Gentleman's supporters in the North of Scotland before the last Election, and we are feeling sore at their lack of fulfilment. If he comes forward with facilities for treating our problems on the lines which I have suggested, or on any other helpful line, I would give him my warm and hearty co-operation. I am not interested in partisan politics. I will support the Government whether Socialist or Conservative, that does good for the Highlands, but I remember in the Election before the last the present Prime Minister sent a special message to the Conservative candidate for East Aberdeenshire that he was going to do great things for the herring industry, if returned to power. He was not returned to power, but if his promise were sincerely meant it applies now when he finds himself in power with this great majority.

Then there was the land. Lord Novar came to my constituency. He had been Secretary for Scotland in the last Conservative Government, and a great many of the people up there thought that he would be Secretary for Scotland in the next Conservative Government, and he told the men there that the bottom had fallen out of the land system, and gave the people to understand that the new Conservative Government would do great things for the poeple who live by land in the Highlands of Scotland. I appeal to the right hon. Gentleman to fulfil that expectation. Right hon. Gentlemen on Government Benches are entitled to demand from Members for Highland and other constituencies that they should actively represent to them the needs of our constituencies. That is a duty which I claim to have performed, but once having discharged that duty I look to the right hon. Gentleman to discharge his part of the programme, and not to continue to neglect the Highlands but to do something to benefit them.

Mr. W. WRIGHT

I am sure that wean realise that the nation during the last few years has been passing through a time of great anxiety in consequence of this prolonged period of trade depression. I wish at the beginning of my speech to refer to my own particular division, because we are suffering in Lanarkshire very severely in consequence of this trade depression. We were told recently by the hon. Member for St. Rollox something of the conditions which prevail in the City of Glasgow. In all probability the conditions are equally bad in the neighbouring county of Lanark. This is one of the great industrial centres of Scotland. There are 60,000 miners in Lanarkshire, and 5,000 are unemployed at present. What applies to the mining industry in Lanarkshire applies to many of the other mining centres in this country. There are said to be 11,000 men unemployed in Northumberland, and something like 20,000 people in Durham are in danger of suffering from starvation. The children there are being fed to prevent them from dying of starvation. The same thing applies to South Wales. A miners' leader of 50 years' experience declared the other day that never in all his life had he known such very severe conditions as those which are prevailing at present.

Between the signing of the Armistice and 31st March, 1924, the nation paid something like £392,000,000 for the relief of unemployment, and yet the condition of the working people of this country is going from bad to worse, and sooner or later we shall have to decide in this House whether the system which has failed so hopelessly and completely as, in my judgment, it has failed to provide the great majority of people with the essentials of life—food, clothing and shelter—is worth supporting any longer, because I submit that any system of society, certainly in these days, that fails to give the men and women who are doing the essential work of the world the essentials of a well-ordered life stands condemned, and ought to stand condemned, in the judgment of those people. That is one reason why, in my opinion, the system of private ownership of land, what is called the capitalist system, as a whole has failed. This is one of the evidences that it has failed, and it is one of the reasons why I hope that at no very distant date the system for which I stand, the system that is based on a co-operative commonwealth, sometimes called a Socialist system, will be inaugurated in this country in the interests of the community as a whole. At present we have what, is tantamount to organised starvation. The resources of the nation are not equal to meeting all the requirements of a well ordered life from a physical point of view, and in so far as they are not doing that, the present chaotic system is to blame. Therefore, hon. Members who are responsible for that systtem are in the ultimate resort responsible for that organised system of starvation and all its consequencies. It is well that we should realise what it is that is being defended from time to time with regard to these matters.

One of the very serious aspects of the question, so far as the West of Scotland is concerned—I am thinking rather of the industrial areas—is due to the influx of people into that part of the land. I am quite in agreement with what was said by the hon. Baronet who has just spoken, that it is a problem affecting the people in the Highlands of Scotland. It is also a problem affecting the people who have come over to the West of Scotland from Ireland. One half of the population in the West of Scotland is concentrated in the City of Glasgow and in the county of Lanark. We have to deal with a very grave condition of affairs. For instance, in 1923 this country lost by emigration 27,724 workmen skilled in the metal and engineering trades and 26,223 men employed in agriculture. Those men went chiefly to the United States. We have an enormous burden of taxation. We are, in fact, the most heavily taxed people in the world. Great Britain is now taxed to the extent of £16 per head of population, against £7 in France and £3 in Italy.

Speaking for myself, I see no great hope of any redemption, even from a physical point of view, so long as the present order of society remains. It was said in this House to-night, I believe by a former Chancellor of the Exchequer, that the power to create wealth in the land to-day, and in the world, is enormous. Progress has been going on for hundreds and probably thousands of years, but in many respects the position of the peoples in Britain at the beginning of the 20th century is infinitely worse than it was in Palestine 3,000 or 4,000 years ago. That is surely a very shocking state of affairs, which it is very difficult to justify. There are vast possibilities in this country, even apart from the principle for which the Labour party stands, that might be utilised to bring about a better state of affairs. We are producing wheat in this country for only 29 per cent. of our requirements, 40 per cent. of the meat, and 46 per cent. of the dairy produce. Yet we know that there are lying uncultivated vast areas of land which could be brought into cultivation without delay.

The hon. Member for East Aberdeen (Mr. Boothby) in his maiden speech. to-night expressed the view that this country was carrying a much greater population than it could support. That may be true or not; it is a debatable point. But it is not a debatable point as to whether Great Britain could produce a far greater quantity of wheat than it produces now. We know that it produced greater quantities in days gone by. The land is still there, and the machinery, and we have greater resources than we had 50 years ago. It is a very serious matter from the national point of view that we should be dependent nine months out of 12 on food supplies from abroad. We can alter that state of affairs. I will not discuss the question of wheat supplies tonight, because I have referred to it on previous occasions. Take another aspect of the question—the condition of other food supplies which we are importing, and which might be produced at home. The fruit supply of the nation is very unsatisfactory. I was discussing the question of orchards and their decay with a lady in Devonshire only last year, and she agreed with my statement that the orchards of this country are a disgrace to the community. Apples are being brought from Tasmania, Australia, New Zealand and Canada. They are being brought at a very small cost, and the community is paying from six to seven or eight times the actual cost at which they are put on the market here. That is very shocking.

I will give one illustration to show how improvements could be made in these respects. One of the most interesting experiments of which I have ever read was the story of a medical man who was obliged to retire from his profession. He bought some 300 acres of land, and grew apples and obtained milk and fruit and eggs. On those 300 acres in a comparatively short time he was employing 25 people. He had from 1,500 to 1,600 hens, from 500 to 600 pigs, and lie developed a system of production from the land (which had been more or less derelict before he undertook its management) which it is marvellous to contemplate. I suggest that the Government should consider the method this man adopted and should endeavour to establish in this country 100 or 1,000 holdings of 200 to 300 acres each, and see if we could not produce in this country something similar to that which this man produced in a distant land. We have one of the best markets in the world, an enormous population, and yet year by year we are producing less food.

Take another aspect of the question. According to the statement of the Minister of Agriculture a few days ago, we are importing something like £18,000,000 worth of eggs from year to year. In all probability, if we had access to the land, the whole of that vast quantity could be produced here without difficulty. Then there is the improvement of land which might be inaugurated. I have seen within the last two or three years instances which I have in mind. I saw one near Oxford, and another near Bournemouth, where there were acres and acres of land under water after we had had a few days' heavy rain. Surely something might be done to deepen and broaden the rivers of the country so that that land could be improved. There is another thing which might be considered. Why should not the River Trent be deepened and converted into a ship canal and connected with the River Severn, so as to open up, by means of a great waterway through the very heart of England, one of the most effectual means of transport in the land? If you are wanting schemes and methods whereby we can find useful productive employment for men, here is one of them. We must at any rate some day deal with these problems.

Again, take the question of mining. One reason why I am in favour of the Socialist system of society is because of the obvious injustice of the existing order. The Prime Minister quite recently took the House into his confidence with regard to a thousand men whom he found unemployed through no fault of their own. He ventured to tell us how, out of sympathy with them and finding them in the plight they were, he gave them financial assistance until the time of trouble passed. Perhaps I may refer to a personal incident of a similar character. Some years ago I happened to be one of those unfortunate men on the other side of the picture. I was then 30 years of age and had been working since I was a boy of 10, and I found myself in this plight. I was working for a firm that was paying 30 per cent. per annum, and I was one of 400,000 men who were locked out for the period of four months. Before the dispute was over we had one of the most striking testimonies from the employers' side which has ever been given in this country. Mr. Alfred Davy a colliery owner in Sheffield, wrote a letter to the "Times" newspaper with regard to the points in dispute. It should be remembered that Mr. Davy, according to his own statement, was a colliery owner and knew the facts of the case, and he sent his letter in reply to the Secretary of the Colliery Owners' Association.

He said in his letter, which can be seen in the "Times" newspaper to-day, that the collieries of his own county to which he referred and of which he had been an original founder, had not been coal mines, but had been gold mines, yet, the men who were locked out for resisting a reduction of 25 per cent. in wages had been paid starvation wages. It was a scandal that the colliery owners had been paying what they were, and yet there were men working for these starvation wages. The mineowners are receiving £6,000,000 per annum in the form of royalties, and under the system of production the colliery owners for many years past have received, speaking broadly, very large dividends. That is one of the reasons why the nation is in the plight it is in to-day. We have a highly skilled race of people, but they lack purchasing power in order to buy back the goods which are being produced, and one reason why they cannot buy these goods back is because of the enormous sums which go in the form of rent, interest and profit. Under the existing order of society, they do not get full value.

Mr. DEPUTY-SPEAKER (Mr. James Hope)

I do not think that state of things could be altered without legislation. It is to the Government Departments that the criticism must be directed.

Mr. WRIGHT

At any rate, it seems to me that if the Prime Minister was justified in making his statement the other night I was entitled to follow him with the picture of the other side.

Mr. DEPUTY-SPEAKER

The Prime Minister would not have been able to make his statement on this occasion.

Mr. WRIGHT

I bow very readily and willingly to your ruling. I would just refer to one matter which I hope will be in order and would not require legislation, but it is a matter of fact and has a very great bearing on this question. We are now importing vast quantities of fish from Canada to Scotland. The hon. Baronet (Sir A. Sinclair) who has just spoken is keenly interested in this question. Another reason why we are hampered as we are is instanced by the case of some of the salmon and trout rivers in Scotland. One in Aberdeenshire, for instance, is paying a rent of £100 per annum for the rights of fishing along one mile. It is things of this character which form some of the very great hardships upon this community. I am quite sure that if we developed the land resources as we might, we could have a very much higher production than at the present moment. Whether we look upon the capitalist system of private property in land as being the chief cause of the evils from which we are suffering or whether all the dreams of the Socialist would be realised or not may be a debatable point, but we have got men and women in this country of the manual labouring class who have had the advantage of a superior education to that which their fathers and grandfathers received. They have access to all kinds of information to-day, and many of them I am fully persuaded are much more highly educated than many people give them credit for. Men will not submit to an organised system of starvation. They rise in rebellion against it and they will be justified in doing so. No man who is able and willing to do a useful day's work should be compelled from time to time to see his wife and children on the verge of starvation, and no man should be compelled to accept starvation wages because, as I have known in days gone by, his wife and children are in danger of starvation.

Sooner or later this will be changed. The Government have the power to alter it. I hope they will take some of these statements to heart and consider them very seriously and not in any carping or unkind frame of mind. They quite freely express what are their views., and we know now that at any rate they have a sufficiently large majority to inaugurate any kind of reform within the existing order to remedy the evils from which we are suffering. They have an opportunity now, and they are on their trial. If the chance does not come within the lifetime of this Government and we do not sweep away many of the evils from which we are suffering, then we can rest assured that there will be what has already taken place in the minds of a comparatively small number of men, namely, a loss of faith in all political power and in this House of Parliament itself, and they will resort to other methods. In my own Division things are very serious. Quite recently there was an ex-soldier evicted from a cottage for which no rent ought to be paid. I visited it two years ago. It was well down below the ground level of the main road, and it was a rat-infested hovel. I saw large wire rat-traps there, with which they were attempting to catch the rats. Yet this man, a destitute workman, and ex-soldier, who had been regarded as a hero of this nation but a few years ago, was evicted from that cottage and sent to prison for two months for resisting the eviction. What hope or chance is there for people living under these conditions? My final word is a suggestion to the Government, and it is that with all speed they should take into consideration very seriously the possibility of providing old age pensions for men at an earlier period.

Mr. DEPUTY-SPEAKER

The Government could not do that without legislation. The present occasion is one for criticism of their administration. We are voting a large sum of money for Government services, and it is in order to suggest that it is not well spent or might be better spent, but it is not in order to suggest new legislation.

Mr. WRIGHT

It has been observed in days gone by that the way to learn the rules of this House is to break them, and I have given a very good example. I will say what I have to say in another way, and I shall get my point home all the same. A year ago in this City of London there was a dispute among the dockers, and the statement appeared in the London daily Press that there were men working in the docks before the dispute who were actually carrying on their backs day by day a weight of 150 tons. Men cannot do that and remain physically fit until they are 70 years of age. Men cannot work in the atmosphere of the coal mine with a temperature of from 90 to 100 degrees and remain fit to earn a livelihood for themselves, their wives and their children until they reach the age of 70. If these men who become prematurely exhausted under the existing order of things cannot be provided for during their working life, what is to happen It is a very serious condition of affairs, and those who are the upholders and defenders of the private system of landlordism and capitalism are bound to take into consideration the consequences of the system under which we are living. From that point of view, I hope hon. Members will consider some of the points which I have just raised.

Mr. SKELTON

This Debate, although it has ranged over many subjects and afforded the opportunity for many interesting speeches, has in the end come back to two main points, the improvement of trade and the reduction of unemployment. I noticed that in the speeches of hon. Members opposite there was recurrently used the phrase that it was only by a change, in one form or another, from the present system to a Socialist system that a real improvement: could be made. I rise to controvert, so far as I can, that proposition. I believe, for reasons which I shall attempt to put before the House, that the future of trade and employment in this country depends, first and foremost, upon a constant upholding of the principle of private enterprise and private property, and the great extension of the latter through the larger number of the people in this country. So far from believing that through any form of State control, far less of State ownership, you will get improved production, improved work, and improved conditions, in my judgment the real hope of this country and in particular the real hope of the working classes, lies in the development of what I venture to call a property-owning democracy.

Mr. DEPUTY-SPEAKER

The hon. Member must confine himself to some action which Ministers can take within their existing powers. Perhaps he will bear that in mind in the course of his argument.

Mr. SKELTON

I am much obliged to you, Mr. Deputy-Speaker. What I was going to say was by way of illustration of the proposition which I submit. I wish to illustrate a state of affairs which can be brought about, which does not require legislation, but which, partly by administration and partly by other functions which I think a Government can easily exercise, can be brought into existence. I hope I shall not be out of order in merely stating the contrary to the Socialist proposition, namely, that it is through the development of private property among a much larger proportion of the members of this community that the way to safety and prosperity lies. [HON. MEMBERS: "How?"] I do not believe that the method is so difficult, but we must first agree upon the principle before it is worth while discussing the method. Much has been said, and rightly said, about the necessity for improving production and increasing output, and I think that is a topic with which if I avoid the snare of reference to legislation, I can deal. I submit that to improve production and increase output you must give to the people who produce a further, a more interesting and a stronger stimulus than they have at present. I suggest that is to be done by the adoption of such ideas as the development of industrial co-partnership which does not need legislation and, indeed, could not be produced by legislation. It can be produced partly by the administrative action of the Government, and partly by what I believe to be a most important function of a modern Government, namely, the development of public opinion on the topic. I believe through such methods we can put before the people of this country the proposition that if you desire to increase the output of manufacturers, you must show the people who produce them that they will have a direct and property interest in what is produced. There may be more than one method. One method has been referred to in connection with the book of the hon. Member for Linlithgow (Mr. Kidd). From any study I have been able to give to the subject, I am convinced that full inquiry will show that the principles of co-partnership can be more widely extended in the industries of this country than is generally admitted by hon. Members opposite. I will not develop that point, because I am anxious not to delay the House.

May I turn to the other side of national life, namely, the rural side. There, too, by administrative action and by the formation of public opinion, you can develop a property-owning democracy, a set of people who own pieces of land, and who, because they own and cultivate those pieces of land, will get from them a far larger return than is obtainable from corresponding pieces of land under the present system. The rural side of my own constituency is one of the most fertile parts of Scotland and some years ago an area of 500 acres of land there was laid out in grass. Its permanent population was five at the outside. It is now divided into 11 holdings of 50 acres each. There are 11 householders, it is highly cultivated, and when last I collected the figures, those 11 separate arable farms were employing 11 hired men over and above the householders themselves. I have no doubt that from that 500 acres of land, by small ownership and by the interest in the work which small-ownership creates, results are being obtained which could not be obtained in any other way. You have there an example of what I believe to be the fundamental necessity. You have there a property-owning democracy.

I believe we must go along the line of giving a real stimulus to production by allowing the producer to know that he will become the owner of property, that ho will have something of his own, and that he will not be a mere wage slave—to use the familiar term—of some Socialist State, but will be an independent man with all the advantages of independence and his own position in life. I believe that there we have a clear line of advance. It. is a line of advance which can only be developed by a Conservative Government, because a Conservative Government is the only Government and the Conservative party is the only party which fully realises the close relation between ownership and the character of the individual. Therefore my contribution to this Debate, such as it is, is concentrated in this, that we, on ibis side, confident of the material, moral, and economic value of a system which is based upon private property, feel that we cannot stand still on that point, but believe that, in the development of that very instrument of welfare, namely, private property, in which we so profoundly believe, lies the only hope of the working classes of the future in this country, lies the only hope of larger production, and lies the only hope of the development of an independent, sound, strong, and, may I add, absolutely non-Socialist nation.

Sir A. MOND

I would like to bring back the House for a few moments to some of the problems which lie at the basis of a good deal of the discussion which has been taking place during the interesting Debate we have had to-day. The hon. Member for Perth (Mr. Skelton), who has just sat down, has gone into a wider field of general principles than perhaps is altogether useful in the rather confined time that we have in which to discuss the important matters that lie before us, and I do not propose to follow him in his interesting argument. I would like rather to address myself for a few moments to one or two points which I think underlie a good deal of the difficulties under which we are labouring at the present time. There is no doubt that the best remedy for unemployment is employment. There is no doubt that the best way of obtaining employment is better trade. Therefore, the fundamental questions which underlie the whole of this discussion are these: What is the cause of the trade depression under which we are suffering; what steps are in our power to remove it; what steps are beyond our power; and what is the view of those best informed and in the best position to judge as to the future prospects of the industry of this country as a whole? The last question, which I address to my right hon. Friend who will wind up the Debate, is one of very great importance, both in the handling of the question of unemployment and in the whole situation, financial and otherwise, of this country at the present time.

There can be no doubt whatsoever that there is a feeling of profound disappointment throughout the country and in industrial circles that the trade depression, which those well qualified to judge expected to lift in the last year or two, remains just as heavy apparently, with just as little blue sky as we have seen in the course of the last two or three years. We all know, of course, that the demoralisation of exchanges, especially on the Continent of Europe, has had a very hampering influence on the restoration of our trade, that but for it financial stability at home would have been restored to a higher degree than it has been by this time, and that the evil influence of the diminished purchasing power of some of our most important customers, owing to the high exchange rates which they have to pay, would by this time have passed away. That is a subject over which the Government and the nation have very little control. We may give good advice, we may make admonitions to Continental and other countries as to how they ought to conduct their financial affairs or their expenditure, but we cannot make them follow our advice, and I think there is little doubt that one of the reasons, for instance, for the depression in the coal trade to-day is due as much to the rates of exchange in France and Italy as to almost any other cause.

There are other causes which have been operating of a similar character. Perhaps we could get some information which would be of value as to what prospect there is of the greater stability of the political position of China. The great market of China is very commonly overlooked in the discussions on the prospects of trade in this country, and yet there we have a large consuming population of over 300,000,000 industrious people, who, if they could only have peace and security, being a trading people, could probably take, if they could only get going, not only our lack of exports, but much more than we have ever produced in the past, or are probably likely to produce for many years to come.

There is no doubt that this country, having a trade so largely based on exports, is in a singularly susceptible position with regard to the question of trade depression. That is why, to some extent, we have suffered more regarding unemployment than countries which might be described as more evenly balanced in other parts of the world. My right hon. Friend the Member for Carnarvon Boroughs (Mr. Lloyd George) made a stirring appeal on the question of the development of our agricultural resources, and I do not wish to enter into that very difficult subject at this late stage of the Debate. I would only remark that I think we must all be agreed as to the absolute importance of endeavouring to obtain a more even balance between our agriculture and our industry, and the greater increase of home consumption which that would bring about, than we have at the present time.

The hon. Member for Bow and Bromley (Mr. Lansbury) made an interesting speech on this subject the other day, and in this connection I would only say that, if we want to do something, we shall have to show financial courage to a much greater extent than we have shown in our lamentable attempt to settle ex-soldiers on the land. If you are going to load a man, whom you want to place on the land, and to remain on the land, with the finance of interest and sinking fund on land and buildings over a short period; if at the end of that time he is not to be allowed even to own the land which he has made valuable; if you are not going to provide from the commencement proper instruction, with proper cooperative purchasing and selling organisations, such as is done, for instance, in the State of Califonia and in other countries, you will never be able to make a success of the experiment. I hope that a larger and wider view will be taken on this as on other matters. If you look to the figures of our unemployed and analyse them, there are certain facts which hit you in the face—certain facts which cannot be denied. You have, for instance, 130,000 miners unemployed at the present time. Our export coal trade is much diminished. Some of it has, I am afraid, gone for ever, not necessarily from any consequences which we could have avoided. The electrification by water power of the railways of France, and the loss of 15,000,000 tons of coal a year, is one of those changes of industrial technique over which we have no control. The change over to oil fuel by your large liners, your Navy and merchant ships is a change of industry over which, again, neither the coal owner nor the coal miner has had any direct control.

These are the facts which we have all got to face. We have to face losses of this kind, just like the electrification of the great factories in the North of Italy that used to burn coal, and are now using cheap water power. What we can see is what markets we can keep and what markets we can develop. Therefore, co-operation of all those interested in industry both to increase production and, if necessary, to cheapen production, is to my mind, of the utmost necessity. In fact, the position is much too serious— and I think all responsible people recognise it to-day—for anybody to try and get any particular advantage for one side or the other, much too serious; and any controversies of theory, either of Socialism or private enterprise, seem to me too academic to occupy thinking people at the present time. We may reserve them for those debating societies which we occasionally have to attend. Those are some of the fundamental questions.

To go on with the unemployment analysis, you will find the shipbuilding and the ship-repairing industries standing idle. It is the same with engineering works. You will find all the industries connected with what was one of our premier lines of industry showing large figures of unemployment. If there is one thing which alarms me, it would not be merely the stationary figure of our unemployed population, but it is a phenomenon of a new character. There is not merely a large number of workmen unemployed, through a momentary depression in trade which is likely to pass away in a few weeks, but there are today people who have been permanently unemployed for a number of years; also a large number of people who have never become employed, and who, if you do not find some form of work for them, you will never be able to employ—I do not care under what system. Surely this is a situation which must make any Government feel that some risk has to be taken and some steps tried, even although they may offend against the pedantic, orthodox, economic canons of those who expect the world to come right if you only give it time enough, or it will extinguish itself—which is much more certain to happen.

There are the inter-Departmental Reports, of which I read so many while I was in the Government, and with which I disagreed so very heartily whenever I read them. They were always full of objections to any possible and conceivable idea which anybody put forward, but they never contained any idea of their own. Surely it is time that the Government brushed them aside. I was rather disappointed at the speech of the Minister of Labour. He seems to be still in the atmosphere of the period which I remember so well, when I was chairman of a Cabinet Unemployment Committee, and when the orthodox view seemed to be that you were still dealing with a state of things in which unemployment went up automatically in the Autumn, and came down automatically in the Summer; that if you could devise some scheme to get over the trouble from October to March or April, you were dealing with the problem; and if you proposed any scheme which lasted longer than six months, you were gravely informed that it was a very unwise thing to do, because probably by the end of that time there would be no more unemployment. That delusion has been going on for three or four years.

I advocated some four years ago that we should use the national credit, which we have so faithfully acquired at such cost to ourselves, for the development of this country, for the development of the Empire and for the provision of employment. But I was always met with the terrible indictment that "we ought to reduce our debt rather than to increase it." Yes, but it all depends for what purpose you incur it. It all depends whether you incur the debt for productive purposes for the national wellbeing, or whether you simply incur it for the purpose of destruction and waste. Had the great schemes which were outlined three or four years ago been started, they would to-day be in operation. I remember an important scheme for building a canal from the Forth to the Clyde., whereby was turned down on the ground that by the time it was finished there would be no unemployed. That was three years ago. That scheme would almost be completed to-day. It would have employed 100,000 men. It might have shown no immediate financial return, but I am certain in the long run it would have proved a valuable asset.

10.0 PM.

You want to look at the whole question of national finance from a very much broader point of view. It is no use examining each scheme and saying, "This scheme will not pay the interest and sinking fund." You have a balance on the other side of your ledger which cannot be put down in£ s. d. Who can put down in £ s. d. the degeneration of a working population or the human misery which is taking place? Look at the loss we have sustained by some of our best skilled workmen going to America Who can guarantee that when trade improves, those people are coming back in order to re-establish our industries? You cannot put such things into figures. All we know is that these things are taking place. We are told in connection with a country like this, with its huge national credit and financial purity, that it is more important to write off debts, that it is more important to convert debts, that it is more important to try to make the pound balance the dollar, than to deal with the human problem, and use our resources in order to get people work. That seems to be neither good finance nor good common sense.

The right hon. Gentleman the Minister of Labour referred to a scheme which I put forward a good many years ago. The idea is not novel. It must have occurred to anybody who has thought about the matter that it is really more sensible and sound to spend £100,000,000 a year to enable people to do something than to utilise it in order to pay people to do nothing. I will say about this plan of mine that I am not wedded to the particular scheme which I and my Department drew up with a great deal of trouble and care. What I am wedded to is the principle of the idea of allowing a man, if he wants it, to use his unemployment benefit to get him a job at full trade union wages, not reducing wages one iota, and not displacing a single man who is in employment. The right hon. Gentleman has not studied my scheme even cursorily. He referred, as everybody seems to refer, to the period of 1832. I have also studied that period, and I would ask anybody whether, had he been alive at that time and had to deal with that extraordinary depression after the Napoleonic wars from 1815 to 1830, he would have found anything much better than what they did? They had a choice of either letting people starve or giving them some relief. It was very easy, after the crisis had passed, for people to be wise. Because 100 years ago a scheme was crudely and badly managed, it is fantastic to tell me that we to-day are incapable of working out a national scheme and safeguarding ourselves against a danger of that kind. Of all the dangers in the world, analogies by past history is the worst of which I know.

It is too late for me to go into the full details of my scheme, but the broad outline of it as I first worked it out was this: It would have to be worked through Employment Exchanges. You would naturally have to safeguard those who are now at work. You would have to safeguard the employed man against bring discharged, in order to let another man take his place so as to get the value of his insurance benefit. Mind you, to me such a proposition is unthinkable. I do not believe that any employer in the country would do it, and I am sure not a workman would stop in his works if he tried anything of the kind. [Interruption.] I would like to meet one of those employers. That, of course, is, and can be, easily safeguarded against. Under my scheme you will have an appointed day, on which the employers will have to notify the nearest Employment Exchange of the number of people employed. If they wanted to take advantage of the benefit of any scheme of the kind I propose, they would have to prove to the Employment Exchange that these people were in excess of any people whom they were employing on the appointed day. Obviously, any man taken on would have to be taken on in addition. He would have to be taken on for a definite length of time, on a definite job, and at the district trade union rate at which ordinary workmen were employed. But through the medium of the Employment Exchange the unemployed benefit could be turned over and would be turned over to the employer who was giving the employment. That is the basic idea.

Why am I proposing this idea? Because there is no doubt we all know that there are a large number of contracts to-day which we cannot get because the margins of cost, and other margins existing, cause us to lose these contracts to others countries. Wipe those margins out, reduce the overhead cost in the way I propose, and you will be able to employ a much larger number of people. You may say, "How are you going to deal with competition between one firm and another?" That point has often been raised, but I think this scheme would have to be organised industry by industry You would have to have a committee of the industry. This, to my mind, should have on it representatives of the employers and of the workmen, in order to deal with and give out all the contracts which would come in and would be dealt with in this way. It is easier in practice, I believe, than it is in theory. It is quite easy, because the kind of thing I am thinking of are large lines of business.

I would be quite prepared, and I think anybody would, to start by confining this scheme to a few industries like shipbuilding, engineering, and industries of that kind. A contract comes in to the town, or it comes in to some shipbuilding centre like the Clyde. Every body knows about it. There are no secrets about it. That contract cannot be got because the British tender is £10,000, £15,000 or £20,000 higher than the tender of some Dutch or German firm. Will anybody tell me that the shipbuilders of these areas cannot form some committee under which they would allocate these tenders in a fair way among themselves, so that no unfair advantage would be got by one lot of employers over the other? The same thing would happen in large centres like Sheffield and other great engineering centres. It is impossible to devise any scheme which will work unless the people who are going to work it are prepared to come together in the, frankest way imaginable, in order to make it work on all sides. To-day we are not in the position a people wanting to make profit. I think these people would be quite ready to stipulate and agree that there should be no profit on these transactions.

I have only just heard of the case of one of the larger shipbuilding factories in this country. It is a case of two ships. If the House will allow me, I would like to give them particulars of these, the actual cases. It illustrates the position which has arisen to-day. These are two oil-ships, I understand. The total value of one ship is £218,000. Labour on this is £162,000. It is equivalent to 54,000 men-weeks at £3 a week. Fifty-four thousand men-weeks, at an average of 23s. average insurance benefit, amounts to £62,000. In order to enable this contract to be got, there is a difference of £12,000, so that if this firm can, through my scheme, or for that matter any other scheme, get £12,000, they could give £162,000 worth of work, and save to the Insurance Fund £62,000. That is to say, on two shifts, they could save to the Insurance Fund £100,000.

What I want to say about the matter is this. The National Employment Fund is found two-thirds by employers and workmen and only one-third by the Government. Therefore, it always seems to me that the main contributor ought to be allowed to decide first as to what can be done and cannot be done rather than the minority party to this agreement, that is to say the Treasury. We are all interested in this Fund. The height of the contributions themselves are a burden on industry.

Mr. COUPER

Are these oil-driven ships or oil-carrying ships?

Sir A. MOND

I think they are oil-carrying ships.

Mr. COUPER

Are you certain?

Sir A. MOND

The company is an oil company, and I take it that they are to be tankers. They are oil-driven ships. In the scheme I have outlined of course there are a number of other points. One of the most important points in any scheme of this kind is the difficulty of ever bringing it to an end, which is an objection that can be legitimately urged against any scheme which is of its nature temporary. You must assume, if this scheme is to be established, some normal datum line of unemployment. You must get people to agree that in an industrial community of 14,000,000 people you may always get a number of people out of work on a certain day. Some datum line far below the present line, which is quite abnormal, would have to be assumed. [HON. MEMBERS: "Socialism!"] If I were certain that you would get to zero unemployment under Socislism, I should now be a Socialist. But I will not be led away on that tack. By graduated diminution, carefully calculated, of unemployment, you would arrive ultimately and automatically at the datum. There are other provisions in the memorandum which I drew up to deal with the question of new firms coming in who had no datum line figure of employment, and matters of that kind. My right hon. Friend the Prime Minister and the President of the Board of Trade are only too painfully familiar with this idea of mine. We discussed it in the days when we were colleagues together, now some years ago. I would put it to them to-night that many of the objections that were raised were ludicrous. I know that at one time a great objection was raised that we were interfering with the contributory system of the National Unemployment Insurance Act. Surely, after years of uncovenanted benefit, it is no use producing an argument of that kind. Another argument was that it would interfere with the "gap." But the gap has gone, not too soon.

We were told that the trade union leaders and the Labour leaders would never agree to such an idea. I have never believed it. I think we have arrived now, after two or three years' broad experience, at such a position that any scheme of this kind will have its chance of consideration. I do not mind whether you adopt the suggestion which has been made that a National Committee, dealing with unemployment insurance funds, should use them in the way I have indicated by helping shipbuilding and similar specified limited industries, in order to give work and save the wasteful expenditure of money, whether you adopt the wider and more universal scheme which I propose, or whether again you limit the scheme to the local authorities so as to eliminate the idea of private gain. But I do say we must try some experiment. We cannot go on drifting as we are doing. We have got so accustomed to the present state of things that we scarcely pay any particular attention to them. Why, if ten years ago you had had an unemployment figure of the present kind, the Press, this House, and the public would have all been talking about it, and about nothing else, except how to deal with it. Because we have come down from the terrible figure of over 2,000,000 unemployed to a lower figure, and because this figure has become almost a constant figure, interest seems to have weakened. The Government—every Government—is advised by the same people, the same people who advised us with the same timidity, the same want of courage, the same keeping of the eye upon the financial aspect of the case, and the same dealing with the matter in the same dull and hopeless spirit.

Recently I have been in Greece. They have had something of the same problem there. Greece is a small country. Greece is a poor country. It has some 7,000,000 of inhabitants. It has had 10 years of war. It is not a rich country. The situation has been terrible. Yet it has had in the last two years a million and a half of refugees thrown into it from Smyrna and from Constantinople. Greece, a small country, has had to house these people, and find employment for them. This Government and the City of London have lent them money to do so. They have done so well in the trying circumstances that there is practically no unemployment there. Suppose, [instead of having 1,300,000 unemployed in this country, you had had, by some unhappy chance of war, placed upon the shores of this country 1½ million of refugees, homeless and workless. Would any of these Departmental Committees have been asked to sit, or anybody have produced arguments that were not to the point? Would not the nation have demanded, and insisted, that, at any cost, these people should be housed and found work? Of course they would. It is merely because we see these people, because they are among us every day, that we have got used to it, and we do not feel the imperative need to deal with them in the manner that the Greek population set to work for their refugees. We gave and lent money to Greece for her refugees. Has anybody suggested that we should raise loans here to anticipate work? Why should not the Indian railways be developed? Why should British credit be limited in a matter of this sort? It is to me fantastic, as it always has been. Government after Government have wasted their surplus s, have overburdened us with taxation, are crushing down our industries, and, through the financial machine, furthering unemployment, while we all sit here wondering how to solve it. Now, apparently, we are to be harnessed to the money rate of New York, our trade is to be further depressed whenever there is a flurry on Wall Street, because some people seem to think that we must be hanged on a cross of gold. I hope that doctrine will be repudiated. I can imagine nothing more dangerous to the harassed and already depressed trade of this country than that we should hitch ourselves on to the American money market, and take it as the guide and goal and lode star of British finance. We have deliberately adopted a policy which undoubtedly, economically, must produce a reduction of employment and a reduction of trade.

I am not advocating wild inflation, or any inflation, but I do say, "For goodness sake stop deflation." Do not, whenever there is a tendency for the wheels of industry to get moving again, say, "By heavens, here is a boom coming, let us stop credit something might happen by which the depressed spirits of our traders might be raised and confidence might be restored." You cannot separate your finance from your trade. You cannot separate your financial system from your unemployment. The whole of these matters are interlocked. It is useless to treat them in watertight compartments—on the one hand to spend money to keep your unemployed, and on the other hand to adopt a financial system which is already producing unemployment. The two things must be brought into step. We have too long waited.

We have too long followed the advice of those whose eyes are fixed too much on the account hooks, and too little on the future of industry. They do not understand that nothing is more difficult than to restore a destroyed industry, nothing is so difficult as to re-establish a trade which is lost, nothing is so fatal as to repress the energy and initiative of those who conduct industry as well as those who work it. Unless some kind of change be made, I look to the future with the most gloomy apprehension—a feeling which one ought not to have to entertain of a country strong in credit and powerful in industry. It is no use throwing everything on the employers and the employed, as if it were all our fault. It is no use asking us to sit round a table and expose cards which have nothing on them. We have no ace up our sleeves. We have no cards up our sleeves to put on the table. We have an empty cupboard to show. Let the Government help us to fill that cupboard. Let the Government actively intervene for the benefit and assistance of industry. It is no use offering to people with an empty cupboard to discuss with them the sharing of profits which to-day no longer exist.

Mr. THOMAS SHAW

The right hon. Gentleman who has just sat down has made an extremely interesting speech, with much of which I find myself in hearty accord. It would be very easy in this Debate to make a speech and secure debating points for party purposes, bit the Debate so far has been conducted on lines much higher, and I intend, so far as I can, to follow that higher line. I agree with the right hon. Gentleman (Sir A. Mond) when he appeals to the Government to brush away the difficulties and not be afraid of making experiments. I am sure that most Members of this House, to whichever party they belong, would welcome a courageous Government of whatever party which would really make arrangements which would result in giving permanent relief to unemployment to the great advantage of this country. Our difference, however, is a matter of the method. Will the right hon. Gentleman's method work? In my opinion it will not. It is a very difficult thing to arrange a scheme under which you pay part of the employer's wage bill. It is not so easy to get employers and employed to agree that their contributions shall be placed at the disposal of any employer in order to pay part of the wages of the workers and to subsidise other concerns.

As most firms are members of a trade obviously other members of the same trade would raise the most strenuous opposition to any unfair competition produced by any form of subsidies from the Insurance Fund. I see no possible way of subsiding industry from insurance that could be safely administered by the State. I am afraid if that principle were begun you would have every firm in the country of a competitive nature demanding a subsidy towards wages, and the result would be that your last stage would be worse than the first. I do not admit that we have had little or nothing to do with the collapse of the exchanges in Europe, because I believe that the policy of the Allies had a great deal to do with that. I will, however, leave that point because I wish to avoid all controversy and I am anxious to contribute some practical suggestion to the subject under discussion.

The most serious aspect of the case is that whilst last year, on the 3rd March, the live register at the Employment Exchanges showed 1,057,000 unemployed, on the 3rd March this year the total was 1,235,000. Again I wish to avoid controversy or the making of debating points, but there is an increase of nearly 200,000 in the live register of the Employment Exchanges. I know that these figures are not strictly comparable, but during the Election they were held to be comparable, although they were not. I think it may be said that, everything taken into consideration, there are 150,000 more unemployed to-day than there were 12 months ago. That is the really serious point in the discussion to-night, and we all desire to contribute what we can towards helping to improve that state of things. I am a keen party man myself, but. I should bitterly regret it if this question of unemployment was made the mere shuttlecock of party politics. It is much too serious, the suffering involved is too great, and the danger to the nation is too great, for it to become the plaything of party discussions. We have listened with great attention to the speech of the Minister of Labour. I wanted to hear what he had to offer in the shape of hope to this House.

With regard to the unfortunate people who are unemployed, evidently his mind is not made up yet as to whether extended benefits to certain classes of people should be continued in the future. I want to make an appeal to him not to continue the action which he has already taken, and which seems to indicate that very large numbers of the people now on the live register and being paid are to be thrown out of unemployment insurance payments. I have said to the House before, and I want to repeat it now, I hope without offence, that it seems to me a peculiarly mean and shabby thing to push these people off the Unemployment Insurance Fund and on to the boards of guardians in those places where the burden is already insupportable. It is merely adding another straw to the back of the camel whose back is already broken, and I hope that the Government will use the utmost generosity in their consideration of this question of benefits. The municipalities and boards of guardians are becoming very alarmed as to the prospects for the future. I want to say no more than this, that I am sure the whole House, and certainly those Members who live in districts where unemployment is very great, would feel thankful if they had a gurantee that the Government do not intend to take any action which would place an extra burden on the boards of guardians in localities that are already suffering so severely.

What can one offer as a practical suggestion for the future? I am one of those who frankly believe that, whether we like it or not, there must be a re-arrangement of our industrial population, that there must be very great changes in the country if ever it is to return to the position in which it once was. I do not want to enter into a discussion of the Socialist as against the non-Socialist position, but this I will say, that everybody who believes in the capitalist system of society takes it for granted that there must be a margin of unemployment in order to keep industry going. [HON. MEMBERS: "No!"] Over and over again it has been said from the benches opposite, and I know no employer of labour who would say that he did not need a certain number of unemployed in order to deal with the exigencies of his business. Anyhow, as I have said, I do not want to enter into controversy, but I want to give one or two ideas as to what I think the Government can do in order to help the country in the future. I believe that there is one word, and one word only—or the putting of one word into action—that will make our position secure, for the future. I do not believe that we are as efficient as we might be, and only the efficient nation can live in the future, whether it be a Socialist nation or whether it be a capitalist nation. If the nation be not efficient, no system on earth will save, it; if it be really efficient, it can live under any system. That is the premise that I lay down, and I do not think it will meet with much objection anywhere. But when I talk of efficiency, I mean efficiency all the way through—efficient employers, efficient managers, and efficient workers, all working hard. Incidentally, may I quote to the House, in order to illustrate my meaning, a trade union motto from the North of England? It is this: A man, in proportion to his intelligence, makes skill take the place of muscle, and, with less labour, gives a better produce. We have studied machinery, and how to avoid friction in machines, until machines are uncanny in their perfection; but we are only just beginning to study how a man may exercise his skill so that, with the minimum of friction, with the least physical effort, he gives the best result. We are only just beginning, and the Government that will help in every possible way—and Governments can do a great deal to help—every movement that has studied the possibilities of the human as well as the machine, will have done something to bring us on the road that will finally lead to efficiency.

There is a lot of prejudice against this word "efficiency." I have talked with employers who have at once ridden off into a discussion of ca'canny. I have talked with my friends in the industrial world, and I find them very suspicious, and with good reason, of any doctrine of efficiency, because, unfortunately, in the past, when efficiency has been exercised, it has often been exercised at the expense of the worker. There can be no true efficiency, I think, unless we accept the principle laid down in the Treaty of Versailles, that the worker is not an article of commerce to be bought and sold, but is a living being, with a right to a knowledge of what he is doing, and a right to a knowledge of the concern in which he works. If at the present time employers and employed could meet together and the employed could have an assurance that increased production would not be used to injure their chance of employment, I believe that enormous strides are possible.

We talk a great deal about America, and we discuss Free Trade and Protection. Surely, everybody knows that neither Free Trade nor Protection is responsible for the great success of America. What is responsible is efficiency. It is my experience—I know how dangerous it is to argue from the particular to the general—that wherever you find an efficient firm you do not find the workers working like beasts of burden. You find them working intelligently, under a well-managed and well-organised concern, and with less labour they really give a better production. I think the Government would be wise to help in every possible way in the development of all efforts which aim at the bringing together of both sides in order to get the best out of every industry. Jealousies will have to be dissipated, misunderstandings will have to be removed, and the sooner we begin, the sooner we are likely to get to our ultimate object. Amongst Members of my party there is a growing fear, which was expressed by the late Chancellor of the Exchequer, that more and more industry is passing out of the hands of the actual manufacturer and the actual worker, and that the non-producer, the mere juggler with finance, is getting a greater and greater stranglehold on industry in this country. That is a thing that is worthy of attention by all Members of this House, and particularly by those who are interested in industrial occupations.

The Minister of Labour ventured in his speech to compare the conditions of Germany and of this country as far as the bank rate was concerned. I suggest to him that all comparisons of a financial nature between this country and Germany are very dangerous, and that to draw any conclusions from a country which has been in the position of Germany is a very risky thing to do. The collapse of currency in Germany was so complete, that illustrations from Germany ought to be used with the greatest possible caution. I was one of those Members of this House who were very pleased to hear that the coalminers and the shipbuilders on both sides, employers and employed, are sitting round a table to discuss what can be done in their particular industry. Nothing but good can come of these discussions. I may be of the opinion that 50 years hence there will be no need for these discussions, but there are people living now with no wages, who are unemployed, and I am anxious to get something done for them now, and not 50 years hence, when they will be dead and gone.

I suggest to the Minister of Labour that the more ventilation we get of industrial matters the better it will be May I remind him of a principle that I adopted at the Ministry. I hope he will consider it and see whether he cannot follow the same principle. My principle was, that whenever a dispute threatened to inconvenience the public, at once the whole facts should be brought to light, and a committee should investigate the whole of the circumstances. There is nothing worse than interfering unduly in a trade where negotiating machinery exists, but when a strike is imminent then is the time to make inquiry in order that the public, which has a right to know what is going on, should be made acquainted with the facts. I share to the full the hope of the Minister of Labour that the best brains in industry should get together with the view to deciding what method can be devised for the immediate amelioration of the conditions that exist. I am also at one with him in his keen desire to preserve the industrial quality of the workers. It has been said over and over again in this House, but it is worth repeating, that there is nothing worse than the deterioration which comes from idleness. In the case of a workman it leads to dejection and despair, in the case of the idle rich it leads to the cases which one sees in the Law Courts. It is bad wherever you have it. We ought to aim in the House of Commons at eliminating, so far as we can, the idle individual, whether he be found at the top or the bottom. There ought to be no room in this country for any man or woman who does not do something to help the nation.

I was afraid that the Minister of Labour had not attached sufficient importance to the question of afforestation. I was informed by some authorities that afforestation gave little to hope for. Other authorities were of opinion that in Scotland alone it was possible to employ thousands of men, and permanently to enrich the country which ought to be the object of every scheme that is undertaken. I agree that roads ought not to be built for the sake of building roads. There is no good in throwing money away simply to employ people. To employ people on useless labour is almost as bad as leaving them unemployed, but if schemes can be found, such as afforestation, which would not only employ people but will permanently enrich the country, I hope the Government will take the advice of the right hon. Member for Swansea (Sir A. Mond) and not be afraid of spending money even though the Treasury lead the protest. I was glad to hear that the Government had not scrapped the ideas of the last Government with regard to electrical development. An electrical development, such as was foreshadowed, which would give the country districts cheap light and power might do a great deal to develop our countryside.

Men do not leave the countryside merely because of the wages. Often they leave because the amenities of the countryside do not satisfy their ambitions, and if the countryside could be brightened and conditions made better then there may be a possibility that thousands of men who now leave the country for towns would remain in the country and become a very great asset, indeed, to the country, a far greater asset than they become if they go to a town already overcrowded, where unemployment is rife. I was very glad, also, to hear the Minister of Labour speak about the possibilities of improved water transport. When the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) talked about developments on the Continent, I thought that there was really room there in our national economy for a tremendous improvement. When one thinks of the schemes on the Continent, the joining together of the. Elbe and the Danube, for instance, surely it is possible for us, in what I consider still the finest country in the world, to develop our own water carrying powers much more than they have been developed, and to provide ourselves with cheap transport which in many cases would solve the difficulties of employers and industries? I have already stated what my opinion is about the subsidising of employers out of the Unemployment Fund. It would be easy to make debating points about the collapse of exchanges and the, collapse of our foreign markets. One could refer to the waste of millions in attacking Russia. One could speak about the cost of the war between Greece and Turkey and the part that our Government played in it. One could speak about the missing of an opportunity to have a peace with Turkey much better than that which we got at Lausanne, and with Turkey as a friend instead of as a rather contemptuous enemy. One could speak, too, about Indian policy. But that would not fill a single worker's mouth. What we are concerned about, I take it, is to get remedies and not to get party advantages. Party advantage in this connection is nothing, but an improvement in the conditions of the people is a great thing.

I would like to say a few words about a subject which I approach with some diffidence—the question of agriculture. I have already said that I was one of those who hold that there will have to be some rearrangement in our industries. I believe that unless we can place on our own land much larger numbers of people than now find employment on it, we are not likely to get near a solution of our unemployment problem. I notice in every town that I visit in this country, even in the agricultural districts, that Danish produce is being sold. I ask myself why. I do not pretend to be an authority on soils, but I am told that the soil of this country is more than equal to that of Denmark. Certainly Denmark has in transport tremendous difficulties of which we know nothing. Anybody who has visited the country knows that it is impossible to travel for any reasonable number of hours without the train being shipped on to a ferry and carried over the water. Yet Denmark sells her produce in every one of our towns, and she does not pay her workers badly. How has Denmark got to that position? I leave out the question of rents for the moment, because I do not think that that question is the most important. What has she done? She has applied science to agriculture, she has applied a system of costings to her farming work, her farmers have joined together, not only to buy in the cheapest markets for themselves, but to distribute their production, to manufacture their articles, and to sell them afterwards. By these simple methods the Danish farmers have been enabled to compete successfully with us in a market which, if we had followed the same lines, would have remained our own. Neither in soil nor in any other respect does Denmark seem to have any advantage. Her people are comfortable and happy. The Danes are one of the finest peoples in Europe, and there seems to be no reason at all why, by adopting the same methods in this country, our farmers should not become more prosperous and why we should not have more men on the land. I welcome everything the Government can do to help forward what the Labour Government tried to begin and to help the farmers to co-operate and to help them with advice and, if necessary, with credits, in order to develop on lines that have proved so satisfactory in other countries.

Finally, may I say a word about a trade in the North of England that means a very great deal to the internal economy of this country. I speak of the cotton trade, which before the War was the largest exporting industry in the country. It employed well over half a million workers, and provided work in addition for very large numbers of miners, metal workers and transport workers. It has been depressed for a considerable time, and its future is gloomy unless methods are found to provide it with a fair supply of raw material at something like fair prices. I venture to suggest to the Government that they might do more than any Government has yet done to develop the growing of cotton, and particularly in our own Empire, for the Government could not help to grow cotton anywhere else but in our Empire, and by so doing to look to the future of one of the trades which, as an exporting trade, has been the backbone of the country. However we try to develop our trades and industries and agriculture, obviously it will require years before we arrive at a satisfactory conclusion. I hope the Government will take a long view in this matter. I do not in any way deprecate immediate measures which can be taken, and I hope the Government will take as many as they can in the immediate moment to alleviate the suffering that now exists, but I think the true solution lies years ahead. I hope the Government will keep an open mind and will exhibit the courage which the right hon. Gentleman the Member for Carmarthen (Sir A. Mond) asked for, and will really try to look upon our nation as a nation which must be made efficient, and its agriculture developed, and I am sure the whole House will welcome anything they propose in order to achieve those ends.

The PRESIDENT of the BOARD of TRADE (Sir Philip Cunliffe-Lister)

I think everyone who has listened to this Debate will be glad it has taken place, and will have welcomed the whole tone in which it has been conducted, dealing as it does with a subject of transcendent importance, and the general readiness there has been to bring in information and suggestion into the common pool. May I respectfully say, as one who has often fought against him in the past, how well the right hon. Gentleman (Mr. Shaw) who has just sat down has maintained the tone of the Debate, and what an enormous amount of good, hard sense he has put into the discussion, in the suggestions he has made.

The right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) asked me, as indeed was right in a Debate of this kind, to give to the House without fear as true an appreciation as I could of the trade position as I saw it, and he was good enough to say that on previous occasions I had not tried to gloss over the difficulties I saw in the way. Without accurate figures of production it would be almost impossible to present a complete picture at the present moment. That is one of the reasons why, apart from the Census of Production which we are taking this year and which we hope to be able to publish next year—and the quicker we can get the returns the quicker we can get the census out—I think it is so tremendously important that manufacturers and industry throughout the country should try to co-operate with the Government in producing periodical figures of production in addition to a census of production once every five or ten years, so that an up-to-date accurate picture may be given of what the real problem is in every industry. Look at what is happening in America to-day, at the tremendous efforts which are being made in this direction by firms and industries there, not as an intellectual exercise—American business men do not do that—but in order to collect statistics and to pool all the information and make it available for trade and for the American Government. I feel sure if they find it is good business to do this, it would not ho bad business for firms in this country to try to do the same.

Even without information as complete as that, one can make a fairly accurate survey of the position. I think, without being unduly pessimistic, it is not a pleasant outlook at the present time. The expectations that were entertained some months ago of a general improvement in world trade are not being verified. What are the facts? The facts are that although our export trade is only three-Quarters of what we were doing before the War, we are probably getting to-day something like our pre-War proportion of any overseas trade that is going. That makes the fact that we are 25 per cent. short all the more serious. We have got on the whole of the national balance sheet, when you take invisible exports and visible exports and all the imports— we have got this fact, that for the past year, 1924, there is a far lower net balance than we had in 1923. I made some calculations, with the help of experts last year, which made that balance out at about £100,000,000. That figure was generally accepted. A similar calculation made in respect of 1924 gives the net balance as only £30,000,000, and I have not, so far, found any expert, and I have invited them all, who would criticise that figure as being very far from the mark. This balance is down to £30,000,000, and yet the need for money for investment, in order to develop new markets and new trade, is even greater than it was.

We have a bigger population, and yet with the progress of science in industry it takes fewer men to produce the same output; nor can one hope in a great competitive world to put back the clock in that respect. We have a diminished emigration. People talk very loosely about emigration. People of all parties do so. I am not making a party speech, and I know there are people on my own side who are just as bad in this respect as those on any other side. They talk about emigration as if it was a kind of tap which you could turn on when you wanted it—that when the garden was dry all you had to do was to turn on the hose. You cannot do that, because when your garden is dry the other people's gardens are dry also, and unless there is a prospect for them of better markets, there is a limit to the number of emigrants they can take. When you want it most, the possibilities of emigration are least unless you take every means in your power to stimulate it. Therefore, emigration by itself is not a solution. There is another factor. There is a much greater capacity for industrial production in the world to-day than there was before the War. Every country, whether it was a fighting country or a neutral country, has developed its productive capacity. We find that on all hands; yet with it there is in the world a diminished capacity to buy.

11.0 P.M.

You have to-day another thing in this country which is not disclosed by the trade returns, but which is most serious. You have many Cases, particularly in great basic industries, where orders that are being taken and keeping men at work are being taken at a loss. I have no hesitation in saying that that is a fact, for though it is not reflected in the statistics, I have had instance after instance of it. You see an industry like the iron and steel industry, where production is kept up, though not to anything like an economic level, working, as it is to-day, at perhaps 75 per cent. of capacity, and yet much of that is being carried on at a loss and, therefore, cannot possibly be carried on indefinitely. I am sure that hon. Members will not think I am imputing praise or blame at all—because if a Debate of this kind is to be of value, one must say frankly what one sees and thinks—if I say that you have in industry in this country a remarkable disparity between wages and conditions of labour in the sheltered and the unsheltered trades.

Mr. D. GRAHAM

What do you mean "by sheltered and unsheltered trades"?

Sir P. CUNLIFFE-LISTER

A sheltered trade is a trade which has not got to face any foreign competition, and an unsheltered trade is a competitive trade. For instance a transport service or a municipal service in this country is a sheltered trade.

Mr. GRAHAM

And the Board of Trade?

Sir P. CUNLIFFE-LISTER

Yes, and the officials of the Board of Trade. I am sheltered, and the hon. Member, as a Member of Parliament, is sheltered. We are protected industries. Perhaps we are both key industries. The very fact that von are able to maintain conditions in the sheltered trades inevitably reacts upon the unsheltered trades, and you have—and there can be no question of this—lower costs in many foreign industries, which we at first thought were of a purely temporary nature, but which now, with exchanges having become stabilised for considerable periods, one has to face as being of a permanent or at any rate a semi-permanent character. Of course one has also the difference between rigid rules and no limitations of that class. If that be a brief but a fair summary of the position, if it be an indication, as I think it is, of considerable anxiety, what are the lessons which one has to draw from it; because that surely is the whole object of this Debate to-day? Unless we believe that the way out of all this is nationalisation—and I am certainly not going to enter upon a discussion of that to-night; I would only say that as long as this country exists and maintains a population anything approaching the population it has to-day, it has to maintain its position as a competitive country in the world, and, therefore, it cannot play with ideas or shelter itself behind an idea that a mere change of system will make all the difference, because it will have the same competition, whatever be the social system in this country. That being so, surely what a Government can do is of a strictly limited character. What a Government can do is to pursue a policy, and a general policy, at home and abroad and in its Empire relations, which will tend to create and to maintain those conditions in which the industry of this country can best help itself.

I shall have a word or two to say in a moment about the specific suggestions made by my right hon Friend the Member for Carmarthen (Sir A. Mond), representing, I assume, the considered views of his party. I want to come to that in more detail, but whether you take the schemes which we originated, or which the Coalition Government originated, or which the Labour party originated when they were in office—trade facilities, export credits, special afforestation, special road schemes, grants to public utility companies, subsidies to local authorities for public utility works—or whether you take the kind of thing that my right hon. Friend the. Member for Carmarthen proposed, which was in effect a direct subsidy to industry, those are all things to be considered upon their merits. But let this be plain. All those are palliatives, and must be palliatives. They differ in degree, but they are all of the same kind, and it is perfectly impossible to contemplate a perpetual system in this country whereby we buoy ourselves up by living entirely upon these kinds of palliatives.

Mr. GRAHAM

What is the objection?

Sir P. CUNLIFFE - LISTER

The objection is you bankrupt yourself. I do not want to make a debating point, but surely that is true. All these are artificial stimulants. All these involve taking money from the State, that is to say, from the taxpayer, and all, therefore, are indirect charges on industry.

Sir A. MOND

My scheme will not bankrupt the taxpayer any quicker than he will be bankrupted now.

Sir P. CUNLIFFE-LISTER

I was a member of the committee over which my right hon. Friend presided, and he never produced any financial statement or estimate in regard to his proposal, nor has he to-day. As a matter of fact, if you had a subsidy of this kind you could not possibly limit it to the amount of the dole paid to a particular man. If you are going to make this scheme work, you have got to make it work irrespective of the number of men who might be for the moment on the dole. That is where the right hon. Member's scheme is not practicable. [An HON. MEMBER: "Why did not you say that on the Sugar Bill?"] I am coming to the Sugar Bill.

Mr. SPEAKER

I hope not!

Sir P. CUNLIFFE-LISTER

I certainly do not propose to embark upon the Sugar Bill. I will content myself with taking a parallel case which does not involve legislation, that is, the safeguarding of industries. Hon. Members, if they are consistent, cannot possibly press for a subsidy to-day such as this scheme, and then reject another form of protection on another occasion. If they are going to fly the flag of Free Trade, they must fly it consistently; they must not put it mast high when our legislation is taken, and half-mast high on another occasion, and lower it completely at sunset when the right hon. Gentleman gets up to propose his subsidy.

I want to come back to the point which I made when I said that these are artificial measures of stimulation. It does not matter for my purpose whether in this form of subsidy you are going to spend the same amount of money or a different amount of money. My whole point is that you cannot possibly rely on a permanent stimulus, which is going to add permanently to the burden of taxation of this country. You have got to go deeper than that and see that the whole of your policy is designed for the promotion of trade.

My right hon. Friend the Member for Carnarvon wanted to know what the Prime Minister—whose speech he greatly appreciated—was going to do next. Surely the creation of an atmosphere of good will and frankness is in itself most valuable. The admirable speech which was made by the right hon. Member for Preston (Mr. T. Shaw) pleaded for confidence. You want that confidence in everybody to-clay. You want it in the people who have got money to invest in order that they may go deeper. You want it in the men who have financial difficulty in their business and who are probably inclined to avoid risks. You want to get these men—men like the right hon. Member for Carmarthen—to be encouraged to go deeper and not to invest in gilt-edged securities but to invest in, speculative industrial enterprises. You want that confidence in all the discussions that are going on between the employers and the workers, and that frankness, that confidence and stability and sense of goodwill, is the very thing which is necessary for the country to get on with the job. My right hon. Friend the Member for Carnarvon Boroughs (Mr. Lloyd George) said—he has been making an anthology of the Prime Minister's speeches—that he was extremely struck by what he said at the Albert Hall that we should not hesitate to cut our way through vested interests.

Certainly if we found it necessary to cut our way through vested interests of one kind or another we will not hesitate to do it. That does not mean that you have to take an axe and run amok through the whole industrial system. The productive capacity of many industries is far greater than the capacity of the world to buy. Not only is it necessary to have national arrangements in industries, but to have international arrangements between great industries. Your duty is not to run amok and to try to prevent amalgamations either in unions or in industries.

No one knows better than the right hon. Gentleman what help has been given to the British Empire Cotton Growing Association. I can go further here, and give the assurance that wherever we can see development of cotton-growing within the Empire that can be assisted by wise Governmental credit, or where we can help transport systems, or the like, we shall do in the future what we have done in the past. We shall always do what we can to assist these schemes. To safeguarding I must refer for one moment. The right hon. Gentleman the Member for Carnarvon Boroughs objected to our action on the ground that we were sinning against the light. But earlier he himself was ready to put forward similar proposals. In the middle or February he spoke, and considered 'then that the outlook was not so serious. He said that German competition had been eliminated. I thought then he looked at the matter in a rather lighthearted fashion. Now he comes down in a serious frame of mind. I hope he has brought his party with him. He calls upon the Government to consider what steps should be taken—the most adequate steps—but why does he set out to oppose the measures that are necessitated by the administration of the Safeguarding of Industries Scheme—

Captain BENN

And by legislation!

Sir P. CUNLIFFE-LISTER

Certainly, and by setting up these inquiries about which the hon. and gallant Gentleman spoke.

Captain BENN

On a point of Order. I know that the case of the Prime Minister and of the Chancellor of the Exchequer were that none of these duties could be imposed except by the House of Commons being consulted, and by enactments being passed. If that be so, I submit that the President of the Board of Trade is out of order in saying that these duties could be imposed by administrative order.

Sir P. CUNLIFFE-LISTER

On a point of Order. That was not the point which I made. The point I made was that the hon. and gallant Gentleman and his section of the party opposite were perpetually obstructing the administrative action, which is necessary as a preliminary to that legislation to which I may not refer. Then may I turn to the positive assistance that my right hon. Friend the Member for Carmarthen spoke about. He was proposing—and it is a very attractive proposal—to take the monetary equivalent that you would pay into the Unemployment Insurance Fund and pay it over to particular Indus- tries which are hard pressed, in order to enable them to get orders.

In the first place, that is a matter which was considered very closely in the Government of which the right hon. Gentleman was a member—that is, the particular scheme which he put forward, and to which he has referred. I am bound to say, as a fellow heretic, that I found it rather attractive myself. I believe that in this matter I was something of a conspirator with him at the time. He himself was the Chairman of the Committee which found insuperable objections to it, and the memorandum which he would have us believe is the product of those tiresome officials who always see objections was the result of the consideration of the Committee over which he presided and of the Government of which he was so distinguished an ornament. We considered it again, in a later Government, and we found the practical difficulties of dealing with insurance in that way were insuperable, for the reasons—I do not want to go into them—which were stated in the White Paper. I should like to know, and I think the House will want to know, whether in that proposal which he made to us to-night he is speaking for the party for whom he is at the moment the spokesman?

Sir A. MOND

I do not profess to speak for anybody except myself, and I am still an unrepentant heretic.

Sir P. CUNLIFFE-LISTER

There are other members of his party still around him, and I should like to know whether the heretic is a solitary heretic or whether the representative group who are still there endorse the action of the heretic and are prepared to be either burned at the stake with him or to adopt another Shorter Catechism for their party. I see there my hon. and gallant Friend the Member for Leith (Captain Benn) who is the particular custodian of the Free Trade conscience. Might I ask him—and I do not hesitate to do that, because he always asks me questions—whether he endorses this proposal?

HON. MEMBERS

"Answer."

Captain BENN

I must ask the right hon. Gentleman to give me notice of that question.

Sir P. CUNLIFFE-LISTER

I am very much obliged to the hon. and gallant Gentleman. Perhaps he will let me know how long notice will be required, and I hope he will not hesitate—because he always expects me to give him the fullest answer—I hope he will not hesitate to let the House know when he has made up his mind where he is on this matter.

Captain BENN

I will refer my right hon. Friend to my answer given in December, of which I am sending him a copy.

Sir P. CUNLIFFE-LISTER

The right hon. Gentleman the Member for Carnarvon Boroughs, I think, is probably a little nearer in regard to this principle. The right hon. and learned Gentleman the Member for Spen Valley (Sir J. Simon), who opened this Debate, said that we ought to be very careful in considering these suggestions. I would like to ask, does he support the proposal that these subsidies should be given to industry?

Sir J. SIMON

I must ask for notice of that question.

Sir P. CUNLIFFE-LISTER

I would remind the right hon. Gentleman that for years we have had this matter under consideration, and it must have occupied the attention of hon. Members opposite for a long time. I think they ought to be able now to come to a conclusion in this matter in regard to a great departure of policy which has just been adumbrated by one of the leaders of their party, and I think we ought to know whether they support him or not. If this policy be adopted by the Liberal party in its different sections, then once and for all the cause of Free Trade is not only dead but damned because no more Protectionist proposal than the one which has been put before us could possibly be imagined.

I am always prepared to consider a proposal of this kind, but I am sure my right hon. Friend will agree with me when I say that it is a proposal which requires the most careful consideration. I have been discussing a good deal this kind of proposal to see if there is anything in it, which I could put before my colleagues, and to find out what the financial commitments would be, and whether they would be of a temporary character, If it should be found that some such proposal in any particular industry was practicable, I shall not hesitate to remind hon. Members opposite, who have not yet made up their minds, and I should ask for their support.

The object of our Foreign policy must be to aim at a settlement, and we must make such commercial arrangements as those which the House readily agreed to in our treaty with Germany.

I was surprised that in all the speeches made to-night, with the exception of the speech of the right hon. Gentleman the Member for Preston, there was no reference to the most important of all possibilities, that is, the possibility of Empire development. If we mean to get new markets by investment and developments abroad, we want them in places where the trade will be mutual, and where it will mean an outlet for our population and the supply of commodities to us from them in exchange for our own commodities. Where can you find that better than within the Empire? Hon. Members opposite always tell us that the great thing we should look for in industry is co-operation—something on the lines of the co-operative society. Where can you find such a great co-operative society as in the mutual trade of the British Empire? [An HON. MEMBER: "What are the Government doing?"] We have given notice that we are going to stand by our Preference proposals We have already set up the Economic Committee to advise as to the best methods of spending the £1,000,000 grant, and it is only by carrying out Preference, and by a policy which will give to them a market, that you can find the possibility of development and of settlement.

Mr. R. RICHARDSON

What does the right hon. Gentleman propose to do in that case with the coal trade?

Sir P. CUNLIFFE-LISTER

If you can get trade better, if already Australia, with her preference, is one of the biggest markets for the exports of this country, then, the more manufactured goods you can send overseas, the greater your exports, the greater the industry of this country, and the greater the market for the coal trade.

Mr. RICHARDSON

May I suggest that the more you tax goods coming from abroad, the more it hampers the coal trade?

Sir P. CUNLIFFE-LISTER

I do not think so.

Mr. RICHARDSON

Is the right hon. Gentleman not aware that the northern counties of this country depend upon the export of coal for their very life? They export coal to Germany, Italy, France, and so on, and the more you cut off those countries by Preference, the worse it will be for us.

Sir P. CUNLIFFE-LISTER

On the contrary, the reason for the decline in the export of coal is that Germany and the Continent generally are producing a very great deal more coal than before.

Mr. RICHARDSON

It is not up to pre-War.

Sir P. CUNLIFFE-LISTER

Undoubtedly they are producing a much greater output. They are developing enormous lignite fields down the Rhine, and as a matter of fact their exports, so far from diminishing, are steadily going up, while the exports of coal from this country have been steadily decreasing.

Mr. RICHARDSON

Because of reparation coal.

Sir P. CUNLIFFE-LISTER

It surely must stand to reason that the more foreign trade you can get, the more goods you can sell, the greater is going to be the prosperity of your industry, and therefore the better for the coal trade. The general sentiment has been expressed right through the Debate that the country should face the facts, and that there should be a combined effort to see things through. It can in only a very small degree be the work of the Government. It must be the work of every section of the community, working in confidence, good faith, and a desire to make good. It is hopeless to try and rely upon the Government, and say it is the Government's job. You are not entitled in this country, which has always fought its way by its own initiative, to challenge the Government because it is not doing what the individual trader, manufacturer and workman ought to do within industry. What you can call upon the Government to do is to try to create conditions for industry which will enable it to find its own work, whether at home, abroad, or in the Empire. That will be the policy of this Government; that has inspired all our activities up to now, and that will inspire our action in the future.

Mr. LANSBURY

I am sorry to have to add a jarring note to the very pleasant discussion that has taken place; but after all the pleasant speeches, hon. and right hon. Gentlemen have left the unemployed where they were. This is the sixth or seventh Debate on the subject of unemployment since the new Parliament was elected. Always we have ended up on the same note that there must be goodwill, co-operation and so on. But after a week or two, we have had to make the same speeches over again, and the unemployed go on living on the unemployment pay or Poor Law relief. Nothing of any worth has been done, either by this Government or by any of the Governments since 1922.

I rise to protest against the assumption that goodwill and friendliness between employers and employed can get over the economic difficulty—a point which the right hon. Gentleman himself, the Prime Minister and the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) have always made—namely, that the world power of productivity is so great that we do not know what to do with it. The right hon. Gentleman has made it abundantly clear, and each of the leaders who has spoken from the parties who uphold the present industrial system has agreed to the Socialist proposition, that what is needed to-day is to discover a better means of distributing the goods that we produce. There is no earthly use our trying to fool ourselves, or trying to fool the people outside, that there is some other way by which the difficulties can be overcome, except by a complete change in our ideas as to how the work should be done, and what should be done with what the worker produces. This House, this Country, this Civilisation have to face the fact that we have reached the end of capitalist development on the old lines. All this talk about subsidies being wrong or right, and about Free Trade being wrong or right, or Protection being wrong or right, is beside the question. The War has brought us at an earlier date than writers imagined, up against the difficulty that every Socialist economist and every other economist knew was certain to happen. Mankind in this country is suffering, not because we have over-produced, not because there is not enough for the needs of every man and woman, but because we will not apply our brains to the task of devising the schemes that are necessary for distribution. It is no use the right hon. Gentleman saying that this is a question where we have to give one another credit for good intentions. I am willing to do that, but the road to hell is paved with good intentions.

As I listened to the speech of the right hon. Member for Carmarthen (Sir A. Mond) I thought that I was listening to the speech of any ordinary Socialist on a Sunday evening. He told us, as other hon. and right hon members have told us, but not so effectively, that there are worse things in life than in losing money—that there was one thing much greater than money, and that was the valuable asset of a human being's character. What I am worried about, and what every thoughtful man in this House must be worried about, is the position outside. We laugh at one another's jokes—we should be destitute of any sense of humour did we not. But in the end the tragedy is that we shall go home to-night, after unanimously voting the Consolidated Fund Bill, and after eight hours' discussion nothing practical is going to come to the unemployed, In the early part of the evening the late Chancellor of the Exchequer called attention to the fact that the people were very quiet, that there were no riots and no demonstrations. I think that is a very bad sign, and an even worse sign is that five out of eight of the men who go to the recruiting sergeant and ask to be allowed to join the Army, are being rejected. And that, within a few years of the greatest War in history!

That is coming about because you are driving the minds of people to change. Many boards of guardians do not give them enough to live on. Then they are living herded together, starving together, and the general physique of the people is being pulled down. This country has got a greater enemy to fear that Bolshevism. It is economic and moral decay. That is going on now, and unless this Parliament wake up, we shall have no human material to carry on whatever industry there is to carry on. It is because I feel that so strongly that I must enter the most emphatic protest which any human being is capable of making against this Parliament of intelligent men talking for eight hours, and doing nothing to solve this tremendous problem. There is only one way. I know that I must not argue it, but I can say it. You have to face the fact that you are at the end of the capitalistic era. You are at the end of another epoch in the history of the world. If the nation, of western civilisation is to survive, this nation must help in going from one system to another. No man can say "There is an end to human progress. Thus far, and no further."

Every step in civilisation has been, not an individual step, but a step of individuals acting in concert with one another, and to-day you have got to take the great means of producing wealth and organise them, not that men may make dividends, profits, rents or interest, but organise them on exactly the same basis as you organise the great social services which you carry on to-day. No nation that forgot to till the soil has persisted in history. Rome, Carthage, Greece have passed. They went down when their people forgot agriculture. I am not a Liberal, but I am with the two right hon. Gentlemen who spoke to-night, and who said that you must deal with agriculture. You must do so for two reasons. One is that people outside these islands will not go on for ever allowing us to be as parasites, living on their raw materials and on their labour, but further you must have people living in the country districts in order to keep your population in being.

It is all very well for people who live in the City, who only dabble in bits of paper but who never dabble it real industry, not to face this matter. If they did they would know that all the hard physically laborious work which has to be done in the great towns and factories is done by people who come from the country. Those who are responsible, those who have in their hands the directing of things, need not imagine that, because the people are quiet, because they acquiesce as it were in the little bits of relief that are given, and because they starve in quietness, the country will go on. It will not. It will be pulled down by the dead weight of economic and moral decay. Think of all we said at the last Election! No we are going home once more, after eight hours miserable talk, and nothing whatsoever is done for them.

Mr. J. ROBERTSON

Earlier in the Debate the hon. Member for Caithness and Sutherland (Sir A. Sinclair) drew the attention of the Secretary for Scotland to the conditions in the Highlands and Islands. I am afraid that at this hour of the night it may be very difficult to get anyone to listen to that appeal. I have had the feeling very often in this House that you can raise enthusiasm, irrespective of party, about injustice in Russia, about injustice anywhere in Europe. I believe that hon. Members of all parties know more about Continental countries than they know about the people of my native Highlands, who are living under terrible conditions I sincerely hope that something will be done for the people who live in the Highlands and Islands. It was for another purpose, however, that I rose to speak. Like the last speaker I am bound to contrast the organisation of economic forces to-day, during a time of depression, with what would have been the position had we been facing a war as in 1914. This has been very largely a non-party Debate. I do not know whether that is a good or a bad sign, but I want to ask one or two questions of hon. Members opposite. We had eight months of a minority Labour Government. We have had five months of a Tory Government with a dominant majority. During the time of the Labour Government hon. Members opposite asked many times, in the House and out of it, why we were not solving the unemployment problem.

Mr. REMER

You promised to do so.

Mr. ROBERTSON

I can answer an argument, but I shall not attempt to answer a noise. An hon. Member opposite has said that what is wrong to a very large extent is that everyone in the country is not pulling his full weight. I agree with him. But, I ask, is that the opinion of the Leaders of his party? What is the present Government doing to make everyone pull his full weight? Is it only the miners or the transport workers that are not pulling their full weight, or is it the idle and luxurious who live on the labour of the workers who are not pulling their full weight? I have heard this discussion and followed it very closely, and I have also read very closely past Debates in this House. No man in this House or outside it would dare to stand up and say that the workmen of this country were not producing a superabundance of those good things which are essential for a hearty and full life if they were not taken from them under the present industrial and commercial system. We have solved the question of production, and I want to know from the Tory party are they organising all the economic forces in times of peace, when the men who fought in the Great War are demoralised and standing outside the Employment Exchanges, and some of them find a resting place elsewhere than where they are living at the present time.

The Minister of Labour himself agreed with the late Chancellor of the Exchequer who said that the condition of the country at the present time was due very largely to waste, and that nothing would help the country so much as the elimination of waste. I agree with that. I think it was John Ruskin who pointed out that of all the waste that could be perpetrated in the world, the worst waste was the waste of the labour of man. What are the Government doing to eliminate that? Are they doing anything to eliminate it? They are agreed with the late Chancellor of the Exchequer that that is the cause very largely of the conditions in our country at the present time. During the War horse-racing was stopped, and I say it ought to make one feel ashamed that you should have sleek well-fed and well-groomed race horses, while at the same time honest workmen are starving and cannot find a place where to lay their heads. What is the Government doing on a question of that kind? If I had time, I could point out many ways of waste, but what are the Government doing to eliminate that? You may talk as long as you like about your overseas trade or your foreign trade, but you cannot get away from the hard fact that the capitalist system as it exists to-day stands condemned, and the greatest proof of it is the condition of the working classes of this country after all their labour and toil. I do not want to see any turmoil or any trouble or any revolution except the peaceful revolution; I do not want to see any other kind of revolution, for other kinds of revolution often recoil very largely on the heads of the people who carry it out, but I am sure members opposite must agree with me when I say that it makes you feel sad and sends you away with a lump in your throat to stand outside the Employment Exchanges and see the condition of these men who are standing outside those exchanges. Do we produce sufficient wealth to get rid of this condition of affairs? I say we do, and if there were less idle food and less idle raiment worn in this country and less senseless luxury and a reorganisation of our production, this condition of affairs could be altered and we should be a happier, more contented, and stronger nation than we are at the present time.