INCREASE OF PRODUCTION.

HC Deb 10 February 1926 vol 191 cc1151-95

Mr. SMITHERS

I beg to move, That this House is of the opinion that the solution of the present economic and industrial situation in this country lies in increased production, with adequate remuneration to the worker in proportion to output, thus enabling this country successfully to compete in the markets of the world, and consequently to increase her exports. Any new Member who is fortunate enough to draw a place in the Ballot must feel the great responsibility placed upon him. I have put down this Motion to-night because I believe that what I am here advocating is vital to the existence of the people of this country. Increased production at competitive prices is the only way we can make pro- gress, raise wages, reduce unemployment, and raise the standard of life of the workers of this country. May I be permitted to put before the House one or two elementary truths about the conditions under which we in this country, whether we like it or not, under whatever Government is in power, have got to live? If we ignore them we cannot hope successfully to solve the difficult problems before the country. In all our political and economic discussions let us remember always that Great Britain is different from every other country in the world. We are not only an island in the North Sea with a large population, but we do not grow enough food in these islands; we do not produce enough raw material either to feed our people or to keep our people in employment.

Our very existence economically depends upon our power to import about four-fifths of our food and raw materials. This food and those raw materials do not rain down upon us like manna from Heaven, but have to be paid for by the export of goods or of services at such a cost level that we can compete, and compete successfully, in the markets of the world. The logical conclusion is that otherwise we shall starve. The process may be long and painful, but the end is certain. Last year the excess of visible imports over visible exports was between £350,000,000 and £400,000,000, the balance being made up by invisible exports, which enabled us to meet our heavy burdens of rates and taxes to pay interest on our National Debt and to about balance our national balance-sheet. During the past few years the balance standing to the credit of this country at the end of each year has become less and less. This cannot be allowed to continue. The situation must be faced with courage by the nation as a whole, and with a will to overcome it. But I submit that the basic remedy is to be found in increased production at a cost level which will enable us to increase our exports, combined with a determined effort to economise in national expenditure. Subsidies and subventions only tend to obscure and to make the situation in the end more serious.

Mr. MacLAREN

Hear, hear!

Mr. SMITHERS

Some lasting remedy must be found, and must be found quickly. I am confident that a solu- tion is not difficult to find if masters and men alike would substitute, for those leaders who persist in turning economic questions into political questions, fair-minded, able, capable business men. Surely this is too vital a matter for political controversy. If economic issues were put before the workers of this country as clearly as political issues are—

Mr. MacLAREN

God help the country!

Mr. SMITHERS

—I believe that the problem would be halfway to solution. Tell the men the truth, the economic truth, and I believe the immediate response would take the form of increased production. British industry would prosper, and British wages would increase. Increased production means increased wages.

Mr. R. RICHARDSON

Does it?

Mr. SMITHERS

And, what is more important, increased purchasing power. In America to-day there is practically no unemployment. In this country, speaking in round figures, we are crying out for a million houses, but we have a million unemployed. Has the building industry in this country as a whole done its level best to increase the production of houses and to absorb as many as possible of the unemployed? I, for one, feel it has not. Restriction of production in the building industry, which is prompted by a selfish and short-sighted policy, prevents industry developing as fast as it might, and ignores the misery and inconvenience that such a policy causes. The American worker today is enjoying higher wages and a fuller share of the pleasures and necessaries of life not because he is working longer hours but because he believes that the maximum output per man per hour means the creation of wealth. In America they see to it that every device and invention is utilised which will increase production and lighten men's tasks. I would respectfully ask, Can the trades unions of this country say with sincerity that they have welcomed every method and device and invention which would increase production, and have they urged their members to use those means effectively? The mineowners of this country are asking for an eight-hours' day, which has produced a slogan "Not a second on the day, and not a cent off the pay." I venture to submit that both parties have entirely missed the point. We in this country have spent too much time in discussing the number of hours and the amount of wages, and too little time in discussing the purchasing power of wages and the output per man per hour.

I know the difficulties and the dangers of comparing the output per man in the coal mines of America with the output per man in the coal mines of England. I want to give just a, few figures to show that during the present century the output per man in America has enormously increased, while the output per man in this country has decreased. My figures cover a period of 23 years. In 1901 we produced per man per year in this country 281 tons of coal; in America they produced 543 tons. In 1923 we produced in this country 229 tons per man per year; in America they produced 682 tons. During that period the American production per man per year increased 139 tons, while our production decreased by 52 tons. These figures are taken from the official returns of the Mines Department. I do not say for one moment that we can hope to obtain the same production as in America, owing to the various differences in the circumstances between the two countries and the natural advantages they enjoy in America. In view of these circumstances, we cannot hope to obtain as much output per man as in America, but I do believe the difference is greater than it need be, and greater than it ought to be.

I want to say quite definitely and with respect that I support and always have supported trade unions because I believe they are an especially necessary and useful factor in our present industrial system. I also want to say, and I say it quite definitely, that in the interests of the trade unions themselves and of the country I view with alarm, and, I believe, the country views with alarm, the destructive influences that have, arisen within their ranks which, to satisfy political vanity, are playing with forces they will not be able to control or to direct, and which policy, if persisted in, must ultimately bring about a national calamity. I am forced to the conclusion, after careful inquiry, that the greatest hindrance to an increase of production is the policy of restriction of output which is pursued—[HON. MEMBERS: "Where?"]—and the coercion which is all too frequently practised to secure that end. [HON. MEMBERS: "Where?"]

Mr. DEPUTY-SPEAKER (Captain FitzRoy)

I hope hon. Members will allow The hon. Member to proceed with his speech.

Mr. SMITHERS

I am trying to compress what I have got to say into 20 minutes, and I have on purpose refrained from going into details, because I conceive it to be the duty of an opener of a Debate of this kind to put forward broad views and to allow the discussion to take form from what I have moved. I submit that this policy of restriction of output, if persisted in, means national suicide, and the people who will suffer most will be the members of trade unions, for whose interests their leaders are responsible. If I thought it was helping the situation I would support it with all my power. I want to call the attention of this House and the country to the exploitation of the power of production of the finest workers in the whole world for political purposes. Trade unions have perfected a system of industrial organisation, but they have used their great power and influence not in the direction of tackling the more fundamental question of increasing production.

A policy of this kind tends to create in men's minds that they need not make the most of the talents which God has given them, because they are led to believe that, after all, the State is a kind of fairy godmother with a bottomless purse. There are two methods by which I believe this policy can be exploded. The first is the Prime Minister's method, with which I respectfully and heartily agree, of appealing for peace in industry and appealing to the reason and common sense of the people of this country, and by telling the people the truth in such a manner that we may obtain very willing co-operation to increase production and thereby to create wealth for the benefit of all. The other method is a continued decline in our industry, and, therefore, one of decreased production. The country will have to realise the economic truth of this by the bitter experience of further unemployment and all the misery that it entails. Some of the most thoughtful men with whom I have talked, who have no axe to grind but the good of this country, have expressed the opinion that if such a situation should arise we might never be able to recover from it. Therefore, I appeal to all to realise the necessity of increasing production before it is too late and before we have lost our markets. I hope the House will not think I am neglecting a very important point of the Resolution. I will not now give my reasons to show how the workers who increase production can share, and share fairy, in the result of their labours. I understand that that subject is being dealt with by another speaker, and, therefore, I do not propose to go into it now.

I am supported in much that I have said to-night by a speech quoted in the "Times" of the 3rd December, 1920. The words are so weighty that I hope the House will forgive me if I read the quotation: Our educational system, I think, has not yet reached the point of teaching the mass of the community some of those simpler and elementary facts in political economy which it would be well for every man and woman in the country to know. There are workmen who think that if they do less there will be more for someone else to do. I submit against that view the results of experience, which are the real test. From one cause or another this year of 1920 has been one of low production, and it is towards the end of this year of low production that we see the highest figure of unemployment. … If it were true that low production found work for others, that would have solved your unemployment problem. … It is, I think, proper for the workers to secure safeguards against unemployment and against additional output being of greater benefit to employers than to anyone else; but"— and I would ask the House to mark these words— even if those safeguards cannot be secured, it would, I believe, still be desirable enormously to increase output of commodities, for that increase would confer more benefit on the working class than on any other class in the country. … Plenty, then, is the friend of the worker. Increased production lessens his difficulties; decreased production increases his burdens and diminishes the purchasing power of his wages. Those words are reported to have been said by the right hon. Gentleman the Member for Platting (Mr. Clynes). I submit that what this country is suffering from to-day is not over-production, but under-consumption. Under-consumption is due to under-production. One of the greatest students of our present economic situation expressed the following opinion: That this country is capable of industrial expansion, even up to the limits of its present productive capacity, is unquestioned, provided the will to do it exists.' Unhampered by trade union regulations, and inspired by a common purpose, we astonished ourselves and the world by our vast production during the War. The situation to-day, though different, is, I submit, as serious as that of 1914. It requires the same energy of effort, and the same unity of purpose. Cannot we recapture the spirit of 1914, and again astonish ourselves and the world? Low production is mainly responsible for low wages. Restricted production means restriction of wages. Increased production, I submit, means increased wages, increased prosperity, greater purchasing power, and a better standard of life for the workers of this country.

9.0 P.M.

I hope the House will not think that am talking in a too pessimistic vein. We have had signs recently that trade is improving, and I devoutly hope that nothing will be done to dash those hopes to the ground by anyone or by any section of the community in this country. When any Member of this House has the honour to move a Resolution, he naturally hopes that it will have some practical effect. In view of the decision that is to be taken next May, I hope it will lead to a national appreciation of the position which will result in a determination by increased output to bring about an industrial revival; and, if the same determination were shown to sink individual differences, to emphasise points of agreement, and to discuss points of divergence and difference with a view to securing agreement, I believe the difficulties under which we now labour would soon disappear. If it be answered that that is a counsel of perfection, I would reply that self-preservation is the strongest motive that dominates human thoughts and actions, and it is that and nothing else that is at stake. I urge that this increased production and this industrial revival can be secured by the co-operation of all men and women who have the future and the prosperity of this country and its people at heart.

Brigadier-General CHARTERIS

I beg to second the Motion.

I think that the present time is a particularly opportune one for a Motion of this nature. There is, of course, no doubt that in the Motion itself there are certain points with which people will disagree, but some parts of it, I think, must commend themselves to the whole of the House. Increased production in itself is, of course, obviously desirable. Adequate remuneration is an idea which, I think, commends itself to all parts of the House. It is particularly opportune that it should be brought forward at the present moment, because the minds of the whole country are stirred by and interested in economic problems, owing to the fact that we are not far distant from what may be one of the most serious crises through which this country has ever passed. For this reason, if for no other, I think it is desirable that, by a Debate in the House at this moment, attention should be attracted to an economic problem of this sort. But there are other reasons. The Locarno Pact and the reversion to the gold standard have removed the last of the War controls, and, in the year upon which we are now entering, we shall begin a new phase—a phase where competition will again be, in a larger measure, unrestricted.

By the Locarno Pact we again allow, and it is desirable to allow, Germany to enter into free competition with us; and, owing to the return to the gold standard it is estimated by our economists that our costs of production have somehow or other to go down by 10 per cent. I do not know if the actual figure will be accepted by all but, taking it as the immediate requirement and adding it to the 10 per cent. Which is generally accepted as the reduction necessary in the cost of production before the gold standard was reverted to, we get a figure of between 20 and 25 per cent. as the lowest to which our cost of production has to be reduced if we are to be successful. It is not a question of whether we can reduce that amount. It is a, necessity if we are to compete successfully in foreign markets, and without successful competition it is difficult to see how the country can survive. There are certain other factors which have to be borne in mind. The whole country has welcomed the indications that the trade of the country has definitely turned the corner. There may be an improvement for causes other than those which are suggested in the Motion. It may be that even if we cannot bring about a reduction in costs some other events in some other part of the world may give us temporary assistance. Quite obviously France, in a few months, or possibly in a few years, cannot compete on the same favourable terms as she is doing now. All these factors must, of course, be taken into consideration, yet the great fact remains that if we can by some means or other reduce our cost of production while still giving adequate remuneration to the workers we shall have made a long step towards prosperity.

The crux of the Motion to my mind is in the question of adequate remuneration to the workers. I do not think hon. Members opposite really believe any one on these benches wishes to see the standard of living of the country reduced. I do not believe people in the country think the party to which I belong in any way desires to see that. We give equal credit to hon. Members opposite that, if we can suggest any solution that is economically sound, they for their part will, in the national interest, be prepared to support it. When you come to analyse the means by which a Resolution of this nature can be given actual effect to, of course, the difficulty begins, and it is to meet that difficulty that I ask the House to listen to me for a few moments. Cost of production is, of course, intimately connected with the question of output. It is axiomatic that with a greater output overhead charges decrease and the whole cost of production goes down, but there are other factors far more important, in a way, than even overhead charges. There is faulty management, which everyone admits has a disastrous effect on output. There is restricted output from whatever reason that may occur, whether it be restrictions, which are due in themselves to faulty management, or restrictions due to the individual who voluntarily does not desire to work his hardest, or whether they are imposed by some outside organisation, but it cannot be disputed that restricted output means necessarily increased cost of production. In addition to that you may have interrupted output. It may be due to trade disputes, it may be due for the moment to the lack of a market or to a sheer accident, such as a fire.

All those things mean interrupted output, which necessarily adds to the cost of production. Further, there is low production which may be due to the inherent incapacity of the person concerned in the industry to do better than he is doing at present—to work up to the average of his capacity. I put that aside, because anyone who has studied trade abroad knows that our workers, and I believe, in general, the management in the country also, is as competent as are the workers and management in other parts of the world.

Turn back then to the only two things with which we can deal. That is to say, restricted output through faulty management, or some other cause — I think we have long passed the day when anyone believes that any party in the State, or any given body of men, desire to bolster up faulty management at the expense of the industry of the worker or of the country. The trouble is how to improve it. Inspection—intervention by the State—is not, in my opinion, at all likely to be effective. Competition—and the closer the competition is the more immediate is the correction—appears to be the corrective found by nature for faulty management. It would appear to be in that that we have to put our trust. But there are other factors also which have to be considered. If you look to the experience of Germany, if you pin your faith to the grouping together of industries and careful inspection by the State or any other superimposed body, that was tried in Germany in the mines and failed. The failure was brought to notice by the commission appointed in 1919 by the German Government, and brought to notice in no uncertain terms. Of course, that does not debar the subject from being discussed and does not debar the theory of larger management, even State control, being believed in, but it is a consideration which one cannot, I think, if one is fair minded, put entirely out of one's mind when looking at a problem of this nature.

Then you get the problem, shorn of State management, of larger groupings. On the other side of the Atlantic that has been tried successfully. There, under materially different conditions, though certain of the factors are the same, high wages have not produced a more ex- pensive article and have not materially raised the cost of production. We know also that by mass production, by grouping industries into great groups to meet competition, great things have been achieved. The question is whether that is possible in this country. One of the troubles, it appears to me, with regard to those groupings of industry, that bringing together of great numbers of men working under one control, is that for the mass of the men you take away the spur of personal ambition. There does not appear, to the individual workman in the trade, the same immediate outlet for his ambition that there necessarily is in a smaller concern. The question we have to consider is whether by any means we can produce any other method whereby the worker can be induced to produce of his best. We want to find some legitimate opportunity of satisfying the perfectly legitimate ambitions of the individual worker. I am told, and I believe it is true, that in the newer countries on the other side of the Atlantic the transsition from the working stage to the management stage is far easier and far more often accomplished than it is in this country. One would like very much, if it were possible, to see steps taken which would make that transition equally easy here.

There are schemes of co-partnership, bonus schemes, profit-sharing schemes, all schemes which try to give a personal inducement to the worker in the progress and success of the industry in which he is engaged. All these schemes are greatly to be praised and greatly to be helped, but there is one difficulty in them which I see, and which I do not see how to improve. The return is necessarily slow. It is difficult to see how the individual worker even under the most complete profit-sharing or co-partnership scheme, the rightly ambitious individual, will get complete satisfaction out of the share of profits which he may obtain. Experience has shown that although a great number of firms are still engaged—they number 240—in schemes of co-partnership in one form or another, the firms that take up these proposals go through what is almost a regular cycle. They adopt the scheme at first with enthusiasm, then they cool off and gradually, for some reason or other, the history has been that the schemes have been dropped. I do not think that is inherent in the system, but I do think it means that the system of co-partnership, which I would advocate to the utmost, requires most careful examination and requires, if possible, that some alteration should be made whereby the remuneration to the worker by co-partnership should be greater than at the present time.

There are certain other considerations to which I would like, briefly, to direct the attention of the House. I am not blind to the fact that although the present situation must give us all cause for concern, yet actually, in competition with the rest of the world, we have not done badly since the War. We have retained our due proportion of the total markets of the world. The loss in our trade is due to the fall in the total markets of the world, and not to the fact that we are not competing with equal success with other countries. That is not enough. We have to try by some means or other to get greater production, greater output, and great efficiency in management. Conciliation, concession and self-sacrifice, as one hon. Member opposite suggested, are desirable. The trouble about conciliation and concession always appears to me when it is interpreted in trade disputes on both sides to be, "You concede and I conciliate." That is a, danger that has to be avoided in any disputes that come in the future.

I urge the House in the Debate that is to take place to bear in mind that, in spite of all the efforts we have made since the conclusion of peace, in spite of the £750,000,000 of debts which we have solved, in spite of the fact that we have maintained our proportion of the world's markets, nobody looking at the future can be wholly satisfied. I would ask the House to look at this Motion, not as though it contained any panacea, because it does not, for all the evils of the moment, but to look at it and reflect whether it is not possible that in this Motion to increase output, the removal of any form of restriction, always providing, and this is essential, that the remuneration of those engaged in industry is in no way impaired, but rather increased; in some solution of that nature we may have the germ of far greater prosperity, and even the solution of many of the problems which concern and dismay us at the present time.

Mr. BARNES

I beg to move, in line 2, to leave out from the first word "the" to the end of the Question, and to add instead thereof the words immediate improvement of the industrial situation lies in the organisation of industry for the elimination of waste and the sound capitalisation of industry, and that increased production, though desirable, would aggravate the industrial situation and would not guarantee continuity of employment unless its distribution be equitable and is devoted to raising the standard of life of the people. I move this Amendment because I do not consider that increased production of itself can solve any of our economic ills. We have had increased production ever since the capitalist system began. Year after year we have increased our output of commodities, and yet the fact remains that to-day life is more critical and anxious for millions of our citizens than it was before the capitalist system was inaugurated. A very legitimate point which we can submit to the Mover of the Resolution and the party that he represents is that if increased production of itself will solve our economic ills, why does not the Government put the one and a-quarter millions of unemployed to work immediately? We have only to consider a proposition of that description to realise that there is something more in the economic structure of society to-day than a pious expression such as this Resolution embodies.

While we on this side of the House do not disagree with the necessity for increased production, we would point out that the grievous anomaly that exists under capitalism is the fact that increased production instead of leading to increased consumption on the part of the mass of the people, aggravates in many respects the inequalities or life and the inequalities of opportunity. I want to examine this issue to-night not altogether from the situation we are in at the moment. The present state of affairs, economic, industrial, political and social, in Great Britain, is linked with our post-War policy. There are many factors in the world over which we have had no control which have affected the present situation. It is true that our foreign policy has aggravated many of these issues, to our disadvantage, but I do not think it is within my province to-night to examine the international field.

I want to devote my attention and my analysis to the home market and the home conditions of trade in which, to a large extent, we have been able to control our own destinies. The policy which financial and commercial interests in this country have operated since the war, hold out no inducement for the working classes to support them in the policy adumbrated in this Resolution. I would ask hon. Members to take their minds back to the position immediately after the Armistice. It was a buoyant time in trade; everybody was hopeful. Employers and all people engaged in trade in this country considered that there was an excellent opportunity for rapid industrial expansion. At the same time that these prospects were apparent to the commercial interests in this country, and when steps were taken after the war to lay the foundation of business expansion to meet this possible increase in trade, the Government, the Press, financial and business interests in this country, who organise opinion in certain directions, chose the opportunity to start a campaign for the purpose of economising consumption and exercising the utmost thrift, so far as saving was concerned, to provide the necessary capital for this expansion.

That was all right as far as it went. But there was no connection between that campaign and the financial policy of the banks, which, at that particular period was being prepared for a deflation policy. On the one hand you had a direction of all the public attention on the necessity of restriction of consumption, and on the other hand, at the same time we had a preparation and development of a policy leading to deflation. Directly deflation commenced to come into being, it involved a fall in prices. It was at that moment, directly prices commenced to fall that you had the full psyschological effect of the previous campaign to restrict consumption. Immediately prices began to fall, consumers stopped dead, with the exception of purchasing the absolute necessities that they required. With falling prices, traders had to unload their stocks at any cost. The unloading of stocks on the market at a time when the public generally were restrained and nervous in their purchases, compelled traders to sacrifice their stocks at unprecedented losses. With falling prices, with retarding stocks, so far as sales are concerned, it meant that all traders, all selling agencies, at any rate, had to keep their stocks as short as possible. That meant that manufacturers could only produce for current requirements and for actual orders.

It was that position which, I claim, was deliberately produced, first, by the financial policy of the banking interests of this country, and, secondly, by the stupid lack of co-ordination between the Press publicity and Government control, which accentuated the slump that commenced in 1920 and has operated for a number of years. Falling prices, short stocks, the lowering of the output of Commodities, what was the result? Manufacturing costs commenced to rise very rapidly. Anyone who was in touch with business costs at that period knew that they were rising at a rate that was almost impossible to control. The people who produced this situation: where did they turn for relief? They turned for relief to the cutting of wages. To a certain extent you cannot help that, under the system, and that is why we condemn the system whereby human materials must always be sacrificed to the other materials like plant, machinery, buildings and things of that sort. You could not cut costs of that description; they were fixed and immovable. Therefore we had a policy which, in a space of three years, caused the workers of this country to suffer a net reduction of over £500,000,000 a year. I want to submit very briefly that it means that the workers in their wages, and in their standard of life, in unemployment, and in the lack of social improvement, as far as this generation is concerned, have been compelled by the present system to pay all the cost, the material and spiritual cost, which the waste of the War and the consequences of post-War policy have brought about in this country. In these circumstanes are not we entitled to say to the Members on the other side who represent the commercial and financial interests who have produced this situation: What guarantee have we that, if you have increased production in the near future, the workers will get adequate return with this experience in front of us? Who is going to determine that adequate return? Are the mineowners going to give an adequate return? Are we to take the policy of the Government on education as an indication of what their adequate return represents in social policy? Therefore, we submit that the contention of Members on the other side, that increased production is a remedy for our social ills, is proved by facts and experience, and by the development of the consequences of our economic system, to be a fallacy, as far as our workers are concerned.

Since 1923 we have been more or less in a period of stabilised prices. We have got out of the slump, and, although we have not left the consequences of the economic policy behind us, we have been working on a more or less stabilised price basis, and during that period there has been an actual increase in production and output in this country in almost every trade. Working costs, as a result of the increased output of commodities and a clearing of stocks, have gone down. What is the result, in the last two or three years? In 1924, analysing 1,490 companies, the net profit of these companies totalled £142,000,000; in 1925 the profits of this same group of companies amounted to £154,000,000, an increase of over £12,000,000, which suggests that during that period there was, and from now onwards there will be, a rising output of commodities and a rising total quantity of wealth in the community. But during that year wages fell £70,000 a week. Wages fell, while profits had gone up to the extent of £12,000,000!

Let us take the analysis of the current rates of profits on ordinary capital for the last four years, which represents more or less a stabilised-price period. In 1922, the average return on ordinary capital was 8.4 per cent.; in 1923 it was 9.3 per cent.; in 1924, 9.8 per cent.; in 1925, 10.3 per cent. Where is the guarantee to the people that increased production means adequate return to the workers? There you see, without any question or doubt, that as far as we increase production and increase the total volume of wealth in this country, by the processes of control and distribution, and by its power, capital attracts that increase of wealth to itself and uses it in a different direction. Our arguments from these benches are these. We do not ignore economic problems or economic consequences, but we do say that the Government, the commercial and the financial interests of this country, have to realise that in the twentieth century men and women of the working class can think for themselves and work these problems out for themselves.

Through our working-class organisations, like our trade union organisations, our co-operative societies, and other bodies of that description, they are, by experience, finding that they can organise and run industry, and, by relating production to consumption, secure the net results of industry, not for a comparatively small section of the community, but for the lifting up, however slightly, of the average condition of life of the majority. That is what you are faced with to-day. That is what capitalist interests must face to-day. The time has gone by when you can delude, hoodwink, and deceive the workers of this country by meaningless resolutions of this description. We shall proceed by our existing working-class institutions, and by the encroachment of political power, to organise more and more a process of production for the purposes of serving the needs and desires of the community.

Let me give the House another argument against the present system. We do not consider that the wealth that we create is being used adequately. We can point to a variety of ways in which there are produced commodities that are a sheer waste of human effort and of the wealth of the community. In our opinion there is no utility in producing commodities for the sake of producing them. Our contention is that the production of commodities should lead to increased human happiness and comfort. The post-War period of difficulty, which has helped Conservative Governments, social agitation, class embitterment and great industrial struggles, has meant the loss of wealth in this country. In the last six years the people of this country have produced commodities of a value of £2,774,000,000 for the payment of interest and principal on War Debt. Yet the debt is higher to-day. That wealth has been produced and the services rendered are represented in human labour. Where have they gone? They have gone to those people who own the National Debt. It is true that they have spent the money, but in what direction? In expenditure on luxurious articles, in the purchase of commodities which they do not require for their personal comfort and happiness, and which mean the withdrawal of other services to the community.

Let me give a simple illustration to show what I mean. If you want increased production we can demonstrate how you can get it. It is well known that the costlier an article the less is the labour represented in the production of it. I have here an illustration of a fur coat, and similar illustrations can be seen in any newspaper. [An HON. MEMBER: "A Russian coat?"] Very likely it is a Russian coat, but it is of the sort that we do not buy. I notice that it is advertised for 128 guineas. As a matter of fact, you could produce 42 three-guinea coats for the same money. The 42 coats would provide more work; they would represent the greater output, if hon. Members opposite are so much concerned about increased output. The production of 42 useful three-guinea coats means greater output, more employment, and certainly it means more happiness and comfort for 42 women to have a three-guinea coat each than for one woman to have a coat costing 128 guineas.

Mr. HOPKINSON

Surely the hon. Member has forgotten that there is much more labour expended in shooting a blue fox, for example, than in shooting a cat.

Mr. BARNES

I notice that the hon. Member's economics, as far as this country is concerned, are quite wrong. The blue fox does not exist in this country, whereas rabbits or cats, whose furs may be used in these goods, will certainly be produced in this country. In our analysis of the present system we can detect the difficulty that is in the way. Hon. Members opposite agree as to the necessity for increased production. So do we. But they attach certain conditions. They will agree to increased production only if it means more profit. The Mover of the Resolution referred to housing. Why have we not more houses to-day? Private builders could build houses before the War because they made a profit on them. It is impossible to build a working-class house to-day and to let it at an economic rent that will bring in a profit. Therefore, although houses are more vitally necessary than ever for the health and comfort of the community, they are not produced. It does not matter to what field of industry you turn. Directly profit ceases private enterprise ceases to function.

We visualise a state of society that is not imaginary and not impracticable. We know that a machine can produce a piece of good cloth just as easily as it can produce shoddy cloth. We know that a boot operative can make a good solid boot just as easily as he can make a paper boot. We know that the building operative can build a good brick house if he likes, and he will do it if you will give him adequate wages. We can produce these commodities, but all the time capitalism, by taking the cream off the various processes which produce profit, eventually returns to the mass of the people a purchasing power out of all proportion to the total volume of goods that they produce. We intend by every constitutional means to develop through Parliament, through our local authorities, trade unions and co-operative organisations, the control and ownership of industry, of land, of capital and of raw materials, so that we can relate the purchasing power of the community to the total volume of goods produced. Then the increased production, the incentive to work and the question of restriction even on the part of employers and trade unionists, will fall to the ground, because the incentive in life to everyone who gives service is the sure knowledge that the results will not be taken from him, but that he will enjoy with others in the community what he has helped to produce.

Mr. D. GRENFELL

I beg to second the Amendment.

The hon. Member for Mossley (Mr. Hopkinson), who interrupted, in comparing the expense of shooting a blue fox and the expense of shooting a cat, apparently forgot that a cat has nine lives. I am satisfied that the Resolution we are discussing has been killed long ago. Time and time again the theory which it embodies has been put forward and has been demolished. We do not mind how often these targets are put up for us. They give us good shooting practice for bigger game. We shall show that this Resolution is quite an unjustifiable assertion on the part of hon. Members opposite. I had expected that the Mover would have explained more clearly what is desired. Does he want to increase production in the aggregate? Does he want more national production or does he want a higher individual production? Does he want the individual man to work harder, and to expend more energy in order that he may produce a cheaper article and be paid at a lower rate? Hon. Members opposite have curiously avoided giving an explanation of their intentions in this Resolution. We have heard the old assertion with which we are so familiar that good trade follows higher production. Is that really the result? Have we forgotten the recent history of Germany, which was held up to us as an example. The German workmen have been referred to as the most industrious in Europe, as good-natured fellows who are willing to spend the last ounce of energy in the re-creation of their national life. The German worker, I believe, has been trying to obtain big production, and the German system has been organised on those lines, but what do we find? Germany is in a worse position to-day than she has been at any time since she became an industrial country. There are nearly 2,000,000 workers unemployed in this Utopia of high production, and willing workers.

The Mover of the Amendment has dealt exhaustively with the conditions at home which have produced a situation in which over 1,000,000 of our working people are idle. I propose to point to the position of our export trade because the Resolution refers to the hopes and possibilities of regaining what is said to be our lost export trade. We all know that the aggregate volume of trade is much less than it was in pre-War years. I think the figures of last year showed that we exported only 76 per cent. of the quantity which we exported in 1913. That is a drop of nearly 25 per cent. Is it due to anything that can be remedied by more application on the part of our working people? Is it not rather due to the failure of the world to receive our goods? Is it not due to the fact that we have been insisting on other nations sending material to us rather than receiving the materials which we can send to them? Reparations have contracted the avenue through which our foreign trade is conducted. We may assume that the channel through which our trade passes is limited to certain dimensions to-day, and what hon. Members opposite propose to do in that case is to dilute the flow of trade. They say, let us make more; let us pro- duce more, and reduce prices, and alter the volume in that way. But that is not a way which will bring wealth to this country or add to the prosperity of industry. If we have commodities to sell, we must sell them at world prices, or we shall have to pay a disproportionate price for the goods which we receive in return. If by any magic wand or by any process which hon. Members opposite have in mind, but have not explained, we were able to produce in much bigger quantities, we would still have to sell our products at something corresponding to world prices.

The falling off in trade is marked in certain industries, such as the coal industry. The coal industry has hitherto been the chief means of creating export values in Great Britain. Since the War there has been a considerable falling off in that trade, but at the present time we find that while we do not sell within 20 per cent. of the quantities of coal abroad that we used to sell, we still sell a bigger share of the world's marketable coal than we have ever sold before. We own a bigger proportion of the world's trade in coal at the present time than we have ever owned; but if the world does not want coal any longer there is no use asking for more production. More production is possible in the collieries at the present time because we have 300,000 miners unemployed, and it would be possible to increase individual output. It is easy to produce more coal, but with what result? If you add to the production of the individual miner, you put out of work a corresponding percentage of men who are at present employed and thus add to our troubles, and you also add to the cost of production by increasing the rates as a result of that additional unemployment. I have figures from 13 industrial areas in South Wales where the rates are much in excess of 20s. in the £, and represent an average of 23s. in the £, or an increase of 140 per cent. above pre-War rates. That all adds to the cost of production, and if by the process which hon. Members have in mind you were enabled to employ less colliers, you would have more colliers on the local rates, more Poor Law expenses, and a higher cost of production. There is no remedy to be found in that way.

The way in which the remedy is to be found is indicated in the Amendment. The Prime Minister, speaking at Plymouth in 1923, in his famous policy speech, said one of the points of his policy was to take steps to redress the balance in industry, and he referred to the one-sided development of our national industry by which men were taken from the countryside and thrown into congested industrial centres where they were unable to find employment. There lies the remedy. We cannot compel the world to buy from us. We cannot enable the world to buy from us by advancing them money. If this were a question of creating markets, I might be able to show that there is a country, naturally complementary in an economic sense, to this country, where we might be able to sell considerable quantities of goods. I refer to Russia. I am satisfied that with proper relations between this country and Russia, a great deal of our unemployment would be relieved by giving to Russia that which she requires, and which we can produce here, and by deriving from her natural products which we are unable to supply ourselves.

I shall not, however, follow that argument to-night. The line which I suggest to-night may be indicated by taking the coal industry as a direct example. Here is an industry producing a commodity which will not be required in the prewar quantities for a considerable time to come, if ever again. Here is an industry capable of producing large quantities of coal, but largely idle because nobody has need for the coal which we have to sell. We could give this coal away at a price 25 per cent. lower than the present price, but still the demand would not increase to any appreciable extent. What is the remedy? We find the coincidence that in a period of stagnation in the coal trade we ourselves are importing immense quantities of oil each year—of the oil which is contained in this coal and is a very valuable product of the coal. The proper organisation of the industry would make it possible for us, in the absence of markets, to mine the coal, to extract the oil from the coal at home, and to dispense with the necessity for importing oil in the large quantities in which we now import it.

It is on those lines that the coal industry could be resuscitated—the exercise of the capital of the nation, subject to proper direction, in making the best use of our industry and finding employment for our men in a way which would really add to the nation's wealth. What is the use of suggesting that we should reduce the price of coal by another 2s. or 3s. per ton, and get this richest of all our national treasures bought at a price much below the price that gives a living wage for our people, when by proper organisation at home we can make this treasure yield its full value, and build up our industrial system and our economic life in a way that, without this organisation, we have never any hope of building it up again? We import in foodstuffs into this country between £400,000,000 and £500,000,000 worth each year, depending on the sale of our manufactured goods to pay for those products which we could very well produce at home. In this country, which has a soil comparable to that of any competing country, which has more convenience for transport in the form of railway systems, canals and rivers that are more accessible than any agricultural country in the world, we have the possibility of producing, if properly organised, more than half the £400,000,000 worth of foodstuffs which we now import. It is not by adding to the burden of the day worker, by paying him lower wages and working him longer hours, that we shall gain.

What is the view of hon. Members opposite of the situation next May? It is well known to all who have studied the mining situation that the miners are making no appeal for more wages. They say they are working as hard as they can to-day, that human physique cannot stand more, and that their homes are deprived of comforts because of the low wages they get, but they do not ask for any more. What do hon. Members who talk about higher wages and the need for paying adequate wages say about the situation next May? Will they say that the miners shall be paid adequate maintenance after May? Will they say it is good business to pay good wages in the mining industry, or will they, rather, lend themselves to the proposal that wages shall be cut again, thus lowering the aggregate of purchasing power and making the home market still smaller than it is at the present time? We want high production because we want high consumption, but we say that, prior to a recognition of high production, we must have a recognition of the right to high consumption all round. It is only when hon. Members opposite and those responsible for the industrial life of this country recognise that all the people of this country have a right to the enjoyment, not of fur coats at 128 guineas, but of good food, good clothing, proper houses, and a higher standard of life all round—it is only then that the industries of this country will be able to produce, and find a ready demand for, the goods they can produce. In our Amendment we say that the immediate improvement of the industrial situation lies in the organisation of industry for the elimination of waste and the sound capitalisation of industry, and that increased production, though desirable, would aggravate the industrial situation and would not guarantee continuity of employment unless its distribution be equitable and is devoted to raising the standard of life of the people. I have every confidence that, whether this year or next year, hon. Members opposite and those who oppose our views in this country will agree that the prosperity of the country lies in the prosperity and the contentment of all the homes in the country.

10.0 P.M.

Mr. AUSTIN HOPKINSON

I should like, in the first instance, to congratulate The hon. Member for Gower (Mr. D. Grenfell), who has just sat down, on his very excellent quip at my expense—perhaps the best quip that I have ever heard from the benches on which he sits. I should like to congratulate him also on having spent a very happy half-hour, because I gathered that he was very happy in the argument he was putting before us. But it seems to me that there is very often a certain remoteness from the actual problems of industry displayed by those who speak from the benches above the Gangway. Indeed, there is that same remoteness sometimes displayed by hon. Members opposite, because on both sides, when a discussion of this sort arises, we find gentlemen who know all about it, who are quite convinced that the problem is a perfectly simple one, and that those poor unfortunate people who, like myself, are actively engaged in endeavouring to solve that problem are very stupid not to see what a very easy matter it is. What I think must have struck those who have listened to the Debate so far is that not only has there been a remoteness from the actual problems of industry as they arise from day to day, but that there has been a remoteness from the consideration of the fact that in industry we are largely dealing with human beings and not with economic men, whether those economic men invented by individualists or those economic men invented by collectivists.

For example, I think it was the opener of this Debate, and certainly the Seconder of the Motion, who referred to the well-known fact that the production of the workers in America at present is gigantic as compared with the production of similar workers in this country, and they also referred to the equally well-known fact that the economic condition of the workers of America is again very much higher than the general economic condition of the workers in this country at the present time. But they failed to point out that that is not due to a matter of climate, nor even to the geographical conditions, but that it is due undoubtedly to a very great distinction between the actual personalities concerned in America and the personalities concerned in this country. It has been my misfortune to have been connected intimately with the coal industry of this country for the greater part of my life, and the problem which confronts us repeatedly in that industry is a problem which, I believe, does not exist in the United States of America.

I gather that in the coalfields of the United States the love of money among all classes, and particularly among the working miners themselves, is such that, if wages are high and trade is prosperous, the men would be only too willing to work Saturday afternoon and Sunday in order that they might add a second Ford car to the one they already possess. In other words, in America they have a very primitive form of civilisation, a civilisation which, I believe, this country passed through at about the time when the Liberal party—the old Liberal party—was the sole foundation of economic and political rectitude. In this country, and particularly among the mining population, we now have a well developed and an old civilisation, and fortunately the progress of civilisation has mitigated that overwhelming love of money which is so distinctive of primitive nations such as that of the United States.

When wages are high, as fortunately they are at times in the coal fields, and when on Thursday morning the simple miner looks out of his bedroom window and sees that it is a fine day, he is only too apt in our country, where there is a real civilisation, to say to himself, "I put in a shift on Monday, I put in a shift on Tuesday and I put in a shift yesterday, and it is a fine day to-day. I shall have quite enough to draw for my expenses and I shall take the pup for a walk." That makes it difficulty to carry on the coal industry of this country. I have no doubt that there are many coalowners in this country at the present date who would delight to see this country retrace its steps and take that reactionary course which would bring them to the stage of evolution which is now occupied by the bulk of the population of the United States. If you could be certain that our workers were really fond of money, and that the more money they got the fonder of it they would become, as used to be the case I believe in this country, then the problems of industry would be solved very easily, almost as easily as hon. Members above the Gangway believe they could solve them if they were allowed to do the job.

Surely the real problem we have before us is how to persuade the workers in some of our industries to adjust the balance between wages and production. When the Mining Association of Great Britain put forward the suggestion that wages in the industry must be reduced they forgot to explain what they really meant. What they really meant was that they could not see any way out of the present difficulty except by an adjustment of the ratio between wages and production in the coal industry. That, of course, is the real crux of the problem. When the world is impoverished and the country has poured out capital like water over a period of years in a European war, it is absolutely necessary to make an adjustment if we are ever again to recover our position. In that connection I do not think we need take the somewhat pessimistic views of the Proposer and Seconder. Personally, as far as I can see, and I think I shall have the support of very much more important people than myself, we have turned the corner.

We have been through a period when every political and economic folly has been put into force in this country—I mean the period from 1906 to the present day. But, in spite of that, the strength of this nation is such and the common sense of the workers of this nation is such that we have survived. I venture to say no other nation on earth could have survived those days which concluded with the downfall of the Coalition Government. For example, look what the productive workers of this country have got to carry. We have got to carry the building trade, lock, stock and barrel. We have got to carry the building trade merchants the plumber and the rest of them. Everybody in the building trade has got to be paid something out of our wages week by week. In the same way, we have got to carry the gentlemen represented so ably by the right hon. Member for Derby (Mr. Thomas), who, if I might say so, has shown extraordinary ability and of all men deserves well of those persons whose interests he represents. I think the trade union leader who, practically by his own unaided efforts and his own intelligence, has placed his men on the backs of everybody else is one to be envied. I think the ingratitude of some of those whom he placed in that fortunate position is very much to be deprecated.

We are carrying the building trade on our shoulders, we are carrying the transport workers [HON. MEMBERS: "Who is we?"] Myself and my engineers. We are carrying on our shoulders also various other petty industries which are added to our burdens occasionally. We are carrying the employés of the municipality and of the State, and although we are paying these inflated and artificial wages our difficulty does not end there. We are not only paying the men on the railways an artificial wage at our expense, but we are putting into the market every week the railwayman's wife to bid up the price of the necessities of life against us. I speak with some feeling in this matter as one of those unhappy persons that has to endeavour to provide a decent living for a number of excellent good fellows in the engineering trade, people who cannot be sheltered. It is a little rough when we find our efforts thwarted by the wives of the friends of the right hon. Member for Derby and the wives of the gentlemen engaged in the building trade and the wives of the gentlemen who drive trams and collect the fares and of those who sweep the streets and of a vast host of other gentlemen who are in the happy position of being paid by us an artificial wage, which they use to produce an artificial price for the necessities of life.

That is the problem we have got to face. At present it is difficult to see how we are going to get out of it, because, unfortunately, those in the sheltered industries have got the whip hand of the rest of us. I must give them credit for this—particularly the railway men—that they have not used it to the extent they might have. They have let us down fairly easily considering the cards they hold, but they might ease off a little more. Really to sit on a loco in the siding, reading the "Daily Herald," having lunch over the greater part of the day, and beginning to draw those rates of overtime which loco men begin to draw now at a very early hour in the day, adds to the load on the productive industries a very heavy burden indeed.

To give an example of what we have to put up with in the engineering industry I have here figures from the City of Glasgow which were given in evidence before the Coal Commission. They are the figures of the wages paid to the employés of the Glasgow Corporation, refuse carriers—an extraordinary skilled trade—get 85s. a week; joiners get 80s. a week; bin emptiers 61s.; park labourers 55s.; park gardeners 57s.; destructor labourers 55s., road sweepers 50s., though for some obscure reason lavatory attendants only get 43s. 6d. In my own district the agreed district rate for a skilled fitter or turner is 56s. 6d. if he is lucky enough to get a job. That that man should, week by week, have to pay shillings out of his wages in order to keep men in the sheltered industries and the municipal and State employés in what to him is comparative luxury seems to me the greatest injustice. [HON. MEMBERS: "It is too low!"] Supposing we raise his wages, supposing the whole engineering industry raise their wages, it means that instead of 18 per cent. being on the books you are going to get 36 per cent. on the books. We are not a sheltered industry. It is easy enough to raise the wages of the sheltered industries, but we have got to pay them and the miner has got to pay them.

It is the price that we can get that fixes our wages in the unsheltered trades. In other words, we are only paid by the services we render to the community, and we cannot levy blackmail on the community as some in this country can. Therefore, we have to suffer, and I do hope, at any rate, some of our friends above the Gangway will really take into consideration the extreme importance of this question. We have a burden we cannot bear. It is almost unbelievable that the most skilled of our men, the men upon whose work depends the reputation of this country in the markets of the world, should be living on a wage less than that of unskilled labour. And it is not only an utter injustice, but a piece of the greatest unwisdom. Reference was made by the Seconder to methods to induce men to give the extra bit of production which, in our heart of hearts, we know is really wanted at the present time. One of the first things we have to do is to remove from the productive workers this appalling sense of injustice. They keep quiet for the good of their fellow workers in other industries, but they do feel—and I say this with knowledge—that they are not having a fair deal from some of the others.

I do not think we can solve the problem by some system of profit-sharing or copartnership. Experience over a long period has shown that is a very difficult thing to work, and only a comparatively few schemes have survived in recent years. There has been a very remarkable example of a general system of profit-sharing in a particular industry, and I think all of us, on whatever side we sit in this House, will agree that that experiment has not been a success, mainly for the reasons I have previously put before the House. It was not a success because it was imposed upon an industry which in the main was unwilling, by an outside authority, and because it limited the possibilities of fresh capital for development work. In order to give the miner a reasonable standard of living, the owners' profits were limited to such a drastic degree that they had not enough to spend year by year on development work. I may say, from my own experience of six years of profit-sharing in my own works, that that is the real difficulty of the whole system. The limitation of profits means the limitation of fresh capital, and that means the limitation of the possibility of a rapid raising of the standard of life of the people employed in that industry.

That being the case, it is only when profit-sharing is done voluntarily, and only, I might almost say, when done from proper motives on the part of the employer, that it has any possible chance of success. If an employer introduces a system of profit-sharing, as I think I can say, without boasting, I have myself, simply because he wants to give the best possible time to some of the best possible fellows in the world, then it does work, because in hard times the employer can find some little economy he can make himself in order to find fresh capital. Then, of course, production reaches what I believe to be a very high pitch indeed. That is to say, that under such conditions it is possible to compete in the markets of the world even against German competition, and at the same time pay what in these days is a fairly satisfactory wage. But I would warn the House against being misled as to the possibilities of co-partnership schemes, because it is utterly wrong to induce the small capitalist to put his savings into the business in which he is engaged and is earning a living. His position is precarious enough in all conscience, without adding to the risk.

In my own case if I make a mistake—and I am quite capable of making the most appalling mistakes—every one of my good friends may lose his job in the course of the next few weeks. If at the same time, through the system suggested, he is going to lose the little capital and the little savings he has, I say it is a most disastrous thing, and no employer of labour ought to take upon himself that responsibility. In these days the responsibility of keeping his men in full work in productive industries, in unsheltered industries, and giving them anything like a decent wage is responsibility enough without adding to that the further responsibility of taking up a position where he is the only person that stands between them and practical destitution in case of misfortune. Willing as I am, and as many employers are, to take responsibility in the first case, the second is asking them perhaps a little more than they can bear.

Mr. T. SHAW

I would very much like to enter into argument with the last speaker, but, unfortunately, the time at my disposal will not allow me to do so. I have risen to take part in the Debate because the Mover and Seconder of the Resolution, while disclaiming any idea of so doing has committed the very error which has made it almost impossible for really good relationships to exist in this country between capital and labour. The speech of the Mover from beginning to end was preaching down to the workers. There was not a word to the employers. There was not a word of sympathy with the workers' sufferings. The whole speech from beginning to end was a lesson given to the workers.

Let me take the Resolution itself. What is the use of me going to Lancashire—as a Lancashire man who knows the textile trade—and telling people who are employed on short time—with millions of capital lying idle—the workers' skill unused — they are the most skilled workers in the world—and they cannot get rid of the production they have made—what, I say, is the use of me attempting to prove the impossible to them? What they want is a system of distribution first, and a system of production afterwards. The fact of the matter is that this country possesses infinite capacity for producing wealth, and the system of distribution is so bad that, in spite of it all, millions of our people are poor. That is the problem the House will have to solve if it ever is going to make a success of its efforts in this direction. We are told about the great virtues of the American working man. We are told that the American working man produces everything he can, that his means of production are extraordinary. There is never a word about the employer; never a word about the time the American employer puts into his work, never a word about American science! It is the worker, worker, worker all the time!

It is not true that the American miner works any harder than the British miner. It is questionable whether there is a man in the world who works harder than the British miner of to-day. He is the most generous, the bravest and the hardest working of all our industrial workers. It is about time people realised what mining is, and what it means. To take a little practice at it would do a world of good to some of the miners' critics. When one reads the papers, and hears criticisms from other quarters, one would think the miners were a decadent community. On the contrary, the miners, who are being attacked, are skilful. But are the mines skilfully managed? We have had one or two inquiries into mining, and the results of those inquiries have not shown that too much skill is invested in the management of the mines; and the latest demand of the mine-owners, that British miners should work for less money, or should work longer hours, even than miners on the Continent, is a positive insult to the intelligence, not only of the miners of this country, but of the world.

Then we are told that it is the miners who are going to attack the country, and the rest of the workers are standing behind the miners. The view of the country is being twisted. The position of the miners is misrepresented, as the position of other workers is misrepresented. After several savage cuts in wages, wireless operators refused to submit to another cut. They did not ask for an advance of wages. When they sent their case to Members of Parliament, one well-known Member of this House wrote telling them they were literally criminals, that they had made demands upon their employers which the latter were not prepared to grant, when all the time he knew that the demands were not made by the men at all, but that it was the employers who were demanding a reduction in wages. What is the use of preaching to working men about a better understanding when on every occasion they see their case misrepresented publicly and themselves blamed, even when they are defending themselves against attack? It is no use talking about good feeling until we begin to realise what good feeling is.

Then we are told that we ought not let political vanity blind us to the facts of the situation If I wanted to talk about political vanity I could talk about the political vanity of hon. and right hon. Members on the other side of the House, who, feeling themselves, apparently, to be little tin Napoleons, are prepared to put themselves at the head of a great army in order to do the work if the miners leave it. Well, I welcome all the work they will do—down the pits. I can see the right hon. Gentleman the Home Secretary leading his great army down the pits and showing the miners how to work—I can see it in my dreams, but I shall never see it in reality. We shall hear a lot of talk about mining, but we shall not see many men attempting to do the miners' work. The sooner we get rid of political vanity the better, and if Ministers would set an example and get some work done in their Departments instead of continually preaching to the workers we should, perhaps, have a better country than we have now.

I want to say one or two words about why the thinking worker refuses to accept these resolutions at their face value. He sees, what every social student has seen for years, that, whilst everything has been done to improve machines; whilst machines have been made uncanny in their operations; whilst by ballbearings, lubrication systems and other applications of science we have made the machine almost a sentient being, working with the minimum of friction, we are only just beginning to study the human body. We are only just beginning to study how human beings can work with the minimum of friction, how they can produce the best results with the minimum of exertion; how to apply science to the work done by man so that his production will be increased without so much fatigue. The working man knows all about it. He knows that so long as human blood and muscle and bone and sinew were cheap he could work and he could die. It costs capital to replace machinery, but no capital is required to replace a worker. The worker is now determined that he must be treated as a human being, not as a machine, and his human aspirations must be attended to. Therefore, I hope we shall hear very little more of the continued one-sided statements about the worker not using his talent.

If someone got up and pointed out what was considered to be lacking on both sides, in regard to science and skill on the capital side and the supposed abuse of productive power on the part of the worker, then we could listen to the arguments with some respect, but in the speech of the Mover and Seconder of this Motion there was no criticism at all of the employers. It is no use preaching to one side and leaving the failings of the other side altogether out of consideration, and it will not work. If we are going to face this question of production and distribution scientifically, we must open both eyes and not one eye, and look at the faults of both sides at the same time. We hear talk of men having the right to demand decent wages, and that appears in the Resolution, but there is no indication as to how these decent wages are to be paid.

We are told that if we get efficeincy, decent wages will follow, but even that is not true. I believe that the absolute maximum of production ought to be got in every industry. I do not believe that the greatest production is to be got by hard physical work, low wages or long hours, because every indication proves that short hours, the application of science and the elimination of fatigue lead to a higher production, and that is what does not appear to be realised by employers generally. The idea of increasing production by lowering wages and increasing wages is 50 years behind the times. If we had a few Henry Fords studying how to make industry efficient—

Mr. J. JONES

I hope to God we never shall!

Mr. SHAW

I know the point of view of the hon. Member for Silvertown, but I am putting my own point of view.

Mr. JONES

You are speaking for the party, and not for yourself.

Mr. SHAW

I am speaking my own ideas, as I always intend to speak them, and I shall put them forward in the same way every time. The theory that long hours, low wages, and hard work mean high production is not true, and if only employers would realise that, there would be an understanding of a better type as to what ought to be done in industry. The old practice of using a workman as an animal, as a beast of burden, is, or ought to be, dead, and we ought to devote our efforts to studying how in the best possible way we can get the best possible results with the minimum of physical effort. It is no use talking to us, either, about control leading to great waste and great expenditure. As a matter of fact, the Mover of the Resolution called attention to the fact that phenomenal production was achieved just at the time when nearly every industry in the country was controlled. If it be true—and I hold that it is true—that when we had a scientific control of industry the production went up enormously, then it is true to-day.

I do not believe it is true, either, that the country is poor. This country is really rich in its capacity beyond the dreams of avarice. We have scores of millions of capital lying idle, and we have well over a million skilled workers also idle. We have wealth to be produced, and workers to produce it, and we are rich enough to waste the efforts of both the capital and the men. If we were not rich we could not bear it; we are bearing it because we are stupid, not because we are not rich. The intention of the Amendment is to see that at the present time we get increased production and a scientific method of distribution, so that those who produce may have the fruits of their labour. That is why I shall go gladly into the Lobby for the Amendment. I hope that this discussion will finally lead to an attempt to see this problem in its true light, that it will lead to a better feeling for the workers, that it will lead to a clearer statement of the position, that it will lead to giving the workers fairer play, that it will lead to an understanding that they, and they alone, ought to come first to the national table when the food is put upon it; for the worker with hand and brain in productive industry is the one man above all who ought to be looked after first in this country and have the fruits of his labour.

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

I only want to intervene for a very few moments. Having heard the whole of this Debate, I think that, whatever views may be taken of the merits of this Motion the House will be grateful to my hon. Friend the Member for Chislehurst for initiating this debate. There are two reasons why any Member of the House might without injury to his conscience or his political convictions, support the general object of the Motion. I do not think it is really challenged that effective maximum production is not only desirable but necessary in industry under whatever system we are living. It has been said by the right hon. Gentleman who spoke last that it is not fair to say that that depends entirely upon the worker, and I should be the first to agree with that statement, though I think the right hon. Gentleman was a little unfair to my hon. Friend who moved the Resolution. I do not think there was really anything in my hon. Friend's speech which was as wholly one-sided as the right hon. Gentleman has suggested. But, if you are to have efficient maximum production, that undoubtedly means that you must have the best equipment and management in a factory that you can get.

It means that employers have to work at least as hard as, and probably a good deal harder than their workmen; it means the best brains and the best scientific application, and so on. That is necessary if you are to get the best output, and if the workman is to be in a position to give the best output. That is true. But, on the other side, where you will find the security and the encouragement which will produce at once the capital and the incentive to get that equipment? You will never find it unless, on the side of the workman, you get the best that the worker can put into his work. Therefore, both aspects of this truth are right; you have to get the greatest efficiency on both sides, and in order to get that efficiency you have to have the consideration moving from both sides, as the lawyers say, in the contract, and you have therefore really to have a partnership in endeavour. That is the first reason why I should say this Motion should be supported.

The second—and here I disagree with the hon. Member who seconded the Amendment—is that it is untrue to suggest that greater production is not going to lead to greater consumption. Nothing is more fallacious than to argue that there is only a limited market in the world and that that market cannot be increased. As a matter of fact, greater efficiency in output in this country—capacity to sell at low prices—not only means that you get a bigger share in the static markets of the world. It means that as prices come down, you increase almost proportionately the potential consumption that there is. I think the hon. Member who seconded the Amendment will agree that that is true of the coal trade.

Mr. D. GRENFELL

The price of coal was reduced 4s. in 1925 as compared with 1924 and less coal was sold.

Sir P. CUNLIFFE-LISTER

The hon. Member is well aware of the conditions that were obtaining in 1924 as compared with the conditions that are obtaining now, and if he will go through some interesting figures which have been given to me of sales in the Scottish Co-operative Society, they show that as the price of coal fell, so consumption increased—not in the full ratio, but it has undoubtedly increased. [An HON. MEMBER: "Domestic coal!"] Certainly domestic, but it is also true of industrial supplies of coal. As prices come down so you produce cheaper and sell more. Everyone will admit that in that trade the increase that has lately taken place in export is not only due to the fact that you are capturing a bigger share of the static export market but you are actually developing an increasing demand for coal, and if that is true of coal it is true of all things. I get reports from abroad which go to show that, British prices having come dawn, British quality is more appreciated, and again you are not only getting a bigger share of the static market, but you are getting a developing market. For both those reasons I would commend the Motion to the House. Whatever be the basis of our economic and social system, whether it is individualistic or socialistic, this is going to remain true, that this country has to import far more than it can ever export, that it has got to pay for what it imports, its food and its raw material, by its sales and its services. But whatever the social system, it has got to be able to produce at a price at which it can sell in the markets of the world, and that can only be achieved by the most efficient production.

Mr. MacLAREN

In the last sentence of his speech the right hon. Gentleman said that greater production necessarily means greater prosperity and comfort amongst the workers. It has been shown by the previous speakers on this side that that is not so. He used an illustration in regard to coal, discounting all the time the influence of the subsidy. If we go on subsidising various industries, undoubtedly we shall give an impetus to trade which will be largely transitory and will disappear when the subsidy disappears. I should like to deal with the speech of the Mover of the Resolution, which was devoted largely to a soft impeachment of the trade union leaders of this country. We were told that wages were low because of the lack of enthusiasm on the part of the workers to pro- duce more, and that if their enthusiasm was intensified, if the trade union leaders were ignored and the heresies which they are preaching failed to permeate the discontented masses of the people, the wages of the workers would rise. Let us take the facts of the economic situation. Until this question is faced from the economic point of view, and dealt with on the economic plane, very little advance will be made.

The wages of the worker to-day, whether he happens to be a, labourer or a tradesman in any capacity, are determined by what the unemployed man is willing to take for doing the job that the man in employment now occupies. Except in one or two instances that is the ruling law. If you have a number of unemployed men in society, it does not matter how much you intensify production, because given this competition of the unemployed man looking for work, the unemployed man will set the pace for the wages paid. You may intensify production by machinery, by all forms of invention, as you have done during the past two centuries, and what has been the net result? It has not been that the workers have received increased wages. It has not been that the general comfort of the people has been such that the worker of to-day feels more relieved from the fear of poverty than his forefathers did 100 years ago. The working man to-day, although he may receive relatively higher monetary wages than his forefathers did 100 years ago, has a dread of poverty greater than was the dread of poverty 100 years ago. Intensified production has not meant much for the worker.

Something has been said about sheltered trades, and how the sheltered trades are in a privileged position whereby they can exact certain wages from the community. There may be something to be said about that; but can any hon. Member who complains about any section of the community getting behind whatever shelter they may seize upon ignore what has been the ruling passion for the last 60 years in industry? The employing classes the moment they are faced with intensified competition, instead of devising some scheme and coming to this House and using whatever brains and ability they have to lower their overhead charges, which now are and has been for a long time a heavy handicap in the competitive field as far as the prices of exchangeable commodities are concerned, have invariably attacked wages. They have invariably said, "We cannot meet foreign competition, and therefore we must reduce wages."

It has always been the wages that have been open to the attack of the employing classes in this country. What happened the other day in this House? We had to listen to speech after speech on the mining question. We have been told that wages must come down; that wages are an enormous charge. I would like to emphasise this simple fact, that every time one listens to a Debate it becomes depressing to hear men in 1926, with cheap literature on economics within their grasp, at small prices, saying that wages are a charge against production. Is there a sane man in this House who dares to advance the theory that the employing class advance the wages to the workers before the workers render to them a service? Wages have to be paid, but the wages are not paid to the worker until the worker has paid over to the employer more than he receives in wages. Yet you hear, underlying all these Debates and discussions, this economic fallacy, which would disgrace a fourth form boy who has made a study of economics, that wages are a surcharge against production. If you want enthusiasm in your workers, the best thing that any employer can do is to give them the fullest possible remuneration and to reduce overhead charges in other directions. [HON. MEMBERS: "Hear, hear!"] I am glad that I received that response, extremely glad. Hon. Members say, "Hear, hear, let us reduce overhead charges in other directions!" Let me take two of them: Your national taxation and your local rates. These are two overhead charges. I will only mention these; I could mention others, but in order to keep clear of contentious ground I will mention these two only. The Minister said nothing about them in his reply.

Sir P. CUNLIFFE-LISTER

One cannot tell the whole of the truth in ten minutes.

Mr. MacLAREN

I quite admit, of course, in that short space of time the Minister could not. But I should have thought that, being a Front Bench man, and replying to this Debate, this most important point of the rate of taxation and the burden on industry would at least have occurred to his mind. I will take these things, and I will ask the employing class who are in this House amongst The hon. Members opposite, if they would be prepared to support those of us on this side of the House who would take immediate action to remove certain rates and taxes off industry, and put them on another place. Will you? No. [HON. MEMBERS: "You have not said what!"] I am asked, put them on what? I will tell you on another occasion. [HON. MEMBERS: "Ah! Tell us!"] I hope this joviality will not distract our minds from the fact that this is a serious discussion. I am asked where would I put these rates and taxes. I am merely asking hon. Gentlemen opposite, if an occasion arose when we would appeal to them to remove these rates and taxes, which are now a heavy impediment, would they support us?

I have two suggestions. There are now two bases upon which you can levy rates and taxes of any kind. The first is upon the value of the products of human labour—and when you do so you increase the cost of production and give rise to unemployment. If, on the other hand, you levy your taxation upon monopoly values inherent in special franchises, and upon the value of the soil of this country—[HON. MEMBERS "Ah!"]I knew that that would create a smile, but I want to tell hon. and right hon. Members that it will not be months until you will not smile, when it comes into this House as a serious proposition, because the rating and taxation in this country are driving us on to bankruptcy. You have either got to face this issue seriously or go on the road you are now on.

I am not going to be diverted from what I have in my mind. When Debate after Debate takes place in this House and appeals are made to the gentlemen opposite to take certain lines of action to remove certain brakes which are now upon industry, you walk complacently into that Lobby as if nothing had happened. The other day the Minister of Health, in language that was eloquent and persuasive, and which for clarity of thought stands unequalled amongst the classics of this House, advocated the unrating of machinery, and the argument was that by that he would give an impetus to industry that would almost absorb the unemployed. Hon. Members opposite all cheered him for the statement. They did not then ask the Minister on what he proposed to put the rates that he was taking off machinery, despite the fact that some of them thought that these rates would have to be levied on the houses of the poorer people. The factors in production are labour applied to land, and capital.

We have observed a fact that hon. Members opposite have forgotten. The net result of progress and invention, the intensified production of commodities has led to this and nothing else: wages have always been beaten down by the presence of unemployed men. Wages, if they have risen at all, have risen more or less artificially. Any attempt to raise them artificially has soon been checkmated by the action of the Chancellor of the Exchequer on the other side Capital as had to struggle very often for an existence, until it received a secure position under some special protection. But there is another section in society who own and control the land of the country. We are selling land in London to-day at thousands of pounds per acre—land which has gone up in value from prairie value. The value of laud has increased, but wages have remained static. And here we are to-day, by virtue of this land monopoly creating unemployment, and this unemployment keeping wages in a static condition. Yet you are coming into this House and asking us to produce more, and stating that the workers will get more wages, while there stands in front of you the competitive men who will keep wages static under any conditions.

Mr. J. JONES

I have just two minutes. In so far as we are concerned, we repudiate all these half-way houses to what we want. The landlord is not the only robber. He is only a sleeping partner in this concern. As far as increased production is concerned, some of us would like to see those who talk so much about it going down the mines and working in the mills and factories and doing a bit themselves. No, they know a better game than that. They will be directors of companies, some of them directors of 13 companies at one and the same time. One of them admitted to the Coal Commission that there were 14 companies which he directed. God help us! Where did his brains come from? He gets £1,000 a year for each £14,000 a year for looking after 14 companies—and he knows less about them than the lowest man who works there. [HON. MEMBERS: "You will talk it out!"] I will not talk it out; I am talking it in.

Mr. BARNES

rose in his place, and claimed to move, "That the Question be now put."

Mr. SPEAKER

I think the House is prepared to come to a decision.

Question put, "That the words proposed to be left out stand part of the Question."

The House divided: Ayes,124; Noes, 115.

Division No.13.]	AYES	[11.00 p.m.
Acland-Troyte, Lieut.-Colonel	Gretton, Colonel John	Peto, Basil E. (Devon, Barnstaple)
Agg-Gardner, Rt. Hon. Sir. James T.	Grotrian, H. Brent	Phillpson, Mabel
Allen, J. Sandeman (Lipool, W. Derby)	Gunston, Captain D. W.	Price, Major C. W. M.
Amery, Rt. hon. Leopold C. M. S.	Hannon, Patrick Joseph Henry	Radford, E. A.
Apsley, Lord	Harland, A.	Ramsden, E.
Astor, Maj. Hn. John J. (Kent, Dover)	Harrison, G. J. C.	Rawson, Sir Alfred Cooper
Balfour, George (Hampstead)	Harvey, G. (Lambeth, Kennington)	Remer, J. R.
Barnston, Major Sir Harry	Harvey, Major S. E. (Devon, Totnes)	Richardson, Sir P. W. (Sur'y, Ch'ts'y)
Betterton, Henry B.	Headlam, Lieut.-Colonel C. M.	Ropner, Major L.
Bourne, Captain Robert Croft	Henn, Sir Sydney H.	Ruggles-Brise, Major E. A.
Bowyer, Capt. G. E. W.	Hennessy, Major J. R. G.	Russell, Alexander West (Tynemouth)
Briscoe, Richard George	Hills, Major John Walter	Rye, F. G.
Brittain, Sir Harry	Holbrook, Sir Arthur Richard	Samuel, A. M. (Surrey, Farnham)
Brooke, Brigadier-General C. R. I.	Holt, Capt. H. P.	Sandeman, A. Stewart
Brown-Lindsay, Major H.	Hope, Capt. A. O. J. (Warw'k, Nun.)	Sassoon, Sir Philip Albert Gustave D.
Bullock, Captain M.	Hopkinson, A. (Lancaster, Mossley)	Shaw, R. G. (Yorks, W. R., Sowerby)
Burman, J. B.	Hudson, Capt. A. U. M. (Hackney, N.)	Smith, R. W. (Aberdin & Kinc'dine, C.)
Burton, Colonel H. W.	Iliffe, Sir Edward M.	Stanley, Col. hon. G. F. (Will'sden, E.)
Cecil, Rt. hon. Sir. Evelyn (Aston)	Jephcott, A. R.	Stanley, Lord (Fylde)
Chadwick, Sir Robert Burton	Kidd, J. (Linlithgow)	Stanley, hon. O. F. G. (Westm'eland)
Cockerill, Brigadier-General G. K.	Kindersley, Major Guy M.	Steel, Major Samuel Strang
Cope, Major William	King, Captain Henry Douglas	Stott, Lieut.-Colonel W. H.
Crawford, H. E.	Lister, Cunliffe-, Rt. Hon. Sir. Philip	Sugden, Sir Wilfrid
Crooke, J. Smedley (Deritend)	Little, Dr. E. Graham	Thom, Lt.-Col. J. G. (Dumbarton)
Crookeshank, Col. C. de W. (Berwick)	Locker-Lampson, Coin. O. (Handsw'th)	Thompson, Luke (Sunderland)
Crookshank, Cpt. H. (Lindsey, Cainsbro)	Looker, Herbert William	Thomson, F. C. (Aberdeen, S.)
Cunliffe, Sir Joseph Herbert	Lougher, L.	Wallace, Captain D. E.
Curzon, Captain Viscount	Lumley, L. R.	Warner, Brigadier-General W. W.
Dalkeith, Earl of	Macdonald, Capt. P. D. (I. of W.)	Wells, S. R.
Davies, Maj. Geo. F. (Somerset, Yeovil)	McDonnell, Colonel hon. Angus	Williams, Com. C. (Devon, Torquay)
Dean, Arthur Wellesley	McLean, Major A.	Williams, Herbert G. (Reading)
Dixey, A. C.	Macmillan, Captain H.	Wilson, R. R. (Stafford, Lichfield)
Edmondson, Major A. J.	Macquisten, F. A.	Windsor-Clive, Lieut.-Colonel George
Erskine, Lord (Somerset, Weston-s.-M.)	Margesson, Captain D.	Wise, Sir Fredric
Fielden, E. B.	Merriman, F. B.	Wornersley, W. J.
Finburgh, S.	Meyer, Sir Frank	Wood, B. C. (Somerset. Bridgwater)
Fremantle, Lieut.-Colonel Francis E.	Milne, J. S. Wardlaw-	Woodcock, Colonel H. C.
Ladle, Lieut.-Col. Anthony	Mitchell, S. (Lanark, Lanark)	Wragg, Herbert
Gates, Percy	Nall, Lieut.-Colonel Sir Joseph
Gault, Lieut.-Col. Andrew Hamilton	Neville, R. J.	TELLERS FOR THE AYES.—
Gibbs, Col. Rt. Hon. George Abraham	Oakley, T.	Mr. Smithers and Brigadier.
Glyn, Major R. G. C.	Pennefather, Sir John	General Charteris.
Greene, W. P. Crawford	Perkins, Colonel E. K.
NOES
Adamson, Rt. Hon. W. (Fife, West)	Davies, Rhys John (Westhoughton)	Henderson, Right hon. A. (Burnley)
Alexander, A. V. (Sheffield, Hillsbro')	Davison, J. E. (Smethwick)	Henderson, T. (Glasgow)
Ammon, Charles George	Dennison, R.	Hirst, G. H.
Attlee, Clement Richard	Duncan, C.	Hirst, W. (Bradford, South)
Baker, Walter	Gibbins, Joseph	Jenkins, W. (Glamorgan, Neath)
Barr, J.	Gosling, Harry	Johnston, Thomas (Dundee)
Batey, Joseph	Graham, D. M. (Lanark, Hamilton)	Jones, J. J. (West Ham, Silvertown)
Beckett, John (Gateshead)	Graham, At. Hon. Wm. (Edin., Cent.)	Jones, Morgan (Caerphilly)
Bowerman, Rt. Hon. Charles W.	Greenwood, A. (Nelson and Colne)	Jones, T. I. Mardy (Pontypridd)
Broad, F. A.	Grenfell, D. R. (Glamorgan)	Kelly, W. T.
Bromfield, William	Griffiths, T. (Monmouth, Pontypool)	Kennedy, T.
Brown, James (Ayr and Bute)	Grundy, T. W.	Kirkwood, D.
Buchanan, G.	Guest, J. (York, Hemsworth)	Lansbury, George
Buxton, Rt. Hon. Noel	Hall, F. (York, W. R., Normanton)	Lawson, John James
Cape, Thomas	Hall, G. H. (Merthyr Tydvil)	Lee, F.
Charleton, H. C.	Hardie, George D.	Lowth, T.
Clowes, S.	Hastings, Sir Patrick	Lunn, William
Compton, Joseph	Hayday, Arthur	MacDonald, Rt. Hon. J. R. (Aberavon)
Connolly, M.	Hayes, John Henry	Mackinder, W.
MacLaren, Andrew	Sexton, James	Townend, A. E.
Maclean, Neil (Glasgow, Govan)	Shaw, Rt. Hon. Thomas (Preston)	Varley, Frank B.
MacNeill-Weir, L.	Shiels, Dr. Drummond	Viant, S. P.
March, S.	Short, Alfred (Wednesbury)	Wallhead, Richard C.
Maxton, James	Sitch, Charles, H.	Walsh, Rt. Hon. Stephen
Mitchell, E. Rosslyn (Paisley)	Stesser, Sir Henry H.	Warne, G. H.
Montague, Frederick	Smillie, Robert	Watson, W. M. (Dunfermline)
Naylor, T. E.	Smith, Ben (Bermondsey, Rotherhithe)	Welsh, J. C.
Oliver, George Harold	Smith, Rennie (Penistone)	Westwood, J.
Palin, John Henry	Snell, Harry	Williams, David (Swansea, East)
Paling, W.	Snowden, Rt. Hon. Philip	Williams, Dr. J. H. (Llanelly)
Parkinson, John Allen (Wigan)	Spencer, George A. (Broxtowe)	Williams, T. (York, Don Valley)
Potts, John S.	Stamford, T. W.	Wilson, C. H. (Sheffield, Attercliffe)
Richardson, R. (Houghton-le-Spring)	Stephen, Campbell	Wilson, R. J. (Jarrow)
Ritson, J.	Stewart, J. (St. Rollox)	Windsor, Walter
Robinson, W. C. (Yorks, W. R., Elland)	Sutton, J. E.	Wright, W.
Rose, Frank H.	Taylor, R. A.	Young, Robert (Lancaster, Newton)
Saklatvala, Shapurji	Thomas, Rt. Hon. James H. (Derby)	TELLERS FOR THE NOES.—
Scrymgeour, E.	Thurtie, E.	Mr. A. Barnes and Mr. Charles
Scurr, John	Tinker, John Joseph	Edwards.

Question put, and agreed to.

Main Question again proposed.

Several Hon. Members

rose—

It being after Eleven of the Clock, the Debate stood adjourned.