HC Deb 03 May 1926 vol 195 cc57-80
The PARLIAMENTARY SECRETARY to the TREASURY (Commander Eyres Monsell)

I beg to move, "That this House do now adjourn."

The PRIME MINISTER (Mr. Baldwin)

The House is meeting to-day on one of the gravest occasions on which it has ever met, and I am confident that the Debate which will ensue will be worthy of the occasion, if not in the eloquence that inspires the speeches, at any rate in their sincerity and in their willingness to face the truth and their desire to be fair. I have to thank the House for the courtesy and consideration which they have extended to me during this last week in abstaining from putting questions to me and in leaving me free to devote, as it has proved, unsuccessfully, such powers as I possess to the maintaining of that peace which it has always been my first endeavour to secure. It has not been possible for me before to-day to make any statement to the House as to the progress of negotiations, and, if I be in any way physically less able to make the presentation I should, owing to the abnormal strain of the last 10 days, and to do justice to the occasion, I am convinced that the House will be willing, as it always is, to make allowance for those facts.

For many years past, the coal industry has been beset by serious difficulties, many of them, like the War and the aftermath of it, far beyond the control of the industry itself, but I should like to express my view at the outset that those difficulties have been considerably increased for many years past by the organisation of the industry itself and the extraordinary machinery they have for wages adjustments. There are, no doubt, historical reasons for this. The nature of the industry itself, and the isolation of many of the mining villages, have something to do with it, but the industry would have caused far less anxiety, not only to itself but to the nation, had it succeeded in conducting its affairs through such organisations as are employed in the cotton industry, in the iron and steel industry, and on the railways.

Moreover, the condition of the industry has been interfered with many times by successive Governments, on which I will say a very few words in a moment. But I am quite convinced that there will be and can be no settlement in that industry until—I do not Know which order I should put them in—we can secure two things. First—a thing which it may seem curious to mention to-day—a very different spirit, and, secondly, a very different organisation for the discussion and the arrangement of wages. The whole machinery requires, in my view, a radical overhauling. I think that when we are in a position to deal with these matters in a calmer atmosphere, that must be one of the first subjects to which we devote ourselves.

So far as the relations of that trade with the Government are concerned, time after time have their affairs been brought up to Whitehall. One inquiry after another has been set in motion. One Government prescription after another has been tried and administered, and yet the health of the patient has been but little improved. The recurring crises have always had certain common symptoms. Either the Mining Association gives notices of reductions or the Federation demands an advance. Each side generally asks more than it expects or ought probably to get. They do not negotiate; each refuses to take less than it asks and ties itself up in a complete deadlock. A situation is produced when, owing to the damage to the country that may be produced by a stoppage, Government interference becomes essential, and then this and that committee and inquiry' are set up and something is done at the last moment, because up till that last moment both sides have been too prone to man[...]euvre for a favourable position with the public. The public themselves are incapable of forming a sound judgment because of the mysteries of minimum percentages and datum lines, bonus terms, ascertainment of allowances, additions and subtractions going to two places of decimals, and then you have—this is common to the whole country—to check and alter and regulate them by a dozen district agreements in which old practices and calculations may upset everything that you have hitherto understood.

I am quite sure that everyone who has taken part in these negotiations must have found that difficulty. I have no doubt that my right hon. Friend the Member for Carnarvon Boroughs (Mr. Lloyd George), when he has finished that portion of his speech which will naturally lay the whole blame for this crisis upon my shoulders, will confirm what I am saying by his experience, which is longer than mine. One of the great difficulties is that you can never get an agreed amount of what a miner is earning. Neither owner nor miner will ever agree upon a figure. At that moment a Cabinet Minister, not necessarily a mathematician or a, chartered accountant by profession, is called in and expected to understand these matters, and expected, with a divine impartiality, to make these two sides agree, and agree —and this is a peculiar feature—time after time, at the last minute of the eleventh hour that is left. It has not only been my experience, but it has been the experience of those who have gone before me, and whoever has had to deal with two very human but very stubborn bodies whose advance in negotiations is like an absolutely irresistible force attacking an absolutely immovable body.

My right hon. Friend the Member for Carnarvon Boroughs, has had far more experience than 1 have, but I never remember him settling a dispute except at the fifty-ninth minute of the eleventh hour. I would remind him of this, that no settlement has been made of recent years by Government interference—and I am not blaming any Government for their interference; it is part of the horribly vicious circle that we are in—and no Government has attempted a settlement which has not contained in it the germs of future trouble. I will mention one or two things, with no party feeling and no criticism offered. In 1919 my right hon. Friend the Member for Carnarvon Boroughs avoided a stoppage by giving the miners the Seven Hour Act. Within two years of that time there was a stoppage that lasted through the greater part of the summer. Two years ago, the Leader of the Opposition (Mr. Ramsay MacDonald) was faced with trouble in the coalfield, and the Government secured peace by putting pressure on one party. I am not allocating blame here; I am just talking about Government settlements. They secured peace by raising the minimum on a falling market. The economic situation was too much for the settlement. If the right hon. Gentleman had been in my place to-day he would have had this very trouble to deal with. Two years to a day have passed since my right hon. Friend's settlement, and once more the Government has to deal with trouble in the coalfield. That is why the owners and the miners will have to find, or to have found for them, some way of managing their own business independently of Government intervention, just the same as all the other great industries of the country do. I am stating facts. I am not allocating any blame. I am pointing out where one of the grievous difficulties of this whole situation is in order that when we are able once more to give our attention to it, we will go to one of the things that I believe is at the very root of the difficulty.

4.0 P.M.

I want to bring the House up to the period when these recent negotiations began, and I will be as brief as I can. I have dealt generally up till now, and although I am not going to overload what I have to say with details, I must make one or two observations about the condition of things that led us to the publication of the Samuel Report. The coal trade has not been wholly happy or settled really since the war. It was upset to its foundations by control, a necessary control at the time, but it has never succeeded since that time in getting really on its own feet, and difficulties which were already showing symptoms about four years ago were lost sight of and delayed by the French occupation of the Ruhr which, while it lasted, gave what really was a fictitious value to coal, and made many people feel that those difficulties that had existed and existed during that time and which were ready to break out the moment a change in the situation in Europe occurred, did not exist. That sent prices up, and good profits were being made. Now, there is very often a time-lag in wages catching up profits and the converse is true; but in this case the misfortune is that the rise in wages came owing to the settlement of 1924, just when the good trade had worked itself out and prices were falling.

When the stimulus afforded by the Ruhr occupation was removed and the Ruhr got back to work, the Ruhr, to make up for lost time, increased their hours, the production of the world for world supply increased fast, and world prices began to tumble fast. The result we all know, that from the time of the winter before last until last summer, prices were falling so fast that the high minimum which had been fixed in 1924 had the effect of knocking a considerable number of mines out of work and we were faced with increasing unemployment in the trade. Everyone in the trade knew that there were grave causes of anxiety. It was in the autumn of 1924 that the Mining Association invited the Miners' Federation to meet them to join in an inquiry into the conditions of the industry. Nothing came of that, and one of the difficulties in this industry, as I think I hinted a few moments ago, [...]s that, whatever the feeling may be in individual pits between owners and men, there is no doubt that the two big bodies which meet on coal questions are singularly antipathetic one to the other. That is the reason undoubtedly why nothing came of that proposal. The Mining Association gave notices terminating the existing agreement at the end of last July. From their point of view they were right. It was all they could do, because mines were going out of work fast and it was perfectly obvious that, so far as the position of an industry must be judged and managed economically, the time had come when investigation was necessary into the wages conditions. At that time all efforts to bring the parties together to negotiate were unavailing and a Court of Inquiry was set up under the present Government, which was presided over by Mr. Macmillan. As so often happens when inquiries are set up, and notably in that most important inquiry, the Sankey inquiry, little time was given to those Commissions for their work, and Mr. Macmillan's inquiry had to he conducted with speed.

The Report agreed with the owners that the financial position was very unsatisfactory; they agreed with the miners that they could net be expected to accept less than a reasonable minimum level of wages. They expressed the view that the gap between what was called the economic and the social level of wages was due to causes for which neither side could be held responsible—that is, the general trade conditions at home and abroad. They added that there was some room for improvement in organisation, but made no observations as to what the value of such improvements might be. That Report had no effect in composing that particular crisis. The owners claimed that the minimum district percentages should be abolished and the eight hours' day restored, but the miners were not prepared to concede anything at that time in the way of either wages or hours. There was a complete deadlock. It was in these circumstances that I recommended the appointment of a Royal Commission, giving more time than had been the case on previous occasions, to examine and report upon the economic conditions of the industry and to make recommendations as to how it could be improved. It was settled that for nine months—a period which I calculated would cover the preparation and publication of the Report and leave time over at the end for negotiation on the lines of the Report—the miners should continue to be paid as under the existing 1924 Agreement, and that the Government should make up to each colliery the difference between the amount of its wages bill at that time and the amount the wages bill would have been under the proposals of the Mining Association. All that verbiage means the subsidy. I do not propose to say much about that to-day, except to repeat what I have often said, that I adopted that policy deliberately recegnising that it would be perfectly impossible for this country, and that Parliament would never assent, to continue the subsidy indefinitely. But I believe that it was worth the subsidy for that time to get that Report, on which I based great hopes, and to give people time for reflection.

Now, the depression in the industry which then existed continued, and while the subsidy enabled many pits to work that could not have worked without it, undoubtedly one of its reactions—and these are very difficult to follow and no one can speak with certainty—was to lead to lower prices still. We come now to the publication of the Report, and I wish the House to note the time-table, because many charges of dilatoriness have been made against the Government. It was on the 11th of March that the Royal Commission's Report appeared in the Press. It was on the 11th of March that I asked the representatives of the owners and the miners to meet me. I asked them, I made an appeal to them, to examine and study the Report before they talked about it. I did that designedly. I wanted them to do nothing that would precipitate a hasty judgment or exacerbate feeling. That appeal was immediately and loyally accepted and observed on their part. The Report made a number of suggestions for the permanent improvement of the industry, but it stated definitely that the carrying out of these suggestions might in some cases take a considerable time. They said the position was one in which about three-fourths of all the coal produced in this country was produced at a loss, and they declared that to meet that position some reduction in the present level of wages was indispensable—I wish to make this perfectly clear, and I am trying to give an absolutely impartial statement of the facts—and that to avert the disaster impending over the industries the immediate reductions of working costs that could he affected in this way and this way alone was essential. They pointed out that it was only the guaranteed level of wages that was in question, because if results improved, wages would substantially and automatically rise above that guaranteed level. But the guaranteed level, based upon the abnormal position of the Ruhr occupation, was economically wrong. They concluded their Report in these words: That it was definitely agreed that alt practical means for improving the organisation of the industry and increasing its efficiency should be adopted as speedily as the circumstances in each case allowed.

Mr. MARDY JONES

Will the right hon. Gentleman read the next few words?

The PRIME MINISTER

I am afraid I have not got them. The hon. Member can draw attention to them later on. The only indication of the amount of reduction of wages which appears in the. Report, was that the 1921 minimum was the sort of reduction they had in mind, but they stated expressly—and it was this portion of the Report that caused a great deal of trouble in the negotiations, because there was some slight ambiguity of language and obviously the interpretation put on the words by each party differed—that different reductions were necessary in the different districts and that the actual figures should be discussed and provisionally agreed by districts, subject to effective supervision by a national conference. I shall come back to these words in a few minutes.

I hope the House will bear with me as I am speaking under great difficulty. Thirteen days elapsed, and this is of great importance, before the Government announced their position. I am quite sure that no one who has attempted to master that Report will say that there was any dilatoriness on the part of the Government in coming to a conclusion at the end of thirteen days as to what their attitude would be on such a number of recommendations, some of them precise, some of them vague, some of them of first importance, some of them small, but many of them needing an immense amount of investigation if they were to be put into effect and carried through. It was on the 24th March that I announced to the two parties the Government's attitude in the following words: The conclusions reached by the Commission do not in all respects accord with the views held by the Government and some of the recommendations contain proposals to which, taken by themselves, the Government are known to be opposed. Nevertheless, in face of the unanimous Report of the Commission and for the sake of a general settlement the Government for their part will be prepared to undertake such measures as may he required of the State to give the recommendations effect, provided that those engaged in this industry—with whom the decision primarily rests—agree to accept the Report and carry on the industry on the bases of its recommendations. The other parties did not express the same general acceptance. Each side stated its views and put them forward. From the day the Report appeared, until the breakdown of the negotiations, the single attempt of the Government has been to obtain the assent of both parties to the recommendations of the Report, with the view of placing the industry on an efficient and self-supporting basis. The colliery owners offered to enter into a national agreement with the miners on the same lines as those of the previous agreement, except this, that in the place of a general national guaranteed minimum, a minimum should be negotiated and settled separately in each district, subject to the subsequent approval of the national body. That was their, I believe, perfectly genuine interpretation of the wording of the Report. The miners took another view of the wording of the Report. thought on examination that the view which the miners took was more close to what the Commissioners had in their minds than the view taken by the owners, and I persuaded the owners with some difficulty to make what they considered to be a very great concession, and that was to negotiate nationally and without reservation.

I also pressed them to consider what guaranteed wage level they could offer on a national basis, because all through the various conversations it was a constant complaint on the miners' side that no offers had been put before them: "We do not know," they said, "what sacrifices are asked of us." That was a phrase very often used, and as they were unwilling to make any suggestions themselves, it was obvious that the suggestions must come from the other side. To offer a guaranteed wage level, that is to say, a wage below which it should in no circumstances fall, to make that offer the owners were faced with this difficulty, that owing to the circumstances of some districts to-day, notably the exporting districts, it would be very difficult for them to make a uniform offer which would enable any considerable number of pits to continue working in the exporting districts unless that minimum was put at a very low figure. A high minimum would have kept on certain parts of the country without difficulty, but, apparently, would have cut out the exporting districts, and it was that difficulty, which may or may not he a permanent one, that had caused the Commissioners to make the observations they did make in their Report as to the necessity of devising some means during this time of meeting this case. Faced with that difficulty, the owners turned round and looked at the hours question, and it was quite obvious that with a longer day a much higher wage could be paid; and they decided to combine hours and wages and see what the best offer they thought they could make would be. They offered the 1921 minimum and an hour longer working day. While that does look a large drop in wages, it is only fair to remember that owing to the reduction in the cost of living the real wages to-day would be very slightly more than the real wages were when that minimum was im- posed in 1921. But there was as never any chance of negotiating on that offer, because the miners refused to consider the proposal.

That created a deadlock. Any scheme which contemplated the maintenance of the present wages pending investigation into the problem, which was the matter that was discussed, brought us up against this difficulty. The investigation of the details of making these recommendations must have taken a considerable time. No one knows how long, but a considerable time. To see their effect would run into years, and it was impossible to consider, after the recommendations of the Report and after the statements made in this House, the continuance indefinitely of the subsidy. The Government had always felt, and this was the emphatic view of the Commission itself, that the mining industry had to be brought face to face with the problem of supporting itself without it, and that was the question I hoped might have been solved on the basis of the Report. It was represented to the Government that further time should be given for negotiations. I was determined to try every practical expedient to avoid a conflict, and I did not rule out that suggestion. My difficulty was that the miners' representatives stated over and ever again that they would not be prepared to consider any immediate reduction of wages or increase of hours, and that brought myself and colleagues to this position, that if that were the case there would be no means of carrying on the industry without the aid of a continuation of the subsidy. So there we were on Friday night, after all this expenditure of money, after the labours of the Report and after our considerations of it, in exactly the position we stood in last July. We could not continue to pay wages to miners and profits to mine-owners at the expense of the general taxpayer, because after all among the general taxpayers there are vast numbers of men who work longer hours and a good many men who do not earn as much.

Mr. BATEY

Not a bit of it.

Mr. KIRKWOOD

It is a shame.

The PRIME MINISTER

I am giving hard facts. The payment of a subsidy to any one industry in the country—I do not care what it is—a subsidy amounting to nearly £750,000 a week is not a mere phrase; it is a very real fact. On Saturday afternoon, the day before yesterday, I received a communication from the Trades Union General Council, stating that the executive committee of the trade unions affiliated to the Trades Union Congress, including the Miners' Federation, had decided to hand over to the General Council the conduct of the dispute, and that they would undertake future negotiations. They asked to see me, and it was that afternoon that I received, not officially—

Mr. J. H. THOMAS

You do not mean they asked to see you. In sending a communication to you, they said they were ready to see you.

The PRIME MINISTER

You are quite right. They intimated that they would be ready to see me. It was that day, and I want the House to note this very carefully, that I had heard, not officially, but through the Press, of the threat of a general strike—it was the first intimation I had of it. It was not an easy position for the Government to know what was the right and wise thing to do, but I decided that I would ask them to come and see me at once, that I would ignore that threat for the moment, so anxious was I to see if even at the last moment we might find a way out of a position which had become almost insoluble. That body came in the afternoon, and what we tried to do was to see what chance there was of the parties coming to an agreement on the basis of the Report. Those words sound very simple but they are important. After a time 1 felt that the large body that we had then, nine, I think, from the trade unions, and some five or six, myself and my colleagues, with a shorthand reporter, was far too formidable a body to make progress. I suggested that they should just have three of their body, and one of their officials, and I would have two colleagues and a permanent official, and we would have no shorthand note, but just talk it all over to see if we could come to some kind of agreement. Of course, those three gentlemen would refer to their larger body and I to the Cabinet.

That was done, and we 'sat up to between one and two o'clock on Sunday morning. What I and those who were negotiating with me were hoping to get at—I wish to pay every tribute to the efforts that they made and that we all made—we wanted, or I wanted, and the right hon. Gentleman who follows me will say whether that was in his mind—we wanted to get to a position where we could get an assurance that the Trade Unions Council, on behalf of the miners, would say that they really believed, the phrase I used was that they "felt confident" that, given a fortnight, the time I named, a settlement would be arrived at on the basis of that Report. At the last moment I and my colleagues, if we could have got that complete assurance, would have risked it, we would have asked for another fortnight, and I think, if necessary, we would have paid for another fortnight. But it was no good going on, with the experience we had had for the past fortnight, in any negotiations, unless we could have some assurance that there was a reasonable hope of success. It would have been pure waste of time if we had got back to the same deadlock. That was what we felt all the time. We strove manfully and honestly for it.

When we parted early on Sunday morning the three who had been consulting with us were going to see the miners that morning later, and they hoped to be in a position to let us know whether they had the miners' endorsement, by about 12 or one, or it might be rather later. They were going to see them first thing. I summoned the Cabinet at 12 o'clock on the chance of the answer coming earlier, but when it did not come through then—there is no charge of bad faith—we met later in the afternoon to get the answer. But those who were negotiating with me found to their great surprise that the miners had left London, and so they were unable to get into touch with them. It that way a great deal of Sunday was lost. But so anxious were they to get to business that they recalled the miners to London that night.

About 9 o'clock last night, when we resumed discussions, we made another effort to see whether it was possible to obtain the sort of assurance which we, on behalf of the Government, felt was essential if we were to comply with the request for further time, namely, an assurance that there would be an acceptance of the Report. In this expression "acceptance of the Report" is included both the reorganisation of the industry, which was to be put in hand immediately, and, pending the results of reorganisation being attained, such interim adjustment of wages or hours of work as would make it economically possible to carry on the industry in the meantime. Twenty-four hours earlier I had formed the impression that some such assurance might be forthcoming. I did not feel so hopeful last night, although I determined not to abandon hope till the last moment. But the time was running out; and do not let anyone on either side of the House forget the risk that I was running as Prime Minister, responsible to the whole country, in negotiating like that up to the last minute under the threat of a general strike. [HON. MEMBERS: "What about the threat of a lock-out?"] I When my hon. Friends in the corner who interrupt occupy the position that I occupy to-day they will know exactly what I mean by what I am saying. The right hon. Gentleman the Leader of the Opposition would know, and does know.

It had come to our knowledge during Sunday afternoon—that is, to my knowledge—that specific instructions had already gone out, under the authority of the executives of the trade unions represented at the Conference, directing their members in several of the most vital industries of the country to carry out a general strike to-morrow. That had, of course, moved it on a very considerable stage from where it was on Saturday. M position was becoming an extremely difficult one. Yet with that knowledge I continued those negotiations on the Sunday evening, and I ran, as everyone who visualises my position will see, what was a real risk. But while the parties with whom I was in discussion last night left the room for consultation and I went to consult my colleagues, at about 11.30 I learned that certain overt acts had already taken place in anticipation of the general strike, acts perhaps not so great in themselves, but great in their possible consequences and certainly in their signification. Those were acts interfering with the freedom of the Press.

Mr. SAKLATVALA

It was not part of the general strike at all.

The PRIME MINISTER

Such actions as that, coupled with the notice that we had had of instructions sent out by the representative leaders of the unions—instructions which men could carry out in many cases only by breaking their contracts—made me realise that I had got to a point where it would be impossible for the Government, or for me to persuade the Government, to pursue these negotiations any further. It was a matter which I communicated at once to those with whom I had been negotiating, and, while a formal letter was written—which had to be written to put the view of the Government officially —I felt myself so keenly the break, the failure, of our efforts, and the failure of our hopes, that I asked those representatives to come out from that conference for a moment and to receive a verbal message from me and an expression of my feelings on the matter before I handed to them the formal letter.

I have recounted now the history of the last few days, I hope fairly. Stripped of all accessories, what was the position in which the Government found itself? It found itself challenged with an alternative Government, and that Government ignorant of the way in which its commands were being carried out, and incapable of arresting disobedience to them. It is no use disguising matters with words which conceal the truth. The miners have a dispute with the mine-owners. The owners offer terms of work and pay which are rejected; the men refuse to accept either a minute extra or a penny off. They attempt to throw on the State the burden of maintaining the industry at a loss. I wish to make no charge. Let me say this: If the industry was to be carried on, that would be necessary.

Mr. SAKLATVALA

For the sake of profits and royalties.

The PRIME MINISTER

The Government cannot consider this burden, but they would have considered it for a further fortnight had it been possible to enter on negotiations which would have afforded the slightest prospect of success. The Trade Unions Executive, through their council, have put all their resources at the disposal of the miners. They did not consult their members by ballot before taking this momentous step, when their rules required such consultation. They secured on Saturday last plenary powers to order a strike without notice. This was done, I imagine, without prior consultation with or authority from their members and branches. [HON. MEMBERS: "No."] Hon. Members will be able to answer this point if I am misinformed, and I shall be glad to know. I do not believe that there has been anything like a thorough-going consultation with the rank and file before this despotic power was put into the hands of a small executive in London. This irresponsible power is a gross travesty of any democratic principle. In most of these industries the unions have solemn agreements which were understood to safeguard these industries from sudden and paralysing stoppage. These are to be broken ruthlessly and the sanctity of contracts repudiated. When you extend an ordinary trade dispute in this way, from one industry into a score of the most vital industries in the country, you change its character. I can understand the hon. Member for North Battersea (Mr. Saklatvala) smiling, because it is what he has dreamed of for years.

Mr. W. THORNE

He has had nothing to do with it.

The PRIME MINISTER

I do not think all the leaders when they assented to ordering a general strike fully realised that they were threatening the basis of ordered government, and going nearer to proclaiming civil war than we have been for centuries past. They laboured—that is, many of them—with the utmost zeal for peace up to the very end. Perhaps they thought that there was nothing more at stake than bringing a certain amount of spectacular pressure to bear, which might suffice to persuade the Government to capitulate without serious damage to the liberties of the nation. But they have created a machine which they cannot control. I tried to co-operate with Mr. Pugh and his colleagues in the search for an agreement to the last possible moment, but. I became convinced last night that-Mr. Pugh and those with him who sought peace were not in control of the situation, and that it would be wrong and dangerous for the Government to continue talking unless we got an immediate and uncondi- tional withdrawal of the instructions for the general strike. This is no attack on the wages of the nation. It has arisen out of the local dispute in the coal trade where, after a Commission had reported, it was found that that trade was in a peculiarly difficult and unhappy position—temporarily as we all hope. Statements have been made that there is a general attack on wages in the air.

Mr. WALLHEAD

You said so.

The PRIME MINISTER

I am not aware of having said it. I know of no movement against wages on railways. All those contracts have been honoured and are being honoured. How are we going to help the wages of this nation to be increased, if we teach men to break contracts, if we throw men out of work by the million—and we know that, whatever happens, the state of unemployment afterwards must be worse than that which we have to-day. At this moment we are enjoying the lowest unemployment we have had for some years. [HON. MEMBERS: "No!"] Whoever speaks after me will be able to refute that, if he can. The cost of living is lower to-day that it has been for years. There are signs of improvement, slight hut real, and this is the moment which has been chosen to challenge the existing Constitution of the country and to substitute the reign of force for that which now exists. It is only two years ago that I remember very well reading in the "New Leader" some observations by the Leader of the Labour party. He said: All his life, he had been opposed to the sympathetic strike. It had no practical value; it had one certain result—a bitter and blinding reaction. Liberty was far more easily destroyed by those who abused it, than by those who opposed it. I agree with every word of that. I have very few more words to say. There are very few light hearts in England to-day. The only people who are happy in this situation are those who envy us or who hate us, because they see the home of democratic freedom entering on a course which, if successful on the part of those who enter on it, can only substitute tyranny. It is not wages that are imperilled; it is the freedom of our very Constitution. But I have confidence, knowing the character of our people, that we will see these troubles through. I call to mind au observation of the late Minister of Labour, only two years ago, when he was asked whether the Government would give full protection to men who worked during these disputes, and he said Yes, undoubtedly, the Government will do all it possibly can to maintain public utilities. I re-echo his words, and I say no man who remains at work shall be prejudicially affected afterwards. I have only a few words now to say and I have finished. It may well be—indeed, I know—that I shall be attacked this afternoon from all sections of the Opposition, and I shall be told, among other things, "This is the end of all your dreamy, visionary speeches about peace and all that kind of thing." Let me say this. I have worked for two years to the utmost of my ability in one direction. I have failed so far. Everything that I care for is being smashed to bits at this moment. That does not take away from me either my faith or my courage. We may in this House to-day be full of strife. Before long the angel of peace, with healing in his wings, will be among us again, and when he comes let us be there to meet him. I shall pick up the bits. I shall start again. I may not see what I have dreamed of in my lifetime, but I know that the seed I have tried to plant in men's hearts these two years is germinating. I know it is germinating in the hearts and the minds of men, and that it is in that direction, and in that direction alone, that we shall pass, after much suffering, through deep waters and through storms, to that better land for which we hope.

Mr. THOMAS

Like the Prime Minister, I think I am entitled to ask for the indulgence of the House. We have not had many hours of rest recently, and I feel that there is a duty and an obligation on us to state to this House as clearly as possible what has happened. Hers let me say that I have no complaint of the Prime Minister's own version of what took place. Not only do I not complain, but I say frankly that his version is probably—indeed I know it is —his clear and definite conception of everything that took place. Equally, I am going to give to the House my view and my impression of all that took place, because, like the Prime Minister, I share in the responsibility for the negotiations in which I have taken part. I want to say at the outset that whilst I am going to join issue on interpretations—[Interruption.] We have reached a stage, at least on this issue, when I am not going to make debating points, and I appeal to the House to listen to what I have to say. There is in existence a verbatim report which records every word that passed. Therefore, in giving my impression, I hope that it ultimately there is any doubt, the report will be referred to, in order to see whether the Prime Minister's impression or mine is an accurate reflex of what took place. The only exception to that, is the private conversation—to which for obvious, well-understood and always accepted reasons, I refuse to make any reference. Therefore, I start off clearly with the knowledge, in what I am going to say, that there is in existence in front of me and in front of the Prime Minister a verbatim report which can be turned to immediately if I am challenged.

5.0 P.M.

I am not going to make a party speech. I am not going to attempt to make party capital, nor do I believe the Prime Minister has done so. Like him, I believe that the next few hours are of such consequence to this country, to the future of us all and of our wives and families, that, whatever be the party differences between us, there is not a man worthy of being a Member of this House who will not say that the interests of the country and all that is involved here are more important than any party. Therefore, if that be the position, I only put one other point. If 12 o'clock to-night takes place with no change, if the die is cast, if the worst comes, can anyone dispute that whatever the result, whether it is one side or the other that wins, the same economic facts, aggravated, face us when the situation is over? He is a blind idiot and a fool who thinks anything other than that, and I go further and say that no man speaking with authority, anywhere, no man who can use some influence, even at this hour, takes any other view of the situation than I do. We are as firm in our belief that there was no other course open to us as the Prime Minister is firm in his. We believe that this course was taken, not by anti-patriots, not by people who wanted a revolution, not by people who do not love their country, not by people who desired an upheaval. Because there are people on both sides

who do not weigh consequences. On the Labour side, I do not disguise that there are people who would like and welcome this day, but they are an insignificant minority; they have not been in this business; they have never been consulted; and, therefore, I am going to ignore them, just as I am going to ignore the foolish employer and the other persons who say: "We have to have a bust-up ' sooner or later; let it come now." Neither of those people at this moment are worth considering. The country is bigger and better than all of them, and, therefore, I rule them out, and I now come back to my view of the situation. The Prime Minister has given an accurate report of what he believes to be the position, but I believe he has omitted the real essential. He has omitted the cardinal thing in the whole business, the thing, even at this eleventh hour; that can still save it, and I will try to put it to the House.

Seven months ago the Royal Commission was appointed, and seven months ago the Government gave their subsidy. I ask the Prime Minister and the House, whatever their views of the subsidy may have been, whether they were for or against it—and I am one of those who think it would be madness to assume that any industry can be maintained on a subsidy; it is economically wrong; and we on the General Council have never argued that as a permanent solution of this difficulty, but the subsidy was given, and I ask the House—what was in their mind when they voted for it, and supported it, however much they may have disagreed with it? Is it not correct to say that they believed that after the period of the subsidy the industry would have had time to shape itself, and would be better able to find a solution? Is not that a fair interpretation of the situation? If that be true, I am going to ask this question: How can we explain, or excuse, or justify that., after the period of the subsidy, instead of it being better, either from the employers' or the workers' point of view, it is infinitely worse than before? If any proof of that be needed, I will give one figure. Taking the three months ended March, 1926, the subsidy period, and the three months ended March, 1925, the non-subsidy period, and dealing with the export coal alone, which, please observe, is the cardinal point in all this business, this fact emerges. In 1925 there were 80,000 tons less exported than in 1926 in the subsidy period, but the payment for the 80,000 tons more during the subsidy period was £1,750,400 less; in other words, 1s. 11d. per ton reduction, which proves the situation. That, I put as the net result.

Now I come straight away to the period of the Royal Commission's Report that has been issued. When that Report was issued, the Prime Minister, as he rightly said, called both parties together, and. he said to them: "If you accept the Report, we, the Government, will take all the responsibility of giving effect to our side of it." So far, there is common agreement between us, but on 13th April the coal-owners refused national negotiations. The Prime Minister has already told the House that his view of national negotiations is precisely the same as ours, namely, that the Commission's Report recommended it, and he, as he has told us, had considerable difficulty in persuading the coalowners to agree to it, but ultimately he succeeded, for which I thank him. But please observe the time that elapsed between when he said, "We, the Government, will accept the Report," and the day that he got the coalowners to agree, because it is all-important to keep that fact in mind. When he met them, he discovered that the differences between them were so acute that it was impossible for thee, to agree, and the result was that on 26th April—please observe the date—he invited the General Council to meet him.

Everybody knew then that the crisis must come on the 1st May, and that the owners had already posted notices to lock the men out. The coalowners had posted the lock-out notices, and on the 26th April the Prime Minister invited the General Council to meet him, and what did he say to us He said, "Well, it is almost impossible to get these people to agree," and we agreed with him, because, again like him, I believe there can be no hope in this or any other industry, whatever their view of nationalisation or anything else may be, unless both sides are determined to make the best of the situation and have confidence in each other. We talked over the situation, and we made this suggestion: We said, "Yes, there is only one chance of doing it, and that is that you, the Prime Minister, take the chair, keep in the chair, and let the other people hammer out their differences before you, you keeping them together. Then, at least, you will be able to form an impression of who is right or who is wrong."

I ask the House was not that a fair suggestion? Was not that a. practical suggestion? Was not that something that made the first contribution? The Prime Minister consulted his colleagues, and agreed. That, I want to observe, was last Thursday week, but although the notices had been posted and only eight days then remained, he told us that he knew that the coalowners could not meet until the following Monday at least. Our views were that if there was going to be peace, we wanted to stop week-end speeches. I am quite frank with the House, and I am going to be frank. I did not want any ultimatum from the employers, and I did not want any speeches from the miners' side, because it might have rendered it more difficult to get peace. The suggestion we made was deliberately designed for the purpose of creating the right atmosphere. Then we found that we were called together again on the Monday. Now I jump right away to this day week, and every day from last Monday until this morning there have been, night and day, continuous, consecutive negotiations between us.

What were our requests? The only thing that the General Council ever asked the Prime Minister, either last Monday or this morning at 12 o'clock, was: "Give these negotiations a fair chance." He said: "How?" We said: "Because you cannot conduct. negotiations under the threat of a lock-out." Why did we ask that? In 1917, when the War was on, the Liverpool railwaymen went on strike to force an advance of wages, and the South Wales railwaymen went on 'strike, and the companies intimated that they would refuse to negotiate anything with me under the threat of a strike. I went down, and resigned my position, because I said, "That is a fair thing for the employers, and it is not right for an employer to have a revolver pointed at his head." That was in 1917. Six weeks ago, when the engineers went on strike, a lock-out was threatened unless they went back to work, and I am not casting blame. Please make up your mind where I am on this matter. I do not believe that negotiations can be conducted under threats of this kind. Therefore, if the Government supported the owners then, were we asking them too much in saying, "Never mind what the Report may be, remove the lock-out notices."? That was our plea on Monday, Tuesday, Wednesday, Thursday and Friday. We never deviated from it. We asked nothing else, and the breakdown took place on that, and that alone.

How many Members of this House realise, when they have got to explain all that may follow, that the first time any offer of any sort or kind was made, although I told you for 10 days I myself was in the negotiations with my colleagues begging and pleading with the Prime Minister, was at 1.15 p.m. on Friday last, when 40,000 men had already finished and were on the street? I am speaking deliberately, and if anyone dare correct me, it is now for him to do it. I repeat, the lock-out took place at 12 o'clock on Friday night. There were 40,000 men who finished their shift on Friday afternoon. At 1.15 on Friday night the first offer came, namely, eight hours a day and the 20 per cent. minimum. How can you do other now than try to picture the mentality, the kind of feeling and the atmosphere created by these men'? We need not argue the economics about the value of the cost of living; one short act will bring it out. Let the cost of living be what it may—69 or 70 points—40,000 men in Wales work to-day five days a week, and no more, and their wages are less than 7s. a day. Bad as that is, horrible as that is, what is to be said for negotiations being conducted, when even at 1.15, when the lock-out had already taken place in sonic places, the first offer was made?

I come to what I really believe is the meanest part of this business. The coalowners and the Government acquiesced in this view. They said to the miners, "We want you to agree, and say so, that when you go to discuss this Report you must agree in advance to a reduction of wages." I ask any employer on the other side, and I ask any man who is an advocate on that side, to put himself in the position of a leader of men, whatever his views may be. Can he conceive of a leader going in for negotiations and straightaway being told that the first thing you have got to do is to agree to a reduction of wages? No leader would be worthy of his responsibilities if he did that. He would be repudiated in two minutes. What the miners' leaders said was, "No, that is unfair. That is not what we want. Give us a chance to discuss the whole situation." Then we reached a stage on Friday night when again the clear simple issue was put to the Government, "Will you suspend notices?" They could not do it.

Now I come to the Prime Minister's reference as to what caused him to break off negotiations. He said that nothing is so bad as when two people are genuinely striving for peace for threats to be made by either side. There were loud cheers from the Government side of the House, and I agree. I did not intend to say this were it not for the right hon. Gentleman's speech. But what I am now about to give to the House I have already given to the right hon. Gentleman, and he has repudiated all knowledge of it. Let there be no misunderstanding. I accept the right hon. Gentleman's statement that he knew nothing about it, but I will show how difficult the task of the peacemakers was, and how we met this situation. I have told the House that for 10 days we negotiated. For 10 days we said to the Government, "You force the coal-owners to give us some terms never mind what they are, however bad they are. Let us have something to go upon." They said, "No it cannot be done." And it was not done until 1.15 on Friday. On Monday afternoon last there was issued from the Conservative and Unionist Central Office a private document to all newspapers marked, "Private and confidential," and it said: As you will no doubt be fully occupied with the Budget debates, perhaps you will very kindly pass on the enclosed to your Labour correspondent. The Government are particularly anxious to draw the attention of the public to the serious economic position of the coal industry as disclosed in the statistical table given in the House of Commons last week. A detailed explanation of some of the figures is given in the enclosed. Reference may also he usefully made to the question of hours upon which it is desirable to concentrate attention, rather than upon the reduction of wages. Whatever may be the merits of this, whether it was right or wrong in their view, what is to be said of the treatment of those of us who were striving for peace, saying, "Give us terms," when a week before propaganda was being made of a situation like this? I observe that someone treats that rather as a joke. We do not so treat it. What we said was, "We will keep this to ourselves; we will not even show it to the Conference, lest it inflame opinion." But while we were striving for peace, while we were again saying there is a chance, while I was telling my people, "Do not do anything," this was being printed: