UNEMPLOYMENT.

HC Deb 08 November 1928 vol 222 cc243-370

Mr. C LYNES

I beg to move, at the end of the Question, to add the words: But regret that, although Your Majesty's advisers have had four years of office with a commanding majority in Parliament, general election pledges remain unfulfilled, the country is burdened with the problem of unemployment in a more acute form, in many mining areas appalling conditions prevail, the proposals outlined in the Gracious Speech are utterly inadequate to meet the existing industrial situation and ignore the need for improving the conditions of labour, and, in particular, regret that the oft-repeated pledge with respect to factory legislation is unredeemed, and that it is the declared intention of Your Majesty's advisers not to honour it during this Parliament. This Amendment emphasises and repeats in several places the conviction, which I hope we shall be able, in this Debate, completely to sustain by argument, that the Government have been guilty, on outstanding national issues, of breaking pledges repeatedly given in the country and in this House. There are very many subjects referred to in the Amendment. I shall touch upon only two or three. The Debate will permit of a very wide range, and we have already had some discussion on matters having relation to two or three of the topics referred to in the Amendment. I felt, in listening to much of the discussion yesteday, that the Prime Minister's attitude on the preceding day was not an attitude of inten- tional discourtesy to the Leader of the Opposition or the House so much as a deliberate act of strategy intended to diminish the usefulness and the work of yesterday's discussion, and hon. Members who commonly support the Prime Minister were careful to take little part in the Debate, and to shelter themselves behind a silence which is not occasional, and which appears to have become almost their customary instrument of Parliamentary defence.

I would ask the Prime Minister whether it is his purpose deliberately to withhold answers from the House of Commons while at the same time, as an act of procedure evidently conducted and carried out with the knowledge and sanction of the Cabinet, while withholding answers in the House of Commons, replies to proper questions put from this side of the House are answered in another place by the Acting Secretary for the Foreign Office. It may be that there is no future intention on the part of the Government of seeking a reform of the House of Lords, and that their purpose is that of making, in substance and actuality, this House, which traditionally is regarded as the Second Chamber, in fact and in reality a subordinate and inferior assembly entitled only to answers from the Government after they have been given elsewhere. If that is to be the procedure I think we might very well be told, when assembled for the purpose of listening to the Gracious Speech from the Throne, that we are called really to take part in a ceremonial half-hour and that there is nothing for us to say. Seriously I suggest to the Prime Minister that these are abnormal times and that there are a few millions suffering from the most acute distress, that their outlook is of the gloomiest and that nothing has been done in the preceding sessions in the life of this Parliament and nothing is promised for this present Session likely in the slightest degree to lessen the despair which confronts such a large number of the electors. The Government as yet have offered no case. Why should they? It is not necessary in their mind that they should have a case. They have a majority. They were reproved some few years ago, I think on more than one occasion, by a distinguished member of the other House, Lord Birkenhead, for having only second-class brains. I suppose they have reached the stage where they think it is not necessary to use their brains at all. It will be, good enough if they use their feet, and their Members can be carried into the Lobby and, by overwhelming majorities, vote down anything that is raised from this side of the House.

I ask the Prime Minister to beware of these examples. In the ordinary nature of things His Majesty's present Opposition must become His Majesty's Government, and it may be that, when that time arrives, right hon. Gentlemen on this side of the House will better the instruction and improve upon the example which is being set them. It might well he that on some really fundamental and substantial question in the social and economic life of the country proposals might be made by the new Government and questions might be asked on this, that or the other point and the answer of the Government of the day could be, "Well, we have issued a White Paper about it. There is really no reason why anything more should be said, and let us wait for the time of the Division." We say the Government has repeatedly broken its pledges, and in effect the answer we receive is, "Why argue about it? Why take up the time of the House in that way? Let us have a vote and settle it." The Prime Minister, I can assure him, is facing the period when his majority will not only diminish but will completely disappear and, accordingly, this Speech, which is in reality the Government's prospectus for the Session, is a complacent and evasive utterance, failing altogether to face, even to look at, the big outstanding troubles which confront so large a number of our population. Unquestionably the worst and the most expensive of all our internal problems is unemployment. Can anything be done? So far as we can look for an answer to that question to the Speech from the Throne, the answer is that nothing can be done. Nothing is suggested. Nothing is proposed.

I have before recited references in Speeches from the Throne that we have had since this Government was placed in office in 1924. In the first, second and third of the years some mention was made of unemployment. Some cautious, consoling reference to good intentions, at least, found a place in the King's Speech for the particular year. But in the case of last year, none at all, and in the case of this year unemployment is not referred to in the Speech in so far as unemployment is a problem, a situation, the worst and the most dreaded condition which faces so large a number of our people. It is completely silent in so far as the matter is viewed as a great national concern, and only in the most indirect manner does the word "unemployment" find a place in the Speech, and that in relation to the subject of export credits and borrowing powers, in regard to both of which we say the mention of them in the King's Speech on this occasion is a proof of the shortsightedness and incapacity of the Government in dealing with these issues. If I were to say the Government has done nothing on this problem of unemployment., I should be wrong. Indeed it would be a good thing if it had left alone what it has done and done nothing at all, for what it has done has been worse than nothing. I allege that the Government by its policy has prevented work being undertaken and diminshed the volume of employment, and, secondly, by administrative action and by other methods it has designedly denied benefits to workless men who are entitled to them because of the contributions they have paid for insurance purposes.

4.0 p.m.

The position of many local authorities is now that of being greatly burdened by the policy deliberately followed by the Government. The most pathetic, perhaps, of all our spectacles is the condition of hundreds of thousands of men in the mining areas, and I hope I shall have the assent of all members of every party when I say that there is no more deserving class of serviceable workers in this country than the miners. Yet their position is, perhaps, the very worst of all the indispensable workers. How eagerly we accepted their sacrifice and service in the War. How full of promises we were of the gratitude that would never be forgotten, and that our grateful, victorious nation would see to it that they ever held the place which they had won for themselves in the estimation and goodwill of the people of this country. We have fallen long, long away from that sentiment, and all that we hays in the Speech from the Throne is that the situation in the mining areas is engaging the earnest attention of His Majesty's Government. There is not any outline of an idea or scheme for any redress in the case of so large a number of distressed miners. The conduct of the Government in this regard has been one of uninterrupted blundering since they had to touch the question of subsidy in the year 1925. From 1925 until 1928, including the fatal passing of the Eight Hour Bill, compelling miners to work longer hours in the hope that they might be able to recoup themselves for reduced wages, the action of the Government in respect to the coal industry has been one of blundering without ceasing. Will even the Chancellor of the Exchequer now allege, after the considerable experience we have had of the working of that Act, that the industry has been in the slightest degree assisted, or that the prospect or outlook is any the better either for the mineowners or the miners themselves? At least we are entitled today, or sometime during the course of this Debate, to a defence of that particular line of policy pursued by the Government.

I was interested to-day to hear the reply of the right hon. Gentleman the Minister of Labour to the pertinent question from an hon. Member below the Gangway as to what was the effect of the policy of transference pursued so far, and I understood the right hon. Gentleman to excuse himself from answering on the spur of the moment, and to indicate that it would be better done in the course of discussion than by answer in reply to a question. I hope that I may be present when the right hon. Gentleman undertakes his reply, for so far there has not been an instance where one person has been transferred except to take the place of another. I do not know whether the right hon. Gentleman was present yesterday when my hon. Friend the Member for Spennymoor (Mr. Batey) recited a number of the most tragic cases where men had been misled and very much worsened in their position and prospects by the way they had been sent from Durham to London, one of them to become a hoots in a hotel, and one to take his prospect of being employed as a porter7 There may be something to be said for a policy systematically arranged, drafted and approved which would institute transference of groups or of families from one part of this country to another part, or, it might be, from this part of the Empire to another part of the Empire. Much can be said for a great plan of that kind, but let no one imagine that a plan of that kind is a solution of the problem of unemployment, or that you are settling this difficulty by requiring a collier to leave Durham for London, in the hope that he may take the job of some Londoner who might be glad to undertake it if he could get it. And we ask that men shall not be treated substantially as deportees and offered the chance of being employed as a labourer in a hotel. Until we are assured that there is something supplementary being done—not an act of displacement, but something that is a substantial contribution to the means so far devised of finding work, we shall think little of the recent device of the Government of trying to assist or diminish the problem of unemployment by transference from one place to another. It may be that the right hon. Gentleman the Chancellor of the Exchequer will take an early part in the course of this Debate.

The CHANCELLOR of the EXCHEQUER (Mr. Churchill)

I follow the right hon. Gentleman.

Mr. CLYNES

The Chancellor of the Exchequer, as is very well known, is a man who has never broken his word in public. He has the very highest regard for public pledges on questions of great policy, and I, therefore, now ask him as a member of the present Government to answer the criticisms we offer on the deliberate pledges the Prime Minister made in the election of 1924. They have often been quoted, but, perhaps, the right hon. Gentleman has not been in his place, and has not previously heard them. This was said by the Prime Minister in the 1924 election: The Unionist party would be unfaithful to its principles and to its duty if it did not treat the task of grappling with the unemployment of our people as a primary obligation. He submitted to the country the prospect of undertaking the handling of this problem as a first duty, as a primary consideration, and said that the Unionist party, as the phrase is, would be unfaithful to its principles if it did not. I confess that I have no familiarity whatever with Conservative principles. I have been trying to find out what its duty is. So far as I have seen, its duty appears to have been, in a Parliamentary sense, to evade this pledge, and never really to try to grapple with the problem of unemployment as it promised to do in the year 1924. From the Tory headquarters in the same year, the general body of the electorate, those who do not read the Prime Minister's speeches but who read leaflets, and who are impressed with the written or printed pledge of a great organisation, were told this: The Unionist party has a positive remedy for unemployment. … Constant work at good wages will be secured for all who desire and seek it. The most reckless Communist at a street corner could not give a more alluring pledge than that which was held out by responsible Tory agents in 1924. What has become of the intention to act up to this standard of duty and give expression to Unionist principles about this problem of unemployment? I say that the choice of this Government or any other in any such prolonged period of unemployment as this is a choice between paying for idleness and paying for work. We do not endure idleness for nothing. It must be paid for, and I estimate that no less than about£1,500,000 a week through one channel and another is received by those who are compulsorily idle, in order, of course, that they should be kept alive, however low their standard of living. I say we must turn the dole into a wage, that is to say, we should add something to it, and pay only for serviceable work performed. This, I know, is a declaration expressing a principle and a system of life likely to find little favour with right hon. and hon. Members opposite, but until we do accept this principle, and apply it in a day of peace as we did in a day of war, we shall really not come near to any appreciable solution of this troublesome problem. My conviction is that by this plan the country would not stand to lose, but to gain. The gain would not be merely economic, not merely expressed in forms of property acquired by labour, but expressed in an improved standard of life, efficiency, contentment and morality, for the continued presence of a hungry and an angry body of unemployed means that they are suffering not merely because of a. low standard of life but because of the despair that confronts them week by week and day by day. My conviction is that for every two men who are found work who were formerly idle, a third man becomes employed. So that if you could find work for at least half of those now out of a job, their purchasing power from increasing wages, their demand for a larger number of commodities, would automatically make demands for much of the work of the remainder.

When the House rose in the summer I am certain His Majesty's Ministers dispersed with many forebodings, and the Prime. Minister made an appeal by sending out a letter in, I believe, very large numbers, to employers of labour and public bodies. I cite the case which I am going to present to the House not merely because I happen to be a Manchester Member, but because I may take it as a representative case applying substantially to all public bodies and a large number of private persons. Let the House remember that the Manchester City Council is a Tory City Council. It is not dominated by Labour representatives, although in increasing numbers Labour representatives are going there. In reply to the Prime Minister's letter, the Town Clerk of this Conservative City Council told the Prime Minister: Unemployment is a national problem, and calls for a national solution. It is a good thing that public bodies are facing the matter from that standpoint. It took us a long time to make that phrase familiar. It is now becoming the accepted doctrine of representative Tory bodies. The letter to the Prime Minister goes on to say that in eight years Manchester had spent more than£2,250,000 on useful relief work, and from the Government Manchester has received only a little more than£500,000. There are now on the registers in Manchester as officially unemployed nearly 28,000 persons. In addition to that number, there are many thousands who, technically, are disqualified from so registering as being unemployed. That is the condition in all like cities and towns and boroughs of Britain. Accordingly, the letter from the Manchester City Council to the Prime Minister concludes with these words: The unemployment relief works in respect of which grants-in-aid have been received are now practically completed, but there are other schemes which have been prepared which are available to he put in hand at once if the Government will offer reasonable financial assistance. The City Council feels that it has done its utmost to execute work in advance of normal requirements in order to benefit the unemployed, and, failing further assistance from the Government, it can do no more at present in that direction. That is, I think, a fitting and justifiable answer to send to the Prime Minister, and it tells him that he has no right to expect them to try and do anything at all more than they have attempted to do if the Government withhold from Manchester, as they have done, the support which will enable them to undertake and carry through these overdue schemes referred to in the paragraph which I have read. And so they say that they can do no more. I do not want to leave this section of my speech without again specially asking the Minister of Labour to give attention to a matter raised in previous debates, for every little helps. The Minister of Labour in, I think, 1925, fixed a particular figure expressed by a percentage of unemployment and said that no place below that level could continue to receive aid from the Government. As it happens, Manchester is a centre where the figure fell slightly below the one which had been arbitrarily fixed—a figure of 10 per cent. I say to the Minister of Labour that on an important question of unemployment policy he ought not, in a secret, administrative way to attempt such a change without first of all asking for and receiving the approval of the House for that very great change in his policy. Manchester, as a great Lancashire centre, is in the midst of a population of some millions, 'a large number of whom for years have suffered not only from being out of work but from a condition of continued under-employment which has deepened and become more severe as time has gone on. I ask the Minister of Labour if he cannot fairly reconsider that Manchester situation. I regret that in the later stages of our discussions on this matter his condition of health disabled him and prevented him from giving consideration to the question. I am glad that he has recovered, and now he will be able to apply himself to a reconsideration of what I think is a justifiable and a reasonable scheme.

These are times when we Cannot afford to close any avenue at all which offers an opening for a job or a prospect of an order. I am glad that the Chancellor of the Exchequer approves that general statement. I therefore think that the time has come for the House, and the Government especially, to reconsider their trading and their commercial relations with Russia. Russia is a big country and contains several times our population. It is a country with people requiring what we make in our workshops and cannot sell. We want orders from them as well as from any other quarter. I agree that Russian trade bas to some extent been maintained even in spite of Government policy and that they have not destroyed it all. I would like to direct the attention of Conservative Members especially to a comment in a recent number of the "Sunday Times." I will not dare to quote to them anything recently said in the "Observer," but perhaps they will listen to a statement on this matter of Anglo-Russian trade from the "Sunday Times." The months that have gone by since the rupture with Russia have not been good for Anglo-Russian trade. Russian purchases of rubber, machinery and textiles in Great Britain have been kept down to a minimum. They are now only about a quarter of what they were before the break with Russia. The declarations of Lancashire manufacturers, the heads of great firms, like Hetheringtons, Mather and Platts, Platt Brothers in Oldham, other firms, great machine shops and engineering works in that county—the pronouncements of these great commercial chiefs, all bewail the policy which, as we believe, for unworthy political purposes the Tory party followed in relation to Russia. We should be eager to sell anywhere. [HON. MEMBERS: "We are."] Yes, and I am urging that that condition of trade and those commercial relations begun by the right hon. Gentleman opposite when first he brought to this country the trade delegation from Russia—that that attitude of mind should dominate the relations between those who wanted the trade in this country and the representatives of the Russian Government. I observe that in all the pronouncements of Lancashire commercial leaders, great employers of labour, in all their references to Russia, they have said that Russia always pays. She does keep her word. [Laughter.] I am ready to receive any instances to the contrary. This Debate will last until Monday night, and hon. Gentleman who laugh at that statement will have their opportunity to give some evidence to justify their merriment. I say that, unlike this Government, unlike the Prime Minister, Russians in trade do keep their word. They have not been guilty of breaking any pledge into which they have entered in financial and commercial transactions in this country.

I want in the remaining part of the time which I shall occupy to deal with perhaps the very worst of the broken pledges standing to the account of the Government since they took office in 1924. I refer to factory legislation. This matter must not be treated lightly. I know that it occupies no place upon Conservative platforms—it is not an exciting or attractive theme for discussion at party meetings—but let hon. Gentlemen remember, factory legislation affects the lives and the health of many millions of the operatives of this country. It is some 25 or 26 years since there was any general revision or treatment through any comprehensive Act of Parliament of factory life and conditions. The Prime Minister, in, I think, the only answer which he volunteered to the numerous and appropriate questions put to him by my right hon. Friend the Leader of the Opposition, did offer some answer to the question as to why this Bill found no place in the programme for this Session and why it had not been passed in a previous Session. The Prime Minister said that there was no time. I am certain that all his supporters felt from the very tone in which the answer was volunteered that the Prime Minister himself knew that it was a most feeble and unconvincing reply and carried no weight whatever in any quarter of the House.

There was time for the Coal Mines Bill. That Bill was never demanded by the country. It was a Bill on which no pledge had been made to the country. That Bill contained many very highly controversial parts and features, and, in spite of condemnation by the Government of many things done by the mine-owners, the Government were able finally to accommodate them by passing an Act of that kind, although there had been no pledge whatever relating to it. He gave no time to a Bill about which they were pledged up to the hilt Session after Session. But even if we had to pass the Coal Mines Bill in the economic interests of the coal industry, on that stupid Tory assumption, what reason was there for taking up the time of the House in the passing of the Trade Unions and Trade Disputes Bill? Supposing we admit that the Government genuinely felt that legislation must be passed to prevent the possibilities of another general strike, what reason was there for taking up so much of the time of the House as was taken up with that part of the Bill designed politically to cripple the forces of trade unionism. There had been no demand from the country, no political or national necessity for, at any rate, that part of the Bill. I heard an hon. Gentleman opposite say that it was done to protect the workingman. The working-man has given you his answer in the latest opportunity which he has had at Ashton-under-Lyne. I say clearly that the purpose of that Bill, though it will never be successful, was to make it, if not impossible, certainly extremely difficult for the forces on this side of the House to collect sufficient money in their customary organised way to conduct their political campaign. [Interruption.] I conclude that the hon. Gentleman opposite knows very little about the matter, and unfortunately I have not time to tell him any more. The Leader of the Opposition on Tuesday cited, in respect to this broken pledge on factory legislation, instances of how clearly and expressly that pledge was made in this House and out of it, and I want ts o reinforce his quotations with one or two brief paragraphs which I think were not used. The Home Secretary, at the beginning of the Session of 1926, made this statement: I desire, with the full authority of the Prime Minister, to state clearly and distinctly that the pledges to pass the Factories Bill during the course of the present Parliament are not only not to he waived, but are this night emphasised by me on Mr. Baldwin's behalf. That is the statement which was made at that time by the Home Secretary. A little later in the year, on the 26th March, the Home Secretary made this statement on the subject in the House: The Factories Bill will he one of the principal Government Measures of next year,"— that is 1927— and we will do our utmost to ask the House to pass it into law. That is a cate- gorical statement which I have been authorised to make."—[OFFICIAL REPORT, 26th March, 1926; col. 1568, Vol. 193.] The English language could not go further. But, in spite of these expressed declarations and repeated assurances and reassurances, we have now the statement from the Prime Minister that there is no time to do anything of the kind. The Prime Minister denies that there was any pressure exerted to cause the Government to withhold their hand in respect of this particular Bill. If it be true that it is their own spontaneous act, that it is of their own free will, the case against them is all the greater. There surely is ground for some suspicion of pressure when we follow the terms in which Ministers have addressed themselves to this question. Let me again quote the Home Secretary. Speaking on 28th October of last year in relation to the Factories Bill, he said: The Bill will make balustrades and staircases in factories compulsory. Fancy' Balustrades being regarded as rank Socialism! It will make mechanical shuttles take the place of the present methods and conserve the health of women. Every week one man is killed in mills through being caught in overhead shafts. Is it rank Socialism to try to prevent that? If so, I would be ashamed of the Conservative party if they failed to prevent it. I would like to know the measure of the right hon. Gentleman's shame when at the end of this Debate the Division is to be taken on the question of this gross violation of these repeated pledges. I shall not trouble the House further with evidence as to the violation of the pledge. If the Prime Minister prefers to say that there has been no undue influence to stay the hand of the Government to fulfil their pledge, I would say that there has been no kind of influence exerted in the Conservative party to assist them to pass the Bill. There was a great conference at Yarmouth, but not a word about factory legislation. I am certain that if the Yarmouth conference had been as enthusiastic in demanding the Factories Bill as the conference was in demanding the anti-Trade Union Bill, the Factories Bill would have been passed into law.

The Prime Minister still takes heart and feels that in spite of everything, these facts are not likely seriously to disturb the complaisance and, as some assume, the permanent position of this Government in the political life of the country. In a recent speech, in which he airily referred to the bye-election successes on the Labour side, he calculated that at the rate of our victories in the bye-elections it will take us 147 years to shift them from office. That is quite the characteristic Conservative way of explaining things. It leaves out of account the general election. In spite of every proof of disapproval, this Government is going to hold office, but no longer than some time next year. We await the opportunity, and the Prime Minister may rest assured that the facts in relation to the Government's pledges will lose nothing in the telling. I say that deliberately. We know our handicaps. We have not the enormous Press influence and the propelling power of the party bigotry which defends the forces opposite to us in this House. We have little money, but we have a great deal of goodwill, enthusiasm and real zeal in our cause, and our poverty will be overcome. If we have not a Press we have a platform, and in spite of the inequality of the weapons in the fight, we welcome the day when it will be fought.

Mr. CHURCHILL

If I rise at this early stage, it is not only out of courtesy to the right hon. Gentleman who has just spoken, and certainly not because the speech he has delivered was of so formidable a character as to call for an immediate answer, but because I think it will he convenient for the House if at this moment a statement is made on behalf of the Government, addressed broadly to the attack which is made upon them, in the Amendment to the Address in reply to the Gracious Speech, and covering the problem and the treatment of unemployment at the present time. I listened to the right hon. Gentleman's speech, which was quit moderate, both in expression and in argument, and, like the Amendment which supported, conceived throughout in a veil of purely negative criticism and want o appreciation. The only suggestion of t constructive character which the right hon. Gentleman has put forward in this important Debate on behalf of the Labour party for dealing with unemployment, in that we should resume relations wit} Russia. That was the only suggestion of a constructive character. Anyone who says that the difference which would be produced in our trade with Russia if we once again admit the Soviet Embassy to these islands would have the slightest effect upon the general problem of unemployment, is misleading himself and, if he repeats it, is misleading others.

What was the rest of the speech of the right hon. Gentleman? It was to the effect that all the troubles of unemployment are the fault of the Government; that the present situation is the fault of the Government—of what he called the uninterrupted blundering of the Government. The Amendment says, "You have had four years of office; you have a commanding majority, and yet there is this serious unemployment." It is very easy to say that it is the fault of the Government, but it is almost easier to say that a large part of the misfortunes of the present day are the fault of the Socialist party. Not only is it easier to say that, but it is easier to a very large extent to s prove it. Is it not astonishing that the right hon. Gentleman should be so oblivious of the recent past? I think the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) spoke of the morbid egoism of the Labour party. To that there certainly ought to be added an impenetrable complacency. Das the right hon. Gentleman forgotten the disaster of 1926—the general strike and the prolonged coal stoppage?

Lieut. - Commander KENWORTHY

Whose fault was that?

Mr. CHURCHILL

Some£80,000,000 was lost to the revenues of the country and at least£400,000,000 of national wealth was consumed. We have been thrown back for two or three years behind the onward march of other nations in the world. The reserves of industry were exhausted during that period, and the resources of the State to aid misfortune have been grievously impaired. You say: "Whose fault is that? Have you no responsibility for it?" I have never said that all the faults were an one side. Have you no responsibility for it? Have you not admitted your responsibility for it'? Has there not been an effort on the part of the responsible leaders of Labour to establish a different and saner policy? Are not the Communists being excluded from the Labour polity as far as possible? Is not Russion interference now being repulsed in domestic affairs? Is not Mr. Cook now discredited? These signs of amendment are welcome, but they are too late. All of us, whatever our shortcomings may he, are suffering from the consequences of 1926, and the price has to be paid. The one supreme, definite, obvious, recent cause of the delay in the general trade revival lies there. We warned you of these consequences beforehand. We warned you that dragging the trade unions into the heart of party politics was bound to add a new complication and a new element of bitterness to the whole industrial life of this country. I am only surprised that the consequences of 1926 in the financial sphere and in the sphere of employment and trade have not been a great deal worse than they have actually shown themselves.

If unemployment is to be used, if this sorrowful problem is to be used as a mere cudgel for belabouring party opponents and the Government of the day, we have a retort which we shall not hesitate to make and which will be readily understood by the electors, but I think it would be—I am sure it would be—a great pity !or us to waste an important Debate on this tragic subject in mere party bickering. We ought not to lose patience with each other on a matter of deep concern to us all. We must consider how wide and mysterious the problem of unemployment is, and how many and various and contradictory are its causes in different countries and at different times. Look east and look west. Look west. In the United States, with extremes of capitalism which have not yet developed here, you have nevertheless in the last year seen very heavy unemployment. Look east to Russia where, under the most ruthless expression of Socialism which has ever been tried—with ample power and ample time—in the history of-the world, you have also very heavy unemployment. Here you have two great communities each in possession of enormous areas—fertile, rich areas—of 'die earth's surface, each in possession of almost a continent, pursuing absolutely different policies and systems of government and industry, and each of them is suffering from very heavy industrial unemployment, and neither of them, let me add, is making anything like the provision to aid and succour the unemployed that is being made in this country.

I am not attempting to draw any constructive moral; I am only trying to point out the difficulties and dangers for any responsible person who lays down the law about the unemployment problem. Indeed, I think he is a bold man who claims to have a solution. It is easy to say "Go back to Russia" and I am sure the right hon. Gentleman the Member for Platting (Mr. Clynes) knows that far more effective schemes than that have already been set on foot. But if a man is bold to claim that he has a solution for the problem, he is rash and foolish if he makes such a claim at a time when in his own opinion he has any chance of being called upon to apply it. The right hon. Gentleman told us that he and his colleagues were soon coming into office and into power; he said that our majority would soon completely disappear. I do not share that view. I think hon. Members opposite under-rate the rugged binding strength of the political forces by which they will be opposed. But if their hopes are justified then surely coming responsibilities should cast their prudence before them. They should walk modestly in the sight of all men.

The Amendment speaks of the appalling conditions which exist in parts of our coalfields. Let it not be thought that the feelings of distress which these conditions have caused is confined to any one political party, and certainly I repulse the suggestion in so far as it is made that there is any want of humanity in the British treatment of this problem. There is no country in the world where direct taxation of the rich and wealthy in all its forms is carried so far; there is no country in the world where so great a portion of the national income is spent on the relief of sickness, old age, unemployment, destitution, widowhood, and orphanhood. I have taken some advice on this point and although I admit the figures cannot be taken as precise, yet I think it would be true to say that man for man and woman for woman we in these islands provide two or three times as much, and it may be four or five times as much, as any other country in the world, including the most wealthy and also including the most socialistic countries, for the care of the sick and poor. At the outset of this discussion if there is any disagreement with the measures which are being taken on the ground that they are inadequate to deal with the situation, or if there is any suggestion of inhumanity, let us remember that the British nation and the British Government make a contribution to suffering and privation in their midst with which no other country in the world can compare, and that we to an extent which no other country has attempted take from the wealthy and the rich in order to give to those who are in poverty and distress.

It is in the light of these preliminary observations of a general character that I shall venture, if the House will permit me, to examine the actual facts of unemployment in our midst. It is nearly 20 years ago since it fell to my lot to introduce the first Unemployment Insurance scheme into the House of Commons, and I have followed this subject year by year with continuous attention. No one will underrate the evil, but do not let us exaggerate it. It is grave enough without exaggeration. Let us analyse the general total of unemployment and compare them with the past. Before 1911 unemployment was left entirely to the trade unions, and they rendered indispensable service to the working community. But they only rendered it to the higher ranks of labour, and in the main only to males. My belief is that in the years before the War, there were rarely less than 300,000 or 400,000 unemployed, and that in bad years like the year 1908 the number approached 1,000,000. We now have 1,374,000 unemployed on the register. But the Great War has happened in the interval, and a large part of the capital of Britain and the world has been consumed in consequence. The world all round has grown much bigger. All sorts of countries which were quite ready before the War to buy our basic manufactures now wish to make them for themselves; they wish to become self-contained, and they are increasingly showing themselves capable of doing without many important lines of British goods. Great new coalfields have sprung into activity abroad. White coal has made its appearance and many countries are now using this form of power which used to buy coal from us. There is also the advent of oil as a great motive force. New and more vigorous competitors meet us in every foreign market; old customers are increasingly closing their doors upon our goods. The right hon. Member for Carnarvon Boroughs, in the Coalition days, used to talk about the Great Shop in a district which had become impoverished, and there is a good deal of ground for uncomfortable reflection in the statement which he made. If that is so, if this is to any extent an accurate picture of the events which have occurred in our own lifetime, then surely this is of all others a problem which we should not use for ordinary party purposes; it is one which we should treat as a common problem which British men and women should try and face together.

Coming to an analysis of the existing total of unemployed, if there were nearly 1,000,000 in a year of trade depression before the War, there are now 1,300,000 or 1,400,000 on the register. Let us first remember that the present system of unemployment insurance catalogues and presents each week much which was previously unrecorded. A large proportion of the present total of unemployment represents the normal and not unhealthy working of a nation system of unemployment insurance. At any given moment there are at least 500,000 of the unemployed workmen on the register who only occasionally come upon it, who pay their weekly 7d. for months, sometimes for years, without ever claiming benefit, and when they claim their benefit they are only receiving what they have actually paid for, and often something far less. To apply the word "dale" to workmen in that condition is a most unworthy attitude. They have the same right to draw their insurance benefit in temporary periods of unemployment or when moving from one job to another as any one who draws interest from investments which he has made. The use of the word as applied to such workers is a form of abuse, and I am surprised and shocked to see how very frequently this error is made by superficial observers both domestic and foreign. At the other end of the scale we have the weaker brethren who find it difficult to get their living even in the most prosperous times, who hang heavily and permanently on the Insurance Fund; a fund, let me remind the House, supported partly by State but mainly by industrialist and working class contributions.

Here you have two great classes; one which has paid for every penny it receives and the other which lies like a load on national and working class life. The first class represents nothing but the regular and proper working of an intricate scheme of national self-help against the fluctuations of modern conditions, the second class represents a problem which no government has yet had the strength to treat in a logical and courageous manner. There are 224,000 women at present on the unemployment list who were scarcely ever included in any pre-War total. The fortunes of all these three important classes of unemployed can only be relieved by a general improvement in British trade and by a revival of world and national prosperity. There is a fourth class which is in an entirely different position, and for whom an improvement in British trade and a revival in world trade carries no direct permanent hope of alleviation. I could perhaps speak of cotton, where we have lost a proportion of our cruder markets in which previously we reigned unchallenged. But, after all, the industrial history of the last four years can be summed up in the word "coal." There are 150,000 more coal miners unemployed now than when we came into office, and the general total of unemployment has also swollen by about 150,000. There is equality in those two figures. The aggravation of the problem of unemployment is summed up in the black word "coal."

5.0 p.m.

The position of the coal-mining population, the spread of their misfortunes, the strife that has arisen, have darkened the life of the whole nation, delayed the revival of trade, depleted the finances of the State, and to a large extent have frustrated the hopes of the Government. Let us look therefore into coal. After the War and until three years ago there were 1,200,000 persons engaged in coal-mining. There are now 920,000, so that 280,000 persons who two years ago were supported by the coal industry have now been discarded by that industry. Some of them have been absorbed by other industries, but the fact remains that that enormous casting out of labour from the coal industry has taken place; and if it is a grievous misfortune for these men and their families, it is not a misfortune far the coal industry. On the contrary, the coal industry with its reduced staff is now capable, so I am informed, not only of supplying the whole present demand, home and foreign, for our coal, but it can if need be quite easily, without taking on another man, produce 30,000,000 tons of coal more than we are able to sell now anywhere. If and when the time comes, and come it shortly will, when trade expansion takes place, such trade expansion will not bring hope or assistance to this great problem. There are to-day at least 200,000 surplus members of the mining industry who, even with the preference given to miners in the recruitment at the mines, cannot be absorbed for years into the ordinary working of the industry. The existing staff of employes working full time are more than able to supply any demand that even the most favourable conditions that we can hope for would render possible. There is the problem. It is a limited problem and a grim problem, and it is the last problem that any decent man will approach with any other motive than a desire to help, and it is the last problem which ought to be used as an election cry. Moreover, an aggravation of this problem lies in the fact that this mass of 200,000 men and their families is largely concentrated in particular areas, brooding round the mouths of dead pits and in valleys where the industry has died down, where whole communities suffer together, and where the institutions which should support them fall with the industries by which they live. Lastly, their numbers will not be diminished but may be increased by every improvement in the efficiency of the coal industry, by every well-conceived amalgamation, by every step towards that rationalisation which able Labour documents, Liberal Yellow Books and Samuel reports have so strongly advocated.

There is the problem. Shall we not try to face it across all party conflicts and the interests which naturally, before an election, are antagonistic? Cannot we try to face it as much as possible together? Incidentally I may say that this problem of the coal industry is repeated on a smaller scale in the iron and steel industry in almost every particular. The coal industry itself as a living factor has greatly improved. It has cast off its heavy burdens and it has cast them on to society and the State. But it stands to-day in a far superior position to compete in the markets of the world and to supply our own needs, than at any time since the Great War. Although the industry as a whole is indeed still showing a loss on the average on every ton which has been produced in the last few months, the margin is a small one, and the real problem before us is not that of the coal industry—that will solve itself now and move forward as time passes, and rapidly—the real problem is the problem of the displaced coalminers and their dependants, and besides that there is the larger general question of the revival of the trade of the country as a whole.

I have ventured to try to present the issues as I see them. I will now proceed to state the practical steps, and the only practical steps, which the Government recommend to Parliament at the present time to remedy or mitigate these evils. The first and main contribution of the Government is to assist trade and employment generally by a comprehensive rating relief scheme to agriculture and to industry. [Laughter.] Well, do not mock, because we are working while you mock. This scheme will relieve productive industry of three-quarters, and agriculture of all, of its rates, at a cost to the national Exchequer of some£22,000,000 a year. In addition there is the further relief on railway freights to agriculture, coal, iron and steel. The rating relief, which the railways will pass on to their customers, will be concentrated in helping those very industries where the need is greatest, and in selecting the particular traffics we have followed the advice received from the industries concerned as to where the relief could best be applied in order to give the greatest benefit.

The railway relief forms a part of the general scheme, but in response to earnest appeals which reached me from the representatives of all parties in the House, we decided that, in order to give immediate assistance, this railway freight relief should be anticipated. At an early date we are going to submit a Vote to the House to enable this relief to begin on December 1. It is estimated that this will throw an additional charge on the Budget this year of nearly£1,000,000, and£2,250,000 on next year's Budget. It will provide for a re- duction of 10 per cent. on the selected traffics of agriculture, iron and steel, but it will provide for a reduction on the selected coal traffics—that is to say, coal for export, foreign bunkers, blast furnaces and steel works—of something like 30 per cent. The efficacy of this relief consists in the fact that it is concentrated mainly upon the basic trades, that is to say upon those which employ the largest number of manual workers and in which unemployment is most prevalent.

British industries are classified, for the purpose of unemployment statistics, into 100 groups, and in these 100 groups there are now about 1,000.000 wholly unemployed persons. But of these 1,000,000 half are found in only nine groups, and it is upon those nine groups that more than half of the whole rating relief to industry will be concentrated. In the remaining 91 industrial groups, considered as a whole, unemployment has for the last two or three years remained relatively low; it has actually lessened in the last three or four years. The percentage of persons unemployed in all those 91 groups does not exceed 6 per cent. The real trouble is in the nine groups, and it is to the nine groups that the main aid will go. The improvement in general industry, and especially in basic industries is the first hope of providing new openings for displaced miners. Not only should this concentrated aid to these industries bring direct aid to coal, but, far more, it should enable other industries to absorb the surplus mining population.

I turn aside now to deal with a point to which the right hon. Gentleman referred at some length—the failure of the Government to fulfil pledges in regard to a Factories Bill. We have not included that Bill in the work of this Session. You have invited us to the great assize of the nation. We accept your invitation, and we shall appeal to the country at the first moment after our de-rating Bills have been passed and the necessary financial business settled. How then is there time for a Factories Bill as well as the de-rating Bills? Parliament will have to sit very long and almost continuously. We had to choose between the de-rating Measures which are our main contribution to trade revival and employment, and this desirable factory legislation. Can anyone doubt that it would be wrong to delay a General Elec- tion the sake of the Factories Bill, or to give a Factories Bill at this time priority over de-rating legislation? When de-rating has brought its relief to industry which is now so heavily burdened, the Factories Bill will follow naturally. On the whole the conditions in the factories of this island are better than those which prevail on the Continent of Europe. But you cannot say that British industries are in a more favourable position than the industries on the Continent. I am sure that with trade and unemployment in the position in which they are, it is absolutely necessary that a measure of relief should precede and not follow additional regulations, however desirable.

The second main feature of the Government's policy for dealing generally with the economic conditions of the day is the policy of Empire settlement. The Industrial Transference Board emphasised the importance of stimulating the normal flow of migration to Canada. I would like to take the opportunity of saying what everyone knows, and what cannot be repeated too often, that in the displaced mining community we have not what may be called the ordinary unemployed. We are not dealing with, as it were, any large proportion of the weaker brethren. On the contrary, you have representative groups of British labour, including a large proportion of the very finest specimens that our country can produce. For this class His Majesty's Government have agreed to accelerate and expand the policy of Empire settlement at, it is estimated, an additional cost of£500,000 this year, rising to£1,500,000 in future years.

There is no doubt whatever that a low migrant passage rate would be a great encouragement to steady migration. It is not a question of State-aided passages so much as of individuals availing them-selves of an extremely low passage rate. Arrangements will, it is hoped, very shortly be completed with the shipping companies on the North Atlantic service by which they will be able to quote a largely reduced third-class fare to Canada for British migrants. Moreover, we now understand from the Canadian Government, and are most glad to receive the information, that their immigration department will, for the purpose of their regulations, regard persons pay- ing these reduced fares as if they were full fare paying passengers. That is an important fact. Apart from these steps which are being taken to stimulate the general flow of migration, the existing facilities for training and testing migrants who wish to take up work on the land overseas are being expanded by the enlargement and fuller use of the training centres and by the provision of new training centres.

In the third place, I must not omit to speak about a feature of the policy of improving employment by the safeguarding of particular industries after they have made their case before a tribunal. Here I do not think we can overlook the more extreme policy of placing an embargo on certain classes of foreign imports to which the Leader of the Labour party has lately given his adhesion. The position of the Government in this matter is perfectly clear. It has been declared once for all in the Prime Minister's letter of 3rd August. That letter carried with it, needless to say, the unanimous agreement of the Cabinet, both in its negative and in its positive assertions. According to that letter there will be no general system of Protection and no protective taxation of food, but no industry which applies will be prevented from making its case before an authoritative and competent tribunal. That is the platform on which we have taken our stand. Evidently it will be necessary in any particular case for all parties affected, including agriculture, to be able to be heard before the tribunal.

Lieut. - Commander KENWORTHY

Including agriculture?

Mr. CHURCHILL

Evidently it will be necessary for all parties who are affected by any application for safeguarding to have a locus before the tribunal under that application—all parties, including agriculture. For the rest, it is, of course, futile to prejudge the results of such inquiries. The results, whatever they are, lie in the lap of the new Parliament. Let me make it clear that we shall claim at the Election, full freedom for the safeguarding of any industry which establishes its case on the merits before an authoritative tribunal and which proves that a Safeguarding Duty on its products will do more good than harm to the general trade and employment of the country. Fourthly, in order to stimulate export trade, the original Export Credits Scheme was introduced in 1920. The terms under which this scheme is operated have been altered from time to time in order to make them more suitable and more convenient for manufacturers and exporters. Under the existing legislation, no new guarantees would have been given after September of next year, and the uncertainty of whether the scheme would be continued or not would have deterred firms from undertaking business without that guarantee in the coming year. The King's Speech has already announced the Government's intention of continuing that help to our export trade for a further period of two years and a Bill for this purpose will shortly be brought before the House.

There is a fifth form of help to general industry coming into operation through the new measures for the improvement and extension of our electricity supply, following on the Act which the House passed two years ago. Four schemes have been adopted by the Central Electricity Board, covering an area of 30,000 square miles and a population of 27,000,000. The total capital expenditure involved in these adopted schemes amounts to£17,000,000 and contracts have actually been entered into for£2,750,000. Rapid progress has therefore been made in the last two years, and, from now onwards, this new Act and its consequences will begin beneficially to affect trade and employment.

I leave these general measures and come to the special methods for absorbing surplus mining population. We shall no doubt be pressed in this Debate to embark upon large schemes of public relief works. Most careful study has been made again, during the last few months, by the public departments of possible relief works. On general grounds we are opposed to such a system, especially when directly conducted by the State. It is surprising to see, in the examples which we have lately studied, how meagre are the results in actually relieving the particular problem of unemployment with which we are coping, compared with the outlay in every case. The right hon. Gentleman the Member for Platting said we had the choice between paying for idleness or paying for work. We would find no difficulty in making that choice if he explained to us what were the methods by which we were to be able to choose the one instead of the other. But the general objection to public relief work has never been better stated than by the Leader of the Labour party when in office. On 12th February, 1924, the right hon. Gentleman the Member for Aberavon (Mr. Ramsay MacDonald) said: If wish to make it perfectly clear that the Government have no intention of drawing off from the normal channels of trade large sums for extemporised measures which can only be palliatives. That is the old sound Socialist doctrine and the necessity of expenditure for subsidising schemes in direct relief of unemployment will he judged in relation to the greater necessity for maintaining undisturbed the ordinary financial facilities and resources of trade and industry."— I OFFICIAL REPORT, 12th February, 1924; col. 760, Vol. 169.] [HON. MEMBERS: "Hear, hear!"] Then we are all agreed, but, nevertheless, there are two respects in which we propose some relaxation in the rigour of what is undoubtedly the present sound policy. We propose to make certain extensions in the field of land drainage and allied schemes which are at present being assisted out of State funds. The Ministry of Agriculture has a list of suitable schemes, including coast erosion schemes, upon which it will he practicable to employ a certain number of unemployed persons from distressed districts.

Mr. ERNEST BROWN

Scotland also?

Mr. CHURCHILL

Naturally. I was going to say that, of course, whatever is done in this matter in England will be, in due proportion, applied to the Northern Kingdom.

Mr. KIRKWOOD

There is no scarcity of land in Scotland.

Mr. CHURCHILL

To meet this extension, some widening of the conditions which are at present maintained will have to be made in order that the Ministry of Agriculture may have greater facility and freedom in carrying forward this plan.

Mr. MacLAREN

How is this money to be raised?

Mr. CHURCHILL

The money in this case, for these grants for land drainage, will be provided by the Exchequer.

HON. MEMBERS

And coast erosion too?

Mr. CHURCHILL

Yes, but schemes will be framed so as to provide for local contributions in proportion to the national aid. The second extension of grants for public works arises out of the present tasks of the Ministry of Labour. My right hon. Friend the Minister of Labour, who will speak tomorrow, will deal more in detail with this part of the problem and will explain his work in moving men and women from the desolation of the depressed areas into the stream of living industry. [Laughter.] Surely it is not a laughing matter.

Mr. BARKER

Where are these living streams?

Mr. CHURCHILL

After all, the vast bulk of the trade of this country is flowing with great strength, and the problem we are confronted with is the problem of dealing with the laggard trade and with the individuals in those trades who have fallen behind the general movement of the national trade. A substantial and increasing measure of success is attending the efforts of the Ministry of Labour and, in the actual process of transference from the depressed areas, there is a rate of transfer of something like 600 or 700 a week.

Mr. MacLAREN

One per cent.

Mr. CHURCHILL

We were told that nothing ought to be neglected, and do not at all underrate this, or in any way obstruct or belittle this most important function. The process of transference is being facilitated by the training centres where men unused to factory life are being fitted for new trades. These centres are being steadily expanded for the benefit of the depressed areas. If the present rate of transfer can be maintained, it means that in six months something like 16,000 will have been transferred from the depressed areas through the machinery of the Ministry of Labour. If at the same time the expansion of the trade of the country can be stimulated by the general measures to which I have referred, it is obvious that we shall be making, although slowly, progress out of our difficulties. It is said that the work of the Ministry of Labour in transferring labour has already aroused a desire to move among the population from the depressed areas and that it is possible that at least as many men and women are moving on their own account in addition. This policy, if it is to succeed, must have the good will and co-operation of all classes in the community. It is not a question of asking for charity or of asking employers to take men they do not need. All that is asked is that out of the very large number of labour engagements made every week a relatively small proportion should be given to these men who include, as has already been said, some of the best workers in the industrial population.

In order to facilitate and further the transference scheme, and only for that purpose, we propose to re-open, on more favourable terms, the grants for works financed out of loans which are offered to the local authorities through the St. Davids Committee; but we propose to give the more favourable terms only in cases where authorities in the more prosperous areas are prepared to employ a substantial proportion of persons from the distressed areas upon these public works. See how this will help. It is a new principle. We shall, of course, not disturb the present arrangements in regard to the depressed areas, but what we are trying to do is to pull away a proportion of those actually in those areas to more prosperous areas. Therefore, we shall offer more favourable terms to local enterprises set on foot in prosperous areas, provided that in those enterprises there will be employed a substantial percentage of men from the mining districts. This will help the working of the transference of individuals through the Ministry of Labour, because when there is unemployment in a town which is doing fairly well, and when some employers are asked to take men from the mining areas, they say, "We ought to deal with our own local unemployed first." But if, at the same time, in that town a scheme is set on foot on favourable terms which would not otherwise be set on foot, and which absorbs a proportion of the local unemployed and brings some miners from the depressed areas, that will make it easier for the individual employers in that same town to take their proportion individually of the miners.

The existing conditions requiring a minimum acceleration of five years in the application of the work and excluding road work, will be relaxed in order to secure the maximum response. I have had printed a circular to local authorities of which I have an advance proof here and I have arranged for the circular to the local authorities to be in the Vote Office during the course of to-morrow. The policy of giving preference to miners wherever possible with regard to forest holdings, and particularly to miners with very large families, is also being pursued and will be steadily extended as far as possible having regard to the considerable financial expenditure entailed by each particular case.

I have, I think, presented to the House a series of proposals. I purposely give no total estimate of the numbers hoped to be relieved by these proposals, and no complete estimate of the money required. These proposals as a whole constitute the policy of His Majesty's Government. It is a policy which we shall develop to the utmost of our power. If anyone has helpful and practical suggestions to make which can be dealt with in the present Parliament, now is the time to put them forward. We will certainly consider them fairly, but of course we have already examined and rejected a host of proposals before we chose these and decided upon definite action. You may say you do not agree with the policy, you may say that it is not adequate, but no one can say that there is not a policy, and no one is more interested than His Majesty's Government in bringing that policy to practical and substantial success.

I am very much obliged to the House for having listened to this statement. I thought it very necessary to present our case in a comprehensive form, and I close on a note certainly not of pessimism. There are more people employed in this island to-day than there ever were before. There are 350,000 more people employed in the sphere of industrial insurance alone than there were when we became responsible. This small, overcrowded, overburdened, but still unconquered island has actually found, in the last four years, as many new jobs for British men and women as all the resources of State-aided emigration have been able to provide throughout the whole of the British Em- pire. Although our pre-eminence in exports is declining, nevertheless we still export, as I reminded the House in the summer, twice as much of manufactures per head of population as any other great country in the world, and apart from population we actually export more manufactures than any country, however populous, in the world.

It is true that the savings of the people are steadily increasing, even in these hard years. The investing power of the nation, both at home and abroad, is still enormous and is still increasing. Many of our leading industries are putting themselves in a far better position to encounter the new stresses of modern competition. Our finances are sound, and our credit is unimpaired. The reliefs of basic industry which we have long planned are now rapidly coming into action. The period of paying and of accumulating funds is nearly over; the period of aid and stimulation to industry is now at hand. And when we hear, as sometimes we do, that in the modern world we are being dwarfed and outclassed, let, us in the end remember that we do not stand alone. Although we can see the giants that are growing up in the world all around us, the British Commonwealth of Nations, the British Empire, is actually and potentially the greatest giant of all, and by settling with the British race the vast and mighty lands which own allegiance to the Crown, and by fostering the ties of Imperial commerce and mutual interdependence between the different parts of the Empire, by every approved method possible, we shall ensure our safe and honourable eminence in the world, however large the world may grow.

Mr. RUNCIMAN

The House must have listened to the right hon. Gentleman with profound interest immediately he addressed himself to the practical proposals dealing with the very difficult problems which we have been discussing to-day, but when he ends up on a note of optimism, I fear that I must remind him and the House that this is not the first time we have heard cheerful speeches from that bench. Again and again the President of the Board of Trade, the Chancellor of the Exchequer, and the Prime Minister have assured us that the period of bad trade was passing, that the future was much brighter, and that they saw signs of improvement, and within a very few months their prophecies, one after another, have been falsified and the silver lining prophets have all proved to be false prophets. Whatever may be said about a larger number of men being employed to-day than there were in 1924, the fact still remains that there are nearly 1,500,00 on the, unemployment register, that a very large number of people are working short time in addition to those, and that indeed the total earnings of the working classes to-day are much less than they were no less than four years ago.

The right hon. Gentleman draws some satisfaction out of the fact that there are more people at work now than there were then, but he surely does not overlook the increase of population, which probably accounts for that. If you have an increase of population, you must have an increase of home consumption. There are a great many reasons why, even with a normal expansion of trade, we should in normal times have been absorbing not only 300,000 men in the course of four years, but as many as 250,000 a year, and in times past we have again and again seen the home trade and the foreign trade of this country expanding so fast that the total number of employed has increased twice as much and twice as rapidly as it bas during the last four years. What satisfaction the right hon. Gentleman can get out of that, I am afraid I do not know.

But it is really not his prophecies, nor indeed the play that he made of statements from any quarter of the House on this subject that really interest the House or the country to-day. What we are mainly concerned in is a revival of trade, which is a commonplace phrase, but one covering a great deal. It affects not only those who have capital invested in industry and who see their capital actually diminishing, but it also concerns the millions of those who are finding their employment more and more precarious and in some directions more and more hopeless. During the last few years it has been the custom of successive Governments, in dealing with this subject, to apply to the disease nothing more nor less than palliatives. There has been an effort made to reduce the outward effects of the disease, and assistance has been given from public funds, assistance which, I may remind the House, had to be paid for by other people, which did not add to the sum total of national wealth. There has been the great assistance given to the expansion of credit, which in many directions led to the creation of goods and commodities and facilities in advance of the immediate trade requirements of the time, and we are now having to meet the reaction. That is particularly noticeable in the region of shipbuilding.

There have been large public works, as the right hon. Gentleman so truly said, done at public expense, which really have brought very little return and in some cases no permanent return what-ever. We have passed from the stage where that is likely to be or can be a solution of these very difficult problems. The right hon. Gentleman is not concerned-to-night, apparently, with the general expansion of world trade; he has not addressed himself to that nor to the fiscal discussions to which we have been used in this House, and I do not give way to the temptation of following him into the new methods by which trade and industry have received artificial assistance. These things do not interest the people of this country as a whole, as they are really concerned in the main basic industries, for which no safeguarding and no protection can grant relief.

Let me run rapidly through the suggestions made by the right hon. Gentleman. A change is to be brought about by the de-rating of our basic industries. There may be a change to some extent brought about in these industries, but I must remind him that, whereas there will be a smaller amount paid in rates by those industries, there will he a larger amount paid by the general taxpayer. The relief he grants with the one hand, he must, on the other hand, extract from the tax-payer's pocket. The total national wealth will not be increased by any de-rating proposals, and indeed there are arising so many anomalies under those proposals that I fear that in some of the basic industries actual harm, rather than benefit, will be done by them.

Then there is Empire settlement, to which the right hon. Gentleman adverted in passing, and I am sure we all agree that the more that can be done to settle the enterprising and younger generation on the land, in the British Empire or elsewhere, the better it will be for this country. But do not let us force that artificially. If the enterprising young man cares to go abroad, by all means encourage him. He takes his life in his hands, and if he has the pluck to go out to the uttermost parts of the world to find work or to take part in enterprises and developments, by all means encourage him, but do not let us imagine that by any artificial assistance we can resettle the Empire with anything like rapidity. It is doubtful whether, under the most favourable conditions, more than a few tens of thousands can be sent to any part of the Empire during the next year, and I doubt very much whether in the course of five years we shall make a big hole in the total body of the unemployed by Empire settlement. The more, however, there are the better, and I would not have it supposed that I would do anything to belittle that great movement. No doubt already great steps have been taken, by cheapening passages abroad, and I hope that may be carried further. A reduction of passage rates may make all the difference in the world to families who want to go abroad. The extra£5 is often just enough to prevent them taking that adventurous step, and if one can help them to go to Australia. New Zealand, Canada, South Africa, or even Central Africa by lower rates, then by all means let us do it.

The right hon. Gentleman made some reference to the extent to which great electricity schemes are likely to improve the trade of this country, and he spoke of£2,500,000 already having been spent on the plant—contracts placed for these great schemes. I must confess that when I heard it was only£2,500,000, I heard it with great disappointment. The sum of£2,500,000 is a mere drop in the bucket. If the whole of these schemes are to be set going in the near future, with which we are largely concerned, we shall have to go at a rate much faster than£2,500,000 in the course of two years. I hope that the right hon. Gentleman will have something more cheerful to tell the House later on with regard to the extension of the electricity schemes, but they can do good. Let me point out, however, that they are not likely to help the coal in- dustry to any great extent. Indeed, it is very doubtful whether the extension of these electricity schemes will not tend in some directions to alter the shape of the coal problem rather than to reduce the problem itself to smaller dimensions.

The last practical suggestion made by the right hon. Gentleman was with regard to expenditure on public works, and I am sure the House must heartily agree that if money is to be spent on relief works, it had far better be spent on remunerative works than on any other. No one has more consistently advocated expenditure on wholesome relief works than have those who have been the authors of the Liberal schemes. Again and again we have, whether in the House or outside, pleaded for more money on land drainage. Ever since the present Government came in, not a single agricultural discussion has been taken in this House which has not, throughout one of its stages, found an opening for the advocacy of land drainage on a larger scale. With regard to the extension of facilities in our ports, I am sure the House must have read with interest the articles which have recently appeared in the "Times" on the great ports of Europe, and they must have done so with some degree of apprehension that we were scarcely keeping pace with what is being achieved on the Continent. If relief works were established round our coasts, not only in regard to coast erosion but for improving the facilities of our ports, large and small, we should make more certain of getting an adequate return for the public money thus expended.

But my main interest in rising was to refer to the three great industries which provide us with more serious thought than almost all the rest put together—coal, cotton, and woollens. The right hon. Gentleman did not mention the woollen trade in the course of his speech, but I have no doubt he must have known —he must have been told by Government Departments—that the problem in the woollen industry is in some respects just as grave as it is in Lancashire itself. Let us take them in order. First, coal. We have discussed again and again in this House how we were to meet the coal situation. Everything that the right hon. Gentleman described in picturesque language this afternoon about the competitors of British coal is perfectly true. White power, oil, lignite, all these have been displacing British coal from the markets where formerly we found that customers bought our coal and indirectly were providing employment for hundreds of thousands of our miners in this country. Lignite has come to stay, and I dc not think that coal will hold its own against it. As for white power, I have always believed that it would not have gone ahead with the same rapidity and the same extravagant expenditure had it not been for the extortionate amount we demanded from our foreign coal customers for coal during the war period and immediately after. That undoubtedly encouraged the expenditure of capital on an extravagant scale, which would never have been the case if these customers had been carefully nursed, as they would have been nursed even by capitalist merchants. Water power is there, but I doubt very much whether it will extend. I believe that we have come to the end of the extension in Europe. Further afield there will be more and more utilisation of water power, but in Europe I think that we have come to the end of what can be done there profitably.

As for oil, there is only one way in which coal can compete with oil, and that is that coal should be as handy and as capable of being put into the furnaces easily, and with as little expenditure of labour, as oil can be blown in. Coal in lumps thrown into furnaces will soon be a thing of the past. Great advances have already been made in the use of powder coal. It is not an experiment now, but it is proved that the thing can be done regularly and without having men of very remarkable skill. The ordinary fireman, donkey men and engineers can deal with powder fuel as easily as with oil. There has already been a considerable amount of expansion of the amount of powder fuel used in shore furnaces, and more and more will be used afloat. Experiments have been fully justified and show that in the course of a few years a large number of vessels will be using coal of a lower value thrown as powder into their furnaces. So, while the oil supplies may be used up in the course of time, there is enough coal to carry us on for ever.

While the Government were spending money to help our basic trades, I could never understand why they devoted such a paltry, mean sum for research into the use of coal. The case of the Gas, Light and Coke Company shows the advantages that may accrue from successful research into the use of coal. I hope that the right hon. Gentleman, when he is talking about dealing with the matters which he has mentioned this afternoon, will not exclude the investment of a certain amount of money in research work with regard to coal. We can do it profitably, not only to the Exchequer, I believe, but to the country as a whole, and unless there is some work done of this kind, and unless we find new ways of using coal and better ways of providing it for the furnaces, unless we can persuade our foreign customers to adopt these newer methods and take all we can send them on a cheap basis, I see no hope for many parts of our coalfields. Unless we can revive the export trade in coal, there will be no relief in the mining areas. The consumption of coal by our inland industries will go on, I hope, increasingly, but, unless we can regain our foreign markets, it will mean that some of our most important coalfields, which still have great potentialities, will go completely out of use. By research work, and not only by producing, as I believe we can, through experiments on a small scale, but by encouraging experiments on a large scale, we can teach our customers as well as ourselves, how it is possible to utilise this power to the best advantage. I therefore hope that the right hon. Gentleman will see his way to invest more national money in this way, and I can assure him that, in the opinion of one who knows something about it practically, he will get a far better return than from a great deal of the expenditure which he has sanctioned during the last four years.

With regard to cotton, do not let us imagine that the crisis is by any means past. In the heavy side of the trade—the American cotton section—their troubles are just as great as they were, and they show no signs of diminishing; and, unless there is some very rapid change, it means in many parts of Lancashire that poverty will become chronic. There is practically nothing that the right hon. Gentleman and the Government have suggested, either now or at any other time, in regard to the cotton trade which will grant any relief whatever. I do not know whether we have come to the end of our ingenuity in dealing with cotton, or whether it may be that our competitors in Japan and India, and to some extent in America, are now to displace us in the American cotton section. Of one thing I am certain, that is that we have been able to hold our own in the higher and finer grades, and that has been simply due to the expenditure of more human ingenuity and resource on that section of the industry. I hesitate to criticise anybody who is in misfortune, but if there had been as much brain used in the lower as in the higher sections of the trade, their plight would not have been so serious.

With regard to woollens, I do not see where relief is to come. Before the War, it was the case in Yorkshire that about days a week in the heavy woollen districts were devoted to the production of woollen goods for home consumption, and the other days of the week were expended on the foreign trade. It is in those other days that there has been the diminution; it is the foreign trade that has gone. There are a good many reasons for that. Some of our customers have ceased to buy. One of the most distinguished men in my old constituency, in Batley, devoted himself almost entirely before the War to making trousers for Turkish soldiers. He had a wonderful hold of the Balkan business. It is not worth having now, and the Turks do not want to buy British woollens. One customer after another abroad has disappeared, and it is very difficult to see how their place is to be filled. Unless it is filled, there can be no great increase in the woollen industry of Yorkshire. On that problem, what can the Government do? Absolutely nothing. They have not a single idea to put in to the common pot, and they do not suggest anything now. What they have done in regard to dyes has during the last 10 years all gone. It has been a vast failure until now at last the old Dyes Corporation, started with national money, has been swallowed up in Imperial Chemical Industries, Limited. It will have the advantage of having as the main director Lord Melchett, who used to be a distinguished Member of this House. The only hope of this industry may lie in that direction. I have observed, in taking a survey of the woollen trade, that there are two sections of it that appear to do fairly well. The dyers do not seem to have suffered as much from bad trade as other people. I draw no inference from that, except that they seem to have the market very much to themselves, and have succeeded in absorbing all their competitors and running one great concern. This, I suppose, is what is meant by rationalisation, and they do succeed in making a regular profit. If rationalisation means nothing else but gathering together all your competitors into one ring, it is not going to bring about the salvation of the trade of this country.

It is really abroad that you must look with more hope than in any direction here at home. The expansion of British industry and commerce in the past has come through the ingenuity in this country, the expansion of dominions abroad, and the development of great countries mainly under the direction of people from these islands. It is a remarkable fact that some of the most prosperous parts of the world owe their first period of prosperity to the enterprise, courage and ingenuity of men who came from Great Britain, especially Scotland. The railways of South America are almost entirely British born, and with the development of these railways whole territories have been thrown open, providing us with customers and raw material. In Africa the same thing is true. In Central Africa one of the greatest developments of modern times may take place during the next 20 years, and this is due to the enterprise of one man. Members of the House know Sir Robert Williams, whose courage and enterprise have done more to add to the trade and commerce of Central Africa than the work of all governments put together. He built the great Benguela railways of these territories. There is a great deal that can still be done by way of exploration and development of this kind in other parts of the world, and it is in that direction that I look with more hope than to anything that can be done by governments.

We want to see a much more rapid degree of exchange, of goods being bought and sold more freely than ever before, for it is a tragic fact that as we look at the trade statistics and analyse them, it is apparent that there is actually less being carried across the seas now than in 1913. The self-sufficing nature of many countries has led to the diminution of trade which used to pass freely across the ocean and the land territories in the past. The more that can be restored, the better, and the economic conference at Geneva last year did good work when it drew attention to the fact that trade barriers are to the detriment of all the world alike. If the great barriers can be reduced, let us in this country play our part. While Governments can do much in the direction of policy, on the whole I believe that the recovery of this world is going to take place by the expenditure of personal energy, by brains, by confidence, and by skill.

Sir ROBERT HORNE

I listened with great interest to the speech which has just been made by the right hon. Gentleman the Member for West Swansea (Mr. Runciman), but, unlike him, I am glad to hear from the Chancellor of the Exchequer that the number of people employed in this country at the present time is greater than it was four years ago. That, to my mind at least, is a reassuring circumstance, because it indicates that there are jobs open for more people instead of there being a decreasing number available. The right hon. Gentleman expressed some wonder that the number of unemployed should still be so great, but there are a great number of people in the country now who in the days before the War would have emigrated, and the amount of emigration since the War has been very much less than formerly, with the result that we have been trying to sustain a much larger number of people in employment than ever was the case before. I do not say that that entirely accounts for the number of unemployed, but it at least represents a considerable proportion of them, and I, with the right hon. Gentleman and the Chancellor of the Exchequer, look with great hope to what might be done in accelerating Empire settlement.

6.0 p.m.

The Chancellor brought this Debate to a very high level, and he begged the House to treat this great issue in a non-party spirit. I think that that is the proper attitude for us to adopt. At the same time, I can recall the day when the Socialist party was in office, when we made as great complaints from our part of the House with regard to their efforts to deal with unemployment as they have been making to-day. In fact, it is more than you can ask an Opposition to do, to avoid this opportunity of castigating the Government. No matter what Government is in power it will be blamed for unemployment, and I am not sure that I regard the attack this afternoon by my right hon. Friend on the Front Opposition Bench as being nearly so acrimonious or so bitter as it very well might have been. But while making that allowance for the proper attitude of an Opposition, we are entitled to consider what would have been done by those critics if they had been in the position of the Government. I will take first the case of the coal industry, about which the right hon. Gentleman on the Liberal benches has made a very important speech. As we all know, the coal industry has been subject to very many vicissitudes which have arisen from circumstances which no Government could control. There has been a change in the world's use of coal. The appearance of oil and the use of electricity in countries which used to be our customers, have aggravated and accelerated the conditions which the right hon. Gentleman has described. Then there is the fact that many of our old customers are to-day working their own coal seams to a far greater extent than ever they did in the past. All those conditions have undoubtedly brought about, or have tended to bring about, the condition in which our coal industry finds itself to-day.

I, for one, share the view of the right hon. Gentleman the Member for West Swansea as to the future of coal in this country. I have previously expressed my conviction, and I hold it to-day more firmly than ever, that oil cannot permanently displace coal. For the moment its competition is doing a very great deal of injury to the coal trade, but as science advances, and better methods are devised for the use of our coal, I have not the slightest doubt that coal will come into its own again. The pulverising of coal, to which the right hon. Gentleman referred, will undoubtedly not only give a very much greater calorific value per ton of coal than we have ever obtained, but will give facilities for its use in ways which will be infinitely more economical than when used in the form of round coal.

We may look in the immediate future to the possibility of pulverised coal, perhaps, being blown into the hunkers of a ship just as easily as to-day you can pour in oil through a pipe-line. There are certain conditions which for the moment make that a somewhat dangerous process, owing to the possibility of spontaneous combustion, but I have not the slightest doubt that those difficulties will be overcome, and that in the end we shall see coal being used in ships, certainly in tramp ships, to a much greater extent than oil, and being handled with as much ease.

But after having surveyed all these aspects of the situation, and after listening to the Debate one is compelled to ask, What would a Socialist Government have done with regard to these matters if they had been in power? It is perfectly plain that we have been faced with a series of conditions which no Government could control, and that in the future, as in the past, we must look to those whose livelihood depends upon it to find the best way of using the material which is to their hand, and, as the right hon. Gentleman has told us, they are rapidly doing so.

I observe from some of the Scottish papers that the hon. Member for Dundee (Mr. Johnston) made a speech on this topic in which he ventured to criticise the Government with very great acrimony for their failure to take advantage of new devices in the development of the use of coal. I think it is worth while drawing attention to this matter, because he has also raised it in this House, and I am sorry that he is not here at the present time. He said the Government had failed to purchase a particular system, devised by a Scotsman named Turner, for the low temperature carbonisation of coal, that this system had been sold to some foreign country, and that through the Government's negligence in this respect the coalfields had lost a great opportunity of being redeemed from their present situation. He said thousands of men who would have been employed if this system had been adopted were to-day out of work, and that the whole trade could have been revived if only the Government had had the courage to pur- chase this system. I speak with great diffidence about this topic, because I have a little knowledge of it, and therefore I am humble; but the hon. Member has a great reputation in this House, and deservedly so, and what he says upon a matter of this kind is listened to with great respect by everybody. I think, however, that he has seen this matter somewhat out of perspective, and that he was misleading the Scottish people when he ventured to make the assertions which he did.

The truth is that about 400 various processes for the low temperature carbonisation of coal have been tried in various countries, and 200 of them have been experimented with in this country. At the present moment there are at least 20 systems which experts would declare to be quite as promising as that of Mr. Turner, and for the Government to buy Mr. Turner's particular system in preference to all the others would exhibit a folly which no Government ought to commit. Apart from that circumstance, it is perfectly obvious that even if Mr. Turner's system were all that the hon. Gentleman described it to be, nevertheless it would take a very long time to instal sufficient plant in this country to make an appreciable effect upon our present unemployment; and, indeed, I think it is obvious that while the ultimate result must be to make coal cheaper, and thus enable us to gain more markets, the first effect would be to bring into use a great deal of coal which at the present time is unsaleable, or only saleable at very low prices, and this would so dislocate markets that for a time you might have more people unemployed than there are now. That might be the first effect, although the ultimate effect would be, I hope, so to revive the coal trade of this country, and so to cheapen our prices, as to give us immensely greater markets and to bring a far greater revenue than we have had before.

I come back to the question: What would some other body of men have done in these circumstances if they had been in the place of the Government? I have dealt with coal. Let me turn for a moment to the iron and steel trade. Many people imagine that I have some personal interest in this trade. Indeed, I have none; I am not in any way con- nected with it. But it is one of the great basic industries of the country and has been referred to this afternoon as one of great importance, which it undoubtedly is. Why have we so many people unemployed in the iron and steel trade to-day? The reason is that our prices per ton of steel are greater than those of our competitors, and we have been undersold, to a vast extent, in our own market. Why are our prices so high? The main item in the cost which is higher in this country, and which I should be the last to wish to see reduced—indeed, I think it ought not to be reduced—is the wage cost per ton of steel.

I have examined the figures of our competitors. It is perfectly true that in Germany to-day the wage of iron and steel workers is increasing, and that there is a new demand on the part of the German steel workers which, if it be granted, will bring the German wage a great deal nearer to our own, though still leaving it lower. But take the case of Belgium and France. They have revalorised their currency, and to-day the French franc represents only 2d. in our money. But in France you can buy more, far more, than twopence worth of food and clothing with the French franc; and- the case is similar in respect to Belgium. The currency has a far greater purchasing power within the country than it has in the outside world, and the consequence is that when you come to put a ton of steel made in Belgium or in France in competition in the markets of the world with a ton of steel made in Great Britain it can be sold, owing in the main to the lower exchange value of their currency, at a price which does not represent the cost of it in this country. What is a Socialist Government going to do about that? How are they going to treat unemployment created by a circumstance like that? When I had the honour of being a Member of the Government of the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) he would have dealt with it by giving a safeguarding duty to this industry if it could have proved its case, and, indeed, under his guidance I was responsible for getting a measure for that purpose through Parliament.

Mr. LLOYD GEORGE

I am sure my right hon. Friend does not wish wilfully to misrepresent the effect of that Act. I am not sure that he was not the originator of it; but, at any rate, it was during the time when I was Prime Minister. It was applied only to the case where, owing to debased currency, you could sell in the markets of this country below the cost price in the country of origin. Once you have revalorised and stabilised the currency, that case goes completely.

Sir R. HORNE

I am afraid my right hon. Friend does not remember all the aspects of that particular regulation; but at the moment I do not want to go into it in detail. All I say is that I was so much impressed by his view of the matter that I have adhered to it ever since, and to-day my inclination would be to give the steel trade a chance of proving its case before a Board of Trade Committee. Then my right hon. Friend the Member for West Swansea went across to Paris during the War to consider the conditions which were to exist after the War, and he came back having made certain agreements which Mr. Asquith, as he was at that time, proudly commended to the House on the ground that they were the work of his President of the Board of Trade. One of those resolutions, which was passed at the suggestion of my right hon. Friend, was that in all essential commodities, commodities of national importance, we were to provide against being at the mercy of the foreigner. I am paraphrasing the language, but that was the implication. I would venture to ask him to-day: Is the steel trade of this country an essential trade, or is it not? Without it no country could win a war; as we very quickly realised, and we developed our plants far in excess of our ordinary needs. After the War we found that we had far more steel plants than we required. No country like ours can ever regard the steel industry as being anything but essential to its prosperity and existence. We know what has been done in other countries in regard to this question, and we have now before us the proposals of the Government. I would like to ask what is the solution of this problem put forward by the Socialist party or the Liberal party? What have those parties to offer in order to prevent an increase in unemployment in the steel trade?

I will turn for a moment to another trade to which the right hon. Gentleman the Member for West Swansea referred—I mean the wool trade What is the reason why the wool trade is suffering so much more at the present time than it was before the War? As everybody knows, a good many new woollen factories have been established in France, especially at Roubaix, and a careful examination of the wage costs in the woollen trade in France shows that the wage paid to workers comparable with those in Yorkshire is 40 per cent. less. What is the remedy of the Labour party for a situation of that kind? I agree with anybody who says that free trade would be a proper system if all other countries were free traders, but when you find others countries with lower wage costs refusing to take your goods unless you pay a penalty upon them you cannot compete with such countries on old lines.

What are you going to do under those circumstances? When unemployment is complained of, and when we are told that the conditions are unjust, I think those who make such criticisms should be prepared with a remedy for these conditions which bring about unemployment.

So far as I am concerned, I welcome the plan which the Government have brought forward, not merely for public works which I believe are merely palliatives, but for the de-rating of the great productive industries. It has been complained that the cost of de-rating in the end must come out of the pockets of the taxpayers, but that complaint does not fill me with dismay. I believe that the unemployment problem is not a local but a national question, and it is absurd to expect an absolutely over-burdened local community to bear by itself all the distress which falls upon it when a large number of factories are closed down. I think that under those circumstances the, nation should come to the support of the industries of the country, no matter where they are situated. That being the case, I agree that we should give direct relief in rates to those people who necessarily require it. I am not at all surprised that many successful factories will come under the de-rating proposals. In my view, it would be wrong to put a, penalty upon those who have been successful in industry. I hope that one of the results of de-rating will be that prosperous industries will be able to extend their operations still more and give more employment. After all, we are dealing now with unemployment. This is not a question of relief but a question of doing something which will bring about an incentive to employment. Suggestions have been made that something more should be given in the shape of doles and gratuities, but that policy does not do anything at all to stimulate productive enterprise. It was said of an American statesman that when he failed to pull American agriculture out of the hole, he just lay down beside it. That seems to me to be like some of the plans which are proposed from the opposite benches. I am willing to support a scheme which is likely to produce more employment and to relieve distressed industries of the heavy harden of the rates.

There is one other matter which I would like to mention. The right hon. Gentleman the Member for Platting (Mr. Clynes), who opened this Debate, put forward only one constructive suggestion as to how he could relieve unemployment in this country, and it was that we should renew our relations with Russia. On that point, the answer which the right hon. Gentleman got from the Chancellor of the Exchequer seemed to be complete; it was to the effect that even if we succeeded in getting back all the trade with Russia which we enjoyed when we had trade relations with that country it would amount to almost nothing in the way of coping with the unemployment problem of this country at the present time. I think the Socialist benches are the last benches from which a proposal of that kind should come, when we remember the action taken by the Trade Union Congress upon this question. They followed the lead of the Government in cutting all connection with Russia. In view of these facts, a complaint of that kind comes very badly from the right hon. Gentleman the Member for Platting.

The right hon. Gentleman told us that there were people in Lancashire who wished to carry on trade with Russia. I would remind him that every channel for trade with Russia is still open, but our manufacturers are very much more nervous about having trade operations with that country. Recently Russia has been going from bad to worse. At the present time, Russia has no exportable surplus of grain, and the grain is being collected from the peasants at the point of the bayonet. Russian credit is steadily going down and that country is unable to give orders because it is unable to export any large quantities of timber and grain. Under these circumstances, what encouragement can there be for anybody in this country to give long credit to Russia? After all, trade with Russia earl only be done on long credit, and who is going to give long credit in view of the situation which we see there to-day? Which of us would venture our own money in the process, and that, after all, is the test. At the present time, Russia is offering concessions to people all over the world in order to attract capital to that country. The Government of Russia having upset the capitalistic system in that country, and having killed all their capitalists, their representatives are now asking for capital to be brought back to Russia; but who is prepared to invest capital in Russia under these circumstances?

Mr. KIRKWOOD

You were the first to open up trade with Russia.

Sir R. HORNE

Yes, but look how disappointed I was. The Harriman group in America paid a large sum of money for a manganese concession in Georgia. They spent three or four years trying to work that concession, but the Russian Government placed every obstruction and impediment in their way and they have now abandoned the concession in disgust. Who is prepared to take up concessions in Russia on such a basis? At a time when foreigners are being invited to invest their capital in Russia the newspapers in Russia are stating that the people of Russia will take good care that the foreigners do not make anything out of them. If vain the net is spread in sight of any bird. My view is that very little capital is likely to reach Russia under such conditions. In these circumstances, I do not think there is much hope of reducing unemployment in this country by re-establishing trade relations with Russia. The industries of this country are going through a bad time, and we have to reduce the burdens upon them. The more we can do in this direction, the more will our industries be able to indulge in new enterprises and bring in new labour to conduct their industrial operations. We have a population in this country so large that it is impossible for us to sustain it, and we should adopt the most energetic measure to distribute that population more evenly throughout the Dominions of the Empire. We ought to take advantage of all the opportunities which these young countries afford to us in that direction.

Sir OSWALD MOSLEY

The Chancellor of the Exchequer has made an earnest appeal to the House to treat this subject from a national and not from a party standpoint. I am sure that in a situation of such gravity and such widespread distress every one of us would be much moved by that appeal. It was certainly my intention in this Debate to treat this matter from a rather wider angle than the purely party angle. For this I claim little virtue, as the delivery of attacks upon the present Government has now been made so easy as to lose all dialectical appeal. I must say, however, that the speech made by the Chancellor of the Exchequer has made the elimination of controversy from this Debate exceedingly difficult, and it is necessary to say a few words in reply to his opening observations. The right hon. Gentleman has delivered many admonitions to those sitting on these benches, some familiar, others unfamiliar. He admonished us in all things to walk modestly before all men. I have observed for some ten years past with ever increasing admiration the progress of the Chancellor of the Exchequer in this House, but I have never yet noticed that peculiarity in his own gait, and such an admonition is rather unfamiliar on the lips of the right hon. Gentleman.

The right hon. Gentleman was more familiar when he described every trouble with which industry is afflicted, from influenza down to the present Government and the general strike. In this respect, we are once more on familiar ground, because we all know that whenever any charge is made against the Government the Government spokesman replies that the general strike lies at the root of the whole matter. One would think, to hear the Chancellor of the Exchequer speak, that the miners, with no grievance, with no attack upon them of any kind, came out of the mines, supported by the whole working class of the country, in order to pull down the Constitution and wreck industry. What are the facts? There was no trouble of any kind in the mines until the miners were asked to face wage reductions. We have heard a great deal about Russia in this Debate from the right hon. Gentleman and others, but at any rate it was not Russians who asked the miners to accept wage reductions, and it was that fact, and that fact alone, which led to the mining crisis and to the general strike.

But what was the policy which led to that demand for wage reductions? That policy in another form has been referred to by the right hon. Gentleman the Member for Hillhead (Sir R. Horne). The financial policy of the Chancellor of the Exchequer led directly to the wage reductions which brought about the mining crisis and the general strike. It was that last effort to raise our exchange artificially in a return to the gold standard which made the difference between profit and loss in the mining trade and in our other great export trades. Mr. Lee, the Secretary of the Mining Association, described the loss per ton as 1s.; Mr. Keynes put it at 1s. 9d.; and, if we examine the situation, T submit that there is no other factor which can have accounted for the sudden collapse in the mining trade except that financial policy. In 1924, despite all the defects of the present system, the mines were paying wages according to the then existing wage agreement, and were paying a certain profit. In 1926, we were faced with a complete collapse of the coal trade, and the mineowners went to the men, with their books exposed, to demand enormous wage reductions. What single factor had intervened between those two dates except the presence of the right hon. Gentleman at the Exchequer?

The right hon. Gentleman the Member for Hillhead has reinforced my argument with respect to the steel trade. He put it in this way, that the Belgian currency was debased, but that argument can be put in another way with even greater accuracy by saying that our exchange has been artificially raised; and to-day the foreign product, produced at the same cost in terms of foreign currency, can sell in the British market at a lower price in terms of British currency, while, con- versely, the British product, produced here at the same cost as before in terms of sterling, has to be sold at a higher price in foreign markets in terms of foreign currency. That is the direct effect of the financial policy which artificially and precipitately raised our exchange in order to return to the gold standard.

That argument, advanced and supported by the right hon. Gentleman the Member for Hillhead, Answers the Chancellor of the Exchequer's denunciation of the miners and those on these Benches who supported them. Apart from that denunciation, what contribution did the Chancellor of the Exchequer bring to the solution of this great evil which now confronts us? All the old palliatives were produced, with, perhaps one additional palliative—the transfer of men from one district to another. We now have the extraordinary theory that, if you take a man who is unemployed in Durham, and put him down in Birmingham, where there is considerable unemployment, you are assisting the aggregate of employment if that man from Durham puts a man, who is in a job in Birmingham, out of that job. That is what it comes to. We are not increasing the aggregate of employment by a single man; we are merely putting one man out of a job to make room for another. Until you can expand your market, until you can increase your demand for goods, and thus increase the demand for labour, you have not begun to deal with the problem which confronts us.

Apart from that, what single new contribution to this great problem was adduced by the right hon. Gentleman? At any rate on this occasion he had the frankness to say that it would be a bold man who now proclaimed that he has a solution. The Chancellor of the Exchequer a little more than a year ago was a bolder man than that. According to a speech by the Prime Minister, he not only claimed that he had a solution, but claimed that that solution was taking effect. The Prime Minister, on the 6th October, 1927, said: I would remind you that my colleague the Chancellor of the Exchequer in this Government, speaking a few days ago, used these words: British industry is once more in full swing, and the work of repairing the damage has already made appreciable headway.' That was more than a year ago. The Chancellor of the Exchequer now says that he has no solution, but still confronts this national problem with the same airy optimism with which he has faced all these troubles for the last four years.

Only one hopeful fact was suggested by the Chancellor of the Exchequer. He claimed that more men were actually employed in industry to-day than were employed four years ago. I am very sorry indeed to have to adduce an argument which undermines that hopeful fact, but, after all, we should not be serving this House or the country if, when an unpleasant truth had to be revealed, it was not stated. One of the main troubles in the course of the last four years has been this tendency, at all times and on all occasions, to conceal the facts rather than face the unpleasant difficulties which confront us. What are the facts? The facts are these, and I take them from the Ministry of Labour's annual publication on the distribution of insured population. There are more people employed to-day, but that is due entirely to the increase of those employed in distributive industry, and also we have to meet a transfer of labour from productive industry to distributive industry. In productive industry there are 201,777 fewer men and women employed to-day than there were four years ago, but in the distributing trades you find an increase of 327,000 people.

A transfer from productive industry to distributive industry is not a hopeful fact in trade. It merely means that you are adding to the selling price of every article that you are producing. An increase in distributive costs, unless it be accompanied by a corresponding increase in production of goods to be sold, is merely another overhead charge on industry, and another handicap to British trade. In the last five years we only find an increase of 7.6 per cent. in the total production of this country, but even in the last four years there has been an increase of 26.1 per cent. in those employed in distributive trades. All this great improvement, of which the right hon. Gentleman talks so glibly, merely means that, in the degeneration and disorganisation of our industrial system, we are piling up our distributive costs, while steadily the number of men employed in productive industry is going down. Then it has been stated, in this Debate and on other occasions, that, apart from the great basic trades—coal, steel and iron, general engineering, shipping, textiles—industry is doing very well; but here again, if you examine the unemployment figures, you find, outside those trades, an unemployment figure of just under 9 per cent., so that even if we exclude altogether the big basic export trades, which are specially hard hit for the reasons which were stated by the right hon. Gentleman the Member for Hill-head, and which I endeavoured to reinforce when I rose, we find that there is 9 per cent. of unemployment in the rest of industry.

It is claimed that the new trades are going to take the place of the old. What are these new trades in which miners and other workers are to be absorbed? These new trades, almost without exception, are either subsidised trades or safeguarded trades, and, of course, it is perfectly easy for any Government to buy artificial prosperity for one or two trades at the expense of the rest of the community. You may be able to induce a certain prosperity in the silk and artificial silk and motor trades by safeguarding them at the expense of the rest of the community, although even that is open to challenge. You can certainly, in trades like building, the brick and tile trade, the cement trade, or road transport, produce greater prosperity by a direct subsidy from the Government, and these trades which I have mentioned are practically the only bright spots on the industrial map to-day. But see the cost to the nation of inducing that. From 1919 to 1925, the State has spent£47,000,000 in housing subsidies in order to absorb only 143,000 new workers. At that enormous cost a certain prosperity has been induced. Of course, housing had to be carried on, and a large sum of money had to be expended; I am only stating the argument that., where we find bright patches in British trade, it is due to subsidies in one form or another. Again, we find that in the transport industry we are now spending£55,000,000 a year in order to absorb only 19,000 new workpeople. I would invite anybody on I he other side of the House to mention any industry in this country in which there are really hopeful signs of a revival, and which is not covered in one form or another by a Government subsidy or Government assistance. I would challenge whoever replies for the Government to state, over an appreciable area, where such hope exists, and I shall be very glad indeed if any such reassurance can be given.

Apart from these new, artificially sustained trades, what is the position? In our basic trades like coal, steel and iron, or cotton, the Government simply throw up the sponge. Was there a single suggestion in the Chancellor of the Exchequer's speech carrying any hope to those trades, beyond his rating proposals, with which I will deal in a moment? There was no suggestion of any unification which might lead to selling agreements with our foreign competitors. What a sense of shame one experiences when travelling, as I recently have, in a country like Germany, where industrialists come to one on all hands and say, "Two or three men can speak for our trade; why cannot you come to some agreement to stop this cut-throat competition in the markets of the world?" Wherever one goes on the Continent one is met with queries of that kind, and the only reply that the Englishman has is that in the British coal trade some thousand or more confused and conflicting interests represent that trade, that there is no unity of any kind, that there is no possibility of any such agreement; and I believe that in the steel trade a similar condition prevails. What hope is there of rationalising those trades except through the intervention of the State? Have we not come to this, that rationalisation, in effect, in this country, means nationalisation? Can anybody on the other side of the House, the young Conservatives or other followers of myths of long ago, suggest to us any means by which they can induce coherence and unity into these great trades except through the intervention of the State, which is the Socialist method that they spend their nights denouncing on the platform?

Sir R. HORNE

What would a nationalisation Government do when the price of foreign steel was less than the cost of making it within their own borders?

Sir O. MOSLEY

As I was saying to the right hon. Gentleman, if you have a unified steel industry, which can be represented by one authoritative body, you can go to foreign countries and say, "Instead of reducing our costs by the brutal method of reducing wages, instead of entering into that cut-throat competition which the right hon. Gentleman has described, let us have an agreed selling price." [Interruption.] Is not the right hon. Gentleman aware that these proposals, in the coal trade at any rate, have actually been made by people running far bigger industries than the right hon. Gentleman has yet been called upon to run, by people commanding even larger emoluments for their services than the right hon. Gentleman? These proposals have been seriously advanced, and there is no one in this country in a position to take them up. I would ask the right hon. Gentleman: how can we possibly come to any such arrangement to eliminate competition which he himself has said is fatal unless we have the intervention of the State and some form of nationalisation?

Mr. HAMMERSLEY

What would a nationalised Government do to the cotton trade?

Sir O. MOSLEY

At any rate, we should have a greater contribution to make than the present Government. I understand the policy of the present Government is explained in the Home Secretary's illuminating exposition of that very significant fact that whenever he goes to Bootle the mill girls try to kiss him.

The PARLIAMENTARY SECRETARY to the BOARD of TRADE (Mr. Herbert Williams)

There are no mills in Bootle.

Sir O. MOSLEY

Far be it from me to define the exact locality of those felicitous events. But really do not let us be diverted, if possible, from the subject to which I would try to give serious attention. Now I come to one of the great factors which the right hon. Gentleman claimed to introduce into the situation. Every hope from the Government side of any improvement in the employment situation is now resting on their rating scheme. What does it amount to? The right hon. Gentleman, to do him justice, does not claim in his wildest moments that that relief can cover the difference between loss and profit to British trade at present British prices and world prices. The total relief, I understand from answers he has supplied, amounts to some£29,000,000. Setting aside all details of the scheme which will be discussed thoroughly at a later stage, I would ask anyone on the other side to reply to this question: Do they seriously contend that a rating relief of£29,000,000 a year can make any serious difference of any kind to British trade? Of course, it is a mere drop in the ocean. Not only that, but I claim this, and I will substantiate it with facts and figures, that this relief offered by the Government to the rates does not even cover the burden which they themselves have placed on the rates in the last four years. What are the burdens which the Government; have placed on the rates? I will enumerate five main charges. In the first place, there is the return to the gold standard. The last phase of that policy was estimated to transfer£1,000,000,000 from productive industry to what we may describe as tae owner or the rentier. I need not elaborate that, because I have often discussed it in this House, but its direct effect upon the rates was that in hitting the export trade in the manner I discuss3 earlier and which was also discussed by the right hon. Member for Hillhead it concentrated on special areas in South Wales and Durham a great and abnormal volume of unemployment. The result of that abnormal concentration was to throw a tremendous burden upon the rates in those areas. The exact cost of that policy to the rates is of course incalculable. It cannot be produced in concrete figures.

I come now to my third charge, which I can substantiate in considerable detail that the Government by their so-called economy measures have actually thrown a greater burden on the rates than the relief which they now offer. What were those measures? In the first place, the raiding of the Road Fund to the tune of£19,000,000, the reduced grant to the Unemployment Fund another£5,000,000, and the raided Health Insurance Fund another£3,000,000. There is£26,000,000 reduction of assistance to local authorities and to employment which has resulted directly in throwing men upon the rates. [Interruption.] The Road Fund is, of course, spread over a longer period than a, year. Apart from that, there are other incalculable charges thrown upon the rates, such as the extension of the gap, and the reduced grants for maternity and child welfare work. There is the reduced housing subsidy—again, we do not know to what extent it will affect the rates—and then there is a very big factor, the reduced relief works grant. In 1924, under the Labour Government,£24,250,000 was granted to relief work. This year it is only£1,032,000, and all the men thrown out of employment through the cutting down of those schemes have, of course, been thrown upon the rates. There, as a matter of simple arithmetic, it can be shown that during their tenure of office the Government have thrown far greater charges on the rates than any sum of money they are going to take from the taxpayer to relieve the rates.

Mr. H. WILLIAMS

By what number of years should the annual charge be multiplied?

Sir O. MOSLEY

They are all annual charges except the Road Fund.

Mr. J. H. THOMAS

Is that an admission that at present unemployment benefit is made a charge?

Sir O. MOSLEY

The hon. Gentleman will find that in annual charges alone the sum annually granted by the Exchequer is very greatly exceeded. I should be very much obliged to him if he would tell us what in his view is the aggregate annual charge. He is so confident in the matter that I am sure he is ready with a reply and will be able to inform us of something which we have never heard before, by how much the Government have reduced annually these vital services, and then we can calculate precisely the burden that has been thrown upon the rates by the policy which they have pursued.

I have enumerated three ways in which the Government have burdened the rates. I will proceed to another charge. The Government have introduced certain social reform schemes. Its method of financing them has been to levy a tax upon wages and upon employment. Instead of financing its Widows' and Old Age Pensions Act by direct contributions from the rich taxpayers, as was advo- cated from these benches, it introduced a principle of taxation as vicious in its effect upon industry as the rates themselves. It is a tax that is considered as an overhead charge, that is prior to the calculation and distribution of profits, and therefore as a form of taxation it falls into precisely the same category as rates. These schemes have been financed by taxing the workers' wages and by taxing firms in exact ratio to the number of workers they employ, and those charges were, of course, considered in the same way as rates prior to the distribution of profits. There is another charge that the Government have laid upon industry. As is well known, they have substantially reduced the taxation of the Income and Super-tax payer in place of giving any relief to industry.

After four years of piling burdens with both hands on to every industry, they come along with this curious scheme of partial and ineffective relief which if the wildest claims made for it were in every way true could no more affect the actual problem than the time spent in delivering a speech in this House. Can we not now in the closing days of this very long Parliament have some contribution towards the solution of this problem from the Government side? I should like to ask whether they have any hope at present of arriving at all international agreement on the Genoa lines or any other for the relaxation of the present very serious position of national credit. Have they any hope on that line, or alternatively on the lines suggested by Mr. McKenna in some alteration of the Bank Act of 1844, by which we might seek on individual national lines to arrive at some amelioration of this very serious condition? It was not after all just a shock of returning to the gold standard so suddenly that affected British trade. It has been the effort of holding the position ever since that has continued to affect it.

Ever since then we have been tied closely to the dollar, and every movement of the Federal Reserve Board has affected trade in this country, and now we have an extraordinary situation which I think has not yet been brought to the notice of the House, but which is admitted in America, that the Federal Reserve Board by trying to control the speculators in Wall Street is hitting not only American but British industry as well. See how the matter arises. In the effort to stop this wild speculation on their Stock Exchange the Federal Reserve Board restricts credit. The speculator who is looking for very large returns on very short borrowings with the optimism of his breed does not really mind at all about paying a little more for the money he borrows, but industry is very seriously affected by the restriction of credit and by the higher money rate. In fact, America is only hitting at the Wall Street speculators by first hitting industry so hard that the whole Bull position on the stock market is broken. That is effected by the slowing up of industry through restriction of credit. This situation will prevail until at any rate in this country you have some system of selective credit as opposed to purely quantitative credit. The situation would not be so serious if it merely affected America, but as long as we are tied so closely to the dollar it means that all these attempts in America to grapple with a situation which is getting out of hand affect us in this country. In fact, we have had to restrict credit to prevent a great efflux of gold to America ever since we came back to the gold standard. It is for these reasons that I would ask the right hon. Gentleman very seriously whether on the lines suggested by Mr. McKenna, or on the lines adumbrated in Genoa for a concerted European policy, any measures of any kind are being taken by the present Government or any attempt is being made to arrive at some solution of this problem which now affects us very seriously indeed.

7.0 p.m.

There are a good many lessons to learn at the moment from America. There is a lesson to be learned both from her present difficulties and from her past prosperity. A few years ago you had a situation in America from which there is something to be learned, a situation in which an easy credit policy was possible owing to the fortuitous influx of gold during the War, and where you had very strict immigration laws restricting the entry of labour and preventing the creation of any surplus labour problem leading to the forcing down of wages. There you had this situation, that on a buoyant market there was a shortage of labour and, as a result, despite the absence of effective organisation, American workers were able to fight for a higher level of wages all over the field of American industry. That higher level of wages brought a higher purchasing power and an immense home market which evoked unparalleled prosperity in American industry. The decline of that prosperity arose from the causes I have just mentioned. Is it not possible from the analogy of American prosperity to devise any measures which will fit our situation? I venture to make this suggestion? If, by the measures I have described, it was possible to reach a solution of our credit difficulties and just to give industry that small lift which she needs so sadly, and to combine with such a measure the removal of your surplus from industry, you would produce in this country precisely such a condition as American prosperity rested on.

Is that possible? The analogous thing to the immigration laws in America would be, I suggest, the removal of the aged from industry. You have got 800,000 men and women over 65 years of age employed in this country to-day. If you offered a pension of an extra£1 a week to those men and women and they all accepted, your total cost would be£40,000,000 a year, whereas we are paying now over£75,000,000 a year in insurance benefits, so that even a possible nett economy might be effected. Now, combine that measure with raising the school age and taking the young out of industry at the other end, and then you will have gone very far indeed towards the solution of your unemployment problem. Combine that. policy with a more rational credit policy—and I am not talking about inflation or any wild schemes—I am merely referring to such measures as those Mr. McKenna has adumbrated—and you produce such conditions as gave America an unparalleled boom. You then have labour in a position to secure higher wages; you have the growth of the home market to which evidently we must increasingly look in the future.

I believe there are few things more fallacious than the conception of the right hon. Member for West Swansea (Mr. Runciman). He seemed to think that the only criterion of British prosperity was the number of goods we could send abroad for foreigners to consume. That fallacy arises from this simple fact that we have got to export sufficient to buy the foodstuffs and raw material we require, but we need not export much in excess of that. In recent years we have exported sufficient to buy£300,000,000 worth of imported articles and to pile up in 1927 a favourable trade balance of£97,000,000, which was largely spent in creating industries abroad and which might better have been used to create them in the suffering districts of our own land. Of course, we have to maintain and stimulate our export trade, but do not let us make a fetish of export trade. Do not let us think it, is the sole criterion of British prosperity. It is to the home market, therefore, and to the raising of wages and purchasing power that we must increasingly look, and we must of course anticipate some transfer of production from the export to the home trade. Hon. Members opposite no doubt will see the bright vision of Protection in such an argument. I believe that Protection leads to the exact reverse of that situation for reasons into which I will go on a more appropriate occasion. I believe that that situation of a buoyant home trade and a large home market could be introduced by the measures which I have endeavoured to describe.

If I may say one word in conclusion on export trade, I believe there are measures by which that export trade can he stimulated. There are the measures of selling agencies and the measures which I strove to describe earlier in my speech. There are other measures than those. Hon. Members opposite talk a great deal about the Dominions, and I am very glad that they do, because, obviously, there is a possibility of a very large market for this country in the Dominions, but I suggest to them that we are asking the Dominions for something for nothing. There has been no Dominions policy since Joseph Chamberlain went down on his great Protectionist cry in 1906, and it is idle for hon. Members opposite to pretend that the Tory party have got any policy of any kind. In 1924 they did not propose a tax on food. It was a, tax on wheat and meat that alone was of any use to the Dominions. That went down in 1906, and nobody, in this country has had the courage even to propose it since. In 1924 hon. Members opposite had a different suggestion. They did, I believe, go as far as to suggest a tax upon tinned lobster, but the Dominions in return suggested that the British Empire was too large an institution to be held together by something so frail as the grip of a lobster's claws.

If I may get back to my main argument, I think we can all agree that it is the export of wheat, meat and wool which is of importance to our Dominions and that, if we want a market from them, we must take some measures to produce a market here for these staple products of theirs. What policy is there on the other side of the House? On this side of the House there is the approved and declared policy of the Labour party to buy direct from the Dominions the staple foodstuffs and even raw materials, to enter into direct agreement with such bodies as the Co-operative Society of Canada, the Wheat Pool of Canada, for the bulk purchase of its commodities. That co-operative society controls to-day about 70 per cent. of the wheat produced by Canada. Canada exports about 300,000,000 bushels a year, and I believe our total imports are not much more than 250,000,000 bushels. By a policy such as that you can enter into direct negotiation and agreement with the main staple trades of the Dominions and, by doing so, can reduce instead of increasing the price of food in this country. The British people will never stand for a tax upon food. That policy is dead for evermore. There is only one Dominion policy and that is the policy of buying direct from the Dominions, a policy which gives them a market and gives us cheap food. That is the only Dominion policy which now holds the field.

When you set up those buying agencies, I would suggest that in due time you might come to selling agencies As well. A very interesting scheme now forgotten was contained in a Labour party policy of 1921 in that respect. It is quite possible to follow up your buying agency with a selling agency, by which British exports could be diffused through the Dominions to pay for the imports which we get from them. I would ask any hon. or right hon. Gentleman opposite to state any other policy by which they may hope to expand our Dominion market for the reception of British goods. When the right hon. Member for Hillhead (Sir R. Horne) and the Chancellor of the Exchequer suggest that there is no policy or no suggestion forthcoming from this side, I say that on those Socialist lines contained in the official publications of the Labour party there are measures which are worthy of some consideration in this country. At any rate, I suggest that, in default of a clear policy, of a more comprehensive policy than that to which we have listened this afternoon, those measures will inevitably be accepted by a nation which is determined to find some way out of the present difficulty. It is a matter of reversing the engines on national policy, and when we nave reversed the engines and got the ship off the rocks, there will be a good deal of drastic repair work to be done. I, for one, am more confident than I have ever been that this country is very far from finished. The very fact that our industry is so strong and so vital as to survive at all four years of Conservative mismanagement, is most encouraging. I have never felt a greater confidence that with better organisation, with the rationalising not of one or two industries, but of the nation in accordance with the declared policies of the Labour party, we shall in due course proceed to an era of the greatest industrial prosperity this country has ever known.

Mr. ELLIS

If this Debate has done nothing else, it will be of great interest to the House to know even in a somewhat shadowy way what has been moving in the minds of the Socialist party in their new financial policy. The illustration given by the hon. Member and his references to America were a little beside the mark. Those of us whose business it is to go over the world looking for trade, particularly in America, realise almost at once that when one comes to compare conditions in trade, any attempt to make a useful comparison between conditions in America and in this country and the Empire generally, is fraught with disaster from an economic and argumentative point of view. If I heard the hon. Member aright, he was instancing as a reason why we should have more State control in this country over finance and credit, the action of the Federal Reserve Board in America in controlling credit. So far from having controlled credit, the present speculation that is now going on in America is entirely due to lack of control. Had America been plucky enough to have the amount of control we have in England as to credit, the trouble they are in to- day might never have arisen. What really happened there was that at a certain stage in the speculation in America, the Federal Reserve Board intervened to stop speculation for the time being by raising the rate of interest and by checking all further lending that they controlled. Industry in America was, however, so prosperous and bad such large balances in the banks that, when the Federal Reserve Board stopped the banks lending, industry came in and lent us money for speculation. So far from the Federal Reserve Board being able to stop speculation, it lost control completely, and things ran away far more than they would have done had they the kind of control we have in this country.

When we hear illustrations given of conditions in this country and in America, and a recommendation that we should follow what goes on in America, it seems to he forgotten that America in almost everything is a self-sufficient country. We can never attain to that condition in this country, whatever Government may be in power and whatever we may attempt to do. More than that, if one wants an illustration of the reasons the Americans themselves hold for their present prosperity, surely he finds it in the election of the President which has just taken place. Those of us who happened to be in that country while that election campaign was going on know that the feeling was that in order to retain their prosperity, they must not only have the Protection and the tariffs they already possess, but still higher tariffs Therefore, it seems to me that the hon. Member for Smethwick (Sir O. Mosley) was wrong when he turned round and said that Protection is not the remedy, became the Protection in that country to-day is the sole reason for the prosperity they enjoy.

I must say that in some respects I feel that the criticisms delivered against the Government in respect to remedies of unemployment are, to some extent, justified. I am very sorry, sitting here to-day representing, as I do, a constituency which is in considerable difficulty, to find proposals suggested—it is of course difficult to get details yet—by the Chancellor of the Exchequer, apparently to leave out altogether any opportunity of helping such a constituency as mine, and, I think, many other constituencies in the same position. It is perfectly true that the results of the changes which have taken place in the coal industry have caused to be put on one side a definite number of men who can never be absorbed into the coal industry again. I am afraid that from the very nature of the case there is a definite number of men who, because of their age and circumstances, probably can never be absorbed by any industry. Therefore, as far as they are concerned, one has to consider them on an entirely different basis from any other set of people who may be out of employment. That is not to say that there are not in many parts of the country centres of unemployment which, in course of time, may be bettered by an improvement in trade, and centres of unemployment which, probably, will get back to such a condition that anything given to them to tide over their difficulty will be thoroughly justified by the hopes they have of the future. That is the condition in my own constituency.

We are told that under this new scheme of relief, relief will not be given unless we consent to take into the districts a certain number of men from those areas having unemployed people who can never hope to go back because trade in their district has gone. They have to be removed because their trade has gone, and we are only to be given relief if we undertake to take some of these men. What is the position if we do this? We actually import unemployed people into a district where already there is unemployment. Surely the test for relief in any area ought not to be that it shall import other people into the area, but the condition of unemployment in the area itself. It may be that in some places you could accept people from outside because you were in a position not only to hope but to show that your trade was going to improve to such an extent that you would get more than the normal increase. Such districts can afford to take these people, although, of course, they may have to undergo a period of training, but I suggest that it is neither right, from the point of view of justice as between people and people, nor economic from the point of view of the country itself. You should not regard this question of employment purely from the point of view of getting more benefit for those who are out of employment. You should not regard it too much as a question of transfer. You must regard it on the whole as a question whether the district itself is suffering from unemployment.

Mr. CHURCHILL

My hon. Friend, I think, misunderstands. The proposal is to allow the old terms for districts which have suffered acute unemployment. For other districts better terms will be given provided they agree that a substantial proportion of the men to be employed upon their schemes will be taken from the depressed centres.

Mr. ELLIS

I do not wish to misunderstand the right hon. Gentleman at all, and I am very thankful for the explanation. I am still in sonic little difficulty, because I understand that the new grant that is going to be made will not be applicable to any district unless it is prepared to take some of those people from the transferred district.

Mr. CHURCHILL

The improved terms over and above the original terms will not be given to districts unless they take unemployed men from the depressed areas.

Mr. ELLIS

The original teems were in force last year. We were allowed to have only£1,000,000. To-day applications have been made under the original terms by my own borough in quite a small matter, and we are told that no more money can be obtained.

Mr. CHURCHILL

With the statement that has been made to-day, a new situation has been created.

Mr. ELLIS

If I am right then, the position is this. Although in the new circumstances conditions will be more favourable to districts which are prepared to start schemes, I presume, on Government assistance, and take in people from outside, we are, in these districts, in almost as bad a condition as the depressed areas, and will be treated a good deal more favourably than we have been in the past.

Mr. CHURCHILL

No, but the preference in the matter of terms will apply to those who will relieve the congested districts by taking men from the unemployment areas.

Mr. ELLIS

I think that I understand the right hon. Gentleman, and when the matter is made clear in the White Paper which is to be issued, one will be able to appreciate the position. But so far —I hope I am not stupid—it seems to me that if the preference is going to be given to somebody else and not to districts such as mine, I shall still be in the dark when the time comes. I am afraid that I cannot see it now in any other way. May I put the position in definite terms to the Government representatives? I am not desirous of being argumentative, but the question is vital to my people. I do not ask for a reply now, but for further consideration. I regard this as a very vital question indeed. If it can be shown, quite apart from any scheme of transfer from a depressed area—and I think "depressed area" carries a perfectly technical meaning in the Ministry of Labour—that you have in any district an unexampled amount of unemployment which cannot be dealt with by the normal trade of the district, but which may be dealt with by expediting schemes in that district on the part of the local authority, is it intended to give us a little better consideration than we have bad in the past under the schemes dealt with by the Unemployment Grants Committee? That is my question. In considering it, may I ask the Government to consider whether it is not also worth while to take into account those areas as well as others?

I will give a simple illustration. In my area we have a colliery which has recently been compelled to close down, not because of any reasons which can be applied to the men or which can be applied to the coal trade generally. We have out of employment more than 1,000 men who can never find employment again in that colliery, because it has been closed for good owing to certain physical reasons. These men cannot hope to find for the next four, five or six years, employment in that disstrict, because there is, as everybody knows, a general restriction in order to get the basis of consumption and production on the same level. Is it suggested that in order to get a grant we are to agree to bring in colliers from Durham and Northumberland and put them on schemes of relief which we may be asked to start, or are we to be considered purely as an unemployment district which is suffering exceptional hardship? I say that the Government should consider that position, because it is a position which exists to-day not only in the constituency which I represent, but in a good many coal districts in the West Riding, and, incidentally, in a good many areas which are not coal areas. For instance, there are the textile areas of the West Riding, about which so much has been said. It is no use treating this question merely as a transfer question. It is a much bigger and a much wider question. It has to be looked at from the point of view of unemployment. It has been said that this question ought to he entirely outside party politics. No one has a sounder opinion about that than I have. Those of us who have come a little late to this House, and a little late into politics, have taken a good deal of satisfaction unto ourselves that as time has gone by and questions have been looked into, we have come to a common agreement that certain things should be treated outside polities altogether and left entirely to the industries.

If we have got to this stage, surely the unemployment question is a matter which might also he treated entirely from a non-political point of view. I know perfectly well that you cannot stop' your candidate, and Members from using it on election platforms but here in this House we can surely come to some such agreement. At any rate, might we not regard it in this way? It would satisfy a great many people if we could bring about t the establishment of an unemployment board, just as we have brought about the establishment of the Electricity Board, instead of passing a Bill which gives you exact definitions, so exact that people who have to administer them wish they had never been made. If you could lay down some general principle and then allow a board such as I have suggested to be the deciding factor as to the extent of unemployment, and decide whether there ought to be some measure of relief given to particular areas, I believe that you would get your unemployment question, as far as grants of relief are concerned, in a far better condition than it is to-day. When it is attached to a Government department it must always be subject to the political aspect.

There is another aspect, a wider one, which one cannot help seeing as one travels about. We are told that the future lies in an extension of the Empire, which is to be brought about by sending our own people to the Dominions. Those of us whose duty takes us into different parts of the Empire have found —and I say it advisedly—that in many directions public officials acquiesce in all that is being done, but somehow or other they very often find rather a determined attempt is made for each part of the Empire to keep definitely to its own deliberate policy and to object, in one way or another, to immigration that does not fit in with its own policy. What is the position to-day? It is said that we will send our people to the Colonies, where our people will grow food and we will send to them our manufactured goods. Day by day not only in the Colonies but all over the world other people are considering the raising of tariff barriers to prevent our manufactures from going in there, and yet it is said that we are to send out our manufactured goods in place of the food that is raised in those countries.

What is the one problem to-day in all those countries? The one problem is that there is an over-production of food throughout the world. In consequence of that over-production a price is paid which does not pay the people who raise the food, and the result is that you have the same flow from the agricultural areas in the Colonies into the towns which you have in this country, and for the same reason, the reason being that the man who produces the food, compared with the man in the town, is not getting a fair show anywhere in the world. [HON. MEMBERS "Come over to this side."] Hon. and right hon. Gentlemen above the gangway do not appreciate the end of the argument. What is the end of the argument? It is not unfair to say that this is not a question which you can consider piecemeal. It is a question which you have to consider in all its aspects but before you even begin to look at it from the point of view of unemployment you have to lay down as an axiom that those in the towns possibly will have to face, in some terms or another, the giving up of the privileges which they have got compared with the people in the country districts, and to meet them in some sort of way in order to get a better balance between one and the other.

Mr. J. JONES

Piccadilly Circus against Canning Town.

Mr. ELLIS

For the moment, I have not England in view, but the wide spaces of Australia and Canada, where this problem is being worked out. Until the problem has been worked out and has been settled by the Colonies themselves, then unless the people you send out know about it, it seems sometimes a little hard to send them out to something which may appear bright on the face of it but which, until it is settled entirely in the countries to which they are going, ought clearly to be put before them. It is the more difficult to say that, because one does appreciate that we have an overcrowded population in this country, and we must find work for it and work which is generally remunerative; but it is becoming more and more difficult for us to do that in this country because we are not a self-sufficient country, and by our very position in the world geographically we never can be.

What I do ask is, that if in the future arrangements are to be made for emigration, some effort should be made to deal with it on a much larger scale than at the present time. What I would like to see—it may be said that it is impossible—is this, that if we cannot find our own Colonies prepared to take a larger part in the distribution of the population, which is essential if the Empire is to continue to persist and exist, then we should tak it into our own hands and, as a nation, attempt to get them to give up some portions of their territories for us to deal with them and with this problem in our own way. We have lent our money and given our credit for generations to Australia, and in a lesser degree to Canada. At the present time the position out there, certainly in Australia, is that the people have collected in the towns, and the town man is living a good deal at the expense of the country. If we are to continue to send people out there, where they are wanted quite definitely, we must realise, that Australia wants them only in one part of the country, and that is in the country districts.

I have often wondered what would happen if, by any chance, the system of debt and the repayment of debt and interest which exists to-day in Australia were to stop. What would be the privi- leged position of those who have been collected in the towns and who have been living on what one might fairly term false pretences qua their fellows in the country districts all these years? That is a position which we may have to take into account. One travels abroad and talks to people out there and then one comes home and finds the position as it is here. Perhaps we do not get a sufficient perspective in all these things. Unless we can get that perspective and take the unemployment question out of politics, it seems to me one of the most hopeless things that has ever happened. I hope the Government will give some consideration to the point whether it would not be worth while to try to take this question of unemployment away from politics, to establish an independent Board, and to deal with it on general principles rather than by a succession of Acts which must, in the end, be treated more or less politically.

Mr. WHITELEY

During this Debate the mining industry has occupied a very important place, and quite naturally. That is chiefly why I have intervened, but before dealing with the mining industry I should like to raise one or two points which may be of interest to the Parliamentary Secretary of the Ministry of Labour. Perhaps when I refer to the mining industry the Secretary for the Mines Department will be here. Much has been said about the scheme for sending men to Canada to take part in the important work of harvesting, and it has been pointed out that the whole thing was done so hurriedly and the organisation was carried out in such a slip-shod way that there has been much hardship in consequence.

May I draw attention to the case of a number of men who when they landed on the other side were presented at Halifax with 15 dollars each, and sent up country? By the time they reached their destination the whole of their money had been spent on meals on the train. On their arrival they found no arrangements had been made for them, and they had to sleep in the station. Next morning, about six o'clock, a farmer came along and engaged a number of them for work which he had ready. During the day other farmers came and engaged the men one by one until there was only one roan left. That man spent the whole day in the station. He had no money. Towards the end of the day he went out in order to get a drink of water at a garage. There he was met by a farmer, who said: "Are you prepared to accept work?" "Yes," replied the man, "I am here for that purpose." He accepted the work, which was to drive a team of horses. "Can you do that?" asked the farmer. The man replied that he was prepared to do it, or that he was prepared to do the best he could. He was engaged and received four dollars per day. The work lasted for a very few days, about rive days, then he had to seek work elsewhere. He and other men, after a day or two, were fortunate in securing work in connection with threshing machines. They worked 10¼ days, but at the end of the time they did not receive any money from the farmer. The men went for a policeman in order to try to secure their wages, but it was no good. They could get no further, and they had to employ a lawyer to go into Court with a view to securing from the farmer the money which they had earned. Of course, the Court case will take a long time before it is settled. These men in the meantime have no money and have had to do the best they possibly could in the circumstances. One man has been fortunate enough to secure a job from a man who was prepared to pay for the work that was done.

When the Government make arrangements to send people from this country to the Colonies to assist in harvesting or any other thing, there ought to be some definite organisation to ensure that the men are not blown to the winos as these men have been, and left stranded. It ought not to be, as has happened in some cases, that they undertake work for people who refuse to pay them their wages and that they should have to engage, a lawyer in order to get their wages in court. I hope that the Secretary of State for the Colonies and the Minister of Labour will see that in future some definite organisation is set up whereby the men who are sent out shall have proper protection.

We are told by the Government that industrial transference and migration will be the one solution which will help in regard to the difficulties in the mining industry in the future. Candidly, I say that this will not touch the fringe of the unemployment situation in the mining areas. The Chancellor of the Exchequer told us to-day that we must face our responsibilities on this side of the House and accept the difficulties of the present time as part of the price we have to pay for what occurred in 1926. Are the Government going to accept their responsibility and are they prepared to accept the consequences of the effect of the Eight Hours Act in the mining industry, which they put on the Statute Book in 1926?

In connection with one of the Government's latest proposals, which we discussed before the Recess, with regard to freight relief on industrial hereditaments they are making a big mistake, although their attention has been drawn to it not only in this House but by various deputations. Before the Recess, the Minister of Health pointed out that he understood and believed there would be a great hardship upon collieries who have their own private railway lines as against collieries who have the full use of the public railways for the conveyance of their coal, and he promised them that although he could not bring those collieries under what is called the freightage hereditaments he would bring thorn under the relief of rates in the industrial hereditaments. Even if he brings about that proposal these particular collieries will be placed at a 10 months disadvantage compared with other collieries. The point which the Government must bear in mind is that the collieries that are going to be so handicapped are the older collieries which laid down their own railways before there were public railways. These collieries are further inland than the newer collieries and their economic conditions are far worse than the economic conditions of the newer collieries can possibly be. Therefore, their handicap is tremendously heavier. Although the Minister of Health told us that if it was possible for any feasible scheme to be suggested he would give it favourable consideration, apparently up to the present time nothing has been done in that respect. In the counties of Northumberland and Durham, and the same thing will apply to Wales, many collieries are going to be let down in consequence of the legislation of the Government. May I read the suggestions which have been made for overcoming the difficulty—I believe they are in the possession of the Government at the moment. There are four Clauses. It is proposed therefore that the private mineral railways, like the public railways, should pay into the pool the amount by which they are to be de-rated, and should draw from the pool an amount equal to the amount by which their freights would be reduced, if their lines were public railways and their charges for leadage over them were public railway freight rates. During the intermediate period from 1st December, 1928, until 1st October, 1929, the private mineral railways should participate on the same principle in the sum to be provided by the Government. It is submitted that the scheme proposed provides a basis for the calculation of relief which is substantially fair to the collieries using private railways and which at the same time cannot be unfair to other collieries; that this scheme is simple to apply; and that it gives effect to the intentions of the legislature, which will otherwise be partially defeated. Unless such a scheme is adopted, public money intended for the benefit of the coal industry will he withheld from a large proportion of the collieries of Durham and Northumberland an area in which it is conspicuously needed. That is the situation with regard to these old companies and I am hoping that the Government between now and 1st December will give the matter careful consideration and will see that these older companies, who have laid down a large amount of capital in providing and maintaining these lines, get justice and equality with other collieries who do their business on the public railways. We have heard to-day from the Chancellor of the Exchequer some of the difficulties which industry in this country has to face. He pointed out the development of coalfields in various parts of the world, and it is a fact that coalfields are developing everywhere. He also pointed to oil as a motor force becoming greater day by day, and this is certainly one of the things which we in this country will have to face in a much greater measure than ever before. I think it is the duty of any Government to look on this matter as being very important indeed.

The coal industry was the means of bringing industrial prosperity to this country and we shall never regain our prosperity by silk stockings and motor cars. They are fleeting things. If we are to get back our prosperity we shall have to get back to the great basic industry of coal and make it possible for it to bring prosperity again to the country. The right hon. Member for Hill-head (Sir R. Horne) made a similar statement to a fuel and power company a little while ago. He said that there must be a concentration on the coal industry if we are to get back our prosperity, and the President of the Board of Trade during the Recess spoke at a Chamber of Commerce and pointed out what we on this side have insisted upon for the last four years, that the coalowners of this country will have to cease their cutthroat competition in order to secure an export trade which is not there. They are simply lowering the price of export coal in order to capture foreign markets, which are less easy to capture than ever before. Our export of coal will decrease year by year because of the increasing amount of coal which is being produced in every part of the world. The President of the Board of Trade said that this policy was not the way to bring back prosperity to this country. Coalowners in different countries have also met to discuss the question of co-operative selling. That is a big advance. When we put forward such a suggestion, we were told that we were talking with our tongues in our cheeks, but now other people are beginning to see that we were right and are conferring with each other in order to put it into operation.

I was delighted with the speech of the hon. and gallant Member for Rochester (Lieut.-Colonel Moore-Brabazon) during the last days of last Session, in connection with the mining industry. He pointed out that the situation was becoming more difficult day by day because oil, as the Chancellor of the Exchequer has said, is becoming a greater motor force than ever. He said that the building of the 10,000-ton ships meant the displacement of 100 miners and that the erection of the huge buildings in this country, and many of the dwelling houses, would also mean the displacement of miners because they are being erected on the principle of central heating by oil. The hon. and gallant Member said that it was essential we should get down to this problem and see whether we could not consume our own coal in this country rather than depend on an export trade which is not there. I have myself been down to the research station; as a mining representative I have been very interested in that particular side of the in- dustry. I have seen the work being done in connection with the extraction of oil from coal. I have seen what is called the Bergius process, a very interesting process. I do not know the patent, but I saw it actually at work. The best of our coal is being used and this machine pulverises it into the most minute powder. It is then mixed with certain chemicals and a certain liquid and again goes through the operation of pulverisation until it becomes a huge pulp from which is extracted pure petrol and pure oil, while a large amount of crude oil is left.

Those in charge of it say that it is not yet quite a commercial success, but it is getting very near to being a success. My point is this: has the Secretary for Mines any information as to whether this process is now nearer to being a commercial success than it was six months ago, or has he any information as to any other processes for the extraction of oil from coal which are a commercial success or sufficiently near to being a success to warrant the Government of this country launching out on a projet to absorb the mines of this country and put miners who are unemployed into work? This matter is as important to this country as the production of coal between 1914 and 1918. We have a derelict population and the nation is responsible to the citizens in the distressed areas. It is our duty to find some way out, and if we have come to the point when the extraction of oil from coal, although not quite a commercial success at the moment, is very near being a success, then the Government instead of giving additional assistance to prosperous areas to enable them to absorb men from the distressed areas should begin to set up State factories, State retorts, for the extraction of oil from coal at the pitheads. This would mean an improvement in the distressed areas themselves and would absorb those men who are idle at the present time.

It would be worth while our doing this. It is no use saying that it would not be a paying proposition. Even if it is just short of becoming a commercial success, the fact that you would put all these people in employment, set all the collieries in occupation, save a large amount of unemployment benefit and a large amount of poor law relief which is given at present, give men some security and some pros- pect in life, would in my opinion be better economy than simply standing aloof and allowing things to work themselves out as we appear to be doing. In spite of the fact that the present Government stands for private enterprise as against State enterprise, I hope that they will have the courage to face these difficult problems and will undertake a great step of this kind in order to bring the distressed areas out of the morass in which they are at the moment and put them on a basis which will enable the men and women in those areas to enjoy life as citizens of this country. It is no use the Government saying that they are transferring 600 or 700 men who have been specially trained from one area to another. That is simply leaving the distressed areas in a worse condition than before, and if the Government carry out the policy of the Chancellor of the Exchequer and the St. Davids proposals and give assistance to prosperous areas as an incentive to take people from distressed areas, they are only going to make the position worse. The depressed areas will become more depressed and more distressed. The Government's policy should be to give preference to the distressed areas, lift them out of the morass by creating facilities which will bring prosperity to them and to the nation as a whole.

8.0 p.m.

Major KINDERSLEY

I only propose to deal with one of the possible remedies for the present position of unemployment and that is the question of migration particularly with reference to Canada. I do so because I had the privilege of visiting Canada with the Empire Parliamentary Association and although I was there far too short a time to be able to dictate as to conditions and prospects which await people in that country, I formed certain impressions which may be of some use to the House and some contribution to this problem. The hon Member who has just spoken referred to a case of hardship. I do not doubt for a moment the truth of what he said and I could give a similar case of a man who was not paid for the work he had done. But I ask hon. Members to take a broad view of this matter and to follow the example of the Leader of the Opposition who spoke as follows in Canada. I am reading from the "Calgary Herald" of 19th September. He used these very wise words: It is true that seine 330 of these men are on their way back. We are all practical men, and we know that it is absolutely impossible to take 8,500 men from one end of the country to the other at short notice, persuade them to come, tell them what they are to get here, bring them here, and then find that not a single one of them has been unfairly treated. But when grievances are reduced to three or four per cent., it is our duty to keep an eye on the more than 90 per cent. that have been successful. Those words were spoken by the Leader of the Opposition shortly before he left Canada, and I think that they put the case in a just perspective. I am not for a moment saying that there were not cases of hardship. Of course there were, and it was inevitable. But I do say that when you consider that there were 8,500 men sent out there at short notice, to conditions which were entirely new to them and perhaps not realising sufficiently what those conditions were—when you consider the circumstances, this experiment—it was an experiment—has been entirely justified. Something between 5,000 and 6,000 of them are to stay in Canada and make their homes there. Probably 6,000 will do so, from what I know, but I put the figure low and say between 5,000 and 6,000 of the 8,500.

I travelled back on the boat with many of those who returned to this country, and I spoke to them. T should divide them into three classes. First there were those who were obviously physically unfit to go out. How they passed the doctor I cannot conceive. It was necessary only to look at them to see that they were unfit. I suggest to the Government that if this experiment is repeated next year a great deal more care should be taken in the medical examination of the men. Then there was the second class; these were men who said that they were perfectly satisfied and that they did not want to stay in Canada during the winter, but were going out again. Some said that they hoped to be able to take out their wives and families. Then there was the third class. If I may use the expression, there are rotters in every class in the community. There are rotters in my class. It is no good our talking as if men were different because they happen to be in different walks of life. There are rotters in every walk of life, and among the men I saw there were numbers who would never make good. I put them in the third class. None the less, taking the experiment as a whole, I am entirely satisfied that it has been a success, and that with the experience we have gained it should be made a far greater success in future.

I want to say a few words about this migration question as I Saw it. First of all there is no doubt that Canada desires to get migrants of British stock. The Canadians are somewhat alarmed at the number of Central Europeans who are going there and who, they find, do not assimilate themselves to the conditions and become what are called "good Canadians." In other words, they are inclined to keep to themselves, apart, in communities. Canada would infinitely prefer, if the right type can be got, the man of British stock. It is the Canadian's ambition that Canada should be predominantly of the Anglo-Saxon race. I want to clear up a misconception on the part of some people, that the Canadians do not want Britishers. They do want Britishers, but Britishers of the right type, and I think they are right in insisting that those who come must be at any rate physically fit for the life they have to live.

It seems to me that we can divide the migration problem into three. The first class that makes the most hopeful type of settler is the boy between 16 and 20. I do not believe in sending them out too young. It does not matter where that boy comes from, whether he has never seen a plough or horse in his lift, or whether he has been brought up in a city or a slum. If the boy is of the right type and physically fit he will make good. I had the privilege, when in Canada, of going round many farms, and I want to give an instance to show what I mean. I met, near Saskatoon, a dairy farmer who kept some 30 head of milking cows. We called casually on him and asked him if he had any Britishers working for him. He said, "No. I have no harvesters, but I have a lad who came out to me last April, and he is a capital lad and is doing very well. He has gone to get the cows in, and if you will wait you can talk to him." Naturally I waited. In time the boy came in driving the cows and we asked him how he was getting on. He was radiantly happy and said he was excellently treated. Chaffingly we said to him, "Do you want to come back with us?" His reply was, "Not much." In reply to a further question he said that he came from Notting Hill, that he had never been on a farm before, but had been in a tobacco factory and lost his job when hands were being dismissed. He went out to Canada with the help of the Church Army. I asked him "Did you have any difficulty?" and he replied, "None at all. This farmer sent in for a lad and I was sent cut to him."

The lad was thoroughly happy and was going to make good. The farmer told me that he had had two other lads who had also come from the city and that after being with him for a year they had gone on and had obtained better jobs. They had corresponded with him and were making good. Then you have that wonderful experiment, the Cossar Farm and the hostel in the maritime provinces in connection with the boys clubs in Glasgow. To the hostel lads are sent out from Glasgow. I saw many of the lads who came on to our train. They are sent out to farmers who will look after them. If they are not properly treated they can go back to the hostel. The same remark applies to the Church Army methods. I am certain that lads between 16 and 20, if they are of the right type, will make good. It does not matter whether they are from city or country. They can be sent out there through these organisations. I think that the Government should do all that is possible to encourage that type of migrant to Canada.

Then you get the second type, the man who has the spirit of adventure or what is called the pioneering spirit. He has perhaps£20 or£30, and he says "I am going out to try my luck in Canada." He has not been asked to go; he is not going under any assisted scheme, but is going of his own free will and initiative. Before the War that man could get out to Canada for£6. To-day it costs him£18. When it cost him only£6 he had left with which to carry on while looking for a job in Canada. But the£18 fare to-day is far too much for him. I am speaking of the ordinary passage. I suggest to the Government that this type of migrant is the most likely to succeed, because he migrates of his own free will; and he should be encouraged in every way. The best way is to get the ordinary fare lowered. If the shipping companies cannot afford to lower fares, it would pay the Government to subsidise the companies and say to them, "Now then, reduce your fare to£6 or£8." There would then be a natural flow of migrants to Canada once more. I ask the Government very seriously to consider that point.

In the third class you get the man, like the miner, who cannot get employment and has little prospect of getting it again in his own industry. Often he is an older man with family obligations. He has been brought up in one industry and there is only one satisfactory way of dealing with him. That is what I might call, shortly, the system of community settlement. It is no good taking a man of that age and with that experience and putting him out on the Canadian prairie unless there is proper supervision. He has to be started. In order that there may be proper supervision and help, and in order that he may not feel too much the loneliness of the life, I believe that the system of community settlement is the only way to deal with his type. I do not think that this question has been sufficiently explored and I ask His Majesty's Government to give it more consideration than they have hitherto done. Many hon. Members opposite who were with me on this tour will, I think, agree with me. We may not agree as to the details, but we agree as to the principle. I believe it would be quite possible to arrange with the Government of Canada that a large tract of land should be put at the disposal of the Government for a large scheme of group settlement.

Mr. MacLAREN

Why not do it at home?

Major KINDERSLEY

Anybody who has been in Canada knows that there you have a country which is somewhat larger than Europe and which has a soil in the prairie provinces which has only to be ploughed in order to become good wheat-growing soil. Any man who, having seen that, can then ask, "Why not do it at home?" has no vision. We have in this country 45,000,000 people; there you have a country bigger than Europe with under 10,000,000 people. Then the hon. Mem- ber asks, "Why not do it at home?" I take it the hon. Member has not been to Canada, because I do not think that any man who has been there would make a remark of that kind. I ask the Government to consider this question of group settlement. I daresay they are doing so, but I am not by any means satisfied that all has yet been done that might be done in this direction. The Peace River district, which is immensely rich in agricultural and mineral resources and which has recently been opened up, would provide ample accommodation for a very large number of families of miners and those who cannot find employment in this country, but it would have to be a properly supervised scheme of group settlement. That is my own opinion.

That is the small contribution which I want to make towards the solution of this problem of migration to Canada. Before concluding I wish to deal shortly with the speech made yesterday by the hon. Member for Dumbarton Burghs (Mr. Kirkwood), which unfortunately I did not hear, but which I have read in the OFFICIAL REPORT. He referred to the difficulties which were met by the harvesters in Canada. I know there were difficulties. The difficulties were inevitable, but I have already quoted the speech made by the Leader of the Opposition in which he stated the matter most moderately and in the way in which I should state it myself. I do not think any good is done by dwelling upon the failures and saying nothing of the successes. I suppose we all, in our heart of hearts, wish to see this transference of population to our great Dominions successful. If that be so, we should give some credit for the successes and not dwell only on the failures. I think I have a quarrel in this matter with the hon. Member for Dumbarton. I had the pleasure of travelling with him and found him a most delightful companion, but I think sometimes his heart runs away with his head. He dealt in his speech with a certain episode which occurred at Winnipeg and I want to give the House another version of what occurred.

We arrived at Winnipeg on, I think, 5th September, at a time when some 250 men were, for various reasons, being sent back to this country—miners or others who had gone out under the harvesting scheme. On that date a dinner was given by the Government of the Province at which I was present and at which, as he has pointed out himself, my hon. Friend the Member for Dumbarton was not present because he was looking into the conditions of certain of the harvesters who were being sent home that night. It so happened that the gentleman who should have sat next to me at that dinner was a gentleman called Mr. Queen. One of my neighbours told me that he was one of the gentlemen responsible for the great Winnipeg strike of 1919. There was another gentleman named Mr. Heaps who was also one of the people responsible for that strike. Evil communications corrupt good manners, and I rather fancy that my hon. Friend the Member for Dumbarton and my hon. Friend the Member far Dundee (Mr. T. Johnston) got into rather bad company that night. By the way, the Leader of the Opposition was also in Winnipeg that night and it was after hearing all there was to be said about this question that he used the words which I have already quoted. Next day we were entertained at the Winnipeg Country Club by the Board of Trade. I happened to be the speaker of the delegation and after my speech there was to be a conference on the subject of migration. When the conference began the hon. Member for Dundee to the consternation of the audience made a speech of which I have here a report. Mr. Thomas Johnston, Labour M.P. for Dundee, Scotland, charged that at Winnipeg station—he believed it was the Canadian Pacific Railway station—he had seen British harvesters kept in an underground cage. There was an armed soldier at the door. There were a couple of dozen policemen at the door. They were forbidden to go out and they were herded together like sheep. 'British citizens,' Mr. Johnston declared, 'are not in the habit of being treated that way.' That was, in substance, as far as I remember, what the hon. Member said, and the same type of charge, leaving out the cage, has been repeated by the hon. Member for Dumbarton in his speech yesterday. We were of course the guests of the Winnipeg Board of Trade, and I was very distressed to hear, these allegations. I had arranged to go for a motor drive with one of our hosts, but I said that these allegations were so serious that I wished to see the place for myself. My hon. Friend the Member for Orkney and Shetland (Sir H. Hamilton) and I went down to see this place. We could not see what the hon. Member for Dundee had seen because he had seen the men there. We did not see the men there, but we saw the premises which had been described as a cage. I am going, with the consent of the hon. Member for Orkney and Shetland, to read a statement which he and I wrote and signed, immediately after having seen these premises, for the benefit of Lord Peel, the Chairman of the Delegation: Statement for the information of the Chairman of the British Delegation of the Empire Parliamentary Association.—After the meeting at the Country Club to-day, Major McEarchan, Manager of the Bank of Montreal, took us to the Canadian Pacific Railway Station, where we visited the emigration department, seeing Mr. Thomas Gelley, Divisional Commissioner for Emigration and Colonisation. We reported to him the statement made by Mr. Tom Johnston at the lunch regarding the treatment of the returning harvesters. In reply, he informed us that the men in question, some 250 in number, had been under no restraint whatever whilst under his charge in Winnipeg waiting for repatriation. We examined the quarters in which we were told they had slept. They were in a building adjoining the railway station, the sleeping apartments being separate rooms, with four beds to a room. Each had had blankets, pillows, and sheets. There was also sufficient lavatory and bath accommodation, the whole appearing clean and well-kept. Food was supplied from the kitchen on tickets when requested. From there, we went to the Canadian National Railway Station, where we saw Mr. McGowan, Western Manager, Department of Colonisation, who showed us where the men were assembled for the purpose of complying with the railway and steamship tickets. This is a large hall in the basement of the railway station which is used for this purpose. It is clean, sufficiently lighted, and supplied with benches. The men did net sleep there, but only used the hall preparatory to departure. Mr. McGowan informed us that, on instructions from the railway and steamship authorities, it is always the practice in such cases to close the door of the hall when tickets are being issued and to keep the men there until the train starts. These precautions are held to be necessary to prevent unauthorised persons from obtaining tickets, and to prevent those who have received tickets from selling them outside. Hon. Members should remember that these tickets are issued at a very cheap rate and are, therefore, of some value. The statement proceeds: As Mr. McGowan himself had not been present on the occasion in question, we saw his assistant, who told us that between 12 o'clock and one the men had been told to get their baggage, that the grille door of the hall had been closed at four, and that the train left about eight p.m. The guard on the door consisted of Canadian Mounted Police on foot, partly to control access to the door and partly because some of the men had been somewhat unruly. I cannot conceive that anybody who did not wish, except possibly in the heat of the moment, to create a wrong impression could possibly call this place that we had seen a cage. I have often—and I imagine most hon. Members have frequently—descended in one of the Underground lifts, and this large waiting hall, which I think would have held 800 people, had one of those sliding iron doors such as you have in a lift. When I get into an Underground lift, I do not go down in a cage, and I maintain, and, I am prepared to maintain, that the precautions that were taken were under the circumstances perfectly necessary, because, after all, Winnipeg is a large place, and there are many undesirable characters in it, and if, after these men had had tickets issued, there had been free access and egress, I maintain that they might have lost their tickets, and their tickets might have been sold and got into the hands of undesirable people, so that the men might never have got to their train. But except between the time when the tickets were issued and the time the train left, a matter of two or three hours, they had complete freedom of access to and egress from the emigration department.

Mr. MONTAGUE

Supposing it had been you.

Major KINDERSLEY

I should certainly have accepted the conditions as perfectly reasonable. There were among these harvesters many men of education, such as university graduates and others, and I never heard any complaints of this kind from them. I want to give another experience that I had, because the hon. Member for Dumbarton rather gave the impression that there was not the demand for the harvesters that was alleged. Canada is a vast place, and one district, of course, differs very much from another, but I want to give this personal experience of my own. When I got to Moose Jaw, I happened to be one of the first who came out of the station, and there was a, group of men there, some 12 in number, I think, who surrounded us and began telling us, many of them, of grievances. I said that I would go and see the employment exchange and find out what the situation actually was.

A rather curious incident happened. When I got into the motor car which was to take me from the station to the Employment Exchange, one mart who had been with us in the crowd came to the car. He had not said anything yet, but he said, "I want to tell you that I have already earned 80 dollars, and I have still got 65 dollars left." And he said, I also want to say this, that on the boat on which I came out there were two men"—he described them as Communists, but I do not know whether they were—"and," he said, "they held meetings all the way out trying to persuade the men not to work." I went on to the labour exchange at Moose Jaw, and there I actually saw the applications for 500 men for harvesting from the farmers, and they were offering six dollars a day. I asked whether these men had been offered work, and they said that they had been offered work at six dollars a day, but had preferred to go home, as they had a perfect right to do. I do not want to take that as typical of everywhere, but at that place that was what I saw, and I am sure the House will not believe that I am telling them what is not true. Therefore, whatever may be the case at some places, there were undoubtedly instances where men were offered work at good wages and preferred to go home.

The work is unquestionably very hard, and it is particularly hard for men who have, perhaps, been out of work and are not well nourished. I can quite understand, from all that I saw and heard, that there are men who would chuck it during the first three or four days, and perhaps quite naturally—one cannot blame them—but after a man had stuck it, for three or four days and got his muscles accustomed to it, then he was perfectly happy. [Laughter.] Why should hon. Members opposite laugh about it? Surely we have all got commonsense. I know that if I went out and started to garden for a couple of hours, digging or something like that, I should very likely have pains in my back, but after one had been at it for two or three days, if one stuck at it, one would come through all right and feel perfectly fit. That was, in fact, the experience of many men. Coming back on the boat, I spoke to certain university men, Oxford graduates, who had been out there, and they had had that experience and had come through it all right. It was very hard work, but they had got their muscles used to it, and they said they had been very well treated and were perfectly happy. No doubt hon. Members have seen letters to that effect. I think there were two letters in the "Times" to-day from two university graduates, and there was an article by one of them which did not exaggerate the position and at the same time gave, I think, a very fair account of the conditions.

I ask the House to take a broad view of the situation. I do not deny the cases of hardship that have occurred, but there is one significant paragraph in the speech of the hon. Member for Dumbarton Burghs, and it is so fair that I want to read it to the House. He said: Take the farmer. We interviewed several farmers. The Canadian farmer has only three weeks at most in which to get in his harvest. His all is at stake, and invariably he is a sturdy and hardy built individual who works during harvest time all the hours God sends and expects every other man about the place to do the same. He says: 'Look at this. I have the whole thing planned out and if I happen to get men who are not suitable the whole of my organisation goes to bits. I am better without them. These men have come over here from mining villages and the big towns and they have, rightly or wrongly, engrafted into them the idea that eight hours a day is long enough to work, and when they are asked to work more they revolt. During harvest time we know nothing about hours. We want to work as long as we possibly can in order to get the harvest in, and therefore we come up against these men.'" —[OFFICIAL REPORT, 7tih November, 1928; cols. 167–8, Vol. 222.] That is a very fair statement, such as I should expect from the hon. Member. If men go to Canada they should be told about and instructed in the conditions that they will have to meet. They ought also to be well equipped in the matter of boots and strong clothes, because in harvesting, unless boots and clothes are good, they would be torn to pieces. It is small things like that which would help very much to ease the situation, and make the wheels run more smoothly. Broadly speaking, that is the situation that we have to face. Out there nature is man's mistress, and if a man is prepared to work for her, her terms are hard, but she is a very bountiful mistress. She knows nothing, and can know nothing, of trade union regulations. She knows nothing of an eight-hour day. If a man has the grit to face the conditions, if, when he gets out there, he is prepared to realise that these conditions are totally different from those to which he is used at home, he will achieve what all of us out there saw was achieved by numberless men. Over and over again one heard stories of what men have achieved. I was taken round farms at Saskatoon by a man intimately acquainted with the neighbourhood, and he told me of a man who came out there 20 years ago, who went round grinding tools for the farmers, and who to-day is one of the most prosperous farmers. One met with numberless instances. It is a land of very great opportunity; it is a land which a man has to accept as it is, and what we have to do in future is to see that those conditions are made thoroughly clear to the men who are going out. Otherwise, what happens? We get failures and troubles such as we have had, and which are unfortunate, but they should not be exaggerated, and should be put in their right perspective. If we do otherwise, we only do something which may harm a scheme which is badly needed to-day, and which prevents men from going out there to find opportunities which for most men are very difficult to find in this country. I came back from Canada firmly convinced that the doctrines which hon. Members opposite preach may be right or wrong, but if they find a home in men's hearts, they will make us a nation unfit to be an Imperial race.

Mr. T. SHAW

I should not have intervened in this Debate had it not been for the last speech, but I happened to be chairman of the Labour group on the delegation to which my hon. and gallant Friend the Member for Hitchin (Major Kindersley) has referred, and I cannot allow several of the things which he said to pass without a statement justifying what was said by my colleagues in Canada, and a statement of my own as to what I saw. When we arrived in Winnipeg, we were met by the wife of one of the Members of this House, who told us that her husband was with a lot of returned harvesters who were imprisoned in a room below, and she asked us to go and see what was the matter. We went to the closed gates of the room and found the men were not allowed to go out and armed men were standing there; it does not matter whether they were soldiers or policemen: I thought that they were soldiers, and I believe that they are the North West Mounted Police. We did not get in easily to see the men. We had to state pretty precisely who we were before we could get through the barriers. We went and saw these men imprisoned there; you can call it what you like, but they were not allowed to leave and some of them, according to their statement, had been there since morning, and, according to the statement of the hon. and gallant Gentleman himself, many of them had been imprisoned for four hours and were wanting to leave. It would have been a perfectly easy matter if there were danger of tickets being lost to take the tickets from the men before they went out. I do not accept that statement as being in the slightest degree a justification for not allowing any man to go out who wanted to go out. We saw those things with our own eyes, and I suggest that it is too much to assume that a man who has not seen a, thing is better able to say what it was than a, man who has.

Major KINDERSLEY

I accept entirely the right hon. Member's statement that he saw what he saw, and I admitted in my speech that I did not see the men there, but I saw the place.

Mr. SHAW

The hon. and gallant Member saw an empty room which had been cleaned up, and we saw a full room which had not been cleaned up. That is the difference. We saw the men at the gates with the gates shut, and he saw the gates open. I suggest that the six of us are neither blind nor dishonourable nor in any way opponents of a reasonable scheme of migration; and I shall have a few words to say on what I think of the possibilities of migration before I sit down. But that was the condition of affairs in that room as we saw it. The hon. and gallant Member speaks of the sleeping accommodation. I appeal to him not to play too much with prejudice. He has mentioned the names of two members of the Canadian Parliament, men who are, I dare say, just as honourable, as conscientious and as able as either he or myself. He says they had been connected with a strike, and that evil communications corrupt good manners. If it is the hon. and gallant Members idea that a man who has been connected with a strike at some time is an evil communication corrupting good manners, I cannot argue with him. All I have to say is that I met those two gentlemen and had very long conversations with them. I found them strikingly moderate in their views, much more moderate than I am myself, and over here we should have a tendency to call them very old-fashioned Labour men. In any case, they were not firebrands, and Canada can safely go to bed to-night if all the disturbance it has to fear arises from those two men.

After the dinner of which the hon. and gallant Member spoke, and when nearly all Winnipeg knew what had been going on, we were invited to see the place to which the men who were coming into Winnipeg were to sleep the night. I say unhesitatingly that when we got to that place two Scottish harvesters were being turned away; and I am going to say of those Scottish harvesters that if ever I saw two genuine, straightforward, self-respecting working men it was those two, who were a credit to their nation. So much a credit were they that when one of our party offered them a small sum of money with which to buy-cigarettes they said, "No, we are not men of that kind. We are not beggars, we work for our living." That is the type of men they were. At the request of one of the Canadian Members of Parliament these two men were admitted. We saw the beds. There were no blankets. I tell you candidly if I had had to sleep in that place I should have slept on the floor, as they said they would sleep on the floor, rather than sleep in the beds. We saw those things. Anybody who did not see them may imagine what he likes, but if I had been in the place I should not have slept in the beds but on the floor.

There is no question at all that in that room there were unhealthy influences at work from the other side. I am going to say in this House what I have said outside. There was an attempt amongst those men to preach a doctrine which in my opinion it was simply damnable to preach to men in that condition. It was being hinted to some of them that the best way to get home was to get ex- patriated, and that the best way to get expatriated was to steal something, because then they would pretty quickly be sent home as undesirable characters. I do not wish to use strong words, but it was a devilish doctrine to preach to a young man on the thresh hold of life—urging him to do a thing that would brand him for life as a thief simply in order to get home rather more easily. I want to say that in all honesty, because I heard the statement made, and, I think it was a good job some of the men were confined where they were. At the same time, to be quite open about it, I must say that I heard the way some of those men were spoken to. I rather object to a man being spoken to as if he were a horse, or a cow, or a swine. I believe that a working man is the very basis of the country in which he lives, and the way those men were spoken to was not respectful; it was scarcely human in many cases.

I regret having to say this. I should have liked this whole thing to be buried, and I think it was extremely injudicious of the hon. and gallant Member to raise it, but as he has raised it he has forced me, in defence of my own colleagues, to state my personal experiences and what I saw. As I say, I hope this particular episode will he forgotten. I am one of those who believe as strongly as any other Member of the House in developing our own country, and there are hundreds of thousands of men in this country who would like an open air life, with vast spaces, in a beautiful country. I believe that by proper arrangement the men and the country can be brought together. I believe that Canada offers opportunities to scores of thousands of men to build happy homes and rear happy families in conditions almost approaching those of an earthly paradise for a man who is fond of country life. How is it to be done? Cannot we drop this squabbling over mistakes and concentrate on doing better in the future? What is the use of denying that this business had been hurried and rushed? What is the use of denying that mistakes were made? What is the use of denying that hundreds of men were sent to farmers who had no use for them? What is the use of denying that one Labour Minister told us quite frankly that the day before the harvesters arrived in his particular Province he did not know anything about the matter? What is the use of denying these facts? They are patent, they are open, everybody knows them. What is the use of denying the speeches which were made by the Minister of Labour for the Dominion of Canada? He told us quite distinctly that he was not going to support any method of migration which would make the position of the Canadian workmen worse. The question is, how best to help the migration of willing emigrants—for I am never going to be a party to forcing any man to leave the country of his birth—to a country that gladly receives them in order that they may help to develop it?

In Canada my hon. Friend the. Member for Dundee (Mr. Johnston) made a very practical suggestion which was repeated by more than one member of the delegation. It was that you should take a district like the Peace River and arrange for colonisation on such a scale that you would be able to give to the people who went out to Canada the advantage of living with their neighbours in order that they could help each other. We want a scheme large enough to provide technical instruction and help for those who go out to Canada in the shape of providing them with machinery. I believe it is quite possible to work a scheme of that kind in Canada which would be to the mutual advantage not only of the people of this country but to Canada as well. In this way we should be able to provide thousands of happy homes for the people of this country who are at present employed in trades which are doing very badly. There are thousands of people in this country who would prefer the open life of Canada to working in the pits. Quite apart from Imperial sentiment I am sure every man will be willing to do his best to help a policy of that kind.

I bitterly regret that I have to say some things which may be looked upon as a criticism of Canada and its methods. We were entertained by the Canadian people in such a way, and we saw so much of the resources and the wonderful beauties of Canada, that I think we all came back profoundly touched with the kindness we had received, and greatly impressed both by the country and its people. What struck me more about Canada than the beauty of the country and its richness was the ever abounding health of the people. Everybody there seemed healthy and full of vigour and life. I had a good opportunity of finding out the conditions under which working men live in Canada. It happens that from the part of the county of Lancashire which I know best we have sent out quite a number of working people to Canada, and they have gone out there purely for the love of adventure. Right from Quebec to Vancouver I came across men I had known in my own town, and I can give their experiences in a very few sentences. This is what I would say to any working man who is contemplating going abroad: "If you are fond of an open life and a beautiful country with unlimited space then go to Canada; but do not go unless you have a job to go to and friends to meet out there. If you want to go to work on the land do not go to Canada unless you have resources to provide yourself with clothing and other requirements during the winter." If you happen to go alone first of all my advice is that you should take work with a farmer for some time until you become acquainted with farming conditions, and you should not jump on to the land before you know the conditions of Canadian farming.

9.0 p.m.

You must make up your mind that you will have to work very hard if you go on the land for four, five or six months of the year and during the other part of the year you will have very little to do. My advice is that you should make absolutely certain that you understand the conditions before you go to Canada. Many friends of mine have gone out to Canada because their relatives have said that there is a job waiting for them. In this huge and undeveloped country, with riches in soil and minerals almost beyond comprehension which need opening up, there is an opportunity for large scale emigration carefully arranged between the two Governments. I would exclude all private interests. Let the two Governments come to an arrangement so that you could give the families who go out a clear understanding that they will have to work hard upon the land. I hope the time will come when scores and thousands of our people will be able to live in Canada working for themselves in the grand open air and in one of the most beautiful countries that God ever fashioned.

Mr. WOMERSLEY

I had not the privilege of being a member of the delegation which went to Canada, but I have thoroughly enjoyed the exposition given by the right hon. Gentleman the Member for Preston (Mr. T. Shaw) as to what he considers is the right method of working out the emigration problem in Canada. I have met one of the men who has been to Canada and has returned, and he said to me, "Some of the chaps who went out to Canada were very lucky. They went straight to a job but I was unlucky and I was sent right into the country when I arrived at the farm to which I had been sent I was told that they did not want me, that they had not sent for me, and that I had better go back again. I came to the conclusion that there had been some error and I did the next best thing, I found another job, although I must say that many others were not so fortunate." The real trouble was that there scorns to have been some hitch in the arrangements for the men who were sent to the farms where they were not wanted. If ever a scheme of this kind is put into operation again I trust that better arrangements will be made, and then we shall not hear so many grumblings from the men who have come back to this country.

I had not intended to speak on that matter, because there is another matter to which I want to call the attention of the House. I listened with some wonderment to the speech of the hon. Member for Smethwick (Sir O. Mosley), who did not seem quite to understand the proposals which the Chancellor of the Exchequer put forward this afternoon for putting the St. Davids Committee into operation again. I welcome the pronouncement of the Chancellor of the Exchequer on this matter. I have made many speeches in this House advocating the revival of this Committee, and that something should be done by way of relief works. Admittedly some of them are only palliatives, but, if a patient is very sick, a palliative is very comforting to him until it is possible to get a radical cure. This question of the relief of unemployment is not by any means a new one—it is not one that has only been in existence since 1918, as many people seem to think. It existed in pre-War days. I remember as far back as 1911 acting as a member of a relief committee. In those days, of course, there were no Employment Exchanges, and no unemployment pay, at any rate for the ordinary labouring man, and there were no schemes of any great utility that could be put into operation. We did our best, however, with the schemes that were then available. But the great mistake that has been made all along in dealing with this question of relief works is that, instead of encouraging revenue-earning schemes that would, when completed, provide continuing employment, encouragement has been given every time to that type of scheme that can best be described as digging a hole and filling it up again.

For instance, the terms set out for non-revenue earning schemes, such as laying out parks, sewerage work, and so on, offered up to 75 per cent. of the interest and sinking fund for a period not exceeding half the period of the loan. Those terms were very favourable, and local authorities took advantage of them. That meant that many of these grants of large sums of money were for schemes which only employed a very few men. I remember one in respect of which a grant of something like£40,000 was made, and on which only 40 workmen were at any time employed. Is it to be wondered at that business men and others began to say that this system of setting up relief works was altogether wrong, or that articles appeared in the financial papers, and in the financial columns of the "Times" and other influential papers, calling -upon the Government to stop what they called waste of money? On the other hand, a scheme was introduced about the year 1923 to enable assistance to be given in respect of works of a revenue-producing character—harbours, docks, gas or electricity undertakings, and canals—and I thought that at last we had got a really reasonable scheme. But the amount of aid that was granted in that case was only 50 per cent. of the interest for a term of years. That was nothing like so attractive as the terms for non-revenue-earning concerns, and, therefore, I am afraid the St. Davids Committee did not get a large number of applications for assistance under that scheme. At any rate, however, certain big schemes were put in operation and created a certain amount of employment.

I would like to mention in passing that one of the causes of a large increase in the number of men registered as unemployed is the fact that many of these schemes which were put into operation four or five years ago have now come to an end, and the men who were employed upon them have been thrown back on the unemployed market. I understand that in 1925 word was sent that the St. Davids Committee was to ease up. In other words, it practically closed, and I believe that at the moment there is merely a skeleton staff just hanging on in the hope that something may turn up in the shape of work. The Chancellor of the Exchequer said this afternoon that this Committee is to commence working again, and to my mind that is a most welcome pronouncement. It means that at any rate immediate work can be provided for those who need it, and, further, it will be possible to provide the real test as to whether a man wants to work or not. When I hear people talking about those who are registered as unemployed as though they did not want work, I always say to them that the only real test as to whether a man desires work or not is to offer him work. If he refuses it, then you know that he does not want it. But my opinion is, and I speak from a long experience of work on relief committees, and so on, that it can be said without fear of contradiction that 90 per cent. of those registered as unemployed would be glad to take a job to-morrow, and would prefer it to drawing unemployment pay. Therefore, I say that it is our duty to find something for them immediately.

The hon. Member for Wakefield (Mr. Ellis) was a little concerned as to the terms announced by the Chancellor of the Exchequer, but those terms have been framed on right lines. The difficulty about the old system was that you could not get assistance for a revenue-earning scheme unless it could be shown that there was abnormal unemployment in the district where the scheme was to be carried out. I want hon. Members to visualise what happened. You had a district where there was great depression, and therefore abnormal unemployment. They could go to the St. Davids Committee and say that they had abnormal unemployment, and were therefore entitled to a grant, but had no scheme, because very few people would agree to put forward a scheme for erecting, say, a gas or electricity works in a district where there was abnormal unemployment and depression in trade, as there would be no outlet for the products of the industry. On the other hand, in districts where there was an outlet for this kind of thing, where works could be erected and carried on successfully, they were told that because they had not abnormal unemployment they could not have a grant. The district that could provide work was refused because it had not abnormal unemployment, and the district that had abnormal unemployment and needed work had no scheme to put forward.

I am eagerly awaiting the White Paper that we are to get to-morrow, but, as far as I can gather from what the Chancellor of the Exchequer said this afternoon, he evidently has seen the difficulty, and now says that a district which has not abnormal unemployment, but can put forward a sound scheme, shall receive assistance provided it is prepared to take unemployed people in a certain proportion from distressed areas. I do not know what the proportion will be, but, even if it is 50/50, surely it is in the interest of the district that wants a scheme to be put into operation, and is in the interest of the nation as a whole, that unemployed people from distressed areas should he given a chance in those districts where there is work. I do not like to think that we are going to regard this question as a purely parochial question. Unemployment is a national question, and, as has been rightly said in this Debate, it ought not to be a political question, at any rate when we are dealing with it in this House; certainly it ought not to be regarded merely as a local question. I know the difficulties. A man who, speaking in his own locality, and suggesting that certain work should be done, suggests the bringing in of someone else, immediately comes under suspicion, but nevertheless we ought to think nationally on this matter. At any rate, we have to remember that the money that will be given from the Exchequer in respect of these schemes is national money, and, therefore, we ought to consider it from a national point of view.

I think that the Chancellor of the Exchequer has at least brought forward a sound scheme for dealing with this question of providing relief through work, rather than paying in other ways. I know the argument is used time and again that there is only so much money in the nation, that, if you take a shilling from this pocket and put it into that pocket, there is a shilling short there, and that, if you take away capital from productive industry and put it into relief works, you will create a worse position. If it were a case of taking money from productive industry and putting it into relief works, I might feel inclined to agree, but it is not so, because, surely, if you take these men from the unemployment list and put them into work, you are going to save the money that has been paid to them from the Unemployment Insurance Fund, and then we should not have the position that was referred to yesterday, of the Government having to bring in a Bill to extend the credit of that Fund from£20,000,000 to£30,000,000. Although it may be said that that money is not provided by the nation, but is owing to the nation, I am wondering when that£30,000,000 will be paid hack.

The Chancellor of the Exchequer this afternoon has at any rate given new hope to certain members of his party who were beginning to wonder when the Government were really going to tackle this unemployment problem. I commend the right hon. Gentleman for bringing his proposals forward. At any rate they are practical proposals, and I would say to my Friends on the Labour benches that I cannot remember any really practicable proposal that they have ever brought forward. If they had them to bring forward, I should he delighted to support them, but I have not heard of one yet. I know there is that wonderful programme we have heard so much about but they will not get any real sound, practical scheme out of that. If their programme was going to provide what I consider is necessary in the best interests of the country, immediate employment for those men who are out of employment, I should feel inclined to support them. The programme outlined by the Chancellor of the Exchequer to-day includes the very import-ant matter of land drainage and coast erosion. In my part of the country we know something about coast erosion and the difficulties of land drainage and I am sure those proposals will be welcome. We cannot, of course, say much about them until we have seen the actual proposals, but the fact that the Government are determined to tackle this question is one of great satisfaction to myself and I am certain it will be to the people I represent. I welcome the pronouncement of the Chancellor of the Exchequer and I believe at last we have some sound proposition to deal with the problem and I hope local authorities will take full advantage of the scheme.

Mr. L'ESTRANGE MALONE

I feel sure the hon. Member who has just spoken has not seen the programme of the Labour party. Every single point he has raised is fully covered in that programme. I will post him a copy and I am sure when he has read it he will join our party, as he has promised, and if he applies for admission I will do my best to further his candidature.

Sir JOSEPH NALL

Do not treat him like the bricklayers did.

Mr. MALONE

Like many other speakers on the Government benches, the hon. Member suggested that the problem of unemployment should be treated as a national and not as a party problem. There is one way in which unemployment can be removed from the sphere of party politics, and that is for the Government to introduce practical measures which will decrease unemployment and not increase it, as has been the case during the four years of the Conservative Government. I do not intend to deal with the question of Canada except to say that, having had the privilege of that wonderful journey from Vancouver across the Rockies to Montreal, no one can be other than impressed with the tremendous possibilities of the country, but I felt that unemployment and starvation and exploitation are just as bad in Canada as anywhere else, probably much worse, because there you do not find those measures for relief—guardians and other institutions—such as you get in this country. All I will say about Canada is that I hope the discussions that have taken place about the sending of workers there will throw the searchlight of publicity over and will make all those concerned more careful in propaganda about Canada in the future. It has been said that Canada offers more opportunities than this country. I would remind the House that since the Government came into power four years ago, 720,000 acres of land in this country have gone out of cultivation, and no fewer than 30,000 agricultural workers have lost employment on the land.

I want to deal with two particular questions. I believe the scheme of rating and the scheme of migration and the other questions put forward by the Chancellor of the Exchequer are pure palliatives. What you have to do is to find those markets which have been lost during the past four years. It is no good relieving industry. It is no good arranging for transferring miners from this place to that or taking a miner off the guardians in South Wales and finding him a job as a valet in the West End of London. That is only touching the fringe of the question. The real question the Government ought to address themselves to is the finding and the furthering of the markets on which the industries of the country depend. I want first of all to deal with certain foreign markets which have been lost in the last four years. I did not intend to touch on that very controversial question of Russia, but I want to correct one mistake that has been made by the right hon. Gentleman the Member for Hillhead (Sir R. Horne). He said what did it matter whether we resumed relations with Russia. The total amount of trade done with that country was a very small amount. It was, I believe, something like£18,000,000 in 1913.

Mr. H. WILLIAMS

Are those exports of British goods?

Mr. MALONE

Yes. After Germany, France and the Netherlands, Russia came next. It has gone down steadily to£6,500,000. But that is oat the sum total of our loss of trade due to the breaking off of relations. We have also lost trade with other countries. Trade is so interlocked that the loss of one market involves the loss of others. I will give two examples. We used to bring back wheat from the Black Sea. Instead of going out with empty bottoms, causing extra cost, of freightage, they used to take coal to Italy. Italy has given up coal on her railways and gone in for electrification, and we have lost over 3,000,000 tons of our coal exports to Italy alone. Another market we have lost is India, which used to be a very large market for this country. The purchases of British manufactures in India were largely financed by the sales of Indian produce to other countries in Europe, notably tea to Russia, and that again has largely accounted for the falling off of British trade in India. British trade in India has fallen off in spite of the fact that the consumption of goods in India has increased. From 1913 to last year imports into India show an increase of 61 per cent. Exports have decreased by nearly 21 per cent. That has been reflected in the British percentage in the Indian import trade which has fallen from the pre-War average of 62.8 to 47.8 in 1927, and that market has been very largely captured by the Japanese, whose percentage has increased from 9.1 to 13.3.

I wanted particularly to deal with our Far Eastern market for I believe that is one of the most important questions connected with this problem of unemployment. Many of the difficulties in connection with our Far Eastern markets are entirely of our own creation. The Chinese market is tremendously important. It used to stand third amongst our non-European foreign markets. After India it used to be the largest piece goods market of this country. I am not going to discuss the controversial question of the despatch of the Expeditionary Force. I must say, in passing, that I feel that, as long as we maintain a force of arms there, relations will not improve. Indeed, it is only common sense to expect it. If you were a manufacturer in Manchester and you were anxious to sell goods in London, you would not send a commercial traveller up to London with a sample of piece goods in one hand and a loaded revolver in the other. Exactly the same thing applies when you are trying to sell your British goods in the Far East, but you back it up by tanks armoured cars and so on.

Mr. HILTON

Deal with the Chinese trade. Do you really understand what Lancashire is sending to China?

Mr. MALONE

If the hon. Member will bear with me, I will go into that very fully. He will have an opportunity afterwards of correcting me. The real difficulty in regard to the Far Eastern markets is not connected with the question of the Expeditionary Force, but is due to something much nearer home, and which I believe the Government can tackle. Before the War our exports to China were£14,750,000, but last year they had dropped to£9,000,000. People may say the loss of our market in the Far East is due to competition and to native industries employing cheap native labour for longer hours and so cutting out the British goods which used to find a market there.

I want to draw the attention of the House to the very able report that was published by Mr. Barnard Ellinger and reproduced by the Manchester Statistical Society—a very important document which I have yet to see controverted or contradicted. It contains some very valuable matter, and I hope the Government will study it very carefully. The first point that is brought out in this report is that the consumptive capacity of the Far East for ordinary foreign-style cotton goods has increased. In spite of 14 years of civil war and all the upheavals and troubles that have taken place during that period, consumption has increased, and to-day it is greater than in 1913 before the War. In spite of the great increase in the consumption of the Oriental peoples in the Far East, the change has been to the disadvantage of Lancashire to an extent that can only be termed appalling. Let me put it in more popular language. Before the War, in 1913, nearly two out of every three pieces of cotton goods imported into China came from Lancashire. What is the situation to-day? In 1925—the latest year for which figures are published—three out of every four piece's came from Japan. These are the figures from the report of the Acting Commercial Councillor at Shanghai. In 1913, Great Britain did approximately 56 per cent. of the trade and Japan 26 per cent. This has changed round very nearly completely. In 1926, the British share amounted to less than 24 per cent—less than the Japanese share in 1913—while the Japanese proportion had grown in the meantime to over 67 per cent. That decline was only partly due to the boycott of 1925. It was but one factor and by no means the determining factor. There has also been an increase in the output of the native mills in China. That again has only been a small factor. The really big question is the competition of Japan. According to the figures which have been produced by the Manchester Statistical Society, although Japan is working under tremendous handicaps, she is able to cut us out in the Far East.

Let me give some figures. Wages in Japan in the last 10 years have quadrupled, whereas wages in Lancashire since before the War have not more than doubled. The cost of building mills and of land in Japan is much greater than it is in Lancashire. The cost of buildings and of land both in the towns and in the country in Japan is greater than in England. Most of the Japanese mills are only one or two storeys high and cover a great tract of territory and have to provide sleeping-in accommodation for the women. I know when I was out there two years ago I went over one of the largest cotton mills in Osaka. The mill occupied a very large acreage indeed and provided living-in accommodation for the girls, and there was very excellent welfare work for the girls, such as cinemas and all forms of recreation. They are, of course, liable to be called prisoners, but I am not discussing that question. I am only referring to the expense of providing the land and buildings in Japan.

Sir J. NALL

How many hours do they work?

Mr. MALONE

In spite of the fact that they work longer hours, let us see what are the deductions drawn by the Manchester Statistical Society. If you take the average of 15 qualities of grey shirting, in no single case was the British cost of production higher than the Japanese cost. In fact, the average was 7½per cent cheaper. What is the result? The result in plain language is that, although the total trade of Japan in China has more than doubled, the English trade is only half, and even in the British stronghold of Shanghai, Japan has been leading since the boycott. What is the reason for that? Is it due to something that we in this country can avoid? I believe it is. I believe that the Japanese cotton manufacturers are showing more foresight than the manufacturers in Lancashire. It has been said by the right hon. Gentleman the Member for West Swansea (Mr. Runciman)—and he knows something about overseas trade—that he wished a little more forethought had been given to the question of our export cotton trade. What has happened is that during the boom period after the War many of the cotton mills changed hands and are not now controlled by those who built up the cotton industry to the great position which it held before the War, but are in the hands of people who are speculators and who have yet to learn the intricacies of the business. I suggest that Lancashire should be prepared to change her methods, and to learn how the Japanese are getting into the Chinese market, how they are cutting out five or six middlemen, and how they are not afraid to deal direct with people because they have yellow skins. If Lancashire will learn a few lessons there will be some improvement in the Lancashire trade in the Far East.

I make no apology for raising this question. There are three industries which are of vital importance to this country—coal, cotton and wool. They have all been referred to this afternoon, but I put the cotton industry as the most important industry in this country, because, indirectly, of the number of workers employed. I believe it is more important even than the coal industry. If you have unemployment, if you have short time in the mills, it immediately affects the coal miners, it immediately affects those who have to supply the cotton operatives with clothes, it immediately affects those who have to supply the cotton operatives with boots, in the manufacture of which my constituency is particularly interested, and it soon affects the whole of industry. I suggest that this question is extremely important and that the figures show that the Lancashire trade can compete on favourable terms even with Japan. The figures shown by Mr. Bernard Ellinger in his report are sufficient to justify the Government in setting up an inquiry into the, state of affairs in the cotton industry. Over half-a-million souls and their dependants in this country are dependent upon the cotton industry, and we are justified in putting forward that demand. If the cotton industry were a State concern, there is not a Conservative Member in this House or a Conservative newspaper in this country that would not come forward and point to the condition of the cotton industry as an example of the failure of State enterprise. I say that the failure to maintain our markets is an indication of the failure of the pre- sent system of organisation in the cotton trade, and by this at least private enterprise stands condemned.

There is one other market to which I want to refer before I sit down. It is a market which is just as important as the market to which I have referred. It is the home market. The Chancellor of the Exchequer in particular and the Government in general have been responsible during the four years in which they have been in office for destroying the home market to the extent of many hundreds of millions of pounds. In the four years that the Government have been in office, the poor have got poorer and the rich have got richer. It is a fallacy to imagine that because the Government have produced more millionaires, because there are more Super-taxpayers more work is being provided. The millionaire does not eat five hundred breakfasts or five hundred dinners or buy five hundred pairs of boots. The extra wealth of the millionaire provides very little extra work. If the Chancellor of the Exchequer is not too busy with his bricks, I would suggest that he should analyse the last return published by the Commissioners of Inland Revenue. He would find that in the last five years income from ownership of land and houses has gone steadily up each year from£189,000,000 to 2235,000,g00. Income from profits, from the occupation of land, has gone up from£24,000,000 to£28,000,000. Income from British Dominion and Foreign Government securities has gone up steadily from£127,000,000 to£137,000,000. Income from businesses and professions has not gone up so much because the shopkeepers are included, and the shopkeepers have begun to suffer as much as the working-class. Income from businesses and professions has gone up only from£1,036,000,000 to£1,040,000,000.

Mr. H. WILLIAMS

Are those figures gross or not?

Mr. MALONE

Gross. The income from Super-taxpayers has risen from£00,000,000 to£98,000,000. Here is my point. While there are these examples of landlords, rich people increasing in numbers, increases in the individual amount of their wealth, what has happened to the weekly wage-earner? He has gone down from£356,000,000 in 1922 to£165,000,000 in 1927, a drop of nearly£192,000,000 in the yearly wages bill of the worker.

Mr. WILLIAMS

Are those gross figures or not?

Mr. MALONE

They are gross figures. I suggest that the drop of£192,000,000 in the wages of the workers in the four years during which the Conservative Government have been in office is one of the great causes of the increasing unemployment in those four years. That is the question that can be settled by the Government. That is a position that has been entirely caused by the Budgets of the right hon. Gentleman the Chancellor of the Exchequer. The loss of the home market is as important as the loss of the foreign market, and I suggest that when the General Election comes, as it will come in about six months' time, there will be a very long charge sheet against the Conservative Government. It there is one indictment above all others on which the Conservative Government will stand condemned before the people of this country it will be their handling of unemployment. By that they stand condemned, and I submit that these two questions which I have tried to put before the House to-night are the two directions in which the Government have failed most signally.

Mr. HILTON

it was not my intention to rise to-night to speak upon this subject, but when I listened to the hon. Member for Northampton (Mr. Malone), giving a lecture to the Lancashire cotton spinners and manufacturers as to how we should conduct our business and suggesting that we should take a lesson from the Japanese, the Lancashire spirit in me could not stand it. I am in the third or fourth generation of cotton spinners in our county, and I would like to tell the hon. Member that we have taught all the countries in the world, including Japan, how to spin cotton. I will make the statement that every machine that they have there is Lancashire made and that the majority of the men at the head of their firms are Lancashire men. To state that unemployment is directly caused by the bad management of our own affairs shows the absolute ignorance of a person who makes such a statement. I know as much about the cotton trade of Japan as the hon. Member for Northampton, and, if he were to try and suggest that in Lancashire they should live in compounds like the Japanese cotton workers—

Mr. MALONE

No one ever suggested it.

Mr. HILTON

I say that they live in compounds in Japan. Do you agree? The hon. Member must agree that this is a charge upon their industry. We have in our Lancashire towns—[An HON. MEMBER: "Slums!"] The constituency which I represent—Bolton—is one of the finest towns in the world. We have less unemployment than most places in England certainly our percentage is low. In regard to our amenities we have all that is necessary. We have our huge hospitals and infirmaries and we are not as they are in Japan, forty miles away from the mill. We are together as one huge entity. Our people do not want to be mollycoddled; they want full-time employment, it possible, 'and good wages and to be allowed to spend their own time in their own way. That does not apply in Japan. We in Lancashire are charged by the hon. Member with being incompetent. That is a charge which I stand up to refute. There is no country in the world that can make cotton goods equal to ours. The skill of our work-people is far in advance of that of the Japanese. The status of our workpeople is higher than that of the Japanese or of any other country not excluding America, and our wages 'are higher. The hon. Member talks about our wages having doubled since before the War, whilst wages in other countries have quadrupled. When I was a youngster I could jump a foot. When I grew older, I could jump eighteen inches. [An HON. MEMBER: "How much can you jump now?"] I can jump three yards now.

When my Socialist friends talk on these matters they make a great mistake. The greatest mistake they make is that they decry everything that is English and especially that which is Lancashire. [HON. MEMBERS: "No!"] Let my hon. Friends bring the Japanese and the Chinese standards up to ours and then ask the Japanese or the Chinese to compete with us. I wish to be serious, but the argument used by my hon. Friend has been so absurd that one can scarcely be expected to be serious. Let us get on to the real basis of business. I have been connected with firms for many years who did a consignment business with China. Does the hon. Member know what a consignment business is? We shipped our goods to the auctions in Shanghai. In that way, goods worth thousands of pounds had to be sent out. We have been robbed of thousands of pounds by pirates on the Canton river We were robbed of thousands of pounds in one week. We could not go on repeating that process. We had to stop because we were short of money. We were paying the highest wages paid to any cotton operatives in the world, with the exception of America, and working shorter hours, and we were sending our stuff out to China and not getting paid for it. I would ask hon. Members whether they could go on doing that. Are they prepared to set up shop and do that? That is one of the reasons why we have had to go on half-time. Then we are accused by the hon. Member for Northampton with not being able to compete with the Japanese. Some time ago I asked, in this House, for gunboats to be provided out there to protect our trade, and hon. Members on the Opposition side of the House decried me.

It is not our fault that the people of Lancashire are out of work. We can produce goods cheaper than any country in the world, under the same conditions. The employment of our workpeople ought to be our first consideration, and as a Conservative that is as dear to my heart as it is to any hon. Member. I am one of the Lancashire Free Trade advocates who want Free Trade in its truest sense. Every tariff interferes with trade. That is why I fought in 1923 on the Prime Minister's programme and suggested that we ought to sweep away all tariffs, to sweep away all restrictions on trade. We ask for no favours. I suggest that other countries should try to bring their standards up to ours and not that we should bring our standards down to theirs. I have been rather ruffled by what, I consider to be the absolute ignorance on this subject displayed by the hon. Member for Northampton, and I would now turn to another subject.

If the Government wish to help trade I would remind them that one of the greatest difficulties from which we are suffering to-day is our economic standard. In 1925, the Government took upon themselves a very serious responsibility when they decided to revert to the gold standard. I heard all the speeches made in the House on the subject and listened very carefully, as a student, to what was said. A few weeks ago, I was invited by one of the leading societies in Manchester to speak to them on this particular subject. I spoke at an old established place, the Manchester Athenaeum, and I was astonished at the interest taken in the subject. I found that, irrespective of party political opinion, they had been trying by serious discussion to discover a fresh way out of our difficulties. Let me try to take hon. Members back to the period before we reverted to the gold standard. In 1924 we were more or less on an inflated basis. In the latter half of 1924 we got a lift in trade and we made money, and also in the first half of 1925. Then came the Bung-mot, which brought us back to the gold standard. I heard every argument that was adduced mid I sat in this House not knowing on which side I stood.

Lord Melchett, then Sir Alfred Mond, made a speech which impressed me very much, and I have read that speech many times since. I have seen through the processes of trade and through the fluctuations of the market, exactly what he said would take place. He warned the Government on this point. He said that if we were really very busy and if trade was expanding, we could take this thing in our stride. We were not busy then; we were just getting busy. Then came the reversion to the gold standard and the immediate effect was restriction, including restriction of credit. Who felt the restrictions? One section of the country and that section was the exporters. We live on 70 per cent. of our export trade in Lancashire, and we got it very badly. The man who had his money in War Loan, the free trader who does not care where he buys so long as he buys cheaply, was not affected. Unemployment did not affect him in the slightest degree so long as he could get his goods at the cheapest price possible. I would remind my miner colleagues that this meant 10 per cent. against the export of coal.

We cannot go on, handicapped in this way. We are handicapped too much now. We are paying the highest rate of wages to artisans; they are 95 per cent above the pre-War level. I do not grudge it at all. I would like them to be higher still. We want to maintain that standard of wage, and it would be no advantage to us to have a strike and bring down wages. I am not a believer in such a policy. I believe in having the highest spending capacity possible, but the point I want to make in connection with the reversion to the gold standard is that the Government should treat the question very seriously. I have had the privilege since the last Session of travelling through many countries in Europe and I have studied the question of unemployment on the spot. As far as I can see we are considerably worse than many countries on the Continent. I have been to Germany, one of the defeated nations, and have seen the huge buildings going up in Hamburg. I have seen prosperity in other countries on the Continent, including bits of Russia like Estonia, where there is a concentrated movement for one object; and that is to create. It does not matter whether they have to borrow money or not they are working; and I want to make this one criticism quite fairly against the Government. There has been a restriction on our people to stop them creating, a withholding of credit, not exactly by the Government but I submit that their policy has helped it.

10.0 p.m.

Take the attitude of the banks. I have had as much to do with the banks in Lancashire as the average person. When I did not really want money the bank sent for me, and I once signed acheque for£750,000, and that particular firm five years afterwards when I wanted£5,000 said it was impossible. This is my point and my criticism of the Government, that the restrictions which the Government have been practising have benefited stockholders, who certainly have a prior right to get down to the gold basis and those individuals who have leases of 999 years, but the person who has been hit every time by the reversal to the gold standard has been the exporter. This country can only live by its exports. There are actually over 400,000 people directly employed in Lancashire who for the last five years have been on the verge of going out, they have been on less than half-time work. I say, as a good Conservative and a supporter of the Government, that they have lost caste in Lancashire. We have had four or five constructive ideas given us to-day by the Chan- cellor of the Exchequer. They are all very well, but they are a little delayed. They have come somewhat late; they should have been given a little earlier. At the same time I have not heard one single constructive proposal from the Opposition benches, and the only thing the right hon. Member for Platting (Mr. Clynes) could suggest was something about Russia. I am connected with a firm which sells machines, and we deal with Russia in cloth. I was asked the other week to quote for 5,000,0000 yards of cloth for Russia. What are the terms? I am prepared to trade with Russia. I am prepared to sell Russia as much as 50,000,000 yards of cloth on one condition —that Russia will pay for it. At a meeting in my constituency I put it to any man as to whether he was prepared to sell his piano to Russia if he was not to be paid for it. He would like to see his money first. I am quite prepared to give Russia six months credit—

Mr. SHINWELL

Have they not paid for what they have had?

Mr. HILTON

We give them up to five years' credit now. We have given them all the latitude they want, but we require the money to give them credit. We have not got it, although export credits is going to help. I say that the policy of the Government has been restrictive. Italy gives more credit than we do, and there has been a tendency on the part of the Government and the banks—I know Italian bills have been discounted in London—to help other States and restrict Lancashire people. I can give chapter and verse if necessary. The Parliamentary Secretary to the Board of Trade shakes his head; but that is the attitude of the Government and the banks. If I am wrong let me refer my hon. Friend to the monthly return of the Midland Bank in which they speak a restrictions. This gold standard is a fetish. What does it matter to the working lads and girls of Lancashire whether there are 170,000,000 or 190,000,000 of bullion in the Bank of England? It does not create a yard of cloth, it does not work a single loom or a single spindle. It stops them; it is not in the interests of Lancashire. It is done in the interests of what we call finance and economics. The mistake of it and of the Government is that the gold standard should not rule England, should not rule Lancashire and should not rule employment. It should be the servant of the Government and of Lancashire and of employment.

Mr. DAVID GRENFELL

I am delighted with the speech of the hon. Member who has just sat down and am very glad that he was provoked into making it. The speech is much more effective criticism of the Government than I could offer on the subject with which the hon. Member dealt. The subject with which I wish to deal is that of the shipment of harvesters to Canada. I refer to it only to say how ineffective and hopeless the Government proposals are regarding migration and the transference of labour. The country of Canada has been poetically described by several speakers to-night, yet in all that vast expanse of country it was found too difficult to find employment for 10,000 of our people who were sent there under the most favourable auspices on the occasion of that country's most urgent demand for labour. In view of that experience what is the use of expecting any great measure of relief from the emigration of our people to Canada, or anywhere else in the Empire, unless a very carefully thought out plan of settlement has been adopted beforehand?

I had an opportunity of acquainting myself with life in Canada 25 years ago. I went as an emigrant, and experienced conditions which I would not recommend any boy or young man in this country to undergo. Certainly I would not send anyone unless he had at the end of his journey, as I had, the best friend a man has in Canada or elsewhere—a pound in his pocket that enables him to resist the exploitation so often imposed on a man who has been sent from home. I had some bargaining power when I went there, because I had a few pounds left and was able to refuse the first half dozen jobs that were offered to me. Yet for two months no kind of bed did I have at all, and it was only after very severe hardship that I found myself able to sleep once more in bed like a Christian. If possible I would like to shout about how utterly hopeless it is to expect relief for our unemployment by sending men either to Canada or to Australia. Unemployment is not a simple problem. One speaker to-night said how easy it would be to reduce the ocean fares to Canada or Australia to a few pounds and that then people could be given those few pounds and be shifted to Canada or elsewhere, and our problem of unemployment would be solved. That is not the problem at all.

Take the mining districts, those of South Wales particularly, and the most depressed districts. It is sheer futility to imagine that you can shift those people to any other part of this country or to the Dominions. There is very little difference indeed in the problem of transference either from one part of Great Britain to another and from Great Britain to Australia or Canada. It is not a question of fares, of a few hundred thousands; it is a question of providing homes and family comforts. Hon. Members talk of sending a man to Canada. That is the easiest thing in the world. You charge him a farthing a pound for his passage as you would for the shipment of a dead carcase, and you get him to Canada. The prairies of Canada are beautiful in the summer time, but go there during the first week in December and from then on to the second week in April, and what do you see? I have spent two winters in Canada and I know that the homeless man without proper clothing can fall by the roadside and be so frost-bitten that he will never recover. I have known vagrants to lose fingers and toes by frost-bite because they were destitute. It is not a hospitable country at all. It has, of course, beautiful natural features that cannot be discovered here. But it is not a country for our unemployed, and unless some provision is made for them on migration they are going to cost this country or the Canadian Government, or both, infinitely more than the few pounds spoken of tonight as the equivalent of the cost of transport from here to Canada.

No family can be transplanted even from South Wales to Kent—I mean full transportation and full substitution of one place of residence for another—at a cost of less than£1,000. You must create homes that are provided with sanitary and social conveniences, you must make your roads and provide the people with employment, and the implements for their work; and whether it is emigration abroad or transference in this country you must view the matter from an entirely different point from any that has been suggested to-night in the speeches of hon. Members opposite. I do not think it is possible to find employment for 10,000 men a year in Canada without a complete reorganisation of our whole system of migration, and I have seen no signs so far that that is to be done. It would be cruel to undertake the transfer in face of recent experience. We sent 8,000 men for harvesting in Canada, and we failed to find employment for more than 6,000 of them. Two thousand of the 8,000 have not been able to pay their way and have been compelled to rely upon Government charity once more to bring them back to their homes. There are 6,000 still in Canada who have not come home. How many of them are in work to-day? I am very doubtful indeed about the lot of those men. I fear that their experience in the next few months will prompt them to do as hundreds of thousands of migrants from this country have clone in the last 20 years, that is cross the border to the United States and be lost to Canada. I have no prejudice against Canada, but I do say that if there is a country anywhere in the world where there has been bad government, where there has been exploitation of the emigrants, that country is Canada. Money has been poured in from this country. When I was there 25 years ago during election time there was more graft than I ever known in my life. There are more sharks per square mile in Canada than anywhere else that I know.

Let me revert to the question of transference at home. We have now 1,300,000 weary people who are unemployed. Except for about six weeks the figures have shown an increase every week since the first week in May last. More and more men have been registered as unemployed in every industry in the country, in coal, cotton, steel, blast furnaces and shipbuilding. The Minister of Labour persuades himself that the Transference Board which his Government are setting up is going to do something substantial to remedy the condition of unemployment in our mining valleys and industrial districts. I do not understand anybody fooling himself with the belief that by finding jobs for some 400 men from the mining districts as hall-porters and valets and cinema attendants in residential parts you are finding a way out of the difficulties existing in our industrial districts.

In South Wales alone we have 60,000 men wholly unemployed. These are men who have lived their lifetime in the mining valleys, following an employment in which they have helped to build up this country's wealth. They have given their lives, their experience and their labour-power in the building up of this industry. In addition to giving their services to that industry they have by stinting and striving built up homes for themselves. It is true to say that these people' who are now shut away from all hopes of employment in these mining valleys are' the people who have built up the houses; and the streets and the improvements, not only in the mining towns of South-Wales but in the cities of Cardiff and Swansea, and who have helped to make the wealth of all that great district. Now-they are deprived of employment, their life savings have gone, all their efforts represented in the buildings and the improvements of all these townships have, gone for nothing, and we are told' that the Government are finding work for 400- of them—20 from this township and 20, from another township perhaps 10' miles away. We have had 400 boys sent from one part, of the country to another part, of the country, where already there are men unemployed, and this is spoken of as if new work were being Toting for-them and as if the Government were, actually beginning on the real job of finding employment. But is there any place, of 5,000 inhabitants in this country where' there is not an Employment Exchange, and a daily queue of applicants for work?

In face of the widespread prevalence of unemployment and the increasing figures in the Ministry returns, what is the use of trying to delude ourselves in this House? We are responsible for this problem. We are expected to solve it, and what is the use of trying to delude ourselves that we can in this way find homes and a livelihood and comforts for the families of the 60,000 people who are without employment or prospect of employment in South Wales? We have had no constructive policy placed before us believe the Government are changing their outlook on this question. The Minister of Labour and the Secretary for Mines are in their places to-night, but I do not believe that between them they have a single constructive idea for dealing with this matter next year. I am satisfied that they will allow things to drift as things have been drifting for the last four years, and, if they go out of office in Juno next, as I hope they will, they will leave this country with a larger measure of unemployment than it has ever known before and the prospect of finding that unemployment still worse than it is today. I believe a start should be made at once with the effort to find employment for these men on remunerative schemes and on sound business lines, and' I know of no more businesslike approach to this problem than to let these men stay near their own homes. Let these' men—starting with a financial liability against them if you like—have work as, near to their homes as it can be found, so that they can return to their homes each night.

In these mining valleys with wide stretches of mountainous country between then, there is opportunity for employment for thousands of men. They could be found work in tree-planting on those hillsides, which were once more beautiful than any part of Canada. This beautiful mountain scenery was covered with verdure even 80 or 100 years ago. Those hillsides, denuded of timber, need replanting in the interests of the mining industry itself, for the provision of pit wood. It can be found on those hillsides. The men can be found employment, going to the hillsides to work for six months a year. There are figures familiar to all of us about the possibilities of employment on those lines. It is possible to plant over 100,000 acres within reach of the mining valleys and towns of Wales, every 100 acres providing employment for six months for 12 men, in planting and preparing trees. A substantial number of the men unemployed in South Wales could be given employment of that form alone, on the spot where they live, without the expense and without the anxiety contemplated in the proposals for transferring them no one knows where.

I am convinced that there is no solution for this mining problem except by building en the coalfields themselves. The Prime Minister knows why the steel industry came to the coalfields in the Midlands, in the North-West, and in the North-East of England, in South Wales, and in Scotland: he knows that the blast furnaces were set to work on the coalfields because coal is a source of heat and mechanical energy, without which modern industry is impossible. Now we find in South Wales and Durham our great coal-exporting districts, and the only way of recovering their industry and of regaining their prosperity is by building, in those districts, a new industry, which alone can save the coalfields of this country from utter ruin. That new industry consists in the distillation of oil and other valuable by-products from coal. Timid starts and beginnings with these processes are being made in this country and in other countries, but success can only be assured by a much stronger financial backing than any that' we have to-day.

I am as convinced as anybody can be, and more and more people are becoming convinced in this country, that our coalfields will be much more prosperous 20 years from now than they are to-day, but that prosperity will not be brought about by trying to produce cheap coal and hawking it round the world at the lowest price in the form of solid coal. Prosperity can be brought to the coalfields only by deriving the fullest possible measure of value from the coal on the coalfields themselves. I hope the Government will keep these men in the coalfields at the kind of employment that I have suggested, and then prepare, with the utmost possible speed and on the largest possible scale, for the reconstruction and reorganisation of the industry, which will give abundant work and prosperity in the future.

Mr. H. WILLIAMS

I do not profess to be an expert on forestry, but I am certain that no responsible person who knew anything about forestry would be willing to father the scheme which has been outlined to us by the hon. Member for Gower (Mr. D. Grenfell). It is absurd to suggest that the 60,000 people, or any appreciable proportion of them, for whom he is speaking, living in certain narrow valleys, can be found employment by planting trees on the hill sides there, and it is only deceiving people to suggest that it is possible. With regard to the distillation of coal, we all hope, of course, that progress will be made, but it is certain that as soon as a real, first-class process is available, there will be no need for any Government to provide means to see it through. The real trouble up to the moment is that, as far as we know, no scheme has yet been run on a commercial scale which is likely to prove satisfactory. There are high hopes about many of them, but it is no use comforting ourselves with that kind of thing when we are facing an immediate problem, and surely it is better for the coal miner in South Wales to come to London and cut somebody else's hair than to stay in his mining valley and do nothing. Nothing is more deplorable than the man who is not prepared to change the nature of his occupation at a time when his normal occupation will not afford him a livelihood. On that basis this country would never have been built up.

The hon. Member for Northampton (Mr. Malone) entertained us by reading some statistics about Income Tax; I interjected a question in order to find out whether he appreciated the statistics, and, as he was unwilling to answer the question, I gathered that he did not appreciate them. The figures will be found on page 73 of the Report of the Commissioners of Inland Revenue for 1927, and it is best to study them in the original than from the hon. Member's abstract notes. In Schedule A there is an increase, which is merely a measure of the success of the Government in building houses, because when a house is built it becomes assessed for Income Tax. We all rejoice at the growth in Schedule A; it is not a matter for criticism. He seemed to think that Schedule D covered only the income of shopkeepers, but, if he will look on page 87, he will find that it includes manufacturing production, mining industry, distribution. Transport—

Mr. MacLAREN

rose—

Mr. WILLIAMS

I am dealing at the moment with the hon. Member for Northampton.

Mr. MacLAREN

But the hon. Gentleman has made a sweeping statement with regard to Schedule A.

Mr. WILLIAMS

I am dealing with the hon. Member for Northampton, and I presume that he considers that he is capable of defending himself. Schedule D does not cover only shopkeepers; they comprise probably one-third, and as they are placed on the three years' average, and the figures relate to the years which begin at 1923, I do not think that they are very pertinent to his argument. Lastly, he gave statistics with regard to wage earners, and he seemed to think that they related to the total wages paid to the wage-earners. They do nothing of the sort, but relate merely to that proportion of the wages that happen to be brought under review for purposes of Income Tax. Since it was decided very properly by the Chancellor of the Exchequer in 1925 that the relief afforded to the Income Taxpayer in respect of his earned income should be changed from one-tenth to one-sixth, instead of people being liable for Income Tax at 150 a year they become liable at£162, or thereabouts. The a week man thus disappeared from the returns; it ceased to be necessary to assess him. These are not the figures of the wages paid to the wage earners, but that relatively small part of the total wages which happens to be brought under review for income tax purposes. I hope with that explanation that the hon. Member for Northampton will not press his argument any further.

He said that the measures of the Government have increased unemployment, that the proposals of the Government are palliatives, and that what is wanted is to get back our markets. I agree. Then he said in regard to Russia that our exports were£18,000,000 in 1913 and only£6,000,000 now. To be precisely accurate, he might have included the trade to the succession States. Russia is not what it used to be. A very large part of Poland was once Russia, and there are also Latvia, Lithuania, Estonia and Finland. I do not think Rumania includes any Russian territory. [HON. MEMBERS "Oh!"] Yes, I was forgetting; it does. It is not always easy to remember the map of Europe as it is now, and I am glad to have the information. You have to include all these succession States which were once part of Russia, and which used to absorb British goods and which buy more from us than the whole of Russia.

What is the use of coming along with figures like that which entirely ignore those changes? Then he said we were losing a lot of the export trade in coal with Italy. In the old days our ships used to go out to the Black Sea to bring wheat to England, and in order that they should not travel light out to the Black Sea they used to carry coal from Cardiff to Italy. He says that as a result of the absence of trade with Russia we have lost the export trade in coal to Italy. Does he really suggest that it is our faul[...] that we are not importing wheat from the Black Sea? I suggest there is not much wheat lying round the ports there, and when I am told that the Russian Government are buying substantial quantities of wheat drawn from various parts of the British Empire in order to sustain some of their starving people, it hardly seems to me that it is our fault that we are not selling that coal to Italy. His explanation does not seem to fit the facts.

With regard to trade with China, we all regret that we are not selling so much to China. He suggested that the decline in the trade with China arose from the sending out of the Defence Force. If my memory serves me right, and I am certain the hon. Member's memory will serve him right on this point, because I know he has taken a particular interest in affairs there, the boycott of British goods had commenced and was being pursued violently for a, considerable time before the despatch of that force. I also think I am correct in saying that the volume of our export trade to China is now improving, and that the volume of orders is growing more rapidly than is yet shown by the export trade returns. Curious as it may seem, the fact that people are now enabled to live their lives in some kind of security has facilitated trade rather than otherwise. So far his contribution to the Debate does not seem to have been very effective. Then he blamed the Lancashire cotton manufacturers, a charge which was answered very effectually by my hon. Friend the Member for Bolton (Mr. Hilton), although I think that certain things which were said about the gold standard were not quite accurate, because, curiously enough, in the nine months after the introduction of the gold standard things in the cotton trade were much the same as before; there was no serious decline in employment in the cotton trade until the general strike, since when there has not been a satisfac- tory recovery. The figures are available if anyone wishes to study them. He also said that the home market had been destroyed to the extent of hundreds of millions of pounds; but as he did not explain what that meant I cannot very well reply.

Then the hon. Baronet the Member for Smethwick (Sir O. Mosley), who sits next to him, seems to have suffered similarly. Somewhere about 1919 two enterprising people named Douglas and Orage wrote a book called "Credit Power and Democracy," and all my friends of the Labour movement who belong to what I call the intelligentsia section, who like to buy highbrow books they do not understand by people who do not understand what they are writing about, were all reading it. It was one of those satisfactory books of which you are able to say not merely that you think it is wrong but that you know it is 100 per cent wrong. The hon. Member for Smethwick apparently had not heard of it at that time. When he joined the Labour movement they had begun tot give up reading that book and presumably their publication department had got a lot to dispose of second-hand, and he bought the lot, and since then he has become an expert on currency problems. He ascribed all our trouble in the coalfields to the restoration of the gold standard. I remember a political opponent of mine making a speech in which he claimed large credit for the party which he supported. He said that when the Labour party were in office trade was good and British credit stood high, and that the pound appreciated in relation to sterling. It was quite true that the exchange value of the pound sterling rose while the party opposite were in power, and they claimed that as being to their credit, but the hon. Member would not be conscious that that meant a nearer approach to the gold standard because in those days he had not decided what he believed in and was not studying these things very carefully. Immediately after the unpegging of the American Exchange the value went right down, and from that point it was gradually built up until it became a few points below par and it was decided to restore the gold standard.

That was a process to which every party in the land made its deliberate contribution for a period of six years. The party opposite played their part and there was no change in financial policy. The Coalition Government made no change, and it sought to do those things which were necessary for the gradual restoration of the gold standard. The gradual restriction of the floating debt and every other conceivable step that could be taken for the gradual restoration of the gold standard was taken by successive Chancellors of the Exchequer with no interruption. What happened in April, 1925, was merely the final act of a process which had been going on for six years, and how absurd it is to suggest that in these circumstances the peculiar difficulties through which we have passed arose from that cause.

Take the coal case. In the summer of 1924 the right hon. Gentleman opposite achieved his first great diplomatic triumph for which he received praise not only from his supporters but also from his opponents—I allude to the negotiations which led up to the London Agreement arising out of the Dawes Report. I remember that Mr. Herbert Smith and his colleagues referred to the effect of this policy on the mining industry; and for the first time since the Armistice the coal industry found itself in real competition with Germany in our export markets. The right hon. Gentleman opposite, while conducting those negotiations, brought pressure to bear upon the coal owners, and he changed the fundamental basis of the agreement of 1921, and sent up the cost of the production of coal. Those two things acted together, and it is a fact that within four months of that decision unemployment in the coal mines had increased by 100,000 and the party opposite were still in office. That increase continued until the summer of 1925 when the position was temporarily restored by the granting of the coal mining subsidy. How stupid it is in these circumstances to attribute this result to a decision taken eight months after relating to a totally different subject. I am sorry these matters have been brought in because it is merely wasting time. [HON. MEMBERS: Oh!"] It is wasting time in a real sense, but not in the sense of trying to prevent other people being deceived by the utterances of people who have already deceived themselves.

The hon. Member for Smethwick said that the only industries in this country which were showing any signs of prosperity were those which were in some way or other subsidised. It is a little difficult to tell what you mean by subsidising, but he chose, as one example of a subsidised industry, the industry of silk and artificial silk. It would not be appropriate in this Debate to discuss the general issue which arises when one starts to discuss silk and artificial silk: I understand that there will be an opportunity next week of discussing it: but that is an industry which has expanded its employment. The actual number of insured workers at work in it, between the ages of 16 and 64, rose from 42,500 in July, 1925, to 65,000 in July, 1928. That is an expansion of 53 per cent. The hon. Member said that this is a subsidised industry, and that its expansion has been bought at the expense of other people, but he cannot produce to me one single person in this country who is hearing any new burden as a result of the assistance given to this industry. If he will consult his constituents, many of whom I had the privilege of meeting when I had some connection with that part of the world, he will find that many of them go to dances, and if he will go to a dance and examine their nether limbs he will find that they are clothed in garments the prices of which, as they will be quite prepared to tell him, irrespective of their politics, are far cheaper now than when the duty was imposed.

Mr. KELLY

Some of them are produced under sweated conditions.

Mr. WILLIAMS

If they are produced under sweated conditions, I am surprised that my hon. Friend the Member for Rochdale (Mr. Kelly), through the organisation of which as he is a distinguished member, and which is representative of every industry, has not taken appropriate steps to put an end to it. The hon. Member for Smethwick also made some suggestions about the burden caused by rates. I tried to understand his figures, and have consulted the Financial Statements for successive years, and I have come to the conclusion that the total grants out of the public Exchequer to local authorities are higher now than when the present Government took office. That, I think, is true, if you take them all into account, and, therefore, his statement that we have reduced them is wrong. He made a calculation in which he took a lump sum which was taken out of a fund where it was not being used, and added to it certain annual charges, not stating whether he took those annual charges for one year, or two years, or three years. He arrived at a certain sum which has no scientific basis, and is not connected with any real facts, and compared it with the annual sum that is to be given under the Government's rating scheme. If he knows what that proves, he is more fortunate than I am.

His final solution is to give everyone over 65 an increased pension. That would naturally be very popular with people over 65. He would also keep all young people at school. That he regards as a solution of the unemployment problem. If you like to mask your actual unemployment by pensioning off any section of the people, you can do it. You could, if you liked, take people between the ages of 20 and 25, and give a sufficient number of them a pension, and, provided that that did not have subsequent reactions through increased taxation, you could provide employment all round. But why pretend that in that way you would be solving the unemployment problem, when you would be merely transferring the unemployed into a new economic sphere, which you might or might not be able to finance? Do not let us profess to call that any solution of the unemployment problem. We all realise quite frankly that the last six months have been a disappointing six months to all of us— —

Mr. BATEY

The last four years.

Mr. WILLIAMS

I am speaking of the last six months, for definite reasons. There was a period in the middle of the last four years for which the hon. Member has a far greater responsibility than I have, but I did not want to hurt his feelings, so I only went back six months. The great banks are in a position of peculiar advantage for taking a survey of trade affairs, because they have contacts with every industry, they know what the demands of every industry are, and, through their branches up and down the country, they have an extraordinarily good picture of trade and trade prospects. I do not believe our banks are indulging in any restriction of credit. I believe at present their advances in relation to deposits are probably as high as at any time in history in time of peace. I do not think you can attack the banks on that ground. The chairman of every great bank at their annual meetings in January committed himself to the statement that he believed this country was out of the wood, and that there was every sign of a trade revival. They are not all of the same political views as I am. Every responsible trader in every industry expressed the same view. They believed we had got over the appalling difficulties thrown on us by the coal dispute. I do not know anyone who expressed the opposite view. During February and March more or less the same point of view was expressed. Then we began to receive at the Board of Trade reports indicating a very disappointing change. There was a trade reaction which, quite frankly, in my opinion, was not confined to any one industry. It was general. If you ask me why it happened I do not know, and I do not believe anyone can tell me. The real tragedy about political economy is that the only people who are experts in it have never been in business, but they are quite ready to tell other people how to conduct their business.

We really do not know why we have this curious slump. We have had a state of industrial peace, which is to the credit of the whole nation, and frankly a good deal of our troubles in the last seven or eight years have been due to industrial strife, and I am not now considering who was responsible for it. We have had industrial peace. All the evidence has been that the rate of accumulation of new capital has been much more satisfactory recently, there is a spirt of thrift prevailing amongst all classes of the community, and very material evidence—I think-rather unfortunate evidence—of that is to be found in the advertisements that appear with such frequency in our daily papers. Every kind of new issue seems to get all the money required. I am told by some of those connected with the cooperative movement, which is a wide and representative body in a good position to judge of what I call the general habits of the manual workers, that thrift in the country is increasing. More new capital is available than has been available for many years past, world harvests on the whole are fairly good, and yet in the last six months we have had a curious reaction in trade. I wish I knew why it was. [Interruption.] The hon. Member may believe in the single tax. It is an interesting subject, but I do not think 10 minutes to 11 would be quite an appropriate time to start a discussion on Henry George's contribution to the Government of this country and other countries. He said let us have one tax only and abolish all others. Put a tax on the annual value of land. As our annual Budget consumes seven times the income from our land, it would not function very well.

Let us get back to the real trouble. Here we are face to face with a problem to which we all recognise that what we have to do is to apply certain palliatives. They have been outlined by the Chancellor of the Exchequer to-day. Everyone has recognised them to be an honest and a fair attempt to assist the situation for the time being. We have to do all we can to increase the efficiency of our processes. I believe we are increasing amazingly the efficiency of our processes. I should not be at all surprised if some of our unemployment is the temporary and unfortunate effect which you get when you improve your efficiency, in that intermediate period when you are lowering your cost of production and, as a result of lowering it, you are getting a great volume of new orders. It may conceivably be that the unemployment about which we have been grumbling for the last six months is really the first symptom of a great trade revival, may be. I cannot tell.

We are making an effort through the schemes which the Government have announced—the relief scheme and the rating scheme. Whether you like them or not, they are bound to be a useful contribution. Some hon. Members might have worked the problem out differently, but the fundamental purpose, if they had adopted any scheme, would have been the same, namely, to seek to lower the costs of production in relation to foreign costs. The hon. Member for Northamp- ton (Mr. Malone) said we could not compete on equal terms with the Japanese in prices.

Mr. MALONE

I said we could compete in prices, and that on 15 different samples of cotton piece goods our costs were 7½ per cent lower.

Mr. WILLIAMS

My general impression was that if prices were right, our goods would not take much marketing, as our, quality was better. There is a wide field where we have suffered on the basis of price. Surely the reduction in costs of production represented by the relief and rating schemes are bound to be a really valuable contribution? It is true that that proportion will vary very much from industry to industry. In some it will be a really large contribution and in others comparatively small, but think of the vast number of orders which are lost on the tiniest margin!

I am sorry the right hon. Member for 'West Swansea (Mr. Runciman) is not here, because I was amazed to hear him saying that this scheme was merely taking money from the taxpayers in one form, and returning it to them in another form. He regarded it merely as a transfer of expenditure, but he did not realise that the object of the scheme was to reduce costs of production, and that by a reduction in costs of£10,000,000 you might get increased orders of£60,000,000 or£70,000,000. He did not seem to visualise that, and I am amazed that a man of his great business experience should take such an extraordinarily narrow view of it.

Then the right hon. Gentleman seemed to think that the Empire Settlement Scheme was not much good, but he thought that reduced ocean fares were a good thing and praised the Government to that extent. He urged land drainage, but, generally speaking, he rather condemned artificial works for the purpose of providing employment, and land drainage falls into that category. He condemned the principle, but supported the practical application of a number of the details. He implied that nothing the Government could do was of any value. He may hold that pure and unadulterated view of Liberalism that Governments cannot help in any direction, but one thing is certain, that in this Amendment on which we shall yore on Monday night, the Government are being condemned because they have not done enough, and I am perfectly certain that the right hon. Gentleman will be compelled to go into the Lobby with us, because he thinks we ought to have done nothing. We have not done as much as hon. Members opposite think we ought to have done, but we are, according to the Socialist party, nearer to grace than the right hon. Gentleman is. Therefore, I appeal for the support in the Division on Monday next of all those Members of his party who believe in its fundamental principles.

Motion made, and Question, "That the Debate be now adjourned," put, and agreed to.—[Mr. Hayes.]

Debate to be resumed To-morrow.