DEVELOPMENT (LOAN GUARANTEES AND GRANTS) [MONEY].

HC Deb 16 July 1929 vol 230 cc269-393

Considered in Committee under Standing Order No. 71A.

[Mr. REBERT YOUNG in the Chair.]

Motion made, and Question proposed, That it is expedient— (1) to authorise the Treasury, after consultation with a committee appointed by them, to guarantee at any time with-in the period of three years from the thirty-first day of August, nineteen hundred and twenty-nine, the payment of the principal of and the interest on any loans to be raised for the purpose of meeting capital expenditure to be incurred under schemes for development, reconstruction, or re-equipment in connection with public utility undertakings in Great Britain carried on under statutory powers by bodies of persons other than local authorities or such statutory bodies as are mentioned in paragraph (3) of this Resolution (including loans the proceeds of which may be applied in part towards the payment of interest on the loans during a limited period), and to charge on the Consolidated Fund any moneys required to fulfil any guarantees given under this provision; Provided that the aggregate capital amount of the loans so guaranteed shall not exceed such amount as is sufficient to raise the sum of twenty-five million pounds; (2) to authorise the Treasury, with the concurrence of the appropriate Government Department and after consultation with the committee aforesaid, to make at any time within the period aforesaid grants for the purpose of assisting persons carrying on any such public utility undertakings as are mentioned in paragraph (1) of this Resolution in defraying, during a period not exceeding fifteen years from the raising of the loan, the interest payable on any loan (not being a loan in respect of which a guarantee has been given under the said paragraph (1) to be raised for such purpose as is mentioned in the said paragraph (1); (3) to authorise the Minister of Labour, with the approval of the Treasury and on the recommendation of a committee appointed by him with the approval of the Treasury, to make at any time within the period aforesaid to any local authorities and any such statutory bodies as carry on undertakings under statutory powers otherwise than for profit grants towards any expenditure to be incurred for the purpose of carrying out works of public utility calculated to promote employment in the United Kingdom; Provided that in the case of a grant made by way of assistance in defraying charges for interest and sinking fund in connection with a loan, payments on account of the grant shall not be made in respect of charges for any year after the expiration of thirty years from the raising of the loan; (4) to authorise the payment out of moneys provided by Parliament of—

1. (a) such sums as may be required for the purpose of grants under paragraphs (2) and (3) of this Resolution; and
2. (b) any expenses, so far as not otherwise provided for, which may be incurred by the Treasury or the Minister of Labour in connection with the committees aforesaid;

(5) to make provisions ancillary to certain of the matters aforesaid."— (King's Recommendation signified.)

The LORD PRIVY SEAL (Mr. J. H. Thomas)

In the course of the Debate on the King's Speech, I gave the House my general views on our unemployment policy. There was considerable criticism of the meagreness of the proposals and the modesty of the finance involved. I could, of course, have come to the House with more far-reaching proposals, but at the end of the Debate I should have had questions addressed to me in this form: "When is it anticipated these proposals are likely to materialise?" I felt that my first duty, therefore, was to indicate a method of dealing with this problem in stages and that I should first consider and concentrate on proposals which could be immediately taken in band. The late Chancellor of the Exchequer, finding himself in opposition for the first time and not knowing what it was to sit on the back benches and wait his turn, for the first time being free and in opposition, said to himself: "This must be my day out," and immediately launched out and said, "I have listened to all these proposals: what are they?" During the General Election he had predicted that one day the country would wake up and find a Labour Government in office, and that it would be the end of all things, and he was disappointed to find that the first proposals of the Government did not fulfil his predictions. Then in the most airy way he said: "I have listened to all these schemes; to the £6,500,000 for the railways. I sanctioned that. I told the House the principle." There were, of course, some "Hear, hears!" from hon. Members behind him. They assumed that it was true. Hon. Members opposite should have delayed some of their cheers. Of course the late Chancellor of the Exchequer told the House about the £6,500,000, but he knows perfectly well that from the time he told the House until I announced a decision no principle had been settled, and this might have gone on until now. Then he said: "I have heard of the £9,500,000. My scheme; the late Government's proposal." And again there were cheers from hon. Members behind him.

Mr. CHURCHILL

What was the £9,500,000?

4.0 p.m.

Mr. THOMAS

For the roads. I can excuse back benchers saying, "Hear, hear" because they thought it was true, but I cannot excuse the right hon. Gentleman when he knew that he himself turned down the £9,500,000. I repeat, I say it deliberately, that in respect of the £9,500,000 which I sanctioned under the second scheme, while it is true that the proposals were worked out, it is equally true that the late Government turned them down, and turned them down unanimously. Therefore, when I introduce these proposals, and the right hon. Gentleman immediately gets up and says, "Ah, but this is my baby," I am entitled to remind him that it was stillborn as far as he is concerned. Then he examined all the proposals in that way. He said: "Look at this Colonial Development Fund— £1,000,000. My scheme again! Our Election pledge!", and I could almost hear the ex-Colonial Secretary saying, "Forgive him, because it was he who punctured me all through." His million scheme! As a matter of fact, for 4½ years that scheme had been urged upon him, and he would not touch it until the General Election arrived. Therefore, I am entitled to say that if we are to be criticised on the ground that we are merely adopting the late Government's scheme, I am entitled to tell the facts. [Interruption.] If at any time the right hon. Member for West Woolwich (Sir K. Wood) is going to speak, I will answer him, but I am quite sure that the ex-Chancellor of the Exchequer needs no advice from him.

Therefore, I only observe that in making the proposals that I did, I took the schemes that were in existence, because it seemed that it would save delay, and I repeat to the ex-Chancellor of the Exchequer that as far as the first proposals were concerned, he was mainly responsible for seeing that they were not given effect to. Incidentally, I welcome that kind of criticism, because if my proposals were so modest and so meagre that right hon. and hon. Gentlemen on the other side could cheer them and say, "We want something better, something more elaborate, something more costly," I have only got to remind them that it was only 4½ weeks ago, and that in 4½ years I will give them something more elaborate and more costly. I hope, therefore, right hon. and hon. Members opposite will give me the same blessing to the proposals then.

What was the situation? What is it to-day? Proposals might have been submitted of a kind that in five, 10 or 15 years would mature. What I had to ask myself was: Would the House of Commons and the country expect, after the recent General Election, any Minister or any Government to ignore the coming winter, not to keep clearly in mind what was taking place to-day and what would inevitably happen in a few months time? Therefore, to the criticism as to the modesty of my proposals, the practical answer I give is that I was more concerned in getting on with the work for the coming months, and an opportunity would be afforded to me and the House later to look beyond that particular period. It is in that spirit and with that intention and object that the Motion we are now discussing and the Motion which I submitted to the House last week have been framed. Last week I asked the House to give sanction to a scheme the ultimate effect of which, I am absolutely certain, will be for the benefit of the Empire as a whole. The immediate effect of the proposals with which I was primarily concerned was, as far as possible, to get work in this country from our Colonies and get it as soon as possible. I am not unmindful of, and I am not likely to forget, the intention of the Government not to ignore the wider aspects of the question, with the whole problem of electrification, the importance of which cannot be minimised, and the benefits of which cannot be over-estimated; but it is the next stage of the problem with which I desire to deal.

The same with regard to the question of export credits, all of which is wrapped up with the question of unemployment. It is no good to come to the House with a partial scheme and say that you are going to introduce export credits, and then someone asks: "What is your view with regard to Russia?" My answer is that all aspects of the question will be considered, and when we come with our export credits scheme, we will try to remedy the existing difficulties. Re-member there is a sum of £26,000,000 there not spent. Why? Because there is not the security; because people want a period of years in which they know-there will be continuity of policy. Therefore, I am indicating clearly to the Committee that our intention is to take the big view, but to take it in stages appropriate to the immediate situation and the future development and prosperity of the country. In the same category, I merely refer to what I indicated to the House on the last occasion. Why have I not dealt with the school age and old age pensions? Again, I submit that my main object at the moment is to find work, and find it immediately. It is no good coming to the House of Commons with schemes that have not been carefully thought out and which would not stand the test of criticism and explanation.

Therefore, it is from that point of view that I approach the problem, and it is in that spirit and with that intention that the Financial Resolution before the Committee is based. I want first efficient transport and cheap power. I knew that there were many possible developments, and in approaching the problem again I had this in mind. I do not know whether this Committee is alive to the danger which arises from our skilled men in the country. There is a large number of skilled men out of work, not only are they losing the appetite for work, but they are losing their skill. That is a very dangerous situation. Again, in considering the framing of the proposals I had in mind not only the unskilled section of the people but the skilled population as well.

This Motion, and the Bill which will follow, set out certain clearly defined lines of policy. In the first place, unlike the late Government, we intend to put the Unemployment Grants Committee on a Statutory basis. The ex-Chancellor of the Exchequer knows that every one of these grants could have been made illegal by the action of this House. There was no Statutory sanction. It is quite true that they came up for review. We are not supposed to be a people who want all things regularised, but when we found this body spending all this money, trusted with this great authority and responsibility and not made a Statutory body, we took the opportunity of saying right away that our first job was to regularise the situation.

Therefore, in this Motion I do not propose to make any material change in the position of the Committee or to do anything to impair their efficiency. I propose only to withdraw from the Committee authority to give grants to public utility undertakings carried on for profit which the Committee have not hitherto been able effectively to assist. Here let me remind this Committee that there was considerable criticism about the proposal to develop private enterprise, and there is an hon. Member sitting on the Liberal benches who has been a member of the Unemployment Grants Committee for a number of years— I refer to the hon. Member for Harwich (Mr. Pybus)— who can tell this Committee of the encouragement and help they have given to private enterprise. They have, unfortunately, been handicapped in the past in this particular connection. Therefore, I propose to regularise the situation. Here let me say that it is my duty to pay tribute to the work of the St. Davids Committee. They have worked hard and well. When it is remembered that they have in 8½ years sanctioned expenditure up to £105,000,000, some idea of the great public service they have rendered will be appreciated by this Committee. The right hon. Gentleman the ex-Chancellor of the Exchequer when dealing with that Committee, in the most airy way said again, "Ah, but you are only continuing our work; that is all that you are doing." What he did not tell the House was that this Committee in 5½ years sanctioned £105,000,000 of expenditure, and then he issued his circular, with the result that, in the next two years, they found themselves unable to sanction more than £1,000,000. The chairman of that Committee and the members know perfectly well that instructions were given to them deliberately to stop the progress of their important work.

Mr. WALLHEAD

I do not clearly understand the right hon. Gentleman. Did he say he was going to withdraw help and assistance from public utility companies that are working for private profit?

Mr. THOMAS

I did not say anything of the kind. Let me again emphasise this point. Here is a committee which in 5½ years has lent assistance to local authorities, mainly for good tested schemes, to the extent of an expenditure of £105,000,000. Then it was by the action of the late Government deliberately stopped in its work. The late Government said: "We shall not abolish the committee, for that will look bad; everyone will see through it and that we are abolishing it. What we shall do is that we shall issue a circular and see that the committee is handicapped and hedged round so that it cannot continue its work." Yet the right hen. Gentleman the ex-Chancellor of the Exchequer gets us in this House and says: "Ah, but the Labour Government are merely continuing our work."

In that connection, I propose even to make a further change in the administration of this committee. What is the difficulty at the moment? The committee are tied to a percentage of 15; they must have 15 percent, unemployed before they can give certain grants. That is not only an unreasonable restriction, but one which means that the majority of the local authorities are unable to get the benefit of the scheme. In its application even the figure of 15 percent, is unfair, because you can have a municipality or local authority that has been struggling along for one, two, three or four years trying to deal with its own unemployed and has exhausted all its own resources, but because it did not come up to the 15 percent, standard of unemployment it has been ruled out automatically. That is something which must be swept away, and I intend that the 15 per cent. shall not stand any longer.

Mr. WOMERSLEY

What figure will the right hon. Gentleman substitute?

Mr. THOMAS

I want to see the figure reduced to 10 per cent. But I want much more than that, because, whatever figure you fix, if it is too rigid it must prove a handicap; any figure when examined must be unfair in relation to the whole problem. Therefore I propose that the committee shall have wide discretion to consider all aspects of the problem regardless of percentage. There is also the question of speeding up. Here again there is a difficulty. The municipality comes along and has to prove that the work that it is submitting for assistance is work that it would not have undertaken until five years hence. That handicaps municipalities; it prevents them from getting on with really practical work. I have decided to abolish the five years and to substitute three years. I ought to say in fairness that I have discussed the whole problem with Lord St. Davids, and I was bound to take, the view, if all the changes were made, that his experience of eight and a-half years ought not only to be applied but would be a valuable indication of what ought to be done. Having discussed the matter in detail with him and argued out all the proposed changes, to quote his own words he felt that the changes I have indicated and intend to make would enable his committee to go on efficiently, and that was all that he required.

But I have felt obliged to make this appeal. No matter what powers the committee may have, the real danger is the delay on the part of the local authorities. I felt it necessary to issue an appeal to them through the Press last week. Let me give an indication of the difficulty. Here is a highway committee which is the body responsible for one side. There may be another committee of the town council responsible for another side. It is the same with a county council. It may be that when they get a circular they have just met and will not meet again for another month, or it may be the summer holidays and they have adjourned for all the summer period. All those things mean that after they come back and submit schemes, the estimates and the Surveys and the contracts and all those things involve endless delay. I have felt it necessary to appeal to the local autherities to speed up all round so that the committee when it met would not only find itself out of a job, but would find that the municipalities are anxious and willing to cooperate.

I turn now to the most important section of the Resolution, that dealing with assistance to public utility undertakings operating under statutory powers. These are mainly railway undertakings, and railway companies' docks, tramways, light railways, tubes, electricity and gas undertakings. If any hon. Member takes that list and thinks for a moment of the great possibilities of improvement and development that all of them offer, he will get a better picture of the great improvement that can be made. On a previous occasion I dealt with the London traffic problem. Anyone who goes through the streets of London must say to himself, "Here is something that ought to be undertaken." If anyone takes the trouble to look at the conditions in the morning, when workmen are struggling to get to their work, he will get a picture of the hardship inflicted on the community by the present inefficient methods. I have seen shipowners, I have seen those engaged in commerce, and without a solitary exception they have told me of some harbour or some dock or some new scheme which would tend to improve the efficiency of a port and in the end to benefit trade and commerce. If our object is to find work, surely the best thing is to find useful work such as that which I have indicated?

Here again one cannot dogmatise about terms. I am offering two alternatives, a guarantee of the interest or principal or both, to a limit of £26,000,000; or, alternatively, the whole or part of the interest on any loan up to a maximum period of 15 years. No undertaking can have both under the scheme; it must have one or the other. My reason for that restriction is this: There are many bodies that I know of which would do all manner of useful work if they were able to borrow money on reasonable terms. They cannot go into the market and pay the high rates that would be necessary on their own credit, but with the Government guarantee that is provided in the Bill that I shall introduce, there are many undertakings that would immediately say, "Yes, now that we can get money at a cheap and reasonable rate we have no hesitation in going on with development work." Many undertakings that I need not mention now come under that category.

Mr. SULLIVAN

Is Scotland included in this scheme?

Mr. THOMAS

When I am dealing with the subject I am dealing with the whole of the country. I ask the hon. Member to appreciate that when I speak of these schemes and the terms and conditions, they are applicable to all. Take Glasgow as an illustration. There is a traffic problem there. If Glasgow likes to submit a reasonable scheme that will stand examination, Glasgow is in precisely the same category as London or any other place.

Mr. ERNEST BROWN

Or Leith docks?

Mr. THOMAS

Or any other place. In other words none is ruled out, provided it has a reasonable scheme that will stand the test that I have mentioned. I have submitted to the Committee the reasons for the first part of the proposal, namely the loan. But there are other undertakings that have made it perfectly clear that that would be of no value to them. They put up schemes of which they say: "We ourselves could not undertake the electrification of a section of railway for perhaps two or three or five or seven years. We know perfectly well that it would justify itself in that period, but you ask us to undertake it now. We could not. possibly do it." In order to get over that difficulty I am taking power to grant, in part or in whole, the interest for any period up to a maximum of 15 years. It is only fair to say that no Minister would be justified in taking that responsibility himself. There are the varying nature of the undertakings, the complications, the 101 considerations that will have to be taken into account on their merits, and they necessitate consideration from every point of view, more especially from the public point of view.

The result would be this: In all these schemes, before any terms are made, there will be a committee at work. Here I am pleased to say that there are a large number of public-spirited men of all parties who want to help and are prepared to help in the work of this committee and in colonial development. In a few days I shall be able to submit to the House names representing every branch of industry, engineering, roads, finance and commerce, names of men of wide and varied experience who are prepared to sit on the committee as judges of the particular merits of any of these schemes and of the terms. That in itself will be a guarantee to this House. Equally it is only fair to say that in appointing this committee I did not appoint them on the same basis as the circular of the ex-Chancellor of the Exchequer; that is to say I did not issue a circular with a view of stopping the committee from doing anything. I am not appointing this committee merely with a view of having nothing done. I made it perfectly clear to them that their business experience and knowledge of commerce and industry were such that I wanted to avail myself of them, and they in the public interest were ready to serve. They know the problem, its difficulties, and the need for urgency; and they will be sitting with the necessary safeguards in mind and at the same time will be conscious of the need for speeding up the work as far as it is humanly possible to do so.

Those, broadly, are the powers contained in the Financial Resolution, the proposals dealt with in which will be ultimately submitted in the Bill. I have given to the Committee a broad outline of my views. It is only fair to say that when I sit down to consider this problem— and I have applied myself strenuously to it— every day and every hour convinces me not only of the formidable nature of the task, but of the hundred and one difficulties which one has to get over. You start on one scheme and you find that a local authority has to be consulted here or an Act of Parliament passed there. You find, on the other hand, that surveys and specifications have to be gone through. All these matters I have to deal with, and I often find that the balance is equal. One simple illustration will indicate what I mean. I have to determine in some schemes as to the relative value of finding employment for unemployed people in a great electrical undertaking, which is generating power from water, balancing against that the effect on the coal industry which is affected by it. All these factors I am dealing with.

These proposals may be called modest and may be criticised because they are not bold enough, but I beg of the Committee to believe me when I say that the maximum that I can see to be done to-day is being done. I will not hesitate to ask for further powers or for bigger schemes, but I am entitled to say that the Committee ought to support me in not asking for more money than I can usefully and properly use. There is no point in merely talking about millions unless you can use them. This I can do. This I can set to definite purpose. In conclusion, I ask critics to remember this. I met City business men, while discussing these proposals, and some of then said to me: "Do you remember the cost and the millions that have been paid?" I said: "I do remember it," and I say to the Committee that when you calculate the cost from 1918 until to-day in unemployment benefit, boards of guardians relief, the Lord St. Davids Committee, and so on, it is a colossal and amazing figure calculated in millions. Bui every day that I deal with this problem brings home to my own personal knowledge what I say to this Committee deliberately, as I said to those business men— "Do not make the mistake of assessing the danger of these problems merely on the financial side. The cost is heavy as a burden and we cannot minimise it, but the demoralisation of our people, the feeling that they have lost hope and do not care what becomes of there, is far more dangerous to the future of this country, and the longer that goes in the worse it will be."

That is my answer to the question. I have not lost sight of it. I ask the Committee to believe me when I say that I know the limitations of this scheme, I know its imperfections, and I know all the criticism?, that can be levelled against it; but I submit that, for a start, it is the best scheme possible. It gives an opportunity, it enables many things to be done which would not otherwise be done, and, as far as finance is concerned, that will not be a barrier. I have asked the authorities outside to help by sending on their schemes, and I ask the Members of the Committee to help by sending individual schemes which they know of. Our object and intention is not merely to spend money blindly— because anyone can do that— but to spend money wisely and well for the ultimate development and benefit of the country.

Mr. CHURCHILL

The Lord Privy Seal opened his speech in a somewhat controversial and even, one might say, truculent mood and tone, but, as he continued, he very soon sank to the querulous, and before he had finished he was frankly in the plaintive state. He was first controversial at my expense, and I rise largely for the purpose of reassuring him, of comforting him, of cheering him up, of making him feel that, after all, it is not quite as bad as he evidently has been led to feel. I intended, and I certainly propose to carry out my purpose, to pay him some compliments and to pay a tribute to him in various respects. Let me begin by assuring him that he is still even after a fortnight at this task, in possession of the sympathy of the whole Committee. I think no one can doubt the difficulty of what ho has undertaken. No one can doubt the immense exertions and efforts that it will call for from him; the constant, incessant, strenuous attention to every detail of these schemes, the wearing sense of responsibility, the gnawing worries which arise when one considers all that one has said in the past, the unpleasant contrast which daily develops between promise and performance. From all these points of view, I say that a sympathy, sincere and sufficiently strong to overflow both the Gangway and the Floor, may be extended to the hon. Gentleman.

I will address myself to his scheme as set out in the Resolution. In the first paragraph, he proposes to obtain powers to make loans amounting in the total to £25,000,000 for what I will call— as it is the name which has always been used before— trade facilities. That is all it is. That is the old name. You can invent a new name if you like but that is what it is— trade facilities to help unemployment. On the merits, there is, I think, no objection to be raised against his proposal, at any rate no serious objection. There may be some criticism on details and so forth, and the right hon. Gentleman would be the first to welcome that, but there is no question of any opposition in principle to the idea of using State credit to the extent of £25,000,000 in a trade facilities scheme so moderately conceived, so soberly presented and so carefully hedged about— as the White Paper shows— so strictly limited in scale, and so rigorously disciplined by Treasury experts. On such a scheme, there really can be no immediate or serious controversial difference in any quarter of the Committee.

When I spoke in the Debate on the Address in answer to the right hon. Gentleman I expressed only the first impression I had of his scheme. I had no idea of what it was going to be. I had, in fact, prepared myself to make quite a different speech, pointing out the ruin to our finance which would ensue from a lavish squandering of public money on the kind of scheme with which my right hon. Friend the Member for Carnarvon Boroughs (Mr. Lloyd George) has associated himself and I was agreeably surprised by the general character and tenor of the right hon. Gentleman's speech. Further reflection and a closer study of his speech, of his scheme, and of the White Paper have confirmed all those first impressions which I sustained after listening to his very illuminating, agreeable, and attractive statement. I cannot see any ground principle on which we, as a party, need oppose the Resolution or the Bill which it is sought to found upon it. There is nothing new or novel about it, no startling discovery or departure of any kind.

There is only one point in the right hon. Gentleman's remedies for unemployment which was novel to me, and that was drawn attention to by the right hon. Member for Carnarvon Boroughs, namely, the proposal to get Mr. Courtauld, or some other silk manufacturer, to start up a factory in the Rhondda Valley for the miners who are out of work and for public money to be advanced for that purpose. I do not see in this Resolution any point which covers that, but it is a very interesting point, and I do not express any opinion whether it is a wise provision or not, but, apart from that, I know of nothing that is new in this scheme.

We have had a long and full experience of this kind of schemes of trade facilities which are set out in the first paragraph, not only under the late Government, but under the last three or four Governments. They were originally devised, as all these remedies for, and efforts to cope with, unemployment were originally devised, in the days of the right hon. Member for Carnarvon Boroughs, when the great and terrible crisis of unemployment came upon us in the deflation period after the Great War; and I do not think the Committee would run any risk in lending itself to these schemes. After all, we have had great experience of them. We know perfectly well what happens and the limits within which good results or bad results are to be expected. We have all tried trade facilities, and on a much larger scale than this. Opinions may differ as to what the results were, but all opinions will be agreed that those results are confined within a very limited area of importance. I am glad to see that the money is not to be spent all at once, but that it is only to be spent as it is wanted, that it is not to be borrowed or spent except as it is required. That, I think, is very wise. Fresh powers have to be sought in the event of this £25,000,000 loan for guarantees being exceeded, and so far we shall have an opportunity of re-considering the whole matter, of seeing how it is working out, what progress has been made, and what results have attended the schemes. That is all perfectly correct, and I am sure no one would deny the Government's request.

Now I am going to pay my compliment to the right hon. Gentleman the Lord Privy Seal, which I think he has de-served. I compliment him— and I am sure it will be agreed by all Members of the Committee that it is deserved— on having resisted the temptation— he has told us again to-day how he has resisted it— to be drawn into megalomania. [Interruption.] He has resisted the temptation to play up to any of those grandiose and flamboyant schemes with which the right hon. Member for Carnarvon Boroughs hoped he would rehabilitate the Liberal party. I congratulate him upon these schemes, and I congratulate the Treasury on the strictness of their control. No doubt these plans will contain some useful feature. No doubt some desirable enterprises, whether by local authorities, by private authorities, by private capitalists or by statutory bodies will be started a little earlier than they, would otherwise have been begun, and others, which perhaps are beneath the threshold of economic utility, will just be lifted into actual existence. No one can doubt that some help will be given in this respect, and it may well be that a number of useful enterprises will be set on foot. But even the right hon. Gentleman, I think, will not claim for his schemes more than that they will be a tonic to industry so far as they go, that they will give it a little fillip. The encouragement in paragraph (1) will give a little fillip, a little titivation of encouragement, a stimulant, a dope, if I might say so, to industry, which perhaps will have good results.

I would praise him also for not hesitating to help private enterprise where it is engaged in public utilities, and, as has been said, though I am not certain whether it was endorsed by the Treasury Bench, not hesitating to help private enterprise in matters so far removed from public utilities as to cover the manufacture of silk stockings, which perhaps would come under the heading of public necessities. At any rate, private enterprise is to be helped and sustained with public money. That is an important development and fortification of the Capitalist system, which is very remarkable, coming from the right hon. Gentleman and his Friends, and [...] gratulate him on not being hampered by foolish Socialist ideas about profit-seeking being a crime, all that sort of nonsense about rent and interest being exploitation, about private enterprise being the exploitation of the worker. All that nonsense is swept away, and the right hon. Gentleman has not hesitated to cut himself adrift at the outset of his responsibilities from all the nonsense which he and his Friends have talked, so long and so loudly, in Opposition.

I also congratulate him on consulting the business men and the great employers; and, let me say this, that it is their duty to help the Government. Being the Government, they ought to be assisted in non-party matters by anybody, and, if the right hon. Gentleman goes to the great employers of labour and heads of big businesses and asks them, as he has so wisely asked them, for their aid and assistance, they ought not to allow any party or personal considerations to stand in the way of giving the best help they possibly can. The task is heavy enough. So far as I have been confronted by some of these gentlemen, I have said, "It is your duty to help the Government in every way you can to minimise the difficulties of the unemployment position."

But what I liked about the right hon. Gentleman's speech, and especially about the closing portion of it, was the new application of the doctrine which has been called inevitability of gradualness— the inevitability of gradualness in attaining the Socialist ideal. There is certainly gradualness here, and I have no doubt there is inevitability also, but what I am glad to see about it is that the gradualness is in a new direction. It is gradualness, not forward, but backward. What we are witnessing in paragraph (1) of this Resolution is the gradual retreat from the claptrap and folly of Socialism to the firm ground of the modern Capitalist system.

The right hon. Gentleman the Lord Privy Seal has, like Beaconsfield, to educate his party. He has to teach them, and he has been teaching them. He may even have been, as it is sometimes called, "learning" them; and they have a lot to learn. He has to teach them that everything he taught them to say when they were out of office is all wrong, and that what they have to do is to support the opposite when put forward by the very man whom they chose to carry his original doctrines into effect. That is a very stiff course, but I hope they will not mind this salutary discipline. They had some chastisement in public the other day from the right hon. Gentleman, and I understand that at a private conclave this morning further chastening of a more severe disciplinary kind has been administered. That is, perhaps, the explanation of the absence of the hon. Member for Bridgeton (Mr. Maxton). I am glad to see, though, that he has come into the House now, and that he has apparently survived the ordeal. He has returned, I trust, in a sober, contrite, and humble spirit.

I entirely agree with the course which the Lord Privy Seal has taken. Everyone knows that he is a very shrewd and practical man, and, indeed, he would not have lived through all he has done so successfully if he had not got as many lives as a cat, and almost every gift of practical human ingenuity. I think he is absolutely right. It is a very bad thing to deceive people, to gull people. It is very unfortunate that he should have been Jed into deceiving them and gulling them, but it is far better to throw foolish words aside, and not to translate them into still more foolish action. Therefore, for all these reasons, which I have been endeavouring to express, so far as the Conservative party, for whom I have the duty of speaking, is concerned, we shall make no difficulties about granting the request which the Government make to us in this Resolution.

Paragraphs (2) and (3) of the Resolution, which deal with the grants to public utility undertakings, local authorities, and statutory bodies, are not, of course, comprised within the ambit of the £25,000,000 for guarantees, and we are told in the White Paper that no limit is assigned to the expenditure which may be incurred, but we are also assured that Parliament is to vote in every case upon the details of expenditure, and that Parliamentary control will be retained.

Mr. LLOYD GEORGE

Is that so?

Mr. CHURCHILL

It is at the end of the White Paper: In any case full Parliamentary control will be secured by the necessity for a Parliamentary Vote of the grants to be made. 5.0 p.m.

Therefore, you may really say that there is nothing in Paragraphs (2) and (3) except the intention of the Government to produce plans on the subject at a later date, and to submit their proposals to the House of Commons. Nobody could object to that. It is the right of any Government, of every Government, to make any proposal for the spending of money if they think that advantage will result to the community. No one could possibly object to that, but, in the absence of any proposals, none having yet been made, we can only await the further development of the right hon. Gentleman's plans. We find ourselves this afternoon in the presense of the Government's complete policy for dealing with unemployment, apart from certain Votes which they will present for the helping by grants of local and statutory bodies. I should like to point out to the Committee that this Motion comprises the whole policy with inconsiderable exceptions. The right hon. Gentleman talked about the £6,500,000 which is to be spent upon the railways, but that was already provided, and arranged for, and announced to Parliament in the Budget. The right hon. Gentleman made the criticism that nothing had been done to establish the principle on which this money was to be spent. The Budget was only in the middle of April, and Parliament was dissolved before the end of May; at the beginning of May, the railway companies were asked to prepare schemes, and the natural time to consider them would have been when they were brought before us. Far be it from me to rob the right hon. gentleman of any credit for any schemes which he puts forward, but I advise him not to base any recommendation to abolish the unemployment disease upon the fact that he received a proposal from the railway companies to dispose of the money which Parliament had already decided that they should have in accordance with the agreement entered into with them before the Election.

There is the question of the road programme. The right hon. Gentleman said that I had turned down a £9,500,000 scheme. There never was any intention of not spending upon road development all the remaining moneys which are derived from the revenues of the Road Fund. That is all that His Majesty's Government are doing; they are merely spending the remaining money—

Mr. THOMAS

I made the specific statement that the right hon. Gentleman's Government turned down the £9,500,000 scheme point blank and said that they would have nothing to do with it. I made that statement, and it is true.

Mr. CHURCHILL

It might well be true and yet quite irrelevant to the argument, because the question in all these schemes is not only the question of adopting a scheme at a particular moment before the revenues are there, but of adopting it a year later when the revenues have grown up. Our intentions were, and our public declarations were, that the whole of the money of the Road Fund, or what was left of the Road Fund— [HON. MEMBERS: "Hear, hear!"]. I shall come to that later, and I notice the Chancellor of the Exchequer beginning to get rather uneasy— was to be spent on the development of what we thought to be the best programmes normally year after year, but what has the right hen. Gentleman the Chancellor of the Exchequer done? He used to be the foremost in accusing me of larceny, theft, and I forget what other he used but he used stronger words.

The CHANCELLOR of the EXCHEQUER (Mr. Philip Snowden)

"Pilferer" and "plunderer!"

Mr. CHURCHILL

The right hon. Gentleman did much better than that, and I hope that he will be more like his own self, in spite of his cares of office, and that before we get though the Session we shall hear some of his rasping adjectives, for I hope that- he is not so crushed down by the weight of official responsibility that he cannot express himself with his natural fluency. What has the right hon. Gentleman done? I took certain lump sums from the surplus of the Road Fund, and I am very glad that I did it, and I would do it again in the same circumstances. In addition to that, I claimed £4,000,000 or £5,000,000 a year under the heading of luxury charges from the Road Fund, and the Exchequer is now enjoying them. That was a said to deprive the Fund of £4,000,000 or £5,000,000 a year, and the right hon. Gentleman is dabbling in the proceeds of this raid at the present moment. Talk about developing any new expenditure and any new policy: They have simply carried on the policy which was going to be carried out in any case, and have even adhered to the policy of extracting from the revenues of the Road Fund between £4,000,000 and £5,000,000 in aid of the general expenses of the Exchequer. I agree with the right hen. Gentleman the Chancellor of the Exchequer; I think that he is quite rightly holding on to this money, but we cannon have all these heroics from the Lord Privy Seal about how shocking the late Government were, and how magnificent he is in embarking on this road development. Not a farthing is being spent out of the Road Fund that would not have been applied in the ordinary way.

As to Colonial development, which afforded the right hon. Gentleman an opportunity of expressing his devotion to our great and glorious Empire, some parts of which he is visiting at no distant date, he is only spending the revenue of the £10,000,000 which was voted and proposed by the late Government. It is quite true that the money was not spent as fast as we expected, and as fast as it ought to have been. There were, however, very good reasons in each case, and I am bound to save that the highly competent experts of the Treasury in matters of detail were more than a match for the experts of the other Departments in proposing schemes, and they advanced extremely good reasons why particular things ought not to be done and could not be done, and why this and that would not work. For instance, in connection with the Zambesi Bridge, they pointed out that the Portuguese had rights over it if we had proceeded then, and that it would have been found very inconvenient. I agree that there should be a loosening, and I am glad that the right hon. Gentleman proposes to spend this money more freely. It is, however, only the money that was set aside by the late Administration, and the right hon. Gentleman cannot claim to use it as if it were another store of gas with which to inflate his unemployment remedy balloon.

I do not think that I have omitted anything in the scheme of unemployment relief which is before the Committee. I have forgotten one thing, however— Lord St. Davids Committee. I had forgotten that Committee which is stressed so strongly. The right hon. Gentlemen is going to regularise the Committee, to invest them with statutory power, and to widen their scope. The right hon. Gentleman reproached me very much with the fact that we limited the functions of that Committee in 1926, but on what grounds was it done I We read what the Committee themselves said in 1926. They said that: Broadly speaking, it would appear that the scheme, which has now been in operation for six consecutive winters has, largely for that very reason, passed the period of its greatest utility, and that if pursued indefinitely to the same extent as in the past, it would be difficult to avoid subsidising work properly undertaken by local authorities in the normal course of their business, and in such case but little could be added to the sum total of work performed in the country. In so far as special schemes might continue to be evolved, there is the further objection that they might well have the tendency to divert capital from the normal trade developments which are now to be looked for, and would thus hinder rather than assist the relief of unemployment through the proper channel of trade recovery. That is one reason why we curtailed the activity of Lord St. Davids Committee. It was by their own advice, and the advice of the very experts and gentleman to whom the right hon. Gentleman paid such a high tribute this afternoon. It may well be that in the three years that have passed since 1326 some leeway which can be made up has accumulated, and that there are local authorities which wish to embark on new work if they can get a little assistance, work which they would not attempt but for assistance. I make no objection to it, and I should apologise to the right hon. Gentleman because, in describing his. scheme for remedying unemployment, I omitted to mention the fact that he is endowing Lord St. Davids Committee with statutory authority.

I have so far been in agreement with the right hon. Gentleman, but I fear that I must part company with him upon the suggestion contained in the White Paper that these proposals are going to be a remedy for unemployment. They may be quite good in themselves, and I think that we all pretty well agree about them, but they are put forward as a cure for unemployment and raise issues of a very different order, and I believe that the result which they will bring to the volume of unemployment will be entirely negligible. I will endeavour to support that by three sets of considerations. First of all, take the scale of any of the proposals now before us. They are inconceivably small. The late Government, so abused, so infirm of purpose and feeble in dealing with these matters, spent £100,000,000 a year in loans and expenditure on Colonial, domestic and local developments, and we found no remedy. In 1922, the then Financial Secretary for the Treasury, Lord Cushendun, gave figures to the House which showed that £63,000,000 had been provided under trade facilities, and that £63,000,000 worth of schemes had been started. He calculated then that 100,000 men had found employment in virtue of the starting of those schemes. I do not accept that, for I think that it is very questionable whether there was not as much employment killed in other directions as was started by that money. Even if you take that figure and apply it to the £25,000,000 of Paragraph 1, we get about 30,000 or 35,000 men who may be expected to find work, if everything works well and if the whole of this new expenditure operates without detriment to any other industry elsewhere in the country.

Compare this scheme of £25,000,000 in Paragraph I with the rating reform scheme of the late Government. When I mentioned this in the Debate on the Address, I noticed scornful laughter on the Benches opposite, but it is our best hope at the present time. I know the sincerity of hon. Gentlemen about the evils of unemployment, and the agony which they see in their constituencies of friends with whom they come in contact on the matter, and I say that it is our best hope. Compare it with this scheme. A relief of £30,000,000 a year for productive industry all over the country operates from next October in perpetuity. The capitalised value of that is £600,000,000, and that is a figure which is comparable to the £25,000,000 about which we are talking now. It amuses me when I read the newspapers to see the different standards by which the actions of the various Administrations are judged. We produce from the labours of two years, and with the gathering together of all the revenues we could secure, past, present and future, this £30,000,000 a year to go as relief to our heavily burdened basic industries, and it is whisked aside as if it were a thing too trifling to be mentioned, whereas the right hon. Gentleman comes forward with £25,000,000 of trade facilities— a little slice cut off the old hambone— and we are told of vast schemes to cure unemployment, and what a gratifying thing it is for the country to see real energy and courage on the Treasury Bench.

I do not believe that these proposals will have the slightest effect upon the number of persons upon the live register of unemployment, or that there will be any appreciable difference at any time with which the present Government are likely to be concerned, or in any time that we shall be able to measure or appraise. They may do good in themselves. Some things may be done which it is a very good thing should be done, and future generations may be quite content, but the limited scale of these proposals excludes them from the category of effectual remedies. With 1,250,000 unemployed at the present time and with over 16,000,000 insured persons, this additional £25,000,000 a year is but a small tonic to stimulate industry.

Mr. THOMAS

I am sorry to interrupt the right hon. Gentleman, but I am sure he only desires to be fair. I do not mind his party points, but he must know, as he has read the White Paper, that the £25,000,000 is a fraction compared with Part II.

Mr. CHURCHILL

Quite right.

Mr. THOMAS

Yes, quite right, but I want to inform the Committee. Incidentally, he is incorrect in assuming that any of this money must be first sanctioned by the House of Commons. That is not in the Bill, it is not what is intended, and it would be ridiculous if it were suggested.

Mr. CHURCHILL

I am very much obliged to the right hon. Gentleman for giving this information, although he has somewhat interrupted the theme which I was developing, but the last paragraph of his White Paper says: in any case full Parliamentary control will be secured by the necessity for a Parliamentary Vote of the grants to be made. That is all I say about that. We never suggested that the right hon. Gentleman had to come to the House of Commons before going on with any scheme, but at frequent intervals he will state his definite schemes and we shall say whether they are good, bad or indifferent. So there is very little disagreement between us. I am dealing only with the proposals actually before us. We have yet to learn his other proposals. The right hon. Gentleman is in the position of a man who comes forward with a remedy for curing a disease, and in this Parliament we are listening with bated breath to his solution of the difficulty. The only solution is £25,000,000 of guarantees, and the fact that he is going to submit to Parliament in due course various schemes for helping the local authorities, as we did to a very large extent year after year, and encouraging them to go forward with local developments. So far as curing unemployment on this scale and dealing with this ghastly problem, which, one may say, ruined the prestige, of the Conservative administration in the last Parliament— [HON. MEMBERS: "Hear, hear!"] Yes, I admit that. You used it in a manner to make it most detrimental to those who were in power. But I say that the schemes of the Lord Privy Seal for curing the great problem of un-employment are absolutely visionary and futile. They are good in themselves, but are absolutely futile as a cure. He might' just as well go down on to the terrace on some afternoon when the tide is high, take a tea cup from one of the tables, and try to bale out the Thames as imagine that the proposal he is now putting before Parliament is going to be any effective solution of this grim and grey social evil.

I come now to the Treasury argument. The Treasury argument is that the money which the Lord Privy Seal gets to spend in one direction will only be abstracted from a fairly limited supply of credit, and the effects of it will be manifest in unemployment in other quarter. That is their argument, and I hope I am going to hear in this Debate some statement from the right hon. Member for St. Ives (Mr. Runciman). He may have had to make a judicious dive at the General Election to conceal his convictions in order not to impair his newly grown affinity with the Leader of the Liberal party, but now he is safe with us in the new House of Commons—

Mr. LLOYD GEORGE

What about Mr. Amery?

Mr. CHURCHILL

We all have our affinities; he might courageously stand up and express his views upon the economic principles of the Treasury case. They definitely say, "Make it just as much as you like, be it on a big scale or be it on a small scale, unless you inflate public credit by the artificial manufacture of credit you will not add to the volume of employment." That is their case, and it is not a mere theoretical case, but is the truth about the existing financial situation. It is contended that there is the fullest use of all the credit available in the banks, with even a tendency to overstrain banking facilities given to industry. That is their case, that is the proposition which they put forward, and I hope we shall hear from the hon. Gentleman in whose name this Resolution stands some exposition of the Treasury views, because it would be most unfortunate, now that all the hopes of the unemployed are concentrated upon the schemes of the right hon. Gentleman, if we found out that after all we were barking up the wrong tree and that no extension of Government credit would in fact create new employment, unless accompanied by an act of financial inflation.

The right hon. Gentleman the Chancellor of the Duchy of Lancaster stated in the course of his interesting speech— his maiden speech from the Treasury Bench was a very able speech if he will allow me to say so, if he had not got into trouble with his noughts— that he knew the Treasury view but that the electors had repudiated it, had pronounced against it at the election. I think that is quite true. Undoubtedly they pronounced against it. Unfortunately, on questions of economic law it does not matter at all what the electors think or vote or say. The economic laws proceed. [Interruption.] You may vote by overwhelming majorities that you can cure unemployment by public works on borrowed money, but that will not have the slightest effect upon the results, whatever they may be, which you achieve by your programmes. I am finishing now, and I will not detain the House any longer. I think these large topics ought to be fully explored. It is really only an act of courtesy to the Lord Privy Seal that we should do full justice to the magnitude or otherwise of his proposals.

I am submitting that there is no hope of curing unemployment in any of the proposals we have heard from the Treasury Bench, and I am now going to say that the Government themselves know there is no hope that any of their proposals will, in fact, produce an effective diminution of unemployment. What have we been listening to in the last two or throe days? We have been dealing with Unemployment Insurance. The Unemployment Insurance Fund is solvent if the figure of unemployment falls below 1,050,000, on the old basis. The moment the figure of unemployment falls below 1,050,000 the debt of the Fund will begin to be paid off. [Interruption.] We had the debt down to £7,500,000 just before the unfortunate labour troubles of 1926. If there is going to be any improvement in unemployment, there was no need for the Chancellor of the Exchequer to take from his slender purse the £3,500,000 which he is proposing to take— I quite agree that on financial grounds it was a respectable and proper proceeding— no need to take that from the slender resources which he will he looking over before the end of the year, and using it to endow the Fund. If he believes that unemployment IS going to fall, if he thought the Government remedies were going to have any effect upon the figure of unemployment, it would have been quite easy for him to have let the matter stand over and to have gone in for a little extra borrowing. Then, if matters turned out well, in a very short time the Fund would be solvent again, or on a solvent basis.

But the Government do not believe that. They have taken a more gloomy view than I have felt justified in taking, and I dare say they are right. They are budgeting for a figure of 1,200,000 unemployed running through the winter, and they are making arrangements— I do not say they are wrong— on a scale to enable them to bear the whole of the brunt and weight of this terrible burden of unemployment. They have no serious expectation that the figure of unemployment will fall below 1,000,000 as the result of any measures which the Lord Privy Seal is going to take. In fact, the right hon. Gentleman himself, when dealing with this matter in the Debate on the Address, had already begun to whittle away the figures of the unemployed. He is going through just the process which I went through in the General Election, and some of the very arguments I used he used in regard to what is the normal residue of the unemployed. I remember very well how the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) and I were found fault with by the "Daily Herald." Though we were much opposed in the particular controversy, we both talked of a certain normal figure of unemployment, and I remember the indignation to which the "Daily Herald" was moved. They seemed to imagine that hundreds of thousands of our working people are condemned to live permanently in this hideous and miserable condition. [HON. MEMBERS: "So they are!"] We have to read the literature of our masters nowadays, and the other day I was reading "Labour and the Nation." It says on page 7: For four years more than 1,000,000 workers have been deprived through no fault of their own of the opportunity of adding their quota to the nation's output of wealth. And on page 20 it says further: The Labour party will not be satisfied, as capitalist Government have hitherto been satisfied, merely will tinkering with unemployment. And what did the right bon. Gentleman say? I noted it particularly, because he was agreeing with me. He was repeating one of the arguments which I had been using at the General Election. It had sunk into one brain, at any rate. He said: When we talk of the live register and deduce from those figures the fact that a million or more of our fellows are unemployed, that gives an entirely wrong picture of the situation to the outsider. The position is not exactly that. Of that total at least 50 percent, are men and women of many of whom it can he truthfull said that they are unemployed it may he on Monday and find employment before Saturday. That is not a difficult problem to deal with. That is a problem which the unemployment Insurance Act was intended to deal with."— [OFFICIAL REPORT, 3rd July, 1929; col. 91, Vol. 229.] I am not going to read the whole of it. The House will notice the extraordinary rapidity with which the educative process of Governmental responsibility is having its effect upon the Lord Privy Seal. Only a few weeks have converted him from the phrase about more than a million workers having been deprived through no fault of their own of the opportunity of adding their quota to the nation's output of wealth into the statement: That gives an entirely wrong picture of the situation. Two weeks have translated the right hon. Gentleman from a leader and inspirer of ravening millions into the sleek apologist of power. If those plans had been presented by the late Government, if we had been returned with a diminished majority and had brought those plans forward from the Treasury Bench, they would have been laughed out of court as a remedy for the unemployment problem. They would have been denounced as shams and trivial makeshifts by every Minister who is now prepared to support them. Although I must admit that those plans look innocent, inoffensive, and modest in them selves, they run counter to the orthodox Treasury view, and that is a very serious thing on an economic question. The unemployment problem remains utterly unsolved. Putting it at the best, let us hope that the Treasury are wrong. What is now proposed is only a mild tonic and encouragement to certain particular industries, local enterprises, and private interests which may be beneficial in themselves, but the benefit which can be gained by those private interests and local bodies by the additional employment which may flow from their stimulus will be far more than swept away and counterbalanced by the disturbances which the Chancellor of the Exchequer is making by undermining the whole principle of inter-Imperial trade, by prolonging uncertainty, and by the vicious and heavy taxation which I have no doubt whatever will be the consequence of the pressure and stress which is rife within the party opposite, and which will herald the dawn of the new year.

Mr. LLOYD GEORGE

I do not rise in order to criticise or defend, but rather to administer a few interrogatories to the Lord Privy Seal in order to elucidate two or three propositions which are not quite clear to my hon. Friends and myself. The proposals which have been welcomed with such warmth and commendation by the ox-Chancellor of the Exchequer do not diminish the disappointment with which I first heard them. It would be idle for me to pretend that hon. Gentlemen and right hon. Gentlemen were not distinctly convinced after a good deal of examination that something of a very much bolder character on a larger scale was essential in order, not to cure unemployment, but to deal with normal unemployment.

Mr. THOMAS

I indicated when I spoke last, and I do so again now, that I have turned nothing down. If my right hon. Friend carefully examines the Financial Resolution, he will find that it embraces anything.

Mr. LLOYD GEORGE

That is why I am going to administer a few interrogatories, because I think these proposals fall far short of any scheme which is essential for dealing with the problem on the lines which the Lord Privy Seal laid down for the coming winter. I accept the dictum of the right hon. Gentleman that it is no use having schemes which will fructify in five, ten, or fifteen years. The Government are confronted with the problem in the coming winter, and' this scheme must be criticised from that point of view. I want to put a few questions to the Lord Privy Seal in order to make it clear what is the actual scheme. I come, first of all, to the question of the roads. As far as I can follow the proposals which have been submitted to the Committee, I take exactly the same view as the ex-Chancellor of the Exchequer. I do not see anything in the proposals of the right hon. Gentleman which go beyond the utilisation of what remains of the Road Fund after the various raids which have been made upon it. There is nothing in these proposals beyond the utilisation of that miserable remnant of the Road Fund for improving roads and constructing bridges. The Lord Privy Seal has pressed the local authorities throughout the country to send in suggestions to him and to submit schemes, and I think that is right. At any rate, it is better that the initiative should come from them in so far as mere local alterations are concerned. But that does not apply to schemes for trunk roads, and it does not apply to the general improvement of the unclassified roads which is essential in order to improve marketing in our agricultural areas. This Resolution does not deal with the problem of London traffic, and in those three categories the Government should take the initiative on a large scale, and not wait for the action of thousands of petty little local authorities here and there across the country. Let us assume that the local authorities respond readily and liberally to the invitation of the right hon. Gentleman and send to him in the course of the next few weeks a number of good schemes which will pass the muster of his expert examiners.

Mr. THOMAS

I think the right hon. Gentleman must be aware that it is out of order to deal with those questions upon this Resolution, and that is why I did not deal with them. It would be out of order, because there is nothing in the Financial Resolution dealing with that aspect of the question.

Mr. LLOYD GEORGE

I do not quite follow that argument, because the Lord Privy Seal said a good deal about roads and the ex-Chancellor of the Exchequer has replied to his arguments at considerable length. If those two speeches have been permitted by the Chair, then it must be in order for me to reply to them in continuing the Debate. Therefore, I really must pursue my questions, because it is very important from the point of view of knowing exactly where we stand. I understand that on the whole we are going to have a review of the schemes of the Government with regard to unemployment for the coming winter. This is a very important question. Supposing the schemes which are sent in to the Lord Privy Seal are all good schemes that pass the muster of his Department and the aggregate amount of the schemes goes beyond the amount of cash available within this financial year. I do not know what the amount is, but suppose it is £7,000,000 or £8,000,000? Let U.S suppose that those schemes will run up to £20,000,000. Under those circumstances, I want to know: Will the right hon. Gentleman cut down his scheme so that it will come within the limit of the amount available within the current year, or is he proposing to widen the basis of the Road! Fund in order to enable him to proceed with schemes of which he himself approves? Will the right hon. Gentleman cut the amount down to the limit of his income, or is he going to borrow money on the Road Fund for that purpose? That is an important question, and it makes a very great deal of difference when you come to consider the question of the number of people who are going to be employed.

Mr. THOMAS

The right hon. Gentleman did not take that view when I introduced my proposals. He said that there was nothing in them, and that is why I did not deal with the question of the roads. The specific question which has been put to me is: Supposing I find that the expenditure allocated for this year or next year from the Road Fund for schemes approved and which I think ought to be gone on with, is not sufficient, am I limited to the money available for that year? Certainly not. I mortgage the future. I said so before, and I repeat my statement now.

Mr. LLOYD GEORGE

If that statement has been made before, it has escaped my notice, and I am delighted to hear the right hon. Gentleman's explanation. What I now understand is that the schemes which are submitted and approved by the right hon. Gentleman are not to be limited merely by the cash available, but by the quality of the schemes; and, if the schemes run to twice the amount of the income which he has at the present time, I understand the right hon. Gentleman is prepared to mortgage the revenue and anticipate and spend, if necessary, £15,000,000 or £20,000,000, although his income may be only £5,000,000 or £6,000,000. If that be the case, then the position is much more satisfactory.

I should like to know upon what authority he proposes to borrow. I am distinctly better pleased with the schemes now that I know that the right hon. Gentleman intends to anticipate the revenue for the purpose of spending money upon road development in the coming winter. The Lord Privy Seal has told us there is nothing in the White Paper which deals with roads. I assume, therefore, that there is nothing of that kind in the Resolution, and I should like to ask under what Parliamentary authority the right hon. Gentleman proposes to borrow money on the Road Fund.

Mr. THOMAS

The right hon. Gentleman cannot have read the clear statement which I made in the last Debate. This Financial Resolution does not deal with the Road Fund. I have already stated that, if the amount taken from the Road Fund is exceeded in any one year, the Chancellor of the Exchequer will introduce the necessary legislation to enlarge the resources of the Fund in order to meet the expenditure.

Mr. LLOYD GEORGE

That is not the question I am putting. According to the statement which the Lord Privy Seal has just made, he is prepared to introduce legislation for enlarging the resources of the Fund. That might mean an increase in the Petrol Duty or some duty or other. Does the right hon. Gentleman propose under those conditions to allow us to separate in another fortnight without dealing with this important problem? So far as the relief of unemployment during the coming winter is concerned, it will depend entirely upon the schemes which the Lord Privy Seal puts forward during the next few weeks. No one knows better than the right hon. Gentleman that the preliminary expenditure must be incurred. We must assume that three months will be spent in preliminaries before any scheme can be put into operation. I am not complaining that the right hon. Gentleman has not put anything into operation and will not do so for the next couple of months, but the schemes must be ready, steps must be taken to begin them, long before Parliament meets in November. Therefore, we really ought to know from the right hon. Gentleman if there are schemes that go beyond this miserable remnant left by the ex-Chancellor of the Exchequer out of the Road Fund, and whether he is going to borrow on it; and I trust that, before this Debate is over, we shall get a definite answer upon that, because I think it is very vital, in spite of what the right hon. Gentleman has said. He has never attached due importance to road development from the point of view of employment. I think that, the more he goes into it, the more he will find that that is the readiest method of dealing with this problem, and I hope that when he does he will also take full borrowing powers to meet his responsibilities in this respect. I make that suggestion to him very respectfully, and I press it upon him, because I can assure him, having gone into the matter very carefully, that I am certain that that is necessary.

Now I come to the second point that I would put to the right hon. Gentleman, and that is with regard to paragraph (2) of the Resolution. I do not even new quite understand, even after the explanation given to the ex-Chancellor of the Exchequer, what the position is with regard to paragraph (2). Paragraph (1) deals with what is known as Trade Facilities, as I understand it— the £25,000,000. It was known as Trade Facilities. Under those Trade Facilities borrowings, the tube to Edgware was constructed. A sum of £12,000,000 was borrowed for that purpose. I believe the total amount borrowed under Trade Facilities was well over £70,000,000. The loss to the Treasury was only comparatively a trifle. Most of the money has been recovered and paid back. There has been no loss except a comparatively small one up to the present. I understand that the right hon. Gentleman proposes to extend Trade Facilities— it comes to neither more nor less than that. Naturally, I approve of that. I was responsible for that in the year 1921. I thought it was absolutely essential in order to cope with the problems of unemployment. But that is not the point upon which I am asking a question. I come to paragraph (2). I do not quits understand what paragraph (2) is for, apart from Trade Facilities. The right hon. Gentleman hinted obscurely and mysteriously that it was to deal with some great schemes which might be advanced by public utility companies or by others. What has he got in his mind I think we ought to know.

Mr. THOMAS

I am sorry I was so obscure, and I am sorry if there should be any misunderstanding. I understand the right hon. Gentleman's position to be that he wants, like me, to work this winter. The first question he puts is, "Does the £25,000,000 enable you on the same basis as Trade Facilities to lend money?" The answer to that is "Yes." He wants to know what paragraph (2) is—

Mr. LLOYD GEORGE

As distinct from Trade Facilities.

Mr. THOMAS

The value of it is because it is distinct from Trade Facilities, and that is why, in this talk about a miserable £25,000,000, the real value of the second point is lost. Let me explain what it is. I will take the railway companies. There is not a railway company that can accept paragraph (1). Why? For reasons that ought to be obvious to every Member of the House, and especially to the right hon. Gentleman. He knows perfectly well that railway companies have only certain borrowing powers on ordinary stock behind a limited number of debentures. They have all exercised those powers up to the limit, and when I met the railway companies there was not one that did not say, "A loan is no good to us; we cannot go on the market for a hundred and one reasons." But the other scheme is good to them, and they will accept it. Paragraph (2) will operate in this way. Suppose the development of a tube from Finsbury Park— I am giving cases I have in my mind—

Mr. W. THORNE

Let us have one down East as well.

Mr. THOMAS

When I say that, I mean for all parts of the country. They say, "We could not undertake this work with a loan, but"— for the reason I have given, which everyone understands—"if you will guarantee and pay the interest for two, three or four years, as the case might be, after examination of the merits of each scheme, then we can undertake it." the meaning of paragraph (2) is that, if there are any undertakings that could not work under paragraph (1), then paragraph (2) is open to them. That is shortly the situation, and, incidentally, that is so in the case of most of the public utility companies.

Mr. LLOYD GEORGE

Perhaps there will be a further opportunity of explaining what it means. I really do not see now the difference between Trade Facilities and paragraph (2), because the very instance given by the right hon. Gentleman was that of a tube which was financed under Trade Facilities to the extent, I think, of £12,000,000. I do not see why it could not be done under Trade Facilities, because under Trade Facilities you can either give a loan or a guarantee, or you can make any arrangement you like in order to enable the company to raise the money on Government credit. The thing that matters is the Government credit. I know exactly what the right hon. Gentleman has in his mind. He illustrated the case by the North Eastern, who could not borrow except at, I think, 7½ per cent. At the present moment other companes can borrow at a much lower rate of interest, but, for the companies that would have to go to the market and pay a high rate of interest, it is quite prohibitive, and for that particular reason it is essential that there should be a Government guarantee in order to reduce the rate of interest and make it possible for the scheme to pay. But that could have been done under Trade Facilities. I really do not know at the present moment what is the difference between the two, unless it is a subsidy— [Interruption.] That is very important.

Mr. WARD LAW-MILNE

It is a subsidy by payment of interest.

Mr. THOMAS rose—

Mr. LLOYD GEORGE

Let me put my question. Hon. Members must be tolerant. I am putting questions which I am entitled to put. The question I want to put is this: Whether the interest is to be paid by the Government in the form of a subsidy, or whether you are going to add the interest afterwards to the capital, is the Government to be repaid that amount as if it were a loan, or is it to be a subsidy and a free grant and gift to these particular companies which is never to be restored to the Treasury? That is what I want to know.

Mr. THOMAS

Obviously, the right hon. Gentleman has not read the White Paper. If there is to be this cross-examination, I am entitled to ask that Members should read the White Paper. The ex-Chancellor of the Exchequer knew perfectly well what is meant, and said so. Of course it contains a form of subsidy. It says that. Let us be under no delusion about it. If you want speeding up, what is the difference between this and the very schemes that you yourselves put forward? The answer is quite clear. There seems to be cross-examination without understanding the situation. If a company comes along and says, "Here is a scheme that in the ordinary way we would not undertake for a period of five years," what is the difference between helping them to speed up and do it now, and asking a local authority to speed up and subsidising them in the same way? There is no difference whatever.

Mr. LLOYD GEORGE

That is the answer given by the right hon. Gentleman. Now I come to the question which I want to put to him. Are these schemes to be sanctioned in advance of a Parliamentary grant?

Mr. THOMAS

Yes.

Mr. LLOYD GEORGE

That is not the White Paper. The right hon. Gentleman has complained that I have not read the White Paper, but I am proceeding on the White Paper. I am not going to be so discourteous to him as to say that he obviously has not read it, but I will just read to him the very last sentence: In any ease no limit is proposed on the expenditure to be incurred under paragraphs 2 and 3 of the Resolution. The data on which any Estimate could be formed are not available, but in any case full Parliamentary control will be secured by the necessity for a Parliamentary Vote of the grants to be made. If that means anything, it means that before you sanction a particular grant — [Interruption.] If it does not mean that, I do not know what the White Paper means, and that is exactly why I pressed the first point. If it was to be a gift, then the House of Commons ought to know the amount of the expenditure. The Government are going to commit themselves to this gift. Are we to find that by November the Government have committed themselves to gifts of public money to an unlimited extent— because no limit is proposed on the expenditure to be incurred? The House is warned in advance that there is no limit to the expenditure which is to be incurred, but the White Paper indicates the safeguard by saying that first of all you must have a Parliamentary Vote of the grants to be made. I can well understand the right hon. Gentleman saying that he does not propose that each particular grant should be submitted to the House of Commons in advance, but it does mean that an amount should be fixed by the House of Commons, that a limit should be fixed by the House of Commons. He has fixed his limit for the Colonies; he has fixed his limit for loans; but, when it comes to gifts of public money, there is no limit at all, and we are to give a free hand to the Treasury to spend as much as they like.

6.0 p.m.

That is contrary to every precedent of Parliamentary control, and that is why I am putting these questions. I have said that it is absolutely necessary that, before the House votes this, we should know exactly where we are, and I do not in the least apologise for having put these questions. It is very vital that we should know exactly where we are. We have never heard, and I should like to know. Take, for instance, the scheme which was adumbrated by the Chancellor of the Duchy, which ran up to £75,000,000 or £100,000,000. I understand, from the change which has been made in the OFFICIAL REPORT, that it is not confined to Liverpool Street, but is confined to schemes in and around it, schemes of a broader character; but there are schemes of £75,000,000 to £100,000,000. Are we really to be told that the Government are to sanction these schemes and that, if we pass this Resolution, the Government could commit the House of Commons to these particular schemes without voting in advance the amount to which they are entitled to do so? I think we ought to be told something about it. Never in the whole history of Parliament has anything of this kind ever been submitted to the House of Commons. In every case there has been a maximum limit imposed. [Interruption.] The right hon. Gentleman may sneer. I should like him to quote a single precedent where a Government has committed the House of Commons to an expenditure with no limit proposed, because that is what it is.

Mr. CHURCHILL

I notice that the only representative of the Treasury is now leaving the Committee.

Mr. LLOYD GEORGE

This is very extraordinary, I must say, and very disrespectful to the House of Commons. I see the bon. Gentleman is taking counsel. I withdraw any imputation, but I think we ought to get an answer either from the right hon. Gentleman or from the representatives of the Treasury as to when we are going to have this Vote. Are we going to have it, with the amount, before the House separates? If the right hon. Gentleman says he will not sanction any grant until there is a Vote, then unless he has. the Vote before next Friday week he can sanction no scheme until November, and the winter is upon him, and that was the paramount consideration in his mind, that you must have schemes for the coming winter. I should like to have a direct answer to that question.

Mr. THOMAS

I will give the answer. This is not a question of merely consulting the Treasury. The Treasury know nothing about it. Let the Committee observe the question, and the way it is put. The Committee, said the right hon. Gentleman, is asked to sanction something unprecedented and with no limit. He knows the Committee is asked to sanction something of which he claimed a few minutes ago that he was the father.

Mr. LLOYD GEORGE

No.

Mr. THOMAS

The right hon. Gentleman knows perfectly well that the procedure I am asking for in this Resolution is precisely what they have been doing in Lord St. Davids Committee all through, and asking the House afterwards to sanction it. The only difference is that I am including railway companies now, because other private profit making concerns were included before. The only other difference is that I am not leaving it exclusively to Lord St. Davids Committee but am setting up a special Committee. That is the answer to the right hon. Gentleman. The precedent is his precedent for the Lord St. Davids Committee, and Parliament afterwards gave the authority.

Mr. LLOYD GEORGE

Then what I understand is this. The right hon. Gentleman says Lord St. Davids Committee can make advances to local authorities for public purposes. He proposes to do so without having any previous sanction from Parliament. I have no time to examine that. I accept it from him for the moment. Therefore, he proposes to extend to public companies, like railway companies, the same system of grants by the committee that he sets up without any limit upon the amount being imposed by Parliament at all. If that be the proposition I shall certainly, when the time comes, oppose it if it means that the House of Commons does not know exactly the limit to which it is committing itself.

Mr. THOMAS

You yourself called it a modest scheme.

Mr. LLOYD GEORGE

I do not know that I ever attributed modesty to the right hon. Gentleman. It must have been someone else, I think, who made that error. Therefore, we know exactly what the right hon. Gentleman's proposition is, and when this is embodied in a Bill, the House of Commons will have to deal very sternly with it. We really ought to know. The right hon. Gentleman has fixed a limit of £25,000,000 for borrowing under Trade Facilities. He proposes that there shall be no limit of expenditure when you come to grants of money to public companies. That is contrary to all precedent, and I cannot see the House of Commons sanctioning it. The third point I want to put is this. The right hon. Gentleman has not said anything on the question of grants for the setting up of private enterprises. I do not know whether he is in a position to make a further statement.

Mr. THOMAS

It is not in the Resolution, and that is why I cannot say anything about it.

Mr. LLOYD GEORGE

Although roads are not in the Resolution, the right hon. Gentleman was good enough to enlighten the Committee, but he is not prepared to enlighten the Committee upon this matter. I hope there will be an opportunity before we separate to get further elucidation upon the schemes of the right hon. Gentleman with regard to the subsidising of private enterprise. Those are the two or three questions I wanted to put in order to elucidate the position and to see exactly where we are. I should also like to ask whether the Resolutions will be embodied in an Act of Parliament. I assume that to be the ease, and that the Trades Facilities Act will be re-enacted and paragraph 2 put into some sort of statutory form.

Mr. THOMAS

I will answer that question right away. This is a financial Resolution which is to be followed by a Bill, and there will be a Second Reading, Committee, and Report stages.

Mr. LLOYD GEORGE

Therefore, there will be a fuller opportunity then. This being the first opportunity we have had of examining these propositions, it is well that the House of Commons and the country should know exactly what they are, because I can assure the right hon. Gentleman that I am not alone in having some doubt with regard to the extent and the character of the propositions to which he is commiting us. On the face of it, they appear to be quite inadequate. As he says, when you come to paragraph 2 they are absolutely unlimited. They may be of a character so gigantic that it might even stagger the House of Commons. I hope the time may come when this secret which is locked in the right hon. Gentleman's bosom will be divulged to the majority of Members of the House of Commons.

Mr. SMITHERS

The White Paper says the purpose of the Resolution is to authorise the Treasury to raise money for the reduction of unemployment. I want to ask whether the mere raising of money will reduce unemployment. Since the Lord Privy Seal opened the Debate, we have had a good deal of light thrown upon the scheme, and we now see further light. I asked a question a day or two ago as to two methods of raising money, one by guarantee, and one by the raising of new capital. The Chancellor of the Exchequer answered that the amount proposed to be raised by way of guarantee was £25,000,000, as we have heard today, and as contained in No. I of the Financial Resolutions. But the right hon. Gentleman went on to say he could not give any useful estimate as to the amount of new capital that would be required. To-day we have heard, as far as I can gather, that the amount required may be unlimited. The point I want very much to draw attention to is this. Will the mere raising of money on Government guarantee help the unemployed problem? You may raise money on Government guarantee, and create such a situation that the mere raising of the money will do so much harm that it will create more unemployment than the actual money raised would have cured.

May I say something about the importance of credit to the country, because it is vitally mixed up with this question of raising "large sums of new capital. We are different from every other country in the world, and we are more dependent upon credit than any other country in the world. Last year there came to this country an income of £510,000,000 entirely received from our credit services—our income from overseas loans, and our shipping services. That is the way we make up for excess of imports over exports. If anything is done, by borrowing beyond the saturation point of the money market, to harm the credit of the country, we then come to a position where the foreign credit of the country is affected, and because we are so dependent upon our foreign exchanges that if they depreciate, especially as regards the pound sterling and the dollar, if, for example, the pound sterling depreciates 6 percent, in terms of dollars, automatically the cost of living must go up by about an equal amount.

May I put it in this way, that if you built a wall round France, practically a self-supporting country, and nothing came in or went out, the French people would live fairly well. They might have to go without their coffee and one or two things they import, but there would be plenty to eat and drink and to carry on. If you built a wall round England, and nothing came in or went out, we should starve in a comparatively short space of time. Therefore, it is of the utmost importance that our national credit should be maintained. If proposals are made on a large scale for the raising of large capital sums, we will suppose for the moment £25,000,000, £50,000,000, or £100,000,000— we do not know yet how much will be required— it will, for the sake of raising that amount, depress the interest rate of the whole of our £7,000,000,000 of debt, and it will cost the taxpayer more to carry that debt. To carry the thing ad absurdum, you could cure unemployment by declaring war on a first-class Power, conscripting the whole community, and giving them employment in the war. To raise large sums of money without considering how it affects the credit of the country may have a somewhat similar effect.

A very curious position has arisen in the world to-day. Hitherto the great creditor countries have been lenders for the development of the rest of she world, France and Holland to a smaller degree and Great Britain to a larger degree. But to-day we have the curious position of the great creditor nation, the United States of America, not lending to the rest of the world but actually taking money into America. The whole of Europe owes money to America for the War debt. Here we have a position where the United States is taking money from Europe and setting up a great tariff wall to make it more difficult for us to pay. The mere raising of large capital sums for unemployment may defeat its own object, and by depressing the credit of this country may create such a state of affairs in regard to our credit with other countries that international chaos may result. By depressing our credit it would create a situation with which neither this Government nor any other Government would he able to cope.

I am not saying this in any antagonistic spirit, but really and truly because I want to point out the difficulties, and, as far as possible, help in this great unemployment problem. I beg of the Lord Privy Seal, or of the Chancellor of the Duchy who is assisting him in this matter, as soon as possible, to get some Treasury Minute as to- the amount of new capital that will be required to carry out these schemes. There is no doubt that at the present moment there is a strong tendency for money to go to America. I do not want to press the point too hard, but I am personally convinced that the trend of money to America is accentuated because there is a Socialist Government in power in this country. If we could know as soon as possible to what extent new capital would be required, we should be able to allay the fears of the people who are sending capital out of this country. They would at least know to what extent the credit of this country is going to be mortgaged in the future. I repeat and emphasise that for the stability of the business community as a whole it is of the utmost importance to the country, and to the unemployed themselves, that we should know as soon as possible the extent of the financial commitments to which the Government are involved.

Major NATHAN

In the first place I crave the indulgence that this House always accords to a new Member speaking for the first time. We are asked to-day to sign, in effect, a cheque for £25,000,000 in favour of the Lord Privy Seal, and we have learned during the last few minutes, to the surprise, I imagine, of most members of this Committee, that we are also being asked to give leave and licence to the Government to put their hand into the public pocket to an extent quite unnamed and unlimited. What is the money for? We are entitled to know a little more than is disclosed in the White Paper, and a little more than the Lord Privy Seal disclosed this afternoon. There were vague references to schemes for transport, for gas, for electricity, for water, for power and all the rest of it, but there was nothing to indicate the sort of picture, or even the outlines of the picture, that the Lord Privy Seal has in his mind as the result of these various schemes when brought into operation. However well vague generalisations— they are, perhaps, inevitable and natural— may do on the public platform, we are, on the Floor of this House, entitled to a rather more exact exposition. Surely, we are entitled to ask how sums for which the Government ask are to be applied. We might expect to be told what are the Lord Privy Seal's calculations as to the number of unemployed for whom employment will be found as a result of the Trade Facility Loans and the other grants referred to in the White Paper. There has been a complete absence of information as to what the Government expect to be the effect of their schemes in terms of employment.

I should like to ask the Chancellor of the Duchy on what basis the employment found by means of these funds will be distributed throughout the country? I should welcome— I think the Committee would welcome— from the Lord Privy Seal or the Chancellor of the Duchy some assurance that where a development operation is initiated in a locality the first preference as to employment within that locality will be given to the available unemployed there. Let me jive an actual example of what I hope may be the procedure. I hope, for instance, that in connection with the Liverpool Street electrification scheme, if it be undertaken, the unemployed of East London will be first absorbed before occupation is found for those outside East London. I feel that the Committee will— I know that the unemployed will— attach importance to the answer which the right hon. Gentleman feels himself able to give upon that point. It is so easy to solve the unemployment problem in one locality just by increasing it in another locality. We have the experience of the comparative failure of the Industrial Transference Board which demonstrated the difficulties and dangers which are inherent in any scheme of migration on a relatively large scale.

I suggest that before giving what is tantamount to a power of attorney to the Lord Privy Seal we are entitled to ask in what direction it would be exercised and by whom it would be exercised? First, as to by whom it would be exercised, I must confess to having read with some concern and to having heard with some concern that there are to be created these committees which are to be under the authority of a Government Department. As I understand the scheme indicated my the White Paper, it involves the abandonment by the Government of central initiative and central control. I believe that their retention, in a very large degree, of central initiative and central control is essential to the solution of this problem. In the ultimate analysis, the solution of the unemployment problem is a one man job. The solution really depends upon the driving force which the man at the top is able to bring to bear at the point of executive decision and executive action, and I am very much afraid that the interposition of these committees may weaken the dynamic energy which is necessary to get these schemes started, and, what is equally difficult, to keep them going when they have been started.

I should have hoped that within so short a time prior to the Recess and within a very few weeks of the autumn and the winter, we might have had laid before us rather more precise plans by the Government. Day after day the right hon. Gentlemen and hon. Gentlemen on the benches opposite tell us that they are thinking about this problem and thinking about that problem. Let me remind the Committee that we on these benches did our thinking years ago, and that the result of our deliberations as to be found in the now famous pamphlet which defined the issue of the General Election and set the task to this Parliament on which it is now engaged. We claim no copyright in the suggestions which we have formulated, but there is one idea, the central idea, in those proposals to which I would most earnestly direct the attention of the Lord Privy Seal and the Chancellor of the Duchy, and that is the idea of speed. Speed is the essential factor of the whole scheme we formulated, and speed is the essential factor now if the Government are not to be shipwrecked. We did not merely sketch a programme of national development; we insisted that it must fee capable of immediate application. We were so certain that it could be speedily carried out that my right hon. Friend the Member for Carnarvon Boroughs (Mr. Lloyd George) gave (his (historic pledge to reduce unemployment to the normal within 12 months.

The Tight hon. Gentleman the Lord Privy Seal made an appeal to the Committee this afternoon. He asked us, in view of his difficulties, to be patient and to give him time. This is not the moment for patience; it is not the moment for temporising. With regard to all the schemes which are outlined, however vaguely, in the White Paper, there is one supreme danger, and that is that the fatal words "Too late!" may be written over every one of them. The Government must find the recent unemployment figures disquieting. They cannot expect any further seasonal decreases. The figures are already slightly rising, and it is essential that they should be stayed now, because it looks rather as if we were at the end of the period of industrial peace that was dictated by exhaustion. Trouble is threatened in half a dozen industries. The news from the cotton industry is very grave. Let there be a sudden cessation of work in a basic industry, and up the figures will leap. The Government must stem there now, before they escape from their control. Any delay now in the conquest of unemployment will make the task infinitely more difficult in six months' time. Unless the plans are ready within the next few weeks it will be impossible to mitigate the hardship of yet another winter of acute industrial distress. It will be the tenth winter of excessive unemployment, and it will be the worst winter of all. It will be the worst winter, because this Government will then be dealing, not like the last Government, with a million men, and more, dulled into insensibility by despair, but with men awakened and stimulated by hope. It will be a serious and even a dangerous situation if those hopes are to be disappointed.

Can the Lord Privy Seal or the Chancellor of the Duchy give us any indication whether the plans of the Government have yet sufficiently matured to make any appreciable impression upon those who will be shivering outside the Employment Exchanges in a very few months? I know that there are difficulties and dangers to be dealt with. I know that there are interests to be conciliated, that there are landlords to be bought out, that there are ancient and half-forgotten Statutes to be repealed or amended, but those are difficulties which, in their general character and quality, are inseparable from any great undertaking. The anxieties of the situation show the urgency of the position. It is really an emergency situation with which we are faced, but the Government have failed to ask for emergency powers to deal with it.

On the declaration of War this House in one hour voted more money for the purposes of war than it had voted in weeks and weeks of Budget Debate which had preceded it. Where it was a question of shells my right hon. Friend the Member for Carnarvon Boroughs saw to it that he obtained powers to enable him to cut a road direct from the shell factories to the guns. I am sure that the House would give the Government similar powers if they showed appreciation of the urgent and compelling circumstances of the situation. More than 1,000,000 men are cut off from the pride and joy of productive employment; they are having to endure every circumstance of humiliation and privation. Let the Lord Privy Seal ask for the fullest powers to organise an immediate rescue party. The right hon. Gentleman spoke to-day of his difficulties and the delays that were inevitable. When a man is drowning, you cannot enter into elaborate contracts for the provision of a suitable rope for rescuing him; you have to take the first thing that comes to your hand. More than 1,000,000 men are drowning, and they look to this House to throw them a lifeline, and to throw it immediately. There can be no doubt about the Liberal position in relation to this problem. We are with the Government in every well-devised attempt to grapple with this grim problem. All we ask is that they will tell us what they are going to do— at the present time we know nothing— that they will press it forward with vigour, determination, foresight and courage, and, above all, that they will do it quickly: If it were done, when 'tis done, then' twere well It were done quickly.

Mr. MARCUS

As a new Member, I do not hesitate to pay ungrudging tribute to the Lord Privy Seal for the remarkably strenuous efforts he is making to deal with the problem of unemployment. I do so, despite the fact that I represent an industrial constituency, the City of Dundee, where the people are exposed to the hardships of unemployment in very large numbers, and where, above all, they look to this Government for a rapid solution of the problem. I am not unmindful of the fact that the explanations made by the right. hon. Gentleman to-day are of a nature which cannot be overlooked by any intelligent person sitting in this House, or outside. This Government have a legacy bequeathed to them from past Conservative and Liberal Administrations, which is fenced around with what one might call a legal structure which serves to hinder every step in a progressive direction which we wish to take. I am, however, fully confident that the spirit which animates the right hon. Gentleman is one which will lead to a rapid improvement in the conditions prevailing so far as unemployment is concerned. I leave the issue of unemployment confidently in the hands of the Government Front Bench.

I am not surprised in the least at the attitude adopted by my right hon. Friend the Lord Privy Seal, but what has surprised me very profoundly in this House is the general attitude taken by hon. and right hon. Gentlemen opposite, who tell us that they are surprised at the slow pace which has been set by the present Government. The ex-Chancellor of the Exchequer told us this afternoon that he was very sorry for the Lord Privy Seal because of the gnawing worries that must beset him if he considers the statements that he has made in the past. The ex-Chancellor of the Exchequer used to represent the City of Dundee, and I recall a remarkable speech delivered by him which must be the origin of the gnawing worries to which he has made reference. Away back in 1908, he spoke of the Conservative party in very frank terms. At that time he was a Liberal and was free to say what he thought of Toryism and Conservatism. This is what he said; I have memorised it because I have used it often in my election campaign: What is Toryism? Toryism is sentiment by the bucketful, patriotism and Imperialism by the imperial pint, an open-hand at the Exchequer and an open door at the public house; aggression abroad and corruption at home to cover it up. or something to that effect. Only a few months ago, when the election campaign was at its height, the same right hon. Gentleman being then in the position of a Conservative and free to say what he thought of his Liberal friends characterised them as thimble riggers, cheap jacks and card sharpers. Now, the two parties opposite propose to solve the unemployment problem. All I can say, as a new Member, is that I am not to be deceived by efforts of that kind. If the former Chancellor of the Exchequer is so anxious, as he asks us to believe, to solve the unemployment problem, one would like to know why no substantial effort was made during the past 4½ years, when he had the power to carry out any schemes which he had in mind.

We are deeply conscious of the difficulties surrounding this problem. We know that the comparatively small sum mentioned in the Financial Resolution is only a beginning, that it is only the basis upon which the Lord Privy Seal proposes to build, and we know that he will continue to build so long as he has the support of progressive Members in this House. The hon. and gallant Member who has just spoken appealed for speed. He wants a speedy solution of the unemployment problem. I would remind him that his party have been in power for more years than I care to mention, and they failed to deal adequately with the great problem of unemployment. We on these benches look forward with confidence to the schemes of reconstruction which will be introduced in this House, despite the threats from the other side; schemes which will have the support of hon. Members sitting on this side.

I am delighted that the great task of solving the- unemployment problem has been placed in the hands of the Lord Privy Seal. We know his capacity, and I want to assure him that as new Members we are thoroughly behind him in every task he undertakes. On this side of the House we are going to show solidarity. Any expression on the part of a new Member suggesting criticism of the Government is offered in a very frendly spirit; it is offered only because new Members are deeply conscious of the hardships to which their constituents are exposed. We shall go on confidently, and we are satisfied that before very long, certainly before this Parliament has finished, a very substantial impression will have been made upon the great problem of unemployment; but it will only be made by the application of Socialist methods, in which we of this party believe, and which we believe form the basis of the ultimate solution of all economic and social problems.

Sir HILTON YOUNG

The Committee will, no doubt, desire that its congratulations should be conveyed to the deliverers of the two very distinguished contributions to our Debate which have just been made from the Liberal and Labour Benches. The speech which was made by the hon. Member for Dundee (Mr. Marcus) must have been particularly grateful to the right hon. Member the Lord Privy Seal, unused as he has been of late to hearing accents of such sweetness proceeding from below the Gangway on his side of -the House. Let me dwell very briefly upon one or two of the most vital issues of the financial procedure which have already arisen in this Debate. It is essential that the information which the Committee desires to be conveyed to it before this Debate terminates, should be clearly defined. There is, first of all, the question of the anticipation of the revenues of the Road Fund. The right hon. Gentleman has told us this afternoon that it is his intention to anticipate those revenues, if it is necessary for him to do so in order to cope with his work. Is it or is it not the contention of the Government that such an anticipation is covered by any phraseology of this Resolution? To the plain man it would seem that it is not, and that it would be a most improper extension of the phraseology of this Resolution to derive from it any authority to deal in such a way with the finances of the Road Fund.

Mr. THOMAS

I said that. I made it perfectly clear that it could not have any bearing, and was never intended so. I said so.

Sir H. YOUNG

It is gratifying to know that this is agreed beyond the possibility of controversy. If that is so I imagine it will follow that an express Resolution will have to be introduced and passed before the rising of the House in order to authorise such proceedings as those to which the right hon. Gentleman refers. No doubt some time will be required in order to answer that question. Secondly, as to the even wider issue of the financial procedure under Part II of the Resolution itself— that which authorises the grant of public money to private undertakings— it appears to me, if I may express a personal opinon, that what is required in order to regularise matters and relieve those apprehensions so legitimately expressed by the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) is this. First of all, that a definite limitation upon the sums which the Government shall be authorised to expend shall be inserted in the Bill when it comes to be drafted. It is impossible to say without a prolonged investigation that it is without precedent that the Government should be given a free hand in the disbursement of public money to private concerns, but if there be any precedent for it I should say that it is a very bad precedent and ought not to be observed, and that under any such circumstances there should be a limitation. The question, an answer to which would relieve anxiety and clear the situation, is this. As I understand it, before any more is expended for this purpose it will have to be voted by Parliament. The unemployment grants for Lord St. Davids Committee are voted by Parliament under Class 5 of the Civil Estimates for health, labour and insurance.

Mr. THOMAS

After they are spent.

Sir H. YOUNG

Is the right hon. Gentleman laying it down as a general principle that the Government claims authority to spend public money in advance of its being voted by Parliament I It is certainly a principle which we should resist on these benches and I hope it is a proposition which hon. Members opposite will resist. I hope it is not a principle which will be laid down by any responsible Government. The task of the Government is to obtain the authority of Parliament for its expenditure before it is undertaken, and when it fails to do so it is guilty of a dereliction of its strict duty. We are entitled to ask the right hon. Gentleman for an assurance that there will be no general expenditure of this sort without obtaining the proper authority, if necessary by a Supplementary Estimate. These surely are the requirements of financial regularity.

Let me proceed to the general principle of the legislation which is before us this afternoon. I suggest that the Government to-day is not playing so distinguished a part as it did a few days ago when it came to obtain the authority of Parliament for expenditure on Colonial development. It then appeared in the new clothes of the late Conservative administration and it looked better than it does to-day in these cast off garments. The trade facilities scheme has been abandoned. Quasi, I have a parental affection for that proposal, and I confess that it was not without a natural tear that I saw it die in the last Parliament. At the time I thought it was a natural death, and I have some doubts as to whether its resuscitation is not somewhat unnatural. If I may outline a point of view about the matter it is this. On the whole it may be just worth while to resuscitate trade facilities in the manner proposed by the Government as long as its work is very carefully watched indeed, but I have a doubt and a fear that even with the most careful watching it might not turn out to waste more time and money than it does good. For these reasons; The scheme hat, been revived now with one fresh limitation and one fresh extension. The limitation is this. When trade facilities was first introduced a guarantee could be given to any undertaking as long as it was calculated to promote employment. In its revived form it is subject to the limitation that the undertaking must be one with statutory powers. I can readily understand why that limitation is introduced, and I do not think it is unfair to say that it is to give the scheme a colour which will be more acceptable to the supporters of the right hon. Gentleman. I sympathise and understand the right hon. Gentleman's desire to paint it in a manner which will make it more acceptable to them, but from the point of view of the practical utility of the scheme it is bad. As a matter of fact, it will be found that amongst the schemes which were formerly advanced and promoted under trade facilities, those which were the most characteristically beneficial in the way of providing employment were purely private undertakings and would not home under the classification of statutory companies at all. I regret the necessity that a party attitude has compelled the right hon. Gentleman to impose the restriction.

Mr. THOMAS

There was no such consultation or any such the thought. It was deliberately done after consultation with a number of representative business men who said that to throw open trade facilities to-day and encourage private industries which ought to rationalise themselves would be madness. I took their advice.

Sir H. YOUNG

I accept the right hon. Gentleman's explanation of his motives and reasons. Let me now refer to the extension of the scheme. It is an enormous extension. It is the grant of public money free of interest to private concerns at home. For reasons which I will give later, it appears to me that this extension is far too wide and must at home lead to a waste of funds. It certainly requires most careful Justification, and I doubt whether that justification can be given. I can best point out the cause' of any hesitation as to whether the scheme is going to do much good by indicating the principal differences between conditions now and conditions when trade facilities was first introduced. When the trade facilities scheme was first introduced it was forged as a weapon and placed in the hands of the Government for a single specific purpose, to deal with a single difficulty. It was that in the period of troubled minds and disturbed business after the War there was a general lack of confidence in the country, and here and there, and everywhere, perfectly good undertakings, which might at once be rendered profitable and of economic advantage to the country, were not undertaken just for lack of confidence. The idea was that the Government by coming in and giving a final blessing as it were of a Government guarantee for the capital of the undertaking could cure that lack of confidence and get the work going. Useful and good work was done by the trade facility in those circumstances. But time has gone on and the country has settled down. There is no longer lack of confidence; there is ample confidence at home for the commencement of fresh undertakings. I am not going to score the debating point and say that there has been a temporary lack of confidence owing to political changes; I will not do that, but I hope nothing will be done by the present Government to continue any little disturbances there may be at the present time. There is ample confidence; and so this remedy for lack of confidence does not appear to be so immediately necessary.

7.0 p.m.

When we were discussing the Colonial scheme, I think we carried the right hon. Gentleman with us in some measure in this little modern analysis of the situation. We said that what we want is not to promote works that are perfectly good and can be made to pay on a commercial basis because they will keep going by their own management. What we want is not to promote works which can never be put on an economic basis at all, because that would be a waste of money. What we want to-day is to advance businesses which will be on an economic basis some day but which are not quite ready yet. The region of doubt as to this scheme is whether there is a large number of undertakings at home of this last class, those which will undoubtedly be a good economic proposition some day but which are not ready or right at the moment and which can be advanced by a Government guarantee. It is difficult to see what they are. As a matter of fact, enterprise, initiative, foresight and constant striving after the betterment of the country on the one hand, and the constant search for that great incentive to enterprise, profit, has the advantage of bringing every undertaking in this country into being as soon as it is ready. If that is so what is good for economics is not good for the country; and for a very obvious reason. In economics there is that class of undertaking awaiting rightness which, as a general rule, only the Government can promote and bring into being. Only the Government have the knowledge and the necessary assets on the spot, for historical reasons, and only the Government has the necessary credit. It may turn out that there is this difference between the Colonial Empire and the economic situation at home, which whilst fulfilling the hopes of the right hon. Gentleman in the Colonial Empire will disappoint them at home. We ought to remind ourselves that it is not simply a question of the disappointment of hopes, but that without the most careful watching a large sum of money might be wasted over this scheme. If there is the least tendency or desire to get money spent without regard to the essential principles of trade facilities, you may pour out money into every channel and it will run away in expenditure which will do absolutely no good for employment or the development of the country. When we are erecting this scheme, we are setting our- selves a most responsible task of making sure that the public money, which we are put here to control, is not, owing to any slight shift in responsibility of administration, now to be devoted to any extent at all to public bodies, public utility companies, or any other source, which as a matter of fact could get the work done perfectly well without a public grant.

Mr. THOMAS

I agree with that entirely.

Sir H. YOUNG

With any public body even of the highest ideals, there is a temptation to get a grant which might result in money being spent under those wasteful conditions. That being so, owing to the difference between the conditions here and the conditions in the Colonies, I do not see how one can be more enthusiastic about the present proposal of the Government than to say that it may be useful to have the possibility there, and to examine any appropriate schemes that come along, remembering the risk there is of the money being wasted.

Lieut. - Commander KENWORTHY

Before I comment on the speech of the right hon. Gentleman who has just spoken, I would like to join in congratulating the hon. Member for Dundee (Mr. Marcus) on his maiden speech, and I hope that we shall have more contributions from him. His city has sent many splendid Members to this House, and I hope that he will be numbered among them. I would also like to pay a tribute to the speech made from the Liberal benches by one of the two Liberal Members for London. His great objection was that the Lord Privy Seal was not moving fast enough, that he was going through the ordinary processes of the law and the constitution, whereas the right hon. Gentleman who has just resumed his seat used his great ability to object to my right hon. friend doing anything at all. He was searching for petty criticisms and irritating little objections, unworthy of this House when the country is faced with a great crisis, and unworthy of the undoubted talents of the right hon. Gentleman. I only mention this to draw the attention of the Committee to his own lack of appreciation of the problem. He objected, because my right hon. Friend the Lord Privy Seal is wishful to confine this first, this preliminary, this stop-gap effort to the assistance of statutory undertakings. The right hon. Gentleman knows perfectly well that under the old Trade Facilities Scheme, which I heard debated for years in this House, the stern economists, among whom he, like the right hon. Member for St. Ives (Mr. Runciman) sometimes numbers himself, objected to private enterprise being helped, because, they said, it was unfair to assist one shipbuilding company to provide ships seeing that it entered into competition with another company, or that it was unfair to assist some private electricity company because it competed with another. That was the objection of the stern economists when private enterprise was to be helped and, now that statutory undertakings are to be assisted by my right hon. Friend, along comes this master of obstruction and petty criticism and pin pricks and annoys my right hon. Friend. Hon. Members on this side of the House who have come recently to this House will realise from the speech we have just heard the difficulties, the annoyances, and the irritations which my Tight hon. Friend has to receive in this House and still more so from the very provocative, mischievous, amusing but unhelpful speech of the right hon. Member for Epping (Mr. Churchill).

I want to put one or two requests to the Lord Privy Seal. He spoke of the members of these committees, and I am sure he did not mean to confine them only to what are known generally as business men. These committees have a very important function to carry out, and I presume he will endeavour to enlist the assistance, for example, of some of the heads of the great co-operative movement, and of some experienced trade union leaders. The time has passed when we must look only to one strata of society for the manning of these committees. The other question I would like to ask him is this: What call will he have upon these committees? I have had some little experience of committees of this kind, composed of volunteers, of great magnates in the city. The come as they like, and they go as they like. They are not paid, though sometimes they draw expenses. They are often very big guns in their own lines of business, a id you have to suit their convenience. Committees of this kind are often not good working committees. Is it understood that these committees will face and tackle these problems in the same spirit as did some of the committees during the War I am thinking, for example, of the Explosives Committee of which I saw something during the War. They worked wonderfully well, and without any thought of their own time and interest. If we can recapture that spirit in these gentlemen who are to help with this problem, possibly great results will follow. Is my right hon. Friend going to be provided eventually with an adequate staff?

I do not mean a staff in the Whitehall sense of the word, but more in the naval and military rendering of the word. I do not mean messengers and typists and telephonists. Will he have people who will take some of this terrific burden off his shoulders. Will he have that machinery? I would like a great organisation like that which was built during the War for the manufacture and supply of munitions to be set up now for the curing of unemployment. I believe that a separate staff in the sense -which I have described will soon be required by my right hon. Friend, and I am sure this House will not allow party feeling to obstruct anything he needs for solving this great problem which he has undertaken, and in which I am sure anyone with the well-being of his country at heart will wish him well.

Sir HUGH O'NEILL

The hon. and gallant Gentleman who has just sat down began his speech in a rather bellicose spirit. If there is any truth in the rumours which we see to the effect that before long he may be called upon to occupy a position of some responsibility in the foreign councils of the nation, I hope that his well-known pugilistic attainments will in that sphere be mitigated and curbed.

Lieut. - Commander KENWORTHY

Does that mean that I am invited to be Governor-General of Northern Ireland?

Sir H. O'NEILL

The two principal speeches which were made upon this particular Resolution from the two front Benches of the Opposition were couched in rather different spirit and terms. The late Chancellor of the Exchequer took the view that the proposals were so mild and moderate and so much in line with the policy of the last Government that he rather assumed that they could do no harm even if they could not do very much good. On the other hand, the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) pointed out the fact, which has been subsequently touched upon, that in one respect these proposals do contain apparently a very great departure from former financial precedents, and I should like to refer for a few moments to that aspect of the question. It comes under the proposal to give grants in lieu of interest to public utility concerns who desire to undertake new measures which may possibly aid unemployment. The right hon. Gentleman asked about the financial control of this House over that expenditure. I would like to ask a further question of the Treasury, if they were here.

Lieut.-Colonel Sir LAMBERT WARD

On a point of Order. The hon. Member is raising a point of the most vital financial interest. Are we not entitled to have a responsible Minister present?

Mr. CHURCHILL

Further to that point of Order. It might avoid trouble if you would give a Ruling in the matter, because we ought to have a representative of the Treasury present, and we do not want to have to move to report Progress and to ask leave to sit again.

Mr. J. JONES

I would like to ask you to remember that very often in the last Parliament important financial matters were under discussion and the Front Bench was entirely empty.

HON. MEMBERS

Never!

The DEPUTY - CHAIRMAN (Mr. Dunnico)

It is not my function to dictate to the Government who shall, or who shall not, sit upon the Treasury Bench, but I think it might be convenient to the Committee if the Department were represented.

Mr. CHURCHILL

May we ask if the representative of the Government— I am not quite certain at the moment what his new office is— would take steps to acquaint the officers of the Treasury that the Debate has taken a financial turn, and that their presence is needed to assist the Committee in this financial discussion.

Mr. WILLIAM WHITELEY (Lord of the Treasury)

The Committee may rest assured that a message has gone and that the representative of the Treasury will be summoned.

Lieut.-Commander KENWORTHY

The hon. Member who is on the Front Bench, is duly a Lord of the Treasury and does represent the Treasury.

Sir H. O'NEILL

I would, in the absence of a representative of the Treasury, like to deal with this point. The White Paper says: It will be observed from paragraphs (1) and (2) of the Financial Resolution that assistance in the latter class of cases may be afforded in either of two ways:

1. (a) by a guarantee of the interest or principal, or both, of any loan raised for the purposes of the scheme; and
2. (b) by means of grants, over a term not exceeding 15 years, of the whole or part of the interest on any loan actually raised for the purposes of the scheme "—

I would like to direct attention to this particular point: or, where the expenditure is met out of revenue or accumulated funds, of the assumed interest on the loan that would otherwise have been necessary, calculated at a rate approved by the Treasury. So that not only are they asking to take powers to give grants, subsidies, of interest on loans which may be raised, but the Government are asking for powers to pay subsidies of the assumed interest on a loan that would have to be raised if the particular concern had not got the money. But it has got the money, because it is only to apply to the large undertakings which have got accumulated reserves. Let me give a practical example of what would happen under this very wide condition. Suppose that you have a railway company which has large accumulated reserves invested outside the business. It has the liquid capital and it does not require to raise any loan to carry out its schemes. Under this Resolution the Government can give that railway company sums of money representing the interest that it would have had to pay if it had been necessary for the company to raise a loan. That, in addition generally to the policy of granting definite payments to enable those concerns to pay interest on loans, is going a very long way towards a definite subsidy. In fact I do not see that it is anything but a subsidy. Indeed the right hon. Gentleman—

The CHANCELLOR of the DUCHY of LANCASTER (Sir Oswald Mosley)

I am very sorry and I apologise to the Committee for my right hon. Friend and myself. He was called into a conference just after I had left for another conference, and we understood that the Minister was on the Treasury Bench.

Mr. CHURCHILL

I beg to move, "That the Chairman do report Progress and ask leave to sit again."

The hon. Baronet entirely misunderstands the position which has developed in the Committee. We are not complaining of the absence of the Minister. We had present a very admirable and engaging representative of His Majesty's Government. We were complaining of the absence of an authoritative exponent of the Treasury. There is not even present the Financial Secretary to the Treasury, although it is his name that is attached to this Resolution. Very grave issues have been raised by the Liberal party on this question of the unlimited powers under paragraph (2), and the inability of the Government to assign any definite figure. We must have an authoritative expression from representatives of the Treasury who have the care of our national finances. There is a general feeling in the Committee that that should be so. In order to express that general feeling I move the Motion. I do so also for the purpose of securing adequate financial advice to the Committee when very large issues relating to public funds are being decided.

It is quite impossible for us to neglect these matters. We are perfectly ready to give the Government the moneys that they require, for any reasonable scheme that will assist in improving employment in the country, but we are not going to provide them with blank cheques. We are not going to allow them, because they are afraid to state the true figures that they have in mind, for fear that they would cause alarm in the City or disgust below the gangway, to remain in a position of vague and convenient nebulosity. WE have a right to the presence of the responsible financial advisers of the Government. It is no good the hon. Baronet coming forward. He knows nothing about the Treasury. He is only a sort of ginger assistant to the Lord Privy Seal, and more ginger than assistant, I have no doubt. In order that the Committee might receive proper assistance from the responsible officers charged with the duties of defending the public finances, I move the Motion.

Sir O. MOSLEY

I really do not apprehend the trouble with which the right hon. Gentleman concerns himself. The representative of the Treasury was present and heard the point that was put by the right bon. Member the Leader of the Liberal party. The reply of the Treasury representative will certainly be made during the course of the Debate if the right hon. Gentleman desires it and if he considers that the few observations that I address to the Committee on the subject altogether inadequate. In that event a representative of the Treasury will foe most happy to reply from the Treasury point of view. He was present throughout. He was present during most of the speech of the Leader of the Liberal party.

Mr. E. BROWN

No.

Sir O. MOSLEY

If he was not present during the whole of the speech, then the points which the right hon. Gentleman made will most certainly be conveyed to him.

Mr. CHURCHILL

May we not have the right of direct access to a Member?

Sir O. MOSLEY

To what, then, is the complaint of the right hon. Gentleman directed? Is he complaining that a representative of the Treasury was not present during the speech of the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George)?

Mr. CHURCHILL

What I am complaining of is that for the last two hours very serious financial issues have been raised, and we have asked that a representative of the Treasury should be present. Even the secondary representative who was previously present has now withdrawn himself.

Mr. THOMAS

first let me say that the right hon. Gentleman himself only arrived the moment I left the House. I know him sufficiently well to assume that he would not be so unfair as not to realise that he himself was not present. I was here and heard all the speeches and replied to his right hon. colleague on many questions.

Sir H. YOUNG

A very remarkable reply.

Mr. THOMAS

I am not dealing with the merits of my reply. I am merely indicating that I was present and replied. The right hon. Gentleman was not present. I left for a conference on another matter. I was suddenly told that Progress was to be reported— I will deal with that right away— on the ground that a representative of the Treasury was not present to answer these financial questions raised by the Leader of the Liberal party and others. My right hon. Friend the Chancellor of the Exchequer was present during the whole of my speech. He heard the extent to which I committed the Treasury. Not only did he agree, but he had agreed before I made my speech, for he knew what our policy was. In answer to the right hon. Member for Carnarvon Boroughs I made a statement that all this talk about unprecedented action that was unknown in Parliamentary history was beside the mark. I gave him the answer which I now repeat. It is alleged—

Sir H. O'NEILL

On a point of Order. I was in possession of the Committee when this Motion was moved. I wish to ask whether the right hon. Gentleman is in order in going into the merits of this question? Should he not confine himself merely to saying why Treasury representatives are not here?

The DEPUTY-CHAIRMAN

The Lord Privy Seal is quite in order.

Mr. THOMAS

Surely, I am in order in giving reasons why the Motion should not be accepted. The basis of the Motion is that there is some confusion or difficulty or unwillingness on the part of the Treasury to deal with certain financial questions that have been raised. I am meeting it by answering authoritatively for the Treasury, and making it perfectly clear that I am answering for the Government when I say further, in answer to the leader of the Liberal party— who has now discovered what un-limited powers are embraced in this scheme— that the precedent is precisely the same as that which he introduced, which has never been varied and is in operation to-day. His colleague behind him, the hon. Member for Harwich (Mr. Pybus) knows that for 3i years he has been sitting on a committee sanctioning money on precisely the same basis, and that I am now merely extending it. The right hon. Gentleman may shake his head, but his colleague does not. The only difference in the procedure is that, when the Bill is introduced, if the House wants to put in an Amendment of any amount, I shall measure the interest in the unemployment problem, of those who put it down, by the amount that they include in the Bill. I have not included any amount because I cannot possibly say what the amount is; I cannot say until I see the scheme. But when the House meets in November, every week a question will be asked as to what is the amount sanctioned, and every week both Oppositions, who pride themselves on having us in the palm of their hands, can do what they like when they have heard the answer.

That, I submit, is a reason why we should not accept this Motion. The Chancellor of the Exchequer is engaged; the Prime Minister is engaged on another important matter. I myself left the Chamber for a few minutes only to have a consultation, also on the unemployment problem. I regret having left the Committee for a few moments. I apologise for having done so, but I hope we are not merely going to take advantage of the position which I have endeavoured to make clear.

Sip LAMING WORTHINGTON-EVANS

The right hon. Gentleman, it seems to me, has given a very good reason why the Committee should report Progress, because we cannot proceed with this matter in the absence of the Chancellor of the Exchequer. I am very sorry that the Chancellor of the Exchequer should be elsewhere when his presence is required here, but the House of Commons has some rights in this matter. I do not want to go into the merits of the argument of the right hon. Gentleman as to whether this is a new departure or not. I propose to deal later in the evening with that matter. I hold in my hand the conditions on which previous advances somewhat similar to these were made. Those in-eluded a large number of limitations, and the House of Commons knew of the limitations which were made. To-day we do not know what those limitations are and, if the Chancellor of the Exchequer were here, I should ask him in the course of the Debate whether he will or will not follow the limitations which were previously imposed upon the Treasury in sanctioning these loans. It is because he is not here that I support the Motion.

Mr. THOMAS

May I ask that the Committee shall not be misled into mere Parliamentary tactics. Will the right hon. Gentleman not admit that the point which he now raises as to limitations is a legitimate matter for the Second Reading of the Bill This is only the Financial Resolution, and these questions can be not only answered, but can be dealt with on Report and on the Second Reading.

Sir L. WORTHINGTON-EVANS

The House of Commons is entitled to two opportunities of discussing these grave matters. One of those is on the Financial Resolution, and if we chouse we can put limitations in the Financial Resolution preventing the Government of the day bringing in a Bill which is wider than the Financial Resolution, and no Government has the right to ask the House of Commons to waive on of its most precious privileges.

Mr. THOMAS

I hope the Committee will now observe what the right hon. Gentleman has said. He says the House of Commons has a right. He knows that that right is only exercised by a Motion. Where is that Motion? No Motion has been moved from the other side, and it is fairly obvious that hon. Members did not intend to do it and that this is a mere afterthought.

Mr. J. JONES

As cue who served four and a-half years' penal servitude under the late Government it comes like a breath of fresh air from the briny to hear hon. Members opposite talk about the rights of the House of Commons. If ever a party trod on the rights of Members of Parliament the party opposite did so. On very few occasions in the last Parliament had we the honour of the presence of the Gentlemen who are now raising this matter. They were only here when they could not help it. If one wanted to find them one always knew where to get them. Now they are standing on their dignity. They are full of it. I stand as an ordinary Member of Parliament and I say that this is all humbug of the most contemptible character. Because a few of our people have been called away their absence has been fastened upon as the excuse for a splendid "beano" by people who were never here when they ought to have been here. Even the leaders of the Liberal party were conspicuous Very their absence in the last Parliament. HOW often were they present? They were attending their party's funeral I expect, but we were here and that was all we could do— to be here.

Mr. E. BROWN

That is all.

Mr. JONES

When we were here we were wiped out sometimes with the assistance of the hon. Member's Friends below the Gangway, but they are not going to play that game much longer. I would sooner be defeated than think that I had depended as a member of this party on their kind assistance. We can do without them when we are busy. As an ordinary back bench Member of this Parliament I protest against this contemptible and hypocritical scene.

Mr. LLOYD GEORGE

I think a great deal of unnecessary heat has been introduced into what is really a very small matter. The hon. Member who spoke last has thought it necessary to make a quite superfluous attack on the Liberal party. This is not a Motion which comes from any member of the Liberal party, but I think, if I may respectfully say so to the Government, that there is a great deal of ground for the complaint, and I think the right hon. Gentleman the Lord Privy Seal has misconceived the point. The whole point is whether the representative of the Treasury ought not to be present when a Financial Resolution is being discussed.

Mr. CHURCHILL

A Resolution in his name.

Mr. LLOYD GEORGE

After all this Resolution is in the name of the Financial Secretary to the Treasury—[Interruption.] The hon. and gallant Gentleman for Central Hull (Lieut.-Commander Kenworthy), for reasons which we shall know later, has resolved himself into a very active defender of his party.

Lieut.-Commander KENWORTHY

So very obvious.

Mr. LLOYD GEORGE

The Lord Privy Seal told us that the Prime Minister and the Chancellor of the Exchequer could not be here, and I am sure everybody is prepared to accept that statement. When the right hon. Gentleman says that they have very important business which makes it difficult for them to attend, or that he himself had important business which made it difficult for him to attend, I am sure there is no Member of the Committee who would not willingly accept that statement. But why could not the Financial Secretary be the Treasury be here? Instead of having an exciting Debate about a good deal of matter which is more or less irrelevant and the flinging of recriminations on both sides, would it not be much (better that the right hon. Gentleman or the Financial Secretary, in whose name the Resolution stands, should be present? If there is an overwhelming reason why he should not be present I am sure the Committee would accept it, but up to the present the Lord Privy Seal— [Interruption.] I hope the right hon. Gentleman will not get angry about a small matter of this kind. If he says that there is some overwhelming reason why the Financial Secretary cannot be present the House of Commons is always very reasonable on these occasions, If there is not, I think he ought to be here. I now make an appeal to the right hon. Gentleman that he should ask the Financial Secretary to be present at the Debate. The Committee is entitled to the presence of the man in whose name the Resolution stands, and, if one representative of the Treasury cannot be here, why cannot the second representative be here May I respectfully suggest to the Lord Privy Seal that in order to bring to an end this rather unpleasant scene and get on with the business of discussing this matter, he should get the Financial Secretary to be present. As far as I am concerned I am prepared to await the explanation which we have been told is going to be given in answer to the direct question which I put.

Mr. THOMAS

I still submit respectfully that there has been cither a misunderstanding, or an advantage has been taken of the situation. I want to state emphatically that the Financial Secretary could not have given the right hon. Gentleman, in answer to his specific question, a more clear, definite and authoritative answer than I gave. The Financial Secretary was present when I gave it and the right hon. Gentleman must know that, since he has been out, the Financial Secretary has been here all the time. [HON. MEMBERS: "No."] Excuse me, but he consulted me on the bench. As a matter of fact, there was a public engagement to which he was going, and he said to me, "May I slip away?" and to that I answered, "Yes." [Interruption.] The Noble Lord the Member for Alder-shot (Viscount Wolmer) says I ought to have said, "No." I said, "Yes," but I have already sent for him so that he can come back. I repeat that if he were present he could not add to the specific answer which I have given. I have given that answer and no other answer will be given than the one I have already given.

Mr. CHURCHILL

I would be prepared to withdraw my Motion on the understanding that the Financial Secretary is to come back as quickly as possible to deal with the Resolution which stands in his name. We talk of public engagements, but the House of Commons is a public engagement, and, while an ordinary Member may leave the House, a Minister who is actually in charge of the principal Resolution of the day, especially when that Resolution turns specifically on a topic on which he has primary information, ought to be in his place. I quite understand that the Lord Privy Seal in inadvertence may have told the Financial Secretary that he could go. We know that the Financial Secretary has gone. The Lord Privy Seal says he will now fetch him back, and that he is on his way returning, and I should be ready to withdraw my Motion but for the fact that the Lord Privy Seal went on to say that when he did come back— out of a deference to the House of Commons which I cordially recognise— he could not throw any light on the situation. [HON. MEMBERS: "No! "] Well, that he could not throw any more light on the situation than had already been thrown by the Lord Privy Seal himself. Therefore, I am bound to say that I see no escape from the proposition that we ought to hear the Chancellor of the Exchequer. He may have more important work to do outside than he has here, but it does not follow for a moment that the kind if statement on this financial question, which would be made by the Lord Privy Seal, would be couched in the same terms, poised in the same manner, phrased in the same way as that which the Chancellor of the Exchequer would make. There are different interests and the Chancellor of the Exchequer is responsible more directly in the financial matter than the Lord Privy Seal. Therefore, as he has said that, though he will send for the Financial Secretary, the Financial Secretary can tell us nothing, I am afraid I cannot find any satisfactory ground for withdrawing my Motion. [HON. MEMBERS: "Vote!"] There is no need for hon. Members to get excited. It is a very good thing that people should learn at the very beginning of this Parliament— [Interruption]

Mr. KIRKWOOD

Stop lecturing.

Mr. STEPHEN

On a point of Order. I want to ask if the former Chancellor of the Exchequer is in order in handing out this lecture?

The DEPUTY-CHAIRMAN

That is not a point of Order.

Mr. KIRKWOOD

I think you can stop him all the same.

Mr. CHURCHILL

I am strictly in Order and in possession of the Committee, but, owing to the fact that the Financial Secretary to the Treasury has now returned, I would not stand between him and this Assembly for another moment.

Mr. LLOYD GEORGE

The Motion before the Committee is one to report Progress in order to ensure the attendance of a represents rive of the Treasury. It is quite clear that that representative could not make his statement upon this Motion, and unless this Motion is withdrawn, it is quite impossible for him to speak.

Mr. CHURCHILL

Now that the Financial Secretary to the Treasury has arrived and is ready to give us a statement, I am quite ready to withdraw my Motion to report Progress, and I beg to ask leave to do so.

HON. MEMBERS

No:

Question, "That the Chairman do report Progress and ask leave to sit again," put, and negatived.

Original Question again proposed.

Sir H. O'NEILL

After that very interesting, if rather heated, episode, I should like to continue the remarks that I was addressing to the Treasury Bench. I was saying that this Resolution practically entailed the payment of a subsidy, and I was drawing attention to the fact that, not only is there power to pay grants to enable public utility concerns to pay interest on their loans, but there is also power to give grants to those concerns in lieu of what in the White Paper is called the assumed interest which they would have had to pay if they had had to raise loans; and I was pointing out that that was going a very long way towards a large financial novelty. The Lord Privy Seal has replied to that criticism by saying that the Lord St. Davids Committee has been doing that for a long time past. May I ask the right hon. Gentleman this question? Has Lord St. Davids Committee to-day the power to give grants for interest on loans raised by public utility concerns? I do not think it has.

The other point I want to ask is this: Has Lord St. Davids Committee this further and very far-reaching power to make grants to public utility concerns of the assumed interest that they would have had to pay if it had been necessary for them to raise loans? Those are two very definite and very extreme alterations in the existing procedure, in my opinion. We have not yet been told in what form Parliamentary sanction to those grants is to be asked or obtained. Is it to come forward in the ordinary Estimates? If it does, very possibly they will never be discussed and will go through under the Guillotine without any discussion at all. If it does not come through in the ordinary Estimates, I do not quite see, unless the Government propose some kind of Supplementary Estimate, in what way there is going to be prior sanction to the expenditure of money upon these grants.

There is another point that I want to raise, in connection with the trade facilities part of this Resolution. Everybody seems to agree that at any rate there is no harm in resuscitating the policy of the Trade Facilities Acts, but I think I am right in saying that when it was proposed to do away with the policy of the Trade Facilities Acts of a year or two ago, among those who approved of that proposal was the present President of the Board of Trade. I think I remember him making a speech in which he agreed that the best policy to be pursued at that time was to bring the Trade Facilities procedure to an end, for the obvious reason that there is only a definite amount of capital available in the loan market of this country, and that if, by giving Government guarantees, you are going to give an artificial lead to the direction in which that capital is to flow, then so much of that capital as is advanced in loans which receive Government guarantees is thereby and therefore diverted from the other channels in which it would have flowed,

I should be glad if the hon. Member could also tell the Committee whether, during the course of those Acts and that procedure, the Government had to meet any of the guarantees which they had given. Had they to pay up anything? Sometimes loans which are guaranteed go wrong, and the concerns which have been helped come to grief. I want to know whether the Government have had to pay anything in the past in respect of the Trade Facilities proceedings and, if so, how much; and, secondly, I should like to know what is the total amount of the guarantees under the Trade Facilities loans which are at present outstanding. I think we ought to have this information before we finally agree to allow the Government once again to embark on a policy which most of us thought was dead a few years ago. I hope very much that the hon. Gentleman will deal particularly with that very big financial issue which has been raised. Until it has been satisfactorily dealt with and met from the Government Benches I cannot help feeling that there will be a good deal of hesitation, not only on these benches, but on the benches below the Gangway, in supporting the proposals now before the Committee.

Mr. A. BEVAN

In regard to the complaints made from the opposite benches about the absence of a Treasury representative, I would like to point out that the late Chancellor of the Exchequer had been absent almost all the time, immediately after making his own speech. The complaint was that the burden of resistance to the Opposition fell on the Financial Secretary to the Treasury, but the burden of the Opposition falls on the right hon. Gentleman opposite. I would not have intervened in this Debate, as this is my first effort, were it not for the fact that we have listened to some very extraordinary speeches from the benches opposite, and I think it is necessary to point out that this is the first example of what we are to expect in the form of collusion between the Tories and the Liberals in obstructionist tactics. The Committee will have observed that there was no attempt at all on the part of Members on the benches above the Gangway opposite to express any opposition to this Resolution until the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) indicated his opposition to the second paragraph of the Motion. When he intimated his opposition, we immediately observed the collusion between the two sides on the benches opposite for the purpose of embarrassing the Government. The desire of the Tories and the Liberals to assist the Government in solving what they have declared to be the most pressing problem of modern times is to be found in the fact that they take the first opportunity to embarrass the Government when the Government are engaged in that effort.

I listened to the ex-Chancellor of the Exchequer with considerable interest, because it was the second time I have heard him. The first time ho was in the role of the bogy man of the Country, over the wireless, and on the second occasion he was the entertainer of the House of Commons. I arrived at the conclusion that his chameleon-like character in polities is founded upon a temperamental disability. He fills all the rôles with such exceeding facility that his lack of political stability is at once explained, He accused the Lord Privy Seal of not being able to produce schemes which would have the immediate effect of making inroads into the volume of unemployment, but I would remind the right hon. Gentleman that this party was not committed in this election to the production of immediate schemes at all. As a matter of fact, the party which did go before the country with a programme of immediately tackling unemployment and reducing it to normal proportions within two years was defeated at the hands of the electorate.

8.0 p.m.

The Members on this side of the Committee are committed most strongly to tackle the problem of unemployment, but they were certainly not committed to produce schemes immediately the House of Commons met. Again, the ex-Chancellor of the Exchequer in his speech attacked the Lord Privy Seal for subsidising and buttressing private enterprise. What else is there for us to do? In the beginning, we were informed that the first time we attempted any application of Socialist principles, our day would end. The same warning was uttered from the Liberal benches, so that we on this side are constrained to do what we can to solve unemployment within the limitations imposed by a Parliamentary minority. The late Chancellor of the Exchequer says that we are bound to fail, and that the schemes submitted are inadequate. All he can say is that he hopes that they will succeed, because if they are not adequate to solve unemployment, we shall, of course, have to go before the country and say that it is impossible to solve any of these problems within the ambit of private enterprise, and that before they can be properly tackled, the country will have to supply Parliament with a Socialist majority to apply Socialist principles. 80 that the party which the ex-Chancellor represents, and the economic interests which he so ably represents in this House, hope that the schemes that will be submitted will be found adequate to solve unemployment. Otherwise, all other remedies having been tried, we shall have to ask the country for a mandate to apply Socialist principles.

Even if these scheme; should prove inadequate to solve unemployment within the limitations of the strict orthodox economic creed as laid down by the experts of the Treasury, we would like to point out that if governmental action will not make any inroads upon the volume of the unemployed, it appears necessarily to follow that, until private enterprise can be sufficiently recuperative to solve the problem, we shall have to carry this burden of unemployment. If that be so, then, within the limitations of the economic creed laid down by the right hon. Gentleman, all we can ask is that as large a proportion of the national income as possible shall be distributed among the people, so that: they shall be protected from the distress for which the right hon. Gentleman admits they are not responsible. it will be necessary, therefore, for us to ask the Chancellor of the Exchequer to supply funds out of the private purses of the friends of the ex-Chancellor of the Exchequer for the purpose of relieving the distress arising from the problem which the right hon. Gentleman says cannot be solved within the circumference of private enterprise. The Lord Privy Seal must find it very difficult to answer satisfactorily the criticisms from both sides of the Opposition. On one side the ex-Chancellor of the Exchequer says that these schemes are negligible and will have no effect.

Mr. CHURCHILL

I said that the effect would be negligible.

Mr. BEVAN

The right hon. Gentleman said the schemes themselves are negligible as remedies for unemployment, which is about the same thing. But if the function of the schemes is to solve unemployment, and the schemes do not solve unemployment, then as means to solving unemployment they are negligible, are they not I That is exactly what the ex-Chancellor said. On the other side, the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) disagreed with the ex-Chancellor of the Exchequer. Whereas the latter found no ambition at all in the scheme of the Lord Privy Seal, the right hon. Gentleman the Member for Carnarvon Boroughs found most immense powers in them. He accused the Government of seeking powers so elastic, so ambitious, and so audacious, that hundreds of millions of pounds might be spent within their circumference without asking the House at all. Whereas we are accused from the Conservative Benches of not having sufficient ambition, indeed of being comparatively pedestrian, on the other benches we are accused of being. enormously adventurous. I would remind the right hon. Gentleman the Member for Carnarvon Boroughs that he tried to be audacious in tackling this problem without having too much regard to precedent, but when we seek to show that imaginative enterprise which should appeal to his Celtic imagination, he warns us in portentous tones that never did he remember any application being made for powers so widespread which would commit the country to the expenditure of vast sums of money without the House being given an opportunity of voting it.

We on this side of the Committee are sympathetic to the Lord Privy Seal in the difficult task which he has to perform, and we can assure him that behind him is a vast volume of support; and if right hon. Gentlemen and hon. Gentlemen opposite want to consolidate the back benches on this side, they have only to repeat a few of the exhibitions of bad temper and disorder which we have seen this evening. The position as we see it is this. The right hon. Gentleman the Member for Carnarvon Boroughs says that Paragraph I of the Motion means one of two things: either it means that large powers to spend money are being asked which will be exercised before the autumn, or that autumn will be reached before any schemes are adopted at all. Everyone in the Committee who has not his tongue in his cheek knows that within the limitations imposed by the two Oppositions, it is impossible for the Lord Privy Seal to produce any schemes immediately, because any schemes that would be introduced on his own initiative would have a Socialist character and schemes of such character would involve the co-operation of local government and of private enterprise. Is it reasonable to suppose that schemes of that kind, involving co-operation, negotiation, consultation, and microscopic inquiry into the incidence of the schemes, can be produced within a month in time to obtain the authority of the House of Commons to spend the money? The right hon. Gentleman the Member for Carnarvon Boroughs knows that it is impossible, so that it is either necessary for the Lord Privy Seal to have a blank cheque from the House immediately, or to be on the other horn of his dilemma and not have it at all until the autumn.

I submit, therefore, that the only steps that can be taken are being taken to meet this very difficult problem. Speaking as one with some experience of local authorities, we have had during the last two years great difficulty in obtaining any grants for schemes from the late Government. We submitted quite a large number of schemes, arid the answer we always received was that our area was a distressed area, and consequently that we could have no grant. That is our experience in Monmouthshire and Glamorgan. The Lord Privy Seal is taunted because with his prescience and foresight he intends to induce new industries to be set up in those distressed areas. Is there anything wrong in that proposal? Is there anything to which to object I What hon. Members opposite really want is that private enterprise shall set up new industries where it likes in any part of the country, and that the poor people shall migrate to those industries, and have to put up with the bad housing conditions that would exist. What is happening now I There is a drift of industries towards the south, and new industries are springing up all over the place. From South Wales there is a migration of workers to those industries. The heavy overhead charges of South Wales still have to be carried, and the high rates and all the standing charges have to be carried by a declining industry.

le it not reasonable that, if human ingenuity can do it, new industries should be attracted to those places rather than that new overhead charges should be set up elsewhere. We prefer to see that done within the circumference of the powers for which the Government are asking, and we hope that it will be possible to erect in South Wales new industries to provide more means of employment for our people. I wish every success to the Lord Privy Seal, and I hope that he will not be deterred by the factious opposition to which he has been subject. I hope that the Members of the Liberal benches will realise that the public will judge them exactly by the extent to which they support the schemes of the Lord Privy Seal. We of course anticipate trouble while we are tackling the problem, and expect that every means of Parliamentary obstruction will be used to make the task more difficult. But that will not serve to convince the country that Parliamentary tactics are the most important things in this regard. When we have the opportunity of making our report to the country, we shall claim that we have had our eyes on the needs of the people, and not on the acrobatics of Parliamentary tactics.

Major GLYN

The hon. Member who has just spoken appears to be under the impression that those of us who wish to see the proper procedure of Parliament strictly followed are not in sympathy with the efforts which are being made to solve the problem of unemployment, a subject to which all parties in this House ought to devote their attention; but just as we, when we sat on those benches in the last Parliament, found Members of the Opposition anxious to see the Treasury properly represented, so what took place just now was merely an attempt on our part to see that the proper functions of Parliament as the guardian of the public purse are maintained, and I am quite sure that all on the Treasury Bench fully realise that that was the sole object of the late Chancellor of the Exchequer. [HON. MEMBEES: "No!"] The object of my intervention is to welcome very heartily the proposals of the Lord Privy Seal from one point of view, at any rate, namely, that of the railway companies.

I have never concealed from the House that I am interested in railways, and I am very glad to find that in this Parliament there are nine or ten representatives of the employés of the railways, and I am sure that by the co-operation of all the interests concerned with railways we shall secure a better state of affairs when, under the statutory provisions under which railways carry on their work, they have to come to Parliament for approval of any new undertakings. When a railway company comes to Parliament seeking powers to lay down a new colliery line in some part of the country the Measure has to run the gamut of protests concerning third-class sleepers, water-bottles in railway carriages, and every other conceivable subject connected with railways. I have known Debate after Debate in connection with certain railway Bills in which not a single hon. Member has mentioned the project contained in that Bill.

A great deal of employment can be found if railways can secure the assistance of Parliament in facilitating the passage of Measures to carry out improvements. Nobody knows the railways situation better than does the Lord Privy Seal, and nobody wishes to speak more highly of him than I wish to in regard to matters concerning railways, because I have never appealed to him for assistance in this House on a matter of importance to the railways without being certain of getting his advice and, if he considered the proposal a good one, his help; and therefore I am sure that any of us who can combine the two objects of improving the conditions of transport and co-operating with the right hon. Gentleman in any scheme will readily give him support.

Something has been said in the Debate about the electrification of Liverpool Street station. The electrification of a station is a matter of importance, but obviously any system of electrification must go beyond the station and out into the country. The last Government passed a Measure which was, perhaps, of greater practical value to the country than almost any other measure of the last decade, the Electricity Act, and when it comes Into full force it will be found that electrical energy can be supplied all over the country. I trust that by its means it will be possible to electrify further portions of the railway system of the country, and I am convinced that those who are co-operating with the Lord Privy Seal in dealing with unemployment will not be backward in utilising the advantages of that Act, even though it was passed by their political opponents. If we are to get cheap power, the one thing necessary is to increase the day load; and that will also mean cheaper light. The railway companies are only too anxious to co-operate in any great national schemes such as the Electricity Act provided for, but it is necessary that they should have the active assistance of this House if it be necessary for them to secure additional powers from Parliament. Therefore, I hope that when the railways do come here for further powers the Lord Privy Seal and the other members of the Treasury Bench will see that the real object the companies have in view is not sidetracked by the ventilation of some petty grievance, such as the loss of a parcel on some section of the line.

A certain amount of publicity is being given to the proposal to introduce steel sleepers, but the highest technical opinion does not regard the use of steel sleepers as providing the simple solution of the unemployment difficulty or assisting railway development which some people believe it does. The conditions in our climate are very different from those where steel sleepers are most effective. Nobody knows what will be the result of laying down steel sleepers in our damp, humid climate. They are admirable in sand and in a dry climate.

Mr. WALLHEAD

Is it not a fact that steel sleepers are in general use on the German railways and on the French railways? I seem to have noticed them.

Major GLYN

They are in use en certain sections of the French railways, especially in the south, where the soil is very sandy and there is a good deal of dust, and it is necessary to get a big, broad spread. But those are technical points which it would not be proper for me to go into at the moment. Another direction in which a great deal of good might be done but to which no reference has been made would be in the construction of steel rolling stock. Recently the French railways put into service some admirable rolling stock made of steel. In this country there are not the facilities for constructing steel rolling stock which we should like to see. If something could be done to provide them it would not only be of assistance to the men in the steel industry but would be of real benefit in the operating of railways in this country.

There is another matter in connection with railways the importance of which is not generally understood by the public. One of the must important things we have to do is to encourage tourist travel. Many people would come to this country from the United States and other countries if they could get the same accommodation in our rural hotels as is available to them in their own country. The Lord Privy Seal has made no mention in any of his schemes of the necessity for renovating and reconstructing the inns and hotels of the country. Unless they are brought up to date we cannot attract tourists, although the money they spend would be very useful, and, incidentally, there would be good employment locally of a permanent character.

Miss WILKINSON

Seeing that these inns are nearly all of them tied houses belonging to the brewers, surely the hon. and gallant Member might make his representations to those gentlemen, who make such large profits out of the community?

Major GLYN

I am afraid I cannot answer for the brewers. All I can do is to make a general statement that the railway companies and others concerned with tourist facilities feel that there is a great field of development in the improvement of the condition of our hotels and inns, with or without the help of the brewers. It is a matter on which we should concentrate if we desire to bring more money into the country. I was disappointed to see that the Lord Privy Seal's speech made no mention of the Empire Marketing Board. I have always regretted that it is not possible for the Board as now constituted, to advertise British products in the Dominions and in the Colonies. The machinery of that organisation, which has become highly efficient in advertising Dominion and Colonial products in this country, ought to be used to advertise the products of British labour in the Dominions and Colonies. Every year there is a great exhibition in Toronto. It opens the eyes of anyone from these islands who visits it as to the huge possibilities of the Dominion of Canada. I should like to see the Empire Marketing Board havings its exhibit of British goods there, because it would be a means of stimulating the demand for the products of British labour at home, and assisting us to secure more continuous employment for British workers.

There is the Department of Scientific and Industrial Research. Those of us who have had an opportunity of studying the work of that Board realise the enormous progress that it has made, and the great benefit that it is to those who utilise the knowledge available as a result of the experiments and work of that department. I often think that we do not give half enough attention to those very devoted civil servants who spend very anxious days and have very disappointing moments in their work. Sometimes they try experiments which finish in a dead end, while on other occasions their experiments lead to very important and useful results. We should do a little more to teach employers the great advantage to be gained by improving the conditions under which the workers labour, and more should be done to make the workers interested in the work that they are doing. The working of a lathe is very monotonous, but, if you can do anything to make the worker interested in the article which he is making on the lathe, the result will be more beneficial to all parties. In these days of rationalisation, if firms came together more they might utilise the discoveries of the Department of Scientific and Industrial Research which costs £456,000 a year. The question has been asked: Are we really getting value for that expenditure? I know that those men are worth the money, but I think employers ought to put the results of this scientific department to much greater use than they do at the present time.

The form in which this Resolution has been drawn has been blessed by the right hon. Gentleman the Member for Epping (Mr. Churchill). The right hon. Gentleman told us that it was a good scheme and he was not going to quarrel with it because there was not effective Treasury control. I believe that there is effective Treasury control, and I hope we shall support the Lord Privy Seal in his schemes for the solution of the unemployment problem. I believe the right hon. Gentleman will work for permanent results which will be far more effective. I think on this question we can all assist the Lord Privy Seal, and I am certain that it is a mistake to ignore private enterprise. On the other hand, we have in this country something which one day will be the model of the world, and that is the formation of public utility undertakings subject to Parliamentary control. We are now working out something on those lines, and the Balfour Report is one of the most interesting and enlightening documents I have ever read. If Parliament will sanction founds to enable public utility societies to go ahead providing those things which are so much needed, then we shall do something, not only to help to solve the unemployment problem, but also to solve that vexed question of how you can get for the community all it requires and how you can check profiteering which nobody wants— [HON. MEMBERS: "Oh, oh!"]— at any rate, nobody on this side of the House wants profiteering, and none of us stand for profiteering. One of the main objects of the late Government was to break down monopolies.

It is most interesting to see how the great co-operative movement which is a great and wonderful force has progressed. We have all seen how that great movement, when its interests are being affected, swings round more to the side of private enterprise than nationalisation. My experience of the co operative movement is that when it is properly operated it gives all the advantages that nationalisation could possibly offer, and a great many of the benefits of private enterprise. I hope the Lord Privy Seal will go forward with his schemes. I believe the Treasury control is adequate, and it would be a delusion to suppose that those on this side of the House are not just as anxious as any hon. Members opposite to see a permanent solution found of the unemployment problem.

The FINANCIAL SECRETARY to the TREASURY (Mr. Pethick-Lawrence)

I sum very pleased to have heard the speech of the hon. and gallant Member for Abingdon (Major Glyn) in which he has welcomed these proposals. I think the Committee generally have welcomed the proposals contained in the Resolution. Questions have been raised with regard to the financial aspect of the scheme. Perhaps I may take this opportunity of uttering a personal word with regard to the incident which happened a short time ago. I quite understand the legitimate party game of moving to report Progress in order to call attention to the absence of the representatives of the Treasury, but that is only part of the rough and tumble of political warfare. If hon. Members opposite think that we have been at all discourteous to the Committee, then I express my regret that that should be so. As a matter of fact, I sat in the House during the delivery of the three opening speeches, and I understood that the Lord Privy Seal had answered to the satisfaction of the Committee the criticisms made by the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George). It was not until I felt sure that hon. Members were satisfied with the reply which had been given that I left the House in order to attend a public function, but when I gathered that I was wanted here I returned immediately.

On the actual merits of the financial position, I think there has been a great deal of misunderstanding. The procedure we have adopted is not at all unusual, and the rights of Members of the House of Commons are fully safeguarded. The machinery which this Financial Resolution contemplates is very familiar to the Committee, and it is the same as that which is adopted in regard to all financial proposals which come before the House of Commons. The Estimate will be prepared and introduced at the usual time and then the whole question will be open for discussion in the usual way. When our proposals have been earned under the normal machinery of the House, then Ministers will be able under the usual restrictions and limitations to Carry out their proposal The only point of difference arises with regard to the initiation of this scheme in the current year. The intention of the Government is, at an early date, to produce a Supplementary Estimate and submit it to the House. It is not their intention to submit it before the House rises for the Summer Vacation, because that would really be a nugatory proposal. It is quite clear that, this Resolution having been taken, and the Bill having been taken through all its stages, it will be necessary for some little time— not very long— to elapse before any schemes can actually germinate, and before we can be ready to form an idea of the amount that would be required. If it were suggested that a Supplementary Estimate ought to be introduced before the Recess, it could be introduced, but it would have to be for a token amount. Whatever amount might be fixed would have to be based on what would actually be done, and it is the intention of the Government, at a suitable time after the Summer Recess, to introduce a Supplementary Estimate.

Hon. Members, no doubt, will wish to know whether that limits the action of the Government in the meanwhile, and my answer to that is this: If this Committee agrees to this Resolution, and if, subsequently, the House agrees to the Second Reading, and the Bill is carried through its Committee and Third Reading stages, the Government will feel that they are entitled to proceed to put the effect of the Bill into operation. They will go ahead and make the commitments, and, when the House reassembles after the Recess, they will bring in a Supplementary Estimate, having by that time the necessary information for making that Estimate a real one instead of an imaginary one, as would be the case if it were brought in before the Recess. There is nothing unusual about that, and there is nothing unreasonable about it. The House will have the opportunity, in all the stages of the Bill, of understanding what the procedure is to be, and the Government will have the opportunity of explaining the kind of schemes that they propose. It would be quite unreasonable to tie the Government down to some particular figure at this stage. Further than that, it would be futile, because, obviously, what the Government will do will not be to spend money between now and October. The money is not wanted for immediate use; it is a commitment of the Government to meet the interest on loans as it becomes due Therefore, the Supplementary Estimate will be produced before the commitments take effect, and the commitments will be made on the strength of the passing of this Resolution and of the Bill, if it meets with a favourable reception from the House, through all its stages in the House.

This question was originally propounded by the right hon. Gentleman the Member for Carnarvon Boroughs, and, if there is anyone who ought not to complain of the way in which the Government propose to handle this matter, it is the right hon. Gentleman himself, because he went a great deal further than that in dealing with Lord St. Davids' Committee. It is quite true that he named a definite sum of, I think, £3,000,000, and he secured a definite Vote of the House for that sum, but as a matter of fact, before that Vote was through the House, he had already made certain commitments in regard to offering 30 percent, of the additional wages paid, and not only so, but he changed the whole nature of the grant, and made commitments extending to 15 years, without any particular express sanction of the House. In point of fact, he committed the House of Commons in advance to an expenditure which has never been regularised, and every year in the Estimates we are called upon to vote a sum, which at the present time is about £2,000,000, in order to implement the commitments which were made under Lord St. Davids' scheme owing to the action which was taken at that time and which has been taken by successive Governments since. As has already been explained, it is part of the procedure which the Government are intending to carry through in this Resolution and the Bill which will follow, that that action in connection with Lord St. Davids' Committee, which up to now has been of an irregular character shall be regularised.

What will be done under the definite proposals of the Government is quite simple, and each year it will be in accord in every respect with the normal, orthodox control procedure in the House of Commons, with, as I have pointed out, only slight divergencies in the immediate future. I am quite sure that hon. and right hon. Gentlemen in all parts of the Committee who have expressed their desire that we should not wait but should get on with the work will see that the present emergency demands rapid action, and, as I have already said, it would be merely nugatory if we were to attempt to carry a token Vote through the House before the Recess. I think I have answered the main point, which was that raised by the right hon. Gentleman the Member for Carnarvon Boroughs. The right hon. Gentleman the Member for Antrim (Sir H. O'Neill) out to me two questions which I will answer at the same time. In the first place, I understood him to ask what actually was the action of the St. Davids Committee. I should have thought that the answer was well known to the House. They advance 50 percent, on all revenue-producing schemes, and 75 percent, on non-revenue-producing schemes, up to a period of 15 years. I should have thought that that was well known to all Members of the House. The right hon. Gentleman asked another question, in regard to which I have had to get exact information before answering it.

Mr. E. BROWN

Is it not the case that the 75 percent, only relates to interest, whereas the other relates to interest and capital?

Mr. PETHICK-LAWRENCE

At the present time it is both, but I cannot deal with that point now.

Mr. WOMERSLEY

It wants clearing up; it is a very important point.

Mr. PETHICK-LAWRENCE

If there is still some doubt in the minds of Members of the Committee, no doubt a later speaker will give information on the point. I am dealing with the scheme of the Government.

Sir L. WORTHINGTON-EVANS

Would the hon. Gentleman say whether that also applies to the grants, that is to say, to paragraphs and (S) of the Financial Resolution? Does the procedure indicated apply also to these grants?

Mr. PETHICK-LAWRENCE

Yes, that is what it does apply to. It applies to paragraph (2)—

Sir L. WORTHINGTON-EVANS

And paragraph (3)?

Mr. PETHICK-LAWRENCE

It applies to the cases where we are prepared to commit ourselves to pay the interest up to 15 years. It applies to paragraphs (2) and (3). With regard to the other question of the right hon. Gentleman the Member for Antrim, I understood him to ask what was the loss up to date on the Trade Facilities loans. There is still outstanding, or was at the end of the last financial year, £67,000,000 of guarantees, out of a total of £72,000,000 given. There has been issued u fulfilment of the guarantees a sum of £342,000, but, of course, the amount still outstanding is very large, and, as some of it goes on for 15 years, I must not be taken to convey the impression that the whole burden we are actually called upon to boar is covered by the £342,000. It is not a very large sum compared with the very big amount involved. I think I have dealt with all the points that have been raised. If there are any further points I, or some other member of the Government, will reply.

Mr. BLINDELL

I should feel some what honoured in following the hon. Gentleman inasmuch as to-day, at all events, of all the Members who constitute this House he happens to be the one man who matters, and it seems as if we cannot possibly get along unless he is here. It is not my intention to follow the financial or other arguments with regard to the proposals in the scheme except to say that I wondered, in listening to the hon. Gentleman, whether the House really appreciated that there was a difference when he said that between now and October the Government would not be actually spending money but would be simply committing themselves to spending it. I do not see much difference. If the commitment is made, the money will have to be found. I leave it there. I have been interested in noticing the reception the Governmnt proposals have received from their supporters. I have come to this conclusion, that the wonderful amount of enthusiasm displayed in the country with regard to the ability of this party to solve the problem of unemployment IS gradually melting away. Anyhow it is not very demonstrable.

There is not very much enthusiasm for the proposals before the Committee at the moment. Indeed the hon. Member who spoke last from that side of the House said we had committed ourselves prior to the election to immediate proposals for solving the unemployment problem, and he assured the House that Members on the other side were not definitely committed. Perhaps they were not, but in 1924 they were committed, and they then said that definite proposals were prepared to solve unemployment, and the electors of the country to-day are asking for the redemption of that pledge, though it was given four or five years ago. We did pledge ourselves, and hon. Members who are supporting the Government and hon. Members above the Gangway were quite right in their prediction that we should not be called upon to fulfil that pledge. We are not called upon to fulfil that pledge and we are jolly sorry we are not because, if we were, we should have taken our courage in both hands and we should have told the country exactly how we were going to do it. I welcome the proposals contained in the speech of the Lord Privy Seal the other day and in this Resolution, 90 far as they go. I take them as an instalment of something else that is to come which to-day cannot be absolutely defined, but we are hoping for the best, and I believe the Lord Privy Seal realises, and I believe he has realised all along the line, that this is a baffling problem, and he is relying not only upon the assistance of hon. Members behind him and hon. Members on this side, because he will get that, but upon the local authorities up and down the country for all the assistance possible. [An HON. MEMBER: "He has a perfect right to do so!"] Well, I can talk about it. We are only just agreeing. He has a perfect right and, if he says he will give a guarantee, he has an equal right to give it, and I wish he would.

I believe the reception of this proposal has not been quite so enthusiastic as I should have liked to see it from hon. Members opposite. As I understand the Resolution, we are to have a revival of the activities of the old Lord St. Davids Committee, but their functions are to be somewhat curtailed, inasmuch as I believe during recent days they have been considering schemes submitted to them by public utility undertakings, and grants have been made, but that particular function is to be taken from them. In place of that, there is to be another Committee, and— I am rather glad of this— it is to be responsible directly to the Treasury. It is going to deal with applications and schemes submitted by public utility undertakings, and they are not to be in a circumscribed area, but in other ways the financial conditions imposed upon Lord St. David" Committee are not to apply to this new Committee. There I see some hope, because I feel that the Lord Privy Seal knows what is going to follow, and probably in the near future we shall have from him some real scheme which will go a long way towards solving the problem. The new Committee is to be guided by two principles, they will be in a position to guarantee the principal and interest, or both, upon loans raised in order to put schemes into operation, or they will be able to make grants covering a part or the whole of the interest on loans which will be raised. I expect some hon. Members opposite will say that is bolstering up private enterprise. I hope they will not, because whatever money is going to be given away is coming from private enterprise, and it is going to be given back in some small measure again to private enterprise, and if by that credit the Lord Privy Seal can put hundreds of thousands of men into work at good wages, under good conditions, it will be money well spent, and we ought not to cavil at the system we are adopting in order to accomplish it.

Seeing that the object of the Lord Privy Seal appears to be to create immediate employment, much of which will be of a temporary measure, because when some of these schemes have been carried out some of us may argue that the men will again be out of work, I want to ask whether he is going to give this new committee power to go a little further than I believe he has already said and give them power to render financial assistance in order to re-establish some of our industries which have fallen by the way. I mean industries of national importance, industries which are worth resuscitating, which will serve the nation well and will provide not only temporary but permanent work. I have in my mind a port on the East Coast which once had a fishing industry. It then created a volume of employment for the town. But the industry has gone, and I should like to know whether the Lord Privy Seal will give the new committee power to consider any scheme brought forward for reestablishing the fishing industry in that port. If you do, you will provide immediate employment for the men in that town. You will provide immediate employment for men engaged in other trades, in the building of new trawlers, and, indeed, you will he p the nation along by giving an increased food supply. I believe that along those lines much can be accomplished, because, after all, we ought to take a long view and remember that we not only wart to find immediate work but to find work which will last. We want to lift up the standard of living of the working-class, and in order to do that we ought to have our eye upon schemes which will give them permanent employment at decent rates of pay.

There is another point which I would like to bring forward. in all the discussions which we have had with regard to unemployment, I have heard hardly a word said about the unemployment which undoubtedly exists in the agricultural industry. For the first time for many years in the countryside we have an increasing number of men who are unable to find work, men whom we hear very little about. I am afraid that some of the proposed schemes may be put into operation, and that, as a result of the conditions imposed, men may be transferred from other area to our countryside, and our country lads may have to stand by and see these men working. There are hardly any opportunities in rural England for those agricultural labourers to find other work. I hope that the conditions that will govern the activities of this new committee will be of such a nature that where there is a volume of unemployment— a small volume if you like— in an agricultural district and work is to proceed there under any scheme that may be presented, the committees will not insist upon sending, in any large numbers at all events, men from the depressed areas. I realise quite well that the depressed areas have a tremendous problem, but I do not think that we shall get over the problem of unemployment by bringing these men to work in districts where our own local men would have to stand by and see other men work while they themselves could not get an honest day's work. That is all I have to say about the matter, except that I sincerely hop"' that this is merely the beginning of a very much larger scheme which the Lord Privy Seal will present to the House. I feel with regard to this great problem of unemployment that I would go to almost any length in support of any sensible scheme which would provide for the men who really want an honest day's work.

9.0 p.m.

Mr. PALMER

I want, in saying a word in support of this Motion, to take this opportunity of drawing the attention of the Committee to one or two main facts which emerge. The first and most obvious question which every phase and shade of opinion in this Committe has to face is the question: Are we prepared to pay the price for a solution of the great unemployment problem? When we come up against great national issues like the late War, it is always a question of finance and a question of "Are we prepared to pay, or what are we paying?" I want the Committee of the House of Commons to come hack to the point that the unemployment problem in this country is a gigantic question which cannot be solved without paying the price, I would like to see it brought home to the Government and to the Treasury that this is not only ghastly from the point of view of the standard of human values, the loss of moral, the distress that obtains among the victims of unemployment, but that it is, indeed, a more costly problem in some respects than war itself. I would like legislation to go forward. I think the method adopted by the Government in inviting the Lord Privy Seal to take over the responsibility for finding work, for organising work, and making the cost and the payment and the financial provisions secondary all the time is a right one.

If is perfectly clear from the speeches to which we have already listened that there is a tremendous amount of goodwill in the House and in the country at large for any man or any Government, or any set of men, who can bring about a solution of the unemployment problem. I come back to my original question: Are we prepared to pay the price? Private enterprise and capitalists are disposed to say— and this is one of the difficulties to which we might as well face up as honest men— "We are not prepared to pay the price." Some of the speeches have contained suggestions like this: "Well, if you can organise employment, if you can absorb- a million unemployed or more without it costing any more, if you can introduce changes in the hours for instance, or a depression of wages, so that they can be absorbed, and it does not touch the dividends of this big commercial undertaking or the other, then 'God bless the Lord Privy Seal and those working with him; go ahead with the scheme.'" I think we have to come to the conclusion that the unemployment problem is one of those hideous and great issues for which we must be prepared to pay the price, and which we must treat as something in the nature of a national emergency. We have to adopt some of the same sort of machinery and the same sort of attitude and outlook on a question like this, as we adopted when we were in the War and when we wanted to organise work of national importance in regard to the manufacture of shells and the building of ships and those kind of things.

I urge hon. Members to come back to the plain facts of the case, to put their hands on their hearts, so to speak, and to make up their minds whether or not they are prepared resolutely to act fairly. It is easy, perhaps, for the hon. Member who claimed that he represented the railways, to say that the capitalists do not want to be profiteers. That may be true in regard to the railways, which are not making 50 percent, dividends, but it may be an altogether different thing in the case of Courtaulds, or other people who are making a tremendous amount of money. In supporting this Resolution, hen. Members must face up to the question of unemployment as a thing that is right at the heart and well-being of this nation. We ought to make it the supreme issue and be prepared to pay the price and to separate the consideration of the problem from every other consideration. There is, however, a sense in which the problem cannot stand alone, because there are many issues revolving round it. The question of world wide peace will contribute towards the solution of the unemployment problem. The wheels of industry will go faster when we face up to the real issue, and when it is the general attitude of all and sundry to recognise that we are here faced with a disease, a disaster, a tragedy of a national character, which must be remedied, and for the solution of which the whole energy of the nation, whether finance, man-power or organisation, must be harnessed.

There have been many speeches in the House within the last few days suggesting that there is no solution of this problem. That argument is always put forward under the present capitalist system. The capitalists tell the world how miserable their standard of society has become, and how near we are to the inevitable solution in the bringing of Socialism into operation in this country. As a Socialist, I maintain that a capitalist concern which is organised properly, which is not unfairly exploiting the workers and which may possibly do as well as an industry run direct for the State, can be of great service in solving the problem of unemployment and getting ahead with this scheme. We must have some regard for the real needs of the case. We must come to a decision on this Resolution, realising that it is one of many steps that will have to be taken in this House not only with the support of hon. Members on this side but with the general consent of all parties in order to bring nearer the day when we shall have a solution of this problem. We cannot lose sight of the urgency of the case and the fact that we are fast approaching the winter season, when unemployment is always rife. I would urge upon the Lord Privy Seal the necessity for speeding up at every point the organisation of schemes which will bring hope of employment and of a better life into thousands or millions of homes.

Mr. WOMERSLEY

I was interested in the speech of the hon. Member for Greenwich (Mr. Palmer), but as he was formerly a Member of this House I cannot congratulate him on having made a maiden speech. He said that he realised that in all parts of the House there was goodwill in finding a solution of the unemployment problem. We all agree with him in that statement. But the hon. Member proceeded to say that, judging from speeches on this side of the House, certain hon. Members were desirous of reducing wages and lengthening the hours of labour. I have listened patiently to the whole of the Debate to-day and I have not heard any such suggestion from this side. If the Debate lasted a week the hon. Member would not hear such a suggestion.

Mr. PALMER

I did not specifically refer to any speech made from the other side. I said that I had heard speeches and that the philosophy was the lengthening hours and reducing wages.

Mr. WOMERSLEY

The hon. Member wishes to withdraw his statement.

Mr. PALMER

I do not. I withdraw nothing.

Mr. WOMERSLEY

The hon. Member cannot have it both ways. Either he did hear that statement made, or he did not. I deny that it was ever said. I am certain that no hon. Member on this side of the House would make such a suggestion. The hon. Member for Boston-with-Holland (Mr. Blindell) has delivered an interesting speech. When he talked about his own party and what they promised during the General Election, and compared it with the promises of the Conservative party and the party now represented on the: Government benches, I was amused, because it re-minded me of a certain old gentleman who lived in Lincolnshire— which the hon. Member and myself have the honour to represent— and who was reputed to be a miser. People were surprised when it was announced in the newspapers that this old man was going to present £1,000 to every person who had been in his employ for twenty years. People said: "Is not it wonderful." But when someone spoke to the old gentleman and said: "You are going to give a lot of money away," he replied; "No. There is not one person who has worked for me more than two years, but it looks nice in the papers." That is the position of the Liberal party. They 1- new that they would not have to fulfil the promises they made. Therefore, they declared that they would immediately bring forward a remedy for this great evil.

The Lord Privy Seal hid more sense than to do that. He had an idea in his mind that it might be possible he would have to tackle the problem. Therefore, he did not make elaborate promises, as did certain members of his own party. I commend him upon that. It is difficult to realise the complexity of the problem unless one has been in close touch with it from the departmental point of view or from the point of view of those who have had experience of unemployment. Those who suggest that you can bring forward schemes that will have an immediate effect in solving the problem speak without knowledge. The Lord Privy Seal has brought forward a sensible scheme to bring some immediate relief, merely as a paliative, but it is a first instalment of something really tangible towards the solution of the problem.

He made this point, that it was unwise to provide work for men who had been trained in a particular trade, skilled men, which would only mean that they would lose their skill. I quite agree; and I hope that in the schemes that are submitted to the Committee special care will be taken to select those which will provide work for skilled engineers and other men who, if put on to Toad-making work, will not only lose their skill but their heart as well. As one who has been connected with unemployment and distress committees for many years I know that one of the biggest problems we have to face is the problem of dealing with men who have been trained at a skilled occupation. I have seen them put on to road making and ratepayers, realising that their work is not as good as that of the skilled navvy, have made derogatory remarks which have been very painful to the men themselves, I have heard them say, "Look at him, he is wasting public money." It is not the fault of the man; he has been put on to a job for which he is not suitable. Then in respect of the Unemployed Grants Committee, the Lord Privy Seal remarked that in the early stages of the Committee a large number of schemes were approved and sanction given to the expenditure of, I think he said, £150,000,000.

Mr. THOMAS

£105,000,000.

Mr. WOMERSLEY

He also said that there has been a great diminution in the amount sanctioned during the last three years. There is a reason for that, and I submit that it is different to the reason suggested by the right hon. Gentleman. I have had a good deal of experience of Lord St. Davids' Committee; I have practically slept on their doorstep trying to get schemes into operation for my own people. I would remind the right hon. Gentleman that in the early days local authorities had many schemes which they wanted to put into operation and they came up in great numbers to the Committee. They were approved and put into operation. But local authorities have found out that although in the old days they could get 60 percent, of the interest and sinking fund on long revenue-earning schemes, it still left a big burden on the local authority, and those which had most unemployment had the least money to spend. They had to slow up. That was the great reason why as many schemes were not brought forward as would otherwise have been the case. Then the best schemes were brought forward In the early stages. Some schemes which have been brought up later meant a huge expenditure of money. One scheme I have in mind was a case in which they asked for a grant of something like £40,000, and the utmost number of men that could be employed on the scheme was 40. It was not good sound finance from the public point of view or the local point of view; and that is why many of the schemes were turned down. The Lord Privy Seal will find from experience that local authorities are not in a position to put a large number of schemes into operation unless they get more generous treatment from the Unemployment Grants Committee.

Under the last Order of the late Government, 75 percent, of the interest and sinking fund was to be allowed to those local authorities who put into operation schemes of a non-revenue earning character on condition that they took 50 percent, of the people employed from the necessitous areas. In respect of revenue-earning schemes they were to be allowed 50 percent, of the interest only for a term of 15 years. I want to ask the right hon. Gentleman whether he is going to make grants under the same terms and conditions as were proposed in the late Government scheme. This is a very important matter indeed. He is doing what I consider to be a very wise thing; reducing the percentage unemployment figure from 15 to 10, but even at the figure of 10 you are going to bar out some of the best and most useful schemes that can be put forward. The best schemes to put into operation are those which not only find employment now but when completed will find continuous employment. I know of schemes which would have brought work to 1,000 men immediately.

Mr. THOMAS

What schemes?

Mr. WOMERSLEY

Dock schemes; and they are some of the best because if there is one thing we do want in this country it is to bring absolutely up-to-date the majority of our docks around the coast.

Mr. THOMAS

I think I had better answer the bon. Member at once. He asks whether I propose to alter the basis of the grants, because he says,"if you do I have in my mind certain schemes which will not only give employment now, but in the future." When I asked what schemes, he said," docks." The two things are different. If he will look at the Financial Resolution he will find that we are anxious to help and encourage such schemes but they are removed entirely from the St. Davids Committee. They are dealt with under Part 3 of the Resolution.

Mr. WOMERSLEY

Then I may take it that the Circular of the late Government will be withdrawn?

Mr. THOMAS

A new Circular will be issued.

Mr. WOMERSLEY

Schemes already approved will go on?

Mr. THOMAS

Yes.

Mr. WOMERSLEY

I am very glad to have had that information; it is very valuable. In the past many of these dock schemes have been turned down, not only by the late Government but by the Government before that, and by the Coalition Government, on the ground that it was possible that some railway company would get a little benefit from carrying ore. I understand the right hon. Gentleman is going to clear that right out of the way and make railway companies eligible for grants in the same way as corporations.

Mr. THOMAS

All the row of two hours ago was on that particular point. The hon. Member for Leith (Mr. E. Brown) put a question to me to-day which I answered; and the hon. Member's own leader kicked up all the row because of private enterprise.

Mr. E. BROWN

In my case, the Lord Privy Seal is entirely wrong. The Leith Docks is not a private enterprise, it is a statutory trust company, and, although a statutory trust company not making private profits, it was turned down on the ground of not being a rating authority but a revenue-earning undertaking.

Mr. WOMERSLEY

I am obliged to the right hon. Gentleman because I have a real interest in the question of unemployment. I do not regard it as a political question; and that is the best way to approach it in this House. I want to ask the Lord Privy Seal what he is going to do about the transfer of labour from the distressed areas? In dealing with the great problem of unemployment it is not wise to have a parochial point of view. It has been said that an attempt will be made to get certain industries into the distressed mining areas, but I know sufficient of the business men to realise that the Lord Privy Seal has got the biggest job in the world to persuade them to go into these particular areas. They prefer to be near large centres of population where they can draw on female labour and have the benefit of lower rates. What is the right hon. Gentleman going to do in regard to this transference scheme? If he is going to blot it out he is going to do a great injustice to men in the distressed areas who are keen on work. Under the scheme of the late Government certain men were transferred from the Durham area, arid I have made it my business to ask for reports as to how they have worked. I am informed that better workmen have never been on the job; the contractor is perfectly satisfied with the way in which they are doing their work and keeping their time. That goes to prove beyond a shadow of doubt that these men are keen upon getting work and will do the work when it is provided. I want to ask the Lord Privy Seal if he is going to issue a circular setting out the terms and conditions at an early date. I hope it will be before the House rises, because many of us who are keen about getting schemes put forward would like to be able to put the terms and conditions before the local authorities as soon as possible.

Mr. THOMAS

This afternoon I indicated that I took the unusual course of making an appeal to local authorities through the Press on Saturday last. I did it deliberately, because I wanted to get them going with the schemes. I dared not have issued a circular, because you have seen to-day how very careful one has to be, with all the talk about good will. You see how it operates in the House, and, if I had dared to issue a circular before I had Parliamentary authority, I should have been jumped upon by the other side. I hope the hon. Member will keep that in mind.

Mr. WOMERSLEY

I am much obliged for that explanation, but I am not quite in agreement with the right hon Gentleman as regards the action taken to-day, because I have a very vivid recollection of certain little scenes in the last Parliament. I am sure the right hon. Gentleman would agree that he would have been the first person in the world to have objected to certain money being spent without Parliamentary sanction and proper explanation. He knows as well as I do that his big difficulty, even during the short time he has been in office, has been with the Treasury. I am delighted to know that he is putting up a fight with the Treasury, and I know he will take his coat off because he is not afraid of them. I have had a good deal of experience in dealing with applications for grants, for we have to consult with the various Government Departments and with the Unemployment Grants Committee. They always say that you must wait to hear what the Treasury have to say about it. I do not want the local authorities—

Mr. McKINLAY

On a point of information—

The TEMPORARY CHAIRMAN (Captain Bourne)

There is no such thing as a point of information.

Mr. WOMERSLEY

Finally, I want to ask the right hon. Gentleman which of the old schemes he intends to continue. He said that the scheme introduced by the late Government in the latter part of last year had to go by the board, but is he going to continue the old schemes which allowed local authorities to come along, even though they had not a very large amount of unemployment, and the ordinary schemes at the lower rate of percentage grant? I hope that before scrapping all these schemes he will go very carefully into what has been their effect, and at any rate will utilise those schemes which are useful in solving the problem. Finally, I wish the Lord Privy Seal the best of good luck in his effort to do something immediately. I want to warn him that he is not going to absorb as much of the unemployment as some hon. Members think. At any rate, if he takes some percentage away from this vast army of unemployed, it is going to be a help. I hope that before we meet again in November he will have something in the way of a more permanent settlement of that question to put before the House, such as the late Government were putting forward— something to stimulate productive industry in this country, for, unless we get it really working well, we shall never solve the unemployment problem.

Mr. SORENSEN

Many references have been made to the necessity of good will, and I am quite sure that on this side we all feel the desire to face up to the problem in that spirit. But we must all realise it is not merely a question of good will but a question of the need for good thought as well. After all, good will has often accompanied the blindest actions or inactions on the part of all of us. We have had plenty of good will during the last century and even during the last 4½ years, but, in spite of that fact, poverty and unemployment have grown apace. At the same time, I would also point out that many of those who had good will, quite sincerely, nevertheless also advanced the argument that there was an iron law, which they called the economic law, which we could not possibly break. I submit that what we call the economic law is constantly changing and that in the last 100 years we have seen a very severe modification of the interpretation of the economic law which prevailed in the early part of that period.

That being so, I am personally gratified to notice that the scheme which the Lord Privy Seal and his colleagues are putting forward for some mitigation of unemployment, is receiving the support not merely of Members on this side but on the other side of the House. That fact, in itself, seems to me to expose the shallowness of the contention of some hon. Members that those who are sitting here are not supporting the development of Socialist principles. The other day a Member on the Front Bench opposite declared himself as in disagreement with the ex-Chancellor of the Exchequer and said that there was no great unbridgable gulf between his point of view and ours. In one sense, that is perfectly true, and the mere fact that suggestions for the assistance of private enterprise through public enterprise is receiving the support of all Members of the House is an indication of the fact that the principle of public enterprise and public assistance has made astounding progress in the last 40 or 50 years. I am quite certain that the predecessors of the parties opposite 40 or 50 years ago never dreamt of supporting the very principles which those parties are patronising and supporting to-day. Even though the ex-Chancellor of the Exchequer may twit those on this side of the House with believing in the inevitability of gradualness, I would point out, on the other hand, that the schemes now brought forward are, as a matter of fact, stimulating what we all admit to be a gradual progress. One of the fallacies into which so many people fall is that of imagining that because evolution is a fact we must proceed at a snail's pace. It is according to the will of man at what speed we do proceed, and because of that we have seen extraordinary developments in the mechanical world taking place and in the social and economic world also.

That is why, personally, I welcome suggestions from all sides, no matter whether from Liberals, Conservatives or Labour. I am quite certain that the Lord Privy Seal will welcome those suggestions and will not look upon them in any partisan spirit. I am quite convinced that those suggestions are in accordance with the principles which I have advocated. I welcome them on that score, but, even if some hon. Members do suggest that they are indirectly or directly supporting private enterprise, still I shall not worry myself very much, because, after all, there are two points to be observed in that connection. Firstly, the more public enterprise comes on the scene in order even to assist private enterprise, and the more private enterprise is subjected to the public will, the more it is an advancement of our principle. I would, however, point out that to-day you cannot discriminate entirely between public enterprise on the one hand and private enterprise on the other. To-day they are being more and more closely knit together. In any case I am deeply concerned at the present time in seeing that the total volume of wealth is increased, and that a share of that wealth is enjoyed more by the masses of the people of the country. I recognise that the problem of unemployment will be solved not merely along the very valuable lines which the Lord Privy Seal is laying down, but in a much wider and more comprehensive way. We cannot segregate this problem from other great social problems. The problem of education is intimately bound up with it, and that of international affairs too.

That is why I deprecate any attempt to suggest that the tentative suggestions and plans put forward by the Lord Privy Seal are in any sense of the word his complete plans, or the complete policy of the Labour party for the solution of the problem. I am quite a ware that there is a certain danger sometimes in imagining that merely by what a certain bon. Member called "shifting wealth from one pocket to another" you will cure unemployment. I quite agree that in that sense you do not; you are employing Peter and at the same time plunging Paul into unemployment. On the other hand, in one sense surely you are going to cure unemployment by more unemployment, but more of the right sort. You obviously want more unemployed children and more unemployed among the aged. That will in some measure enable the able-bodied unemployed to receive work.

I urge again that none of us here look upon the preliminary plans that the Lord Privy Seal has produced under astoundingly difficult circumstances as in any sense of the word the complete plans that he or his colleagues will put forward. All of us do believe in good will— most of us I am sure do, although we may interpret it in many way?— and all of us, I hope, have good will in our minds as well as in our hearts: and so we shall give to the Lord Privy Seal, in the suggestions that he makes, our utmost assistance, and above all faith that this beginning will be followed by greater plans still, and that in the broader sense the whole of the Labour party will go forward to deal with the unemployment problem in a comprehensive way.

Mr. GRACE

I want to congratulate the hon. Member who has just spoken on a very clear and able speech. I agree with him in some measure on the point that he has made, namely, as to the danger of transferring large sums of money from the normal channels of trade and putting that money into the type of relief work that the Lord Privy Seal has in mind. The danger of that is particularly emphasised when we realise that the right hon. Gentleman has come here and has asked in a most amazing way for unlimited powers to borrow money-money which should belong to trade and should go to trade instead of being used for electrifying railways around London and so forth. We have heard of a scheme for spending £70,000,000 upon the Liverpool Street Station and upon roads and other things which, in the lifetime of any Member of this House, cannot produce any kind of wealth to the people of this country. One hon. Member opposite said that the scheme of the Lord Privy Seal was an imaginative scheme. I think the whole scheme lacks any kind of novelty or real imagination or new vision such as we expected from hon. Members opposite, having regard to their speeches during the General Election. For years past hon. Members opposite have posed as people with superior minds, and intellects above those of politicians of the past. They have cloaked themselves in a vastly superior cloak which they never show in this House. But once they get to the country they change completely.

It is an astounding thing that, knowing that, and remembering their way of attacking the Conservative party in the last 4½ years, they should come to this House and that the only solution which the Lord Privy Seal can put forward to cure unemployment this winter is a very slightly modified form of what the last Government did for 4½ years— altering five years to three years, and so on— apart from the demand of the Lord Privy Seal for unlimited borrowing powers. I do not believe that even the patient oxen of the Liberal party will give him that power. I would ask the Lord Privy Seal one question. £25,000,000 is to be spent under paragraph I and he has powers to borrow under paragraph II. We do not know how much it will be or how far that money will go. When he has spent that money upon these vast schemes, will he or some other Member of the party opposite explain what is to happen to the people in the woollen trade and the Lancashire cotton trade who are to-day unemployed or are facing unemployment in the near future? What is to happen to them when all this money has been spent?

It is obvious that the right hon. Gentleman is not putting forward any solution of unemployment. He is not putting forward even a temporary remedy, I am convinced that the taking of this money is inflicting a greater injury upon the very people whom everyone in the House desires to help. The right hon. Gentleman had an opportunity of helping the people in the woollen trade, but he refused it. If the Government had safeguarded that industry— the people wanted it— the Government would have given real and direct help in the coming winter to the 38,000 men and women who are unemployed. But the right hon. Gentleman missed his chance, and he is going to leave those people stranded. Some of them he may induce to go on to road work or the construction of bridges, and he may take them from their own homes to some other part of England, but that will not give a single man in the woollen trade an opportunity of getting back to his real trade. The same remark applies to the cotton industry and to engineering.

I ask the right hon. Gentleman, before he allows these vast sums to be spent, to consider seriously whether the money could not be spent far better in helping the productive trades of the country instead of spending it on what, after all, may be only a luxury. There is no question that when you approach large local authorities or large statutory concerns and dangle before them millions of money, you induce them to prepare schemes which they might otherwise not adopt. In my opinion it would be far better to leave these improvements to the normal and steady course of progress which we do make and which we were making during the past 4½ years— definitely making, in spite of the difficulties put in the way by hon. Members opposite. If we had done that I believe it would have been possible to find a far more rapid cure for unemployment.

After a month's reflection the right hon. Gentleman comes down here, a harassed, worried, and ill-tempered man, and tells us, for the first time, of the immense difficulties which he has suddenly realised to be involved in the question of unemployment— difficulties above statutory regulations, the difficulty, for example, that money spent in one direction may inflict injury in some other way. Very frankly he has put to us the difficulties which he now realises. If hon. Members opposite had been as honest on their own platforms in the month of May, a good many of them would not be here to tell the tale. During the past fortnight we have witnessed, either a sham fight or a skirmish before the battle is joined, between hon. Gentlemen opposite and their own Front Bench, because of the reckless promises which they have made to their own people. Night after night when the Government schemes are being produced, they see that those schemes are not coming up to the 100th part of what they promised. They are finding that things are getting very hot for them here, but things will get hotter still for them in their own constituencies. I do not wish hon. Members opposite any harm, but I strongly urge them, before it is too late, to give up this idea of trying to do the impossible.

Mr. KINGSLEY GRIFFITH

The hon. Member for Wirral (Mr. Grace) has complained that the Lord Privy Seal, after a month's reflection, announced that he had found certain difficulties. The trouble with the last Government was that after five years' reflection they could announce nothing whatever. The hon. Member complained also of a lack of novelty, and to show his own appreciation of novelty, he went back to a joke against those who sit on these benches, which is only six years old. I would not complain with regard to schemes for the relief of unemployment of the fact that each one of them taken separately has been mentioned by somebody at some time in the past 10 years. The best brains of every party have been ranging about covering the field, and trying to find the best way of putting the unemployed to work, and it is almost inevitable that the Lord Privy Seal in making his selection of the works that ought to be put in hand, will all the time be covering ground which at some time or another has been dealt with by somebody else. But that is no condemnation of what he does— either from the ex-Chancellor of the Exchequer or any-body else. The important thing is that after all this time— and I give all credit for it to the Lord Privy Seal— at last something is being done. Whatever complaints may be made about the schemes not going far enough, a start is being made, and we have got away from that mood of hopeless pessimism which ruled the last Government throughout its career and which pervades its supporters still, as anybody can realise after hearing the speech of the hon. Member for Wirral.

What is his message on this subject? It is that if you take any money for the promotion of schemes of work you are necessarily taking that money away from some other kind of work. If there was a vestige of truth in that theory, industry could never advance at all, and we should have been bound to remain, as in the old days, without developing the enormous industrial system which whatever its evils may be— and we here recognise them just as much as hon. Member opposite— has yet succeeded in employing a certain important number of people According to the economic theory of the hon. Member, that has all been a dream. Every time money was borrowed or raised to start mills, to open mines, to begin any kind of work, it must necessarily have been taken away from some existing work. One realises that there must be something wrong with the hon. Member's theory, or else the whole of our economic history has been pure imagination If we went on lines like that, no progress would be made. It is because the hon. Member's Government believed in that theory that they made no progress. I myself was taken to task by the late Parliamentary Secretary to the Board of Trade as being unpatriotic because I suggested that there was a need for action and that unemployment was a matter of national crisis. It was said to be unworthy to point it out; it was said that we employed more people than we did before the War— as if that Was a sufficient answer, with the number of unemployed increasing as time went on under that Government in spite of their Safeguarding and indeed because of their Safeguarding.

That was the result of their work. Of course, if any evil thing happened during their tenure of office, they say it was due to the General Strike, and if anything good happens under the present Government they say it is due to the belated effects of their de-rating scheme. That is a very convenient formula. It is a policy of all-in insurance covering good and bad alike. With that formula, and with their enormous majority it will be realised how hopeless it was to get any work going, and even to get any proposal listened to in the last Parliament, and those who sat in this House in the last Parliament will be prepared to accept what the Lord Privy Seal has put before us as something good in itself, and, we hope, as an earnest of a great deal more that is good to come.

Mr. BOOTHBY

The political events of the last three or four weeks have been very astonishing, and I think the events of the last few hours in this Committee have been almost more astonishing. I have listened to practically the whole of this Debate, and it seems to me as a back bencher on this side that this is what has happened. The proposals of the Lord Privy Seal were received with a great deal of disappointment in every quarter when they first appeared. They were hailed with rapture by what hon. Members opposite, in their unregenerate days, used to call the "capitalist Press," but I never found that they were hailed with great enthusiasm by any section of the House of Commons or any other body of responsible opinion. We were all disappointed because they were inadequate to meet the requirements of the situation. The right hon. Gentleman made a speech during the Debate on the Address and another this afternoon, and they all boil down to a loan of £25,000,000 sterling. That is the main feature of the right hon. Gentleman's proposals. Nobody in his wildest moments would suggest that that policy was likely even to touch the fringe of the unemployment problem. The right hon. Gentleman made the same sort of speech to-day. Then my right hon. Friend the ex-Chancellor of the Exchequer exposed the nakedness of the land. Then the right hon. Gentlemen the Member for Carnarvon Boroughs (Mr. Lloyd George) made a certain amount of play with the inadequacy, indeed the futility, of the proposals, and, as it seemed to us on this side of the Committee, the Lord Privy Seal in a mood almost of desperation rose halfway through the speech of the right hon. Gentleman the Member for Carnarvon Boroughs and said in effect: "Of course we intend to go much further than this. The Committee has not begun to realise how ambitious are our projects. We are going to ask the House of Commons for leave to give what amounts to an unlimited subsidy to private industries, all over the country, to an unlimited extent and to spend all the money and then to come and ask for confirmation of that expenditure." I only say this, that that came as a. great surprise to many of us upon the back benches on this side of the House, because we had this statement in the White Paper, which we read, which I am sure the right hon. Member for Carnarvon Boroughs also read, and which appeared to us to be absolutely categorical: The data on which any Estimate could be formed are not available, but in any case full Parliamentary control will be secured by the necessity for a Parliamentary Vote of the grants to be made. We may have been wrong, we may have been hopelessly misinformed, but I am perfectly sure that I speak for 95 percent, of hon. Members on this side of the House when I say that we were distinctly under the impression that under Paragraphs (2) and (3) of this Resolution the Government were going to lay before the House of Commons every proposal for further expenditure which was going to be made, and obtain the sanction of this House before that expenditure was made; and it certainly seemed to us that the right hon. Gentleman was so dismayed by the speeches of the ex-Chancellor of the Exchequer and the Leader of the Liberal party that he more or less took a header, a desperate plunge, and launched out upon this completely new policy. The right hon. Gentleman cannot seriously think he can persuade the present House of Commons to allow him to set up a Special Committee to give an absolutely unlimited subsidy in the form of paying interest to any private industry that he happens to choose, without any total sum being stated at all, and to come along to the Houses of Commons in four or five months' time and say, "I have spent £40,000,000 or £50,000,000, or £100,000,000, or £1,000,000,000."

The idea is absurd, and, if that is the greatest imaginative effort of which the present Government are capable, they will not last long, because neither the Conservative party nor the Liberal party is going to listen to stuff of that kind. We are not going to give the Government a blank cheque for the spending of what they like in subsidising private industries in this country in the next few months, even although we are individualists and they are Socialists, and I think it is very unlikely, from what the right hon. Member for Carnarvon Boroughs said to-day, that he would agree to do so either. This question will have to be considered very seriously when the Bill comes before this House on Second Reading and on the Report stage. Having raised this completely new issue, so far as we were concerned, and having drawn a new red herring across the path, I think in desperation, the Lord Privy Seal then complained because, when my right hon. Friend the Member for Antrim (Sir H. O'Neill) was putting a series of very cogent and important questions upon this actual financial proposal, and there was not a single soul on the Treasury Bench except a Junior Lord of the Treasury, my right hon. Friend the ex-Chancellor of the Exchequer moved, and properly moved, to report Progress.

10.0 p.m.

Then we got the Financial Secretary to the Treasury back, and he told us that this would in fact be the case; that when we rise in 10 days' or a fortnight's time we shall have been invited to give the Government permission to spend a practically unlimited amount of money in subsidising private enterprise, and that when we come back in November we shall be told what has happened in the meantime, and asked to give our consent. That is practically what the Financial Secretary to the Treasury said. I very much doubt whether he will obtain the consent of this House to any such proposal, and I think we were fully justified, on this side, in moving to report Progress at that time, because it was a completely new issue that had been raised, and one we had never heard of before this afternoon. I do not know what the end of this particular proposal will be, but I cannot accept the statement of the Financial Secretary to the Treasury that the proposal to set up a Special Committee in order to guarantee interest up to any amount to private enterprise in this country is on all fours or squares with the procedure under Lord St. Davids' Committee. I recollect that a sum, I think, not exceeding £3,000,000 was definitely laid down as the maximum which could be spent when that proposal first came into operation, and I think there were many other stipulations made in subsequent Amendments to that Act; but I am certain of this, that it is untrue to say that the St. Davids Committee ever operated with the same freedom and scope as the Financial Secretary now claims for the operations of this new Committee that is to be set up by the Lord Privy Seal. If the Lord Privy Seal seriously thinks this House will give him a blank cheque in this matter, he is doomed to be disillusioned, for every hon. Member on this side would demand, and rightly demand, that a maximum sum should be fixed, beyond which this Committee could not possibly go, at any rate until we met again to discuss what had taken place during the intervening three or four months. We cannot give a blank cheque to any Government in this way.

I think it is about time that we had a statement from the Treasury of their attitude upon the whole question of development and credit policy. We have never had a word. In fact, the hon. baronet the Chancellor of the Duchy of Lancaster deliberately got up and said that he believed the whole question of credit policy was absolute y vital to the question of unemployment, but that he, for one, was going to make no statement on the subject and, that it was not for him to deal the intentions of the Government upon it. I think it is high time that we got a clear statement of the policy of the Government in regard to credit and currency policy generally, because they have talked enough about it during the last four and a-half years. The Financial Secretary to the Treasury himself has made speech after speech in this House denouncing the late Chancellor of the Exchequer for everything that he did, particularly in regard to the gold standard and credit restriction. He raised the question over and over again, but now that he is Financial Secretary he deliberately refuses to make any statement with regard to the policy or the opinions of the present Administration on this question.

The Government cannot claim for one moment that they are in any way hampered in this matter, or that they have not power, because the party which follows the right hon. Member for Carnarvon Boroughs has already expressed its willingness to spend money to the tune of a couple of hundred million pounds to further schemes for unemployment. The Lord Privy Seal comes along and proposes £25,000,000. I do not think even he would claim that that would cure unemployment; but I do think we ought to have a clear statement from a representative of the Treasury or from, the Chancellor of the Duchy of Lancaster, who is going to reply, as to what the opinions of the Government are in regard to the whole of this question: whether they accept the point of view of the Treasury experts, that if you take, say, £100,000,000 out of the general fund of credit in this country, and apply it to municipal undertakings and so forth, you are thereby making money dearer to the rest of industry, and depriving the rest of industry of a certain amount of credit that would otherwise have been at its disposal. That is the strict, Treasury, orthodox point of view. I think the Treasury go rather too far on that line. I have always thought so; but evidently hon. and right hon. Members on the Government Bench do not take that view. We ought to know soon exactly what their opinion upon this very important question is.

In my opinion, for what it is worth— and we all have a right to express our opinions, and I have spent some time in the Treasury— I do not think a large loan policy for the purposes of development would do any good so far as curing unemployment is concerned. But I do think that, so long as you have a falling price level, there is nothing you can do in any Department, so far as curing unemployment is concerned, that will have any effect whatsoever; and I want to ask the Chancellor of the Duchy of Lancaster whether the Government are taking any steps to prevent the continued fall in the general level of world prices, because that is important, and until you check that, nothing that you can do will have any effect in curing the real volume of unemployment in this country. Apparently, in the meantime, until we know more clearly what the intentions of the Government are in regard to Paragraphs (2) and (3) of this Resolution, we have got to abandon any idea of a large credit or loan scheme to cure unemployment.

Of course, nobody on this side of the Committee would deny that you put several million pounds down, and spent it in large works of construction, for instance, on making a road bridge across the Firth of Forth, or -a mid-Scotland canal, it would for the time being absorb a certain amount of the unemployed. Apparently, we are not to have' any grandiose schemes of that kind; and I think the decision of the Government in that respect is, on the whole, wise; but we ought to ask the Chancellor of the Duchy of Lancaster, if he is going to reply, how quickly some of the smaller schemes will be put into operation under the new committee which will be set up. It is all very well for them to say that they are hurrying on the local authorities, that nothing is ready, that they cannot get things going in time, and that the policy of the late Government was so bad that nothing can happen yet, but I know one particular case in my constituency where a scheme has been completely prepared, and it is vital if the fishing fleet is to be properly handled during the fishing season, and there are other examples. Since the present Government came into office, a scheme for improvement of the harbour at Peterhead has been forwarded to the Treasury with a request for financial facilities, but nothing has been done yet. I do not submit for a moment that this scheme would affect the unemployment figures by a single man, but it cannot do any harm, and it will result in a definite improvement in the facilities accorded to the fishing industry.

There are many other small schemes of this kind that could be carried on with this modest £25,000,000, which will not affect the actual numbers of the unemployed, but which are of some intrinsic value, and ought to be carried out, for they will leave the country better off, from a capital point of view, than it was before. To claim that this scheme will prove a final remedy for the problem of unemployment, or even that it will go a substantial way towards solving it— [HON. MEMBERS: "Who said it?] The Lord Privy Seal claimed that it would be of great assistance and that it would go a great way towards solving this problem. [Interruption.] I understood that that was the whole object; but may we take it that he has not the slightest oonception of affecting the problem of unemployment, but merely of effecting some capital improvements in our national life? If so, that is very interesting, but it makes it all the more necessary for us upon this side of the Committee to enter an emphatic protest against the methods which hon. Members opposite use to get back to this House— methods which were very successful, for they got in very largely on this unemployment question. They promised to do something, and what they have done up-to-date is absolutely pitiful. A sum of £25,000,000 was their maximum effort, until the Lord Privy Seal became panic-stricken and had to embark hocus-pocus on a new scheme to spend an unlimited amount of cash in order to bolster up private enterprise. We had not heard of this new suggestion before. One thing that the House expected of the present administration was that they would do something drastic to handle the various problems raised by the question of unemployment insurance. Members who sat in the last House of Commons will remember that my hon. Friend Mr. Harold Macmillan raised this question on more than one occasion, and asked the Government whether it would not be possible—

Mr. McKINLAY

On a point of Order. Are we discussing unemployment insurance?

The CHAIRMAN

I was watching the hon. Member very carefully.

Mr. BOOTHBY

I was well aware that I was going beyond what would ordinarily be considered in order, but this Debate has covered the whole field of national, international and imperial administration, and there has been no check whatever upon any observation on any side of the Committee. However, I will not pursue the question at the moment, except to say that the £25,000,000 to which we are being asked to agree is intended largely to deal with the unemployment problem; insurance forms an important part of that problem; and the House and the country had expected the Government to display a little more imagination and zeal in tackling this particular side of the problem, because it is one of the most urgent; but the Government have not attempted to deal with it at all. I will conclude by expressing the disappointment which many of us feel on this side of the Committee that the Government, after having made every sort of promise— the Lord Privy Seal may not have done it himself, but every hon. Member behind him did— for dealing with this, that and every problem, and having gained victory by doing it, have the audacity to come to the House with this miserable proposal to lend £25,000,000, which, as I say, will not touch the fringe of the problem.

Mr. FRANK SMITH

I agree that a newcomer should speak with diffidence in this Assembly, but I must confess, that after listening very carefully for the last couple of weeks to all speeches, I am burdened with only one point of view. One would imagine that we were a company of moneylenders, and not concerned with the great problem with which we are proposing to deal. The hon. Member for East Aberdeen (Mr. Boothby) said that the country was expecting certain things. I am fresh from the country, and fresh from contact with the people who sent us here, people who are not indoctrinated with the atmosphere of this House, and I can assure him that the country expects one thing in particular, and that is that the House should deal with the question in a practical fashion. Up to the present, the question has been approached from the standpoint of a glorified debating society. The real thing to be borne in mind is that hundreds of thousands of people, defected, brokenhearted and despairing, sent us here to find a way out of this difficulty. For 14 days it has been mere logic chopping and hair-splitting and scoring off one another in the finest debating society manner. Hon. Gentlemen have been talking about what it will cost and about the impertinence of the Lord Privy Seal in coming here to ask for large sums of money to deal with this problem, I would like to ask those hon. Gentlemen: What is money for if it is not to use on urgent matters of this kind 2 Do let us hear less of money and more of-humanity.

This is not a new problem. There are hon. and right hon. Gentlemen here who talk as though this was a problem of recent growth. I remember 40 years ago, when it was my privilege to have a seat among the recording angels upstairs, listening to our grand old pioneer, Keir Hardie, as he sat on that third bench opposite dealing with this problem which is here with us to-day. What has been done during those 40 years to find a solution of it? It is no use anyone saying that because no solution has been found there is not a solution. There is, and the reason, it has not been found is that this honourable institution has not made up its mind to find it. This House is supposed to be the brains of the nation. When this question was discussed here 40 years ago the one man who represented the principles which we here stand for to-day told the House that there was only one way in which the problem could be solved, and that was by the application of Socialist principles. That remains true to-day, say what you will. The schemes which the Lord Privy Seal has proposed are, as he himself declared, good in their way, a step, a short step if you will, in the right direction.

Hon. Gentleman on the other side are afraid that what they worship, private enterprise, will suffer. If private enterprise really represents what I think it represents, a greater regard for individual profit-making than for the good of the community as a whole, then private enterprise must suffer. The life and the happiness of the community outside must not be allowed to suffer if we can help it. Unemployment impossible of solution! If that be true, then the declarations of the Old Book are untrue; but I for one deny that. It is there clearly enunciated "Six days shalt thou labour," and that is the dictum of a very high authority; but hon. and right hon. Gentleman come here and say "If it interferes with private enterprise and profit-making, then we cannot follow it." I hope that this House will get right down to this business and leave off its debating society methods. If the Lord Privy Seal has made proposals which are reasonable, let us help him to carry them out, and, if they are not reasonable, let hon. Members get up and say what they believe would be preferable to these proposals. We have had four and a half years of playing with the question by a Government which had a majority of 200 by means of which they could have done anything they chose. I want to assure the Committee that if there were a 200 majority on this side of the House, instead of wasting 14 days in logic chopping, something would be done.

I hope we shall really get down to business and do our best to help those who are trying to do something. I come here fresh from the fighting line. I have been a long time trying to get here— that is not my fault— but it is a matter of great satisfaction to me now that I am here to find so many of those I have helped to get here. Now I am here I begin to understand why things move so slowly. I do not wonder at people outside asking what is the use of the Parliamentary machine. What is the use of it? If it keeps on working as it has been working, I say with all respect—I am still a young man in a hurry and we have a right to be in a hurry— we cannot wait. Hungry people cannot wait and people who are suffering ought not to have to wait. As far as I can help matters, I for one shall do my best to get the brake taken oft the wheels of the Parliamentary machine. I appeal to hon. and right hon. Gentlemen who have been here all the years I have been trying to get here, and I ask them to get a move on, and to be less critical and more practical.

Sir L. WORTHINGTON-EVANS

The House always welcomes a new Member, and it has shown its appreciation of the speech which the hon. Gentleman has just made. When he has been here a little longer, may I venture to say, he will find that we are all moved by motives of humanity, and that what appears to him strange in our procedure is really designed to elucidate those very difficult questions with which we have to deal.

Mr. F. SMITH

Is it a movement forward or backwards?

Sir L. WORTHINGTON-EVANS

If the hon. Member wishes for an answer to his question, let him read to-morrow morning the speech which he has made to-night, and ask himself, has he moved forward or backward in trying to solve this extremely difficult question? I do not want to keep the Committee long, because I understand that there is to be another speech from the Front Government Bench, and, therefore, I will deal very shortly with the first part of the proposals in the Financial Resolution. The first part deals with the right to raise £25,000,000. I regret that the condition of acceleration is being omitted. Previously, under the Trade Facilities Act, it was necessary to show that there was an acceleration of work before financial assistance was given by the State, and that, undoubtedly, brought to the front, perhaps a year or two, and sometimes as much as five years, ahead of time, works that were useful to the community. I understand that that is to be abandoned, and I am sorry that that is so, because one has to remember, notwithstanding the difficulty of the subject, that there is a competition in loans, and that competition in loans means competition in employment. If you apply money to works which would normally be done by a local authority, you are not really increasing the aggregate of employment. The hon. Member for West Middlesbrough (Mr. K. Griffith) said that, if that argument were complete, it would mean that in all past times we should never have made any progress, because each loan would have been at the expense of another loan. That, however, is fundamentally wrong, because the new loans are made out of savings, and, so long as there are savings, so long as the nation is saving part of its income, it can find a loan fund, and an increasing loan fund. As we stand now, however, there is very little doubt that any large sum taken by the State for the purpose of financing any particular works will be taken at the expense of industry and of works which would otherwise be done by private enterprise.

There is a great movement towards the rationalisation of industry, both in the coal trade and in the steel trade, and finally, no doubt, in the cotton trade. All these rationalisation schemes require capital. They require the scrapping of obsolete plant and its replacement by new plant. All of that is going to take up capital, and I would ask the Committee to remember that, if capital be taken up in that way, it is in the staple industries of the country, where skilled men will be employed, whereas, if the same money be used in extending road work or docks and harbours, the bulk of the employment to be given will be of unskilled and not of skilled men. It is extremely important, therefore, that the trades employing skilled labour should not be starved of the money that they require. One of the professors who supported the Liberal party during the election made another suggestion. He suggested that foreign loans should be discouraged, and that, instead of lending money abroad, we should lend money at home, and so produce work at home. This would necessitate Government control over foreign lending. That is an extremely difficult administrative act, and I have noticed that the Government have not attempted To suggest that they would carry it out. In any event, in my judgment, it would be utterly wrong, because, again, it would be interfering with the export trade, which employs men in the skilled industries of the country, and it would be turning those men into work of a less skilled nature.

I now want to deal with paragraphs (2) and (3) of the Resolution, and I am glad to see that the Chancellor of the Exchequer is here, because we shall, perhaps, get a little information to supplement the information given by the Financial Secretary. To state the Resolution shortly, the Government ace taking power to make gifts— "grants" is the word used in the Resolution— to public utility companies equivalent to the interest which those companies may pay or incur on works that they put in hand up to a period of 15 years. Under this power the Government will be able to pay, let us say, 5 percent, interest for 15 years. In other words, they are asking for power to make a subsidy or gift up to 75 percent, of the cost of works carried out by public utility companies. That is the proposal, all or any part of the interest for 15 years. Assume an interest of 5 per cent. Multiply 15 by five and you get 75. Therefore, 75 percent, of the cost of the works can be financed by the Government and a gift can be made to public utility companies of 75 percent, of the cost of the works for a period of 15 years it is true, but 75 percent, spread over 15 years can be made to public utility companies.

Mr. PETHICK-LAWRENCE

The right hon. Gentleman is forgetting the present value of the money.

Sir L. WORTHINGTON-EVANS

I said spread over a period of 15 years, showing that I have stated it quite accurately and did not forget that the present value would be less than 75 per cent. Spread over 15 years the Government are offering a gift, without repayment, to public utility companies carried on for private profit. That is the proposal. We ask the Financial Secretary to the Treasury: Is there to be no limit on this? Are they to be able to do it to any extent— £50,000,000 or £100,000,000? He says, "No limit, but there will be an Estimate." I agree that sounded all right, but the Estimate is to be in the Autumn and not now, and the Government are to be entitled to commit themselves up to any extent before the Autumn. The right hon. Gentleman docs not suggest that if the Government commit themselves they are going to repudiate their commitment. Whatever may happen in other Oppositions, that will not do for the Government. If the Government commit themselves they have to fulfil their commitments, and it is precisely the same as if they had in fact handed over the money. Between now and the Autumn up to any extent the Government are taking power to make these gifts. The hon. Gentleman tried to justify it by saying that this was the normal orthodox procedure and that it had been done before. That really is not quite a fair statement of what has happened before. When the grants were made before, there was, first of all, a, limit up to £2,000,000. That was afterwards exceeded, but before it was exceeded there was a Treasury Minute laying down the terms upon which the gifts could be made. Will the Chancellor of the Exchequer tell us the term's of the Treasury Minute limiting the conditions of these gifts I May I (remind the Committee what the conditions were: Works which would not be proceeded with at the present time, apart from the pressing need for relieving unemployment, are alone eligible. That is a perfectly proper condition. Cannot he accept that condition? This is an unemployment relief scheme. Cannot he say that he will put that into the Treasury Minute as one of the conditions of the grant? May I call attention to another: Assistance will be limited to a maximum of 50 per cent., with interest at an approved rate on the expenditure as and when incurred. Fifty percent, only was granted by the Government, for the very reason that there was then a check upon extravagance and injudicious expenditure, because the persons who got the grants had then to make a payment out of their own funds. That was a substantial guarantee antee that Government money would not be wasted. In addition, the grant will be made for a period of years which will be dependent mainly on the extent to which the work is being accelerated. If it is being accelerated by five years, by all means make the grant for five years. If it is only going to be accelerated by five years, what on earth ground is there for making a grant for 10 or 15 years? No benefit is being obtained by the unemployed. On the contrary, someone who is lucky enough to be a shareholder in a public utility company is getting a perfectly gratuitous, gift from the Government. I do not know whether this commends itself to those who wish the Socialist scheme to be put into operation. Let me call attention to one more extract which is of extreme importance: In cases where dividends are not already limited by Statute, the undertaking will clearly be required to submit to such limitations as to the distribution of profits during the period of assistance as may be necessary to secure, in the opinion of the Committee, that no undue advantage is taken of its assistance. If you are going to make these grants to a public utility company which has a sliding scale dividend—

Mr. THOMAS

Are you reading from the Minute of Lord St. Davids' Committee?

Sir L. WORTHINGTON-EVANS

Yes, I am reading from the third interim report of the proceedings of the Unemployment Grants Committee, appendix A, page 17. [Interruption.] This is really a serious point. If you are making a grant of public money, you ought at least to see that somebody does not profiteer out of it. That is what I am asking the Chancellor to say. If the dividend is now already limited, as it is in the case of sliding scale public utility companies, then it does not matter, because the shareholder does not get an undue proportion. The consumers of gas or electricity, for instance, get a reduced rate, and I do not mind public money being used for that purpose. Where we get a public utility company with no restriction on dividends, we did insist, in the conditions of the grant, that they would have to make arrangements to limit their dividend during the period of subsidy. Surely, it is not asking too much of a Socialist Government to see that public money is used for unemployment and not for the purpose of paying undue dividends to private shareholders. The Financial Secretary to the Treasury says that there will be an estimate brought in in the autumn, but meanwhile commitments will be made.

I do not want to hold up work, I do not want to hold up grants, but I do want to see that the grants are made under such conditions that there is reasonable security for the public money. I ask the Chancellor of the Exchequer, if he cannot answer to-night, to say that he will, when this matter comes on for further consideration, when the Bill is brought before the House, be prepared to make a statement as to the terms of the Treasury Minute under which these grants are to be made. Of course, there should be some limit on the figure. I do not want unduly to limit him. He ought not to ask the House to grant an unlimited sum. When we did it before, there was a limit of £3,000,000 on it; that may be too little, or it may be too much. I do not know what the mind of the Chancellor of the Exchequer is upon it. He ought to give us a figure, and he ought to give us the conditions. I only desire to speak for a very short time, because I want the hon. Gentleman opposite to have an opportunity of replying, but it is really taking me longer, because there is a running commentary all the time.

Have the Government made up their minds as to what the cost of the Liverpool Street electrification scheme is going to be, because that is a scheme to which these grants might be made between now and the autumn? We may come back in the autumn and, if the hon. Baronet the Chancellor of the Duchy is right, we may find that the electrification of Liverpool Street Station, costing £75,000,000 to £100,000,000, has been made the subject of grants, and that the Government are committed beyond recall to the expenditure of the whole of the interest upon that scheme for 15 years. I do not know whether the hon. Baronet can give us a further explanation as to the amount. The right hon. Gentleman the Lord Privy Seal came to his rescue the other day and tried to explain his extraordinary statement that that scheme could cost £75,000,000 to £100,000,000. It would have been quite simple if the hon. Baronet had confessed to the House that he had put on an extra nought and that the real figure was £7,500,000 or £10,000,000. No one would have complained of a mistake of that sort, because it is not difficult to mistake a figure; but he would not do that.

He reproved us for challenging his figure. Then, the right hon. Gentleman came in, and said, "He did not say that at all," but, when ho was told that the hon. Baronet had said it, he replied: "Well, if you take in a lot of schemes, they might ultimately amount to £70,000,000." That is nearly £75,000,000, so he was prepared to throw in the extra five millions in order to support the hon. Baronet. In this connection, there is a curious grammatical error in the OFFICIAL EKPOET, and I am rather anxious to know whether or not it was made at the instance of the hon. Baronet. The "Times" report says: If the Liverpool Street Station scheme went through, it would involve orders of between £75,000,000 to £100,000,000, very largely to the steel trade. I believe that is exactly what the hon. Baronet said. When that is compared with the OFFICIAL REPORT, it reads like this: As a matter of fact, if the schemes connected with Liver pool Street electrification scheme goes through, it will involve. orders of between £75,000,000 and £100,000,000, very largely in the steel trade."— OFFICIAL REPORT, 4th July, 1929; col. 259, Vol. 229.] It looks for all the world as if the hon. Baronet, knowing that he had made a slip, just put an "s" on to the "scheme" and forgot to put the verb into the plural. Consequently, he has made the OFFICIAL REPORT commit a terrible grammatical error. I should be glad if the hon. Baronet could explain the position, and tell ns whether the Liverpool Street scheme is one of the schemes to which the Chancellor of the Exchequer intends to apply paragraphs two and three before we come back in the autumn.

Sir O. MOSLEY

The right hon. Gentleman has asked me a great many questions and has left ms a very short time to reply. For my part, I am more interested in over 1,000,000 unemployed, with whose lot we are striving to deal, than with grammatical differences between the right hon. Gentleman and the OFFICIAL REPORT authorities. When the right hon. Gentleman, in an earlier part of his speech, asked us to save the Government and the country from the profiteer, and not to dole out money to private interests, I wished that similar injunctions had been addressed to the Government of which he was a Member for 4½ years. They are precisely the injunctions which the late Chancellor of the Exchequer should have addressed to his own back benches when they pressed him, and compelled him, to give large sums of money to the Irish Loyalists; they are the considerations which we urged upon the right hon. Gentleman the late Chancellor of the Exchequer when he made large remissions of taxations to the Super-tax payer; and I can assure the right hon. Gentleman who has just sat down that they will be far more present to the mind of the Government now in office than they were to the Government of which he was a Member, On the points which he raised I invite the right hon. Gentleman to await the Bill and then to make such suggestions, having read the text, as may occur to him. These are points which are not for one moment absent from our minds.

This has been a most remarkable Debate. The late Chancellor of the Exchequer began by minimising the plans of the Government, by holding them up to ridicule and contempt as altogether negligible, as making no contribution whatever to the solution of unemployment, and he turned round to the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) the Leader of the Liberal party, and said that in his conception there were great and grandiose schemes, immense schemes, widely conceived with bold imagination which might have done something to touch the problem. The Leader of the Liberal party was held up to us as the model of a man of bold and daring action to whom we should look for guidance. But when the right hon. Gentleman the Leader of the Liberal party rose in his place to speak he expressed himself as horrified at the size and extent of the powers for which my right hon. Friend was asking. The man of push and go, so much more daring than we on these benches, was appalled and alarmed at the magnitude of the proposals we brought forward. Then the late Chancellor of the Exchequer joined with the Leader of the Liberal party in putting the handcuffs upon people who were doing nothing in case before the House meets in the autumn we should have done too much. The right hon. Gentleman who had just sat down rises at the end of the Debate and re-echoes not the complaint of the late Chancellor of the Exchequer but the fears and lamentations of the Leader of the Liberal party. He too is concerned and alarmed lest under the powers of this Bill, which is so entirely negligible, by the time the House meets in the autumn we shall have raised such a vast loan and undertaken such vast commitments that the whole structure of British credit will be in danger. I leave right hon. Gentlemen opposite to decide on which leg they will stand, whether this Bill is so alarming in the powers it confers upon the Government that it is a public menace or is so small and pitiful a thing that it cannot put half a dozen men into employment.

Mr. BOOTHBY

Both.

Sir O. MOSLEY

I am always glad to have a clear exposition of the Conservative policy. The hon. Member has reproached me, as Chancellor of the Duchy, for not making a pronouncement upon Treasury policy. I must say that he has set me a noble example, for as Parliamentary Private Secretary to the late Chancellor of the Exchequer he never hesitated to make a pronouncement of policy, somewhat to the surprise of the Treasury. I hope to deal possibly with the late Chancellor of the Exchequer's argument together with his before I sit down. What is so astonishing in this complaint that the present Government are pursuing a somewhat irregular procedure in what they suggest is the record of the right hon. Member for Carnarvon Boroughs in this respect. I often felt an admiration for the administrative decision with which the right hon. Gentleman has; frequently acted. He is not a man who has been bound by an over-pure or orthodox view of financial or Parliamentary procedure when he has wanted to get things done. On this occasion we are in this Bill actually engaged in regularising the procedure of that right hon. Gentleman. When he set up the St. Davids Committee in September, 1920, how did he do it, and what was the procedure which he adopted? He acted perfectly properly in the first instance, I am advised by constitutional authority, in establishing this Committee by a Treasury Minute which said that Parliament would be asked to place a sum of £3,000,000 at the disposal of the Committee for a purpose that was well known. But did he wait for Parliament to vote the money before entering into commitments? Within two days of that Treasury Minute being recorded, he sent out a circular to the local authorities offering them grants upon the basis of that Minute. And the right hon. Gentleman who joins with him, the ex-Chancellor of the Exchequer— another great champion of financial and Parliamentary orthodoxy— was a member of the Government which took that arbitrary and heterodox view. There we have the Mussolini touch, if you like. Yet when these gentlemen, who got on with the job, and shook off all the outworn shibboleths under which this country has been goverend so long, when we come forward with this Bill, which is largely concerned with regularising their own procedure, and taking statutory authority for dealing with this matter, they rise in their places and pose as guardians of their principles.

Mr. CHURCHILL

We only ask you to state the figure.

Sir O. MOSLEY

If the right hon. Gentleman wants to put handcuffs upon us, it is quite open to him on the Committee stage to move the necessary limitation. It is open to the Liberal party as well. The right hon. Gentleman began this Debate by complaining that there was nothing in the Bill, and that nothing would be done, and now he is rising in his place and saying that we must accept a limitation because we are such terribly dangerous people. It is open to him at a later stage to take such action as may suggest itself to him when he sees the text of the Bill. To pursue this one step further, there is a further precedent, which we have not followed, which was set by the right hon. Gentleman the Member for Carnarvon Boroughs. What did he do? I have described the sending out of the circular two days after the Treasury Minute, making offers without Parliamentary sanction of any kind. In the following year he committed this House for 15 years without a Vote. It could not be debated by Parliament, and it was done without statutory authority, and we are actually paying to-day commitments into which the light hon. Gentleman entered without sanction and without authority of any proper kind. In all these transactions his fellow-conspirator in to-day's Debate, the ex-Chancellor of the Exchequer, was joining with him when they were in office.

There was a number of questions winch I should have liked to answer, but, unfortunately, the time is not sufficient. The right hon. Gentleman the ex-Chancellor of the Exchequer said we were doing nothing and that we were reviving things which had been done before by the right hon. Gentleman the Member for Carnarvon Boroughs. In so far as that is true, we are reviving things which were smothered and destroyed by the right hon. Gentleman him self. Lord St. Davids' Committee was cut dawn by his circular from an expenditure of over £20,000,000 a year to an expenditure of £319,000 a year. It is true that he justified it by saying, "Here is a report of Lord St. Davids' Committee upon which our policy was based." We asked for the date of that report, and he said, June, 1926. That circular was issuel in the previous December of 1925. That is one of the minor debating lapses into which so great a Parliamentarian sometimes falls.

Then the right hon. Gentleman said that there was nothing new in our colonial policy, and traversed it at greater length than I shall. He said that this proposal for the development and the rest was "all contained in our election address." Why was it not contained in the programme that the party opposite carried through in four and a half years? All through the election and at every election they talk about the Empire. In between elections we try to do something for the Empire and for the unemployed. They wave the flag, and we deliver the goods. All through the last election the walls of Birmingham were emblazoned with the features of the ex-Dominions Secretary enshrined in the folds of the Union Jack. He now tells us that in his four and a half years of office he wanted to carry such a Measure, but was prevented from doing so by the ex-Chancellor of the Exchequer. These domestic differences we follow with much interest. On account of them the right hon. Gentleman strove hard to stir up domestic differences in our home this afternoon. The man who is unhappily married in his own party evidently wants to create trouble in the domestic arrangements of others. We feel for the right hon. Gentleman; he has our fullest solicitude. But at the same time we do not mean that the contagious diseases of party strife should spread to the ranks of the Labour party.

11.0 p.m.

The right hon. Gentleman the ex-Chancellor of the Exchequer put up again the great Treasury dilemma. If I may respectfully suggest it to him, a much older Parliamentarian, would it not be corerct if he took the responsibility for that policy himself? I feel that he' is not one to shelter behind the Treasury. I have always been taught that when a Minister issues a statement of policy he should accept responsibility for it, and that it is highly improper to talk about it as Treasury policy when in fact it is his own policy. But since when has the right hon. Gentleman discovered that credit has something to do with unemployment? In the spacious days when he was committing us to the present credit policy of the country, the right hon. Gentleman said that credit had no more to do with unemployment that the Gulf Stream. But four years later he learned its effects. We are now suffering from the policy upon which he embarked, and from that policy in due course this Government by its measures will escape.

Question put, and agreed to.

Resolution to be reported To-morrow.