PRIVY SEAL OFFICE.

HC Deb 04 November 1929 vol 231 cc657-770

Motion made, and Question proposed, That a Supplementary sum, not exceeding £10,250, be granted to His Majesty, to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1930, for the salaries and expenses of the office of the Lord Privy Seal.

4.0 p.m.

The CHAIRMAN

Before I call on the Lord Privy Seal I would like, for the information of new Members, to say that in Committee of Supply we deal with matters affecting administration and that no matter involving legislation can be discussed.

Mr. MAXTON

On a point of Order. I understand that there was an assurance given to both the Leaders of the Opposition, when this matter was put down for discussion, that, although the Vote was put down in this way, the whole problem of unemployment would be the subject of discussion. I wish to ask you whether your Ruling now is in contradiction to that previous promise given to the Opposition.

The CHAIRMAN

I am not responsible for any such statement as that from the Front Bench. We are in Committee of Supply, and the precedents all go to show that in Committee of Supply discussion must be confined to administration. It will be the Lord Privy Seal's duty to give us an account of what he has been doing in the way of administration, but questions that require legislation cannot be discussed.

Mr. LLOYD GEORGE

I am not in the least challenging the Ruling, but I understand that, by common consent of the whole of the Committee latitude is generally extended to Members on occasions of this kind, when it is desired to survey the whole position, say, of unemployment. I earnestly trust that, if it be the view of the whole Committee that there should be free and unfettered discussion of the whole position of unemployment, Members will be allowed even to divergate occasionally into questions that might conceivably involve legislation. For instance, a loan might be necessary and that would involve legislation. I therefore hope that, with the full consent of the Committee, it will be possible to have a full discussion of the whole problem of unemployment.

The CHAIRMAN

Of course, in this matter I am very largely in the hands of the Committee. If it be the desire of the whole of the Committee that something of that kind should be done, provided that hon. Members do not go into the details of legislation, I shall not cause any obstacle to be put in their way.

Mr. STANLEY BALDWIN

I think the recollection of the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) as to what took place the other day is quite correct. I put a question on that very subject. The discussion was to be of the widest kind—just such a discussion as took place at intervals when I sat on the other side of the House.

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

In answer to a question, or a series of questions, addressed to me on the first day of this Session, I said it was the Government's intention to put on the Paper a Vote for my salary for discussion. The intention then was certainly not to take advantage of any limited ruling; on the contrary it was done deliberately, so that within the limits of the Rules of Procedure a full-range Debate could take place on this important question. When I first addressed the House on this question, it will be remembered, I clearly indicated that I had no magic cure for the problem of unemployment. I made it perfectly clear then, as I do now, that it is not a temporary problem. If it were a temporary problem we would be able to deal with it by temporary means. I do not propose to-day to juggle in any way—for or against—with the unemployment figures. Outside, considerable capital is made of the fact that since this Government came into office the figure of unemployment has increased by 100,000. Twelve months ago, when the late Government were in office, in precisely the same period the figure increased by 200,000. That merely indicates that the seasonal changes which are inevitable in this country are not the real test of the unemployment problem.

I indicated then, as I indicate to-day, the broad view on which I base my policy and the reason for believing what was the only means open for seriously tackling the problem. First, the question was how, by the expenditure of public money, we could find for the unemployed work that in itself will increase the efficiency of the nation and not add to the general burden of industry. I emphasise that for this reason: whatever sums of money we spend at this moment in providing temporary employment for the unemployed, if in the end the result is not to make the nation more efficient, then that capital debt, instead of helping the nation, would be a real hindrance to it. I laid that down as a condition for the expenditure of capital. Secondly, the question was how, by Government help and drive, the export trade could be stimulated and the productive capacity of industries generally improved; thirdly, how the great potentialities of the Empire could be developed and encouraged to contribute to both of those objects.

It was with these aims in view that I asked Parliament last Session for certain powers. I do not disguise from the Committee that the response was, to say the least, not very enthusiastic. Hon. Gentlemen opposite not only cast doubts upon my method, but they said quite clearly, "You will fail, and the reason why you will fail is that we failed." My answer, of course, is that they did not try. Below the Gangway opposite the right hon. Gentleman who leads the Liberal party was very dissatisfied with my policy. He said I was too timid, that I was not bold enough, and that there were not enough millions being borrowed. From my own side the response wag somewhat mixed—a little treacle, some vinegar, considerable brimstone. At all events the House just three months ago gave me the power for which I asked, and to-day my task is to submit to this Committee how during the past three months that power has been used. In other words this afternoon I have to justify to the Committee both the method that I asked them to support and the power that I took, and to show generally whether the forecast as to what would emerge from these powers has been justified in the three months that have elapsed.

I turn first to the Unemployment Grants Committee. The Committee will remember that in examining the question I came to the conclusion that the previous policy was not only unfair but too rigid, and that it did not give that elasticity to the Unemployment Grants Committee which was necessary in considering the various needs of and the differences existing in various localities. It will be remembered that before a grant could be made a rigid 15 per cent. of unemployment over a period of 12 months was necessary. Anyone who knows the economic position of the country knows that that is an absurd situation. Secondly, in order to get a grant it was necessary for a local authority to speed up for a. period of at least five years. I altered both those things; I reduced the 15 per cent. to 10 per cent., and I reduced the five years to three years. Over and above that I gave to the Unemployment Grants Committee a wide elasticity in the matter of transferred labour which enabled them to consider individual cases on their merits.

I now want to submit to this Committee of the House what in the period of three months is the result of that work. In the three months £11,000,000 worth of work has been approved by the Committee, providing approximately 500,000 man-months of direct employment, apart entirely from the indirect employment afforded. In addition, there is at this moment before the Committee £10,000,000 worth of work under examination. Here I want to give a few details of the various classes of work. After the experience of last summer, no one would quarrel with me if I said that every water authority in this country ought to be alive to the dangers of the position we passed through, and with our experience this year there would be no excuse for a repetition next year of both the hardships and the dangers experienced. Having obtained these powers, I circularised all the authorities and all those responsible for water supply, whether large or small undertakings, and the House will be pleased to know that included in that £11,000,000 is expenditure on a considerable number of large water schemes. I go further and say that no water authority in this country will be held blameless next year if they do not take advantage of the scheme to make adequate provision for supplies, as they DOW have the opportunity to do. These schemes approved by the Committee are widely spread, and embrace schemes in such areas as Birmingham, Newport, the Mersey, Durham and Bristol.

At this moment I do not want to go into all the details, except to point out that there is hardly any local authority in the country which has not since the House rose either applied to the Committee or is at this moment in negotiation with them. I was strongly criticised as to the proposals I then made. I was told that no local authority would take advantage of them. I submit there is only one test, and that is to see what was the experience of the last Government and what has been our experience. I do not take the four months as the period of the test; I take the two years of the late Government's administration. In the last two years of the late Government's administration the Unemployed Grants Committee sanctioned schemes to the total amount of £6,000,000. The result for three months which I have given this afternoon is £11,000,000 of expenditure already approved and £10,000,000 under consideration.

Here I would like to say a word on the difficult problem of transfer. I know all too well the argument which is used with force against asking a local authority to bring unemployed persons into its area when they already have large numbers of unemployed of their own. Equally I ask the House to face the facts. If we know, as we do know, and as no one can dispute, that there are certain districts in this country today which, no matter what the change in trade or industry may be, hold out no hope whatever to thousands, even hundreds of thousands, of our fellow men, and if we know that in those districts children are growing up with no hope and with their future blighted, then any Government would fail to be worthy of the name of a government if they did not say, regardless of unpopularity, "We are going to face that fact and do the best we can with it." That is why I have made this scheme more popular than it was under the last Government. That is why I have removed that rigid provision for sending 50 per cent. of transferred labour into a district where they could not deal with their own unemployed, and by giving wide elasticity, we are doing all we can to meet both situations, while at the same time not being unmindful of our responsibility to the transferred.

I pass to the second part of the powers I sought. The House will remember that I set up a Committee composed of representative men of all classes, creeds and politics whose duty it was to examine schemes submitted under the category then laid down. I was fortunate in securing as chairman Sir Arthur Duckham, whose public work the House will appreciate. In the three months that Committee has had very little rest. It has been continuously at work, and at the present moment it has passed and settled various schemes with a total expenditure of £7,000,000. I will deal with the schemes under review in a moment. The £7,000,000 so far sanctioned is divided among three companies—the Great Western Railway Company, the London, Midland and Scottish Railway Company, and the Metropolitan Railway Company. The Great Western schemes are for £4,500,000, and afford direct employment for 300,000 man months. The works approved include extensive improvements to Paddington (Bishops Road) Station, the enlargement of Temple Meads, Bristol, at a cost of £1,250,000, and important works in Cardiff, Birmingham and Taunton. I mention those places to show how widespread is the work. The London, Midland and Scottish programme includes the electrification of the railway in the Wirral Peninsula, and the electrification of the line between Dagenham and Upminster. The Government have also approved a scheme of £300,000 by the Metropolitan Railway Company. The Gas Light and Coke Company put in an application in respect of a scheme of expenditure amounting to £430,000, spread over many districts. The total value of the schemes already approved is £7,000,000.

Colonel ASHLEY

Is this in addition to what was in hand previously?

Mr. THOMAS

No, this is all my own. These are schemes actually approved by the Committee. The House will have seen in the Press a programme submitted by the Underground Railways of London. Here let me pay a tribute both to the chairman of the London County Council, Sir Percy Simmons, and Lord Ashfield. It would be idle to deny that both those gentlemen had been disappointed by the action of this House previously and it is equally due to them to say that although they were disappointed that did not prevent them from responding magnificently to our appeal. The underground railways have submitted very big schemes, involving £13,000,000, which are now under consideration. The House may be interested to know what they are. There is to be an extension of the Tube from Finsbury Park northwards to Cock Fosters, an extension of the Tube from Hammersmith westward to Northfields, and the improvement of stations in the inner area to facilitate dealing with additional traffic. It is only fair to say that these schemes will have to be very carefully examined by the Committee. In addition there are other schemes under review, or which will shortly be under review, amounting to £7,000,000. In other words there are schemes for £7,000,000 already sanctioned and £20,000,000 worth of schemes are under review by the Committee now or will be under review very shortly.

Mr. LLOYD GEORGE

The right hon. Gentleman told us schemes for £7,000,000 had already been sanctioned. Would he mind telling us what is the responsibility of the Government? He will recall that there were two parts to his Bill. I would like to know whether this sum is on loan or guarantee, and what are the financial conditions.

Mr. THOMAS

On the schemes I have already dealt with the assistance is all by way of grants of interest. With regard to the schemes under review some may be assisted by way of guarantee and some by grants of interest.

Mr. LLOYD GEORGE

What is the grant?

Mr. THOMAS

The grant varies under different circumstances; it is not always the same. The House will have from one of my colleagues the details. I repeat that this Committee has sanctioned schemes with an expenditure of £7,000,000, and schemes for £20,000,000 are under review.

In this connection, I would draw attention to the report submitted to the Government on the question of pooling of wagons. I myself was a member of that Committee prior to joining the Government. Shortly the Committee has reported that in their judgment there ought to be no wagon of less than 12 tons, that there ought to be a general pooling of wagons, and that there ought to be a gradual introduction of the 20 ton wagon. Anyone who knows the value to the coal industry alone of this will agree with me that that Report ought to be adopted. One of our biggest commercial men who is a Member of this House reported to me only last week that the company he was interested in could replace 2,000 small wagons by 1,000 20-ton wagons, and would pay for the new wagons on the saving of the repairs to their old ones. Anyone who knows anything about the position at our docks today will at once see the advisability and the necessity, of consideration being given to this question.

I want the Committee and the country to understand that curiously enough, if railway companies or others were to adopt 20-ton wagons to-day there are 51 per cent. of cases where the wagons could not actually be used. In considering this question of facilities I would also like at this stage to mention that the degradation in connection with our coal to-day is such that makes one wonder why consideration has not been given to this subject years ago. When I first went into the coal trouble with a view of finding other markets I found that there was at least 28 per cent. degradation in the coal from the pithead to the buyer. [An HON. MEMBER: "Deterioration!"] We call it deterioration but others, call it degradation.

How is it brought about? It is brought about in many ways and small wagons are one of the causes. Another cause is that the facilities at the docks are obsolete and out of date and the House will be pleased to know that one of the results of the remission of the passenger duty is that the Great Western Railway Company is going to spend £200,000 on improved facilities in South Wales to deal with this particular question. I want to say at this stage that the late Government very wisely remitted the Passenger Duty, and the House will he pleased to know that £7,000,000 has now been sanctioned as far as general principles are concerned. That amount is excluded entirely from the amount which I have already mentioned. As far as the potential work is concerned this £7,000,000 is in addition to the other figures which I have mentioned. The Committee will also remember that in the early stages of dealing with the problem of unemployment I indicated that there were certain directions in which I felt that the railway companies themselves could contribute and I gave One illustration—the substitution of steel sleepers for wooden sleepers.

I explained in my illustration how the wood was imported and I stated all the advantages which in my judgment would accrue from the adoption of steel sleepers. Of course I assumed that when I was emphasising steel sleepers I was not advocating foreign steel. [An HON. MEMBER: "Come over to this side."] I assumed of course that I was advocating something which would be to the benefit of this country. I think the Committee will be pleased to know that in response to that appeal experiments were made and have proved successful, and within the last two months 13,000 tons of steel sleepers have been ordered in this country by the railway companies. I merely give that as an indication that the railway companies and employers generally have never hesitated to respond to the appeals which have been made to them.

Mr. SKELTON

How many miles of track will this 13,000 tons represent?

Mr. THOMAS

I could not say but I know it would be infinitesimal compared with the railways as a whole. I was more concerned about getting a start and I hope this start will be followed up. I ought to mention that in connection with these schemes no one can definitely state the actual number of men who will be employed and hon. Members will be well aware that some schemes mean more employment than others. I desire to emphasise that the Unemployment Grants Committee and the Duckham Committee have certainly not been idle in the period which I have mentioned. The Electricity Commission was also asked to speed up its work and the House will be pleased to know that schemes covering half the country and three-quarters of the population exist at this moment. The Electricity Board have let contracts amounting to £1,250,000 since July last. We have no right to say to a private employer "You speed up" without making a similar appeal to Government Departments. Consequently we asked the Post Office what they would do. [HON. MEMBERS: "Hear, Bear!"] I gather from those cheers that right hon. Gentlemen opposite had difficulties with the Post Office but I am pleased to say that I did not. In response to the appeal we made the Post Office have decided to accelerate their programme and they propose spending £750,000 this year and £750,000 next year on extensions of the telephone programme. That at least is an indication that the Post Office is not reluctant and is not behind the others.

I now turn to the third aspect of this work. The House will remember that in addition to these schemes I mentioned the Government's intention to deal with roads. The Minister of Transport has instituted, with the assistance of the Road Fund, a programme of trunk road reconstruction to cost £9,500,000 spread over four or five years, and there is a further five-year programme dealing with classified roads which will cost £28,000,000. In explaining those schemes to the House I wish to make it perfectly clear that the intention is to concentrate the programme so that the local authorities will have an opportunity of developing their programme four or five years ahead. The Committee will be interested to know that out of the £9,500,000, £7,750,000 has been sanctioned or is in an advanced stage of negotiation, £2,000,000 is under consideration and under the second scheme £13,250,000 is either sanctioned or in an advanced stage of negotiation. This will give the Committee some idea of the speed at which this Department has been working. But in dealing with the road schemes, it is only fair that I should take this opportunity of saying that we are not satisfied with our present methods of acquiring land. On the contrary the method of purchasing land to-day is a positive hindrance. Local authorities are hampered on all hands, and the Government is hampered in promoting schemes. That is only one side of it. The other side is this. When all the trouble and bother is over, local authorities and governments spend money the unearned increment of which goes into other people's pockets. While we are still going on struggling with this problem we are going to ask the House in this Session of Parliament to pass legislation that will get over both difficulties. I now pass to another phase of the work, and here I would pay a tribute to my right hon. and gallant Friend the late Minister of Transport who worked unceasingly for the Charing Cross Bridge. He met with many difficulties. When we came into office we found the money there but one thing we did not find. We did not find the plans ready to get on with the job. I am pleased to say that they are being speeded up now. We are working night and day, and I hope that in this coming Session of Parliament a Bill will be introduced that will enable at least this work to start, certainly before May or June of next year.

Mr. HARRIS

Will it be a Government Bill?

Mr. THOMAS

No, it will be a London County Council Bill, but whatever kind of Bill it is I hope it will be rushed through—not merely in the sense of not considering it, but because when Parliament has agreed, both to the principle and to the scheme, and found the money, and the employment of thousands of people is involved in the scheme, it is surely up to us to speed it up as much as we can.

Mr. HARRIS

That can only be done by a Government Bill.

Mr. THOMAS

In that connection I would also say that my remarks apply equally to Waterloo Bridge. I hope that there will be a start made there even before Christmas. I may turn for a moment to another scheme to which I attach considerable importance. That is what is called the Lower Thames Tunnel. The Government are desirous of proceeding with a scheme for the construction of the Lower Thames Tunnel between Dartford and Purfleet, and every endeavour is being made to arrive at an arrangement which will be satisfactory to all the parties interested, and which will enable the scheme to proceed. This is a £3,000,000 scheme, and is long overdue. All those living in that part of London know how necessary it is, and I hope to be able to announce a settlement in the course of a few weeks from now. I turn from that to another matter. In addition to the powers which I have already dealt with, I asked the House of Commons to pass what was called the Colonial Development Act.

Sir HERBERT SAMUEL

Before the right hon. Gentleman passes from the programme of actual work, can he say anything first about the Channel Tunnel, and secondly, about Liverpool Street Station?

Viscountess ASTOR

And can the right hon. Gentleman say anything about work affecting women?

Mr. THOMAS

The answer to the last question about work affecting women is that in the general development of all these plans there has been no attempt to separate one from the other. With regard to the Channel Tunnel, I would like to take this opportunity of repudiating the suggestion which has appeared in the Press recently that the committee has reported unfavourably to the scheme. The facts are that the committee asked for additional money to facilitate their work in order to employ technical engineers. That money was granted and the committee are now continuing their investigations, and the last time I saw the chairman he indicated to me that he did not think that the report would be out much before Christmas. With regard to Liverpool Street Station, as the right hon. Gentleman knows, that is the property of the London and North Eastern Railway Company, and the full scheme of the London and North Eastern Railway Company is not yet in. We have had an intimation of their scheme, but their full scheme has not yet received the approval of the board of directors. The same answer applies to the Southern Railway. The schemes that are in are those of the Great Western Railway Company, the London Midland and Scottish Railway Company, and the Metropolitan Railway Company.

Mr. MACPHERSON

Have any schemes been considered or approved in respect of Scotland?

Mr. THOMAS

Yes, some have been sanctioned and others are under review now. The details of all the particular schemes of course I am not able to give this afternoon, but any question upon them can be answered.

Mr. MACPHERSON

When shall we have the same information with regard to schemes for Scotland as we are now having with regard to schemes in England and Wales?

Mr. THOMAS

Any particular question directed to any particular part will always be answered. If my right hon. Friend desires to know any given point he can put a question on the Paper.

Major ELLIOT

May we know whether any Scottish Minister is going to make a statement in the course of the Debate?

Mr. THOMAS

No. No particular Scottish Minister is replying, because in the schemes with which I have been dealing and in the whole of the Government policy, we have not separated England Scotland or Wales. The broad lines of policy are applicable to all, and not to one in particular.

Mr. SMITHERS

rose—

Mr. THOMAS

I think I am entitled to ask the Committee to remember that I am endeavouring to give a broad comprehensive review of things done, and it is hardly fair that I should be interrupted on every point of detail.

Sir PATRICK FORD

On a point of Order. Is the right hon. Gentleman in order in regarding Scottish schemes as mere matters of detail?

Mr. THOMAS

I now pass to the third phase of these powers. The Committee will remember that I sought powers under what was called the Colonial Development Act. That was a deliberate attempt, by speeding up the development of the vast assets of our Colonial Empire, to create new sources of demand in countries where a sentimental preference is in our favour, and where we were the first in the field. One million pounds was the limit which I asked in that Bill, but it was £1,000,000 annually. It was £1,000,000 which not only gave an opportunity for useful development there, but the cumulative effect of which would be most marked. I am quite sure the Committee will appreciate the difficulties when I point out that before we could expect a response in that connection, full opportunities had to be given to the Colonies themselves to submit schemes. Here again I am pleased to report that the Zambesi Bridge scheme, which was hung up as the Committee know for a long period, has reached the stage of approval. The estimate is increased, and it will now be approximately £3,000,000, and it is estimated that it will provide employment in this country for 50,000 man months. Other smaller schemes are under review with which I shall deal at another time.

Therefore I sum up the situation as follows. Under the Unemployment Grants Committee, £11,000,000 has been sanctioned; under the Duckham Committee £7,000,000, roads £21,000,000, and Colonial development £3,000,000, a total of £42,000,000. These will provide about 1,400,000 man months of direct employment. There are, as I have already indicated, many schemes involving many millions of pounds now under review.

5.0 p.m.

At this stage I would draw the attention of the Committee to this fact: However impressive these figures may be and whatever may be the ultimate amount sanctioned by these committees, I do not attach so much importance to this side of the question as a solution of our unemployment problem as I do to the wider aspect of the development of our export trade. I want to submit to the Committee a few figures which will give some idea of the importance of the question. This country is dependent upon imports for the vast proportion of its food and raw material, amounting to £800,000,000 a year. They include four-fifths of our wheat, three-fifths of our meat, the whole of our cotton, nine-tenths of our wool and timber. The size of those figures will at once bring home to the Committee how important a bearing the export trade of this country has on our unemployment problem. [Interruption.] I do not know whether it is assumed that any section of the House can ignore that. I do not think it can, and therefore in pointing it out I also want to point out that I attach far more importance, as I have already said, to the development and the encouraging of our export trade as a permanent remedy than I do to any other.

It will not be denied that there is no country in the world where the social services are on a higher scale than in this country. I want to see that continued; I want to see it improved; but no one can deny that the maintenance of those social services, or the improvement of them, is absolutely wrapped up with our ability to pay; and it is because I believe we can pay and because I believe we can improve them if we do tackle it properly that I am attaching so much importance to, and am stressing, the export trade to-day.

It was this aspect of the question which led me to visit Canada. I went to Canada, having set the machinery in motion. I went to Canada because I knew perfectly well that there was a real sentiment and an anxiety to help, so far as the Canadian people were concerned; and no one can deny it. But I also went because, apart entirely from the question of sentiment, we were entitled to consideration. We are Canada's best customer for her natural products. We are her largest single customer for wheat; and when I examined the facts I found, and I told the Canadian people, and I am now going to tell the Committee, that although we were her largest single customer, although she had the benefit of all our Trustee Acts, although she was part of the Empire, yet last year for every £1 she spent with us she spent nearly £5 with the United States. [An HON. MEMBER: "Hear, hear!"] I did not take that view; I thought that someone ought to try to reverse it and I went deliberately with that object.

I did not go to discuss migration as a major proposition, although I did discuss migration with the Canadian Government. I think it is a profound mistake to mix the question of migration with that of unemployment. It does considerable harm in our own Dominions, because it conveys the idea to them that we want to dump unemployed people on them, and they resent it. But equally I looked at the problem of migration, and I said, "Whilst we have no right to force people away, whilst we have no right to try to force people to Canada or anywhere else, we have no right merely to prevent them going and to put hardships upon them if they desire to go." That is why we looked first at the barriers, and we found two right away. The first is that there are a large number of people in this country unemployed—some tens of thousands of them, as a matter of fact—who (in spite of all the talk about our people not desiring work and not being anxious to go abroad) have for years had their names down and have been waiting for a chance to go even to our Dominions. That proves that there are large numbers of people still anxious to take their chance; but we also found that there were many men not prepared to take the risk of penalising their families. To-day, if they migrate to Canada or to Australia or to South Africa, and if anything happens to them while they are there seeking their fortune and trying to make a home for their family—if anything happens to them whilst they have taken their chance—their wives and children are made to suffer because they are deprived of their pension rights in this country. We say that is wrong; we say that is not fair; and we have taken the necessary steps to alter it, and it will be altered next year.

Secondly, we found that there were a large number of mothers and fathers in this country who would like to spend the days of their retirement with the children in the Dominions, and their children would like to have them; but we also found that the old independence of the parents still exist, and they did not want to be a burden on their children. We decided that, commencing next January, that barrier should be removed, and any old person, father or mother, could join their children and not be deprived of their old age pensions.

We also found that a widow, with all the responsibility of bringing up a family, if she wants to take her chance to-day in our Dominions, is handicapped because she is deprived of her pension and her children. I do not know why the Noble Lady the Member for Plymouth should laugh; the widows do not laugh.

Viscountess ASTOR

What I am laughing at is that they do not remain widows long when they go to the Colonies.

Mr. THOMAS

The Noble Lady would know more about that than I do. At all events that shows how wise we are, and that we were not taking too much risk. At any rate the Committee will be pleased to know that that anomaly will cease in January next. Having discussed those matters with the Canadian Government, I am pleased to say that they whole-heartedly concur in the change.

The only other point on migration which I want to mention this: The Committee will remember that last year there was an unfortunate breakdown in the trainees scheme. I am not blaming anybody, but the fact remains that the Government found themselves with thousands of folk who had been promised jobs in Canada, and at the last moment it broke down. I am not going to blame anybody or to do anything except state the facts. The Committee will be pleased to know that, as the result of discussions with the Minister, we have come to a definite agreement whereby we will alter the period of training from eight weeks to 12 weeks, and the Canadian Government have undertaken definitely to take 3,000 of those who are trained in the coming year.

Just one other minor point—minor in relation to my visit, but important to Lancashire. At the present moment Lancashire stands to suffer from the way in which the preference on Lancashire goods is interpreted in Canada. Shortly it is this: that a preference is given to British goods provided it can be shown that 50 per cent. of the cost is made up of British material and labour. Obviously, when it comes to cotton goods, because of the fact of the raw material being bought outside the Empire, the 50 per cent. quota cannot always be established. I had an opportunity of discussing this matter very fully with the Ministers concerned. At this moment I can only say that the matter is being investigated, and I have the strongest grounds for hoping that the difficulty will be removed and that Lancashire will benefit as a result.

These instances—migration, trainees, pensions, cotton—were all matters which it was necessary for me to discuss with the Government of the day. I have already indicated that the response was magnificent; but my main object, as I have already said, was to see how far our own export trade could be developed, even in our own Colonies, and I concentrated primarily on two things, coal and steel. I did so for the reason that last year 16,000,000 tons of American coal was imported into Canada as a whole, and 300,000 tons of American steel was imported into Canada. I had already indicated what a customer we were ourselves. Therefore, I applied myself to those things in regard to which I felt sure, not only that we could compete, but that we were entitled to say, "Give us a fair chance." I knew perfectly well that I could not hope to compete with the whole of the 16,000,000 tons. In the St. Lawrence Basin some 2,000,000 tons of coal from America were used, and it was in that particular direction that I concentrated. Here let me say that I am glad the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) has returned, because, although I was anxious to deal with the question of coal, I was not first on the job. Russia was making a real attempt to capture the Canadian coal market, and the right hon. Gentleman will be pleased to know how even his name can be used for the most magnificent propaganda purposes. The Russians, in order to show the advantages of their coal as against the coal with which I was dealing, got out a pamphlet, and this is how they described it: Beautiful, black, lustrous, shining black diamonds brought to Canada in a ship called the 'David Lloyd George'. I am sure that the right hon. Gentleman will appreciate the picturesque language in which they described it. My right hon. Friend asks, "Did that in itself sell the coal?" I only gave it as an illustration to show that I was not first in the field.

I was faced with this position, and I ask the Committee to appreciate it. America, as I have already said, was sending 2,000,000 tons to the St. Lawrence Basin. Seven years ago this country for the first time sent hard coal to Canada, and it had to compete against tremendous difficulties and prejudices. They not only succeeded, but this year 600,000 tons will be sent, and I say without fear of contradiction that, whatever may be said to the contrary, the difficulty about hard coal next year will not, so far as Canada is concerned, be to get customers, but will be to supply the demand. That is the position so far as hard coal is concerned. I was satisfied that what could be done with anthracite could also be done with bituminous coal, and I took the risk of sending out in advance soft coal. I know that there have been some cheap sneers about that unusual method, but I will tell the Committee why the usual method was adopted. We cannot hope with our soft coal to compete merely on the basis of so much per ton; we can never do it against America. But, if our coal is to be judged on value as against so much per ton, then we can compete. The result of the trials that were made of the coal which I arranged should be sent out not only proved everything that I had claimed for it, but the best test of all is that those who went out with me, who acted as my advisers, who to-day have to deal with the trade, empower me to say this afternoon that so satisfied are they as a result of the visit that a contract for five 7,000-ton ships to deal with the coal next year alone is being negotiated. That is the best answer so far as coal is concerned.

When I come to steel I am even more optimistic. I have already said that 300,000 tons of steel were imported into Canada from America. I was assured by someone responsible for the importation of 100,000 tons that on price and on quality we had nothing to fear. I therefore discussed the situation, not only with all those engaged in the industry, but with buyers as well. When I returned I immediately called the steel people together and laid the facts before them. I told them exactly what the position was, and emphasised this point, that it is no good going to Canada and merely saying to Canada, "You must buy this because we think it is best for you." You have to face the fact that the Canadians, like other people, demand to be supplied with the goods that they themselves want, and they are the best judges. I met the steel people and discussed the whole situation, and I was very fortunate in that they had an association already in existence which is now operating in Canada—not a number of steel firms all competing with each other, not a number of firms with no one actually responsible, but an organisation representing the whole of the steel industry, with a director with full authority to act for the whole of the steel industry, he him- self being responsible for apportioning the orders. In order to get over the difficulty, which is an important one, of the Canadian people having to wait four or five weeks for cables and letters, I am now arranging that the Export Credits Committee will be able to finance a large tonnage of steel that will be on the job in Canada, and so enable us to show that we can give service right on the job without the delay that is now taking place.

I have dealt with coal and steel, and what I have said of both these materials is equally applicable to others. Here I ought to draw the attention of the Committee to the difficulties. I met the Wheat Pool in Canada in order to face the economic facts as they affect this country. It is a very curious, and I hope an abnormal, situation that exists at the present moment. When I was there every elevator in Montreal was full up with last year's wheat. There were 36 ships in Montreal harbour—some of them have been there four or five months—loaded with last year's wheat. There were ships going into Montreal and leaving in ballast. What is the position so far as our own trade and commerce are concerned—because our own people are affected by it? If we are going to send to Canada any of our goods, if we are going to compete—indeed, I would put it higher and say, if we are going to have a fair chance—there has got to be some regularity with the return cargoes. If there is not, the cost of your coal, the cost of your steel, is immediately affected by the position as it exists to-day. I do not want to say any more at this stage except that the Wheat Pool will be meeting me shortly in this country, when I shall discuss the whole situation. I want to make it perfectly clear, so far as the coal trade and the steel trade are concerned, that they all responded to the appeal that I made when I returned and I am quite sure that what was done in Canada can be done in many other places as well.

It was that experience that led me to consider further aspects of our export trade, and, in doing so, I applied myself to meeting representatives of those trades which I thought opened up the best opportunities. I want briefly to make reference to the motor trade, and I will give the House just a few figures to illus- trate its importance. Last year, 4,500,000 motor cars were manufactured in the United States. It was a boom year. We manufactured 211,000. Our Dominions took twice as many cars from the United States as we ourselves manufactured all told, and, when it is remembered that there is no industry that gives such wide scope for indirect employment in other trades as the motor industry, the importance of it will be fully understood. Therefore, in considering this question, I came to the conclusion that there was a real opportunity of tackling again the export trade by meeting representatives of the industry and asking them to organise themselves for a common effort. Of course, I can anticipate the criticism. I know perfectly well the views of the motor industry about our basis of taxation. I know perfectly well their strong views that, if we imposed taxation in a different form, they could deal with it. All that I am considering; all that we are going into; I am only giving this illustration to the Committee in order to emphasise as strongly as I possibly can how vital the export trade is to the country and how necessary it is for us to develop it.

I have indicated the expenditure so far as our own funds are concerned. I have indicated the opinion I met in Canada. I have indicated my views of the development of our export trade. The real contribution to our unemployed problem is the contribution that has been made by the Prime Minister in America, by the Chancellor of the Exchequer at The Hague and by the Foreign Secretary and the President of the Board of Trade at Geneva. Anything that tends to substitute the peace mind for the war mind in the end must be a factor towards the solution of our unemployed problem. I have endeavoured to give a review of three months' work. It may disappoint some. It may not come up to full expectations in some sections of the House, but I am optimistic for the future. I do not believe we have anything to fear. It is a difficult problem. There are many things that can hamper it and there are many that can help it. It can be hampered by silly and extravagant expenditure. It can be retarded by always proclaiming that this old country is down and out, conveying to the world that the whole of the people are living on the dole—a false impression. It can be ham- pered by industrial strife, but my appeal is not to one side. Industrial strife can only 'be cured by a recognition of facts by both sides. Speaking from a close examination of all the facts, I have no hesitation in saying there is a trade improvement. I have no hesitation in saying prospects are better than they were. I have no hesitation in saying that if advantage can be taken of the position it is our duty to do it. It is because I believe it is only by taking that long view that we can make a permanent contribution to the solution of the unemployed problem that I ask the House to accept the statement I have made as the first indication of three months' labour.

Mr. SCRYMGEOUR

Do we understand from the right hon. Gentleman's statement that the Minister of Transport is also to make a statement concerning the Scottish schemes relating to the Tay and Forth Bridges?

The CHAIRMAN

That is not a question for me.

Mr. SCRYMGEOUR

I am not asking you, Sir, with deference.

The CHAIRMAN

The hon. Member rose for the purpose of asking me.

Mr. SCRYMGEOUR

Through you, Sir, I ask the Minister.

Mr. THOMAS

The Minister of Transport is going to speak at a later stage.

Sir LAMING WORTHINGTON-EVANS

I am sure the Committee will congratulate the right hon. Gentleman on the clarity with which he has made his statement. He has put before the House of Commons, desirous of hearing and understanding every word that is said, a long, though not too long, statement covering the work he has already attempted to do. I am going to follow the sequence of his remarks. He began his statement by telling us what he had done and what he is proposing to do in the way of expenditure on palliatives and in the latter part of his speech he dealt with the policy which he hoped to put into operation to relieve the root causes of unemployment. With regard to the first part, he told us that out of the £25,000,000 which has been granted to him from the Unemployment Grants Committee he has already allocated £11,000,000, which will give employment directly to 22,000 men, and under the Public Utility Section, which has also had £25,000,000 allotted, he has engaged £7,000,000, which will give employment on the same conditions to 14,000 men. Then out of the Road Fund, which is not, of course, granted specially for this purpose but which has been in existence a long time, he is proposing to spend £21,000,000, and out of the other special grant for Colonial development he is suggesting to spend £3,000,000, a total of £42,000,000. The test of how much employment that will give he expresses in man months. Of course, that is one way of doing it, but it is not the ordinary way. It is not the way in which comparisons have been made in this House formerly. It has often been stated, and the right hon. Gentleman himself reminded his followers at Brighton, that £1,000,000 of expenditure produced direct work for about 2,000 men and indirect work for about another 2,000. The statement has been made in the House over and over again. I remember making it myself, and it was not received with the quietness with which the right hon. Gentleman's speech has been to-day.

On that footing, the figures which he has produced to-day will give direct employment, on the two special grants that he has had made, to 22,000 and 14,000 men. That is, of course, something. I cannot pretend now to test it in detail, partly because we have not the detail and partly because it would he too long an operation, but all this expenditure has to be justified upon one ground. It is either expenditure which is productive or else it is taking from the community generally money which would be normally employed in productive work, and if it is actually taking credit which would normally be employed on productive work, it is not advancing employment. On the contrary, it is wasting money, because as good employment would be obtained if the money were employed in the ordinary course of business. Let us assume, as the right hon. Gentleman did, that some of this expenditure is reproductive. He claimed that it was all reproductive. Another point arises on that. To build a road is in one sense reproductive. That is to say, it facilitates traffic, facilitates the coming and going of goods, and per- haps reduces the cost of handling goods. But it is nothing like the same sense as reproductive as that money or credit used in an actual manufacturing industry. I do not think he can justify this type of expenditure on the scale which he is setting out unless he can show that he is by these aids from the Government bringing about a real productive expenditure.

He claimed as a merit that he was spending in three months £18,000,000, whereas the former Government had spent, under the Unemployed Grants Committee, £6,000,000 over a period of two years. The reason why more money was not spent under the Unemployed Grants Committee by the late Government was explained in the last Session. Lord St. Davids himself pointed out that all the work that could be put up by the local authorities in anticipation of their ordinary expenditure had already been exhausted, and that if the St. Davids Committee went on spending money, all that would be happening would be, not that original work would have accrued but that work which would be done in any case would be paid for out of taxes instead of out of rates. That is the test that ought to be applied to the expenditure that the right hon. Gentleman is recommending to the House. Is this expenditure which would not have been made otherwise? Are we really getting new objects upon which development expenditure can be made or are we merely relieving the expenditure which the local authorities would make in any case?

The right hon. Gentleman was vague on the question of transfers. May I ask him to tell us what he has done about transfers. He says he has altered the conditions of the grants. He says he has reduced the figure from 15 to 10 per cent. as regards the number of unemployed and from five years to three years as regards anticipation, and he has also altered the numbers of transferees from the distressed areas as having to be employed under the scheme, but he did not tell us to what number he had reduced the transferees. If you are really going to bring into work men who now are in distressed areas, what are called the black spots, you are doing something which is real and for which money should be granted, but what justification have you, for example, for making a large grant for the County of Surrey? I understand that grants for £1,000,000 under this scheme are to be paid to Surrey, where the unemplyoment rate is 2.6. There is virtually no unemployment at all. You are going to grant them £1,000,000 in aid of local expenditure, partly on drainage, partly on roads, and partly for other purposes. You have only a justification for making such a grant if they will undertake to relieve unemployment in the distressed areas and, under the old scheme, before they got their grant they would have had to undertake to employ 50 per cent. of people from the distressed areas.

Mr. THOMAS

So they will now. In the case the right hon. Gentleman has given they must have 50 per cent. before they get the grant. But hitherto they could not get a grant unless they had 15 per cent. of unemployment. The alteration I made was in that figure.

Sir L. WORTHINGTON-EVANS

I am delighted to hear it. May I take it that these grants are not going to be given unless the local authorities will undertake to employ 50 per cent. of people from the distressed areas? The right hon. Gentleman can surely say "yes" or "no" to that. He has told us of some alterations that are being made in the conditions of grants. Surely he can tell us whether this grant is still subject to the 50 per cent. of transfers or some other figure.

Mr. THOMAS

The right hon. Gentleman put a specific question and gave as an illustration the Surrey County Council with an unemployed percentage of 2.6. In fact, he said that by the statement which I had made that Council would have no justification for a Government grant unless they took transferred labour. My answer was, that in the case that you gave there was no change as far as I was concerned, but the change was from 15 per cent. to 10 per cent. It means that your Government would not give any Government money unless there was a rigid 15 per cent. of unemployment in a district. I reduced that rigid 15 per cent. to 10 per cent., and I further reduced it, with elasticity, to 6 per cent. That is the answer—6 per cent.

Sir L. WORTHINGTON-EVANS

The right hon. Gentleman has still not answered the question. It is really very material. He says that he has answered it in a specific case. Is that the common case? Is that the answer in all cases, or is it not? Are there conditions now about having to employ transferred labour before a grant is given, and, if so, what is the percentage of labour that has to be transferred? Cannot the right hon. Gentleman say? It was 50 per cent. Is it now 50 per cent?

Mr. THOMAS

My hon. Friend will give the details, but it is only fair that the right hon. Gentleman should have a clear answer to his question. He will give the full details of the changes, but I will summarise them briefly. I have already said—and there ought to be no misunderstanding by anyone who knew the late Government's policy—it was 15 per cent.—[Interruption] I know. I will tell you what your late policy was. With less than 15 per cent. unemployed in a district you required a local authority to qualify for a Government grant to take 50 per cent. of transferred labour. The change is now made—any district with six per cent. or below must take 50 per cent. of transferred labour. A district with between six per cent. and ten per cent.—powers given to the Committee to consider all circumstances bearing upon the locality. And it may be five per cent. or 25 per cent. of transferred labour. The terms and conditions will be given by my hon. Friend when he speaks.

Sir L. WORTHINGTON-EVANS

I am very much obliged to the right hon. Gentleman. Now we see that in certain cases it is 50 per cent., and in certain cases where the local unemployment is greater the transference is to be lower. As a principle, I have no objection to it whatever. It is a question of how it is administered, because these large sums ought not to be granted unless they fulfil the object for which they are granted. The object we surely must have in view is to find work for those who cannot find work in their own districts. I do not think that I need take up the time of the Committee in dealing in detail with the other conditions of that grant. We shall have more information about it, and from time to time we shall have opportunities of criticising individual actions on the main principles that the right hon. Gentleman has laid down. But the other part of his speech, that which referred to the general policy of the Government in dealing with unemployment, I must say, does require some general observations. The right hon. Gentleman has said that, after all, these various provisions which he was outlining were palliatives, and it was necessary to get at the cause of unemployment. He picked upon the export trade, and he gave a description of how he had occupied a good deal of his time in Canada in connection with the export trade. I am sure he did not mean to claim all of that as his own original work. For example, steel sleepers have been tried on the Southern Railway for some years. Even in our time we were urging the railways to look into the matter with a view to adopting steel sleepers.

Mr. THOMAS

They did not do it.

Sir L. WORTHINGTON-EVANS

With regard to coal and Canada, again he was a missionary. Our expert was out there certainly a year ago—a year before he was there—for that very purpose, and progress was being made. This is one of the fortunate occasions where he comes in to reap a bit where others have sown. I say, "more power to his elbow." I am sure that he is a very fine traveller and the more he travels with Empire goods the better we shall all be pleased, and the more employment we are likely to get.

Apart from the export trade, what other means of dealing with unemployment do the Government propose? It has been estimated that the 20 per cent. reduction of our export trade has made a difference of 600,000 or 700,000 people employed in that trade. The right hon. Gentleman has a right to concentrate on that as much as possible, but it is rather odd that this time nothing more should come from the Government benches than these very tentative efforts. They told us for a long time that they had all the arrangements made to cope with unemployment. The right hon. Gentleman himself said, Schemes of all kinds to cope with unemployment will be put into operation immediately by the Labour Government. He added that "Labour was going to solve the unemployment problem by spending money and by giving bigger pensions to old people, inducing them to retire to find jobs for younger people." That was his statement at Oldham on 24th May last. I followed him four or five days afterwards, and I found that he had made a great impression at an immense mass meeting at which he told them all he was going to cure unemployment by spending money. I congratulate him heartily, because since that time he has learned more. He went and gave some of the benefits of his knowledge to his followers at Brighton, when he told them that spending money was no good; that that would not cure unemployment, and that for every £1,000,000 spent only 2,000 obtained direct employment and 2,000 indirect employment.

He talks of coal. The Government, or at least the Foreign Secretary, had a remedy during the election. He said that we ought to repeal at once the Eight Hours Act, and he told those who were out of work that they would do so. The right hon. Gentleman did not support his colleague in that statement. I do not know whether that is now the policy of the Government, or whether now that the election is over there is no such policy. He is maintaining the policy of transference for initiating which the previous Government was so much abused; the policy of transference which was the outcome of the Transference Board's Report—a report which showed that from 200,000 to 260,000 men ordinarily engaged in the mines of the country were not likely to get work in their trade or in their districts again. It was in order to give these men a chance that we put into operation the policy of transference, and time after time I stood over there and was howled at by the then Opposition on that policy of transference.

The present Home Secretary is one of those who most bitterly denounced us. He said: There is not a man who has been transferred except to put another man out of work, and now I congratulate the right hon. Gentleman that he has found that criticism of his colleague unfair and unwarranted, and that he himself has persuaded the Government to continue the policy of transference and to make these large loans conditional upon that policy being continued. There is another question that I want to ask the right hon. Gentleman. He told us in July last that he was looking for a means of giving an inducement for silk manufacturers and tobacco manufacturers to open factories in the Rhondda Valley. We pursued it at the time and tried to ascertain what were the inducements. He took refuge—I do not blame him—and said "I am thinking." Now, perhaps, he has thought, and will be able to tell us the results of his thinking. Has he found any scheme? Because it is very important not merely to transfer from the distressed areas but to bring new industries into the distressed areas. We tried to do it by our de-rating. [Laughter.] Yes, we tried to do it by our de-rating, so that the heavy rates should not keep away people who otherwise would have gone into a particular district. That, at least, was something towards it. But the right hon. Gentleman said that he had another scheme, or, at any rate, that he was thinking about one. I want to know what is the result of his cogitations?

I will deal for a moment with the export trade and what he said about it. He was quite right in fixing upon the export trade, because it is immensely important. We are down something like 20 per cent., and, according to Professor Bowley, something like 700,000 men are out of work because of the reduction in the export trade. If we could really get the export trade going to its full, we might break the back of this terrible evil of unemployment. As a result of his thoughts, he told his followers at Brighton: You cannot deal with the unemployment problem without getting customers for the goods which you have to sell. 6.0 p.m.

That is the profound truth which he gave to his followers at Brighton. The right hon. Gentleman has been considering only customers abroad, but there are customers at home as well as customers abroad to be considered. In regard to the customers abroad, he has shown us that he has made efforts as to coal and cotton. With regard to cotton, he does not claim his efforts as an original idea of his own, because, while I have no doubt he has helped the position, it was the case that the previous Government had made representations, and an expert from Canada came over here last year. No doubt the work that the right hon. Gentleman has done this year will help to clarify that position. The right hon. Gentleman talked about motors. There is an enormous field there, but what is the policy of the Government in regard to the matter? All we know at the present time is that the Government have thrown the motor trade into a certain amount of disorganisation, because they have been uncertain or unwilling to pledge themselves to continue the McKenna Duties. It is very difficult for the motor trade to plan their output, their prices, and the question of meeting the competition of imported cars unless they know that the Duties which exist are to be continued. The Government at the present time have done their best not merely not to help but to hinder one of the very trades to which the right hon. Gentleman has. referred.

Let me warn the right hon. Gentleman. He has just come across the Atlantic, and he knows well that in the United States at this moment there is a certain amount of discomfort on the part of a very large number of people who have suffered severe losses through over-speculation. The effect of that may be that they will not be able to buy the American output of motor cars, that they will not be able to buy the American output of artificial silk, wireless apparatus and gramophones, the very things which have been more or less good so far as trade is concerned in this country. We may get not merely the ordinary competition which we have had in the past, but the most severe dumping of all these things into this country. If the right hon. Gentleman wants to help us to get customers—that is the only way, as he says, really to deal with the evil of unemployment—what will he do if there is, as there will be, I warn him, an immense crease of importation into this country from America, unless something is done, of the various articles to which I have referred? The price is being cut already in regard to motor cars, for the very purpose of disposing of them if they cannot dispose of them in their own market, and the only other place in the world which will take them is this country. Unless the right hon. Gentleman is prepared to deal with this matter, he is not only not going to get more customers, but he is going to lose some of the customers that he now has.

Mr. THOMAS

I hope the right hon. Gentleman will not dogmatise too much on this question. It is not a good thing even in a Parliamentary Debate to say something that may perhaps do harm to the country, on a subject, the American situation, where other people take exactly an opposite view from that of the right hon. Gentleman. It may be that the effect is such as the right hon. Gentleman describes, and it may also be that a very serious curtailment in the home demand may give an opportunity for this country to step out in the export trade. There are responsible people who take that view.

Sir L. WORTHINGTON-EVANS

I can quite understand an argument being based on that view. At the moment, there is going to be a surplus. It may be that that will cause a contraction of manufacture in the United States, and it may be that that will put up their cost of manufacture. It may be that there will be an opportunity for us then. That is the right hon. Gentleman's argument, and I accept that argument, but do not let the right hon. Gentleman refuse to accept this preliminary fact, that at the beginning there is this surplus, and it is that surplus for which we must look out. We may afterwards get 'a benefit, but in the first instance the surplus is going to be up against us. As regards the general figures of the grants which the right hon. Gentleman proposes to make, they must be examined, each in its turn, from the point of view of seeing whether they really produce work or whether they really anticipate by a few weeks work that would have to be done in any case. As regards the general policy, I will ask the right hon. Gentleman to go on thinking. He has discovered that we require customers. If he will go on thinking a little further, and he will discover that the McKenna Duties are necessary, I hope he will add to the representations that we shall make to the Chancellor of the Exchequer that they should be maintained, and that whatever aid can be given to our manufacturers should be given, so that they may not have to lose customers.

Mr. LLOYD GEORGE

Although the Lord Privy Seal spoke at some length, with his usual force and lucidity, we must realise that even when he has covered so much ground there is a good deal that is left in obscurity for those who are not, as he and his colleagues are, inside. Therefore, I sincerely trust that he will consent to give us a White Paper showing exactly to what expenditure he has committed himself, what are the schemes, and what are the conditions. We ought to know something about the finance of these schemes. In answer to a question which I put, the right hon. Gentleman said that there was a guarantee of interest in respect of the £7,000,000 for private enterprise. If I may trust my memory in regard to the Bill, my recollection is that there is a provision that the interest should be guaranteed by the Government for a certain number of years; not merely guaranteed by the Government, but shouldered by the Government, and that it will not be added ultimately to the amount to be repaid in respect of private enterprise, but is to be shouldered by the Government, which means by the taxpayers.

When the right hon. Gentleman is committing himself, first of all to £7,000,000, and when, according to his own statement, he is now negotiating other undertakings of the same character, in the main, for another £18,000,000, we ought to know something about the burden which is to be cast upon the taxpayers under these schemes. That cannot be done merely by question and answer. It is right that we should have a White Paper in our hands showing exactly what these schemes are. These are very novel proposals. The grants to the local authorities are old, but there have been variations upon the conditions. The right hon. Gentleman is introducing some new variations, but that is a different thing from private enterprise. That is the taxpayer helping the ratepayer, which is practically the same body of citizens. On the other hand, there is a definite grant for a large number of years to dividend-paying concerns, and I think the House of Commons is entitled to know what is the commitment of the Government in respect of these schemes.

I am not in the least concerned, as was the right hon. Member for St. George's (Sir L. Worthington-Evans) as to whether the present Government are doing more than the late Government, or whether the present Government are simply adopting schemes of the late Government. If the righteousness of the present Government does not exceed that of my right hon. Friends who now sit on the Front Opposition Bench, when they were in office, the Lord Privy Seal will not remain in the Kingdom of Heaven very much longer. Therefore, I am not in the least concerned. I was one of the critics of right hon. Gentlemen now on the Front Opposition Bench, on the ground that they were not doing enough as a Government, and I am afraid that I shall have to be a critic of the Lord Privy Seal on the same ground. I want the House to realise fully the significance of the figures given by the right hon. Gentleman. I may be wrong in my calculations, and, if so, it may be because I did not quite apprehend what his figures really mean. If I am wrong, I can be corrected by some other speaker from the Government Bench. Since the right hon. Gentleman came into office and undertook the very onerous task of dealing with unemployment, the figures of unemployment have increased by 100,000 and, unless I am mistaken, by the time the winter has passed the right hon. Gentleman under his schemes will not have provided additional work for one-third of the numbers of unemployed who have been added since he came into office.

Let me examine the position. The right hon. Gentleman can correct me if necessary, not merely by statement in debate but by putting down in a White Paper the number of people who will be employed by the end of the financial year—by that time the winter will have passed—and what will be the number of men employed within a year? Take the scheme in regard to local authorities. The right hon. Gentleman said that the late Government only spent £6,000,000 in two years. His £11,000,000 is not going to be spent in 12 months. How long will the £11,000,000 last?

Mr. THOMAS

I did not say that the late Government's £6,000,000 was spent in two years. I said that the £6,000,000 was approved in two years.

Mr. LLOYD GEORGE

The real comparison is between the amount which is spent in a given year and the amount which is going to be spent in this year. That is the real test. For instance, take some of the schemes. There is a great waterworks scheme for Manchester. That represents very nearly one-half of this total amount. That waterworks scheme is not going to be completed within a year, nor two years, nor probably three years. That sum of money is going to be spread in employment over two, three and conceivably four years. The right hon. Gentleman says that this is an emergency problem, a temporary problem, and he is putting forward schemes which represent £42,000,000 to deal with the emergency. But those £42,000,000 will be spread over several years, and for this year when the unemployed number 1,200,000, there is no provision that will reduce the numbers by more than 30,000 or 40,000 men in addition to what was done by the late Government. So much for the local authorities. The expenditure of the local authorities is spread over several years.

Next we come to the very substantial pecuniary inducement to the railway companies to spend money. Unless I am wrong, I think the interest guaranteed ran for about 10 years; not guaranteed, but paid out of the Treasury. I do not know what the terms are, but the right hon. Gentleman talked of a guarantee which would enable the railway companies to raise this money and spend it, the interest to be borne by the Treasury. And the only schemes up to the present that he has been able to persuade the railway companies, even with this inducement, to start come to £7,700,000! He talks about other schemes. There is the underground railway, but if I may say so, that underground railway is still in the air. And as for the Liverpool Street scheme of £75,000,000, that has vanished into very thin air. The right hon. Gentleman does not even know what has happened. The scheme is still coming over the horizon, but the visibility is very low.

They are all schemes which will involve Private Bill Legislation. How long will they take to get through? Take the Charing Cross Bridge; that will be opposed by the Underground Railway, so I am told—that is the information I have—but at any rate the right hon. Gentleman may depend upon it that there will be vested interests to be considered. That is the case in every Private Bill; and they will all take time. As far as this winter of unemployment is concerned there is nothing there, nothing in the Fins bury Park Underground Railway scheme, nothing in the £18,000,000, about which the right hon. Gentleman talked so vaguely without condescending to give any particulars, and all you have is this £7,700,000. How long will that take? When will it begin to provide employment? The right hon. Gentleman took part with me in attacking right hon. and hon. Members of the Conservative party because they did not provide work for the unemployed, and this is all he is doing, as far as I can see, to justify the very violent attacks which he made on those right hon. Gentlemen, every word of which I still believe but which I now transfer to him.

I am going to take the third category of schemes. You have £11,000,000 and the £7,000,000, but nothing in them to give employment in these winter months. I come to roads, where the figure looks very formidable. To-morrow morning you will hear "£42,000,000 for the unemployed." I come to the £21,000,000 for roads. When is that going to be spent? A good deal of it, according to the right hon. Gentleman, is to take five years. There is £10,000,000 of it—how long will that take? What work will it provide this winter? The right hon. Gentleman is legislating for an emergency—and all his work is to be in the future when the emergency, I hope, will have passed. He says that trade is improving, but no one expects there will be such a recovery in trade this winter that the figures will be reduced to normal. This winter will be a very black winter of heavy unemployment. It may come down by 50,000 or 100,000, but I shall be very surprised if it comes down below a million, and all the work the right hon. Gentleman is providing is one which, as he said at Brighton, will be realised by the genial month of May.

That is not what the right hon. Gentleman led the country to believe, nor may I say the party behind him, before the last election. He taunted me because I said that the proposals were not sufficiently bold. Bold! They are timid, pusillanimous and unintelligent. The right hon. Gentleman is trying to get away from roads, for there is absolutely not one penny for rural roads. There is not a man who lives in a rural area who will not tell you that this is one of the most urgent problems, and if money is to be granted freely to rich railway companies, should not money be granted freely to poor agricultural districts in this country? He has talked about getting exports up. Our exports are growing slowly, but as the right hon. Member for St. George's has said, we are 20 per cent. short of what we were before the War and 3,000,000 or 4,000,000 more in this country to provide for. It will be a sure recovery, but it is going to be very slow. Everything indicates that.

But here at home we are buying over £300,000,000 worth of products which the soil of this country is capable of producing. Quite apart from, all the issues which are in controversy between right hon. Members on the Government side, the Conservative side and the Liberal side about tariffs and protection, there is a vast amount of something which can be done to increase production here and bring it to the markets. But marketing means better roads. If the Chancellor of the Exchequer were present, I would remind him that in the agricultural district where he and I live the whole area is cut off by a couple of bridges that were there since the days of the ancient Britons, and they cut off access, all communication, between the producer on the farm and the markets in the towns. That is only one illustration. I could give hundreds of the same sort throughout the country; narrow roads, inadequate bridges. If the right hon. Gentleman the Lord Privy Seal has so much money at his disposal, I suggest to him that he might take in hand the reconditioning of rural roads and, after they had been reconditioned, then the rural areas would take their fair share of maintenance. But they cannot, they have not the means, undertake this task themselves. If the right hon. Gentleman wants to increase production in this country, there is his opportunity. There is not one half-crown for rural areas in the whole of this precious scheme, which is £42,000,000 spread over an infinite number of years. That is the scheme of the right hon. Gentleman.

In regard to his visit to Canada. I must say at once—I regret to have to say it—that it was incredible to me that the right hon. Gentleman, who had been entrusted with a task of this kind, should have thought it necessary to leave the country for several weeks before any of his schemes had matured, before he had really had time for thinking them out and as soon as he had the necessary powers. It was all the more incredible because, owing to reasons some of which could not possibly be overcome, most of the principal Members of the Government were all away. The Chancellor of the Exchequer had to go to The Hague; the Foreign Secretary had to go to The Hague; the Prime Minister had to go to America, and the President of the Board of Trade had to go to Geneva and The Hague, and the right hon. Gentleman at that time, with a problem that was urgent, with winter coming on, went away for five or six weeks on a mission to do quite useful work but which he could quite easily have handed over to somebody else. I am sorry to say this, but really it is just as well it should be said on the Floor of the House because it is being said everywhere else.

Let me put this to the right hon. Gentleman. There was a mission to South America, a very admirable mission, with an extraordinarily able man at the head of it. It has rendered admirable service to the trade of this country. They went to the Argentine and Brazil, and when I was there I could see for myself that the opportunities for British trade were grossly neglected and that something ought to be done to stimulate it. If the right hon. Gentleman wanted a mission to Canada he could have found probably equally good men to go to Canada and report to him, but for him to leave his job here is like a commander-in-chief at the beginning of a campaign leaving his headquarters and the campaign to be thought out and directed by subordinates on his staff, whilst he goes to some remote corner in order to attend to some minor operation and remains there for five weeks. That is really what happened. It was a serious and grave thing, and I cannot understand the Prime Minister allowing it.

The result is that after five months no real progress has been made. No real progress has been made when you consider the whole of the schemes put forward and the high anticipations raised by the right hon. Gentleman and hon. Members opposite at the last election. And let me say this, they know that what I say represents what is in their inmost hearts on the situation. May I just say another thing to the right hon. Gentleman? He is suffering from the railway obsession. I want him to get off his engine and just look at the whole problem and survey the whole country. I am told that there are great schemes of drainage. I am glad to hear it, but they were not mentioned to-day. His telephone proposals are ridiculous. I looked at the figures spent upon telephones in 1928, when my right hon. Friend here was in office—£10,207,000; the year before, £11,615,000; the year before that, £11,902,000; and the right hon. Gentleman comes here and says, "I have at last found a Postmaster-General, liberal, daring, venturesome, not like the poor miserable things that we have had, and he is going to spend—three-quarters of a million!" The right hon. Gentleman—I do not know whether he is responsible or some of his friends—announced in the newspapers that we were to expect a surprise. I have not got it. Hon. and right hon. Gentlemen opposite have got it.

Colonel WEDGWOOD

I have been much moved, and I am sure the Committee has been much moved, by the eloquence, the enterprise, and the courage of the right hon. Gentleman opposite. He has not asked the Lord Privy Seal to think; he has asked him to do. The right hon. Gentleman himself had four years in which to do something, but that is all forgotten. Once upon a time I remember going with the Home Secretary and some other Labour Members on a deputation to the right hon. Gentleman on this very question of unemployment, and we pointed out to him—it was in 1920, I think—that there was much less unemployment in France than there was in England. The right hon. Gentleman replied quite frankly by saying, "Of course, there is more unemployment here than there is in France. Why, in France they have destroyed half the country, and consequently the people are kept employed building it up again." I suggested that if that was all that was necessary, we should at once burn down London and build it up again. The right hon. Gentleman has been urging the Lord Privy Seal to spend more money. He said, "Only three-quarters of a million on telephones. How timid, how pusillanimous, how unintelligent!" I am grateful that we have now at the helm the intelligence of my right hon. Friend instead of the intelligence of his instruc- tor, because are we going to cure unemployment by squandering public money?

The whole charge against those poor people opposite is that they only authorised £7,000,000 in two years, and they feel guilty about it too. They try to explain that they would have done more if they had had more time, but if we could solve unemployment by spending public money, why, gracious me, what an easy thing it would be to solve unemployment! We could burn down London—of course, I do not mean that seriously—but we could spend money on removing all the slums, on putting up schools all over the country, on making roads, on building that beautiful canal from the Clyde to the Forth, and on damming up the Severn. There are more ways of spending money than he or I could think of in an afternoon. If that is going to cure unemployment, get ahead with it; do not be so pusillanimous. The fact of the matter is that we all know, except the right hon. Gentleman, in the bottom of our hearts that that does not cure unemployment. The right hon. Gentleman the Lord Privy Seal, when he started out, said the truest word that has been said in this Debate when he said that it depends whether or not this money is being spent productively. That is the only question. All these £41,000,000, or whatever it is that he is spending, do not come down like manna from heaven, and they are not being spent by somebody else. It is true that some of the £41,000,000 may be thrown away at Monte Carlo or something of that sort, but the vast bulk of it will go into trade. If you want to help the export trade of this country bring down the Bank rate from 6 per cent. to 5 per cent., and you will help the export trade more than by making special grants to facilitate trade.

The country as a whole is tumbling to the fact that by spending this money you do not help unemployment; you merely postpone unemployment. They are aware of it, and when I hear some of these schemes that are put forward advocated solely because they will employ labour, I wonder whether we are not back in some past century. Years ago there was an Act of Parliament passed in this country to the effect that, in order to encourage the woollen trade of Bradford, everybody was to be buried in woollens instead of in linen; and now to-day we are going to have compulsory steel sleepers to encourage the steel trade. It is so simple if you do not think, but if you do think, the one thing we want to develop is productive industry. Productive industry must start and can only start by the application of labour to land. If you can solve the problem by spending money, making compulsory steel sleepers, or anything of that sort, do not bother about the land question, but if you do not believe that you can solve unemployment in that way, do perceive that everything that is produced on earth must come from the land. It depends, in the first place, upon the application of labour to land. If the primary trades—the building trade, the agricultural trade, the mining and quarrying trade, the iron and steel trade—cannot get access to their raw material, not only will they be out of work, but every other trade in the country will be out of work. If you dam the stream of production at the source, you may well expect to find unemployment lower down.

If you want to solve the unemployment problem, you have to make it easier for the men in the primary trades to start work; that is to say, you have to make land cheaper and raw materials cheaper. There is no other way of helping production. Make land cheaper, help capital to be cheaper, and you will help labour to get useful productive work. There is no other way. I was delighted to hear from the right hon. Gentleman's speech to-day that it has become obvious that you cannot go on spending money on making roads in this country solely for the benefit of the riparian landowners. It has been going on for some time, and we have found it a useful argument against the late Government at election time. We hear that that is to come to an end, and that we are going to have some scheme for preventing the landowner getting that increased value. It is said that we shall have an Act of Parliament this year. I have not much faith in it, but I hope it will be true. But that is not the key of the unemployment question. It is not that we should prevent landowners from robbing the public of money spent on making road improvements, on drainage, on coast erosion, and what not; what we want to do is to get all the land of this country cheaper by making it expensive to own land, so that owners may be anxious to get rid of land to people who want to use it.

I apologise for having been compelled to drag in the land question, but, believe me, it is no good anybody on the Labour benches talking about solving the unemployment problem till we have got at the land. That first, and then all else will be given unto you. If we go on supporting as cures for this curse tinkering legislation such as squandering public money on things people do not want, when we have to face the electorate at the next election we shall find unemployment worse instead of better, and we shall cot have used the chance we have of really breaking the land monopoly in this country.

Sir GEORGE PENNY

While wishing to congratulate the Lord Privy Seal on his efforts, which I am sure were genuinely made to help unemployment, I must express a very grave sense of dissatisfaction at the result. The definite promises that were so lavishly made at the time of the election have in no way been fulfilled, and I consider that it was a cruel shame that the unemployed should have been led to think that there would be immediate relief for them in regard to employment. In the schemes that he has put forward the right hon. Gentleman does not indicate in any way the number of men who will be employed, and I think we have a right to ask, when the right hon. Gentleman's colleague speaks on his behalf later on, that he shall give us these figures. The fact is that there are more unemployed to-day by over 100,000 than when the Conservative party was in power, and we also have to remember that in addition to these registered unemployed there is that vast army who are not covered by unemployment insurance, and who will not benefit in the slightest degree by the schemes which have been proposed by the Lord Privy Seal. They can only secure employment if we can get our trade and industry properly re-established, and in this direction nothing has been done. The Government does not seem to realise that our unemployment problem is not just a passing phase, but that it is a post-War problem, which schemes of relief are powerless to remove, and that money spent in relief schemes is merely a palliative. Raising the school age to 15 and pensioning workers off at an earlier age is not dealing with the question. It is merely nibbling at the problem, and it means additional expenditure, all of which adds to the burden on industry.

There is no mystery as to what is wrong about our great export trade. Our cost of production is far too great, which makes the costs of our goods higher than those of our competitors. [Interruption.] I should not go about it in the way the Labour Government are doing in regard to coal. The Conservative Government were regaining our markets for coal, and now the Labour Government are going to remove the eight-hour day and bring the industry back to the position in which it was before. Continental countries, by allowing their currencies to sink to a fraction of their old value, have been able to pay off their indebtedness at a nominal cost, which makes it easy, with their lower standard of living, to undersell our products and become our potential competitors, instead of our customers. We must not deceive ourselves that this situation will ever return to normal just by looking at it. We have to adjust ourselves to an entirely different set of circumstances brought about by the War. The high wages which were paid during that period brought about a standard of uneconomic production. War gratuities and the general relief felt when the War was over led to reckless and extravagant spending. All these factors militate against the situation at the present time.

The expedient of paying unemployment benefit was at the time thought to be only a temporary measure, but to-day we find it a great burden on industry which cannot be removed until our industries are revitalised and expanded. As regards our productive industries, I say without fear or hesitation that the greatest contribution of assistance was made by the Conservative Government by giving the relief of rating under the Local Government Act. The Socialists criticised and condemned that, but I am grateful to see that they are not altering it in any way. In fact, the President of the Board of Trade, who is a man of great knowledge, said only a few days ago that it was a great step in the right direction to revive industry and create employment. Nothing is more harmful to industry than to leave it in a state of uncertainty, and the statements made by the Government with regard to protective duties have left the country in that state. If the Government are going to remove these protective duties, why do they not say so right out, so that our industrialists may know exactly where they stand. They would far sooner know that the duties are to be removed, than be left in a state of uncertainty. I am a strong supporter of trade unions, but only so long as they fulfil the purpose for which they were originated and look after the true advancement of their members. I consider that they are not doing this, for by imposing restrictions and a rigid demarcation of what one's work should be, they retard our getting back to a normal condition. In America you see trade unionists working with the employers far more than in this country, realising that if they have ability they have an opportunity of rising from the bottom rung of the ladder to the top of their industry. A great number of the leaders of industry in that prosperous country are (men who started from the bottom. But what about our men who show ability above their fellows? They are weighed down with restrictions and kept in bondage far more effective than any capitalism could impose.

Employers also have their part to play. They can help very considerably by reorganisation, by scrapping old machinery and obsolete methods, so that they can attain the greatest efficiency at the least possible cost. If they do not take this in hand themselves, the Government should take power to bring about compulsory rationalisation. The heavy annual War Debt payments of over £30,000,000 which we make to America can only be raised on the back of industry and increase our unemployment difficulties. This position is worsened by the fact that America is raising her tariffs against the goods we care to export to her. I hope when the Prime Minister was in America, he took the opportunity of stressing this aspect of our difficulties; it was a glorious opportunity for this to be done, because, quite apart from the economic aspect, there is undoubtedly a strong feeling growing there that something should fee done to secure better con- ditions and a better understanding throughout the world. I feel that the people in that great country do not realise the intensity of the distress in this country, and although the War did not leave us with our lands laid waste and devastated, we have in our midst huge areas of devastation which can be seen by the queues of men and women waiting daily at the Employment Exchanges to obtain employment. That is an aspect of the question which I hope the Prime Minister put before the President of the United States.

We welcome the generous and sympathetic consideration which the United States have given to the peace and disarmament proposals, but we must not forget that a reduction in armaments must for the time being add to the number of people who will be unemployed. I wonder if it be possible for the Prime Minister to go further, and to see whether America will be prepared to consider a general cancellation of War debts which would go far to ease our present situation. Public opinion is veering that way in America, and the Socialist party is the party which might well put that proposal forward. If America will not cancel debts, they might agree to a postponement of our annual payments until our difficulties are less acute. If the Labour party will work on lines similar to those I have indicated, I feel that every Member of the House would support them, and that it would carry us well on the way to a solution of our difficulties.

Mr. MAXTON

The question before the House is a vote of £10,250 for the Lord Privy Seal's Office. I understand that the Lord Privy Seal is receiving a sum of £5,000 per annum in return for what he is doing in this matter. I am not going to oppose the paying of that sum of money to the Lord Privy Seal, for as a good trade unionist he would find it irksome to work below what has been regarded as the standard rate for this branch of industry.

Mr. ERNEST BROWN

It is not the tandard rate for the Lord Privy Seal.

Mr. MAXTON

It is for Cabinet Ministers generally. I would rather grade them up than grade them down. I notice, if I understand rightly the speeches of the two Opposition leaders, that there is to be no opposition to the payment of that sum to the Lord Privy Seal for his work in connection with unemployment. I must say that as a Socialist I find something that grates upon my sense of equity and social justice in the free way in which this Committee is prepared to vote £5,000 for a Cabinet Minister's salary as compared with the grudging way in which they voted 10s. for widows, orphans and aged persons, and I hope that the time will not be far distant in this land when better conception of social justice will prevail, so that at one and the same time the position will not arise when one citizen will be freely voted £100 while another is grudgingly voted 10s. a week. So much for the subject which is on the paper.

I now turn to the subject under discussion, namely, unemployment. The placing of this duty of looking after the problem of unemployment upon the Lord Privy Seal was a new effort on the part of the Labour Government. Formerly, the Minister of Labour usually dealt with all unemployment problems in this House. Everybody recognises the unfairness of making the Minister of Labour responsible for anything other than the duties which fall to his Department. Presumably, the Lord Privy Seal is creating a new departure in dealing with the general question of unemployment, as distinct from the administration of employment exchanges and unemployment insurance, and I would like whoever replies on behalf of the Government to tell me just exactly what staffing arrangements have been made to enable the Lord Privy Seal to grapple with this new office. I know that he has two of his colleagues in the Government associated with him in this work. I would like one of them to tell me exactly how the duties, powers and functions are divided between the three representatives of the Government, and what staff has been placed at their disposal to arrange the whole problem of unemployment, to examine it and to bring forward schemes and proposals for dealing with it.

7.0 p.m.

I listened to the Lord Privy Seal's speech with very great disquiet. I do not know whether there are any un-happier men in the Committee than I am to-day; I hope that there are not many. I want to say quite frankly to my right hon. Friend that his speech, which was lucid in its exposition, was far below the level of many great speeches that I have heard him make in this House and in conferences of our own party. I draw the conclusion from both the manner of delivery and the matter, that instead of using his own sound working-class common sense, he has allowed the devilling work of the preparation of his speech to be done by the same permanent official who did the same thing for Sir Arthur Steel-Maitland, his predecessor. I listened for some evidence in the statement of an attempt to arrive at a solution of this problem along Socialist lines. I test it in three ways. Does this make for the extension of public ownership in industry? I find nothing in any of his statements that indicates anything there. The second test is: Does it tend to bridge the gulf that separates the idle rich from the idle poor? I find nothing there. I submitted it to a third test: Do these schemes tend to give the working-classes a greater say in the control and direction of industry? I find nothing there. Indeed, I find no difference, no conception in facing up to this unemployment problem that has not been tried out either by the right hon. Gentlemen above the Gangway or the right hon. Gentlemen below the Gangway. I have worked a considerable period in our labour movement, though not quite so long as my right hon. Friend, and I have had it as my hope in life, my religion in life, that one day on these benches would sit a Government of the working-class, holding power in this land and using that power in the interests of the working-class. The right hon. Gentleman tells me of £40,000,000 that is being voted out of the public funds to develop capitalism in one direction or another, in the hope that some of that may trickle through to the working class. That, however, has been done by every Tory and every Liberal Government in the past. I came here to see that public benefits went first to the working-class, the producers of wealth, and, if something trickled over to the other people afterwards, well, it was the overflow and not the main flood.

Every day in his House the Government are being threatened. I am sorry the right hon. Gentleman (Mr. Lloyd George) is not n his place. There is no good in his coming into this House day after day and standing over the Government with a threat as he does. Do I see some Members shaking their heads? Let them cast their minds back to Friday. The Labour Government dared to try to speed-up Government in India, and the right hon. Gentleman stood up there and threatened. Every day in this House the Government are living under that threat. But threatened Governments live long! One of my enthusiastic colleagues on these benches said that Labour was in for 20 years. Well, I hope so. God knows that at the rate of progress indicated in the Lord Privy Seal's speech they will need every minute of it! I would have my right hon. Gentleman believe that since this problem arose in its post-war form, or even since 1908 when it was almost as acute as now, the political representatives of capital has tried every conceivable device to solve the problem under capitalism, and they have failed. I am going to say that the Lord Privy Seal cannot make capitalism a successful intelligent scheme of production for providing the needs of the people of this community any more than the right hon. Gentlemen who are sitting in opposition. That is what the country said at the General Election, and that is what the country said at the municipal elections. They have endeavoured to believe that by some device under capitalism, at some time in the future, there would be a job for every man in this country. For 20 years now the working classes of this land have waited to see that solution for unemployment under capitalism, and the Lord Privy Seal comes here and says that they will have to wait longer still. He says that temporary devices are no good; and that we must re-establish the export trade, particularly with Canada. Canada is obviously in his mind the most fruitful field, because it is the one field which he took the trouble personally to visit.

I have one or two figures; and let me say this, that Great Britain has been exporting for over 100 years. It has been rationalising for over 100 years. Since James Watts and George Stephenson did their work industry has been rationalising itself and becoming more and more productive. Britain has exported as much capital beyond the seas since the beginning of modern industry as ought to keep all the rest of us here living on the interest of it to the end of time, if investment of national effort followed the same course as investment in individual affairs. Remember that every £100,000,000 Great Britain sent across the seas was produced by the work of British workers. It was value extracted out of their skins. It went across the seas instead of going into their homes, and all the time, whatever the extent of the export, whatever the state of trade in this country, the working classes were always suffering privations. The right hon. Gentleman proceeds to follow along the same lines, stimulating the same conception, and also the conception of competition. I would remind him that he may put up this case; that he is going to put Britain in a better position for competition in the markets overseas by improving transport facilities and improving machinery, but the capitalist classes will not stop at that. They will accept his statement that these things must be improved, but they will say: "You must not merely improve transport and machinery, but you must reduce the taxes, and reduce the rates, and reduce wages, and have longer hours of labour." I agree that they will try to find some logical resting place in between, but there is none. If you are going to put international trade on a competitive basis, then do it thoroughly, and see who can starve best in order that we may all live in luxury!

If we are going to sell things in Canada, then the following figures may be of interest. The value of Canadian manufactured goods amounted in 1870 to £40,000,000; in 1900 to £90,000,000, and in 1921 to £700,000,000. Canada is now exporting manufactured goods to the extent of £100,000,000 per annum. She used to import many of these things from Great Britain. She now competes with us in the world's markets. Let me give a quotation. It appears in the book "Mystery of the Trade Depression," by Mr. Holsinger. This was my bedside book when I got home at nights after slamming the Tories during the election. It brought me back to things that mattered! The author of this book makes what seems to me extravagant claims and uses some strange language and arrives at conclusions that do not seem to me to be adequate. The following is taken from a news article in the "Times" of 9th May, 1928: Exhibits of the products of Canada, including over a dozen manufacturing lines, are to appear this year at most of the exhibitions in Great Britain. The Canadian Government has set aside £60,000 this year for this purpose. Among the manufactured goods which are to be shown are the following: Motor cars, bicycles, agricultural machinery, tools, hardware, machine tools, various types of machinery, gramophones, pianos, various novelties including electrical appliances, motor cars, tyres, general rubber goods, electrical washing and sewing machines, and possibly furniture. On 9th March, 1928 the "Times" published the following from its Sydney correspondent: Dorman Long and Co., Ltd., and Baldwins, Ltd., of Great Britain, and Howard Smith, Limited, steamship owners, are joining the Hoskins Iron and Steel Co. for the purpose of developing the iron and steel industries at Port Kembla. The new company will have £5,000,000 capital and contemplates the erection of one of the most up-to-date plants in the British Empire. The Australian Minister for Trade and Customs stated in an interview to the Press, in June, 1927: In my opinion it is absolutely necessary if only for defence purposes, that the motor car engine industry should be developed within our own borders. I can assure my right hon. Friend that this is bringing down to a detailed statement what all of us know to be the facts, that while we are roaming the world, looking for markets in various countries, those countries are over here looking for a market in Britain.

I ask my right hon. Friend who has been a great personal friend of my own at all times, although we have been invariably at extreme ends of the pole in the matter of Labour's policy, to throw overboard the Tory philosophy of unemployment. It is not held by the majority of the Members on these benches. He will get support for the Tory policy in the beginning, I have no doubt, from a very large percentage of the loyal Members on these benches, but with very great difficulty. I forget the exact words used by a Noble Lord, the Earl of Birkenhead, in another place when he was appealed to go into the Lobby in support of something with which he profoundly disagreed. I think he said he would go into the Lobby with "determined resignation "—it was really better than that—in support of the Government. That will be the mood of the majority of the hon. Members on these benches if the Lord Privy Seal has nothing better to offer than has been offered to-day. We will go into the Lobby, but we shall do so merely as a matter of duty, and with no heart, and that mood will not be retained very long on these benches. We are very loyal to our Labour and Socialist principles, and we are ready to work in the team, but we want to work in the team, in our team, as distinct from the team of those persons outside.

I want my right hon. Friend to consider this. At the time when he was going to Canada I had to sign a document for a colleague of mine, a comrade of mine, who had worked in this Labour movement longer years than me. He had looked forward to the day when Labour would have power in this country and working people could hope. I had to sign a document giving him a testimonial to enable him to be emigrated with his wife and family across the seas by a private charity. He was in the team along with me. I searched over the whole range of industry, thought over all my personal friends, and over all governmental powers, and there was absolutely nothing I could do for that man except give him a testimonial as to his character to enable him to obtain this charity. It will not do. My right hon. Friend has gained a great reputation in the working class movement, has attained to a very high and responsible office in that movement, and one of his greatest qualities was to know when to change direction at the appropriate moment. Never was there a more appropriate moment than now to turn away from the capitalist philosophy to the Socialist philosophy.

I make this last plea to him, and it is a plea. When the King's Speech was introduced, I asked him that while he was formulating his higher lines of statesmanship, while he was maturing his plans he should at the same time take steps to see that no man or woman in this land faced starvation or the fear of starvation. I asked that from him, and up to now there has been absolutely no response of any description. I am asking him again to deal urgently with the problem of relieving the unemployed man. While he is waiting for his schemes to produce work, is he going to allow the unemployed, who are most undoubtedly victims and not responsible persons, to continue with their miserable allowance of 18s. a week, and in addition to be battered about from pillar to post, or is he going to increase that allowance to the amount which the Labour movement when in opposition demanded of the Tory Government? I know there will be a squeal from the other side at the demoralisation of doles. They think the working class are demoralised if they get enough to eat. I put it to him that he is granting £40,000,000 to the capitalists of this country—railway directors, landowners. I suggest that a similar amount is not too much to put directly into the pockets of the unemployed workers.

That is the one and only way to solve the unemployed problem. Unemployment can only be solved by the equitable distribution of work and the equitable distribution of leisure. A million unemployed men represent a million men's leisure time to be distributed over the whole population, or it means a general rise in the standard of life of the whole community. The policy on which the right hon. Gentleman and myself and all this party was returned to power was to improve the trade of this country by improving the purchasing power of the common people, and not by improving the profit-earning power of the capitalist class. I ask him to change the policy which has actuated him up to now, to turn to a consideration of the needs of the common people, and not the needs of capitalism, and in the interim, while he is changing his general policy, to give us on these benches, and our colleagues in the country outside, a guarantee that no working man or working woman, whatever misfortune may have come upon him or her through the evil system under which we have been compelled to live, will suffer either from starvation or the dread of starvation.

Colonel ASHLEY

I think it would be inappropriate if I were to intervene in the domestic quarrels of the right hon. Gentleman the Lord Privy Seal and the hon. Member for the Bridgeton division of Glasgow (Mr. Maxton), but though I profoundly disagree with the arguments put forward by the hon. Member who has just spoken perhaps he will allow me to congratulate him on the force of his arguments and the wit with which he illustrated certain portions of his scheme. May I thank the Lord Privy Seal for his kindly reference to myself over the Charing Cross Bridge project? I am sure the best wishes of both himself and myself will go out to the London County Council in the promotion of their Bill, and I trust and believe that there will be no difficulty in its being passed through all its stages in a very short time. Both the Lord Privy Seal and the Minister of Transport have during the last few weeks made great parade in the Press, in speeches and in writings, of the wonderful things they are going to do for the unemployed by their various schemes.

Mr. THOMAS

Will the right hon. and gallant Gentleman quote any of mine?

Colonel ASHLEY

At any rate the right hon. Gentleman's friends have spoken for him, and the glorification of public spending has been the theme and burden of all the speeches. May I examine the road programme for a moment and analyse it to see whether this glorification, this suggestion that it is a great advance upon what the late Government proposed, is really justified? The Minister of Transport has set himself the task or object of spending £38,000,000 in five years, and, as I understand it, has divided up his programme into £10,000,000 for trunk roads and £28,000,000 for other roads. I cordially support the adoption of the trunk road programme. During the late Government's term of office that programme had been carried through almost to completion in many instances, although in some instances there were gaps. It is quite proper that the main arteries of traffic should be made sufficiently wide and safe to carry the increasing traffic. As far as I can judge the amount of the programme has been placed at £38,000,000, and nearly 75 per cent. of that amount will be found out of the Road Fund, the rest being contributed by the local authorities. I imagine that the increase of this Fund must slow down in the future, and I do not think that the Road Fund will be able to find 75 per cent. of this £38,000,000. If that turns out to be true the taxpayers will be called upon to provide the difference; that seems to be quite a new aspect of Road Fund administration. It is rather a dangerous precedent that the Chancellor of the Exchequer, who is a man of strong will, should cheerfully, back the Bill of the Minister of Transport as far as this Fund is concerned.

There is another aspect of this principle of taking 75 per cent. of this expenditure from the Road Fund which occasions me some disquiet. Under the late Government 60 per cent. or 50 per cent. was the normal amount taken from the Road Fund for the schemes of local authorities, and when you raise that amount to 75 per cent., I think you are approaching quite an untenable financial position. It should be remembered that the initiation of this work rests with the local authorities, and if we go much further in this direction we shall be faced with the demand for national roads run by people at Whitehall. This, to my mind, would be a great mistake because you cannot deal with the roads as efficiently from London as you can when the administration is left to be initiated and carried out by the town councils and the county authorities. The proposed expenditure of this £38,000,000 is being dangled before the House of Commons as a large sum of money, but you have to divide that amount either by five or seven. My experience of the administration of the Road Fund and the expenditure incurred by local authorities upon road work is that when you contemplate the spending of a sum of money over a period of five years, it generally takes seven or eight years, because a certain number of the schemes always fall through. When you build a house, it often takes 50 per cent. longer to build than was anticipated, and the same argument applies to road schemes.

Last spring, with the consent of the Chancellor of the Exchequer, I raised the amount to be spent on new construction and alterations of roads from £1,800,000 to £4,000,000 for this year. The £7,500,000 which the Minister of Transport proposes to raise includes the contributions to be made by the local authorities, amounting to 25 per cent. or 20 per cent., while the £4,000,000 which I raised did not include these amounts, which would make my total £5,500,000 instead of £4,000,000. Consequently, there is only a difference of £2,000,000 between the programme which I dealt with and that which is now proposed by the Minister of Transport.

It has been estimated that the expenditure of £1,000,000 upon roads in one year provides work for 4,000 men, and is it really claimed that the expenditure of this £7,500,000 will form any serious contribution towards a solution of the unemployment problem. What the Government say is: "We consider that £5,500,000 is not enough to spend on road works, but we think the sum of £7,500,000 should be spent." I went into this matter very carefully when I was at the Ministry of Transport, and I was of the opinion that my programme, which contemplated an expenditure of £5,500,000, could not have been carried out in 12 months because of the difficulty of getting local authorities to carry out their schemes. I feel sure that the Minister of Transport will have to come to this House in 12 months' time and admit that he has not been able to carry out schemes to the extent of £7,500,000. In my view the amount will be much nearer £3,000,000 or £4,000,000.

I will now deal with the general question as to whether the amount of money which is proposed to be spent by the Government on the relief of unemployment, amounting to £42,000,000, is enough or whether it is too much. I would also like to consider whether that method of dealing with the unemployment problem is sound or not. In my own mind I am absolutely sure that it is radically unsound. The excuse which has been put forward for road works and railway development is that there is going to be a real and strong permanent revival in trade, and in view of that fact it is deemed advisable to anticipate public works by 12 months or two years. Is the Lord Privy Seal prepared to say that he feels sure that in 12 months or 24 months we shall have a real boom in trade, and that then the unemployment problem will melt away like a mist when the sun comes out?

The late Government approached this question on really sound lines by passing a Rating Act, reducing freight charges, removing all the burdens of the rates from the land, and removing three-quarters of the rates upon factories. This was all undertaken with the object of enabling each industry to absorb its own unemployed. The Government are trying to deal with this problem by the expenditure of a large sum of public money which does not go to the root of the matter and will only aggravate the disease. After the £42,000,000 has been spent, unless we have this great trade revival, we shall have more unemployed because you will have diverted that large sum of money from productive undertakings, and you will have spent it upon works which are not absolutely necessary. I shall be greatly interested to see the result of the carrying out of the proposals of the Government. I can quite understand the anxiety of sincere followers of the Government and real Socialists in view of the Government's proposals which are not Socialism at all, and will not give a helping hand towards the solution of the unemployment problem.

Sir ROBERT ASKE

I think it is a fair and sound criticism of the Lord Privy Seal's statement to say that whatever advantages there may be in them for some parts of the country, his proposals are very cold comfort for the great basic industries of the North of England, more particularly on the Clyde, the Tyne, the West Riding of Yorkshire and Lancashire where the Government must recognise that the real problem of the unemployed lies. Unemployment in the North of England is far more rife than in the southern areas. I will take as an illustration one of our great basic industries on the north-east coast, namely, shipbuilding, where the percentage of unemployment is no less than 28 per cent., which is larger than any other industry in the country. These considerations are all the more important because it has to be borne in mind that the energies of the Government are not really being confined to the reduction of unemployment, and the policy of the Government is really causing more unemployment.

May I give as an illustration the cancellation or slowing down in the building of naval ships and engines. I am not criticising the policy of the Government on that question, but I know that a very large number of shipyard workers have been thrown out of work in that direction because of the policy of the Government, and this places a large additional responsibility upon the Government. I know that representations have been made to the Government by the passing of resolutions, and delegations have approached the right hon. Gentleman, particularly from the Boiler Makers' and the Shipbuilders' Society. I would like the Lord Privy Seal to tell me whether he is giving those proposals consideration, and whether he contemplates doing anything to meet the wishes of the members of those trades.

The greater part of the statement which has been made by the Lord Privy Seal dealt with railway development, but it should be borne in mind that there has been a repercussion from railway development which is competing very keenly with the coasting trade. Although that is not one of the vital trades of this country, it does provide employment for a large number of men in the manning, building and repairing of ships. I am not criticising the encouragement which the right hon. Gentleman is giving to railway development, but it must be kept in mind that the more financial aid which is given to the companies, the more they are placed in a better position to compete with the coasting trade, and this may render it still more difficult for that trade to carry on in the future. Therefore, the right hon. Gentleman should see that the facilities required for the shipping trade are being provided as well as facilities for the railways. We have had some experience of the way the canals have been treated by the railway companies at the time when they secured the ownership of most of the canals in the country. Of course, the railway companies are more inclined to develop the railway side' of this problem than the canals or the docks.

I would like to ask the Lord Privy Seal if he is satisfied with the efficiency of the docks and the harbours of this country and their equipment, because these are matters of the greatest importance to the shipping trade. Let me take as an illustration the recent inquiry into the working of the docks at Middlesbrough. It was pointed out that representations have been made time after time to the railway companies by the users of the docks, the shipowners and the traders that the docks at Middlesbrough were very much congested and were causing a great loss to trade. Notwithstanding these representations, the railway companies refused to meet the difficulty by providing an extension of the docks. I am sure that the right hon. Gentleman will be only too glad to have these matters brought to his notice and that he will do what he can to have pressure brought to bear in connection with them. I mention the subject of the railways and the docks at this stage because when the right hon. Gentleman is giving financial assistance to the railways, it can be made a condition of such assistance that the railways should themselves undertake these dock extensions.

My next point is of a more general character and relates to the transference of labour. I understand that within the last few days there has been a relaxation of the regulations through the good offices of the Lord Privy Seal. I submit that that relaxation ought to go a good deal further. The Lord Privy Seal will be the first to admit that in the great industrial centres unemployment grant schemes have not been availed of to the extent that one would have expected or hoped for, and the reason is to be found in the restrictions with regard to the transference of labour. I speak having in mind a concrete illustration affecting Newcastle-upon-Tyne. That particular point has been met, but the principle remains that it is absolutely impossible to contemplate the transference of labour, under any schemes, into our great industrial centres where there is a great deal of unemployment. It is not sufficient to provide that there shall be transference only if there is a certain percentage of unemployment over the whole number of insured workers. It is necessary to provide that the transference provisions shall not operate, first, where there is a certain number of unemployed in the area, regardless of percentage, and, secondly, where there is, in any trade which can be regarded as a staple trade in the area, more than a certain percentage of unemployment. For instance, they ought not to operate in any of the places on the Tyne because every one of those places has got 28 per cent. unemployment among shipyard workers and it is impossible for any local authority there to contemplate the introduction of imported labour. If these suggestions were adopted they would help the right hon. Gentleman and the authorities and we wish the right hon. Gentleman well in the efforts which he is making in the discharge of the duties of his office.

My final point is this: There are two ways I understand in which a Minister can approach the problem of unemploy- ment. He can first look round the country to find where there is work of national importance to be done—work on which money can be spent to the national advantage. The second way is to take seriatim each class of labour on the Board of Trade list, and consider the problem from the point of view of putting each of those categories into work. One of those ways is as necessary as the other. I think the right hon. Gentleman has tackled the problem from the first point of view but has not gone so fully into it from the second point of view. I take the greatest of all illustrations available. There are 87,000 building operatives out of work and there are 33,000 building construction operatives out of work—a total of 120,000 people. In addition there are many thousands out of work in what may be termed accessory manufacturing trades connected with building, such as brick and tile making, earthenware making, metal work, slate quarries and so forth. These make up altogether a total of about 150,000. That is 12 per cent. of the whole problem with which the right lion. Gentleman has to deal. Is there any serious or insuperable difficulty in the way of putting every one of these unemployed persons belonging to those categories into' work which will be of advantage to the country? In my submission there is no difficulty of that kind.

Look on the other side of the account. In every one of the great industrial centres there is the most frightful overcrowding. In Newcastle-upon-Tyne, the industrial capital of the North-East coast there are 80,000 people living under over-crowded conditions. There are 30 per cent. of the whole population and 10 per cent. of the families in that great and important city living in homes of a single room, and, taking the whole of the Tyne, including places represented by four Ministers of the Crown at the present time, we find that the conditions are even worse. There you have people living in many cases with six, eight and even ten of a family living and sleeping in one room. I ask the right hon. Gentleman who has we all know, a great heart, is there a national need there? Can any case be imagined in which the money of the nation would be expended to greater advantage.

Mr. THOMAS

I welcome suggestions and the whole purpose of the Debate apart from any party criticisms should be the making of suggestions. I said that in my last speech and I repeat it now, but the curious thing is that whilst a number of people can airily say this and that about the problem, up to now I have had no Suggestions outside the proposals which I myself have already made. It seems not only absurd but wrong that men should be out of work in the building trade and drawing unemployment pay, when we know that there is work for them to do. That is the point put by the hon. Member. My answer to him is this. The reason why I did not deal with the matter this afternoon is that one of the first of the Government's Measures of this Session is a Slum Clearance Bill, in order to deal with one side of that problem. Secondly, I have urged and am to-day urging all municipalities to take advantage of the Government's facilities to help them on with work—work which unfortunately they ought to have done long ago. The offer is still open.

Sir R. ASKE

I am obliged for the kind intervention of the Lord Privy Seal. I would point out, however, that this is not a matter of slum clearance but of the actual shortage of housing accommodation, and it cannot be dealt with by any policy of destruction. What is necessary is construction. The houses must be built to cope with this question, before you proceed to destroy others. The trouble is that the health of the people is suffering, and if the Government do not build houses now they will have to build hospitals in the future. I welcome what the right hon. Gentleman says, and I would urge him to take his courage in both hands to find out how many houses are required in order to provide one house for one family in this country, and then to go boldly forward. If it is necessary to revise the financial provisions, surely the Government are bold enough to do so. With deference to what the right hon. Gentleman has said, I think it is the case that more generous financial provision may have to be made to get the problem dealt with more quickly, and I suggest that the Government ought to be brave enough to do that. If the right hon. Gentleman undertakes to do so, he will accomplish these objects. He will put a great number of those unemployed in the building and allied trades into work; he will save the unemployment benefit which they are at present receiving; he will benefit public health in the country and save vast sums in the future in public health services. If the right hon. Gentleman undertakes that task, he can be assured of a very warm measure of support from these benches.

8.0 p.m.

The MINISTER of TRANSPORT (Mr. Herbert Morrison)

The speech to which we have just listened is helpful besides covering ground other than that already covered by the Lord Privy Seal. I am certain that the suggestions of the hon. Member, if not dealt with later in this Debate, will certainly receive the attention of the Ministers concerned. We all thank him for the helpful spirit in which that speech has been made. I am bound to say that the Debate as a whole has been a very one-sided affair. We listened to the Lord Privy Seal making the speech of a man who is obviously struggling and doing his very best—with a considerable degree of success—to deal with a problem which has baffled Government after Government during and since the War. The Committee must now be satisfied, not only that the Lord Privy Seal is devoting all his energies to his task, but that he is achieving material results far in excess of those achieved by any previous Administration. The other speeches in the main contained no constructive suggestion and have not been particularly helpful. The right hon. and gallant Gentleman the Member for New Forest (Colonel Ashley) almost complained that the Government were not achieving sufficient of the pure milk of Socialism within two or three months of taking office. But the right hon. and gallant Gentleman's party and the Liberal party have both warned the Government that, if they do any such thing, they will immediately be thrown outside the House of Commons. Really, I wish the Opposition could make up its mind what it wants us to do. Does it want us to live up closely to the ideals and instincts of the hon. Member for Bridgeton (Mr. Maxton), or does it not wish us to do so? It is absurd coming here warning us not to be Socialistic and then appearing to complain that we are not Socialistic enough. The right hon. and gallant Gentleman referred also to an orgy of expenditure which I have been praising during the Parliamentary recess. I am not at all conscious of having praised any orgy of irresponsible expenditure. Anybody who knows my work in the field of local government will know that I am not that type of person; but, when he says that, let me point out that the right hon. Gentleman the leader of the Liberal party, in the same Debate and a very short time before the right hon. and gallant Gentleman opposite spoke, complained with the greatest vigour that we are not spending nearly enough money. They cannot both be right. If the right hon. and gallant Gentleman is right that we are engaging in an orgy of expenditure, the leader of the Liberal party must be wrong when he complains that we are not spending nearly enough.

It is perfectly true that out of the expenditure upon roads a very considerable proportion is provided by the State. Increases have taken place from time to time, and I think it is wise to say that I consider we have now reached the point when the State cannot contemplate further commitments as to the percentage of expenditure which it meets. It would be unwise to flirt with that question; otherwise, people may feel that it is unwise to spend money now because they may get more later on. I am bound to say that when you get to grants of 60 or 75 per cent., the State is reaching a point when it has to be careful, lest those who are responsible for the executive spending of the money in the localities are not sufficiently impressed with their own responsibility in the matter. But the right hon. and gallant Gentleman cannot complain of this Government in that respect, because, although we have found it necessary to negotiate grants upon a reasonable, and in some cases upon a generous basis, the official standard of grants was in fact fixed by the previous Administration. The national contribution is very high, and I hope local authorities will remember that in the applications which they make for assistance.

Colonel ASHLEY

I am sorry to interrupt, but I do want information. Can the right hon. Gentleman give any indication as to what is the rate of assistance from the Road Fund towards the various schemes, trunk road programmes and others, which are coming in?

Mr. MORRISON

It is very difficult to give an average. As the right hon. and gallant Gentleman knows, there are certain cases with which you must deal upon their merits and in which you must make exceptions, but on the trunk road programmes the usual grant is 75 per cent.; as he knows the usual grant on ordinary class 1 roads is 60 per cent., and on class 2 roads 50 per cent., with the provision that On class 1 roads, if the local authority accepts an agreed amount of transferred labour, the percentage can go up to 75. There are cases of counties which have very little if any, practical interest in the work which is proposed to be done—where a road is starting from a point outside their county and finishing at another point outside their county, and where also the county itself is very poor—in which exceptional conditions have to be granted, and those exceptional grants are made from time to time where it is considered necessary; but there is a responsibility on the local authority to show its case and prove its case, and I have found it necessary to be firm and consistent in the administration of these funds, to prevent absolute chaos arising in the financial relationships between the State and the local authorities. My Scottish friends will be interested to know—perhaps some hon. Members would expect it—that the county which so far has had the highest percentage grant out of the Road Fund from the present Government is a Scottish county.

It is not altogether accurate to say that you should divide the five years programme by five and assume that only one-fifth of the money will be spent in the present year. The whole tendency is to concentrate as great a proportion as possible of the work in the coming months, and that policy is being pursued by the Government with every possible energy. It is perfectly true that the right hon. and gallant Member for the New Forest made an allocation of £4,000,000 in the Road Fund estimates for this year, but that was an allocation only, and not an expenditure; whereas the figures which my right hon. Friend the Lord Privy Seal has given are in the main actual approvals of expenditure during the coming months to which everybody is committed.

The right hon. and gallant Member for the New Forest Division said that the policy of the Conservative Government was the right policy, and he gave as illustrations the de-rating of factories, the de-rating of railways, the de-rating of land and various things; but what did that policy come to, if it was not an almost indiscriminate scattering of doles and subsidies among certain interests and certain enterprises? The policy of this Government, on the contrary, is not merely to say that what is needed is a rivival of trade and a development of industry. Anybody can say that. The last Government, and to a great extent the Coalition Government, said that, and that was all. But it is no good saying these things; one must do something; one must use the powers and the knowledge of State Departments in order to assist public undertakings and private undertakings to develop themselves to the maximum extent; and what distinguishes in this department the policy of my right hon. Friend the Lord Privy Seal from the policy of the previous Government is that he is active and positive in the development of industry, whereas the last Government was negative and inactive in these matters.

My hon. Friend the Member for Dundee (Mr. Scrymgeour) has asked what is being done in Scotland. The Lord Privy Seal informed the Committee that we were not handling the problem on the basis of segregating England from Scotland and from Wales, but were considering every proposal on its economic merits alone. That is perfectly true, and indeed is the only administrative way in which the problem can be dealt with; but I may say for the information of the Committee that out of the £10,000,000 in respect of trunk roads, about £1,000,000 is in respect of councils in Scotland with whom terms have been agreed; that is to say, they have put up schemes on the basis of terms which have been agreed. They have to be examined on both sides in detail; but it will be seen that that proportion is not unfair to (Scotland. On the five years programme, out of the £13,000,000 total expenditure concerned £1,200,000 is in respect of Scotland; and I have already indicated that a Scottish country has beaten everybody so far in the percentage grant which it has secured from the Ministry of Transport.

Mr. T. GRIFFITHS

What is the amount for Wales?

Mr. MORRISON

I am sorry I cannot give that figure, but it can be obtained. Unfortunately my hon. Friend from Wales did not put the question as soon as the Member from Scotland did, otherwise I would have done my best to have had the information. There are two very important schemes in which Members for Scotland are very much interested; one is the great Forth Bridge project, and the other is a bridge over the Tay. A report from the engineers has been received indicating that the expenditure on the Forth Bridge would be in the region of £6,000,000 or possibly over £6,000,000; in respect of the Tay Bridge the probable expenditure is in the region of £1,000,000 for a low level bridge, and £3,000,000 for a high level bridge. The reports have been sent to the local authorities, or we are otherwise in communication with them, and as soon as we know what the local authorities have to say as to the merits of the proposals in relation to the capital expenditure involved, and also as soon as we get an indication as to how far the Scottish authorities will be prepared to contribute to the projects, active negotiations can be opened and the matters can be considered; but it is fair that the Committee should see the figures and realise the very considerable expenditure which is involved, which must of course be considered in relation to the economic advantage which is likely to result.

I am bound to say this very clearly; we cannot handle these matters on the basis of 100 per cent. grants, and hon. Members had better appreciate that forthwith. Local authorities must make their contributions. This Minister of Transport is not going flying off on schemes which at any rate are largely local in character, on the basis of 100 per cent. grants. It cannot be done; in the interests of good government—unless we are going to abolish local government altogether—it ought not to be done; and nobody must assume that we can start negotiations upon the basis of 100 per cent. grants.

I am sorry that the right hon. Gentleman the leader of the Liberal party is not here. He had, I understand, an urgent private engagement; but he knew that I should deal with him somewhat at a later stage in the Debate. The right hon. Gentleman made what was in my judgment the most purely destructive speech to which we have listened in this Debate. I have no doubt that he thoroughly enjoyed himself; everybody could see that; and I have no doubt that he was happy at the end of the speech which he made. He asked why we were not getting immediate results after three or four months of operations. Nobody knows better than he does that every Government dealing with this problem, particularly a Government which comes into office after a Government which has neglected the problem and has not got things ready, labours under great difficulties; and nobody knows better than the right hon. Gentleman the leader of the Liberal party that to come this afternoon to my right hon. Friend the Lord Privy Seal and ask him for great armies in work to-day who were not in work when we Came into office is hardly a fair position to take up. We have every reason to believe that the Underground Railway proposals can be negotiated. We have no reason to believe that the Underground Railways are going to be a difficulty in relation to the Charing Cross Bridge, and it is a little unfair and a little difficult when these suggestions are made, because we do not want difficulties to exist where difficulties do not exist.

The right hon. Gentleman the leader of the Liberal party said that not a penny was being spent on rural roads. Really that was an extraordinary statement to make. A great mass of these road works for which I am responsible in association with my friend the Lord Privy Seal, is in respect of rural counties. To give two examples—one that is prominently represented by Liberal Members in this House—Cornwall has a scheme of £250,000, and Devon, an essentially rural county, a scheme of over £1,000,000.

Mr. KEDWARD

The right hon. Gentleman was not, I think, dealing with it by way of counties; surely, he was alluding to unclassified roads?

Mr. MORRISON

The right hon. Gentleman should be a little careful in that case in the choice of his language. I am not dealing with little tracts of road on which you might employ a couple of farm labourers for a fortnight to put them right; I am dealing with the unemployment problem.

Mr. KEDWARD

It is the rural problem that you are dealing with now.

Mr. MORRISON

Really, it is an extraordinary idea that the only rural roads are unclassified roads—that there is no trunk road, no class 1 road and no class 2 road in a rural area.

Mr. KEDWARD

No.

Mr. MORRISON

Do let us get to facts. I am sure that everyone who is familiar with the problem knows that all the work that could be done on unclassified roads would make but a very small contribution to the unemployment problem. It is the work on the great trunk roads, on Class 1 roads, and on Class 2 roads, that is the really effective work, and for the right hon. Gentleman to have led the Committee, and possibly the public outside, to believe that we are doing nothing in the rural areas, that we are not making substantial contributions there, is really unfair and ought not to have been done. Running through the speech of the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) was the suggestion that all that Ministers have to do, that all that the State has to do, is to wave a magic wand and the unemployment problem is solved. That was the spirit behind the speech of the right hon. Gentleman—that my right hon. Friend the Lord Privy Seal had not waved his wand with sufficient vigour, and that if he, as representing the State, had done it, all might have been well.

The right hon. Gentleman did not always occupy the position of lesser responsibility which he occupies today. He once held a position of responsibility here, and had to speak to the House from this Box; and I once held the position of mayor of a Metropolitan borough, and, in common with certain other mayors, I went on a depu- tation to a certain Highland fastness called Gairloch, in Scotland. I went on that deputation to urge that the Coalition Government should deal with the unemployment problem, and I venture to say that I dealt with the matter, in the speech which I made to the right hon. Gentleman on behalf of the Metropolitan Labour mayors, far more constructively than he dealt with the problem this afternoon. To-day, the right hon. Gentleman assumes that the State can do anything, that the State is all-powerful, that, if we only get to work, we can get everybody to work during the coming winter. Listen to the same right hon. Gentleman talking to me at Gairloch on the 22nd September, 1921, when he was Prime Minister of this country. He said: It is no use to come to the State only. Countries who look entirely to the State usually find themselves let down in the end, because there is a sort of feeling that you need not worry, the State will do it all for you. The State cannot. It did not do it during the War, except with the co-operation of all interests. It was because the State managed during the War to secure the interests of every kind to come in and help. That is the way the thing is done; and the same thing applies to unemployment. If you were to pass an Act of Parliament to spend so much money"— I hope that that will be noted— If you were to pass an Act of Parliament to spend so much money, believe me, that would bring us to a worse state than we were in before. You must somehow or other find a scheme where the State will do its share, where the local authority will do its share"—

HON. MEMBERS

Hear, hear!

Mr. MORRISON

Yes, including the rural roads— where the great foreign trader will do his share, where the manufacturer will do his share, and where the trade unionist will do his share. Is not my right hon. Friend the Lord Privy Seal engaged upon the noble task of seeing that all do their share, and is not the right hon. Gentleman the Leader of the Liberal party to-day complaining that my right hon. Friend is not taking the whole executive burden on his own shoulders? [Interruption.] If the right hon. Gentleman did not mean that, I do not know what he meant. All that I would say is that the position of the right hon. Gentleman in this House to-day is utterly inconsistent with his position when talking to me and other Labour mayors in 1921 up in the Highlands of Scotland. [Interruption.] I have read my story; I have carefully read my part in the proceedings at Gairloch. I anticipate that the right hon. Gentleman will read it too, now. My impression is that I shall not have nearly as much to modify, although I was merely an inexperienced mayor, and had never been a Minister, as the right hon. Gentleman will have to modify after he has read what has taken place to-day. Let me say this in conclusion. What the working people want to be satisfied of, what the country wants to be satisfied of, is not that we can bring unemployment to normal within 12 months. We never promised to do it—

Mr. KEDWARD

You promised the millennium!

Mr. MORRISON

No; the promises that we made on unemployment were responsible promises, realising the complications and the difficulties that we should have to meet after years of government by hon. Gentlemen opposite. Therefore, we were cautious and restrained in the promises that we made, and we certainly did not make promises to solve the unemployment problem, or to reduce it to normal, within 12 months. We promised that we would do our best; we engaged that we would pursue the policy which my right hon. Friend is pursuing. We intimated that we would put in hand all possible public work, and that we would stimulate all possible private work. The Government are doing that, and are doing it with all energy. What the people want to be satisfied of is that the Government are doing their Very best, that they are pursuing a sound policy; and I, for my part, am not going to apologise for what this Government have done and are doing on unemployment. They are doing more than any other Administration has ever done. They are pursuing the right policy. Provided that we take the people into our confidence and tell them of our difficulties, and so long as they are satisfied that we are putting a full day's work into dealing with the problem, the people will support this Government, the people will approve this Government, whatever detractions we may meet in the House of Commons.

Mr. ALLEN

It is customary to ask the indulgence of the House for a maiden speech. It is certainly in no spirit of criticism that I intervene in this Debate. My own constituency of West Belfast has, I am sorry to say, the highest proportion of unemployment of any in the United Kingdom. The operatives there are very largely engaged in the linen industry, and that industry, from various causes, is in a state of absolute collapse. There is no question of men over there not genuinely seeking work; there is no work for them; and it is only with great reverence for the human spirit that one can go along those mean streets and see those men so patient and so cheerful, so absolutely without hope and yet so self-disciplined, waiting for something to be done for them. The criticisms which I shall make of the Lord Privy Seal's speech are not inspired by any party feeling; I should probably have made the same criticisms of a speech coming from my own party if they were on those Benches, because I feel that the whole approach to unemployment as outlined in this Debate rather misses the point.

I had a curious experience just after the Election. When the ballot-boxes were being opened, I saw that a voter had written across both candidates' names, "Not genuinely seeking work." I would rather that man had written that than that he had given me his vote, because I consider that it was a challenge to me, to the House, and to the whole of our industrial civilisation. I would offer no criticism if the Labour party broke every promise they had ever made. I would not mind if they stayed in power for 20 years if this House by its combined efforts managed to knock a nought off the unemployment figures. We have heard tonight much of State-aided schemes of relief works. I welcome those schemes, though I should welcome even more any single scheme that had any bearing on Northern Ireland, such for instance as a scheme for a Scotch-Irish tunnel which, without much success so far, I put up to the Lord Privy Seal. But State-aided schemes are really only a sticking plaster on a big open wound. So long as any given scheme supplies a definite need, it is an economic scheme, and it incidentally supplies employment. But after all, State-aided schemes to absorb a surplus of labour are literally as old as the Pyramids, and a State-aided scheme which is uneconomic, which is simply a monument to the despair of the Lord Privy Seal, is just as useless as a monument to the vanity of the Pharaohs.

Migration has also been a panacea of successive Governments. Migration is desirable and excellent, but within certain limits. The case of Northern Ireland is a case where migration falls down. There may be parts of this country which are over-populated. I have not the experience to form an opinion on that point. When you apply the test of migration to Northern Ireland, I find that Northern Ireland in all conscience is not over-populated. The population is and has been declining ever since the repeal of the Corn Laws, ever since we decided to import cheap corn from America and to export hundreds of thousands of working men and women from their homes in Ireland. When we apply migration to Northern Ireland we find it is a council of despair. Northern Ireland is the healthiest, and it should be one of the happiest parts of these islands. It can and should support twice the population it supports to-day. The population of Ireland at the time of the repeal of the Corn Laws was 8,000,000, and now it is a little more than 4,000,000. Nineteen men out of 20 in Northern Ireland as in any part of the United Kingdom do not want to migrate, and there is no reason why they should migrate. There are other cures than migration.

The causes and cures of unemployment lie very deep. They cannot be found in such superficial ways as State-aided relief schemes, and migration schemes, desirable as these may be in a limited way. I will illustrate what I believe to be some of the causes and the cures of unemployment. We find ourselves with a great creation of the human genius which we do not understand how to manage. That great creation of the human genius is mass production. What should mass production in all common-sense mean? It should mean mass consumption—greater variety for everyone all round. It has in many respects painfully and gradually come to near that. I do not speak in ignorance on this point, because I have spent the last 10 years of my life, since I was a boy, in writing advertisements for people who are trying to get mass production, and I realise all the time that you cannot sell goods unless people have the money to buy them. [HON. MEMBERS: "Come over here!"] Mass production surely, in other words, means shorter hours, higher wages, and cheaper goods. After all, when all is said and done, the working man is better off now than he was 100 years ago, and is better off than the Baron was 500 years ago. But, at the same time, mass production has often meant not shorter hours but no work, not higher wages but unemployment benefit, and not cheaper goods but no goods for those who want them, and congested stocks for those who do not want them. In the world to-day the problem of production has very largely been solved. The root of the present tragedy of unemployment is not a problem of production but a problem of distribution.

I do not believe this tragedy of unemployment can be dissolved through Socialism. If I did, I should not hesitate for 'a minute to go over there. But I do not believe, from my experience of the workers, which has been a very extensive one, that we want the methods of Government institutions, including the Employment Exchanges, of which they have day to-day experience, extended to the mills and factories. I feel that some of these problems bearing on unemployment can be solved by the application of certain ideals, based on common-sense, to the problem of distribution. Socialists may have been the pioneers of these ideals in the days of Robert Owen, but we had Lord Shaftesbury, who was another pioneer in the past who met with much opposition, and now they cannot be regarded as the monopoly of anyone. First of all, there is the problem of getting order out of 'anarchy in hours and wages. We must tackle internationally the vicious circle of long hours and low wages, in other words, over-production and contracted purchasing power. The Washington Hours Convention has attempted to tackle this international regulation of wages. Hon. Members on both sides know something of the many serious difficulties involved in arriving at the international regulation of hours. The regulation of hours by international agreement is only one side of a very difficult problem. So long as operatives in Czechoslovakia and Belgium are working at from 30 per cent. to 50 per cent. of the wages paid to the linen workers in Belfast or the boot and shoe operatives at Norwich, for so long will the men in Belfast and Norwich remain out of work, and for so long will the workers in Czechoslovakia and Belgium remain poor buyers and for so long will the profits of the industry, such as they are, go to the foreign manufacturer, to the middleman, and to the investor of British capital abroad. The chaos of international wages requires regulation, and until the day when that chaos can be regulated, the working men of this country are entitled to have their wage standards and their employment safeguarded from the sweating of foreign workers, and from the dumping of foreign goods on this market.

The problem of profits in industry has a direct bearing on unemployment. The first charges on industry are the workers' wages and interest on capital. We come to the question of what are fair wages, and what is a fair interest on capital. The fair interest on capital must obviously, from common-sense, be in excess of the interest that can be received on Government securities. The risk is greater and the profits should be greater. We may, for the sake of argument, put a fair interest on capital in industrial undertakings at 15 per cent. Many industries, particularly new and prosperous industries, make far more than 15 per cent. In these big profits, when fair wages have been paid, fair dividends made, and a reasonable reserve put aside, I feel that labour is entitled to participate on an absolutely equal basis with the capital invested. Profit-sharing broadens the basis of property in this country, it gives the worker an increasing security, and it tends to expand the purchasing power of the millions of workers upon whom industry depends ultimately for a market.

Profit-sharing has been developing for many years in this country, but I feel that His Majesty's Government, who have asked for suggestions, could give it a real impetus by establishing the rule that in all Governmental and municipal contracts the orders went by preference to firms who already had profit-sharing systems established. Furthermore, His Majesty's Government might consider giving special scales of tax rebates on profits which were distributed equally between the capital invested and the workers concerned. Most business men who have interested themselves in profit-sharing and co-partnership and similar objects are quite aware of the difficulties which arise in most businesses through the opposition emanating from people who may be described as having the pre-War mind. I would emphasise, particularly to hon. and right hon. Members on this side of the House, that I feel that profit-sharing has not only a direct bearing an unemployment, but that the extension of the basis of ownership in industry is the one alternative before capital in this country, and the only alternative to State ownership of capital. Rationalisation of industry has been before this House on many occasions and I will not venture to refer to it now.

I should, however, before sitting down, like to say to hon. Members a few words on the all-important question of the control of capital in relation to unemployment. Capital represents reserve energy, accumulated energy. If you could resolve it into chemicals and put it into bottles on the Floor of this House, it would represent a chemical compound of so much brain, so much muscle, so much sweat and so much blood, which would be the essence of the people of this country—the essence of ourselves and of our fellows, to be used wisely and carefully and reverently, the national reserve of the bodies of this country. It would represent part of the nation's raw energies, which we are privileged to administer, and it is not for Tom, Dick, or Ikey to chuck about and deal with in any way that may suit them. This capital, this reserve energy, is necessary to the health of the country, and, indeed, at all times, when the country is exhausted—as it is now after the War—it has the right to call upon its reserves of energy to rebuild its strength.

I would like to submit to the attention of hon. Members who vote against Safeguarding and stand for Free Trade and Free Trade all the time, what exactly happens to this capital. I would like to give an example of how this reserve energy is allowed to trickle away and how it oozes out of the body of this country. We will take, for example, a linen manufacturer in Belfast, who finds that he is unable to pay Belfast wages and compete in the market against the low wages of Czechoslovakia, Belgium and Italy. What does he do? He closes the Belfast mill. He invests his capital—the reserve energy of the industry in Czechoslovakia, where he has to pay just over one-third of Belfast wages. He may not even bring his profits to this country—he can, if he likes, use the money to buy a villa on the Riviera or the Lido or anywhere else. Hon. Members below the Gangway point to these foreign profits as the nation's wealth. So many millions a year coming into this country which can only come in in the form of goods manufactured abroad.

But what is the actual effect? What is the relation of this vast annual importation of goods to unemployment in this country? One of the hon. Members for Dundee in the last Parliament (Mr. Johnston), in a speech in this House at the beginning of this year, which I read before I was in Parliament, summed up the position admirably. I will quote it. He said: In Europe we see British capital flowing into cheap labour countries for the sole purpose of producing goods at a cheaper rate than they are produced here. These goods compete with British goods, not only in British markets but in neutral markets all over the world. And he added: The Labour movement in this country stands four-square for an international regulation of the hours and conditions of labour in order to meet the international capital which has gone over the boundaries of the nation, and which flows freely into the cheap labour countries. I should like to ask hon. Gentlemen opposite what they propose to do, what they have done, and what they are doing to prevent capital flowing out of this country? What are they doing to keep it in this country? In other words, the owner of capital who cannot make profit out of industry in this country transports his wealth abroad, where he can hire labour more cheaply. The worker in this country cannot even earn sweated wages. He can earn no wages at all. Instead, he gets his share of this wealth created abroad and imported from abroad in the form of a miserly dole. This country, which once bore the proud name of the workshop of the world—what is it now? Its workshops are closed to the workers. The steerage is fit for its heroes. Its agricultural land is being turned into partridge drives for speculators on Wall Street.

All this is for the sake of freedom of trade, which means freedom of capital, the right of the individual to gain without regard to the interests of the community. Capital which should be the servant of industry, has become the master of industry, and it has become the master of our fiscal policy. Capital, like all uncontrolled forces, has become reckless and irresponsible. It has become divorced from industry—that old dreary housewife—and has become absorbed in the sparkling attractions of finance. I would ask hon. Gentlemen on both sides of the House if any one of them can contemplate the economic history of the last 10 years, and say honestly that finance has not gone far to bring industry to its present pass—that finance is not the ugly spectre that stands behind the unemployed.

Take over-capitalisation—the respectable apology which describes the gigantic and widespread series of legalised frauds which during the last 10 years have acted like land-mines upon our greatest industries. What is the process of over-capitalisation? During a boom period the owner of a great business is offered an inflated price by some financial group. The group sells the business to the public, adding to the inflated price their own so-called promotion expenses. The public buy. It may be said, "More fools they!" But the public are largely the working and professional and salaried workers of this country, pitting themselves against the slickest brains in the city—to use a term of admiration current in financial circles. The slump comes. The old firm, at' its proper conservative capitalisation, could weather the bad years, but when you get swollen capital, dividends cannot be paid upon it, and the first step suggested is a reduction in wages. That means contracted markets. So the vicious circle whirls.

All these problems, the competition of sweated wages from foreign countries, the export of capital and over-capitalisation, have a direct and fundamental bearing on the problem of unemployment. These problems are difficult and deep, and I would suggest to the Chancellor of the Exchequer—I wish he were here—that if he desires to co-operate' with the Lord Privy Seal, instead of evolving new taxes on the producing and the employing industries of this country he should come to grips with finance. Capital, if I may use another metaphor, is like a lady. She is timid, apprehensive and elusive. She cannot be coerced, but at the same time she can be attracted and she can always see on which side her bread is buttered. The way to attract capital for this country is to reduce the taxation on incomes earned from home and Imperial investments, and to heavily increase it on foreign investments. Capital will then quickly come to learn on which side its bread is buttered.

I would again emphasise the fact that in dealing with the problem of unemployment, State-aided relief work, migration and pensions, however desirable they may be, are mere stop-gaps, and nothing more. They do not touch the problem. The key to the problems of the welfare of this country lies in the control and regulation of capital, which is the reserve energy of the nation. Democracy cannot control capital, obviously, by a stroke of the pen, but capital can be attracted to and held in this country by the scientific use of the instrument of taxation. Such abuses as over-capitalisation can be checked. The ownership of capital, by a long-sighted and judicious development of profit-sharing—a serious development of profit-sharing, and not a mere gesture—can be spread over a very large section of the community. It has been done in many industries in America. Only by a policy which is both bold and careful can an end be made of the present appalling state of things, in which the democracy has no control over the reserves of its own energy and in which the livelihood of this country, the welfare of this country, is at the mercy of the morals and methods of a sort of casino system, an example of which we have seen in America during the past fortnight.

Mr. ALPASS

It was my considered intention to take the advice of many older Members of Parliament and to delay making my first attempt to claim the attention of the House until I had become more accustomed to its atmosphere; but the very great importance of the question of unemployment and the urgency of dealing with it so vitally affect such a large number of those whom I represent that I feel I should be wanting in my duty if I did not ask for the indulgence of the House whilst I endeavour to put the claims of my constituents. Before doing so, may I say that I never expected, and I am sure that my hon. Friends behind me never expected, that we should hear such outspoken Socialist sentiments proclaimed from the opposite part of the House as have been expressed by the hon. Member for West Belfast (Mr. Allen). The thing that amazed me whilst I listened to the hon. Member was why he is on that side of the House and not on this side, helping us to put into operation the principles which he professes, and in which I am sure he sincerely believes.

The city from which I come, while it affords unique facilities for trade and commerce, has during the last few years, owing to an abnormal combination of unfortunate circumstances, suffered very much, and there has been a great and prolonged volume of unemployment. There are men in my constituency who have had no opportunity of doing work for two, three and four years. I have had figures got out by the local officials of the Ministry of Labour which show that for the last seven years we have had a percentage of unemployment ranging from 8, 10, 11, 12 to 14 per cent. We have had industries closing down. Our difficulty has been to get something in order to give the men an opportunity of starting work. I say quite frankly and sincerely that whilst in the short space of five months the Labour Government have not solved the unemployment evil, there are many of my constituents who are enjoying the results of their earnest attempt to grapple with this question. I have men in my constituency who are working this week, and others who will be shortly put into work, who have not done a stroke of employment for 18 months or two years. If the schemes which have been submitted by the local authorities, which are now under serious consideration by responsible Ministers, are approved, as we have every reason to believe they will be, larger numbers of men will be given an opportunity of the work which has been denied to them for so long.

I have been amazed at some of the speeches from the opposite side and the attitude which they have taken up in regard to the Government's proposals for dealing with unemployment, and other Measures which are being introduced. They say, in effect, "You have been in office five months and you have not done what we failed or neglected to do in 4½ years." Let me explain the effect of what the Government have already done upon the people of my own city. We have put before the Government the proposal that we should receive some assistance by way of Government grant for carrying out important schemes. Deputations came to the late Government on two or three occasions, but they returned empty handed. The position today is entirely the reverse. We have had many schemes approved by the Government for grants to the extent of 50 per cent. of the cost, and as a result the local authorities have been able to find their quota, and many men are now employed on those schemes. It is hardly fair to judge the efforts of the Government in dealing with unemployment simply by examining the results of the work of one Department. The Measure dealing with the housing question has, in itself, enabled local authorities and many organisations and institutions to once again open up their housing schemes, and I am on sure ground when I say that there will be many building operatives in the West of England who were walking the streets doing nothing under the late Government's rule who will now be gradually absorbed into the building industry.

When hon. Members opposite criticise the efforts of the Government in dealing with this all important question—to us it is the thing that really matters. [HON. MEMBERS: "TO US also."] You did not prove it by your actions when you were in power—I must point out that there are men at work now through the operation of Government's schemes to-day who could not find work when hon. Members opposite were in power because the late Government refused to give assistance. I am a member of the Gloucestershire County Council and many times we have put up proposals to our Highway Committee for improvement schemes. The Council surveyor has replied that it was no good going to the Government, for when they asked for assistance they said that there was no money. It is not honest criticism for hon. Members opposite to say that the Government has done nothing. A good deal has been said, and I expect will be said, as to the Government failing to fulfill pledges; and so on. May I remind hon. Members who are prone to make that criticism that in our election manifesto issued from our headquarters, and in most of our election addresses—it was in mine—the statement was made that we believed the unemployment evil could only be cured by the re-organisation of industry on Socialist lines, and we have been told by Members opposite that when we attempt to apply what we have definitely stated is the only cure for unemployment, "Out you go." I submit that within the limits imposed by the composition of the House at the moment the Government has made a material contribution not to solving unemployment but towards itsalleviation, and many men up and down the country and in my own constituency will next Friday be taking home wages for having done useful work owing to the efforts made by the present Government.

9.0 p.m.

May I make one or two suggestions to the right hon. Gentleman the Lord Privy Seal. In the rules laid down governing the operation of these schemes there is a clause which deals with wages, and whilst we are using Government money to assist local authorities to carry out schemes of improvement—that is a much better term than relief works—it is necessary that the wages of the men employed should be at the proper rate. The clause runs in this way, that if the work is done by contract then the standard rate of wages and standard conditions have to be observed, and if the work is done by the authority itself it must be the standard rate of wages prevailing or the rate paid by the local authority, whichever is the lower. May I show how that works in some places. Take my own county council. Our rate is the low one of 36s. We carry out schemes of improvement and receive the Government grant. Men will be engaged on these schemes from particulars districts, in which the rate paid is 45s. per week. They will have to walk three or four miles to their work morning and night and will receive a wage much less than that to which they Have been accustomed. I hope the Government will remedy that grievance. Another suggestion I should like to make is in regard to schemes in my own city of Bristol. In company with one of my colleagues I had the opportunity of visiting our Docks. The Docks Committee, like every other department of the City Council of Bristol, have readily responded to the appeal of the Government to submit schemes of improvement by which the docks may be improved and at the same time useful and productive work found for a large number of men who would otherwise be out of work. The Docks Committee is a municipal undertaking and whilst strictly in a legal sense it is true that it is a revenue producing concern it is not a profit making concern from the standpoint of making profit for private shareholders. The Docks Committee are prepared to submit works for improving the docks, and will anticipate them to the extent of several thousands of pounds, but they feel that they should receive the same rate of assistance, the same percentage of grant, for carrying out these works of improvement as is now given to local authorities for carrying out improvements. I commend that to the favourable consideration of the Lord Privy Seal and his colleagues.

I have spoken because the question of unemployment is so vital to the people I represent that I should have been wanting in my duty if I. had not said a few words on the subject, but this is only a beginning. It is not put forward by the Government as the whole of their proposals for dealing with this question. We have had it stated on the authority of responsible Ministers that they are considering bold comprehensive national schemes. There is one scheme which the Minister of Agriculture will be sponsoring We have heard a great deal about the development of the Colonies, about sending many thousands of pounds miles away in various parts of the Empire. I do not wish to say a word against that, but there is a vast amount of land in our own country on which money could be spent and which would yield very large returns. I am referring more particularly to the need for a bold national scheme of land drainage, and I speak from the standpoint of some experience of this question, because I have been a member of the county drainage committee for many years. In my part of the country there are thousands of acres of land which not so many years ago, within the memory of living men, was a productive that it would graze a bullock fat without any artificial feed at all, but that land to-day is waterlogged, producing nothing but rushes.

This is typical of hundreds of thousands of acres of land throughout this country, and I hope the Government will introduce, at the very earliest opportunity, a bold and comprehensive scheme of land drainage. But when they do so, I hope there will be a clause in their scheme which may ensure that the increased value of land due to the expenditure of public money in that direction shall under no consideration go into the pockets of private landowners—that was found possible under the Colonial Development Act—so that this added value shall be secured to the community. I have confidence, especially after the statement of the Lord Privy Seal on this particular point, that the interests of the community will be safeguarded. One hears talk of money spent on improving people's land going to the agriculturists, but some of us could, from experience, point to exactly the opposite result. That is only one suggestion of a scheme, a bold scheme, which I hope the Government, on their own initiative and responsibility, will undertake. I am very pleased to be able to support the Government in what they have been able to do up to now, and I take it that it is an earnest of better things to follow. In conclusion, may I say that I am certain that the bolder, the more courageous, and the more determined the Government are in tackling this great and all important question of unemployment, the greater and more encouraging will be the support accorded to them in the country.

Mr. HANNON

I am sure the Committee will have listened with very great interest and pleasure to the speech of the hon. Member for Central Bristol (Mr. Alpass). It is always of great interest to Members of this House when new Members, like the hon. Member who has just spoken, bring to bear upon the Debates in this House their practical experience in local government administration in this country, and we shall all look forward to hearing many more interesting and educative speeches from the hon. Member. I am very glad that the hon. Member for Bridgton (Mr. Maxton) has come back into the Chamber. He made a speech this evening which, I am sure, was illuminating, at all events to us on this side. He left no possible loophole for misunderstanding as to the relations which subsist between himself and those for whom he speaks in this House and the Government. I hope those right hon. Gentlemen, and in particular the First Commissioner of Works, will take to heart the generous, kindly, suggestive, and helpful speech which was made in his interest and support to-night by the hon. Member for Bridgton.

I must not be taken as associating myself with the very interesting contribution made to the Debate by the hon. Member for West Belfast (Mr. W. Allen). It was a speech that was no doubt carefully packed with thought, but nevertheless a speech with the economics of which I myself at all events could not agree. We find, on this side of the House, as no doubt hon. Members opposite find, that young Members, after they have been in this great Parliamentary public school for a short period of time, substantially modify their views on the economic policy of this country, and I am quite confident that my hon. Friend, interesting and illuminating as his speech was, will considerably alter his outlook on the possibilities of adjusting our economic policy to the needs of this country. The real secret of our unfortunate situation with reference to unemployment is the unhappy economic system under which we live.

The right hon. Gentleman the Leader of the Liberal party this afternoon made one of his characteristic speeches, with all the force, vitality, wit, and native eloquence with which we are so familiar, suggesting that the Labour party should solve the whole problem of unemployment in a comparatively few months, when he and the party for whose guidance he is responsible have thrown this country for generations into the slough of Free Trade. For the Leader of a great party to come down to this House to-night and tell the Socialist leaders that they can substantially solve the unemployment problem without reference to the fiscal policy of the country is that kind of wise suggestion for which, unfortunately, the right hon. Gentleman has from time to time made himself responsible in this House.

The Lord Privy Seal went to Canada. I do not agree with the right hon. Mem- ber for Carnarvon Boroughs (Mr. Lloyd George) that he ought not to have gone. I think that it was a very admirable mission, and no doubt he received in Canada a great deal of useful information on Imperial problems and inter-Imperial trade relations which he did not embody in his speech to-night. I am quite sure that while he was there he realised that there were great opportunities, by a modification of our present fiscal system, of creating a larger market in Canada for the products of this country. I think it is greatly to the credit of other visitors to Canada quite recently that we are to have an important conference of business men, representing the different overseas Dominions, held in this country next year, before the Imperial Conference takes place, to discuss a whole series of important business questions to which practical effect can be given during the meeting of the Imperial Conference itself.

The right hon. Gentleman the Lord Privy Seal would have done a great service to the Committee if he had told us how many people will be removed from the unemployment list of this country in the course of the next five or six months. I do not know anything more deplorable in our statesmanship than the extent to which we have been paying unemployment insurance benefit broadcast over this country during the last 10 or 12 years. It seems almost the bankruptcy of statesmanship that some means could not have been found to combine the payment of unemployment insurance benefit with some kind of constructive work to be performed by the people receiving it. I remember in 1922, I think it was, when Sir Montague Barlow was Minister of Labour, that we had a conference in Birmingham, at which leaders of trade unions and of great industries and outstanding business men in the city were present, with the Lord Mayor in the chair, and for a long time discussion was maintained of ways and means by which the payment of insurance benefit could be combined with public utility services or municipal services, and thus get some work in return for the expenditure which was being (made. Unhappily at that time, and on subsequent occasions when a similar proposition was submitted to the Government, no means were found to pay unemployment insurance benefit in conjunction with moneys expended on practical schemes for the enlargement of the opportunity of employment.

The Lord Privy Seal can render great service in solving the unemployment problem if he will try and convince his colleagues in the Cabinet of the importance of maintaining the Safeguarding system which was introduced by the late Government, and insist on the maintenance of the McKenna Duties and the Silk Duties. We have shown in the House from time to time that in the safeguarded industries, and in the industries to which the McKenna and Silk Duties apply, there has been a steady rise in the volume of employment available. We have shown at the same time that there has been a continued reduction in the opportunities of employment in the non-safeguarded trades, and in the trades which are not subjected to the protection of the McKenna and Silk Duties. I would say to the Lord Privy Seal and to the First Commissioner of Works that it will be a great day for this country when the light of a brighter intelligence beams upon his colleagues in the Cabinet so that they will see the importance of giving labour in this country as reasonable an opportunity of maintaining its existence against unfair competition abroad, as in the past we have tried to protect labour for its own sake.

My hon. Friend the Member for West Belfast drew attention to the export of capital and the means by which capital invested in foreign countries is operating against us by employing cheap labour, which is engaged in the production of articles which compete with ours. He is perfectly right. I remember in 1921 and 1922 we made loans in the City of London to the Czechoslovakians, the Belgians and, through the League of Nations, to other Central European countries, and the result of making those loans has been to flood the markets of this country with articles produced at rates of wages which no decent English employer or workman would tolerate for a moment. That system of allowing British capital to be employed for the maintenance and expansion of foreign industry in the production of articles to compete against us is one of the most serious blots on our economic system. In the speech of the Lord Privy Seal there is no reference to canals, and I want to ask whether the Lord Privy Seal or the Minister of Transport contemplates giving more substantial help to the canal system of this country. Roads, railways and harbours have very properly been the subject of this Debate, but we have in this country a large amount of capital invested in canals, a large number of which are controlled by the railways. The carrying capacity of our canals is very large, and the actual tonnage carried in 1928 was something like 18,000,000 tons. To people in the Midland area, the use of canals is of the greatest advantage in the carrying on of their industries at a low cost of production, and I hope that the Lord Privy Seal and the Minister of Transport will give reasonable consideration to any project submitted to them for the improvement of our canals.

Mr. HERBERT MORRISON

I have already received a deputation from the Canals Association, and have invited them to send in proposals for canal development which could be considered by the Government. It is competent for them to submit for consideration proposals under the Development Act. One proposal has come along, and if any further proposals come along, the hon. Gentleman may be assured that they will be carefully considered by the Government.

Mr. HANNON

I am much obliged to the hon. Gentleman for that information. I would only add that in the last Labour Government a very generous gesture was made towards the development of one important canal in the Midlands, and perhaps my hon. Friend will look up the papers and approach the projects now made in the same generous way. The problem of unemployment, as every previous speaker has said, is the real bugbear of our public life in this country. To do anything to reduce it would be a great act of public benevolence. I do not know how far the schemes submitted by the Lord Privy Seal will carry us in that direction, but I am persuaded, after continuous contact with the industrial problems of this country for 20 years, that in the present circumstances, with an exposed market open to the competition of the whole world, we are in many respects quite helpless to bring about a real settlement of this embarrassing problem. So long as the working people are exposed to the competition of the whole world, this devastating problem will be with us. I hope that this question will be removed in this House from the sphere of acute party politics as far as possible, in order that we may put a handle to the wheel to bring the country to a better position than that in which we find it now.

Mr. McSHANE

In asking for the indulgence of the Committee for a first speech in an Assembly of this kind, I should like to express my wonder at the exceedingly able and paradoxical speech of the hon. Member for West Belfast (Mr. Allen). Perhaps only a speech from an Irish representative could have contained so many apparent contradictions, and I can only suggest that, having already found himself on the way to our party in his analysis of the symptoms of the disease, his can only be a case of arrested mental growth, and that a course of sunlight treatment will send him across to our benches. I have come to this House upon no other question than that of unemployment. I have taken up this position mainly because I consider that we in the Socialist party can do something for the men and women for whom no work can be found to-day, and it was in the profound belief in the principles that we put forward that I decided to take up this new life. May I just give my views and impressions of the House so far as I have seen it in its demeanour towards unemployment? I have listened to the right hon. Gentleman the Member for Epping (Mr. Churchill) declare to our own benches, "We shall look with interest at your attempts to solve unemployment; we know that you cannot solve it, because if you take money from one source and place it into another source, you will put as many men out of work in one place as you have put in the other place." I heard to my amazement a Front Bench member of the Tory party declare, what we have declared for 20 years, that unemployment cannot be solved under the capitalist system. I have listened to the right hon. Gentleman the Member for St. George's (Sir L. Worthington-Evans) to-night, and I have heard him say that this public money which the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) demanded should be spent more and more, would, if it were spent, be entirely wasted. Presumably, all the money that the Conservative Government spent during its term of office in attempting to cure it was also wasted. To me, these statements, coming from the benches opposite, are a source of profound 'amazement. I have listened to the hon. Member for Oxford University (Lord Hugh Cecil) standing at that Box and denouncing this party for having got into power because of the alleged promises to cure unemployment. I have seen him moved with the most tragic emotion standing at that Box, and I have never seen him in the House since. [HON. MEMBERS: "He is ill."] Then I withdraw unreservedly, for I was not aware of that fact.

This is the impression that I have got in this House of its relation to unemployment. The Conservative party admits publicly that it cannot cure unemployment. [HON. MEMBERS: "No!"] The Conservative party has been in existence for 400 years, and, if in those 400 years they could not cure unemployment, then the unemployed are not going to wait for another 400 years. The Liberal party, according to the right hon. Gentleman the Member for Carnarvon Boroughs, has been in existence for 300 years. I think his history is wrong, but I am prepared to accept his authority for the time being. The right hon. Gentleman has been in this House at least 29 years, for a greater part of which he has been either in office, or in power, or both. Therefore, I say that, as far as the benches opposite are concerned, there is no hope for the unemployed from them. At the General Election, I did not stand on false promises. In practically every speech, I said that under the capitalist system you could not cure unemployment and that the most you could do was to alleviate it. I have listened to disillusionment and have heard with amazement all that has been said harping on the idea that if you only protected yourselves from the foreigner and from sweated labour from across the seas it would bring blessings on this country. America is well protected, but some months ago America had 6,500,000 unemployed. In America, or rather, in New York, one out of every twelve persons who die is buried as a pauper. In Virginia they shoot down miners—

Viscountess ASTOR

Nonsense, they do not.

Mr. McSHANE

When any hon. Member was speaking here I have listened with courtesy.

Viscountess ASTOR

I did not realise that the hon. Member was making a maiden speech, and when I heard his remark about people being shot down in Virginia I had to intervene. I am very sorry.

The CHAIRMAN

I think the Noble Lady should be in her place before she makes any remarks.

Mr. DICKSON

On a point of Order. If an hon. Member is making his maiden speech or not, is another hon. Member in order in interrupting him?

Viscountess ASTOR

You have done it a hundred times.

Mr. DICKSON

I have never done so.

The CHAIRMAN

Perhaps the hon. Member did not hear what I said to the Noble Lady.

Mr. McSHANE

Courtesy is never wasted, whether it is a maiden speech or not. I was summing up my impression so far as the opposite benches are concerned. Quite openly and frankly speaking, they have no cure for unemployment. The right hon. Gentleman the Member for Epping (Mr. Churchill) from the Front Bench has declared very specifically that it could not be cured. Then they are placed in this paradoxical position, that when we attempt what we think, rightly or wrongly, is a cure for it, they seek to drive us from power. None of these things has any relation whatever to the question of unemployment. The so-called rationalisation is only a new word for an old method and it is putting men out of work as quickly as we can put them into work. As for the question of machinery, in the wide sense of the word and not in the mere mechanical sense—combines and trusts being regarded as machines—that" must necessarily place more and more men and women out of work.

You have got what I presume has been said here often by the hon. Member for Shettleston (Mr. Wheatley), namely, the fact that goods are produced in relatively larger quantities than the men and women who produce them can buy them back again. That is the heart of the problem, and it is being accentuated more and more as the months and years go by. I have heard to-night hon. Gentlemen on the Front Bench below the Gangway declaring that the whole solution can be found on the land. But the machine has invaded the land also. In Canada last year for the first time a machine was adopted whereby three men now do the work which 16 men used to do in reaping the harvest crops. In this great city of ours Lyons, the caterers, produce over 500,000 loaves and 300,000 rolls every day, and in the production of them probably only three or four men are engaged, whose wages naturally cannot buy anything like the amount they produce. That same principle is applied to every industry and is the cancer at the heart of our society to-day.

I have put to my audiences what I put to hon. Members here to-night, namely, the paradox that in one place machinery should be such a blessing and in another place such a curse. The housewife with a sewing machine blesses the husband for having bought her one, for she knows that the machine will save her four or five hours work, and if she is fortunate enough to possess a vacuum cleaner she can get round the house in no time. This machinery in the house is a blessing in the house, but while the housewife blesses the machinery in her home, her husband comes home from the factory and curses the machine that has put him out of work there. That is the paradox of our modern society—that in one place it is a blessing and in another place a curse. [Interruption.] I am very glad to see that a subject like unemployment can cause such hilarity among hon. Gentlemen opposite, but we on this side regard it as tragic. I would like to see some of the unemployed here on the Floor of the House, and then we would not discuss so many figures in such a coldly detached and scientific way. We would bring to it a much more generous spirit than apparently we now bring.

As an ex-schoolmaster, and as chairman of a board of guardians, there is nothing I have seen which has so touched me as the question of unemployment in towns where, I suppose, the percentage is as great as in almost any part of the country, including even South Wales, Durham or Lanark. I have seen such sights as have moved me to the very depths, and I want to appeal to the House to give us credit for being sincere in our beliefs. [HON. MEMBERS: "We do!"] Hon. Members opposite have themselves admittedly tried and failed, and we do not think them so callous that they do not want to cure unemployment. Therefore what I suggest is that at any rate they must realise that their way cannot be the right way, and that they might at least enable us to attempt our way, because upon this is going to depend the fortunes of these men and women who to-night are expecting something tangible and definite to come from Parliamentary procedure. There is no failure. The men who have undertaken to deal with unemployment on behalf of the Government are at any rate showing a completely new spirit as compared with that of the late Administration. But I am perfectly certain that they themselves realise that, however hard they work, they cannot at the outset do everything. At the best they have been able to alleviate the problem.

The heart of the problem is to be found in the fact that decreasing numbers of men and women are producing ever larger quantities of goods which they have not the means to purchase back. The hon. Member for Moseley (Mr. Hannon) referred to Employment Exchanges. It is as well for the trade of this country that Unemployment Exchanges exist and that out-relief is given to the extent to which it is given, because the benefit and the relief obtained from these sources do enable people, to some miserable extent, to buy back some of the goods they have made, and without the money obtained from those sources unemployment would have been worse. Even the simple method of giving out money almost promiscuously would be better for trade in the long run, though I do not suggest that that would be any intelligent solution of the problem. I look with amazement on the infinite contradictions of our social system, and am astonished that after all their experience hon. Members opposite can be found to defend a system under which we find the hon. Member for Moseley publicly asking for public help for private enterprise. That is the best living proof of the breakdown of the whole of the system which they have defended up to the present time. With the greatest deference to this House, I wish to suggest that when we are discussing unemployment the position of the unemployed men and women should be one of much more serious reality to us. I think the tragedy of an unemployed man is so great and so overwhelming that it should move to the very depths anyone who ponders over it. If this House does one thing it does this, it dulls the imagination of each one of us, and I think it might he as well for us, as was suggested earlier, if some of the most hard hit amongst our unemployed were to come here as a reminder to us of the tragedy of the unemployed.

Captain CAZALET

I hope the hon. Member for Walsall (Mr. McShane), who must be a few years older than I am, will not think me patronising if I offer him what I know all sections of the House would like me to offer, very sincere congratulations on his maiden speech. His remarks on this occasion promise that his contributions to any Debate in which he takes part will always be warmly welcomed. I can assure him that no Member on these benches would ever doubt the sincerity of himself or any of the other Members on the benches opposite when dealing with this problem of unemployment, and in return we ask them not to be sceptical about our sincerity. It is because we sincerely believe that unemployment cannot be cured by State Socialism that we sit on these benches in opposition to them. I do not think anyone would doubt the sincerity of hon. Members opposite after listening to the speech of the hon. Member for Bridgeton (Mr. Maxton). I learned one thing from him this evening. I always thought he enjoyed nothing better than, in his own words, "trouncing the Tories," but he seems to enjoy even more trouncing his own Front Bench.

We have heard from one or two hon. Members opposite that the schemes which the Lord Privy Seal has carried through have already had a beneficial effect on employment in their constituencies. No one welcomes that fact more than we on these benches. The Lord Privy Seal has never denied that he has a formidable task, but however excellent, however well planned, however well devised the schemes which he has outlined to us this evening, and which he intends to submit in the future, I do not believe that any amount of State expenditure or any number of artificially-subsidised schemes can go very far towards curing unemployment. They may, perhaps, alleviate it, may find work for a few thousands for a few months, but such benefit as may be derived from assistance given from the public exchequer is counterbalanced by the results of the uncertainty which exist in various industries, as, for instance, the decorating trade, the cotton trade, the furnishing, painting and printing trades. In all the big centres where these trades are carried on there is uncertainty, prompted partly by the indecision in regard to the future of the Safeguarding Duties, the indecision in regard to the future of Imperial Preference and doubts as to what next year's Budget will contain. I think the uncertainties in regard to these matters have had a very deleterious effect upon many industries and that a judicious anticipation of next year's Budget from an authoritative source would do much to dispel those uncertainties. The hon. Member for Walsall (Mr. McShane) has told us that under the Capitalist system unemployment can never be cured. I do not wish to draw a red herring across the path, but I would like to point out that the only country in which State ownership and the State control of distribution and production have been attempted is Russia. In that country that system has been tried for six or seven years, and I understand that the unemployment figures in Russia are certainly comparable with, if not far in excess of, those of pre-War days. On this side of the House we do not contend that our proposals will cure unemployment, but we believe that they will go a long way in the direction of improving the condition of the people. There are two ways of increasing the trade of this country. First of all you can increase the consuming and purchasing power of the masses of the people, and you can do that either by lowering taxation or by raising the standard of living. There is no hope of the former, and we are very much handicapped if we insist upon a higher standard of living for the workers.

This country forms part of an economic unit with Europe, where we have to compete. Ours is a Free Trade country, and we have to compete within the economic unit of Europe to-day at a time when the wages and conditions of life in this country are already at a higher level than in any other country in Europe. [HON. MEMBERS: "NO!"] There may be exceptions in Scandinavia and one or two other countries, but if we compare our country with France, Germany, Italy or Czechoslovakia I do not think anyone will deny that the standard of living of the masses of workers in this country is higher to-day than in any of the countries I have just mentioned. Much as we would like to raise the standard of living, it is extremely difficult for us to do so under our present system of almost Free Trade. The only remedy we can apply is to improve our exports, and I believe that one of the best ways of increasing the consuming and purchasing capacity of the masses is to develop and concentrate on our export trade.

The Lord Privy Seal dealt with the motor car industry, and what the right hon. Gentleman said applies also to a great many other industries. I believe that there is no industry capable of greater development than the motor industry in this country, where we have only one motor car to 14 of the population, whilst the United States have one to every five inhabitants. I do not think any hon. Member will contend that the standard of living in this country is three times higher in the United States than in this country. I believe there is a field for a much greater development of the motor industry in this country. I do not think that you will ever get a motor industry comparable with that of the United States of America until we raise the standard of the whole industry. We have not developed our export trade within the Dominions as we should have done. No one doubts that we can make the best motor cars in the world, and this applies to cheap as well as expensive cars. There seems to be something wrong with our system of putting motor cars on the market. The other day I was in Berlin, where I visited the motor exhibition, and there was not a single English motor firm represented there. If you visit the motor exhibitions in other foreign countries you will find exactly the same thing, and in many of our large foreign cities and towns there is not a single English motor car to be seen in the shops or in the streets, although American cars represent over 90 per cent. of the total. Six or seven years ago there were practically no motor cars in Germany, but today there are hundreds of thousands. The last figure I was able to obtain showed that out of 300 cars imported into Germany in one week only one was of English make. We have unrivalled opportunities for producing motor cars in this country, and yet the Americans are able to send their motor cars a distance of 3,000 miles and compete successfully with our own motor cars, which are produced only a few miles away. There is a great deal which the Lord Privy Seal might do in order to encourage those engaged in the motor car industry in this country to put their house in order in developing the motor trade. We have about 17 different motor car firms in this country, all of them producing first-rate cars, and I suggest that it is the duty of the Lord Privy Seal to bring the representatives of those firms together to see if it is possible to come to some agreement amongst themselves for improving the industry. I know the difficulty of getting the heads of various industries to combine.

Mr. THOMAS

I think it is only due to the motor industry for me to say that I have already met a number of them and they have agreed that I should call together the members of the Association. I am sure the Committee will be pleased to know that they agreed to co-operate with me in regard to this problem. Obviously I could not go into details in the course of my statement, but I am sure the hon. and gallant Member will appreciate my intervention in order to give this information.

Captain CAZALET

I am sure that we are all delighted to hear that announcement, and I hope the Lord Privy Seal will be ready to provide a certain amount of financial assistance if those interested in the motor industry can agree to a large scheme. Whether we consider the motor car trade or the steel, coal or cotton industries, I think they present unrivalled opportunities for the Lord Privy Seal to try to get the representatives of those industries together. Germany has done it in the case of the coal and steel industries; America has done it in the motor trade and Japan has done it in the cotton trade. I know this policy requires cash and brains, but neither the Lord Privy Seal nor the representatives of those industries in this country lack either the one or the other.

Mr. DICKSON

I think all parties in the House of Commons, and most people outside the House, will agree that the Lord Privy Seal has tackled a problem that he cannot solve. He has tackled a problem that the Conservative party cannot solve, although it is the only party which has, officially, through its headquarters publications, claimed to have a positive remedy as the economic system is to-day. It is a problem that the Liberal party cannot solve, although the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) this afternoon was amazed, or pretended to be amazed, that in four and a half months the Lord Privy Seal and the Labour Cabinet had not been able to provide a larger amount of work for the present winter. One wonders what special advantages the Government have during this winter which the right hon. Gentleman had not during the winter of 1921. During his period of office the figures rose higher than they ever were before or have been since in this country, and it is regrettable indeed that those marvellous powers which the right hon. Gentleman now has, did not develop a little earlier, so that he could have put them into operation when he had office and power instead of as now having neither office nor power and no party worth speaking of. We had tonight several speeches to the effect that it was quite impossible, at least from our point of view as a Socialist party, to cure the unemployment problem, and I think we want to emphasise that view. The hon. Member for Moseley (Mr. Hannon) endeavoured to make us believe that within the four corners of the present system it would be possible to find some cure. His suggested cure consisted of some juggling with the fiscal system. Surely it is in order to remind members of all three parties of the facts. We have unemployment in Free Trade countries like our own, and the leader of the Liberal party, 21 years ago, was promising to deputations that his party then in power were considering not only measures for dealing with unemployment when it arose, but measures to prevent it arising.

Mr. KEDWARD

You are building on that to-day the whole of your policy.

Mr. DICKSON

Twenty years ago the leader of the Liberal party declared that his Government was then devising not only means to deal with unemployment but means to prevent it, and I was only going to argue that the shell of the egg must have been very thick because, up to now, the Liberal party have not hatched it.

Mr. KEDWARD

You are sitting on it now.

Mr. DICKSON

I am sure if the hon. Member sat on it, it would break rather than hatch.

Mr. GRAY

On a point of Order. May I ask for how long during that 20 years the Liberal party have had control?

The CHAIRMAN

If the hon. Member rises to a point of Order, he ought to put a point of Order, and not a question of that kind.

10.0 p.m.

Mr. DICKSON

I know at least that the Liberal party was in power and office from 1908, when that declaration was made by Lord Oxford—then Mr. Asquith—up to 1914. In my view and in the view of the Socialist movement, neither Free Trade nor Tariff Reform, Protection nor Safeguarding, nor any other fiscal device is going to remove unemployment. We have in this country a Free Trade system and high unemployment figures. Therefore, Free Trade will not cure unemployment. In America, which is probably the most closely protected country in the world, there have been, during certain periods, as many as 3,000,000 unemployed. Therefore, Protection is not a cure for unemployment. The hon. Member for Moseley said we were very seriously handicapped, being more or less a Free Trade country, and having to meet the competition of people who are working long hours receiving low wages, and labouring under very grievous conditions. All these things are true of Protectionist countries, and yet he tells us to accept Protection to ensure better conditions. I do not know how he reaches that conclusion, because these things seem to cancel out each other. I suggest that he ought to consult with the hon. Member for West Belfast (Mr. Allen), who has not been long enough in the Conservative party to lose his sense of elementary economics. He said, and I think said correctly, that the problem was not a problem of production but a problem of distribution. All believers in the capitalist order, both those above and below the Gangway opposite, find themselves faced with this contradiction—that the more efficient your capitalist order of society becomes, and the more highly developed it is, the more you get spasms of recurrent unemployment. There is no escape from that conclusion. I suggest that the solution is to be found in the speech of the hon. Member for West Belfast. He argued that you ought to bring into closer relationship spending power, or the distribution of wealth, and the production of wealth. He argued for what he called profit-sharing. I agree. We would only disagree as to the amount of the profits to be shared and the proportion in which they are to be shared. [An HON. MEMBER: "If there are any?"] At the moment we have to share the losses, anyhow, and if you agree that the whole of the community should share in the profits, you have reached the Socialist order of society.

I want to direct my attention to the Lord Privy Seal. There have been some references to the position in Scotland. I come from Lanarkshire, and I am deeply concerned with what is, I understand, the attitude of the Cabinet or the Government or the Lord Privy Seal towards a certain type of relief works in Scotland, particularly in Lanarkshire. I want the right hon. Gentleman to reconsider the terms which he gives for non-productive relief works. Here is the situation. You have in Lanarkshire the great bulk of the industrial population of Scotland. It is the only county in Scotland scheduled as a distressed area, despite the fact that there are great stretches of agricultural land in it, and in my own Division there are, I think, 1,600 to 1,700 farms. Parish after parish is loaded down with rating debt, some parishes paying 21s. and 22s. in the £ of local rates. In the village in which I live, which is the largest village in Scotland, I think we have at the moment something like 1,500 unemployed labourers.

As I understand the Lord Privy Seal's scheme up to now, it is this: if there is a scheme started outside a depressed area by any local authority and the scheme is non-productive, the Government will give to areas outside the depressed area 75 per cent. of their capital and interest charges up to 15 years, and, if they take a certain proportion of unemployed labour from those depressed areas, they will receive 37½ per cent. for the subsequent 15 years. But Lanarkshire stands more in need of immediate relief than any other county in Scotland. It is faced with this position: if you are carrying out immediate works in order to relieve distress where distress is deepest and bitterest and blackest, you will get under this scheme only 75 per cent. for 15 years because you are unable to take any proportion of unemployed from outside. Of course, to take unemployed into Lanarkshire would be worse than taking coals to Newcastle. I do want to suggest to the Lord Privy Seal that unless he has made up his mind that Lanarkshire is derelict, and is going to remain derelict—and if Lanarkshire is derelict and there is no recovery for her steel and iron and coal, then Glasgow is derelict—[Interruption.] The Lord Privy Seal tells me that he has altered it. I do not know the extent of the alteration, but if it does not go as far as I want it, he will hear further from me. You have in the middle ward of Lanarkshire a great housing scheme; I think there is being built in that area a larger proportion of houses than in any similar area in Scotland; and I do want to suggest to the Lord Privy Seal that if he has money to spend it is wiser to spend it in the regeneration of that area, in the belief that all the other things which the Labour party are going to do if they get an opportunity will bring Lanarkshire back to something like normal industrial and commercial life. He should not be afraid of his friends, either above or below the Gangway, and should not be afraid of those immediately opposite—[An HON. MEMBER: "Or behind him!"]—or behind him. Let him take his wounds in front. I suggest to the Lord Privy Seal, so far as his friends below the Gangway are concerned, that when they urge him to spend more money he should listen to them with a ready ear, and get his friend the Chancellor of the Exchequer to find that money where it can be most easily got.

Major ELLIOT

We are, of course, opening in this Parliament a series of unemployment debates, and it is quite clear that it is impossible that all those who desire to speak can do so on any one night. Therefore, I have to apologise to those whom I may have cut out by rising now, but I am anxious to give the fullest possible latitude to the right hon. Gentleman the Lord Privy Seal, who no doubt has put proposals of a far-reaching character before the Committee to-night. I listened with interest to my Friend the hon. Member for Lanark (Mr. Dickson). Some strange fate seems to bring us across each other's path from time to time. Occasionally I beat him, occasionally he beats me; but we are both at one on this occasion, at any rate, in demanding from the Government that it should pay a great deal more attention to certain aspects of unemployment, and more particularly to the aspect of what might be called the "black spots."

Apparently, the principal adversaries of the right hon. Gentleman and his colleagues on the Front Bench do not sit on this side of the House, but on the Government side of the House. None of us has made a speech against the Front Bench in terms such as those used by the hon. Member for Bridgeton (Mr. Maxton); none of us have said, "Is there a more unhappy man in the House to-night than myself? I hope not." Those were the words of the hon. Member for Bridgeton, while the Minister of Transport is gambolling in his delight at having got the schemes which he has in hand. I sympathise with him as a London Member, because undoubtedly London has done well out of the proposals which right hon. Members have put before us—great bridges, great railway stations and tube extensions, in an area where there are 4 per cent. of the total of unemployed; while what is the position of Lanarkshire? The hon. Member for Lanarkshire? The hon. Member for Lanark has made a bitter complaint, and we understand that at the last minute he has succeeded in extracting some concession from the Lord Privy Seal.

Mr. THOMAS

It is not right to say that, because the hon. and gallant Member heard me state this afternoon that I was changing the position as to distressed areas and that details would be given. I only want to make the position clear, because it would be unfair for me to change it on an interruption.

Major ELLIOT

I heard, in conjunction with one of the keenest and most analytical intellects of the Labour party, the hon. Member for Lanark, what was said. We gather from that great channel of light and leading, "Forward," which is undoubtedly among the most interesting surveys of the industrial and political situation which we can get week by week, that the right hon. Gentleman has receive many requests from right hon. and hon. Members below the Gangway to lay papers on this subject as soon as possible. I want to know what those schemes are, and what are the differences that are being made; and I want to know, not merely in the possibly erroneous form of a speech or in answer given across the Floor of the House, but in print, so that one may fully consider the schemes and the amendments, the extent to which they are meeting the unemployment problem and the extent to which they will meet the unemployment in six months, in a year, in two years—because we hope the right hon. and hon. Members opposite will do so well and so brilliantly in solving this problem that they will be summoned by the united voice of the nation to continue in power during the succeeding Parliament. [An HON. MEMBER: "You will want a job!"] I could do well wanting a job if some of the people who write to me for jobs could get them; and that is the experience of every one of us in this House.

You cannot deal with the problem which is before the Committee and the nation now by repeating any set of formulae, or any set of shibboleths, whether they were enunciated by this leader or that leader years ago or more recently. You are dealing, not merely with a problem of economics but with a problem of psychology, and you cannot get all psychology within the four corners of any set of formulae or any book by any professor, however learned.

The statement with which the right hon. Gentleman the Lord Privy Seal opened this enormous subject to-day may be taken as the equivalent of the opening of a Budget. It is more like a preliminary statement, which has to be surveyed and examined and must be allowed to be developed. We are more than willing to allow him time to develop it; but the difficulties before him are enormous, as no one knows better than those who have tried to solve them. The great benefit of the present situation is that now on the opposite side of the House from us, sitting in the seats of power, are those who were denouncing from this side of the House the proposals of the last Government; and the explanations which were given by us to the country, which were given by us to organised labour and which were given by us to the great Trade Union movement and were not believed, are now being given by those right hon. Gentlemen. [Interruption.] As the hon. Member for Bridgeton said, hon. Members opposite are walking into the Lobby in resignation it may be, but in determined resignation, to carry out plans along the lines of things which they said, not merely here on the Floor of the House but up and down the country, were not merely mistakes but deliberate attempts to deceive and defraud the people. [Interruption.] There are many things for which right hon. Gentlemen opposite will have to answer, not to us on this side of the House, but to their own supporters. That is the tribunal before which they will eventually have to stand, and the threat, if there be any threat, to this Government is not the threat held over their heads by the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George), but the threat held over their heads by the hon. Member for Bridgeton, who is the real power in these councils.

Mr. MAXTON

I would not like the hon. and gallant Gentleman to misrepresent me. I think the menace held over their heads is not from here at all, but from starving men outside.

Major ELLIOT

All I can say on that subject is that, as a representative of starving men outside, both in his history and, if I may say so, in his appearance, there is no more vivid representative than the hon. Member for Bridgeton. [HON. MEMBERS: "Oh!"] That is why I say that the Lord Privy Seal has opened a subject which, surely, the Chancellor of the Duchy of Lancaster is going to develop further to-night. The Chancellor of the Duchy of Lancaster has explained his views to the country, in the brilliant career that he has had up to the present, in no uncertain voice. He has explained his plans, he has explained his proposals, he has nailed his banner to the mast. The Chancellor of the Duchy of Lancaster would surely not be sitting on that bench if the only proposals he were about to place before the country are the proposals which have been sketched out by the Lord Privy Seal. We look forward with interest, with, it may be, apprehension, to the proposals of the Chancellor of the Duchy of Lancaster, and, surely, he also is not going to disappoint the red-hot gospellers who sit on the benches below the Gangway behind him. He may not bring forward his main proposals now, but it will be urgently necessary for the Government and for hon. Gentlemen sitting on the benches opposite to go further if the problem of unemployment is to be dealt with seriously in this House of Commons.

Undoubtedly, there is before us to-day a problem which has baffled Government after Government. I do not claim, nor would any man on this side of the House claim—at any rate, none of my hon. and right hon. Friends would claim—that we had solved the problem of unemployment; but we would say this, that the path along which we were travelling was a path on which we were hampered and hindered at every turn by the difficulty that we had of getting belief and credence in our good faith, in our bona fides, by hon. Members opposite, or, at any rate, by the great mass of organised labour and the great trade union masses of the country. I am not here for a moment to discuss whether in fact that belief was justified or unjustified. We on these benches believe that it was justified, but no one will deny that the nation for the past four or five years, and even before that, has been like a paralytic trying to walk along a road, with his arm paralysed, with his leg paralysed, going stiffly, going slowly, going one-sidedly, the right side not knowing what the left side was doing. [Interruption.] The hon. Member for Bridgeton, and other hon. Members on that side of the House, seem to think that the nation which could not solve this problem with its left arm and its left leg paralysed is going to solve it with its right arm and its right leg paralysed. But the whole nation will have to come in, each side of the nation will have to believe in the good faith of the other. It is only by the use of both sides that the nation will be able to solve the problem that is before us; it is only with both legs free that it will be able to walk along any new road.

I have spoken briefly about the position of the black spots themselves. This relief work that is being carried on is being carried on very largely in the areas which are already prosperous and which have a low rate of unemployment, and if you are dealing with the problem on the basis of transfer, no doubt that is a sound policy, but it is impossible to believe that a policy of transfer alone will solve the difficulties in which the nation is now. The problem of transfer is one of the problems we brought forward. We also brought forward the problem of relief from local taxation, relief from the heavy burden of rates, and that was applied with its full force in the most heavily rated areas. The whole of our relief was not concentrated on the most prosperous areas. Relief went in a steady measure to those areas which were bearing the greatest burden, the depressed areas, the black spots, and I am seriously concerned in case these black spots, more particularly in Scotland, are not getting their share of the new proposals the Government is bringing forward. The difficulties of dealing with the black spots are no doubt severe enough, but there are proposals that were brought forward before our Government went out of office. There was the difficulty, for instance, of the herring harbours in the North. In the Budget there were proposals for £30,000 for the herring industry, which was to go into the relief of dues and rates to the herring boats using the harbours. As far as I understand, these proposals have been dropped out altogether, and we hear nothing of them. To those that have shall be given, and from those which have not apparently is to be taken away even that which they have. Hon. Members applaud that, but they cannot expect the black areas of Lanarkshire and the herring harbours of the North to cheer as delightedly as they do when money goes in scores of millions into London and these people are left derelict.

There is another great section of the Lord Privy Seal's programme to which very little attention has been paid in the speeches and apparently not very much attention has been paid in working it up. I refer particularly to the Colonal De- velopment programme. Of course, it is a slow business to get these programmes under way. As far as I understand, there is only one large private proposal that has gone through, and that is for the Zambesi Bridge. That involves, I believe, a subsidy. The cost of the bridge is to be upwards of £3,000,000 and the interest for that is to be spread over a period of some five years by this Colonial Development £1,000,000, and whether any of it can be recovered after that I do not know. The Zambesi Bridge is exactly one of those proposals which, when we brought it forward, was treated with the utmost denunciation by hon. Members opposite and which they are now about to walk into the Division Lobby to support. Hear what a Labour paper said about the project of the Zambesi Bridge: The Scots colliers who have just suffered a further wage reduction may not have observed the report of the Annual Meeting of the Zambesia Mining Development Company ('Times,' 9/5/27), wherein we learn from the Chairman's speech that the Tete Coalfield is developing splendidly thank you! This Tete Coalfield, as we would remind our readers, is in Portuguese territory, and is owned by a Belgian Syndicate, the Societe Miniere and Geologique du Zambese (in which apparently the London financiers hold some shares) is expected to produce 300,000 tons of coal annually, and is to have its development facilitated by a British Government guarantee for the building of a bridge across the Zambesi River whereby the coal will reach the market quickly and help break British coal prices. From the report of the speech by the Chairman already referred to we learn that, 'There is nothing experimental about the Tete coal any longer; quantity and quality are proved and assured: Labour, which at the beginning was troublesome, now presents no difficulties.' 'Labour' here, by the way means poor Portuguese Nyasaland natives at five shillings per month in wages. And some General Hammond has just returned with his report about the Zambesi Bridge. 'Only the glad tidings are awaited as to the date when the Government will back the loan for the bridge with the credit of the British taxpayer and then, hooray for the great profits and the breaking of the British colliers. That is the proposal and the only proposal which the right hon. Gentleman brings forward as an accomplished fact from the Colonial Development Fund. It is reasonable to say that the proposal is a good one, but the present Under-Secretary of State for Scotland was in 1927 of a very different opinion. This means that he must make an explanation either to the readers of "Forward" or to the mining population in Scotland. There are prospects before the nation of an advance and for a revival of industry, but these prospects of advance and revival will come about only if we can believe in each other. Of all schemes brought forward to improve consumption at home and export of goods abroad, none is so important as the avoidance of these fractricidal trade disputes in which the consumption and production of whole blocks of the population are destroyed.

An HON. MEMBER

Are you speaking of the woollen trade?

Major ELLIOT

The disputes in the woollen trade and the coal trade—all these disputes swallow up more of the prospects of this nation in a fortnight than a year's work of the right hon. Gentlemen opposite can restore.

An HON. MEMBER

Does it mean that we must always accept wage reductions?

Major ELLIOT

It is impossible to enter into a discussion of that question just now. In the textile industry, and particularly in the woollen industry, there are interesting documents to be examined and debated in this House before any decisive conclusion is come to by one side or the other as to what steps should be taken to avoid disputes in that industry. There is nothing that any Member of this House need apologise for in stating that trade disputes are an will be a great factor in impeding and perhaps entirely dispelling the possibility of trade recovery, which is the only means by which the unemployed people of this country can be absorbed.

The difficulties before the Lord Privy Seal are enormous and we do not intend to move any reduction in his salary. Heaven knows, he earns every penny of it! I could wish that a similar proposal had been brought forward for an increased salary to the Secretary of State for Scotland, who would certainly earn it if he had to explain to the Scottish Members how he has been looking after the interests of his country in this distribution of largesse. I end, as I began, by saying that we have to make progress by confidence, and that we are beginning and not ending a series of Debates on this important subject. We have the prospect of a recovery of trade which must be mostly psychological and must be based on confidence, and I would ask the hon. Member for Bridgeton to beware when he puts forward his logical scheme for reduction in costs, and to remember that we have won our position in the world by defying the strict rules of logic, and we shall need to go on defying them in the future. [HON. MEMBERS: "With what result?"] With the result that we have a higher standard of living than any other country in Europe. We must go on building up the industrial state of Great Britain and both labour and capital will need to bear with each other while that process is going on. Bear with us, and we will do our best to bear with you.

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

Before I come to the general considerations which the hon. and gallant Member has raised, it may be for the convenience of the House if I apply myself to the rather closer aspects of the Debate which were raised in some of the earlier questions put to the Government to-day. The first speaker from the Front Bench opposite asked us to state the variations and modifications which we have recently introduced into the unemployment grants committee's proceedings. Although those conditions are rather complicated, I will do my best to state them with precision and make them clear to the House. In the first place, we have introduced an important alteration into the conditions covering big works of dock and waterworks construction which are likely to occupy a protracted period of construction. By big works we mean works which involve a capital expenditure of not less than £100,000 and by a protracted period of construction we mean a period of not less than 18 months. In the case of concerns such as these, the Committee is now empowered to grant full interest for the period of construction and half interest thereafter. In the case of big schemes, occupying six years during the period of construction, the proportion of the capital cost carried by these grants will amount to about 32 per cent., as against the present 26 per cent. on an ordinary revenue producing scheme. We believe that this new provision will go far to meet the difficulties which local authorities have discovered in advancing such projects.

Mr. E. BROWN

Will it apply to docks and harbours?

Sir O. MOSLEY

Yes. I said docks and waterworks. The second modification which we have introduced affects undertakings somewhere intermediate between revenue-producing schemes and non-revenue-producing schemes. It covers such enterprises as municipal washhouses, swimming baths and rural water supplies. In the case of undertakings such as these local authorities often found that after the Government grant, and after making a reasonable charge for the use of the facilities, there was a substantial burden still falling on the local authority which in many cases it could not afford. The Government accordingly empowers the Committee in the case of such undertakings to make a grant of the whole interest for the first eight years and half the interest for the remaining seven years of the 15 year loan period. The portion of the capital cost borne by this grant amounts to about 41 per cent. as against 26 per cent. under the previous arrangements for such undertakings. The Committee will realise that in this respect a very considerable advance is being made. Hon. Members are aware that one of the major factors of ill-health in crowded districts is that the washing has to be done often in one or two rooms, under insanitary conditions, and no greater boon can be speedily conferred on really congested areas than the constitution of municipal washhouses with reasonable facilities, the machinery and appliances of which at a small charge can be used by the women of the neighbourhood. This grant is to be made in cases where the Ministry of Health certifies that it is in the interest of public health and where after the Government grant has been made some charge will still fall upon the local authorities. Those are the first two modifications we have introduced.

The third modification affects some of the observations of the hon. and gallant Member who has just sat down and the hon. Member behind me. The Government is considering the case of the small necessitous areas. In that category we do not include large towns suffering from severe and prolonged unemployment with a substantial revenue and a broad rateable basis. We mean rather the type of necessitous areas like the small mining village, and before long I hope the Government will be able to announce the terms to meet these cases, which we readily admit have always fallen right outside the scope of the work of the Unemployment Grants Committee. Before I pass to the other Amendments which the Government have introduced it may be helpful to the Committee if I summarise the financial terms which can be allowed by the Unemployment Grants Committee. For non-revenue producing schemes, which do not involve transfer, the Committee can grant 75 per cent. of the interest and sinking fund for 15 years. That grant is equivalent to about 50 per cent. of the capital cost. For non-revenue producing schemes which do involve transfer the Committee can grant 75 per cent. of the interest and sinking fund for the first 15 years and 37½ per cent. interest and sinking fund for the second 15 years. That is equivalent to about 63 per cent. of the capital cost. For ordinary revenue-producing schemes the terms are 50 per cent. of the interest for the first 15 years, which is equivalent to about 26 per cent. of the capital cost. For the new category which we have created in relation to the big docks and waterworks that I have just described, the new grant is equivalent, as I have already said, to 32 per cent., and to municipal wash-houses, rural water supplies, and municipal swimming baths the new grant is equivalent to about 41 per cent.

Mr. E. BROWN

Has the hon. Gentleman taken into consideration the fact that local authorities have a period of loan repayment of 30 years whereas statutory companies have 60 years, and that therefore the terms are not the same for the statutory companies as for the local authorities?

Sir O. MOSLEY

That is quite true, that a 30 years' period is a certain handicap on the local authorities, but I would say to the hon. Member for Leith (Mr. E. Brown), in regard to the Leith matter which we have in hand, that we have now made a quite substantial advance in the terms, and I very much trust that the eloquence which has so often charmed this House will now be diverted to the local authority. These terms offer a substantial advance on any terms previously offered. They are the best terms the Government can offer, and we earnestly appeal to the local authorities to come forward on this new basis.

As to the modifications in transfer conditions which have been introduced, the Committee will recollect that under the late Government transfer to the extent of 50 per cent. of the men employed on a job was made obligatory upon local authorities with less than 15 per cent. unemployment of their male population. That was the provision of the late Government. My right hon. Friend announced last Session that the 15 per cent. would be reduced to 10 per cent., so that any authority with over 10 per cent. unemployment would not be susceptible to transfer. He further stated that in regard to authorities with less than 10 per cent. unemployment, who consequently were still susceptible to transfer conditions, a greater elasticity would be introduced into the provision, so that it would not be necessary for the committee to insist upon the full 50 per cent. of the men employed on the job being transferred men, and that elasticity has in fact been carried out in some cases. I want to carry the matter a stage further in a definition of the new provisions. Above 10 per cent. unemployment the question of transfer does not arise. Between 6 and 10 per cent., the transfer may vary between 25 and 5 per cent. That elasticity and discretion are accorded to the committee. In areas with less than 6 per cent. unemployed, nearly the full 50 per cent. quota of transferred men will still be insisted upon, and in the case which the right hon. Genteman opposite, who spoke at the beginning of the Debate, raised, where unemployment was only round about 2 per cent., a full measure of transfer would be insisted upon in return for the Government grant.

Mr. WOMERSLEY

Will those terms and conditions apply to schemes that have received the sanction of the late Government but have not yet been commenced?

Sir O. MOSLEY

I am afraid not, but I am sorry I cannot deal very much with interruptions to-night, as my time is very short. In addition to these modifications of transfer terms the Government have also introduced certain new provisions for the treatment of such counties as Lancashire and Glamorganshire, which are as a whole suffering from severe and prolonged unemployment. In the case of counties such as those, you may find one area which, being obviously not susceptible to transfer conditions, can only get Unemployment Grants Committee grants on the less favourable financial terms, and in the same county you may have a relatively prosperous local authority which could take transfers and qualify in itself for the higher transfer terms, but which is debarred from doing so because it is within an area the whole of which is regarded as suffering from severe and prolonged unemployment. In such cases, the Government are making provision for the transfer of labour within the county from the hard-bit areas to the more prosperous areas, and the more prosperous areas can then qualify for the better financial terms which they desire. Other counties besides Glamorgan and Lanark are being examined to see whether the same provisions can be applied.

As to the modifications which have been introduced in regard to London: in London you have some boroughs which are relatively prosperous, which could carry the transfer condition, but other boroughs have very severe unemployment, and they obviously cannot carry such conditions; yet under the late procedure, London, whose unemployment has fallen to a relatively low figure, was subjected as a whole to a transfer from Wales, Durham and other places. The Government introduces this new proposal that a prosperous borough in London which could be subject to transfer, shall take transfer in part from outside, and in part from other London boroughs, and in so doing shall qualify for the higher transfer terms. The less prosperous London boroughs will not be subject to transfer conditions, and will qualify for the non-transfer grant. As my right hon. Friend points out, we have left here a wide margin in the hands of the Committee, and an elasticity by which they can apply these new conditions, having regard to the volume and intensity, as well as to the percentage of unemployment in the various areas. The right hon. Gentleman for Carnarvon Boroughs (Mr. Lloyd George) asked a question as to the financing of the railway undertakings under Part I of the Development Act. All these undertakings so far have been assisted by the method of a grant of Interest which is provided in the Act. The right hon. Gentleman asks if they would be in a more or less favourable situation than the municipalities. The terms so far approved are slightly less than the revenue producing terms given to municipalities, which are 26 per cent. of the capital costs. They are just within that margin.

I would like, if time permitted, to cover other Measures that will be introduced by the Government this Session, such as slum clearance, the Drainage Bill, the provisions of the Forestry Commission, and other matters which the right hon. Gentleman for reasons of time was not able to cover in his speech. But we shall have ample opportunities for other debates on unemployment, and the relevant departments will in the near future bring Measures to the notice of the House. I would like in the short time left to deal with one or two of the general considerations. The main attack made upon us was that, in spite of the very substantial proposals involving a capital expenditure of £42,000,000, which within three months of securing our powers we have been able to lay before the House, we have made no attempt to fulfil our pledges. I have challenged hon. Members opposite before now to state one single particular in which the machinery of our election pledges had not been set working before the end of the last Session, and I have never yet heard that particular named in this House. The suggestion appears to be that we have failed in our pledges because within three months we have not solved the unemployment problem. Hon. Members opposite talk of wild and reckless pledges made by hon. Members on this side. I often turn for consolation to a very weighty document in the framing of which I was so fortunate as to have a small part. I must confess that the mature and sober wisdom of this document impresses me every day with increasing force. This document says: We shall not deceive the people by saying that the task of national and social reconstruction is easy or that it can be accomplished in a day or a year. … The Labour Party believes that if it has a majority. … a great advance in industrial progress and social well-being can be made. That is the election manifesto of the Labour party. How pessimistic is that language beside the radiant picture which the right hon. Gentleman painted this afternoon! The more I look at our election pledges the more astonished I am at our moderation—[Interruption.] Nobody seriously suggested for one moment, or has ever thought, that anything so far done by any Government in this period of time could affect the unemployment situation one way or the other, adversely or beneficially. No, this situation is still dominated—as I will prove from the language of the Opposition leaders—by the Measures which they undertook. I have only to turn to the very fruitful speeches of the leader of the Opposition to find him saying this: The de-rating scheme is one of the finest pieces of constructive legislation. When in full operation next October it will contribute materially to the stimulation of the industrial life of Great Britain and will thus help to solve the already diminishing problem of unemployment. The right hon. Gentleman the Member for Edgbaston (Mr. Chamberlain) said that the derating proposals would strike at the heart of the unemployment problem. These proposals, which were to strike at the heart of the unemployment problem, came into operation at the beginning of last month. Since they came into operation some 30,000 more men have been unemployed. I take the view that I took at the time they were passed, that they mattered very little one way or the other; but this is the factor which was, in the opinion of hon. Members opposite, to govern the present situation, and it has had absolutely no effect on it whatever.

Mr. BOOTHBY

Lack of confidence.

Sir O. MOSLEY

The hon. Member for East Aberdeen (Mr. Boothby) says "Lack of confidence." We have shaken the confidence of the country. That is a shrewd thrust. This Government have shaken the confidence of commerce and finance to such an extent that the City of London has just conferred its freedom on our Chancellor of the Exchequer. I had much more to say on this, but I must give just one moment to comment from the Liberal Benches. The right hon. Gentleman the Member for Carnarvon Boroughs denounced us in emphatic language. Our proposals were puny, pusillanimous and unintelligent. Then he asked for a White Paper, because he could not understand what they were. First came the denunciation, later came the thirst for knowledge. I trust that when that thirst is appeased the denunciation may be modified. The right hon. Gentleman has displayed some versatility in this matter. In the first speech he made on our proposals at the beginning of the Session he said there was nothing in them. In the second speech he said that we were taking dangerous powers which might wreck the country, they were so vast and so alarming in their magnitude. In his third speech, to-day, he again said there was nothing in them, but his colleague above the Gangway, the late Minister for Transport, said that we were indulging in an orgy of expenditure. I leave the Opposition to wrestle out this diversity of opinion amongst themselves, just as I leave the late Under-Secretary of State for Scotland to fight with the late Under-Secretary of State for the Colonies about the merits of the Zambesi bridge, which the latter hon. Member so warmly supported.

In the light of the pledges which we gave and which I have read to the House and the achievements which my right hon. Friend has described this afternoon, I submit that some of the speeches and denunciation to which we have listened become as the wind of party rhetoric whistling in the Void. It is no small or light enterprise to which this party and this Government have set their hands. It is an enterprise the magnitude of which we realised in advance, an enterprise which is at least being tackled with energy and determination, an enter-price for which we invite the support of the country.

Sir BASIL PETO

rose—

Mr. THOMAS

May I appeal to the Committee to come to a decision? Of course, we are in the hands of the Committee.

Sir L. WORTHINGTON-EVANS

Would the right hon. Gentleman say whether he will issue a White Paper?

Mr. THOMAS

It is not a question of will or will not. Certainly, if there is a demand for a White Paper it will be issued. The answer is that at the earliest possible moment a White Paper will be laid.

Sir B. PETO

rose—

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

Question, "That the Question be now put," put, and agreed to.

Question put accordingly, and agreed to.