§ Order for Second Reading read.
§ Motion made, and Question proposed, "That the Bill be now read a Second time."—[Mr. Lawson.]
§ Mr. CHURCHILL
I beg to move, "That the Debate be now adjourned."
Are we to have no explanation from the Minister in charge of this important Bill, imposing fresh charges upon the Insurance Fund? In order to put myself in order, and to reserve my right to speak later on, I move the adjournment of the Debate as a protest at the fact that no Ministerial speech of any kind has been given in moving the Second Reading of this Bill. We had a Debate on the Financial Resolution on Friday last, and the Minister of Labour then made a statement at the beginning of the debate, but during the whole of that discussion a great many criticisms and questions were raised and serious charges were made against the policy of the Government. We all expected that the Chancellor of the Exchequer would make a full and reasoned reply, dealing not only with the purely financial aspect, with which he was himself concerned, but dealing also with the specific and important questions in regard to unemployment insurance which had been raised, but the Chancellor of the Exchequer, although through the usual channels he was asked how long he required for a reply, said casually that five minutes would be sufficient; and certainly, judged by the adequacy of his answer to the questions raised, five minutes were more than sufficient.
Now we have had no answer as a result of all the experience and criticism of the last few days, and nothing has been said by the Minister on unemployment except the speech which she delivered when the Financial Resolution was moved; and apparently we are to be left all through the course of to-day while the Minister for Labour sits waiting to have a last word. Is that really the way in which to treat the House? I must say that I do not think the present Government will facilitate the course of business 1660 by not trying to take an intelligent and respectful part in Debates in this House. To sit silent, hour after hour, waiting for a Division, relying upon a Division to settle the matter, is not the way to deal with these subjects. This question of unemployment is one on which one would expect the greatest amount of leading and guidance from the Labour party, and that they should, as it were, boycott the Debate and offer no explanation or excuse for the situation to the House is a fact meriting, I am certain, severe Parliamentary censure. As a protest against this treatment of this important subject, I ask leave to move "That the Debate be now adjourned."
§ The LORD PRIVY SEAL (Mr. J. H. Thomas)
I did not expect the righteous indignation of the right hon. Gentleman. I read a letter from him this morning in a newspaper, a most interesting, brilliant, and amusing letter, and I could not conceive that in a few hours he would be coming down here so indignant. The explanation of this situation is that the right hon. Gentleman bad given public notice that he intended to-day to make a general constructive criticism of the whole Bill, and my right hon. Friend the Minister of Labour felt, rightly or wrongly—and I think the House will agree—that as last Friday, whatever views there may be on the procedure, she had indicated to the House quite clearly the grounds for this Measure, she had said all that was to be said on that question. The right hon. Gentleman opposite having publicly intimated that he proposed to-day to make a criticism, she felt, having nothing more to say on that side of the question, that she would reply later, on the general debate, but she is quite prepared to speak even now—not that she can add any more—and, after all, the House must remember that last Friday there was a full Debate that took the whole day. There is no discourtesy Intended, but my right hon. Friend felt herself, and consulted with some of her colleagues, that she would meet the convenience of the House by letting a formal Motion be made at the beginning and give a reasoned reply to any general criticism later. If, on the other hand, that does not meet the requirements of the House, she will certainly be Prepared to make her speech now.
§ Mr. CHURCHILL
After the statement which the Lord Privy Seal has made, and its satisfactory tenor, I hope I may accept the offer he has made and that the Minister of Labour will now make a statement on the Bill. On that understanding, I ask leave to withdraw the Motion for the adjournment of the debate.
§ Mr. THOMAS
My right hon. Friend is anxious that at a later stage she may not be deprived of the opportunity of addressing the House again and I am sure the House will agree, under the exceptional circumstances, to give her that right.
§ Motion, by leave, withdrawn.
§ Original Question again proposed.
§ The MINISTER of LABOUR (Miss Bondfield)
The Bill which is before the House is quite obviously the legal form which has to be presented of the Money Resolution discussed last week. It proposes to repeal the Unemployment Insurance Act of 1928 and to raise the statutory limit of borrowing to £50,000,000. May I remind the House that I gave the figures last week? On the 31st March the debt was £38,950,000; that is to say, the six months' interest of £915,000 due on the 31st March has now been paid, and therefore the debt now stands at a figure estimated last week at £38,950,000. It is quite clear from last Friday's debate that the Opposition have no alternative method to offer for dealing with the present situation, but that, on the contrary, the present method of meeting the situation met with the cordial and enthusiastic endorsement of the late Chancellor of the Exchequer, who said:I do not think at any rate that it is dishonest to borrow up to the limits of a year's income for the maintenance of the Unemployment Insurance Fund."—[OFFICIAL REPORT, 28th March, 1930; col. 854, Vol. 237.]We have not proposed borrowing up to the limit of a year's income, and we have still £8,000,000 in hand according to that reckoning. I must disagree with the late Chancellor of the Exchequer, and if I could have seen it possible to deal with the emergency in any other way than by increasing the indebtedness of the Fund, I would have taken that way, but I explained at great length last week that there appeared to be no other way which could be reached within the time limit 1662 available at my disposal. I want to repeat what is perfectly clear to this House, that what I have contended, and what I shall continue to contend, is the fact that the Fund is in the present position largely because of the misguided methods of the late Government in dealing with it. It is perfectly true that my Act has made a more generous provision for the payment of benefit, but that fact cannot enter into the present financial position in view of the fact that the Act did not become operative until a fortnight ago, and that actual payments under the Act are comparatively few at the present time. The estimate which I made of the possible increase has not yet been reached, and, therefore, the situation which arises, arises from consequences that are not to be attributable to the new Act.
Further, the situation is, as I pointed out last week, abnormal because of the extraordinary drop in the wholesale price of commodities. Last week the criticism was made by an hon. Member on the Benches opposite that that was apparent last November. It is obvious to anybody who looks at the figures—either the Board of Trade figures, or any other group of figures—that it was impossible to see last November the drop which has steeply occurred this year in the months of January and February, and is still continuing. This is so abnormal that it reaches a point which is startling in its operation on the whole economic life of our country. I have both the wholesale and retail prices for the months of September to February and we have this startling fact to take into account. Whereas the drop in wholesale price was so steep in the first three months of this year, and began to show itself in December of last year, the course of the retail price showed an actual rise, and the wholesale price is only just beginning, after a long lag, to reflect itself in the retail price, so that the consumer and worker has been hit both ways—on one side by a continuing of the high prices of commodities which he has to pay, and on the other side, by the tremendous interruption of trade caused by a steep drop in the wholesale price, and consequent loss of employment in large numbers.
The figure for the wholesale price in September was 135.8; October, when my Estimates were prepared, it had gone up to 136.1; in November, it had shifted 1663 down to 134, and in February, it dropped to 127.8. Compare those figures with the retail price. In September, the retail price stood at 165; in October, the retail price rose to 167. When the drop in the wholesale price took place to 134 the retail price still stood at 167. Then, when it dropped to 132.5 the retail price went to 166, and now that the wholesale price is 127.8, the retail price is at 161. These figures alone fully justify what I said about the phenomenal situation created by the drop in prices, which we are entitled to claim, represents the abnormal increase on the Unemployment Register.
I find myself in great difficulty, and I hope that I shall have the consent of the House to reply later to the discussion. It is a matter of obvious difficulty to me, when I am informed beforehand that right hon. Gentlemen opposite intend to make militant contructive contributions to the Debate to-day. I shall be thankful to have constructive suggestions from any quarter, but it is obvious that I cannot deal with them before they have been announced, and it is obvious that I cannot make any reply to whatever new charges are going to be made until I hear what those charges are.
§ Sir ALFRED LAW
I suppose that the right hon. Lady was referring to the price of foodstuffs. May I ask from what she is quoting?
§ Miss BONDFIELD
I was referring to the Board of Trade Journal return of wholesale prices—the general level of prices. I should at this point merely say that, in asking the House to give a Second Reading to this Bill, I have no further figures to add to the figures which I gave last week, except one group of figures which deals with the number of persons on the Live Register, as compared with the number a week ago. What I foretold then is exactly what has happened; there is a further increase to be added. I am speaking from memory, but I think I mentioned last week an addition of 40,000 to 50,000. This week I will put the figure as high as 67,000, which may be attributable to the working of the new Act. Again, I warn the House, however, that these figures do not represent payment of benefit, but persons on the Live Register whose claims still have to be regarded as subject to the 1664 decision of the Court of Referees. With the change, I have no further figures to give them than those which I gave to the House last week. I ask, therefore, that the House will give the Second Reading to my Bill.
§ Sir ARTHUR STEEL-MAITLAND
I beg to move to leave out the word "now," and, at the end of the Question to add the words "upon this day six months."
What we have heard from the Minister amply justifies the request which my right hon. Friend has made that there should be some Ministerial statement before the Debate begins, because one sentence which she uttered still leaves me in a position of doubt. Why should the Minister have assumed that, if she speaks now, she ought to be allowed also to speak at the end of the Debate? We wanted a Ministerial statement, and we have a right to demand one, but I respectfully ask, what is the position of the Parliamentary Secretary, unless he is here in order to help the Minister? In previous considerations of the extension of the borrowing powers in the late Government, the Parliamentary Secretary opened the Debate on one occasion, and he always took his proper part in the Debate. Therefore, for a Minister to come forward and say that she does not want to speak first, and that there should not be any opening Ministerial statement because she wishes to reserve her right to the end of the Debate, seems beyond the point. We would have been perfectly content with a statement from the Parliamentary Secretary. There are two Ministers here, and that fact affords one the opportunity of speaking at the beginning of the Debate as a right, and the other at the end.
What the Minister has said has shown the desirability of having some Ministerial statement. A number of criticisms were made in the last Debate, and no answer whatever was given by the Chancellor of the Exchequer, and we might have expected at least some adequate reference to them to-day.
The poverty of the land from the point of view of their defence is shown by the brief statement made by the Minister. She said the present situation is abnormal, that it could not be foreseen, that it was due primarily to the drop in prices. 1665 As far as I can see, that is the stock defence of every Minister in a Labour Government when they have not been able to alleviate the unemployment position, after having promised to deal with it. Recently, I have been looking over the course of past events, and during that not very inspiring occupation I read the speech of the Chancellor of the Exchequer in the last Labour Government. How did he begin his speech on behalf of the Government? Six years ago "the situation was abnormal"—which is just what the Minister said to-day. Why was it abnormal then? Because of the drop in prices—which is what the Minister has said to-day. He said, further, what the Minister has also said to-day, that the position could not possibly have been foreseen. Why should it not have been foreseen?
We have two defences—the drop in prices and the break in the American market. They both occurred before the last statement of the Chancellor of the Exchequer on the Unemployment Insurance Act. The fall in prices was already taking place, the break in the American market had taken place, and to say that it was impossible to foresee them or that they are a justification of their position passes ordinary credibility. I do not want to labour the position in pointing out how inconsistent the Minister has been in her past declarations, but there is one point to which I would like to allude, and that is the one defence which has not yet been examined, fully at any rate—the defence made by the Chancellor of the Exchequer last time. He took my hon. Friend the Member for Cirencester (Mr. W. S. Morrison) roundly to task for having criticised him for being a party to increasing the debt of the Fund after having stated that such an increase was against his own policy. My hon. Friend is perfectly accurate in all that he said.
The Chancellor of the Exchequer criticised myself and others on this side of the House for our "colossal audacity" when we said that the course of action pursued by the Government would tend to bring about a further deficiency in the Fund. "The purpose of this Bill," he said, "is to restore something like solvency to the Fund." It is after those statements that he has rendered the Fund still more insolvent and is extending the borrowing powers. He proceeded to criticise my right hon.
1666 Friend, with his usual acidulated self-complacency, for the ground he had taken up. Stating his own position, he said that in December the floating debt was very high, and therefore in December he had been unwilling to add to the debt upon the Fund; on the other hand he had made it his purpose to reduce the floating debt. "I have pursued since then," he said, "a well considered and well constructed policy of reducing the floating debt."
The Chancellor of the Exchequer had evidently got rid of his trumpeter, because if he had had a professional one he would not have been let in for that mistake. The floating debt being reduced, the objections to increasing the debt of the Fund apparently vanish too. I put it to the House, or to anyone of those bankers who have been helping the Lord Privy Seal in various respects since his advent to office, that there is absolutely nothing in that defence. The addition to the debt of the Fund has no substantial relation to the question of the floating debt at all. It may be an objection to have the floating debt too high, there may be advantages in reducing the floating debt, but that the desirability of the one or the undesirability of the other is affected by the increase in the debt of the Unemployment Fund to anything but a microscopical extent cannot be contended. That is the state of affairs, and all the Chancellor of the Exchequer did last Friday was to put before the House a defence in which there was nothing whatsoever, as anybody with any knowledge of finance would know perfectly well. I can only imagine that he was either bamboozling himself or bamboozling the House; but at any rate the one defence that has yet been put forward to justify the action they took collapses completely on examination. It only shows the nakedness of the land when the Government try to justify what they have done.
I will recall what was said by, I think, the hon. Member for Leith (Mr. E. Brown) last time, that what we want in these Debates is to see if we can help the Government from the point of view of increasing employment. If the Lord Privy Seal will give me his attention, I will put forward one or two suggestions that I think may be of assistance. He has laid stress in a great many of his speeches on the importance of maintaining and re- 1667 gaining our foreign trade. May I make one suggestion? I am not for a moment pretending that it is a cure for unemployment, because a cure is something definite, decisive and final, but I think it may help as a remedy. In trying to promote our foreign trade use has been made of the export credits system. It is a system that has worked very successfully. It is very ably managed, there is also very able and patriotic supervision on the part of those who have given their help upon that committee. Could not the Lord Privy Seal extend their field of operations? Anyone who considers the marketing of goods at this moment will note two features which stick out a yard, if one may say so. One is the enormous extension of sales where there is a development of the instalment purchase system. It may be that people in old days thought the instalment purchase system was hardly moral; they held Victorian ideas on the subject. I think that attitude has gone by the board. At any rate it is quite clear that where such a system has been developed sales have increased enormously. In some of the European markets the system of instalment selling is only in its infancy.
The other point is this: A great disadvantage to British goods in their competition abroad arises from the fact that though the quality may be better the price is sometimes higher than that of our competitors. That the price is higher is due largely to the fact that wages in this country are higher, but at the same time British credit is cheaper than is credit abroad. Could not the cheapness of British credit be used to counter the dearness in price? I think there is a possibility of developing the instalment system in foreign countries. We want to utilise the cheapness of credit in this country in order to make it easier for the purchaser to buy British goods, and, if I can be of any use in the Committee in developing that system, I will try to help. I admit that it is difficult to do this, because when British representatives go to foreign countries they naturally expect to get the full rate of credit that prevails there, and not the lower rate. It ought to be possible to bring the cheapness of British credit into play in order to develop the sale of goods in some of the European countries. These 1668 are questions really affecting unemployment. If the Lord Privy Seal will allow me to say so, I am really trying to be helpful to him on this occasion. Let us look for a moment at the figures of unemployment. At the present time, the total is 1,638,000, which is 132,000 more than they were a year ago. I agree that 70,000 of this total may be due to the effect of the new Insurance Act. On this occasion, I am breaking away from the tradition to which the Chancellor of the Exchequer adheres of refusing to add to the common stock of information on this question by giving what suggestions I can to the Lord Privy Seal.
There is another point which might be considered when we are dealing with the causes of unemployment, and it is the want of mobility in labour. Although I agree that there may be more important causes of unemployment than that, I think it is all the more desirable to try and take away any additional supplementary cause which makes the position worse. One of such difficulties is that labour is not sufficiently mobile, and is largely anchored to the spot. I am not suggesting that it is an advantage in any business that there should be a great turnover of labour, because the opposite is the case. The more constant your work the less becomes the turnover, and it frequently takes weeks or months, according to the nature of the business, for a person new to the work to become fully efficient. The mobility of which I speak is of a different kind. During the last few years there has been a drift throughout the whole of the country back from the North to the South, just as years ago there was a drift from the South to the North. It is quite clear that, under these circumstances, we ought to fill up all available jobs as quickly and as suitably as possible in these difficult times. It is very desirable to see that anything which makes labour immobile should be done away with, and I ask the right hon. Gentlemen to consider our present insurance system.
Take our present unemployment system. It is a fact that there is no one satisfied with it as it exists. That is true of those who sit on both sides of the House. I am not going to discuss the rights and wrongs of the Blanesburgh recommendations or the previous Acts dealing with this subject and more particularly the Act which 1669 was passed early this year, but no one is satisfied with the results, and the reason they are dissatisfied is because those Acts mix up pure insurance with what you may call State assistance, maintenance, or relief. It is the mixture of the two things that causes the trouble. Either of them, taken separately, can be administered all right, but when you mix up the two the results are disastrous. The labour that is immobile is not the labour that would receive benefits under a real insurance system. From that point of view, cannot something be done to improve the situation? Everybody is agreed that the two things ought to be separated. The hon. Member for Leith (Mr. E. Brown) suggested the setting up of a Cabinet Committee to go into this question and thoroughly overhaul it. I do not know whether that Committee is likely to reach the conclusion of its labours very soon; in fact, I am not quite sure whether it has ever met. Of course, I would not refer to a Cabinet Committee if Members of the Government had not referred to it on several occasions.
§ Sir A. STEEL-MAITLAND
That is so much to the good. Here you have a system which is admittedly not perfect, and I think it ought to be changed. The fact that the system is so imperfect is increasing the amount of unemployment. This is obviously a controversial matter, but I would ask the Lord Privy Seal and the House to consider the fact that the field of controversy, although acute, is not really as wide as it seems at the first glance. In my view, if all the differences on this subject were stated, I do not think it would be found that there is any real difference on the purely insurance side of the question. If we were left to settle the pure insurance side, I do not imagine that there would be much difficulty about coming to an agreement as to a workable system.
The controversial part of the question consists more of what I may call the relief and the State assistance side, but even that is not wholly a matter of controversy. I think it is agreed that if the two things I have mentioned were separated you would want a special authority to deal with the ques- 1670 tion, and it would be an authority able to develop training and transport. In this matter it would need to act with local authority, and there should be a national co-operation. Such an authority as I suggest would make a speciality of transport and training, and I think that is common ground. The controversial part of this question therefore can be narrowed down. There seems to be a wide field for agreement and within this field we should try by agreement to eliminate all those causes which at the present moment tend to increase unemployment. I put these suggestions before the Lord Privy Seal as a means of doing something to relieve the present state of things.
We have the other main causes of unemployment: the fall in prices of commodities, to which the Minister has referred; rationalisation; and,—I say perfectly frankly I do not ask Members opposite to agree—what we think is lack of confidence which the Government has created by their action. Of these three grounds, two only will be emphasized by the Government and one will be emphasized by us. Anyone who considered this country from outside would agree that in the long run, where you get a country which is primarily a manufacturing country, the fall in the cost of raw commodities, and even of food, would in the end be a good thing for such a country. At the moment, however, it is bound to cause dislocation. You will not get a shipowner, for instance, to order a boat when the cost is £7 a ton if he thinks that the cost will go down to £6 10s. in a month. The same thing applies in other directions. Therefore, while in the long run the country will benefit by the fall, at the moment there is dislocation. I think that before long the figures will react, but I do not expect that to take place next week.
The same may be said about rationalisation. It is bound to cause dislocation. On the other hand it is inevitable. The country has to go in for it if we are to get our share of the world's trade. I would say, further, that what the Government ought to see to is the rationalisation of the labour supply. I know of contracts in regard to which work has been dislocated because of differences between trade unions as to who should 1671 undertake the work. Hon. members dissent, but I know of an actual contract, one running to over £1,000,000 for the export trade. I am not saying this in order to be controversial. The Minister knows it as well as I do. A great deal of this is being got over at the present time, but more must be done before we can be fully secured with regard to the future.
§ Sir A. STEEL-MAITLAND
Limitation in output in two ways. There can be the one way to which I referred, but there can also be limitation by quota as well. Any rationalisation causes a dislocation for the time being, and what is wanted is something to sustain the home market. Are relief works or public works a desirable method of so doing? We have never heard from the Lord Privy Seal any statement whether he thinks these relief works or public works are really desirable, and his reasons. The desirability of them depends upon the view that you take of credit. You get one view, which is the strict one, that if you deflect £1 of credit to them you take that pound away from industry. You have the other view, which I believe is according to the Liberal plan, that there is an almost infinite fund of credit if you want it. Such a view is not justified by any figures that are available. I have an amalgamated balance-sheet of the clearing Banks which would show this mass of frozen credit if it were there, but it is not there. I ask the Lord Privy Seal, for it is a matter of first-class importance from the point of view of unemployment, to try to find out where the truth lies. At present, he is pursuing a sort of half-and-half course. He has never given any foundation for his belief or any justification whatever for it. Ought these works to be few or many, and why does he strike a balance between the opposite views, as he has done in his White Paper? Surely this is one of the questions which, if you had a normal business, you would endeavour to deal with. If it was so vital to an ordinary business, you would set to work and go into it and if you could not get the exact truth you would get as close as possible to it in order to establish an ordinary working 1672 basis. Great doctors differ, and on this matter professors differ, but they do not differ so enormously, and I would suggest to the Lord Privy Seal that he should get the matter put to some impartial body who could really find out where the truth lies, instead of, as at present, having this matter a sort of battledore and shuttlecock across the Floor of the House, one section asking for enormous schemes and many on these benches thinking the fewer the better, from the point of view of employment, while the Lord Privy Seal takes a middle course and does not give us the foundations for his belief. It should be possible, if this matter were put to a body of independent people, skilled in the matter, to arrive at something like an agreed basis for action.
The last point is on the question of duties on imports. I say at once that I do not want to make any Second Reading remarks on Safeguarding Duties. I would only ask the Lord Privy Seal to see if he could get it considered from this point of view and as a business problem. It is really a question as to which side, under modern conditions, between the pros and cons, the balance comes down. If you get rationalisation, it means production on such a huge scale that you have to go on producing. It is part of the essence of the business that, if the home market does not use it, it should be sent abroad.
The next point is that of international arrangements. You have the Imperial Chemical Company getting an agreement with companies abroad not to invade each others' markets. That is simply a form of protection reached by another route. Take again the proportion of national expenditure to the amount of national production. I do not argue that to-day. I tried to get to something concrete in the figures which I published the other day. I daresay there may have been some inaccuracies in those figures, but they go to show, bearing directly on the merits of this question, that conditions to-day are entirely different from what they were before the War. A duty on imports is an alternative method of sustaining the home market for the time. being, and it should be considered on its merits.
I believe that it ought to be possible, if the Lord Privy Seal and the Government wish to treat the problem in this way, to put it to an independent body 1673 for consideration, which could give its reasons publicly, if the problem could only be shifted out of this business of battledore and shuttlecock in the House. The only criticism that I would make of the Economic Committee for this purpose is the criticism, which I have made before, that it is neither close enough to the Government nor sufficiently detached. It ought to be either the one or the other, and not a compromise between the two. It ought either to be like the old Committee of Civil Research, where Members of the Government themselves were sitting, together with officials and experts, or it ought to be an independent body like the Food Council or some other body of that kind. Along these lines I believe that some positive advance could be made towards, if not curing, at any rate alleviating, the unemployment that already exists. Unless we make an advance along those lines, I anticipate that not merely this present £10,000,000, the borrowing of which we are asked to sanction to-day—for which, of course, the Government are forced to ask, contrary to all their previous declarations, and against which we shall not divide—we shall probably have another £10,000,000 asked for before another year is out.
§ Mr. THOMAS
Let me first congratulate and thank the two right hon. Gentlemen opposite for moving this Amendment. To new Members of the House it may appear hostile, but, of course, the moving of this Amendment reserves to my right hon. Friend the Minister of Labour the right of reply which she desires, and I fully appreciate that. I had not intended to take part in the Debate, but I do so in response to a series of questions—
§ 12. n.
§ Mr. THOMAS
Suggestions. I should wish that on this Friday morning we may be able to discuss this question in a somewhat different atmosphere from that which is usually associated with party conflicts. I am one of those who believe that there ought to be no difference of opinion in the House on one point. and that is that the true position of unemployment ought to be known and stated, but not in an unfair or exaggerated way. There is not an employer in this country closely associated with business of any importance who has not repeatedly urged me to do something 1674 to stop this continued publication of figures—figures, as is pointed out, that we ourselves know do not give a true reflex of the position, but do incalculable harm abroad. They convey an impression that there is a whole army of unemployed, and that contracts cannot be fulfilled, which does a great deal of harm to business. I want at once to inform the House, not only that the Government are alive to this, but that steps are already being taken to have an examination of the figures, not from the stand 12. n. point of any party, not with a view to making party capital, but with a view to giving a true and accurate picture of the situation.
How many Members in this House, and how many people outside, when they read the increased figures last week, would imagine that they included many thousands of people shown on the employment register who may have worked and drawn six days' pay? How many Members on either side of the House have any idea, when they read these figures, that there are on our unemployment register numbers of people who, because of the accident that the register is taken at nine o'clock on a Monday morning, may be at work at 11 or 12 o'clock, and may even work overtime during that week? No one who wants really to understand the unemployment problem would agree that that is a right way of dealing with it. In fairness to the Government, I ought to say that we took this step immediately we assumed office. It should be known that on taking office we communicated through the usual channels, and suggested that an opportunity should be given to all parties to agree to deal with the figures in a different way. I am not blaming anyone, but I think I ought to inform the House and the country that we were alive to the situation and prepared to deal with it, and if the suggestion is made across the Floor of the House it will certainly be considered by the Government. The right hon. Gentleman's next question was, what importance did I attach to the Export Credits Committee, and could it be developed? I said in a public speech—
§ Sir A. STEEL-MAITLAND
I hope the right hon. Gentleman will forgive me for interruping him, but it was not that I asked whether he attached importance to it. I meant to say, if I did not say it, that we all attach great importance to the 1675 Export Credits, Committee, and admire the way in which it is managed. I only suggested for the right hon. Gentleman's consideration whether it might not be developed along certain lines.
§ Mr. THOMAS
In a public speech some few weeks ago I indicated clearly my view and that of the Government as to the advantages of cheap money. I do not take the view that, because the Bank rate has come down so rapidly, that is going immediately to transform the situation. There is exaggeration on both sides as to the real effect of the fall in the Bank rate. There are, however, certain distinct advantages in cheap money of which advantage may be taken, and I assure the right hon. Gentleman that that side of the question is not being lost sight of. Unfortunately, that was a premature announcement in certain sections of the Press two days ago which did incalculable harm. It is the fact that when half statements and exaggerated accounts appear considerable harm is done. I informed the House a few weeks ago that we are taking steps and negotiating in order to implement my Manchester speech. I am not in a position to-day to say more, but I can assure the House that I will take the earliest opportunity of taking the House and the country into my confidence in regard to what I believe will be a real development in the relationship of finance and business in this country.
The only other question put by the right hon. Gentleman was as to whether I considered that in rationalisation the employers' interests only were to be taken into account. My answer to that is "No." I want to make it perfectly clear that in dealing with rationalisation all sections of industry are and must be included before any success can be achieved. The right hon. Gentleman will be pleased to know that, besides meeting employers, I have met the trade union representatives, and there have also been joint conferences between employers and employés. The House will be pleased to know that I have found no difficulty there, but that, on the contrary, there was a frank recognition on both sides that changes and sacrifices would have to be made in order to pull the country through.
1676 The right hon. Gentleman has confirmed all I have said about the abnormal cause of unemployment at this moment. Like him, I take the view that there will be a reaction. I attach no importance to the figures either of last week, the week before, or probably next week, because the intention of the Government in amending the Act was not to deprive a man who was genuinely seeking work of his benefit. That is all we had in mind. We did not and do not intend to allow it to be abused. But curiously enough in the figures last week, and the week before and next week there will be large numbers who thought they were entitled to claim. Press reports, statements in the House, have all been taken advantage of, and hundreds and thousands of married women who had not found work as far as factories are concerned for eight or 10 years made application. But it does not follow in the least that they have received benefit. It means that they have increased the figures temporarily.
I hope the very fair line taken by the right hon. Gentleman will be followed in the Debate. There is common agreement that to have adopted any other course now would have been madness. There is no Member on that side or this who would have agreed to put an additional contribution either on employer or employé at this stage. We are all concerned in relieving industry rather than adding to its burdens, and to have merely added a further contribution to industry at this stage would in our judgment have been madness, and ultimately ruin. The Government, therefore, took the only course open to them. It can be criticised on the ground that it was inconsistent with previous statements, but boiled down and stripped of any party camouflage, there is no Member on either side of the House who would not admit that it was the only course open to the Government. All these points are already being considered, and if as the result of this discussion we are able to make suggestions which will give a true reflex of the unemployed situation, I am sure no one will regret the few hours spent on a Friday on the Second Reading of a Bill to which all parties agree there is no alternative.
§ Mr. DUCKWORTH
In rising to address the House for the first time, I 1677 am fully conscious of the ordeal through which I have to go, but I know I can rely on the consideration that is always accorded to maiden speeches. As a new and humble Member, I have followed what I believe to be sound advice in remaining silent during the course of the many Debates that have taken place since I entered the House. But the Bill before us is concerned with a problem of ever increasing gravity, of which every Member of the House cannot help receiving painful evidence on every visit to his constituency. It is by far the most serious problem with which the House has to deal and I should be lacking in my duty to those whom I represent if I did not voice the growing apprehension that is unquestionably being felt at the recent increase in the figures of unemployment, which is responsible for the introduction of the Bill.
I have no wish to make any party capital by contrasting the circumstances which have unfortunately necessitated the introduction of this Bill with the assurances given us by hon. Members opposite at the time of the election as to their ability to deal with the problem. We are all aware of the abnormal circumstances which have arisen since the Government came to office. The question resolves itself into how the Government have met those abnormal conditions and how the finances of the Insurance Fund have been treated in relation thereto. The Insurance Fund has had a very chequered history. It is very easy now to point out what would have been its position had there not been in the past certain reductions in the rate of contributions, but that is really quite beside the point at present, because those reductions were made at that time in view of the fact, which I believe is generally recognised in all quarters of the House, and which causes some part of the apprehension with which we view the Bill, that the burden of unemployment insurance is a very heavy one on industry, and may well prove to be a contributory cause to the very malady which it seeks to mitigate. The incidence of the contributions to the Fund is, I believe, impossible to determine with any great exactitude. We do not know how far the employers' contributions may be shifted to the employed, nor conversely how far the contributions of the employed 1678 may be shifted on to the employers, but there can be no possible doubt that this enormous sum, which has grown to over £50,000,000 during the last year, is a very serious burden and, although the course proposed by the Bill may be the least of three evils, it is nevertheless a very serious addition to the overhead charges that industry has to bear. To-day we are proposing to add to that burden.
The remarkable thing about the Bill is that it now proposes to adopt a course which was vehemently denounced only three months ago. It is in itself a sufficient condemnation of the action of the Chancellor of the Exchequer on that occasion when he took credit to himself for placing the fund on a sound financial basis by increasing the Exchequer contribution and by putting the onus on the taxpayer. It has been emphatically stated, both by the Minister of Labour and by the Chancellor of the Exchequer, that the present circumstances could not be foreseen and could not have been anticipated. I submit that these circumstances could very well have been foreseen and that they are the inevitable results both of the world causes to which they are attributable and to the whole policy of the present Government. What are those world causes? The collapse of the American stock market, and the steady fall in commodity prices. These things had made themselves extremely evident long before last December. There was a clear warning of the consequences that might be expected on the problem of unemployment expressed in every financial paper which I make it my business to study. We attach no blame whatsoever to the Government for the inevitable reaction on the figures of unemployment which were bound to result from these world causes. We all recognise to-day that these causes are quite outside the control of any Government.
I believe that the only ultimate solution to the whole unemployment problem internationally is by greater economic co-operation between the various nations. I entirely agree with what the Lord Privy Seal has said and with the appeal which he made to treat this matter in a non-party spirit, hut from our point of view it would be very much easier to do so had there been a clearer recogni- 1679 tion of these forces beyond the control of the Government before the last election. I say that in no spirit of vindictiveness at all. How can the Lord Privy Seal reconcile those sentiments to the allegation which was made by the right hon. Gentleman the Chancellor of the Exchequer, when the latter said that there had been an organised conspiracy to increase unemployment in order to discredit the Government?
Granted these exceptional circumstances, the question really is: What action did the Government take to counter them? In face of all these indications and clearly expressed warnings they have consistently refused to remove the natural anxiety that is felt in the Safeguarding Industries and the industries that come under the McKenna Duties. In face of that anxiety, they passed a Bill in December adding substantially to the burden which will be placed upon the taxpayer in the coming financial year. We know perfectly well the views which are held by the party opposite with regard to taxation. Whatever views, theoretically, we may hold about the results of heavy direct taxation, one thing is certain. It has a very direct effect upon the volume of the nation's savings. It has a very direct effect upon the problem of finding capital, and that, after all, is the problem to which the Lord Privy Seal is devoting himself at the present time.
The final charge which we have to make against the Government is that by totally relaxing the conditions of benefit, they have reduced the whole of the Unemployment Insurance System to ruins and converted it into a system of organised charity. The real criticism which we have to make of this Bill is, that instead of this Bill, we should have had an entirely new Bill and one which would have frankly recognised the hopelessness and the demoralisation of the system which has been instituted by the last Unemployment Insurance Act, a Bill which would have restored the system to a basis of real insurance, and a Bill finally to eliminate those who are actuarially uninsurable and place them in an entirely separate category. There should be no stigma at all attached to those unfortunate cases, but those exceptional cases should be treated in an exceptional manner, not only as regards benefit, but 1680 as regards the provision of employment. In seeking to provide permanent employment, it surely would be far easier to deal with those individual cases and to afford a preference perhaps for their more urgent needs.
There is one other aspect of the system to which I want to draw attention, and that is the relationship which it hears to the agricultural industry and to the large decrease in the number of those employed in the agricultural industry during the last 10 years. We have to remember that in relation to agriculture, industrial employment at the present time provides a definite premium. Generally speaking, it holds out higher wages and certainly it holds out greater safeguards in the case of unemployment. For sound reasons the system of insurance has not been extended to the agricultural workers, but when one considers the decline that there has been of approximately 100,000 during the last 9 or 10 years in the number of those engaged in the agricultural industry, one rather wonders how far the disparity in conditions as between industry and agriculture, may have been partly responsible.
I feel sure that when we survey the whole problem of Unemployment Insurance from the point of view of present figures—and that after all, is the really important aspect—we shall find that far too little attention has been paid to the possibilities held out by the agricultural industry. I do not for a moment mean by that that it is in any way possible to bring back in any short space of time, the 1,000,000 persons who have left the land during the last 100 years That is a very big problem. But I do suggest that something might be done in the kind of area which I have in mind which exists in my constituency and which, no doubt, exists elsewhere—an area where in the past a local industry has sprung up and attracted a small industrial population without in any way urbanising the district. The tide has now flowed back. The industry is in distress and there is no immediate prospect of any permanent recovery. The result is that you get a severe proportion of unemployment in a very small community. You get there men living in the country who are yet industrially unemployed, and I do suggest that it should not be beyond our powers to formulate some scheme by which we 1681 can train them and place them as primary producers in their own countryside.
The serious aspect of this Bill is that there is no real sign at the moment that it deals with a purely temporary and passing emergency. I say that in relation to the returns that have recently been published of the nation's finances for the last year. There is every indication from those returns that the national revenue is almost stationary, and that is the measure of our ability to absorb the labour that is coming annually on the market. Perhaps the most disquieting symptom of all is the atmosphere of lassitude and despair that seems to have descended like a cloud over the whole country, The right hon. Gentleman the Chancellor of the Exchequer, in winding up his speech on the occasion of the debate on the Financial Resolution, took comfort in acknowledging the falsification of all his previous anticipations, by saying that:Hope springs eternal in the human breast.I would remind the right hon. Gentleman that there is another quotation:Hope deferred maketh the heart sick.There are many sick hearts in Britain to-day.
§ Mr. GRAHAM WHITE
I should like to congratulate the hon. Member for Shrewsbury (Mr. Duckworth) on his very excellent maiden speech. He said that, acting on advice which he considered good, he had remained silent a long time. As I listened to his speech I doubted the soundness of that advice. I will not presume to offer him advice, but I will express the hope, from the way in which he mastered his facts and presented them to the House, that he will not allow himself for any long interval of time to lapse into silence.
In the few observations which I wish to address to the House this afternoon, in the atmosphere of this sober and rather sombre Debate, I do not wish to refer in detail to any of the financial criticisms which have been directed against the Bill and its various Clauses because, so far as I can understand the mind of the House there is no substantial difference of opinion upon this particular subject. No one has suggested any alternative which the Minister of Labour can possibly adopt other than the course which she now proposes to follow, and which we regretfully support her in doing. It is a melan- 1682 choly necessity from which, unfortunately, we cannot escape. I should like the House to bear in mind the remarks of the Lord Privy Seal, that we should regard this question of unemployment without prejudice and without exaggeration. There have been to-day, and still more was it the case last Friday, criticisms of the system of unemployment insurance which have been gross exaggerations. Those criticisms have come from several quarters of the House. The right hon. Gentleman the former Chancellor of the Exchequer, employing that picturesque and decorative phraseology which always delights the House, focussed that criticism in wordssomething like this—he said that the Government, by wholesale and scandalous relaxation of the conditions of unemployment benefit, had demoralised the whole system of unemployment insurance, and that they had vitiated to a terrible and irreparable extent the finance and, what was worse, the whole system of unemployment benefit.
The Minister of Labour, in her speech, so far as I can remember, brought out only one new fact and that was that there was a figure of 67,000 people who had come upon the live registers of the Exchanges, not all receiving benefit but who were upon the register as a result of the changes of administration that have been brought about under the last Act. That is the measure of "the scandalous and wholesale destruction which is vitiating the finance of the scheme." Accusations of that kind mean that there are within this Fund or on the fringe of the Fund wholesale masses of people who are prepared, to quote another phrase, "To sit at home and smoke their pipes, rather than make any efforts to get work." It means that there are wholesale masses of people in this country within this scheme who are prepared to do that sort of thing.
§ Mr. WHITE
Then, I suppose, we must give him the credit or otherwise for that statement. Speaking from an unfortunately large and wide experience, contact and personal observation of large numbers of unemployed individuals I have no hesitation in saying that there is not in this country any considerable number of people who are prepared to 1683 take up that attitude. They do not exist. I am not saying that there are not a few who may do that. I know that in certain places and in certain sections of the community they are to be found, but there has been far too much ill-informed criticism of the dole and the people who come upon the dole, more particularly in the Press. It might be imagined that the life of those who are compelled to live on the so-called "dole" is one replete with comfort, and that it is a desirable state of existence in which to live. It is true that our system of unemployment insurance, with the benefits that it confers, has been a great stand-by in this country.
I was reading the other day a discussion which took place in America, where they are confronted with a problem of unemployment at least comparable with our own, and one could not but be struck with the helpless way in which they were groping after some system of the sort that we have had long established in this country. I could not help but be thankful that in 1908 we had sufficient determination and vision to devise and put upon the Statute Book a system which has been of great value to us in these years of trial and anxiety. Those who are in the higher paid ranks of labour can come upon the dole, as it is wrongly called, for a time without deprivation and with a reasonable degree of comfort, but when you come to the poorer paid sections of labour who have been out of work for a long time and have never had any reserves to fall back upon, and you consider their lot when they have to draw benefit for a long time, you must agree that it is not life at all; it is mere existence. It is an existence which no man or woman of spirit would endure; and that is a safe-guard against any debasement of the character of the Unemployment Insurance Acts. It is not within the power of this or any other Government to propose a scheme which would alter the character of the insured population of this country. I do not wish to pursue that matter but I thought I should say this because I think the exaggerated criticisms of the dole and the Unemployment Insurance Act should be answered.
I listened with great interest and sympathy to the remarks of the right hon. Member for Tamworth (Sir A. Steel-Maitland) on the separation of those on 1684 the transitional period from the Unemployment Insurance Fund. If the criticism means that there have been put upon this Fund a large number of individuals who have exhausted their right to insurance there is great force in it, and as far as I can see the House is agreed that in some way or other they should be separated from the Fund. It was suggested last Friday that they should be put upon what was called a reformed poor law. If by that is meant that a fund should be derived from local rates or local contributions them. I sincerely trust that the Government will not move upon those lines. If there is anything which has emerged during the course of the last few years it is a recognition not only of the injustice but of the economic unsoundness of the policy that different localities, especially in the distressed areas, should carry the burden of their own unemployed.
It is clear that a fund of some sort must be organised. I have always advocated that the burden of unemployment should be a national charge, not only for the reasons I have mentioned, but because when the full burden of this charge is borne by the taxpayers and the electors they would be stimulated to demanding from the Government of the day much greater energy in tackling this problem and in the production of work than has been displayed up to the present time. There must be a fund of some kind, and it must be a national fund. But a fund alone is of no use. It must be related to an extension of the facilities for training among the younger members of the community, and I am glad to know that the Ministry of Labour are extending their work in that direction. It must also be accompanied—I regret to have to use the word in connection with human beings—by a greater preparation for reconditioning those who have been out of work for a long time and even are now incapable of doing hard work, if opportunities were available. It must also be accompanied by a large number of energetic schemes for the provision of work.
The right hon. Member for Tamworth referred to certain projects which were ventilated prior and during the last election by hon. Members on these benches. I wish the Government had taken over those particular schemes. I believe we should have been in a much better position to-day than we are. He was pleased 1685 to suggest that the money involved could not be raised within the ambit of the money market at the present time, but as far as I recollect the largest amount of money involved in those schemes was £200,000,000. The right hon. Gentleman has been consulting the bank balances of London, and he says that it is impossible. I have not had the advantage of examining the bank balances and the available resources of that kind recently, but, speaking from my own knowledge of, I am almost afraid to use the word "City," I can say that such a sum spread over a period of years would be well within the possibilities. There is to be floated a great international loan, the Reparation Loan under the Young Plan, and that is some hundreds of millions of pounds. The first dose to be placed upon the market is about £60,000,000. If this country wished to raise £200,000,000 for the purpose of providing work rather than the payment of doles it would have no difficulty whatsoever in doing so.
I join in the appeal for a close examination of the separation of those who are no longer insurable and who have exhausted their right in order that the pure scheme of insurance may be preserved. That is important. Before I sit down I should like to draw attention to a matter which I think is of some substance and importance, and that is the internal distribution of the burden of the Unemployment Insurance Fund and also the prospective tax upon industry which is represented by this accumulated deficit, which is now £38,000,000, and which in all probability will rise still higher. If one takes the balances of withdrawals and payments into the Fund, taking the average of the years 1924 to 1928, and examines the figures carefully, they will find certain things indicated which give rise to serious reflection in the present state of affairs. For example, the industries engaged in the distribution of food, meat and tobacco have paid into the Fund, on balance, rather over £1,250,000; that the great distributing trades have paid in over those five years £9,620,000; that the bank and commercial industries in their turn have paid in over £2,610,000, and that the local governments and Departments of State have themselves paid in, on balance, £890,000.
When we consider the great producing industries we find a different picture alto- 1686 gether and a state of things which gives rise to serious reflection, and suggesting a careful re-examination of the whole problem, with a view to recasting and re-organising the whole system. The shipbuilding and ship-repairing industry has withdrawn no less than £10,250,000. The coal mining industry has withdrawn from the Fund £8,800,000, and the cotton industry has drawn £3,550,000; and so on throughout the list. It may be argued that that is quite right—that this is insurance and that the strong lives must pay for the others. But my question is, Is this really insurance? We know that there are on the Fund to-day certain people who have exhausted their rights to insurance benefit. I suggest that it is a question whether or not the levy which the workers and the employers in these still prosperous industries are being called upon to pay are not a tax and a subsidy which cannot be justified on the ground of insurance.
A question for inquiry is whether the incidence of this scheme is being borne fairly and in the best economic interests of the nation. I do not know in what direction it may lead. It may lead in the direction advocated by some hon. Gentlemen opposite—the putting of the whole business on the national Exchequer. But I do invite an impartial inquiry. It would be well carried out by the new Economic Council in the first instance. It is very desirable that an inquiry of the kind should be carried out free from any political preoccupation with an open mind, and especially should it be free from the political bias from which we politicians find it so difficult to dissociate ourselves. That body would be pre-eminently suitable for a preliminary inquiry into the whole scheme.
I do not know that Conservatives are really standing on very firm ground when they attempt to criticise or to make suggestions on the matter because this is not a new problem by any means. The problem has been with us for years. It has varied in degree and unfortunately increased in intensity. Members of the Conservative party had a very great advantage in enjoying a favourable condition in which to deal with the matter, because they had a great Parliamentary opportunity based upon a great Parliamentary majority, and not only a great Parliamentary majority but, what is equally important, a great docile 1687 majority. I would say to the Government that if they do conduct an inquiry into the matter the House will await the result of it with very keen interest, and that, if they come forward with a well-ordered scheme—I hesitate to say on the lines that I have ventured to suggest—for the reorganisation of this Fund, coupled with constructive proposals for training such as have been indicated, and the development of national works as a national investment, I am sure that they too will find in this House a stable majority.
§ Mr. EGAN
I would congratulate the hon. Member who has just spoken on having contributed so well-informed a speech to the Debate. The hon. Member for 1amworth (Sir A. Steel-Maitland) rather ingenuously skimmed over the real causes of the problem. He called attention to the necessity for probing into the reasons and causes of unemployment. He made two or three suggestions, notably credit facilities, mobility and rationalisation. I feel sure that the right hon. Gentleman, with his experience, must realise that the causes of the trouble go back much earlier than the last two or three years. In regard to credit facilities I believe that the right hon. Gentleman is making a very important contribution, for I am sure that all Members of the House regret that there was any limitation put on the credit facilities that were in existence in 1924. It would be well if the Government took that question into consideration again, especially having regard to one or two of our staple industries.
Mobility as a possible solution of the problem will hardly bear investigation, inasmuch as it would be difficult to say to what part of the country there is a necessity for carrying unemployed labour. Unfortunately every one of our staple industries is over-manned with labour and unemployment is overflowing in every town. Mobility would hardly contribute any solution. In the matter of rationalisation the right hon. Gentleman did not make a new suggestion. Rationalisation has been going on for years. He rightly said that since the War there have been important steps taken in that direction. I would point out what those steps have meant. Rationalisation that is confined to one side is not going to benefit us unless we are prepared to take 1688 some steps concurrently to regulate rationalisation for the benefit of the unemployed.
§ Sir A. STEEL-MAITLAND
The hon. Member has misunderstood me and so is misrepresenting me a little. I did not advocate rationalisation. I took it for granted and made some suggestions as to how to deal with the consequences.
§ Mr. EGAN
I do not wish at all to misrepresent the hight hon. Member. I took it that he was speaking on the necessity and benefits of rationalisation. My point is that it will not help unless some steps are taken concurrently with it. as an illustration let me state how it is operating in ship-building. Members know that during the War, when the country was in need, carte blanche was given to almost every engineering and ship-building firm in the country. Old machinery was scrapped and more up-to-date machinery put in, because of the need for munitions and war vessels and transport vessels. At the nation's expense all the yards were equipped with the most modern machinery. While the War went on that was all very beneficial, but soon after the War, when we got back to competitive conditions, what happened was that in ship-building and engineering fewer men were required. From that date to the present time there have not been so many men required, and there never will be so many men required for the output that is necessary to meet the world demand.
Let me give as an illustration what happened in one ship-building yard with which I am very well acquainted. I was connected with the firm when there were as many as 12,000 men engaged. The Chairman of the Company, Mr. Hichens, a gentleman who stands very high in industrial matters—1 am referring to Messrs. Cammell Laird—was able last year to report that in the ship-building section the firm had had a greater output of tonnage than had ever been known in the firm's history. I need hardly say that the name of Cammell Laird is a name to conjure with throughout the world. The Chairman as I say, was able to announce that the firm had had a record output, but it had been achieved with a staff of 7,000.
Thus we see that as many as 12,000 men have been engaged in that yard at one 1689 time but as a result of the process of rationalisation, or economising, or whatever name we call it by, 7,000 only are required now to create the greatest output ever known in the history of the firm. The problem which confronts is is where to find employment for the 5,000 men who have been displaced, and for whom there will never again be employment in that yard. The Government will have to find a solution of the problem and hon. and right hon. Gentlemen on all sides of the House will have to help, because this is a situation which is not due to any action of the present Government. Another factor in the situation is that shipowners to-day are finding it cheaper to man their ships with alien seamen, so that our ancient glory of being a maritime race is gradually becoming tarnished, and as a result of this circumstance, and also of the turn-over from coal to oil, hundreds of seamen and firemen are being thrown on the streets. No place can be found for those men in our industry while we continue under the system which is called capitalism.
Only the other day, the Lord Privy Seal had to announce at that Box that the promised building of five new steamers in British shipyards would not be carried out. The right hon. Gentleman had to admit that there is already too much tonnage afloat, and that he could not reasonably ask the people who had promised to build these new ships, for grain carrying and coal carrying between this country and Canada, to fulfil their promise. The shipowners themselves have decided that there is too much tonnage afloat, and that they are not going to build new ships. Never again will the same number of men be wanted in the shipyards. One of our most pressing problems, I submit to the Government and to the House, is that of finding now vocations for the thousands of men who have become displaced owing to what is, I admit, an inevitable change. Rationalisation is inevitable, but along with it there must be some means of finding other vocations for these people. I am not going to labour the question of the coal mining industry to-day, but it is admitted that no fewer than 200,000 or 250,000 miners have been displaced in the last few years, and that there is no hope for these men regaining a place in the industry. All over the country we 1690 hear of districts which are overcrowded with unemployed people, and in each of our staple industries the same operation is taking place. Hon. and right hon. Gents opposite have "boomed" electricity in connection with certain new schemes and in that case also change is, perhaps, inevitable. But what is the result? I had the pleasure recently of inspecting a power station in the Harlech district, where electricity is being manufactured for the whole of North Wales and an area extending as far down as Crewe, a district of 48 miles. Only a dozen men are required to watch the generating and distribution of power at that station.
Again, there is a case in which, by these new methods, we are creating thousands of unemployed men for whom 1 p.m. something must be done, or else, inevitably, the sum which is being asked for to-day must be increased. I hope the House will understand my point as to the inevitableness of the Minister having to come to this House, not only for a sum such as is asked for to-day, but for a much greater sum. In regard to the textile industry which has been under discussion, I would like to call attention to what has to be faced in the cotton trade, and I may be allowed to give some quotations showing the competition against which the cotton trade in this country has to contend. Reference has been made this morning to highly-paid labour in England; but I ask the hon. Members opposite to consider the conditions which are described in the following passage in reference to mills in Bombay:The cotton mills are mainly in Bombay, Sholapur, Ahmedabad, and South India, The conditions in the industry vary from locality to locality, and the worst figures and conditions are reached in some of the towns in the South of the Madras Presidency. The wages are about the best in Bombay and the average for all workpeople in Bombay city is about ls. 6d. to 2s. per day. In Sholapur the average wages would be about a shilling per day, while in the Southern districts of Madras they range from 4d. to 10d. per day for male workers and less for women and children.I am informed also that in the prolonged strikes in 1929 to better those conditions, no less than 130,000,000 people were involved, and the number of working days lost was over 3,000,000. The House may remember that at that period a fillip was given to the cotton trade in England. 1691 That strike in Bombay was unsuccessful, and I think probably it was while that strike, affecting these 130,000,000 people, was in progress, that the fillip came to the industry in this country, and the trade here has gone down again because, the strike being unsuccessful, those people have bad to resume work again on the old conditions.
§ Mr. EGAN
No, but 130,000,000 people were affected. The point I wish to emphasise is that these mills are mainly British owned. The wages paid are miserable, and the conditions of work are horrible. Children have to be brought to the women workers during the meal hour to get nourishment; and one of the things which the workers were asking for in that strike was that a creche should be established where the children could be looked after, while the mothers were working for fourpence a day. I ask the House what is the alternative to getting more work for our textile operators, when we consider the existence of conditions of this kind? Are such conditions to be imposed on them again; and, if not, where are they going to get work? The point is that we must either increase unemployment pay or create new industries.
I wish, however not to confine my speech to criticism. I wish to offer a suggestion to the Minister of Labour and the Lord Privy Seal. I do not think that any Member of the Opposition really blames the present Government for the abnormal situation now existing. The plain matter of fact is this—that we have been inclined to regard science as something which has only one objective. The only thing that we have asked from science is: Will it replace manual labour? If not, we do not want it? We ask: Will it displace human labour? Will it make production cheaper in a particular industry? That is the standard which we have set up, and that is the standard according to which rationalisation is being carried on and brought to perfection to-day. The inevitable result will be that every advancement of science, every new invention, or every improvement in trade and industry, if it is going to be devoted simply and solely to the displacement of 1692 labour, will bring with it this problem that this House will have to face, day in and day out, until some solution is found for it.
There, I want to emphasize the fact that we have mastered the science of production and that we can produce more than we need, so much so that we are limiting output. It was suggested by the right bon. Gentleman opposite that there should be some kind of limitation, and that was why I intervened to ask the right hon. Gentleman what he meant by limiting output. He knows that to-day limitation of output is to be found in almost every trace and industry, naked and unashamed. We have fish being thrown back into the sea, agricultural produce allowed to rot in the ground, warehouses full of boots and shoes and clothes while people are going short of them; and while we have mastered production, what we have to do is to discover the science of distribution. The right hon. Member for Darwen (Sir H. Samuel) said the other day that we were in the middle of the second industrial revolution. I wish he had amplified that statement and said what he really had in mind, but it is true that we are in the middle of the second industrial revolution, and our only hope is that its solution will not be too long delayed.
I suggest that the Government should devote their energies to finding some solution on the other side, in the way of finding something new on which some thousands of men could be employed, and I suggest that one contribution at least would be in the matter of water conservancy. The supply of water is necessary to every one of our staple industries. It can be supplied very cheaply, but the system under which we get our water to-day in the country is one which tends to penalise and tax our industries very heavily Indeed. It is only the great municipalities, which have great resources behind them, that can undertake any scheme for bringing water to their towns, and the country is so largely dependent on export trade that these big cities are to be found in the main on our sea coast borders.
The bringing of water to any town, I submit, means an expenditure of anything from £1,000,000 to £10,000,000 at least. As I travel through the country, I see large areas of land flooded with 1693 water. Twice this year, in travelling through Leicestershire and that neighbourhood, I have seen perfect lakes of water, and yet the House will remember that at the back-end of last summer we were going weeks and weeks without water and that the country was in very grave danger because of it. I would suggest that we are not cutting across any other trade or business in what I am proposing to the House, and the few firms which are engaged in making reservoirs might very well be brought into consultation for advice on this matter. Right from John o'Groats to Land's End we have chains of mountains particularly suitable for the experiment which I want to suggest, and that is that the Government might very well, with their ordnance and survey departments already in existence, consider these mountains and valleys, that are not under cultivation to any great extent, apart from sheep rearing and forestry, and set up there, without intruding upon any other big industry at all, the making of reservoirs, where the waters would be conserved nationally and then distributed to the towns and villages en route.
The housing problem of to-day carries with it this requirement, that almost every house to-day has sanitary conveniences which require a water supply. The towns and villages of the country are crying out for cheap water. It cost my town £1,500,000 to bring water from North Wales, and the result is that we have to put an imposition of 2s. 6d. in the £ on the rateable value for the use of water. I suggest that along those lines the Lord Privy Seal might very well take the matter in hand, not waiting for the municipalities themselves, and mobilise men for these schemes, because there are thousands of men who could be put to that work in a very few weeks. All sorts of things would be required, such as steel rails, wagons, cranes, and so on, which would help to set the steel industry going, and all sorts of men, at present out of work, such as miners, shipbuilders, and men in other trades could easily be put to that sort of work, at very little expense in the way of transport. The sections of the country where these reservoirs would be built are all within 40, 50, or 60 miles of the areas where the most distress prevails, so that the mobility of labour, suggested from the other side, could be utilized in these schemes.
1694 The money that is being paid away now in unemployment insurance will inevitably have to be paid away, if we go on rationalising all our staple industries for a greater output, requiring a fewer number of workers. We must find something new for these men to do, or the Minister must come here again and again, and the sum of money required for insurance purposes will mount up inevitably. I therefore suggest that this matter of water conservancy as a national obligation should be taken in hand immediately. Commissions on the question have sat and reported, and the archives of the House are full of information about it. Work could be taken in hand almost immediately, without burdening the municipalities with any more debt obligations in that direction. I hope there will be no division on the Second Reading of this Bill this afternoon, and that, as a result of the Debate, all parties in the House will agree that rationalisation on the side of output alone is not sufficient, but that along with it some other vocations must be found for the men who will inevitably be displaced.
§ Captain HAROLD BALFOUR
I shall endeavour to keep to the spirit which has been shown by the right hon. Member for Tamworth (Sir A. Steel-Maitland) and the Lord Privy Seal, and to deal with this matter in as non-party a state of mind as possible. The whole Debate has been tempered in that spirit. There have been no political side shafts, except perhaps the shaft of the hon. Member for East Birkenhead (Mr. White) when he talked about docile majorities. I suppose that all Members who are concerned in any way with industry, and who are, as the right hon. Gentleman, the Member for Epping (Mr. Churchill) said the other day, proud to be in trade—as I am—feel much too deeply about the tragedy of unemployment to try and make any sort of party capital when the country is up against a grave crisis. We are going through a process of industrial revolution brought about by rationalisation and other factors. It is well to ánalyse with a view to helping as much as one can, why it is necessary to raise the limit of borrowing for Unemployment Insurance to £50,000,000. We should do it with two points of view in mind, firstly, in order to prevent a repetition, indefinitely in future, of what we are 1695 having to discuss to-day, and, secondly, to see if we cannot avoid such a repetition by putting the Fund on to a solvent basis.
I suggest that there are two courses by which the fund could be put on a solvent basis. One of these, which I do not intend to enter into to-day, is concerned with the question of distinguishing between Poor Law relief and Unemployment Insurance, and the question of putting the Fund on to a solid actuarial basis. The other course, which I propose to go into, is to take what one used to call in the Army "an appreciation of the situation" as regards the industrial state of the country. Soon after I had the honour of coming to this House, I heard the Prime Minister make a speech which impressed me very much in certain directions. He appealed to us to look on this House as a Council of State. If we could regard this House, to-day, and on such occasions in future, as a board of directors of the national workshop, and investigate the state of our workshop in the country, we should probably do a great service to industry. If we could imagine ourselves as a board of directors, the first thing for which we should ask would be a close analysis of the cost of production of the goods which we turn out.
The right hon. Member for Tamworth quoted three causes which he thought were important factors in unemployment—the fall in prices, rationalisation, and the lack of confidence. I would say that these are contributory causes which are of the gravest importance and necessary to consider, but the real deciding bed rock cause which we have to face is competition in our markets at home and overseas, and we have to do what the hon. Gentleman the Member for West Birkenhead (Mr. Egan) said, sell and sell well, or, as he put it, study the science of distribution. We have to look at how we are building up costs. When you are going to take on a job, the first thing you do is to cost it up with regard to material, direct labour, and the on-cost, which is represented in the form of a percentage on direct labour, and to see how the charges on that job will come out. I can assume that in this country 1696 our direct labour charges are efficient. Rationalisation is bringing the most. modern methods for the utilisation of direct labour. Therefore, we have to look at our on-cost charges, which represent managerial charges, rent, rates and—the most important factor—indirect labour charges for the unskilled labour which there is in the factory, the labour charges which you cannot (harp to a particular job, but which are always present. In our national factory, this labour charge is represented very much by indirect unskilled labour in this country.
I consider that one of the gravest, present industrial problems is the ratio of the wages in the unskilled sheltered trades to the wages in the skilled unsheltered trades. With the apprenticeship system dying out, and industrially skilled men, who have served their apprenticeship as boilermakers, riveters and such like great professions—which have built up the country in the past as the leading industrial country of the world—drawing less money per week than the unskilled dustmen collecting the refuse of the town, we have a very difficult question to tackle. Any political party that went forward to-day and advocated any form of reduction of sheltered wages would be committing political suicide; that would be merely an incident, however, compared with the fact that they were advocating a reduction in the standard of life in this country, and no party wishes to advocate that. Therefore, the course of reducing the ratio of skilled wages and unskilled wages is washed out.
We have to look to see where we can reduce our on-cost charges in other ways than by getting a reduction at the expense of the indirect labour which helps to make up that on-cost charge. We have to see if we can increase our through-put in our national factory. If we increase that, we have a greater percentage of direct labour, and our on-cost in relation to indirect labour is decreased as through-put is increased. if we can get that industrial through-put increased, our standard of life for direct labour will be raised, and a ratio to the indirect labour will be established more in accordance with the value of the direct labour. There is only one way of increasing that through-put, and that is 1697 by selling better, wider and more cheaply, and we can only do that by cutting down our on-cost and increasing our through-put.
I feel that we must also guard against one particular danger. We must not increase our costs at the expense of the standard of life, and do not let us raise the on-cost any more. It is bad enough at the present time, and we have to get it down. There is no attraction at the present time for us to increase our through-put in our heavy industries or what I call our basic industries. The markets are not secure because those industries are always striving against competition. The other day a colleague of mine told me that he had laid out £10,000 on new works at his colliery, and that this would provide employment for 80 men for a year. The old age pension, health and unemployment insurance charges for those 80 men would be just £300 for the year. Therefore, on the £10,000 which was laid out, there was a burden of 3 per cent. That £10,000 has to pay 3 per cent. to the State before he could start to think about earning interest on the capital. I do not say whether this is right or wrong, I am not arguing that at the moment; but if I had £10,000—and I beg hon. Members to believe me when I say that I have not—would I put it into a basic industry, and submit to a charge of 3 per cent. for the privilege of doing so when I could invest it in Government War Loan and get 5 per cent.? That is a typical instance of the burden of our present social services upon industry. But it is a burden which we have to maintain, and I do ask hon. Members not to say that I am advocating that it should be washed out. We have to realise that there is that difficulty and tackle it in the only possible way and that is by selling better and by increasing our markets.
I am sorry the Lord Privy Seal did not say that the Government were taking every possible step to increase the markets for our healthy industries. A lot has been said regarding our sick and decaying industries. The whole trend of modern life is changing, old industries are yielding place to new, and it may be that we are applying our energies too closely to holstering up industries which will never flourish again in this country We ought to divert some of our 1698 efforts to making our prosperous industries more prosperous, to helping our healthy industries to expand. When I used to read the Debates in the last Parliament I had the feeling, I remember, that among hon. Members opposite there was a complex which made them feel that a prosperous industry was something to be ashamed of, something to be taxed. We do not want fewer prosperous industries, but more prosperous industries, and if we can make our present thriving industries still more prosperous we may possibly do a greater service than by concentrating money, man-power and the facilities of the State on some of the industries which may never be prosperous again in this country. Finally, I would ask that when the Government reply some measure of hope may be given to the industries which are prosperous that they may get increased help from the Government—I will not say get protection, but some greater reservation of our home markets and our Empire markets. Possibly hon. Members opposite have just as fertile ideas in their own minds, and I am sure that if every hon. Member, on this side or on the benches opposite, makes to the best of his ability some contribution towards the solution of this problem he will have justified his place in this House.
§ Mr. GRAY
We are dealing now with what is, perhaps, the most difficult situation with which the country has been faced. We all recognise that the Minister of Labour has no alternative but to present this Bill to enable the indebtedness of the Unemployment Insurance Fund to be increased by another £10,000,000, but, in following the Debate, one has been conscious that on all sides of the House there is a desire to get to grips with the real problem which has necessitated this increased loan. In fairness to the Government we have to recognise that we are dealing with a problem which has been in existence for eight or nine years. It has varied in intensity, but if we take the position from the year 1926—when there was a great aggravation through the long drawn out coal stoppage—it will be found that within a. year afterwards the figures took an upward tendency, and during the administration of the last Government, taking the figures from February, 1928, to February, 1929, it will be found that month by month, as 1699 compared with the previous year, there was a steady and continuous rise in the number of the unemployed.
We recognise that the result of the Unemployment Insurance Act passed by this House will be an increase in the contributions that have to be met by the Unemployment Insurance Fund. Those of us who supported the administration in introducing that Measure and urged the injustice of the genuinely seeking work provision, have no apologies to offer either to the House or the country for any increase that may have come upon the Fund by virtue of the change that was made. I would remind the House that the change introduced then has not thrown a single additional person out of work. All that it did was to rectify an injustice. It will bring on to the Fund a certain number of unemployed people who were not previously receiving unemployment benefit, and to that extent it may have increased the indebtedness of the Fund, hut unquestionably it has relieved the local authorities of some of their burdens.
In facing the broad situation there are one of two things of which we ought not to lose sight. The rather premature return to the gold standard has definitely placed a very heavy burden upon industry in this country. Large sums of money were lent by, shall we say, patriotic people to the Government when we were engaged in the terrible strife of the years 1914–1918. The quickness with which we deflated has meant taking the value of money as related to commodities, that the money has now to be repaid at probably something like double, at least, the value it possessed when it was lent by the people of this country. Nearly half the taxation levied upon the community and upon industry has to be used to repay the interest on that great burden of debt; and through deflation a much larger proportion of commodities has to be produced for the repayment of that debt and interest.
This burden makes it much more difficult for our industries to export to various countries in the world, and it would make it easier for the competing nations of Europe to send their imports into this country. Nobody suggests that there is a surplus of commodities. Nobody sug- 1700 gests that the standard of life which people ought to have has reached its maximum. When you bring the problem down to its real cause, you find it is not actual over-production so much as under-consumption or unbalanced production. That is to say your industries are badly balanced for the purpose of maintaining the whole of your people in full occupation.
§ Mr. GRAY
I think the hon. Member has just stated a very considerable truth. It is very largely due to the unequal distribution of wealth, but that does not relieve us from the duty of facing the problem as to how to get a more equitable distribution of wealth. That was the problem to which I was proceeding to draw the attention of the House. I suggest that in dealing with unemployment there are two broad lines of approach. In the first place, there is the permanent settlement of the problem by which the unemployed would be absorbed largely by private enterprise in industry until hon. Members opposite have more fully developed their theories of Socialistic enterprise, and have placed those ideals in the form of Bills. Until that has taken place, I am not prepared to give a judgment for or against the benefits which they may produce. Until that day comes, the great bulk of employment has to be dealt with by private enterprise, and you will have to wait for a readjustment of the burdens which rest upon industry before you can find a permanent remedy. Hon. Members opposite will ask how we are going to deal with the rentier class who are receiving dividends on their investments in the public funds of the country? That is a matter for the Chancellor of the Exchequer, and we shall await the next Budget with considerable interest. If the Chancellor of the Exchequer can do something which will definitely relieve the direct burdens which fall upon production, then he will be doing something which will relieve unemployment.
Those who sit on the Opposition benches have a legitimate cause of criticism in regard to this question. I listened with interest to the right hon. Gentleman the Member for Tamworth (Sir A. Steel-Maitland) who said that every pound spent in one direction 1701 seemed somehow to withdraw another pound from some other source of expenditure. If you accept that argument, then you are faced with the proposition that the amount of employment must be fixed. The argument of the right hon. Gentleman is that the moment you spend a pound in one direction you have that much less to spend in another direction. If that is really true it means all you can possibly do will not tend to increase employment at all, but will merely divert it in one direction or the other. The fallacy of that argument is that there is a very considerable fund that is not expended at all. The point which has been advanced as a criticism of expenditure upon public works is that if you expend it upon that object you withdraw it from the funds available for other purposes, and you do less work in that direction. There is no foundation for that argument. There is no trouble in raising capital in this country for any enterprise that can show a reasonable chance of making a profit. I remember that, in a debate which we had in this House upon the incidence of taxation upon industry, reference was made to the fact that capital was going from this country, because it was attracted by more favourable investments abroad, where the investors could get a larger return for their money. Every year a considerable proportion of our capital resources is invested abroad.
I suggest to the Minister of Labour and the Lord Privy Seal that the great criticism we have to urge upon their administration is that they have not handled as boldly as they should have done the temporary measures that are necessary to deal with unemployment, and that there is a very large amount of work necessary and desirable and which from the national point of view would be profitable but which cannot be put into operation by private individuals and must be carried out by public authorities, local or national.
Another criticism we have to make is that almost entirely the Lord Privy Seal has limited himself and the Government to schemes to be carried out by various local authorities. Under the provisions of the various Acts which we have passed in this House we have made very generous contributions towards those schemes, but everyone who is conscious of the position of local authorities knows 1702 that many of them find that, even with the contribution made by the Government towards their schemes, they still have to face a much heavier charge than they are prepared to place upon the local ratepayers. Local authorities are already finding themselves reaching the paint at which they are not prepared to put forward further schemes which would place a burden upon the local rates.
I am sure that the credit of this country is big enough, and strong enough, to carry the whole burden of any amount of money which we desire to carry out any of the great public schemes that are necessary, and I need not elaborate them, those great works of public necessity, of public value, and of public importance with public money. We do not want relief works in the shape of test work, but we want works which would improve the efficiency, the amenities, the life and the health and prosperity of our people as a whole. Those are the lines upon which we on these benches suggest that public expenditure should proceed. The House must recognise that you cannot find employment for people without the expenditure of money, and without some great and strong effort on the part of this country to put an end to the vicious circle in which you have 1,500,000 people living on insurance pay at a standard of life below what is recognised as a reasonable standard. They are making, in consequence, a reduced demand upon the general commodities of this country.
In addition to the development of our export trade, we require a strong national development of the natural resources of our land in order to bring a larger number of men into the areas of cultivation. Right hon. Gentlemen and Members on this side always seem to forget, when they are dealing with their great theory of safeguarding, that there is only one great industry to which that argument can apply and that is the industry of agriculture. Yet they always fail to apply their great theory to the one industry in regard to which there is a great body of imports coming into this country and where there should be a possibility of developing our land resources. I suggest that progress be made along the lines of a readjustment of the financial burdens of this country which are pressing too heavily on income and national enterprise in the development of our national estates instead of seek- 1703 ing for development in the far ends of the world, and of a reorganisation of the whole industry of agriculture so as to enable men to have access to the land. Where you have a peasantry on their own land you do not have unemployment. It was pointed out in this House in a recent Debate that France has practically no unemployment. If people have access to the land and the primary industry of agriculture, then, even though their standard of life may be lowered and they may live under distressing conditions, yet there is one thing they will never lack and that is work, for there is always employment for men who have access to the land. I urge the Ministry to give further consideration to these factors in dealing with this great problem in order that we may, by improving our trade and industry, and developing our resources, and reducing the number of unemployed, make a reduction instead of an increase in the debt on this Fund.
§ Mr. SANDHAM
I would approach this question from a different angle. The points raised in the Debate this morning indicate to me that the analysis of the question of unemployment has not received that attention which the House has a right to expect. It is certainly no new problem. It was in the nineties, I believe, that Mr. Keir Hardie asked the attention of the House in order that the problem might be tackled. He was ridiculed on that occasion, and we have the reflex or the results of that in the Debates taking place to-day in this House. General routine seems to be an attractive feature of this House. It loves routine. This is part of it: finding money to carry on the State, as we understand it, without attempting to analyse exactly where we are going on the journey. There are certain Members who believe that you can cure unemployment in a capitalist state of society. To my mind, it is fantastical to hug an idea of that description. As a matter of fact, unemployment is the inevitable outcome of your system of production. I believe that was shown to the House by the late Foreign Secretary when he indicated that in order to carry on industry you must have a certain reserve of mobile labour.
Members of this House who have been interested in business have come to realise what an asset unemployment is in industry to the industrial magnate. It 1704 is an unpalatable truth, but it has to be faced, because, as a matter of fact, all that one needs to do is to ask anyone who has experience of that immoral business to which I referred, whether they prefer to have three men outside waiting for one job or one man outside waiting for three jobs inside, and the answer, I think, should give all the satisfaction desired on that account. I indicated on a previous occasion that rationalisation inevitably makes a greater number of unemployed people. If we attempt to rationalise industry, and make it more efficient in production, we have to think, in the first place, whether there are markets across the sea available for that production. Other countries are looking for markets across the sea, and, as a consequence, it has to be realised that, if that idea of competing with foreign countries for the markets of the world is carried to its logical conclusion, we are brought face to face with the fact that, in order to compete with cheap labour across the sea, our working people have to get down to the immoral conditions under which those people are living who are competing for the trade of the world. As a consequence, there is no limit in that direction.
I would like to draw the attention of the House to another feature of rationalisation. I want us to consider for a moment, particularly when Bills of this nature are passing through the House, whether we ought to pay a little more attention to the rationalisation of consumption. Members on the opposite side of the House have indicated to us from time to time that there is an over-produstion in this country. We agree, but the only means or method of handling over-production is to increase your consumption. There is no other way unless you attempt in other directions, on sound economic grounds, to take your old people cut of industry and to keep your young people out of it, to shorten the hours of labour, rationalise consumption, and come to realise for the first time in the history of this country that the people shall have a little more of the substance and less of the shadow of distributive justice That is one of the reasons why one is encouraged to remain in a House of Commons of this nature; because I am filled with disquietude at times when I see the results reflected from the mentalities of politically minded people, 1705 when they are thinking in terms of analysing what they consider to be a problem in this country, namely, that of unemployment.
An hon. Member opposite has indicated to us that we have to consider our production costs. I want to start making things in this country because people need them, and not because it returns a profit to industry. Those are wrong lines. We have had those lines for a great number of years, and the result is chaos industry as we have it to-day, and little or no prospect of any particular improvement as a consequence of the development. of that industry. I do not want, hon. Members on this side of the Rouse to be thinking how to run capitalism better than the capitalists. We cannot do it, and it is no discredit to us, understanding that capitalism knows no moral standard, has no ethics, and, as a consequence, is, and must necessarily be, absolutely brutal in its actions and its outlook. I am sometimes reminded that we are entitled to ask ourselves whether there is any ethical standard in this House itself, because, if this House is determined to abolish unemployment, the only thing that one has to concentrate one's mind on is whether the mentality of this House is capable of facing up to that issue. If this House is desirous of abolishing unemployment, and it cannot abolish unemployment, a further repetition of chaos logically follows.
I would have liked to have called the attention of the House to the question of rationalisation of consumption—[Interruption]. No, it is not repetition. To my mind it is necessary to remind the House of what is very frequently thought of here. I am far more concerned about getting into the homes of the people that which they have produced by their own efforts. That is part of my task while I am here; that is what my electors sent me here to carry into effect as far as I possibly can. I am ceasing to concern myself extensively about production in this country, but am concerning myself more particularly with the issue how to get into the homes of the people that which is theirs by right. Working-class people actually suffer as a result of their own labours that inefficiency in their households which is their everyday existence. I am not concerned about the rentier 1706 class, except to abolish them. I am not concerned about the profit-making class, except to abolish them. I am concerned about the producers of wealth in this country, and I think that the attention of this House should be concentrated upon the interests and welfare of the producers of this country, in order that they may have, for the first time in history, that share of the wealth that they produce which will give them that satisfaction of mind which they have a right to demand.
§ 2.0 p.m.
§ Viscount LYMINGTON
May I, as one who is also making a quasi maiden speech congratulate at the outset the hon. Member for Shrewsbury (Mr. Duckworth) on his most excellent maiden speech? I think that the sincerest acknowledgment that I can make of its excellence was that it took so many of the words out of my own mouth. Last week, when the Minister of Labour moved the Financial Resolution and the Chancellor of the Exchequer wound up the Debate, and also to-day, the fact was stressed that there are only tour alternatives in the present Bill. The Chancellor of the Exchequer remarked with some asperity on our silence on these benches as he enumerated those alternatives. I frankly admit, and we all admit, that at present 2.0 p.m. there are only four alternatives, but were there no other alternatives? The right hon. Gentleman the Member for Tamworth (Sir A. Steel-Maitland), and others who have followed him in the Debate, have suggested that there has been, and that there should still be, another alternative, in the form of reorganisation to distinguish between genuine unemployment insurance and what may be called assistance or poor relief. Then there is, after all, a sixth solution, which is not a palliative but a prevention, and hon. Members in all quarters of the House have been trying to do their best to-day to see if they cannot get it adopted.
We had hoped that, however much some of us might have disagreed with the means which hon. Members opposite brought to bear on this task of trying to get the country out of its present position, they would have shown vision, youth and energy. The hon. Member for Leith (Mr. E. Brown) last week twitted the hon. Member for Cirencester (Mr. W. Morrison) on the fact that he did not come from a district where unemploy- 1707 ment was acute. One does not need to come from a district where unemployment is acute to know the desperate problem, the difficulty, and the almost hopelessness that there is in the mind of a man who is out of work and sees no prospect of getting work, and it is quite possible for a Member who has no great unemployment in his own constituency to see the wood without having his vision totally obscured by the trees. One cannot help feeling—and I say this in no party controversial spirit—that this £10,000,000 which the Minister of Labour is asking us to provide for in the future is something in the nature of hush-money for, if I may coin words, the unvision, the unimagination, the dispromise and the almost hopelessness of the situation as it is at the moment.
Is there no alternative in this sixth solution? Is there no means by which we can arrive at the hope that the Minister will not have to come back again to increase further the borrowing powers of the Fund, but will be able to report that it has reached the stage of solvency because there is more work? Let me give some figures which have come into my possession quite lately; I believe that the Lord Privy Seal himself has cognisance of them. To my mind they present an entirely new aspect of this unemployment problem, and one which at least is worth considering and exploring. Last year, one of the great parts of the Empire abroad had reason to offer a tender for locomotives for their railways, to the amount of something like £1,250,000. The lowest tender was that of a German firm, who beat our lowest tender by £179,000. When the figures came to be analysed, the men who were waiting for a job outside the door of the lowest English firm tendering would, instead of receiving unemployment pay, have got over £500,000 in direct wages. But an even more important and more striking side of the question is that the unemployment pay which the Government would have saved on that job was £183,000, or £4,000 more than the difference between the lowest tender in Germany and in this country. Surely there is something worth considering there.
The hon. Member for Shrewsbury has mentioned agriculture. I cannot help 1708 feeling that the whole agricultural question, if it is not a solution of our unemployment problem, is at least a very great ameliorative. When agriculture is spoken of by the townsman, and very often by agriculturists themselves, one gets the idea that wheat is the only thing that matters. Agriculture, like every other great industry, has to meet that awful word "rationalisation." If you rationalise the stock producing side you not only stimulate the growth of cereals but you definitely increase employment in the agricultural industry. No one pretends that by itself agriculture is even going in the next few years to reabsorb the 100,000 who have gone out of it since 1921 but it is a very large, if not almost the largest user of goods made in this country, and a prosperous agriculture can stimulate the manufactures of the country to a very great extent. Not only can they do that, but the distributive trade which serves the small towns and the agricultural districts can be brought back to a state of prosperity and employment.
Let me give an instance of how agriculture can really get at the problem of indirectly employing a great many more people than it is possible to do in its present depressed state. When you produce milk you employ the cake merchants, the mills, and the transport which takes the liquid milk up to London or other big centres every day. When you produce the by-products of milk you immediately set up a factory for the production of butter and cheese, and you stimulate your pig trade and all sorts of indirect labour. The National Council of the pig industry has produced a very illuminating report in the last few months and they said, if we produced all our own pigs in this country, taking a conservative estimate, the extra employment we might expect is 68,000 men in that industry alone—48,000 on the land and 20,000 in the factories. They had another estimate on the side of the milling and meal and nut producing industry of another 10,000. That is by no means an unimportant branch of the agricultural industry. Again there is the question of relief works which was mentioned by the hon. Member for Mid-Bedfordshire (Mr. Gray).
§ Mr. KINGSLEY GRIFFITH
The hon. Member specially said he was not discussing relief works but works of another nature.
§ Lord LYMINGTON
The hon. Member went into a long fiscal controversy, in which I do not propose to follow him, but he quoted the Liberal Yellow Book, that credo of the Liberal party in which all those who have read it must be able to discover a very large measure of pure and simple relief work. The Minister of Agriculture and the Lord Privy Seal might in this case run in double harness. The Lord Privy Seal, who has been largely so far concerned with the resuscitation of industry pure and simple, might withdraw the Minister of Agriculture from his philosophic and contemplative outlook on the position and get him to agree with him on a course, not of relief work but of wealth producing reorganisation in the agricultural industry. On the Lord Privy Seal's side we can hope for the provision of facilities for creameries, abattoirs and even for fencing. To water and drainage schemes he is already turning his hand, for which let us give him credit. The cheap provision of electricity in the country side is of extreme difficulty so long as the actual cost on the small consumption basis in rural districts is charged but, if the price was lowered so as to meet the potential demands, it might be used. If it runs on the lines of least resistance, there will never be any great demand for what would be, and will still be a great blessing in the countryside.
The hon. Member who spoke last brought a certain amount of party feeling into the Debate. But struck a chord in me when he spoke about emphasising the value of our own home markets. May I put him right on a fundamental fact? There is no chance that we can take in each other's washing so long as we have to go entirely outside the country for our imports in the way of foodstuffs and cotton. I have always been a protagonist of high wages, and I have listened often to the arguments of hon. Gentlemen opposite as to how higher unemployment pay and higher wages are going to stimulate production in this country. That would be true if we had all that we wanted within our own ringed fence. They have argued the case of the United States. High wages in the 1710 United States go to buy United States goods and to stimulate United States trade.
At the present moment in this country higher wages take on a very different aspect, because high wages go to buy food brought from abroad, to buy tobacco from abroad, and sometimes to buy foreign barley in our beer. What we want to do is to encourage our own home market and to organise our own agriculture so that it can react to the stimulus of high wages even more than it does now. But surely the best method is to get the Empire, where the standards of life are reasonably high, into one unit, so that we shall be self-supporting within a ringed fence, and so that higher wages may mean something in the end and be something more than of benefit to the recipient; a benefit to the country as a whole. Let us hope that the Minister of Labour will not have to come back to us for further borrowing powers, but will get to work and will so reduce, with the help and co-operation which may lie on this side of the House or on that, the figures of unemployment as to render further borrowing unnecessary, and, instead of as she is at the moment of securing a certain measure of stability in hopelessness, will secure hope for the workless.
§ Mr. LOGAN
I can hardly understand why views of an academic character have been expressed in respect of unemployment problems. I can well understand that hon. Members on the opposite side of the House who may have to go to the dictionary to find out the meaning of the word "poverty" may not understand how there can be any agreement with the Lord Privy Seal in respect of the meaning of the words which have been used in the course of this discussion. I come from a part of the country where we have used our own words as to what poverty means, and where, day after day, we are faced with the actual realities of life, and where the question of academic discussion does not come in. My constituents desire fearlessly to face the issues, and, as a result, I suppose, they thought that if one were to be sent to the House of Commons he might, although perhaps a voice in the wilderness, have some power of expression to give their viewpoint, which is net the academic point of view but a point of view result- 1711 ing from actual experience of life in that part of the country.
§ Notice taken that 40 Members were not present; House counted, and 40 members being present—
§ Mr. LOGAN
I must thank the hon. and gallant Member for Oxford (Capt. Bourne) for the courtesy in drawing attention to the fact that there were not sufficient hon. Members in this House to hear the truth as to the position of unemployment. I have sat silent long enough to be able to weigh up some of the statements which have been made in regard to this problem of unemployment. What do we find? We find a suggestion coming from the right hon. Member who moved the rejection of this Bill that there should be collaboration with the Lord Privy Seal and that we should get our heads together to try by a tri-party arrangement—Liberal, Tory and Labour—to solve the difficulty of unemployment. The much abused word "rationalisation" has been very flippantly used here to-day. I see an hon. Gentleman opposite is smiling. I like smiles, and when I have been a little longer in this House you will get used to me interrupting; I have been silent too long. In my particular area, there are thousands and thousands of unemployed. I want to know whether under the system which is in operation this House, in dealing with unemployment, really thoroughly understands the subject which it is supposed to be handling. I do not want to waste the time of hon. Members in entering upon an academic discussion. I think that on the question of unemployment it is an abuse of the privileges of the House that only some 15 or 20 hon. Members should be sitting here for the whole of the day. When it is suggested that there should be a tri-party arrangement and there are only 20 Members in the House of Commons, do hon. Members think that the public will really believe that the House is anxious about the unemployment problem or about a vote of £10,000,000. The position is absurd. The whole thing is ridiculous.
In my area, we have the Diesel engine which has transplanted the marine firemen. Where are you going to mobilise that great army of unemployed firemen? Where are you going to put them?
1712 Emigration! Is that the solution? Where are you going to mobilise this great army of men who day after day go down to the docks looking for work. Mobilise! I can mobilise 40,000 men in the City of Liverpool in less time than it takes you to get your dinner. They are too mobile. They are on the labour market and are not wanted. You talk about the social services, about regulations, about all your problems, and about rationalisation. All your rationalisation means is the adding of thousands to the starving masses. It means that with your system of profit and loss you are not thinking anything at all of souls. All you are thinking about in your system is the question of percentages. One hon. Gentleman said "I have not £10,000 but if I had £10,000 do you think I would put it into industry when there is a three per cent, charge on the money as a first cost." We have heard of nothing but costing charges.
Suggestions are made by versatile and fertile brains that the best we can do is to divide society—the workers in one class and the unemployed section, who are to have public assistance relief, in the other. Already, we have starving masses of people. What is going to happen when everything is to be rationalised? How much longer are we going to throw thousands and thousands of people on to the scrap heaps, whilst we go on with rationalisation? I cannot see how the Lord Privy Seal can reconcile the existence of scrap heaps of workmen with the development of rationalisation, unless the machinery is to be used for the reduction of the hours of labour and the absorbing of more unemployed into employment.
When we attempt to face up to the situation of the unemployed, we get pious expressions and pious resolutions. I have sat for 10 years on a board of guardians dealing with the unemployed and with relief. Do hon. Members think that by pious exclamations here they can reach agreement and solve the problems of a system which is all wrong? Is it not patent to every Member of this House that we have to face the changed conditions which have been brought about by the War, and the fact that £350,000,000 of interest must be paid annually? Surely, an incubus like that has something to do with the problem of the labour 1713 market. Hon. Members talk so much about the value of money. The thing that should count is the welfare of human souls, but that, unfortunately, is not considered as it ought to be when we discuss this question. No nation can be a happy nation that has not a contented people, and no nation can be safe or secure, with all its capital, unless there is a feeling of security among its people. I tell hon. Members that they are going on wrong lines and I would suggest to them and the Lord Privy Seal that we might have a common understanding for the lessening of the hours of labour and not for the rationalisation of machinery, to put men out of employment. A fortnight ago, I visited a workshop where rationalisation is about to be brought into play, and where 70 machines were to be attended by one person. Where are the Lancashire cotton operatives going to come in?
We shall have institutional life all over the nation unless there comes about a change of tone and spirit in the government of this country. We are told to be calm, and not to say anything that is out of place. I burn with indignation when I consider the slums from whence I come, and when I realise the want of knowledge that seems to be shown by hon. Members when discussing this subject. I find men of great erudition in this House, classical scholars, who can quote classical phrases when it is a question of paying eulogy to the dead, but I want eulogy to be paid to the living. I want this House to realise that, in the hour of need, when they called upon the men of this country for help, they responded splendidly. It is our duty to come to their assistance in their hour of need, and to adjust the conditions of society more to the conditions of an economic age. I hope that the Minister of Labour will get the £10,000,000 which she requires, and that hon. Members will realise that men and women throughout the country are looking to this Parliament to do justice to them and to bring about changed conditions of life for them.
§ Earl CASTLE STEWART
One of the most striking things in this House is the contact that one makes from time to time with the ideas of people who sit in other parts of the House. I find myself in considerable agreement with a remark that 1714 was made by the hon. Member for Kirk-dale (Mr. Sandham), who made the point that it is possible to lay too much stress upon the value of our export trade as compared with the possibilities of the development of trade within this country. The hon. Member for Bedford raised the question of the gold standard and the influence that that has had upon trade conditions in this country, and I found myself in some agreement with what he said. In that connection, the Minister of Labour stated that the recent increase in unemployment had been partly due to, or coincided with, some fall in wholesale prices—I think last November—and that that fall could not be foreseen. Surely she is aware that her own Chancellor of the Exchequer, last Autumn, appointed a Credit and Currency Committee to inquire into the question of banking, credit and currency, and, presumably, their effect upon prices. We all know that prices are dependent upon these questions of banking, currency and so on.
There can be no doubt that one of the difficulties in regard to the unemployment situation to-day is that it has been so prolonged, more prolonged probably than at any other time in our history. I would suggest that a particular reason for that is the very definite shortage of gold that we have suffered from since the War. Before the War it was reckoned that we needed £120,000,000 of new gold a year, but since the War we have been getting only £80,000,000, which is a short fall of £40,000,000 a year. If we look forward 50 years, with a short fall of £40,000,000 a year, it means that we shall be short of £4,000,000,000. Of necessity, a situation of that kind must affect prices, and they must decline so long as there is this shortage of gold. Therefore, we are faced with the position that either wages must decline—no one wants that—or we must deal with the gold position. Undoubtedly, the proper way is to settle the gold position, if possible.
I know that the Government have appointed a committee to inquire into banking and currency, but I would suggest that it seems unlikely, with America attaching £600,000,000 of gold and France another £300,000,000, that we shall be able to come to a world arrangement in the near future. This matter was discussed at the Imperial Conference in 1923, and I would suggest that it might be taken 1715 up again at the Imperial Conference this year. I think the proposal was made by Mr. Darling, but the Treasury put a few bombshells into it. It is a matter of very vital importance.
Confidence is no doubt very important. I put it second to gold and tariffs. It is rather difficult, however, to maintain the confidence of foreign countries when we dispatch to Geneva the President of the Board of Trade armed in his left hand with the trumpets of Joshua for blowing down the tariff walls on the Continent of Europe, and armed in his right hand with the sword of the coal subsidy. It must be difficult to make foreign nations believe that we are pursuing a consistent trade policy. We cannot go to Geneva and ask them to take down their tariff walls and at the same time take a coal subsidy in our pockets. The Government should be more consistent in their dealings with foreign nations, it would certainly bring about a degree of confidence in those who are anxious to do trade with us.
I put a question to the Chancellor of the Exchequer asking him if any records were kept showing the amount of Income Tax paid by limited companies as differentiated from that paid by private individuals. No figures, apparently, are kept, but the Committee on National Debt and Taxation had a return furnished to them from which it is quite clear that from the undistributed profits of industry £50,000,000 is drawn on an Income Tax basis. That must have an effect not only on existing industries but on all those who are desirous of starting new industries in this country, whether they are foreigners who want to bring their factories here or people already here who want to launch out in extensions of their existing works. In substance, the problem of unemployment resolves itself into this. It is a question of redistributing as far as possible the population of this country, first, into agriculture and, secondly, into new industries. If you look at the League of Nations figures for a recent month you will find that out of 43 countries this is the only country where under 10 per cent. of the population is engaged in agriculture. In France and Germany it is between 30 and 40 per cent. and in the United States over 30 per cent. There must be a mal-distribution of the workers 1716 of this country if we are the only country out of 43 others with less than 10 per cent. of our people engaged in agriculture.
It is quite clear that we have passed the stage when we can expect our iron and steel industry to continue to export masses of steel rails to undeveloped countries. Roads are coming more into existence through the development of the motor-car, which has made the development of steel rails much less necessary than in former days. It is in new industries like the motor-car and tyre industries that we have to look for the absorption of those people who cannot find roam in our old established staple industries like cotton, iron and steel, and shipbuilding. It is that connection that an unprejudiced review of the tariff question is vitally important. We have brought to this country 40 or 50 factories by the new Safeguarding Duties which are in existence to-day, and the example of the tyre industry is one that ought not to be lost upon the Government. I feel certain that if the problem of providing labour for agriculture and new industries, could be faced, it would not be necessary for the Minister of Labour and the Chancellor of the Exchequer to have to come from time to time to this House demanding urgent supplies of money.
Everybody sympathises with the Chancellor of the Exchequer. He has to stand in his room with a hose-pipe in his hand, the suction end being deep in the taxable capacity of this country. He has to turn on the tap and fill four empty buckets. He has to fill the bucket of the Minister of Labour and her insurance fund, and the right hon. Lady knows perfectly well that there is a big hole in that bucket. All the money she gets is not producing more employment; it is helping to maintain the people. Then there is the Lord Privy Seal, the Chancellor of the Duchy and the First Commissioner of Works. They come with their buckets, and he has to fill them. They will agree that a large part of what goes into their buckets is not really the creation of the kind of employment we want to create, that is permanent employment and not producing debt.
That is our difficulty, and that was the difficulty of the proposals of the Liberal party, as far as I could understand them. They might have got 400,000 1717 people into work. There was no unemployment during the war, but all the time we were piling up millions of debt. That is the difficulty with the Liberal proposals, and that is why the buckets of these three Ministers have holes in them. What the Chancellor of the Exchequer pours in at one end pours out at the other. It is quite obvious that the Minister of Labour must have this money, but we should be glad if the Government would review the difficult question of the world distribution of gold, modify the attitude which they have inherited from the Liberal Party upon tariffs and bring forward a non-prejudiced programme for the restoration of agriculture and the development of new industries in this country.
§ Mr. CHURCHILL
I did not expect to take part again so soon in a Debate on unemployment, but, in view of the fact that practically no attempt has been made by His Majesty's Government and their representatives to answer any of the objections which were propounded by myself and other speakers, I feel it my duty not to allow the Second Reading of this Bill to pass without making another attempt to elicit some further and better justification of their actions and if possible to spur them into extra and increased mental energy. I cannot, I fear, respond to the request of the Lord Privy Seal that we should treat this matter in an entirely detached spirit; that we should treat it as a non-political, or certainly a non-party, question; that we should throw our minds into the common stock and endeavour to make as smooth as possible the path of those who are now responsible for dealing with the problem. It is a very natural appeal for the Lord Privy Seal to make, but we should be either more or less than human if we were unreservedly to assent to it. Our position is that we have been grievously injured, maligned, misjudged, misrepresented, maltreated, driven from the control of events, deprived of the confidence of the Crown, and forced to dwell in the cold shades of Opposition, and that all this has arisen because of the almost unprecedented—even for electioneering times—outbursts and outpourings of misrepresentation and vilification by which the party opposite deluded the electors and attained, not indeed a majority, but a sufficient representation 1718 to enable them to assume the reins of office. How can we forget what they said? The Prime Minister spoke of this question of unemployment as being the acid test by which the Labour party would be judged. In the celebrated Labour appeal to the nation we read:The Labour party gives an unqualified pledge to deal immediately and practically with this question. Our schemes have been before the country for years.After 10 months of office, 1,630,000 are out of employment. The Prime Minister, at Middlesbrough, said:Nobody will reduce unemployment to the normal quicker than the Labour party.So far the progress of "reducing it to the normal" has been to increase it by 500,000 over and above what it was at the time when the Government so easily and hungrily assumed the reins of office. The Chancellor of the Exchequer in the "Daily Herald" said:In our first Session we shall deal with unemployment, and we shall bring relief and hope to the workers of the land. We shall not disappoint those who have shown a belief in us.The Foreign Secretary said:Labour's carefully considered plans of social reconstruction and industrial reorganisation and development have undoubtedly caught the imagination of the people.They may have caught their imagination, which they were well fitted to do, since they existed only in the imagination of their authors. Then there was the First Commissioner of Works who said:These poor people, who pin their faith to our leaders, our programme and our party, will expect us to deal immediately with unemployment.The moment the right hon. Gentleman gets into office, he becomes merely one of the ordinary suave occupants of the Front Bench, throws aside all his high social and philanthropic enthusiasms, and subsides into the position of a staid, and I would almost say a dignified, official. The Lord Privy Seal said:The Conservative Government has no remedy for unemployment except safeguarding and de-rating. Labour, however, is going to solve it. by spending money.Incidentally, I do not know whether that quotation might not be of some use to the First Commissioner of Works and the Chancellor of the Duchy. I make them a present of it. If it is of any use they are welcome to it. It might offer the 1719 First Commissioner an opportunity of doing something to carry out the pledges and declarations which he has so freely made. I have given these quotations only to show the expectations which were raised, the promises which were made and the undertakings which were given by the Labour party at the time when they were seeking the votes of the electors. I say that they have been the profiteers of unfairness. But there is a nemesis awaiting them. [Interruption.] We have all heard of Time's revenges. I have rarely seen one so swift or so cruel as that which has fallen upon the electioneers who sit opposite, when after 10 months, during which they have had every facility, during which they have been denied no single proposal which they have made, the state of unemployment is worse than ever before. I can only recapitulate the attacks which we have made from these benches, the justified censures which we apply to the Government as a whole and in particular to the Minister specially charged with dealing with this matter. We say that they have failed completely with all remedial or constructive schemes. They have produced no remedial or constructive scheme which they did not find in the pigeon-holes of the late Government or of the Coalition Government of seven years ago.
§ Mr. CHURCHILL
On the contrary, the Government have only applied again schemes which had already been used by their predecessors, and used to the point where they had ceased to have any further efficacy. They have aggravated the distress, much of which was inevitable, I admit, owing to the world war, and the depression in trade; they have aggravated it by undermining the confidence of business and industry and by the state of uncertainty in which they have left important branches of industry. We say that they have swollen needlessly and wantonly the totals of unemployment by a general relaxation of the conditions enabling persons to obtain benefits, which relaxation they have made openly and patently against their better judgment and in deference to pressure from their back benchers.
§ Mr. CHURCHILL
We are not talking about conscientious objectors now. I have waited to hear an answer to some of these statements. I gather that they are objectionable to the party opposite. Why then have we to sit through two whole days' Debate and never receive any marshalling of facts or of arguments in answer to these charges? Why is it necessary that the charges should be repeated on a second occasion? Why, Sir, the Minister of Labour in her speech this morning did not even refer to what the Chancellor of the Exchequer stigmatised as my "disgraceful attack" on the officials of the Employment Exchanges? When I was speaking a week ago, she jumped up and said that she did not agree with what I said, and I have been waiting to receive, not a flat contradiction, but a statement, of arguments and facts, and I certainly expected to hear this morning a very full and ample statement showing that there had been no relaxation of the conditions under which persons are allowed to receive benefit.
In any case, I pay little attention to charges of making attacks upon officials when those charges are preferred by the party opposite who, on this very subject, never hesitated to attack the officials of the Employment Exchanges and to charge those officials with the meanest forms of persecution. I heard the Home Secretary himself using that word, and, in so far as what I said constituted the slightest criticism of the officials, it has not been to suggest that they have been guilty of persecution; it is to suggest that under the pressure of the new Administration, and of the currents of Socialist opinion, they have lost heart in discharging the extremely painful task of, in many cases, disallowing benefit. They have, as I said, thrown up the sponge, but to say that, is not an attack upon the officials; it is an attack upon the Government whom it is the duty of the officials to serve, and whom, I think, they do serve most loyally. But when they know that there is a Government in power which has got into office by making all sorts of promises to the unemployed, and which is endeavouring to pay its way in office, by gradually increasing the funds available for the unemployed; when they know that there is a Government in office which takes as 1721 the cardinal maxim of its policy, "The greatest doles for the greatest number"; when they are given a practically impossible task to discharge such as that of finding all these jobs and notifying them to the individuals; when in the case of the individual who has not followed their directions the onus of proof is cast upon them, and when, in addition to all that, this unwholesome and vehement atmosphere of spending money has been created—can one wonder in these circumstances that they have, as I said last week and as I repeat, lost heart and thrown up the sponge in many cases? Can one wonder that there is a general relaxation of those regulations and that administration whose strict enforcement is of vital interest not only to the general taxpayers, but also to the contributors to the Unemployment Insurance Fund who, in the main, are weekly Wage earners?
I say that we must request the Government to address themselves fully to the allegations which it is our duty to make against them and against their treatment of this problem, but I wish for a few moments—and I do not intend to stand very long between the House and the Minister—to leave what is necessarily and rightly a controversial atmosphere, and to look at some of the really grave aspects of the present unemployment situation. I have some experience of this subject because nearly 20 years ago it was my duty to unfold to the House of Commons the first scheme of compulsory unemployment insurance which had ever been proposed in any country in the world and at the same time it was my duty to outline and subsequently to bring into existence the whole network of Employment Exchanges which are now an inseparable part of the social organisation of the masses of the people.
Very different were the character and the uses of those systems of insurance and of employment exchanges, in those days, from what they have now become. Insurance was based upon a strictly actuarial foundation; benefits were related to contributions, and the trades selected for special treatment were those which were specially subject to seasonal or cyclical fluctuations. Ample provision was made for the accumulation of large reserves. Each trade was to a certain extent studied separately and none was allowed to make an unlimited draft upon 1722 the others, while, as for the employment exchanges themselves, they were intended to give to labour, to the working men or women who have nothing to sell but their labour—and that is the condition of the vast majority of the human race—a market for their labour which should be as wide as the nation and as punctual and as accurate as the London Stock Exchange.
It seems an extraordinary thing that whereas there is a market price varying to the extent of one-eighth or one-sixteenth, or one-thirty-second in all other commodities, labour, the only commodity which the vast mass of the human race have to sell, should always be subject to the accidents of local markets, and should not have a great central organisation of exchange. But we have strayed very far from that consideration. The employment exchanges were primarily designed to find employment, but they have been so overlain with other business, that that part of their work has fallen, I will not say into increasing desuetude, but has increasingly fallen into the background. All Governments since the war have been responsible for these changes and for the degeneration which has introduced itself into the unemployment insurance system and into the working of the employment exchanges, and certainly I, who have been in so many of these Governments, cannot detach myself from that responsibility. The storms that have blown—the greatest that have ever been—have driven us and our pre-War social schemes very far from the courses which we originally planned, but it has been reserved for a Labour Government, which, as I said before, has at its disposal not only the experience but the good will of the powerful trade union world, to strike a heavier blow at unemployment insurance than has ever been struck under the difficult pressures of the past by any of the preceding administrations.
Let me touch upon some of the evil reactions which are to be noted in the workings of the unemployment insurance scheme. First of all, there is the injustice to the permanently or generally prosperous trades—the usually prosperous trades. An extraordinary disparity between contributions and benefit has grown up, and is increasing every day and with every step that the Government take or ask us to take. I will just read to the House a few sentences written upon this 1723 subject by Sir William Beveridge, whose authority is almost unquestioned, and who was associated with me 20 years ago in the framing of the original scheme. He says:—Some industries have ten times as great a risk of unemployment as others; some are now paying in three or four times as much as they draw out, while others are drawing out three or four times as much as they pay in; dock and wharf service for every £11 it contributes towards the cost of its unemployment gets £31 from the direct contributions of other industries, besides £17 from the taxpayer; eight other industries with eight times as many insured persons as docks and wharfs, and paying ten times the contributions are drawing in benefit only the same total.Are those figures not very impressive? Do they not show the strain which is being placed upon the entire cohesion of this Fund and upon the foundations of this system? Of course, I admit that a certain amount of give-and-take between the different industries was contemplated. The whole idea was that there should be a joining of hands, a linking up together, and within limits you can tolerate these anomalies, but when you reach a certain point, when you aggravate them to the point where these figures begin to emerge, I say that you begin to shake the entire structure upon which unemployment insurance is founded; and if the facts and figures were realised more clearly in these trades, you might very easily be confronted with the strongest possible complaints against a system which is very little better in some cases than the steady transference of money from the pockets of one set of employers and workpeople to another.
Then let us look at the injustice to the regular workmen under this system of insurance, half of whom have actually paid for every penny they receive—at least, that was the case a short time ago—but who are no better treated than those who have paid virtually nothing to it. [An HON. MEMBER: "Why should they be?"] That is the question that I am raising. Take another case. It does seem to me that men who have been insured for eight or nine years in this Fund, and who have never been thrown upon it at all, never come once upon it, have a right to ask whether this is in fact the best system of raising the money to provide for all the other persons who are unemployed; and it seems 1724 to me a very wrong thing that a man who has paid for every penny, who for years and years has had a large balance owing to him individually, if he is thrown out of work temporarily, after a very long period of steady employment should be placed in the same category as persons who have shown themselves utterly incapable of finding the means of earning a livelihood. [An HON. MEMBER: "Would the right hon. Gentleman argue then that he should die to get his insurance money?") That has nothing to do with the question.
I am pointing out that whereas these anomalies necessarily exist in a system of insurance, they have now become most serious and grave in our present system of insurance, and I am arguing that they have been made far more grave and brought forward in a much more wounding and direct manner by the changes which have been made during the present Parliament on the authority of Ministers opposite. Take the effect of unemployment insurance at the present time upon casual labour. When these schemes were originally introduced they were only a part of the treatment of the unemployment problem which was then proposed. One of the essential features following on the recommendations of the Royal Commission of 20 years ago was to enforce through the agency of these schemes a rigorous decasualisation of certain trades. A particular trade keeping large waiting lists of persons habitually under-employed was one of the most unpleasant features of those days, and every effort should have been made to purge it, to remove it.
There, again, I am not making this charge against the party opposite at all. I say that the Unemployment Insurance Scheme, in the condition into which it has now got, partly through our Administration, but in the final stage through the contribution of the present Government to the problem, not only does nothing to clear away this casualisation of labour, but is actually fostering it and maintaining it on a very large scale. Whether it be at the docks or in the textile trades, an immense amount of casual labour is being developed and supported by a use of the Insurance Scheme, which was not only never intended for it, but was intended to be an absolute antidote against it. Lastly, Employment Exchanges have been almost completely diverted from 1725 their prime task of finding jobs, and have been burdened and oppressed with the immense labour of administering and distributing Unemployment Insurance benefits. I am going to quote once more from what Sir William Beveridge said about this subject:The insurance scheme of 1911, giving in exchange for contributions a strictly limited allowance to tide men over passing depression under a contract which, though compulsory, was to be something like a fair bargain for each man and each industry, has been replaced by a general system of outdoor relief to the able-bodied, administered by labour exchanges and financed mainly by a tax on employment.That is a very searching phrase—"a tax on employment." I admit to the Minister of Labour and to the Government that this aspect of the problem is mitigated in proportion as further moneys from the Exchequer are placed at the disposal of the Fund. I admit that, but the fact remains that this phrase, "a tax on employment," is well founded, and it seems to me that now that matters have been pushed to the point that they have, and the evils have been aggravated to their present level, we cannot let the matter rest. It might well be that an increase of indirect taxation borne by the whole of the consumers would be preferable to raising the millions for the maintenance of the Insurance Fund directly by a tax upon the regularly employed workmen in the prosperous industries.
§ Mr. THOMAS
Does the right hon. Gentleman make that as a suggestion? It is a very important point. In substance, he says, "let the State take the responsibility for these people outside insurance." Does the right hon. Gentleman make that as a definite suggestion?
§ Mr. CHURCHILL
I say that now that you have so strained and shaken the foundations of the whole system of unemployment insurance, and quartered so many persons upon it who are not actuarial contributors, the question of how the burden should be borne must be one of the matters which should be reviewed. Let me also examine—and here I dare say I shall be more in agreement 1726 with the Lord Privy Seal than on many other points—the injury which is done to the reputation and the prestige of our country abroad through the manner in which the unduly swollen totals of unemployment are presented to the public. Into those weekly totals go all the millions who have paid for every penny of what they receive, and never ought to be mixed up in what is regarded, to all intents and purposes, as a budget of distress. Into them go over a quarter of a million women who, for the greater Fart, are living in man-supported homes, and who are a special problem. Into them go hundreds of thousands of persons, as I believe, by the system, in collusion with the employers, of working short time to qualify for benefit, thus really obtaining a subvention in aid of wages. Into them go all the flood of new claims which, it is admitted by the Government, have been added by their recent legislation. Into them go all those who, as the Lord Privy Seal has told us only to-day, happen to be out of work at 9 o'clock on Monday morning but find work during that same day, it may be an hour or two afterwards. Into them go a certain proportion of persons who take advantage of this scheme, who have carefully managed to get themselves qualified; persons who are not in distress, persons who have other means of livelihood, or whose homes have other means of support, but who have found, nevertheless, that under present circumstances they can obtain a qualification. Lastly there go into the totals that remainder of real distress due to cruel misfortune, or due, in some cases, to incapacity or weakness.
All this is rolled together, jumbled together in one confused total, and then used to bellow "Stinking Fish" round the world, to our detriment week after week. I listened to what the Lord Privy Seal said on the subject, and as to the change in the publication of these figures. In view of the base use which was made of the unemployment figures in the last election, it would be impossible for us to deprive ourselves, or the country, of a comparable basis for judging as between the present administration and the last; but the Government have the remedy in their own hands, and I strongly advise them to take it. Let them publish the 1727 true figures—the comparable figures may be published as long as they are required, and in political controversy they will be available, but they will fade out as time passes. Let the Minister and the Lord Privy Seal use their experts to draw up figures which represent the actual amount of uninsured distress per week, the true amount, and let them publish those figures, and that will show the extent of the evil from which we are suffering.
God knows it is heavy enough without being exaggerated and swollen by the addition of a lot of altogether irrelevant matters. What are these figures designed to show? I offer this suggestion. They should show the numbers of heads of families or home-breadwinners of either sex who have not been provided for by self-supporting insurance, and who require public assistance. That would be a return which could be made for the appropriate periods and would undoubtedly give a true index of what is happening. You can leave the working of the normal insurance system to other agencies.
I have not attempted to deal with any of the remedies which have been touched upon in the very able speech made by the hon. Member for Shrewsbury (Mr. Duckworth), and others who have spoken. There are tendencies which you can encourage that are beneficial and there are tendencies which you must discourage because they are disastrous. But our difficulty is that we do not know, and we have not found, the underlying principles which would enable us to group together all these tendencies and pursue them in a co-ordinated way. Sometimes, we find that we are pursuing at the same time tendencies which we think will be beneficial, some of which are beneficial, while others are actually harmful. We have not found the underlying explanation, and the world is still at a loss to know how to bridge the mysterious gap between the producing and consuming power. It is a grave question upon which experiment has to be made, and it is one on which the finest intellect of the human race could well be concentrated.
It is strange indeed that production, which involves so much effort and skill, should virtually be unlimited, and consumption, which rests upon the boundless 1728 desires and appetites of human beings, should lag behind it. Many experiments have been made, and many of them have proved disastrous. All the latest experiments have resulted in disaster. I do not attempt to solve the riddle, but I am bound to say that I do not believe that the key to increasing the consuming power will ever be found apart from a proportionate increase in the economic earning powers of the individual. Certainly, I give full credit to the Lord Privy Seal, under all the pressure to which he has been subjected, with all the harassing troubles through which he has passed, with all the criticism which may be justly levelled against him, and I give him full credit for the way in which he has fearlessly held to the principle that the increase in the earning capacity, and the productivity of labour through rationalisation, must be the life-line of which this country should never let go.
I do not intend to discuss these larger matters, because what we have to discuss this afternoon is quite enough to occupy us. It is a large subject, but it is far more limited. We have the problem of unemployment insurance, and the working of that system before us, and here there is a host of grim and urgent questions which are not insoluble, not unmanageable, but which are crying out for new and lucid treatment, and it is to these problems that this Bill, this costly and woolly palliative, fails to make even the feeblest contribution.
§ Miss BONDFIELD
I think we must all realise that the Debate to-day has been well worth while, except perhaps for that interlude in which the last speaker allowed himself to indulge. His little displays of invective, however, must not blind us to the interesting side of his speech. The Debate has raised two or three very important points, one of the most important being the question of the degree of claim on the fund which was raised by the right hon. Member for Tam-worth (Sir A. Steel-Maitland), the question of the degree to which the various trades are taking an unfair advantage, as it is sometimes put, in regard to the contributions they pay. I would remind those who have followed the subject from the beginning, as I have done, that every Minister of Labour, in turn, irrespective of party, has had to face the question of 1729 insurance by industry, and every investigation of the question in the practical realm has caused them to abandon the idea completely. It is quite obvious that it is not on those lines that we can hope to open up further investigation.
I was intensely interested in the suggestion made by the right hon. Gentleman, and I thought he was going to express his belief in a non-contributory system. I am not quite sure whether further investigation in the light of the experiences which we are securing may not lead us to recognise that line as being perhaps the simplest and most just way of any system that could be adopted. I do not think we have yet got to the point of common agreement, but as far as I can do so I will gladly go into any alternative means of financing the Fund that will lead to stabilisation in the sense of doing away with the deficiency period. Regarding decasualisation, I would remind the House that the Maclean Committee which was set up and was working at the time of the Blanesburgh Committee was allowed to go into abeyance, and as soon as I assumed office I took steps to resuscitate it, and asked it to get on with the work. That committee is now actively at work again exploring the problem of casual labour which has baffled us all up to now. I am hoping that they will find a better solution for it.
With regard to the question which was raised by the right hon. Gentleman of any improper use of the Fund, I wish again to protest with the greatest earnestness against the suggestion which he has made, and which is not justified by the facts of the case. It is sometimes entirely overlooked that the adjudicating machinery under the last Act is composed of representatives of the payees to the Fund; the tripartite contributors to the Fund are represented on every court of referees in the country—the employers, the workers and an independent chairman. There is, in addition to that, the statutory resort to the Umpire. I have strengthened that machinery; I have brought the contributors to the Fund into more direct contact with the case work than they were when so much of the case work was sent to Kew; and to that extent we have assured what may be described as a more objective treatment of case work apart from the 1730 Ministry than was possible under the old machinery.
With regard to the effect upon the officials, again I desire in the strongest possible way to resent the imputation that there are any officials in the Ministry throwing up the sponge, or taking any such attitude towards their work. I deplore dragging the Civil Service into the discussion of this question. It is not fair to them. I want to pay tribute, not merely on behalf of my own staff, about whom I can speak with the utmost confidence, but to the Civil Service generally. They are not in the habit of throwing up the sponge. In my own case I have nothing but praise for the manner in which the whole Department has tackled a new job, and successfully transferred the adjudicating machinery from the one system to the other with tremendously satisfactory results.
I would now like to give the House some figures. One of the reasons why I desired to speak later in the Debate was that there had not been time this morning to get the figures sufficiently analysed. I gave to the late Minister of Labour an approximate estimate of the figures for this week, but I have now the complete analysis, and I propose to give the figures to the House in order that they may be placed in the OFFICIAL REPORT for the benefit of Members. The House will realise that I do not want to go into the manner in which they are compiled from the two months file, the dead file, and the Kew books. I gave the total up to the 17th March last week, of the new claims from these three sources, as 45,000, and I am now able to give the analysis for the following week, up to the 24th March. From the two months file the total, including last week's figures, is 17,000. From the dead file books the figure is 20,000, and from the Kew books, 23,000. That makes a total of 60,000. I said this morning that the rough estimate was 67,000, but the analysis shows the actual total for the week to be 60,000.
I will give another group of figures, for the interest of hon. Members, in regard to those claims which are now involved by the new legislation, or the new conditions of benefit. They do not represent an increase, but merely a transfer from one side to the other—from the non-benefit-paying side to the benefit-paying side. The total additional claims on the 1731 register up to the 24th March, owing to the operation of the new Act, amount to 156,000, including the 60,000 from the files to which I have just referred. The number transferred from one side of the register to the other amounts to 96,000—
§ Sir A. STEEL-MAITLAND
The 60,000 from the two months file, the dead file, and from Kew, do not necessarily get benefits?
§ Sir A. STEEL-MAITLAND
They register, but do not necessarily get benefit. Then I understand that there are also 96,000 who are transferred from one part of the register to another. The 96,000 are transferred from the non-benefit-receiving side to the claims side, and in addition the figure of 60,000 represents the figure given by the Minister as coming from the two months file, the dead file and Kew?
§ Miss BONDFIELD
I think that that is so. The claimants are transferred from one side to the other. I have not attempted to give to-day the figures showing the actual persons who are in receipt of benefit, but am only dealing with the transfer of names that help to make up the register. As the right hon. Gentleman knows, the financial lag is very much later; there is about a month's difference between. I can give the figures on the live register, but not a firm figure as to what has actually been paid. That will come a month later.
I should like to touch upon one or two other points that have arisen. There is the question of the degree of work finding that has been increased by the operation of the Exchanges. I am glad to be able to tell the House that, in spite of this great depression of trade, that side of the Exchange activities is being steadily pressed forward, and that we are able to report an increasing success. For example, in the September quarter, vacancies filled by the Exchanges amounted to 368,000. That figure had risen by the end of the December quarter to 376,000, and we hope to be able to show an increase in relation to the work finding branches of the Exchanges which I am developing which will help us to a very large extent to overcome some of 1732 the real difficulties with regard to this problem of the mobility of labour.
The problem of how you are going to render labour mobile enough is one which has such a strong human side that I need not stress it. It is no light thing to ask people who have spent, their lives in an industry to go to a training centre at the age of 35 or 40, as in the case of the Liverpool firemen whose job has been lost because oil has taken the place of coal, to face a complete change of occupation, and not merely a change of occupation in their own home town, but, in all probability, to give them any chance at all they have to be advised to move away from their own town, and at that age such transference is a very bitter thing indeed. It is, therefore, obvious that such transference must take place chiefly amongst the young single people where there are large surpluses of labour which are recognised both by the workers and the employers as being incapable of absorption in their own trade. It is surely a matter of national responsibility that everything shall be done that can be done to ease the transfer until those men can be resettled either on the land or in new trades.
I am pressing forward as fast as I can with the development of training centres in order that there shall be machinery for transference to other trades if and when opportunity arises. I am able to report a slight increase in the number of centres. I am not satisfied, I do not think anyone could be satisfied, with the position of affairs in regard to those who are completely displaced from their own industries. It is a big problem, but I echo the wish of many Members that we shall not look on it as an insoluble problem and regard the whole difficulty through which we are passing as something to be constantly depressed about. When I look back to the state of the country during the industrial revolution, I regard this revolution as quite as serious and as vital to the economic life of the country as the revolution of the coming of steam 100 years ago. Think what the country had to suffer. Think what the people went through in those days. Our system of insurance has saved us from that. Let us press far more on the public attention the benefits of this system. I do not agree with all that the right hon. Gentleman said in his newspaper article lately, but I agree absolutely 1733 when he praised our insurance system and said he looked forward to the time when it would have such a big balance at the back of it that it would be able to take care, even at a much earlier age than at present, of those who are no longer required in industry.
Quite rightly and properly, I believe the whole House shares the view that, as we approach in the perfection of mechanical power to its capacity of production, which is absolutely staggering to the human brain accustomed to things as they appeared 50 years ago, we shall approach also to that great insurance principle, which is much greater than the ordinary commercial insurance, that those who are strong shall contribute to take care of those who are weak. Those who are fortunate will gladly pay their share towards those who are unfortunate. Those who are in a position of security of employment will gladly pay their share in trying to help those whose lot in life is cast among insecure employment, and who do not from day to day know when they are going to be unemployed. I do not pity those who are in security of employment because they have to pay. It is their privilege to do so in order that they may help those whose existence is overshadowed by the thought that tomorrow or next week or next month there may be no work.
Finally, on the point of statistics, I welcome heartily the suggestion that has come from the other side. I will follow it up vigorously. I will endeavour to get, at the earliest possible moment, that restatement of the figures which will reassure the world as to the final position which our workers occupy in this country as a result of their thrift and insurance. With regard to the Government's action, we have—and indeed I have told the House repeatedly—two Committees actively at work, but neither can go very far with their work at present, one specially dealing with able-bodied workers and the other dealing with the larger question of the co-ordination of social services. Neither Committee can go very far while the transition is in being between the old hoards of guardians and the new Public Assistance authorities. We have to do what we do in relation to the new county authorities, and consultations will have to be with them. They were only set up on the 1st April. Therefore, it is not possible to 1734 expect that we could have been more energetic than we have been in securing results. I thank the House for the splendid discussion to-day, for the helpful spirit, and for the removal of much of the carping narrowness of outlook on this question. I believe that together we can help to get a solution of the problem which is, after all, from the standpoint of national life and well-being, the most serious and important with which this House can possibly have to deal.
§ Mr. THOMAS
May I make an appeal to the House generally to allow the vote to be taken now, as there are also two small Orders on the Paper on which there is common agreement.
§ Mr. BEAUMONT
I promise the House that I will not take too long in what I have to say. I think that we must agree with an hon. Member that it will be deplorable, when a matter of this sort comes forward if there is any attempt to cut short the discussion unduly. We must all have felt regret, after listening to the able and pleasant speech of the right hon. Lady, that she did not seem, while dealing with the immediate questions of figures and statistics, in any way to face up to the real problems underlying this matter and to give us any guarantee that the £10,000,000 for which she is asking and which will be given without question to-day will not be followed by another £10,000,000 in another six months. She welcomed the fact, we all welcome the fact, that in this industrial revolution we have something to save us from the hardships of the last one, but she did not face up to the question of the vicious circle of unemployment insurance. As unemployment grows so does the unemployment insurance grow, as taxation grows so does the purchasing power of the people decrease; the goods that they are prepared to buy increase in cost, the number of people making those goods decreases, and as the people making those goods are thrown out of employment, they have less wages, the purchasing power of the various sections of the community which buy the standard goods continues to decrease, and so the thing goes on, rolling up towards national bankruptcy. Because of that fact, we ask the right hon. Lady to take into consideration, if it be possible, the separation of the Insurance part from the definite State-aided part.
§ Mr. BEAUMONT
The right hon. Lady says that it is being done but the separation is not complete. I may be unduly stupid—[HON. MEMBERS "Hear, hear."] The House appears to agree with me in that respect. I did not understand from her speech that there was any sharp and clear cut division between the two sides of the unemployment fund. If there is, I am delighted to hear it. The question of what is ultimately going to happen to these people who are out of employment, is very important. We know perfectly well that in a great many trades in which we were paramount years ago we are paramount no longer. We have to face up to the fact and all parties must face up to it, that we have to seek fresh fields and pastures new. I stress that point particularly because it is in the fresh fields and pastures that we shall find a solution of our difficulties.
If we are to do that—there are friends on both sides of the House who agree with me here—we must give way a little on each side. Hon. Members opposite must give way a little on their Cobdenite theories and realise, as they are beginning to realise, that goods that must be bought in this country and which are imported from places where they are made under sweated conditions are not the best things for progress in this country. We on our side have to realise that even the State on occasion may have its uses in controlling industry. We have to get together, even with the wells of loneliness below the Gangway, and see if we cannot devise a scheme by which we can find fresh work, fresh permanent work, as was done 100 years ago, and in the easiest possible fashion, so that the need for this fund may cease, and there may be no more question of a Minister of Labour asking for more and more delving into the nations resources in order to cure a problem which must be solved if the nation is to continue to exist.
§ Question, "That the word 'now' stand part of the Question" put, and agreed to.
§ Bill read a second time.
§ Bill committed to a Committee of the Whole House for Monday next.—[Mr. Kennedy.