PRIVY SEAL OFFICE.

HC Deb 28 May 1930 vol 239 cc1317-444

Motion made, and Question proposed, That a sum not exceeding £14,784, be granted to His Majesty, to complete the sum necessary to defray the Charge which will come in course of payment during the year ending on the 31st day of March, 1931, for the Salaries and Expenses of the Office of the Lord Privy Seal.

The DEPUTY-CHAIRMAN

It may be for the convenience of the Committee if I indicate broadly the limitations beyond which the debate on this Vote should not trespass. Reference to any administrative action in regard to unemployment as such is in order. Reference to the provision of grants for schemes of work, reference to the Lord Privy Seal's activities with firms, reference to the action of the Lord Privy Seal in approaching the bankers in regard to schemes of work, and the raising of loans are also in order, but all matters which require legislation are strictly out of order.

Mr. CHURCHILL

On a point of Order. Is not this debate to be the occasion of a statement by a retiring Minister, who, according to usage and practice, has always on the occasion that it has been made been given full and untramelled freedom in regard to the matters which have led to the severance from his colleagues? Will not the fact that such a statement is to be made—a statement which is awaited with much interest by the House generally and by people outside—have the necessary consequence of broadening the scope of the debate relating to the most important problem of unemployment, with all its aspects, so far as it is possible for us to deal with it within the scope of one day, and will not the general convenience and the general wish of the House make it desirable for the Chair to give that latitude which is usually given when the House so desires it in regard to this discussion, instead of the somewhat alarming series of strict limitations which we have just had the pleasure of hearing?

The DEPUTY-CHAIRMAN

I have taken such advice as is available, and I understand that it has been the longstanding custom of this House that, when a Minister retires, he is entitled to make a personal statement, but, when that personal statement has been made, the retired Minister is entitled only to the privileges exercised by any other Member of this House, and, consequently, in this debate the retired Minister has no privileges other than those shared by any other Member. So far as the discussion is concerned, long-standing custom and long-standing Rules—I think all old Parliamentarians will admit this fact—provide that matters which involve or imply legislation are not allowed to be discussed. This is purely an administrative Vote on the salary of the Lord Privy Seal.

Mr. CHURCHILL

On the point of Order. In the first case, with great respect, will not a limitation of the kind you have suggested render all discussion upon the treatment of the evil of unemployment, upon the emergency of unemployment, wholly impossible? How, for instance, are we at every stage to know that any proposal which is advocated or discussed trenches over the line between administration and legislation? Would it not result in a completely meaningless debate? The second point is this; has it not long been the custom of the Chair to defer to the general wish of the Committee when it is desired to use a Vote in Supply as a vehicle for a free and general discussion?

Mr. MAXTON

In the list of things you mentioned, Mr. Deputy-Chairman, as being a subject for discussion you mentioned schemes of work, and I wish to ask how it is possible to consider schemes of work without trenching upon matters which require legislation? We have been informed by the Lord Privy Seal that his great problem in getting on with his administrative work is due to the fact that numerous private Bills are held up by the procedure of the House.

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

Your announcement, Mr. Deputy-Chairman, was the first intimation I had as to the scope of the debate. I express no opinion upon it, but I want to make it perfectly clear, lest there should be any misunderstanding outside—I am sure there will be no misunderstanding inside the Committee—that last week I took part in a debate in which the speeches covered the widest possible range and I was quite prepared to do the same to-day. I want to make it perfectly clear that as far as I am concerned I have not been consulted in regard to today's debate.

Mr. LLOYD GEORGE

May I endorse what has been said from practically every quarter of the Committee, that if the debate is rigidly confined to the matters which you, Mr. Deputy-Chairman, have indicated in your statement that it would render a discussion upon the broad question of unemployment quite futile. Seeing that there is a general feeling in the Committee, it is by no means confined to this side of the House but, as indicated by the Lord Privy Seal, is also felt on the Government side of the Committee, that there should be a full and free discussion would it not be possible for you by the general consent of the Committee to allow a full discussion? I can well understand that if we attempted to debate great land projects, or even Free Trade and Protection, it would not be strictly relevant, but as a survey of the whole problem I hope we shall be allowed full freedom of debate with the general consent of the Committee. I do not challenge in the least the correctness of your decision.

The DEPUTY-CHAIRMAN

Hon. Members will understand that, as Chairman, I must comply with the Rules of the House, and it is my business to see that they are kept. I have acted strictly in accordance with precedent. The list of subjects I gave was of a broad general character in order to indicate the limits beyond which the debate should not trespass. Hon. Members will recall the many occasions on which an hon. Member has had to be pulled up for attempting to reply to the speeches of other hon. Members, and the result has been that the Chair has been placed in a position of the utmost difficulty. The Chair is always ready to comply with the general wish of the Committee but I hope hon. Members will understand that it is not for me to ascertain the wishes of the Committee without, first of all, indicating the limits of the debate under the Rules observed on these occasions.

Mr. STANLEY BALDWIN

I beg to move to reduce the Vote by £100.

There will be gratitude in all parts of the Committee to you, Mr. Deputy-Chairman, for the view you have taken, and it will be agreed also that the doctrine you have laid down is absolutely correct. In debates of this kind, where the Committee has expressed its desire, the Chair has always been good enough to grant a little latitude, and I do not think it has ever led to any abuse. I am sure we shall do our best to keep the debate to the point, although, as the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) has said, in debates of this kind we must wander a little outside the strict terms of the Vote. There is no need to make an excuse for having another debate on unemployment. The Prime Minister, who I understand is to take part in the discussion, speaking with that freedom to which we are all accustomed on the platform, spoke about our nagging at the Lord Privy Seal. If we have been nagging at the Lord Privy Seal, I should like to know what hon. Members opposite did to the Minister of Labour in the last Government. I asked a clerk to take out the number of times the Ministry of Labour Vote was put down during the last Government, and he was still at work on it when I came down to the House. I am not able therefore to give the number, but three or four out of every half a dozen times a Supply Vote was put down we discussed unemployment. We were never able to get a discussion on India because the Ministry of Labour Vote was always put down; unemployment was always debated.

To-day is a peculiarly fitting day on which to survey the situation. [HON. MEMBERS "Hear, hear!"] My hon. friends are thinking of one thing, quite apposite, and I am thinking of another. I am very fond of anniversaries in the historical sense. This is the anniversary of a, very powerful broadcasting appeal which was made a year ago by the Prime Minister, and we cannot do better at the beginning of this debate than take ourselves back to Newcastle, just a year ago, and look at one or two of the things which were said that night. The Prime Minister said: Our position is perfectly clear. Will he say that to-day? Unemployment cannot be cured by relief works, nor by patch work of any kind. We must develop national resources and improve trade so that there will be increased employment; and a tremendous revolution in industry and in power by the use of electricity and petrol. Labour's programme for dealing with unemployment is therefore not a programme of relief works, upon which the capital spent would be mainly lost to the country, but a programme designed to add to the wealth and efficiency of the nation, to give a spur to industry and to open the way to markets. The Chancellor of the Exchequer read those beautiful words and was so moved that the icicle fell. A few days later, he said: In our first Session, we shall deal with unemployment and bring relief and hope to the workers of this land. I have in my hand also a very powerful appeal, called "Labour's Appeal to the Nation, General Election, 1929," and I extract one sentence from it: When the Labour Government was in office it announced to Parliament schemes of a comprehensive and far-reaching character which it had already begun to put into effect. Immediately afterwards both parties united and defeated the Government. They could not tolerate its continued success. 4.0 p.m.

The facts are simple, and this afternoon I want only to look at a few facts, to ask a few questions, and possibly to make a few suggestions. I want to say no more about that appeal to the nation, although I might have a word or two to say later on about that publication "Labour and the Nation." I have a strong suspicion that everyone who cherishes a copy of that book will commit it to the flames lest it might be brought up as evidence against him. I can visualise bibliophiles of the future anxious to secure copies of it as one of the brightest works of fiction published in the period. I do not know whether it is worth reminding the Committee of the unemployment figures. I think it would be kinder not to. We all agree that they are very, very terrible. It has brought about the breaking of every pledge and every implied pledge that was given at the last election, and I believe the failure of the programme was shown by what has recently happened, and what always happens when a Government gets into difficulties, and that is the resignation of a junior Minister.

I am going to say nothing about that domestic concern. I have been a Prime Minister myself, and I know the difficulties of these cases, and we shall listen with interest to the explanation which' is given. It is an interesting phenomenon, quite apart from the personalities involved. It is one more chapter in the struggle that is going on, and must go on, in the party opposite until one side or the other can assume the superiority and present the party as a united party to the country. For the moment, it only means that a Member of the Government has left the Front Bench party of pledges unredeemed to join the Back Bench party of pledges unredeemable. The struggle which is going on to-day is the struggle between men who have their feet on the ground and men who have their feet in the air. Years ago both parties had their feet in the air. In proportion as they can get their feet on the ground, they will maintain power in this country and may live to win another election. On the other hand, should those whose feet are in the air win over the others, then the prosperity of the party will fly away into space for ever.

This process is one that we have watched with a good deal of interest. We have admired very much the firm stand which the Government made, and the issue of the struggle so far as we have been able to follow it. Of course, a great many of those who take the same view as the hon. Baronet who has resigned are young and enthusiastic politicians, and I should like to remind them, if I may, as an older politician, and possibly with less enthusiasm, of what a very distinguished American once said. He had a very profound knowledge of politics, and I think some words that he used might well be of interest to the Committee: Nor it don't ask much gumption to pick out a flaw In a party whose leaders are loose in the jaw; An' so in our own case I eventur' to hint, Thet we'd better nut air our perceedins in print, Nor pass resserlootions ez long ez your arm Thet may, ez things heppen to turn, do us harm; For when you've done all your real meanin' to smother, The darned things'll up an' mean sunthin' or 'nether. I want to call the attention of the Committee to a very significant, development which has taken place lately, and that is the new excuse that is being put forward for the condition of unemployment. We are told that unemployment is due to world causes. Well, I have one or two observations that should like to make on that, and the first is this: I alluded to "Labour and the Nation," one of the best friends I have. I want to give this quotation to begin with: The Labour party will not be satisfied, as capitalist Governments have hitherto been satisfied, merely with tinkering with unemployment when unemployment occurs. It declines to accept their—(that is my')—placid assumption that in the twentieth century, recurrence of involuntary idleness is still to be regarded as an Act of God. In face of that, it is almost blasphemous to suggest that unemployment is due to world causes. I think we are entitled to ask, When did the world causes begin'? They certainly had not begun last August. The Lord Privy Seal told this House that unemployment had not answered all his expectations and his faith that by February it was going to be better than it had been under our Government. Nor had it dawned on the Minister of Labour last November, when the Unemployment Insurance Bill was before the House, and she told us that the Bill was based upon an expectation of 1,200,000 as the figure which could be taken as the basic unemployment figure. It had not dawned on the Chancellor of the Exchequer a week or two ago, because the said then that for the first time the unemployment figures showed a slight reduction, and he declared himself optimistic of the future. I think, in those circumstances, we are entitled to ask, When did these world causes begin, and how long will they operate? An interesting question; and we should very much like to have an answer.

An interesting feature of the perplexities of the present moment came before my notice quite recently, when the Lord Privy Seal—[Interruption.] There is one further point I wanted to put about world causes. Of course, there are world causes, or there are not. If there are not world causes, then I think your failure is patent to the world. If there are world causes, then you can never use that argument which you are so fond of using, but which has no basis in fact, and that is that you can do all kinds of things if only you had an independent majority. There is nothing that the Government have asked us to do to help unemployment that we have not helped them with. The first demand that the Lord Privy Seal made, almost immediately after the opening of the new Parliament—and we helped him—was to pass business through with all speed as emergency legislation. We have not hesitated to give support in that way to whatever has been brought forward to give assistance in the unemployment position. I do not think that is an argument, that we are not willing to help, or that the Labour party is not in sufficient power to do what it would like. It is not an argument that will convince the country to-day. You have all the help that we can give you.

We are willing to consider any proposals that you bring forward, but, of course, if it be a fact—and I should not like to deny the fact, now that you all say so—that the causes are world causes, you may throw your hand in. There is nothing more that you can do, whether you have a complete majority or are dependent upon the votes of other parties. The Lord Privy Seal himself is apparently in complete uncertainty, or he would not be asking questions of himself. As recently as the 19th May he used these words: Seeing the figures mounting, and trying to answer the question week after week, I have asked myself, not once, but a thousand times: Is the cause due to any action of the Government Of course, "a thousand times" is only a Celtic figure of speech. I have heard those figures from Celts wherever they have sat in the House. Apparently he has asked that question of himself several times. Then he went on: "If so, no party label or prejudice ought to prevent any Member of the Government or the Government themselves asking: What are we doing that is bringing about this state of affairs?'" Once more he emphasised it: I have asked myself that question a thousand times."—[OFFICIAL REPORT, 19th May, 1930; col. 98, Vol. 239.] Truly it may be said that the Lord Privy Seal is in direct apostolic succession from the original doubting Thomas. He has so far failed to answer the question. The answer is, of course, that it is very largely due to the action of the Government. [Interruption.] I beg that hon. Members will treat this matter seriously, as it is an argument which will require answering in the country.

There are two things that have militated more perhaps than anything against the commercial business and industrial interests of the country. I think that the Coal Mines Bill has done a good deal of harm in destroying confidence, and I think so for two reasons. First, I think there is an apprehension, which I do not share myself, that the Government, having directly interfered with the direction and constitution of one industry, may at any moment interfere with the direction and constitution of another industry. Thereby uncertainty is created. But I think really that the damage done—the psychological damage, if I may borrow that word from the Chancellor of the Exchequer—is this: That at a time when in so much of our competition every farthing almost, in costs, is a matter for grave consideration, the Government quite light-heartedly have passed a Bill which, by their own contention and from the very essence of the case—it would be meaningless if it did not do so—will raise the price of coal, at any rate, let us say, to a great many consumers. That means that for some time to come the coal users of the country in industry have no idea how much more they will have to pay for their coal; the price is uncertain. That makes their costs uncertain, and when trade is bad it is a thing which has much more effect than if trade were brighter and orders were coming along and there were less competition.

There is another direction in which the Government have undermined public confidence. [Laughter.] I ask hon. Members not to laugh. I will tell them the reason for my belief. The Chancellor of the Exchequer is a man upon whose words the country always hangs—in every Government. People want to know exactly where he stands as a man of finance, and what his schemes are. The difficulty caused by the present Chancellor of the Exchequer is that nobody does know where he really stands. There is uncertainty. I have in my hands a very interesting article which he wrote about five years ago to the "Weekly Dispatch." That article laid great stress on the injury which our industries were suffering from the then rate of taxation, and was written from the point of view of the most orthodox Whig economist that you could possibly conceive. That article led many people to think that in all circumstances he would be the guardian of the strictest economy, and that in no circumstances could there be increased taxation—which, as he explained in that article, falls on industry—so long as he had charge of the national finances.

But then came the Budget. We had two very contradictory speeches, or rather we could draw two very contradictory tendencies from what he said. There were his observations when he told us that he realised the psychological effect of taxation on industry; and he gave us to understand, at least I understood, that the taxation that had been imposed that year would be the limit for next year too, because he said quite coolly that people wanted to know ahead what their taxation would be. That, if I remember aright, was in the Budget statement. Yet, whether it was that there was thunder on the left, or the mountain began to be in labour, on the Second Reading of the Finance Bill, on 20th May, he said: I am prepared to maintain that, within limits, the taxation on large estates and large incomes is, as I have already said, sound finance and good for the State, and that the limits have not yet been reached. … small doses—reasonable doses—applied at regular intervals, may produce good results, but if the medicine is taken all at once it will kill the patient."—[OFFICIAL REPORT, 20th May, 1930; cols. 362 and 363, Vol. 239.] It is not a question of whether these things will obtain good results from his point of view, but whether a, statement like that does or does not imbue the industrial world with confidence. They do not know where they are with the present Chancellor of the Exchequer and uncertainty—as he has said sometimes in powerful speeches, and as everyone has said—is the worst thing for business. The fact is—of course, it is obvious—that the old venerable simile of Jekyll and Hyde could have been used about the Chancellor of the Exchequer, but if anyone has used it, he seems not to have drawn the moral. You remember the story. Hyde ultimately completely swallowed up Jekyll. Jekyll ceased to exist, and what happened to Hyde? Hyde ceased to exist. That is always the end when Hyde swallows up Jekyll.

The question before us to-day, the question which the Prime Minister will have to answer and the question which the Lord Privy Seal will have to answer is, with the present condition of things what is the Government going to do? It is not an easy question to answer, because the whole situation is again as bad as it was a year ago. And it is far more difficult to deal with. The Government themselves over and over again, in statements in the country last year at the time the promises were made, showed that they had no real faith in palliatives. Nothing but palliatives have been tried. I do not believe that there are any palliatives that can meet the present situation. I do not believe that anything less drastic than Safeguarding will meet the present situation.

I will state one of the reasons that have made me for so long a Safeguarder—a reason which is getting so strong from the present fiscal evolution in the world that I believe it will carry the country by whomsoever it is brought forward. I absolutely agree, and always have done, that the high tariffs in the world are a great bar to business, but I take the view, which I know is not taken by the bench opposite, that you cannot get these tariffs reduced so long as you leave this one market the only dumping ground in the world. I thought of it so much when the right hon. Gentleman the President of the Board of Trade went to Geneva. How do you get disarmament, which is a very similar problem? I want disarmament in tariffs just as I want disarmament in arms for war. How do you get disarmament in arms for war? By dealing amongst equals. America and ourselves can go into conference and can settle something, but suppose that Switzerland went and made proposals to America to reduce the American Navy. Do you suppose America would do anything? Of course she would not. In the same way I believe that only those who can speak on an equality regarding tariffs can do business. We cannot do that. Our competitors only laugh at us. We can only protest.

We asked the President of the Board of Trade whether he had made a protest the other day about certain increased duties in America on lace. I forget what he said, but it really does not matter. If the right hon. Gentleman made protests for the rest of his life nothing would be done. That truth is beginning to dawn on the British electorate, and that is why you have this result at Nottingham. Nottingham is not an ordinary party victory. I was at great pains when at Nottingham to point out that if Nottingham thought fit to speak with a strong voice and to give its views as to whether it was right, particularly at a time like this, that the Safeguarding Duties should be withdrawn, I did not suppose for a moment that it would cause the Government, so far as lace was concerned, to change their decision, but it might make them think and cause them to review their decision when it came to dealing with articles the Safeguarding Duties on which expired later in the year. That evidently is a view which commended itself to Nottingham. No ordinary party victory could have given the extraordinary election figures that we have all seen this afternoon.

I do hope, for the sake of the country—I can assure the Government that I mean this with all sincerity—that the Government will look at the signs of the times, and that they will quit, if they can, that position of intellectual pride with which people cleave to an old doctrine, and that they will recognise and do something to meet the feeling which is so strong in those industries which have hitherto enjoyed the modicum of Safeguarding given to them, whether it he at Nottingham in lace, or in gloves or tyres or anything else, when the people in the industry, masters and men, want the Duties to remain. The Government are doing a most undemocratic thing when they will not even consider their representations. No, the situation is far too serious to be dealt with, if it ever could be dealt with, by palliatives. For the sake of the home market and the foreign market you must try to pull down the tariffs of the world, which will ultimately strangle you if you do not. You have to go on where the tide takes you and where the country wants you to go, whether you like it or not. You have to safeguard your own home market and develop the markets in your own Empire, which can be developed on the basis of Safeguarding at home.

The PRIME MINISTER (Mr. Ramsay MacDonald)

I must confess that there were one or two parts of the right hon. Gentleman's speech that caused me great surprise, but there was no part of his speech that caused me more surprise than when he sat down. For the last half hour I have been under the delusion that he was delivering an introduction to what he was to say. But having finished his introduction he ceased his speech. He began by telling us that as he has been Prime Minister he understands the resignation of minor Ministers. He then reflected upon certain—shall I say?—divisions in our party, but he concealed from us that, being the Leader of the Tory party, he also understood them. I sympathise with him as much as he sympathised with me, but I do more. I always like to give the Leader of the Opposition the better part of a bargain, and I not only offer him sympathy, but I offer him thanks, because, at any rate, he has given us a suggestion as to how to get out of our difficulties and I might suggest to my hon. Friend the late junior Minister that he and I might adopt the device of a referendum. The right hon. Gentleman then proceeded to pass some interesting remarks about the case that the more recent phase of unemployment is due to world causes and, having made those remarks, he went on to show that the Government as a matter of fact were responsible. He referred to the Coal Bill. I am not going over old ground except to say this—that once again we have heard from the party opposite above the Gangway that they hope to establish prosperity and competitive efficiency in this country on the evil industrial conditions which working miners suffer.

From that matter the right hon. Gentleman proceeded to the Budget. He forgot to tell us that the greater part of the increase of taxation imposed by my right hon. Friend the Chancellor of the Exchequer was necessitated by the fact that his Government had not paid their bills. I suppose his financial doctrine now is that the country ought to be allowed to live on low taxation without paying its debts. He forgot, when he dealt with the increase in unemployment and the relation between unemployment and my right hon. Friend's Budget, that the Budget was not introduced until 14th April and that months before that date, world causes had been operating against our unemployment figures. Then, when he departed from criticism and produced a positive suggestion—it was only one—he referred to Safeguarding. Once again, apparently, he forgot that in countries which are not only safeguarded, but protected in the good old-fashioned way, the figures of unemployment have gone up more rapidly than the figures of unemployment have gone up here, and have reached totals soaring higher than the totals which our figures show.

The right hon. Gentleman laid down the familiar, but, I understood, exploded doctrine, that the history of bargaining between one protected country and another showed that such bargaining led to the reduction of tariffs. There is no such moral or conclusion to be drawn from that history. As a matter of fact, if we were discussing that question here, we could bring in again and again cases of tariff bargaining begun amicably, begun with good prospects but ending always with a tariff war. I do not want to indulge in any Celtic imaginative mathematics, but there have been more tariff wars resulting from attempts to lower tariff walls by bargaining, than there have been cases of tariff walls lowered as a result of such bargaining. As far as the example of Nottingham is concerned it is not unfamiliar. There is not a country which has adopted tariffs in any shape or form, but has had elections where the one case was the immediate and special economic interests of the industries that have been benefiting at the expense of the general mass. I congratulate the right hon. Gentleman on his political victory, such as it is, but instead of moralising that the factors which contributed to that political victory are such as should be welcomed, he should realise that they are nothing but the old-fashioned political experiences of logrolling that every protected country has gone through.

I follow the right hon. Gentleman in this debate because my right hon. Friend the Lord Privy Seal will wind up the debate and will be in a position to reply to the various points of detail which, undoubtedly, will be raised between now and half-past ten o'clock to-night, but I must say this, that my right hon. Friend the Lord Privy Seal has very good reason to complain of the way in which on every conceivable occasion, last week and this week and probably next week, the troubles which he has borne with so much success, become the subject of weekly and, to judge from the speech to which we have just listened, unprofitable debate. What is the position regarding unemployment? There is a difference between the problem of unemployment as it presented itself a year ago, and the problem of unemployment as it presents itself now. Twelve months ago, it was a question of home conditions in relation to a normal foreign market. World consumption was going up, and it was merely a question of how efficient we were to share in and have our just proportion of the world consumption. It was a question of internal equipment, of internal marketing arrangements.

That is not the problem to-day. The right hon. Gentleman says that it is the advent of this Government which has changed the situation. I will give him Anglo-Saxon figures. Take any country, any industrial country he likes. Take Germany. [HON. MEMBERS: "France."] Really in the discussion of economic problems, hon. Members ought to know the difference between the industrial and social conditions of France and those of countries like Germany, the United States and ourselves. If I am to be delayed in order to explain the industrial character of the population of France and draw the great fundamental distinction which exists between that population and our own or Germany's or that of the United States or that of Japan, then, Mr. Deputy-Chairman, your Ruling will have to be imposed again upon us, so as to limit the scope of the discussion. But in Germany the figures have gone up from something like 1,700,000 to 2,700,000 in 12 months. The United States about a year ago had practically no registered unemployed. The trade unions' unemployment registers were practically nil. To-day, there are anything between 5,000,000 and 6,000,000 unemployed.

The right hon. Gentleman spoke of putting certain questions to me. May I put a question to him. Are those figures owing to the Labour Government? Is the co-terminous and simultaneous increase of unemployment in Germany, in Japan, in every industrial country that has an industrial population of the same character as ours, and a distribution of industrial enterprise approximately similar to ours—is the enormous increase in the unemployment figures in every one of those countries, from the rising sun to the setting sun, including our own—is that owing to the advent of a Labour Government here or Labour Governments in those countries? It is nothing of the kind. There have been world causes which have knocked the bottom out of prices and every country that depends on export trade has suffered on account of that slump. Moreover, was it owing to the advent of the Labour Government that India got into the position in which it is now? Really the right hon. Gentleman ought to refresh his memory with a few dates.

Wherever you go, you find that the markets upon which we depend are affected by political causes as well as economic causes, and that, on account of depression of trade in some of the countries upon which we depended very largely for open doors for our population, those doors have had to be closed, and migration has thus ceased altogether, or has been substantially diminished. As far as unemployment is concerned, we are facing to-day a totally new problem and a problem totally different from that which we had to face 12 months ago. Then the problem was comparatively simple. It was insurance, plus normal relief work, plus the re-conditioning of industry in order to make our effectiveness in neutral and foreign markets greater than it was before. My right hon. Friend the Lord Privy Seal has done an enormous amount of work to relieve that situation. When hon. Members speak from both sides as though nothing had been done, may I give a few figures from a paper which has been supplied to me and which I am perfectly certain is accurate. The estimated cost of schemes approved in connection with unemployment has been:

• Classified roads, £33,000,000,
• Unclassified roads, £4,500,000,
• Railways (excluding railway-owned docks), £21,000,000,
• Electricity undertakings, £11,500,000,
• Docks (including railway-owned docks), £7,500,000,

and so on, and the State is undertaking or assisting large developments which are not included in the above figures. The total is £103,000,000 of money sanctioned and ready for spending, as soon as the schemes come into operation, on the relief of unemployment in this country. In addition to that, we have the normal telephone construction programme of some £10,000,000 a year, we have State-aided houses which the Exchequer subsidises to the extent of over £11,000,000 a year, and afforestation, for which the financial provision for the next 10 years has been increased from £5,500,000 to £9,000,000. All that work, put into operation under the conditions, that money applied to the problem of last year would undoubtedly have reduced the figures upon our unemployment registers well below the million.

Mr. LLOYD GEORGE

These figures are very important, and we would like to know exactly what they mean. Take the two first figures, which represent far and away the most substantial contribution in the category which the right hon. Gentleman has given us. What is the total for roads?

The PRIME MINISTER

£38,000,000, approximately.

Mr. LLOYD GEORGE

The first question is this: Taking the whole of the figures for roads, I should like to know over how many years that money is spread. Is it money to be spent this year, or is it money to be spread over four or five years? The second question I should like to ask is, How much money is granted over and above the normal amount which the right hon. Gentlemen sitting here were granting in respect of the same class of work? Otherwise, we shall not know what is the abnormal programme of the Government.

The PRIME MINISTER

I confess that I am giving figures supplied by the Departments, as to the detailed estimated cost of the schemes approved in connection with unemployment. Perhaps my right hon. Friend will just allow his questions to be inquired into, and the figures will be supplied by a subsequent speaker. I have not got them myself. I requested figures informing me how the £103,000,000, which is now the allotted figure, the sanctioned figure, for the relief of unemployment upon relief works was made up. Last week the figure of £100,000,000 was given, without details, but these are the classified, categorical figures—£33,000,000 for classified roads, and £4,500,000 for unclassified roads—money available for expenditure.

Mr. CHURCHILL

Can the right hon. Gentleman tell us if he is including in this special relief work for the aid of the unemployed the normal, ordinary, annual expenditure on loan account of the Post Office for telephones—if those £10,000,000 have been brought in as special relief for unemployment, or are they additional?

The PRIME MINISTER

Entirely additional to the special programme, I am informed. [Interruption.] Will the Committee allow me? As I say, I asked for these figures from the Departments. I am not the head of the Departments. They supplied them to me with their authority, and Ministers and ex-Ministers know perfectly well that those figures, compiled by the officials of the Departments, may be taken as accurate, and any explanation as to how they are precisely composed is a matter for departmental explanation.

Mr. CHURCHILL

It is not a question of detail. What we want to know is, What is the extra amount over and above the normal? That is not a question of detail. I can quite understand that the Prime Minister has been supplied with the gross figure, but it is the net extra expenditure which is the only figure that is relevant in this debate.

The PRIME MINISTER

All that I request is that the ordinary courtesy should be extended to me. I tell the Committee that I have not got those details, and that it happens again and again that Ministers ask the House to allow questions to be postponed for a short time, when they promise that the information asked for will be supplied. The information will be supplied in plenty of time for use in further debate before the day comes to an end. What I base myself upon is this—and no question of detail ought to allow the Committee to have its attention deflected from this—that £103,000,000 is available for expenditure in the relief of the unemployed in the shape of public works, and that afforestation, telephone expenditure, and so on are extra to that and available in addition for further relief.

One of the difficulties of the present moment is undoubtedly this, and this is the question that we have to ask ourselves: Can we, in face of this special outburst of unemployment, this special manifestation of unemployment, undertake specially emergency measures to tide it over? That is the question. The right hon. Gentleman asked me if I could tell him when it was going to end. I cannot, but I can tell him this, that every authority who has been consulted is convinced that it is temporary, and that, for the very simple reason that it is caused very largely from the fact that, owing to falling prices, some of which have only just found bottom, demand is being withheld and orders are not being issued; but wastage is taking place by use all the time, and as soon as confidence begins to be established [HON. MEMBERS: "Hear, hear!"]—one of the innocences of hon. Members opposite is that they imagine that they can establish confidence—as confidence is established, then orders will be issued, and with the orders issued we are just as likely to have a period of immediate boom as a very prolonged continuation of the present depression; and the question is, Can we possibly tide over the period from now until then, whenever it happens? I am not at all sure but that we might see whether it is not possible to co-operate in a temporary manner at any rate. In the ordinary permanent influences, right hon. Gentlemen say—Safeguarding and so on—we cannot join them.

Lieut.-Colonel HENEAGE

Why?

The PRIME MINISTER

Because it is nonsense.

Sir WILLIAM DAVISON

The people of Nottingham do not think so, any way.

The PRIME MINISTER

Whether it is possible to join in expediting business, expediting work, which under normal circumstances is bound to be delayed. Take, for instance, the Standing Orders of this House regarding private Bills of a certain character. It is quite true that my right hon. Friend asked for powers, and received them, and has used them very effectively, and I am not at all sure, in view of the great flood of unemployment that has suddenly welled up, that those powers are sufficiently drastic. But that is not all. We all respect, we all protect, and we all champion our municipal government, and nobody, I believe, would ever think of doing anything to weaken its authority. But within the last three or four months we have had some unfortunate experiences, which could be rectified without doing any damage to the validity and authority of municipal government. We find, for instance, that very fine, very good—admitted by everybody—schemes for local improvements have been accepted by the municipal authorities, have been passed by the municipal authorities, and have had finance put behind them, but owing to a poll of the electorate, they have been turned down. [HON. MEMBERS: "Oh!"] It may be an occasion for a sneer, but we get the case of Hull, we get the case of Leeds, we get the case of Sheffield.

Hon. Members cannot have it both ways. They cannot criticise my right hon. Friend for having failed to produce the effect of working schemes and not consider with us practical and sane reasons why schemes that have been carried through this House, schemes that have been approved by local authorities, schemes that have been accepted by the representatives of the local authorities, and schemes that have been accepted by the country, have, upon a referendum, been turned down and the whole thing thrown on the scrap heap, with all the expectations which they carried for the unemployed.

There is another reason. There is nothing that is holding up schemes more than the power of local landlords to prevent development. There is one case that came under my notice the other day, where over 20 owners of land had to be separately negotiated with before the complete scheme could be plotted and planned. I saw another scheme, where two or three local authorities came up against each other. Individual liberty and all that sort of thing are very dear, but with public need put in jeopardy in the way that public need has been put in jeopardy and held up and destroyed within the last 12 months in connection with the schemes that were being put into operation, this Committee ought to consider whether that form of private ownership should stand so effectively as it does against public utility. In regard to the whole question of municipal assistance to schemes, under present circumstances with the extra need that has grown up, the municipalities might be encouraged to do more than they have done, and for the purpose we are going to summon a conference with the representatives of municipal authorities in order to discuss the possibility of an immediate expansion by co-operation between the municipalities and ourselves.

5.0 p.m.

There is the question that has arisen again and again of borrowing on a large scale in order to put certain work into operation. Borrowing without a programme is, in the mildest language, absolutely ineffective. If there be a case of programmes being held up, or of programmes that can be put into operation at once being held up for the want of money, we can consider the question of borrowing, but I want to remind the Committee and those who criticise us that the figure of £103,000,000 which I have quoted is very largely borrowing. There are three things regarding borrowing which the Government must take into account. First of all, it may be all very well the day you borrow to find that you are in possession of very expanding resources, but, when the day comes to pay back, you will discover that putting large schemes of public work into operation by borrowing is an expensive operation. I am not saying that borrowing is not necessary; I am not saying—in fact, I say the contrary—that borrowing is not to be resorted to, but borrowing in itself, and apart from a severely practical programme, is not the way to help the unemployed. Further, its effect on credit must be considered, and its best use must also be studied. We have, for instance, Sir Henry Maybury's authority for saying in regard to roads that at the present moment, in addition to what has been sanctioned and provided, it is impossible and undesirable to raise more and to plan for more than £20,000,000 worth of work. Let the Committee be perfectly clear that there will be no schemes held up for want of money. Borrowing will be resorted to, and must be resorted to, but not without restraint and not without careful consideration as to its consequences.

Then there is the question of pensions. A great deal can be done by an extension of pensions in one shape or another. Pensions applied merely to classes with many features in them may be both wasteful and ineffective. What we want is a complete co-ordination of our pensions schemes and our social insurance schemes, because only in that way can we effectively use the national resources that are available for the social services in all their varied forms. Here, again, with public help, unemployment insurance, extra unemployment pay, old age pensions and so on, the time has come, with the experience that we have had of these varied methods of social help and insurance, to co-ordinate them all in order that the maximum benefit may be received by the population. It will be a great help in dealing with unemployment, because it will enable us to draw from industry old men and women who have earned a pension by their previous work, and who would, if they had a pension which was adequate, enjoy it in a peaceful, comfortable and useful old age.

A great deal is said about rationalisation. If this country is to maintain its position in the markets of the world, it must produce economically, and one of the most effective and necessary means of producing economically is rationalisation. My right hon. Friend has done a tremendous amount to assist that, but there is a possible flaw: it is that, as you rationalise, so you temporarily increase unemployment. As a matter of fact, the increase in unemployment owing to rationalisation is not so very large when it is carried over a certain number of years, and especially after the industry has been rationalised. I was in a position to say a month or two ago that this question of unemployment as the result of rationalisation was the subject of study by representatives of workmen, trade unions and employers, and we hope very soon to get their considered opinion as to how to deal with the unemployment consequences of rationalisation processes.

What I say this afternoon is exactly what I said in my broadcast speech. I am obliged to the right hon. Gentleman for reminding me of it. The point of that speech was that piecemeal treatment of unemployment is bound to be ineffective. It has to be dealt with systematically, and, in order to deal with it systematically, we require to have a solid Government backing. The substitute for that in a House like this—[Interruption.] I am sorry that I do not understand the allusion. By a solid Government backing in this House I mean this. On those questions to which I have referred, all large and fundamental questions, all questions of the most pressing national importance, might very well be the subject of co-operative action. The Government cannot ask anybody to deal with Safeguarding, or anything of that sort, but in relation to the present industrial revolution, a revolution which 20 years from now will be looked back upon, and will be seen, with the same meaning attached to it as the industrial revolution which began at the end of the eighteenth century, in these great fundamental, economic changes and problems, apart from the political position of each party, I hope that there will be House of Commons co-operation. If there is not, at any rate it will not be the Government's fault.

The conditions of our past prosperity are changing; they have already very largely changed. The conditions under which this country grew up economically at the beginning of the last century, and flourished on to the end of that century, have changed very considerably. We have to face these new conditions, and to produce schemes and ideas which will accommodate themselves to the change. We cannot accommodate ourselves to the change by using the old phrases and adopting the old nationalist ideas—Protection on the one hand, or supremely overriding individual enterprise and possession on the other. Organisation, co-operation, rationalisation, and national views, pursued under the conditions of national control, have to be applied if this country is going to flourish in the Twentieth Century as it did in the Nineteenth. I appeal to my hon. Friends around me, and I appeal to the Committee, to remember, in dealing with unemployment, that our unemployment is a feature of our own conditions, and that world unemployment is a feature of world capitalism, which can never be cured until conditions have accommodated themselves to the new industrial and economic facts that have been born within the last quarter of a century. I appeal to my hon. Friends around me and to the Committee to apply those ideas to the treatment, first of all, and then to the solution of the unemployment problem, and, so far as the Government are concerned, that alone is how it is being explored.

Sir OSWALD MOSLEY

rose—

The DEPUTY-CHAIRMAN

Sir Robert Horne.

HON. MEMBERS

Mosley!

Sir ROBERT HORNE

I promise not to detain the Committee for any length of time. I do not propose to make any contribution to the general debate upon unemployment, and I shall not be tempted to follow the Prime Minister in what he has said, beyond this, that great as is my admiration for the Prime Minister in other spheres, after having listened to his speech this afternoon I confess that, with the best will in the world, I can derive very little consolation from the public announcement that the Prime Minister is now devoting himself to a consideration of the unemployment problem. My purpose this afternoon is a very limited one. It is confined to a consideration of a certain portion of the steel trade whose employment will undoubtedly be adversely affected if certain statements made recently by the Chancellor of the Exchequer in this House are allowed to remain unrefuted and are not withdrawn as publicly and emphatically as they were uttered. It is in the interest of our industry that they should be dealt with at once, and I hope the Committee will forgive me for taking this, the earliest opportunity at my disposal, of raising the question. It will be within the recollection of hon. Members that when the Chancellor of the Exchequer was making his concluding speech on the Second Reading of the Finance Bill he made a definite attack upon three steel companies in this country which he mentioned by name. I had better quote his own words from the OFFICIAL REPORT: Instead of putting aside adequate sums to reserves for the purpose indicated by the right hon. Gentleman, companies, in the days of prosperity, have paid away their profits in huge dividends and bonus shares, and he added that now they are in a condition of lack of equipment, of inefficiency in matériel, so that it is quite impossible for them to compete successfully in the markets of the world."[OFFICIAL REPORT, 20th May, 1930; col. 357, Vol. 239.] It is not usual in this House to attack individual firms by name when they are not here to make any reply, and the Chancellor of the Exchequer's argument and purpose could quite well have been served by a general reference to the practice of firms in this country, if he wished to make that animadversion. In the instance in question the firms were three of the most important organisations in this country. They were Baldwins, John Brown and Company, and the Consett Iron Company. The right hon. Gentleman cited a series of figures in order to establish his argument and these figures undoubtedly showed some exuberant profits which, he said, had been paid away when they ought to have been kept in hand as reserves. But the unfortunate thing about the figures was that in every single instance they were entirely inaccurate. I myself ventured to intervene by interruption, and I warned the Chancellor that, as a responsible Minister of the Crown, he ought to be very careful, when he was talking of individual firms, to be correct about his figures. I said that, being personally acquainted with one of them, I knew that what he was saying was in error, but he only waved aside my interruption, made a personal gibe against me, and refused in any way to qualify these very damaging aspersions upon these companies.

In order that the Committee may clearly understand, and that the industrial world may know, what the truth is, I propose, with the leave of the Committee, to give what the facts are. In quoting what he said were extravagant dividends, the Chancellor of the Exchequer referred first to Baldwins' Limited. He said that in 1918 they had paid a, dividend of 23½ per cent.; the fact was they paid a dividend of 11½ per cent. He said that in 1919 they paid 25 per cent.; the fact was they paid 12½ per cent. He said that in 1920 they paid 25 per cent.; the fact was they paid 12½ per cent. He said that thereafter, in the following years, they were able to pay nothing; the fact was that in 1921 they paid 5 per cent. I wish the Committee to remember, in looking at these figures, that these dividends were paid at a time when the currency was much inflated and when money had not got the value that it had pre-War or has now, that, in fact, these dividends were not worth more than half the nominal figure I have recited to the Committee; and also that at the end of 1920 Baldwins were in this position, that they had in reserves and other accumulated funds a general reserve of £1,750,000.

I turn now to John Brown and Company. The Chancellor of the Exchequer said of that very well known and famous firm, whose work goes all over the world wherever civilisation is established, that in 1918 they had paid 25 per cent.; in truth, they had paid 12½ per cent. He said that in 1919 they had paid 25 per cent.; in fact they had paid 12½ per cent. He said that in 1920 they had paid 23½ per cent.; in fact they had paid 12½ per cent. He said that thereafter they never were able to pay any dividends. In fact they paid 10 per cent. for 1921 and 5 per cent. for each of the succeeding years up to 1926.

Next I turn to the Consett Iron Company. The Chancellor said that in 1918 they paid 80 per cent.; in fact, they paid 55 per cent. I quite agree that that is a very large figure, but I think the Committee will acknowledge that they were not entirely unjustified when they know that between 1918 and 1926 this firm had so much accumulated reserves that they were able to spend very nearly £3,000,000 of their own money upon the reconstruction of their works.

Mr. LAWTHER

Would the right hon. Gentleman say what new capital the Consett Company obtained in that time?

Sir R. HORNE

The Consett Company obtained no new capital then. They did at that time what the Chancellor of the Exchequer referred to, they distributed some bonus shares, but that is not obtaining new capital, The distribution of bonus shares is not taking anything out of the reserves. It is leaving the reserves where they are until they are in a position to spend them. The distribution of bonus shares does not affect that matter in the slightest degree. [Interruption.] I do not know what the hon. Member is asking, but really he ought to try to understand this matter.

Mr. LAWTHER

I understand a great deal more about that company than you do.

Sir R. HORNE

The fact is the Chancellor of the Exchequer based this attack upon figures which, as I have shown to the Committee, are entirely inaccurate. I might leave the matter there and ask that he should explain to the Committee how these awkward and embarrassing figures were given to him, but he went on from those false premises to point a conclusion of the gravest and most serious character, something far, far worse than the citation of erroneous figures, because he went on to say that the result of their action was to put these firms in a position in which they were lacking in matériel and were inefficient. That is a pronouncement, on the sounding board of the House of Commons, to all the purchasing markets of the world, at a time when our steel trade is struggling in the most severe competition with their rivals in Germany, in Belgium and in France, in all of which countries there are lower wage scales, owing to which they are able to produce the articles which they are manufacturing at a cheaper cost than we are in this country. At such a time it is announced to all intending purchasers that these three most famous firms are so lacking in matériel, in efficiency and in equipment that they cannot compete in the markets of the world. Even if that statement had been true it would have been a shocking statement to make in these circumstances. If it had been uttered by some irresponsible private Member it would have been described as a wanton exhibition of mischief, but coming not only from a responsible Minister but from the head of the Department which, above all others, is charged with watching the fortunes of this country, it surely was a most reprehensible example of ill-timed disparagement of important factors in the industry of this country.

Mr. WEST

Is the right hon. Gentleman aware that Lord Salisbury, in another place, said the same thing two months ago? May I read it?

Sir R. HORNE

I have only a very short time in which to make this speech, and I will only remind the hon. Member that Lord Salisbury did not mention any single firm, and spoke only about industry in general. He never disparaged any single firm at all.

Mr. WEST

May I—

HON. MEMBERS

Sit down!

Sir R. HORNE

What I am dealing with is an attack upon individual firma in this country. The hon. Member will have an opportunity to reply. I am now going on to other facts with regard to these firms. Is it true that they are in any sense inefficient or lacking in equipment or matériel which otherwise they would have been able to purchase? Take, first of all, the case of Baldwins. The central portion of the Baldwin works, as the hon. and gallant Member opposite knows very well—

Lieut.-Colonel WATTS-MORGAN

I know it very well.

Sir R. HORNE

—was built between the end of the War and 1922. It was the last word in steel works at that time. It is constructed on a tidal water frontage, and it has all the most modern devices for bringing raw material straight into the furnaces and getting away the manufactured material at the quickest possible rate. Whenever there was any work to be done there is no doubt at all that it could be most efficiently done at the works of Baldwins. In more recent years they have erected, along with another partner, what I should think is the most modem tinplate works in this country; I do not suppose it would fail to bear comparison with the best tinplate works known in the world. It is with regard to a firm like that that this contemptuous aspersion is made which goes round the world, describing them as incompetent and inefficient. I am not myself familiar with the works of John Brown and Company.

Mr. KIRKWOOD

I know them, and there is nothing finer in the world.

Sir R. HORNE

Let me take the case of the Consett Iron Company. Between 1918 and 1926 the Consett Iron Company spent nearly £6,000,000 in completely reconstructing their works. An hon. Member opposite was anxious about some borrowings that they made. They had not £6,000,000; what firm would ordinarily have £6,000,000 of reserves? They did what every other firm in any other part of the world would do. They applied their own reserves, so far as they would go, and they borrowed the rest on debentures from the public. That is one of the reasons why I said on the Second Reading of the Finance Bill that if you take away money by taxation you deplete the source upon which industry depends for reconstruction. The Consett Company have constructed what my hon. Friend opposite, who knows all about the engineering industries, says is one of the very finest steel works in the world. There is no modern device which they believe to be reasonable for the saving of costs which the Consett Iron Company have not adopted. I would venture to say, in the presence of people in the steel trade, that if you eliminate the factor of wages, the Consett Company can make as cheap steel as any firm in Europe, and cheaper than the majority of their rivals. It is upon these three firms that disparagements have been passed by the Chancellor of the Exchequer. It is clear that what the right hon. Gentleman put before the Committee was really a travesty of the truth, and I am sure that he will be anxious to make amends to the companies which he has injured.

I do not venture to suggest to him in what terms he should make any apology or withdrawal he might propose, but, if anybody outside had made those statements, undoubtedly the law courts would have dealt with them in the most rigorous fashion. I am perfectly sure that the generosity of the right hon. Gentleman's nature will at least have this result that, being in a privileged position in this House, he will be anxious to make his withdrawal as complete as possible. I say to the Committee that the disavowal of the views which he has expressed ought to be such as will bring assurance to everybody's mind that the Chancellor of the Exchequer spoke in ignorance of the truth, and upon impressions which investigations have shown to be absolutely devoid 6f foundation.

The CHANCELLOR of the EXCHEQUER (Mr. Philip Snowden)

I do not rise, of course, to take part in the general debate, but I must at once respond to the concluding appeal of the right hon. Gentleman who very kindly intimated a day or two ago that he was going to raise this question, and I say sincerely that I am very much obliged to him for having done so. First of all, in regard to the figures which I gave as to the dividends of the three companies which I quoted. The information and the figures were obtained from a well-known publication which gives the highest and the lowest quotation of the Stock Exchange over a period of three years with the dividends paid in each year. As soon as my attention was called to the inaccuracy of those figures, I made investigations, and I found that they were quite misleading and incorrect. I referred to the Stock Exchange Year Book, and I extracted the correct figures which are not exactly what the right hon. Gentleman has quoted, but they are sufficiently near to require no comment. I am extremely sorry for the statement that was made, and I repeat that I am under a very great obligation to the right hon. Gentleman for having given me this opportunity of making this correction as publicly as I made the other statement.

It will be remembered that I quoted those figures, not as casting any particular aspersions on the particular firms, but rather as an illustration of the whole general argument which I was making at the time, namely, that if our big industrial concerns had not distributed so much profit by way of dividends during times of prosperity, but had placed larger sums to reserve, they would have been in a much stronger position when bad times came to face the position. There are a few other points raised by the right hon. Gentleman about which I should like to say a word or two. I have here extracts from speeches made by the directors of some of our greatest iron and steel companies, which are far stronger than anything I said about the inefficiency and lack of equipment of some of our great iron and steel firms, but I will not read them because I do not want to aggravate any misunderstanding or mischief which my remarks might have made.

I want to make these two points. The very fact that nearly all our great iron and steel companies either have undergone or are undergoing schemes of rationalisation to-day is proof of the fact that they were not in a state of efficient organisation. The other point—and the right hon. Gentleman appeared to attach great importance to it, and I admit that if there were no foundation for it it would be a very serious aspersion upon the iron and steel trade—is that, while talking about the inefficiency of British industry we are advertising the fact to the world and therefore inflicting damage upon the industry. If that be so, then the greatest damage which is being done to British industry to-day is by remarks like those which the Leader of the Opposition made during his speech to-day. The proposal for Safeguarding is being advocated because—and this surely will not be denied—British industry is not able to compete successfully with the foreigner. I have heard the right hon. Gentleman the Member for Hillhead (Sir R. Horne) in this House very often talk about the depressed condition of our industries. Surely, is not that holding up to the world—

Sir R. HORNE

That is a totally different thing. There are other conditions that go with it, but, when you find firms spending vast sums of money in getting the most modern plant in the world, surely it is a shame to say to the world that those firms are inefficient.

Mr. SNOWDEN

I said I would not quote extracts from speeches or letters of our leading industrialists, but perhaps now I may change my mind. This is an address delivered quite recently, in November, 1929, by Sir Mark Webster Jenkinson who, I think, is a director of Vickers-Armstrong, and this is what he said: Since rationalisation was first advanced as a solution of our industrial difficulties there have been some amalgamations of individual units but certain works have been closed down, in isolated cases the managements have been merged, but, compared with Germany, practically few industries have taken any active steps to rationalise their productive capacity on a comprehensive and economical basis and to interpret the true meaning of rationalisation. We just 'muddle along,' hopeful that the sun of prosperity will shine again. … but unwilling to recognise that in the direction of merger modernisation, and management of our industrial undertakings lies the road we have to follow if we are to regain a position of pre-eminence in the markets of the world. And, again, in a letter in the "Times," in November, 1927, signed "Arthur Cole-gate, Chairman, Robert Heath and Low Moor, Limited": Many sections of the steel industry feel that no permanent improvement can be looked for unless their plant and methods are brought into line with the best practice of America and the Continent. …

Sir KINGSLEY WOOD

What about the three firms that you have libelled?

Mr. SNOWDEN

I have already said that I gave those three instances as illustrating my general argument.

Mr. MACQUISTEN

And your instances were all wrong.

Mr. SNOWDEN

I have already said that I hoped my remarks this afternoon, in which I expressed regret for the inaccurate figures, will be as widely circulated as my original statement. And as I rose only to correct and express my regret for the inaccuracy of the figures which I gave on that occasion, I think that it would be best, perhaps, to leave it there.

Sir O. MOSLEY

In the earlier stages of this debate to-day, to which I will return with the leave of the Committee, we have had from the Prime Minister an exposition of Government policy, and also some of the customary exchanges of debate from two great masters of that art. I do not propose to indulge in any form of dialectics, because I believe the purpose which this Committee desires can best be served if, as directly as possible, I proceed to the actual facts of the great administrative and economic issues which are involved. The Prime Minister, in his speech, pointed out a fact which none can deny, that world conditions have been vastly aggravated since the arrival in power of the present Government, and that no one can suggest that the Government are responsible for those conditions. None can deny that fact, but this I do submit, that the more serious the situation the greater the necessity for action by Government. We must, above all, beware, as the world situation degenerates, that we do not make that situation an excuse for doing less rather than a spur for doing more. That is the only comment on the general situation which I would permit myself before coming to the actual issues involved.

General surveys of unemployment I have always distrusted, because they are liable to degenerate into generalities which lead us nowhere. If we are to discuss this matter with any relation to realities, we must master the actual, hard details of the administrative problem, and to that problem I desire immediately to proceed. The first issue between the Government and myself arises in the purely administrative sphere of the machinery to be employed in dealing with the problem. I submit to the Committee that, if anyone starts in any business or enterprise, his first consideration must be the creation of a machine by which that business can be conducted; and, when a Government comes into power to deal with unemployment, its first business is the creation of an efficient and effective machine. That machine, in my view, does not to-day exist, and I will say why.

Under the late Government, the Ministry of Labour, with the assistance of various Cabinet Committees, was, as I understand, responsible for unemployment, and the staff of that office dealt both with the unemployment insurance aspect of the problem and with the provision of work and the reorganisation of industry. The only difference in the administrative procedure under the present Government is that the officials who were dealing with the constructive works side of the problem have been moved from the Ministry of Labour to the Treasury, and have been joined by a small staff gathered from other Departments. The actual central administrative machine is now as follows. An interdepartmental committee composed of the permanent chiefs of all Departments meet at irregular intervals under the chairmanship of the Lord Privy Seal. That is the main machine to secure co-ordination and liaison in the whole great attack upon unemployment. That committee has met nine times since the inception of the Government, and only twice during the present year. To the first two meetings of that committee, I and other advisory unemployment Ministers were not invited, and at those first two meetings every major decision on policy and administration was taken. I am not here to make any complaints, but to analyse the facts, and I suggest that a machine of that nature could not possibly grapple with the problem.

What was the result? The result was that all initiative tended to come from the Department, instead of from Ministers. I am not here to attack, and I certainly should not dream of making any attack upon, the Civil Service. My admiration for the Civil Service has vastly increased since I have been in office. But to achieve a policy of this nature it is absolutely necessary that the whole initiative and drive should rest in the hands of the Government themselves. The machine which I suggested—it is impossible to describe it in great detail on this occasion—was a central organisation armed with an adequate research and economic advisory department on the one hand, linked to an executive machine composed of some 12 higher officials on the other, operating under the direct control of the Prime Minister and the head of the Civil Service himself, and driving out from that central organisation the energy and initiative of the Government through every Department which had to deal with the problem. It is impossible really to expound such a scheme to the House in detail unless it is seen in the graph form in which I submitted it.

It is admittedly a complex organisation. I was told that to carry such an organisation into effect would mean a revolution in the machinery of government. My only comment is this. The machinery which I suggested may be right or may be wrong—after a very short administrative experience, it was probably wrong—but this I do suggest, that to grapple with this problem it is necessary to have a revolution in the machinery of government. After all, it was done in the War; there were revolutions in the machinery of government one after the other, until the machine was devised and created by which the job could be done. Unless we treat the unemployment problem as a lesser problem, which I believe to be a fallacious view, we have to have a change in the machinery of government by which we can get that central drive and organisation by which alone this problem can be surmounted.

That is all that I have to say for the moment upon machinery. May I now proceed to the nature of the problem which confronts us? I have always tried in the House, when speaking from the Treasury Bench, to divide the problem into two essential parts, the long-term reconstruction of the industries of this country, and the short-term programme to bridge the gulf before the fruition of the long-term programme. I think we can all agree, whatever our views upon the permanent re-construction of Britain, that it cannot be done in five minutes. It will be a matter of three years at least, and possibly five years, before you can arrive by long-term measures at an appreciable effect upon the unemployment figures. If that view be agreed to, it is evidently necessary, in addition, to have a short-term programme to deal with unemployment in the interval, which should at the same time contribute to the economic advantage of the country. I will come later to that short-term programme, and to an analysis in detail of the figures which the Prime Minister supplied to the House; but first of all may I address myself to the fundamental problem—the long-term problem—in the solution of which the Government and this House must decide the permanent economic basis of this country in the immediate future.

The Government throughout have pinned their hopes to rationalisation: For my part, I have always made it perfectly clear that, in my view, rationalisation was necessary and inevitable. It has to come in the modern world. Industries which do not rationalise simply go under. It is agreed among most people that rationalisation is necessary, but do not let us proceed, from our view that rationalisation is necessary, to the easy belief that rationalisation in itself will cure the unemployment problem. It is held, and it was submitted again this afternoon, that although at first rationalisation displaces labour, that very soon it so expands the market open to the industry that the labour displaced is absorbed, and more labour in addition, with the result that ultimately the unemployment problem is solved. The only criterion that we can apply to that belief is the evidence which exists in connection with trades which have already rationalised. I have been at some pains to examine the facts in trades which have at any rate partially rationalised, and I think we can take, as a criterion of a rationalised trade, those trades which, in a relatively short space of time, have greatly increased their production for a profitable market. I applied this criterion to trades of that character—four big groups of trades—and I found, between 1924 and 1929, an average increase in production of over 20 per cent., but an average decline in the insured workers in those trades of over 4 per cent. Over five years you have that immense increase in production—a very great achievement—and over the same long period a steady decline in the employment in those trades, which were ever increasing their efficiency and expanding their markets. It would appear, therefore, on the evidence which exists, that rationalisation in itself is at any rate no short and easy cut to the solution of the unemployment problem.

There is a further point. The whole emphasis in this matter of rationalisation is thrown by the Government on the export trade. I do not know if that fact will be challenged. The Lord Privy Seal put it very well on the 25th February, when he said: The problem, difficult in some respects, is boiled down to the simple proposition, how can the Government help our export trade? There are many other quotations of Government spokesmen to the same effect. I think it is beyond challenge that the Government believe that by the expansion of export trade through rationalisation our troubles are to be overcome. May we apply the evidence I have just adduced to the expansion of the export trade? The theory is that, if we can restore our export trade, by rationalisation, to its previous position in the markets of the world, we shall absorb our present unemployed. To win back our previous proportion of the export trade of the world means an increase of some £200,000,000 a year in our export trade or 25 per cent. of its present value. Supposing that is achieved by rationalisation, and that the same thing happens in the rationalisation of the export trade that has occurred in industries which have already been rationalised, to achieve that increase of 25 per cent. in our present volume of export trade would, if the same proportions hold good, mean an actual decrease of 5 per cent. in the men employed in those trades.

Let us set aside all existing evidence, and let us, in examining this problem, take a hypothesis altogether favourable—fantastically favourable—to the theory of the Government. Suppose that in the next four years we can expand our export trade by £200,000,000 a year, not by a rationalisation process which displaces labour, but by an ordinary expansion of world markets which takes more workers on the existing basis. We should, in that event, to achieve that increase of £200,000,000, employ, on the normal basis of production per head at the present time, something like 900,000 additional people. But during the next four years some 1,000,000 persons will be added to the working population, so that at the end of the process we should be back exactly where we began.

I submit that this hope of recovering our position through an expansion of our export trade is an illusion, and a dangerous illusion; and the sooner the fallacy is realised, the quicker can we devote ourselves to a search for the real remedy. There are innumerable factors beyond those which I have mentioned, militating against any increase of our export trade to that extent. There is the industrialisation of other countries for their own home markets; there is the industrialisation of countries which had no industries at all a few years ago. Take the position of our cotton trade on the Indian market. That market averaged for many years, I believe, according to the figures of the International Labour Office, about 5,600,000,000 yards of cotton a year. That was originally our exclusive market, but to-day India, herself produces 1,000,000,000 yards, while Japan, which formerly only had one five-hundredth part of that Indian market, to-day has one-fifth. The intensified competition all over the world is making more and more illusory the belief that we can again build up in the world that unique position which we occupied many years ago.

I should be interested to hear if these figures and calculations can be challenged. If they cannot be challenged, we have to face a shift in the whole basis of the economic life of this country. I believe, and have always urged, that it is to the home market that we must look for the solution of our troubles. [HON. MEMBERS: "Hear, hear!"] I may come to a rather different conclusion from hon. Members opposite, but let us march together thus far. If our export trade on its pre-War basis is really no longer possible, we have to turn to the home market. We must always, of course, export sufficient to buy our essential foodstuffs and raw materials, but we need not export enough to build up a favourable trade balance for foreign investment of £100,000,000 a year, or to pay for the import of the so many manufactured luxury articles as to-day come into the country. We have to get away from the belief that the only criterion of British prosperity is how many goods we cam send abroad for foreigners to consume.

6.0 p.m.

But whatever may be said for or against the recovery of the swollen export trade that we had before the War, the fact remains that it is most exceedingly difficult ever to restore that condition again, and facts have to be faced if we are to find any outlet for our present production. How can the home market be developed? Hon. Members opposite reply "Tariffs." They remind us, rightly, that Mr. Cobden is dead, but it is very often forgotten that the opponents of Mr. Cobden are dead as well. I believe both laissez faire and Protection are utterly irrelevant to the modern world. After all, what are the facts we have to face? We have to face fluctuations in the price level of basic commodities greater than we dreamt of before the War, for a variety of reasons, partly monetary, but still more, the mergence of great producers' organisations which have turned the struggle into a battle of giants in place of the day-to-day struggles of small merchants before the War. We have the struggle of these great organisations and in the event of the collapse of one of these great organisations in the struggle you have a downward rush in prices, or, in the event of their combination, you have an upward surge in prices which would frustrate and baffle any tariff wall that the wit of man could devise. Tariffs lead to the same fluctuations at higher price levels, while the organised and subsidised dumping that we are likely to meet in the not distant future can go over, or under, if the nation doing it so desires, or if the producers' organisations desire, any tariff barrier that was ever invented.

I do not want to-night to re-open that old controversy. I believe we can leave it to the ghosts of Cobden and his opponents to continue the discussions of long ago in whatever Elysian fields they frequent. We should get down to thrashing out the merits of the problem to meet the facts of the age in which we live. I have been driven more and more to the conclusion that the system of an import control board, long adopted as the policy of this party in the sphere of agriculture, and wheat in particular, is the only means by which the facts of the modern situation can be met, and many are daily coming to that conclusion. I have been astonished to find, during my period of office, big business men, whose association was altogether with the party opposite, saying that that policy was the only way to meet the agricultural situation. Some of them have advanced the claim that by that policy a price of some 10s. a quarter above the present world price could be given to the English farmer without any increase in the price of bread, and probably a decrease, owing to the savings that could be effected. I had an estimate put to me that 500,000 men could thereby be put on the land. I believe that to be an exaggeration, but I am confident that a good many could be put on the land. It would lead directly to the rationalisation of trades like milling and baking, diverting all the energies of those engaged in those trades from speculation in wheat to the efficiency of their own industrial processes, and by those economies, and economies in freight and insurance, which we can deal with in other and more detailed debates, I believe the basis of a great agricultural policy can be laid.

I want now to suggest that that policy of controlled imports can and should be extended to other trades, for this reason, that if we are to build up a home market, it must be agreed that this nation must to some extent be insulated from the electric shocks of present world conditions. You cannot build a higher civilisation and a standard of life which can absorb the great force of modern production if you are subject to price fluctuations from the rest of the world which dislocate your industry at every turn, and to the sport of competition from virtually slave conditions in other countries. What prospects have we, except the home market, of absorbing modern production? I have had put up to me so often the theory of the classical economists, which is held by many senior statesmen on all sides, that these things have all happened before. Men's labour has been replaced by machinery, only to be absorbed again later by an expansion of the market. That greater production was absorbed by the gradual raising of wages, by the shortening of hours, and, above all, by an expansion of the overseas market. I once heard it said, "Niggers did not ride bicycles when we were young. They ride bicycles now, and that has given employment." That theory is still held, that sooner or later world recovery will come and our rationalised industries will take advantage of it and so expand our home and overseas market and the problem will be solved. Apart from the effects of rationalisation, which I have already endeavoured to describe, we have to consider this great fact, that since the War there has been a tremendous spring of scientific invention. All through the last century it is true that these things happened, but they happened gradually. You had an adjustment of production to consumption over a long period of time, albeit with considerable suffering to the working-class and considerable dislocation of industry. Now you have this tremendous leap forward in a few years in your productive capacity which has absolutely upset the industrial equilibrium of the world and demands entirely different measures to deal with it.

A great scientist said to me only a few months ago, "In the last 30 years the scientific and industrial capacity of the world has increased more than it did in the previous 300 years," and rather unkindly he went on to add, "The only minds that have not registered that change are those of the politicians." We have in some respects to plead guilty to that charge, because many still believe that gradual automatic processes, as before the War, are going to absorb the great flood of goods which the modern scientific and industrial machine is throwing on to the markets of the world. That aspect of the problem that we have to consider could be elaborated indefinitely, but I have to pass to other subjects. I only suggest at this stage that there is, in the analysis which I have presented, and which many others have presented, some ground for disbelief in the current view that is now so widely accepted, and if there is any force in this analysis or in these arguments, the attempt to deal with unemployment by an intensification of the export trade is doomed to failure, and the belief that it can be done is a dangerous delusion which diverts the mind of the country from the problems which should be really considered and the things that really matter. But there is no machine of Government to-day thinking out and analysing these things. I had the advantage of very able and devoted civil servants preparing figures and facts for me but I have only been one Minister with a very small staff.

These things should be the subject of consideration and research by the most powerful economic machine that the country can devise. That is the point of my request at the beginning of my speech for a Government machine for governmental thinking. We have all done our thinking in our various political parties. Governments, officially at any rate, have never done any thinking. It is very difficult to analyse and get at the facts of the modern situation unless you have at your disposal the information and the research which Government Departments alone can supply. That is why it is so essential to have at the centre of things machinery that can undertake that work. What machine to-day is undertaking the great work of reorganising industry? Not the Government at all, but the banks. It is the Governor of the Bank of England who is doing this work. I admit at once that, in any effort of the Government in present conditions, the co-operation of the banks is very necessary and that efforts should be made to secure it, as the Lord Privy Seal has tried to do, but co-operation between the Government and the banks is a very different thing from abdication by the Government in favour of the banks, and we are perilously near that point.

But, putting aside all questions of general principle and facing purely the practical matter, I make this submission, that the banking machinery of this country is not equipped for the task of reorganising our industrial markets. On the purely practical point, if it was the banking system of Germany, you might say "Yes," because an entirely different practice has been followed by those banks. They have been industrial banks, always interwoven with industry, discovering and promoting new enterprise, putting their skilled, industrial directors on the boards of these new concerns, partners in their losses and in their successes. A vast industrial experience lies behind the German banks. Where is a similar experience in the banking system of this country, which has always repudiated any such conception as something immoral in financial doctrine? What is more, there is this danger. Our banking system has backed many losers. It is committed up to the hilt to many bad debts. As was powerfully brought out in the Balfour Report, industry has often been handicapped, not so much by the strictness of the banks as by ill-timed generosity in the promotion and the bolstering up of inefficiency.

Have we not to be very careful that this new banking enterprise is not an effort to salvage existing commitments rather than to reorganise the industrial life of the country. In all these facts there is a case for the Government taking a more effective control of the situation. The first duty of the Government is, after all, to govern. The worst thing that can happen to a Government is to assume responsibility without control. After all, the impression has been created in the country that in some way or other the Government is promoting the system and is responsible for the activity of these banking efforts, but effective control is absolutely lacking. Liaison and co-ordination do not exist except in the person of the Lord Privy Seal, and ceaseless as his activities are and hard as he works, no one man can in his own person act in co-ordination between all these diverse and great activities. When you are setting out on an enterprise which means nothing less than the reorganisation of the whole basis of the industrial life of the country, you must have a system. You must, in a word, have a machine, and that machine has not even been created.

I must now pass from the long-term side of the programme to the short-terra side, and I will be as brief as possible. The Prime Minister this evening described the programme of the Government by which he hoped to provide immediate employment, and he said that that programme now amounted to £103,000,000. When he was asked how many years that programme was spread over he had not the information and could not say, in particular, how many years the £37,000,000 road programme was spread over. As I have been concerned with the details of this programme, possibly I may supply him with the information. The road programme is spread over five years. Its annual amount scarcely exceeds, if at all, the programme of the late Conservative Government. This is one of our major matters of dispute. The only difference is that instead of a one year programme this Government have a five years' programme, and an undertaking was given that if in any one year the revenue of the Road Fund was exceeded, the Treasury would arrange for a carry over by some means which has not been specified. But the actual dimensions of the programme per annum remain scarcely, if at all, in excess of the programme of the Conservative Government, and if that is challenged, then I shall challenge the publication of correspondence between the Minister of Transport and myself relative to my Memorandum, the publication of the Memorandum itself and detailed analyses of the figures which the Minister has never yet answered.

I want, if I can, to avoid controversy, but if any of my figures are challenged—my figures are not my own—I shall certainly challenge the publication of the official documents involved in order that the House itself may judge who is correct. That £100,000,000 programme as a whole is averaged over much the same period. It is impossible to say with absolute certainty how many years the rest of the programme is averaged over, but it is a great many, and I myself believe it to be not less than a five year programme as a whole. That means an expenditure of some £20,000,000 a year which, on the current computation, would only provide employment on the average for some 80,000 people a year. It is true that that programme will rise to a peak and then decline, and that it is not a steady average, but I very much doubt whether many men in excess of 100,000 will ever be employed by that programme. I very much doubt it, and I would like to see the Lord Privy Seal prove here in detail with facts and figures—I should be delighted if he could—that many more than 100,000 will ever be employed by the programme he is now adopting. I should like to see a detailed analysis in a White Paper, if it can be shown, which I doubt. That, as far as I can analyse it, is the programme of the Government. The greatest increase in that programme is an increase in Unemployment Grants Committee work from some £6,000,000 in the last two years of the late Government to a sum of £30,000,000 under the present Government, a very great increase, which was achieved by big administrative changes which we only got through after a very hard fight. That is the biggest single increase in the programme of the Government.

May I proceed to advance very briefly the proposals which I submitted to the Government in their broad outline. I claimed that a programme could be adopted at a very small cost, as a budgetary charge—I will deal with the charge later—which would in a relatively short space of time provide work for at least 700,000 to 800,000 people. It was made up in the following way. The emergency retirement pensions plan would provide normal employment for some 280,000; the School Bill, which I am happy to know the Government are carrying through, should result in providing employment for some 150,000; while in constructive works, which I will later describe, I proposed the employment of some 300,000 per annum. I will go through the figures of these three proposals in very swift detail. The retirement pensions plan was an emergency measure offering to industrial workers at present over the age of 60 £1 a week pension, and 10s. a week for the wife, if the man is married, on the condition that within a specified and short time they retire finally from industry. The whole life of the scheme actuarially was only 15 years. I did in addition suggest that if the Government at that time desired another and a permanent scheme giving a pension at 65 might be provided, in respect of which, of course, no charge would fall for some five years.

Let me to-day deal with the emergency scheme to meet unemployment, with the facts and figures of that scheme and that alone, because the permanent scheme would be a matter for subsequent decision. The emergency scheme suggested a pension of £1 a week for a man and 10s. for the wife. The cost of it in the first year was £21,600,000 falling to some £10,000,000 at the end of five years, and it would be negligible at the end of 15 years. The direct economies to the Exchequer resulting from the reaction of the finance of that scheme upon the last additional contribution of the Exchequer to the Unemployment Insurance Fund reduced the charge from £21,500,000 to £13,000,000. There was an offset in economies in the contribution of the Government to the Unemployment Insurance Fund of some £8,500,000 if the retirement pension scheme was carried, so that the net cost to the Exchequer was £13,000,000 in the first year, and there were other less substantial economies in the Poor Law and other factors of that nature.

I went further and suggested that it would be right and proper in the case of an emergency scheme of this nature to average the cost of the scheme over the effective life of the scheme. If the cost be averaged over the 15 years of the scheme the cost averages £11,000,000 per annum, and in the first year in which the scheme was introduced you would have a cost to the Exchequer of £11,000,000 and an offset in economy to the Government's latest additional contribution to the Unemployment Insurance Fund of £8,500,000, so that the net extra burden to the Exchequer in the first year amounted to not more than £2,500,000 if the averaging expedient were adopted. This is held to be a very immoral suggestion because it might be necessary to borrow in the first years. But what is borrowed in the first few years is repaid in the later years, and the whole duration of the plan is only 15 years, while it should be unnecessary to borrow at all if the ascending charges of the Budget can be set against the descending charges of the scheme, a very normal transaction, I understand, in balancing a Budget. Anyhow, I claim that if that averaging expedient be adopted the net cost to the Exchequer in the first year need not exceed £2,500,000.

Sir HERBERT SAMUEL

Does this only apply to people who are 60 now?

Sir O. MOSLEY

Yes. If those figures are challenged, then I shall challenge the publication of the retirement pensions report and the correspondence between the Government Actuary and myself on those figures. They are not my figures. I have claimed that 280,000 people could be set in normal employment by means of this retirement pensions scheme, and I should have mentioned, to be quite clear on all the figures, that those liable to the scheme, that is, those who would be offered the pension, numbered 677,000, that those who were estimated would accept amounted to 390,000, and that the replacements of those who accepted amounted to 280,000, so that by means of that scheme we should put 280,000 to work. The only figure which I have given which is my own figure is the 280,000 who would be set to work. The official estimate was 230,000. My figure was 280,000 for very detailed reasons which I could not possibly enter under half an hour's exposition. But every other figure which I have given is not of my own calculation. The first item in the emergency programme was the retirement pensions scheme at a cost of £2,500,000. The next item was the raising of the school age, which is estimated to cost £4,500,000. I will not enter into the details of that scheme. It was outside my Department and it is to be discussed to-morrow, and other Ministers and the Rouse as a whole are just as familiar with them.

Let me proceed to the question of the finance of the large constructive works schemes. I suggest that, apart from slum clearance and land drainage, with which I will only deal briefly in a few moments, a £100,000,000 programme of the Unemployment Grants Committee should be concentrated into three years, and £100,000,000 road programme should be concentrated into the same period. I will come to the administration and the method of handling the programme in a few moments. I will now deal with the finance. The extra £70,000,000 for Unemployment Grants Committee schemes, would, on a more generous basis of grant than that which prevails at present, be an Exchequer charge of about £3,000,000 a year. As for the road scheme, the necessary loan would be raised on the revenue of the Road Fund and no extra Exchequer charge would be incurred at all. Is it so wrong in days of depression to raise a loan on the revenue of the Road Fund for the provision of an emergency programme which in days of prosperity is repaid by a Sinking Fund from the Road Fund? There is nothing novel in the principle. Already the local authorities for the most part borrow large sums to meet their share of local expenditure. Why should not the State do the same in days of depression and repay in days of prosperity? That was the finance and the total finance of the emergency scheme—£2,500,000 for retirement pensions, £4,500,000 for raising the school age and £3,000,000 for the Unemployment Grants Committee, and the raising of the loan for roads carried on the Road Fund. The whole proposal was a budgetary charge of £10,000,000, a £10,000,000 programme by which I believe some 700,000 to 800,000 people could be set to work on emergency measures.

That is a modest and a limited programme devised for the situation with which we are met. Fantastic rumours were circulated as to its cost, but it is a very limited and moderate programme designed to meet the actual facts of the situation with which we are faced. Of course, everybody must admit that the limits of taxation are very easily reached after several years of deflation. We all know that with such a situation the limits of taxation are easily reached, and that when you reach a certain point flight from the pound and disaster may ensue, but if that £10,000,000 programme had to be set against other charges which we have incurred, and are incurring, and if the number thereby to be set to work exceed 700,000, who would choose between that programme and the other charges? As long ago as last September I begged the Cabinet to make up its mind how much it was prepared to spend on unemployment, how much money it could find, and then allocate the money available according to the best objects which we could discover. As it is, no such system has ever been adopted. Departments have come crowding along, jostling each other with their schemes, and, like bookmakers on the race course, the man who can push the hardest, make the most noise and get through the turnstile first, gets away with the money. It is absolutely necessary to make up our minds in advance in any national reconstruction, what our resources are and how they are to be allocated.

Now I come to the actuual administrative machinery of these big work plans. I have made the claim that £200,000,000 could be spent, and usefully spent, in Unemployment Grants Committee work, and roads alone, leaving for the moment slums and land drainage. To arrive at an understanding of the administrative machinery which I suggested, it is necessary for me briefly to analyse the relative breakdown of the present machine. We have greatly increased the output of the Unemployment Grants Committee's scheme by the modification of transferred conditions, and practically by that alone. I believe that the present Unemployment Grants Committee schemes could be trebled if we did away with transfer altogether. What happens? In order to maintain transfer you cannot give proper terms to the hard-hit areas of industry. Brighton or a seaside resort to-day can get more favourable financial terms from the Unemployment Grants Committee than the hardest hit mining area in South Wales, and, as a result, those areas, those depressed areas, cannot go ahead with schemes at all. They are burdened with rates, and even if they were prepared to raise fresh money the Ministry of Health would forbid them on financial grounds. Not only the depressed areas, but other areas with over 10 per cent. of unemployment get much less favourable financial terms, and they simply cannot go ahead with their schemes because they cannot put up the enormous share of the cost which falls upon them, while at the same time prosperous areas, with little or no unemployment, can get far more favourable financial terms, the details of which I described in the House of Commons last November.

What is the official defence of this? The defence is that these areas with under 10 per cent. of unemployment have to accept transfer from other areas. To make them do that they have to be given a premium in the shape of more favourable financial terms, otherwise transfer will appear as an obligation imposed rather than an obligation accepted in return for a reward. Therefore, if the transfer system is kept, the hard-hit areas are bound to get less favourable financial terms than the more prosperous areas. The result of that is that your schemes are hit in both ways. The depressed areas, the hard-hit areas cannot go ahead because the financial assistance is not good enough, and the prosperous areas will not go ahead because with any unemployment of their own they will not take transferred labour from other districts. Therefore, you catch it both ways. You are hit in every direction and your work is broken up and frustrated. What is the defence of all this? We are told that the hard-hit areas are economically dead, that they are finished, and that the only plan is to move the labour out from them. It may be true that those areas will never employ as many people as they did before, but it is a fallacy and overstatement to say that they are dead. Because less people will be employed in South Wales than before, is no reason for allowing its unclassified roads to fall to pieces or to deprive it of the ordinary amenities of financial assistance from the Exchequer which Brighton, Eastbourne or Worthing can obtain from the Exchequer. It is a most extraordinary doctrine.

Another way in which the Unemployment Grants Committee plans are held up is that the whole concentration is on works of magnitude, great wealthy corporations carrying out vast water schemes, and things of that kind. That is where you get delay and the necessity for Parliamentary powers. If you gave to all the small places more favourable financial terms, spreading your assistance all over Britain and letting them carry out schemes which they can do within their own boundaries, without Parliamentary powers of any kind, then not only would you enormously increase the aggregate of your schemes but you would diffuse and spread your relief all over Britain into every constituency and every town. Therefore, I suggested that transfer should be done away with as far as the Unemployment Grants Committee work was concerned, that the financial terms should be uniform throughout, and that in the depressed areas 100 per cent. grants should be made by the State. We have to face realities. In the depressed areas they cannot put up a penny. Either the work will not be done or the State must pay for it. If the State does not like to make a 100 per cent. grant to the local authorities in those areas, then let the State either do the work itself, employing the local authority as the contractor, or employ an actual contractor, if it must.

It is no good deluding ourselves that any formulas will get us round the depressed area problem. I was told to announce from that Box, in November, that a formula would be discovered to deal with South Wales. I made that announcement, in accordance with my instructions, but we failed absolutely with the Ministry of Health and the Treasury. They are still hunting for a formula, and they will never find it until they face the reality that a 100 per cent. grant, and that alone, will get a move on in these areas. With these methods and the abolition of transfer I sincerely believe that the increase in work schemes which I have described could be achieved. With regard to transfer, we want, if we can, to draw men from the depressed areas to other parts of the country if and when useful jobs can be found for them and not to draw them away just to put men out of jobs in those areas. The only way to secure the transfer of labour is by national schemes, in which the State either does the work itself or puts up such a large proportion of money that it can impose its own terms. There are only three ways in which that can be done—slum clearance, land drainage and the roads. On slum clearance and land drainage I made this submission. They were right outside my Department, but I asked the Government whether they would consider a more direct intervention on the part of the State, with a view to short-circuiting the local delays. I believe that in such schemes something approximating to a mobile labour corps, under decent conditions of labour and wages, of course, could have been employed to deal with that problem. I make that submission for what it is worth, and proceed to the roads.

The road programme, as I have said, does not annually exceed the programme of the late Government. If you ask me: "Have you got the latest, the final engineering plans to build £100,000,000 worth of roads in this country?" I say, "No," and I say that it would be a great waste of time if any Department had worked out those plans before we knew if we could go ahead with them or not. I could not do it. My staff, one very able and devoted Treasury official, could not do it. The Ministry of Transport would not do it. I think they properly would not do it until they had settled in principle with the Treasury whether they could go ahead to that limit of money, if they were permitted to do it. If I am asked, "Can you define the administrative methods and procedure by which, in your belief, that achievement can be carried through?" I reply, "Yes," and I will go on to describe that administrative method and procedure, very briefly.

Our central difficulty in building roads quickly is the relationship of the State and the local authorities. On the one hand, you cannot ride rough-shod, and no one wants to ride rough-shod over the local authorities. On the other hand, the work has to be done. I am one of those who believe that the great main roads of this country should be national concerns, and that it is as much an anachronism to leave these roads in local hands as it would be to leave the railways in local hands. I admit that that raises a large controversy, but I try always to face reality and a practical situation, and I believe you can get round that difficulty and get agreement quickly in this way—leave the question of the nationalised roads until you settle the major question later, when you have to face the whole transport equilibrium of this country, as we have not begun to do. What matters in the building of roads quickly in relation to this problem is not the construction of the roads but the maintenance of the roads. Let the State construct and hand over to the local authority for subsequent maintenance. The local authorities would be something more than human or less than human if they objected very strongly to having their work done for them. This principle has been employed before, and in many cases the local authorities would do the work for you if your grant was anything approaching 100 per cent., or of such generous terms as to make a really tempting offer.

If you made it clear that this machinery was emergency machinery and formed no part of the permanent relationship between the State and the local authorities, then I believe that, without upsetting the existing relationship, you would get through that emergency programme on the basis of the State constructing and the local authority maintaining, until your whole system was decided upon. But before you launch out on any such programme you have to make up your mind, in broad outline, what the permanent transport equilibrium of this country is to be. On every turn when we want to build roads we are told that it will damage the railways. What is to be the relationship between railway, road and canal in the future? No research, no thinking beyond the Commission—which has been sitting for long, and is to report later —is going on in this country; no examination by Government; not faced up to by Government, and so at every turn your road programme and your immediate unemployment programme is thwarted because it is said any great development of the roads will injure the railways. That matter has to be decided.

Further, we have to face this fact that to get things done quickly the State has to put up a large share of the cost. If you put up more generous terms under Unemployment Grants Committee work and road work for the emergency programme, and give the local authorities a now-or-never position, and say to them, "Here is your chance to get jobs done which are necessary to do. This is not the permanent problem of unemployment. We are merely bridging the gulf before the fruition of our long-term measures. Directly our permanent reconstruction is achieved this emergency programme will come to an end, at the end of three years or more, and you local authorities will have missed your chance; you will not for ever be getting assistance from the State to do your job." In those circumstances, you would get every local authority coming forward with schemes, if you face them with a "now-or-never" position and urge them forward with machinery of Government, which must be rather similar to the machine of the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) under the National Health Insurance Act, when I believe he had machinery going into every constituency and to every local authority, explaining it and gingering up the locality. Such a machine is needed in this work, because nothing is so astonishing as the ignorance of many local authorities, and even their paid officials, as to the conditions offered by the Government. Have your emergency programme, have your now-or-never position, and then, with a great drive of Government machinery behind it, you will easily treble the work of the Unemployment Grants Committee programme.

I am coming now to my conclusion. I am sorry to have detained the Committee so long, but it is amazingly difficult to cover such a vast field as this in a short time. We have to face up to this fact, that if men are to be employed on any large scale that employment has to be paid for either by the State or by local authorities. There is a tremendous struggle, an incessant struggle, going on in every Government department to put every penny they can off the taxpayer and on to the ratepayer. What holds up these plans for months is the struggle for these pennies, these minor details. What does it matter? What is the use of shifting the burden from the taxpayer to the ratepayer? What is the use of lifting the burden from the right shoulder to the left? It is the same man who has to carry it, and the economic fact is this, as the Colwyn and every other authoritative inquiry upon the economic side has said, that the burden on the ratepayer is more onerous upon industry than the burden upon the taxpayer. If this burden has to be carried, need we struggle and waste time in deciding whether it is to be carried by the taxpayer or by the ratepayer?

Further, it must be remembered that to set many men working for a year costs a great deal of money. It costs £1,000,000 to employ 4,000 men at work for a year, and £100,000,000 to employ 400,000 men for a year. Therefore, if you are going to do this work on any large scale large sums of money will have to be raised by the State or local authorities to carry it out. How is it to be raised, out of revenue or out of loan? £100,000,000 out of revenue! Who will suggest it in the present situation? It is 2s. on the Income Tax. It must be raised by loan. If the principle of a big loan is turned down then this kind of work must come to an end. It has been suggested that I advocated the raising of large loans and spending the money afterwards on any programme we could find. Nobody would be so mad as to suggest anything of the kind. This money, under a three years programme, would be raised as and when required to pay for that programme over a period of three years. It is not a question of raising £100,000,000 right away. It would be spread over at least three years, or even longer as there is always a big lag between the work and payment.

If this loan cannot be raised then unemployment, as an emergency and immediate problem, cannot be dealt with. If we are told that we cannot have the money let us confess defeat honourably and honestly; let us run up the white flag of surrender if we cannot have the money to pay for unemployment. If we are to deal with unemployment then the money, by revenue or by loan, has to be found. I advocate the method of a loan, and in my programme the amount which would fall upon the Exchequer would be the small charge of £10,000,000 a year. I have no doubt that we shall hear from the right hon. Member for Epping (Mr. Churchill) in answer to this latter part of my case, what he has so often described as the Treasury view: the view that any money loans raised by the Government must be taken from other industrial activities and will put out of employment as many men as are put in employment. The right hon. Gentleman in powerful expositions has often put forward that case. How far is that case supported by the present Government? I should like to have the views of the Chancellor of the Exchequer, for every argument with which I have been met seems to support that case. I admit that there is some force in that view in a period of acute deflation. If you are pursuing a deflation policy, restricting the whole basis of credit, there is some force in what is known as the Treasury view, that it is difficult to raise large loans for such purposes as this. The "Financial Times" on 14th April said: The policy of deflation is apparently proceeding apace, and it went on to observe that it was no use having a low bank rate if the whole basis of credit was restricted and charged the Chancellor of the Exchequer in his action in regard to Treasury Bills with a large share of the responsibility. I am not going into that subject on this occasion because there will be other opportunities for doing so, but I agree that if you are pursuing a policy of deflation you are lending force to the Treasury view. Given, however, a financial policy of stabilisation, that Treasury point of view cannot hold water. It would mean that every single new enterprise is going to put as many men out of employment as it will employ. That is a complete absurdity if you pursue that argument to its logical conclusion. If it is true it means that nothing can ever be done by the Government or by Parliament. It means that no Government has any function or any purpose; it is a policy of complete surrender. It has been said rather curiously, in view of the modesty of my programme, that it is the policy of the "red flag." I might reply that what is known as the Treasury view is the policy of the "white" flag. It is a policy of surrender, of negation, by which any policy can be frustrated and blocked in this country.

Hanging all over that policy is the great conception of conversion. There are two ways of achieving conversion. One through the inherent financial strength of your position, leading to a strengthening of Government credit. The other is by the simple process of deflation to make all industrial investments unprofitable, and drive your investor into Government Securities because he has no other profitable outlet. But there may be another effect of that policy; that the money goes abroad, and then you get the logical effect of that policy suggested by the President of the Board of Trade as the only means of solving our industrial problems, when he said on the 14th May: During the past fortnight alone £16,000,000 of new capital has been authorised or raised for overseas investment, and so I trust the process will continue. Why? Why is it so right and proper and desirable that capital should go overseas to equip factories to compete against us, to build roads and railways in the Argentine or in Timbuctoo, to provide employment for people in those countries while it is supposed to shake the whole basis of our financial strength if anyone dares to suggest the raising of money by the Government of this country to provide employment for the people of this country? If those views are passed without examination or challenge the position of this country is serious indeed. In conclusion let me say that the situation which faces us is, of course, very serious. Everybody knows that; and perhaps those who have been in office for a short time know it even better. It is not, I confidently believe, irreparable, but I feel this from the depths of my being, that the days of muddling through are over, that this time we cannot muddle through.

This nation has to be mobilised and rallied for a tremendous effort, and who can do that except the Government of the day? If that effort is not made we may soon come to crisis, to a real crisis. I do not fear that so much, for this reason, that in a crisis this nation is always at its best. This people knows how to handle a crisis, it cools their heads and steels their nerves. What I fear much more than a sudden crisis is a long, slow, crumbling through the years until we sink to the level of a Spain, a gradual paralysis beneath which all the vigour and energy of this country will succumb. That is a far more dangerous thing, and far more likely to happen unless some effort is made. If the effort is made how relatively easily can disaster be averted. You have in this country resources, skilled craftsmen among the workers, design and technique among the technicians, unknown and unequalled in any other country in the world. What a fantastic assumption it is that a nation which within the lifetime of every one has put forth efforts of energy and vigour unequalled in the history of the world, should succumb before an economic situation such as the present. If the situation is to be overcome, if the great powers of this country are to be rallied and mobilised for a great national effort, then the Government and Parliament must give a lead. I beg the Government tonight to give the vital forces of this country the chance that they await. I beg Parliament to give that lead.

Mr. LLOYD GEORGE

We have listened to a very remarkable and powerful speech from the hon. Member for Smethwick (Sir O. Mosley). He has put his case with remarkable lucidity and force, and he certainly need not have apologised for the time lie occupied. I am perfectly certain that it is the feeling of every hon. Member that he did not waste any words and that he could not have compressed the case he was bound to put into fewer words. I profoundly agree with his final sentence, and, with such powers as I have, I want to drive that appeal home to the Prime Minister. The proposals of the hon. Member for Smethwick were good in parts. Some of them I found quite palatable; there were others which were a little high. When he came to his long-term programme, I thought I detected some of the heresies which he must have imbibed in the party in which he was brought up. It is perfectly true that his conclusions are different from those of hon. Members above the Gangway, but his fundamental argumeats were the same. As a matter of fact, it was an injudicious mixture of Karl Marx and Lord Rothermere; and no wonder the Lord Privy Seal and the Chancellor of the Exchequer found it difficult to agree in so far as that was concerned. The Lord Privy Seal does not believe in either of them. When he came to his short-term programme, I found myself very much in agreement except in regard to his proposal as to pensions, which I have heard for the first time. I agree that the proposal is very much narrower in its extent than what I have heard from the various rumours that have been circulated. I thought the proposal was to pension everybody over 60, and I was rather pleased. I thought I would have a look in. I understand that he is only going to pension those who are 60 on a given date, and anybody who is not fortunate enough to attain that lucky age before that day will have to go on working while his neighbour is drawing a pension of 30s. a week. But when he came to the cost of it, it was very ingenious. £400,000. Thirty shillings a week. I think it was £13,000,000. [An HON. MEMBER: "£21,000,000."] That is rather low on £400,000 a week, but, still, it gradually disappears. £8,000,000 went here; £5,000,000 went there. It was a beautiful piece of jugglery. He said, "Look at the £21,000,000, and see them now. Just watch. There is £8,000,000 gone. Now £13,000,000." Then there was another little legerdemain. £10,000,000 disappeared, and then—I am not sure whether it was a final one—it disappeared up to £2,500,000. I am not at all sure at the end whether the Chancellor of the Exchequer was not actually making a profit.

7.0 p.m.

So, on the whole, I trust that the Government, when they reconsider, as I most earnestly hope they will, the whole position of unemployment, will postpone that particular plan until they have adopted the rest, and until all the rest has been carried out. I think we are piling up too much. I venture to say, and I said this once before in this House that there are things which in themselves appear to be quite good and each of them making a special appeal, and somehow you go up from million to million, until at last, I think the burden will become a perfectly crushing one. I hope that scheme will not commend itself to a sufficient number of hon. Members behind the Government to force them to reconsider it. When you come to the rest of the programme, there are a few things I should like to say to the Prime Minister. I am very glad to hear this debate. I am very glad that he has taken this subject, in hand. I hope he has, because he certainly has not done so up to the present. His knowledge, or lack of knowledge, of those figures shows that up to the present he has not mastered the elements. I am going to make an appeal to him, because no one can put this thing through, however able he may be, except the head of the Government. I am going to recall to him his pledges. Let him believe me, I am not recalling these in order to taunt. I am going to recall them in order to ask him to carry them out categorically, and it is not too late. But it is pretty nearly, when one sees how these figures are mounting up. The problem might soon get out of hand.

I will recall to the Prime Minister and to the Committee exactly what he promised. In the course of his speech, which, I think, filled even his own supporters with a good deal of despondency and disappointment, in which we fully share, he suggested that the Government would have done things if they were sure of a majority. I would ask the Prime Minister, or anybody who is going to speak to-night, what proposal on unemployment is there that he has ever put forward either in public or in private in the House of Commons that we refused to support? Let us take his programme of the last election. I will take, first of all, the programme which was the basis of all the speeches of the right hon. Gentleman. In that singularly able document called "Labour and the Nation"—an extraordinarily well written and thoughtful document—the whole problem was dealt with as a programme on a transitional basis. The Government never concealed the fact that they were Socialists and believed in nationalisation, in securing all the means of production and distribution. That was not their programme; it was a practical, transitional one, and that word is used.

I am going to extend an invitation to the Government and hon. Gentlemen behind. There are fundamental differences between them and hon. Gentlemen here, who have never accepted this programme, and I quite well understand their opposing it. That is not the case with hon. Members sitting opposite. I have been re-reading that very remarkable document stating quite clearly the programme a the Labour party to deal with unemployment if they were brought into power. They started with the setting up of machinery: a national economy committee, an unemployment development board, which were to carry out a programme in every item of which we, at any rate, sitting on these benches would be only too glad to support the Government. These are the words: There is no lack of sound schemes, the urgent need for which is generally admited. I am entirely of that opinion. Then you have waterlogged land, national drainage schemes, dealing with floods, reclamation, coast erosion, afforestation, the clearance of the slums, the building of satellite towns with their own public buildings and so on. That is not in the Bill introduced by the Government about housing. But, when you come to roads, the part dealing with roads is the most elaborate of the whole of this programme, and I am going to read it. The enormous growth of road transport demands a network of arterial and subsidiary roads, such as were not dreamed of before the days of motor transport. A vast programme lies ahead of us in the building of new roads, the widening and straightening of existing roads and their adaptation to modern needs and the erection and reconstruction of bridges. Such measures must be carried out in conjunction with the regional planning schemes of the Ministry of Health, and with an eye to future economic development. The Government which first takes the lead in developing resources and equipping the modernisation of industry has the right to appeal to other industries. Can the Prime Minister point out one of those projects, which contained the whole of the Labour programme for dealing with national development, that he ever asked us to support when we denied support? And I am here now to say to him—because it is the future that matters—that if he carries out that programme, the whole of the Members sitting by me will be only too delighted to assist him and his Government to carry it out. These are not relief works. I am very sorry that the Prime Minister used that word, because he disclaimed the word in all the speeches which he made.

The PRIME MINISTER

It was a slip.

Mr. LLOYD GEORGE

Well, I think it must have been. These are works of a national development of the resources of this country. So far did the Government go. When I put forward a programme on behalf of the party which I represent, a programme on the same lines, what was the answer given by the Prime Minister I First of all, this is what the Chancellor of the Exchequer said about the programme: It is a good programme so far as it goes. It did not go far enough for him. There is not an item in it to which the Labour Government is not committed. Then he went on afterwards to say: Mr. Lloyd George's proposals were admirable in themselves or they would not figure in the Labour programme. That was at the beginning of the campaign. The right hon. Gentleman was quite civil in his language then. Afterwards he began to treat me as if I were the right hon. Gentleman the Member for Epping (Mr. Churchill). I thought that was a little hard from an old friend. But here let me give what the Prime Minister said, and this bears upon the question of a loan: To reduce the number of unemployed to its normal level by a carefully devised loan spent upon national development, upon reorganising our transport system and laying down a really first-rate and efficient national system of roads is a policy that we have urged both inside the House and out.

The PRIME MINISTER

Hear, hear!

Mr. LLOYD GEORGE

I am glad to have the assent of the right hon. Gentleman. In so far as the programme is concerned, we are only appealing to him now to carry out the programme that we put forward then. Neither the First Commissioner of Works nor he have a right to say either here or outside that if they are impeded in carrying it out it is due to the fact that there is no support from hon. Members sitting around here. I will carry it a little further. What is the position? The first thing the Prime Minister said he would do was to set up a thinking and acting machine, or, as he put it, a thinking and acting brain for the Government. That thinking and acting brain was not set up until February. For 8½ months the Government proceeded without a thinking and acting brain. [Interruption.] There were two things that the Prime Minister proposed to do, and if he challenges me I have the actual quotations here. The first thing he said he would do was to set up something in the nature of an Economic Staff. That, I assume, was done in February, and I am very glad to find that quite a number of those who assisted us in preparing our programme have been incorporated by the Prime Minister in this thinking and acting machine. I will guarantee that the thinking will be very sound.

But that is not enough. A machine of that kind cannot be an acting machine; it can only be an advisory machine, a deliberative machine. It can examine problems, as has been pointed out—these very searching and penetrating problems. That is the right machine to do the examining. But it cannot act. Therefore, the Prime Minister had to make up his mind to set up some machinery that would act. What is the machine that he is suggesting? I am not putting this forward for criticism, but am simply putting it to him as a point, so that I can ask him to carry out the pledge which he gave before the Election—not here to-day in this House. What was his second pledge? That he would set up something on the analogy of the Committee of Imperial Defence, with the Prime Minister in the Chair. That is vital. I think it would be worth while to read the actual words which the right hon. Gentleman used. He made this statement in Shropshire: So pressing was this problem of unemployment that the Prime Minister ought to make himself responsible as Chairman of a Committee that would have charge of the legislation and administration necessary to deal with it. In a speech at Leicester he said: His idea of a Committee was something on the analogy of the Committee of Imperial Defence. I am very glad he still agrees. That is very important. The Prime Minister went beyond that, and I think that all the mischief has come from the fact that that vital pledge was never carried out. Up to this hour the Prime Minister clearly has not made himself acquainted with even the elementary details of the problem. When I put that inquiry with regard to the £103,000,000 I had two very simple questions in mind. Over how many years was that money spread, and how much of it was in excess of the money which was being spent by the Opposition when they were in office? He would answer neither question. Yet those questions are vital. Not only so, but the right hon. Gentleman said: "This is not a question for me; you must put that to the Departments." That shows that he departed entirely from the position that he took up before the election—that this was a business which the Prime Minister should undertake as his prime and main function. I ask him to resume the position which he took then.

I think that the mistake the right hon. Gentleman made was that he promised to take unemployment in hand as his first charge, but went and took another job which, in my judgment, could have been done just as effectively by two members of his Administration. [Interruption.] I say so with some knowledge of what that problem is. I have here another quotation from a speech which the right hon. Gentleman delivered in dealing with Mr. Gibson's appeal about disarmament is Germany. He said: "That is a Foreign Office question." That is what he said before the election. What more did he say? The line which he took with regard to that is very important. He said that in 1924 he held the view that the Foreign Office was part and parcel of the Prime Minister's responsibility. In present circumstances it certainly would not be wrong to say that his chief and immediate concern is unemployment. But the right hon. Gentleman went on, not merely in that speech but in a series of speeches afterwards, to give an undertaking that if he became the head of a Government he would make it his first and supreme job to set up a committee on the analogy of the Committee of Imperial Defence, and that he would preside over it and take charge.

The PRIME MINISTER

The Committee that was to be set up on the analogy of the Committee of Imperial Defence was not for unemployment. I am Chairman of the Committee, which meets frequently and is doing an enormous amount of work.

Mr. LLOYD GEORGE

I beg the right hon. Gentleman's pardon. He really has forgotten what he said. The right hon. Gentleman was dealing in these speeches with the problem of unemployment. I can give him the dates of the speeches. It is no use the right hon. Gentleman shaking his head. He cannot deny the pledges which he definitely gave before the election. One speech was in Shropshire. I forget in what division, but I believe he spoke only once in Shropshire. Another speech was at Leicester, and in it he definitely made these statements in reference to unemployment. He was dealing with unemployment, and the committee was to be set up to deal with unemployment. In Leicester he went on to explain, further, that this committee was to be a committee on the analogy of the Committee of Imperial Defence. I hope that the right hon. Gentleman is not going back on that, because I think that the grievous error which he has committed is in not having put that pledge into operation. I am going to ask him that the pledge which he definitely gave he should redeem now. May I give the reasons?

There is no one who can deal with a problem of this kind except the head of a Government. Why? First of all, he is the only one who has authority. He is the only one who has the right to give directions to other Departments. The Lord Privy Seal is a Minister who has no authority over any other Minister. He has been entrusted with the care of unemployment. But let the Prime Minister think of the Ministries that are concerned with the problem of unemployment. There are the Ministry of Labour, the Board of Trade, the Ministry of Transport, the Ministry of Health, the Overseas Trade Department, the Ministry of Agriculture, the Mines Department and, above all, the Treasury. I would like to see the Lord Privy Seal giving orders to the Chancellor of the Exchequer! There is only one man who is in a position, subject, of course, to the Cabinet, to give directions to co-ordinate the whole of these Departments and to give instructions to them, and that is the head of the Government. It is a problem of co-ordination.

Take the case of the Minister of Transport, a very able man of great experience. What has he to do? He cannot act without first of all dealing with the local authorities, which means dealing with the Ministry of Health; without dealing with the Treasury, which means the Chancellor of the Exchequer; without dealing with the Lord Privy Seal; without dealing with the Ministry of Labour. He cannot act without consulting four or five other Departments. Therefore, it is vital that you should have some committee that will co-ordinate the whole of these Ministries and co-ordinate the action of the Government in regard to them. I really would like to have the attention of the Prime Minister at this point. It is not often that we get him at these discussions. Those are all very vital questions.

The right hon. Gentleman said, "I invite the House of Commons to co-operate." What does he mean by "co-operate"? Does he simply mean inviting us to have conversations with him? We shall be very delighted, and it would be very pleasing and very instructive. But sporadic conversations on matters which involve detail and detailed examination are no use. The right hon. Gentleman himself laid down the principle upon which to act, and that is the Committee of Imperial Defence. That Committee was first of all created by Lord Balfour. The right hon. Gentleman has been a member of it, not merely as Prime Minister but when he was not Prime Minister. What happens at that Committee? There are certain permanent members of it. When you are dealing with some specific problem, you call together the Ministers whose departments are affected by that problem, and not merely Ministers but Members of the Opposition. I was invited by the right hon. Gentleman the late Prime Minister; I have been invited by the present Prime Minister, and so has the Leader of the Opposition. Mr. Asquith, Mr. Haldane and Sir Edward Grey, as they were then, were members when the other Government was in power. When Mr. Asquith was Prime Minister, Mr. Balfour, Lord Lansdowne and Lord Esher came there. They were there considering the problems with the Prime Minister and the Ministers and with the help of experts, and in so far as it was necessary, sitting continuously. If the right hon. Gentleman is not going to do that, all this talk about co-operation means nothing.

If the Government want the assistance of Members of this House, the only way in which they can get effective co-operation is by summoning Members to this new committee and giving them the same facilities as Ministers to see everything that is going on. [Laughter.] I have heard of the loud laugh which bespeaks the vacant mind. These hon. Gentlemen who laugh do not realise that the whole of the War Book, which was so invaluable in the conduct of that terrific national enterprise, was prepared by the Committee of Imperial Defence, which had upon it not merely representatives of the Ministry, but representatives of the Opposition as well. Is it really so ludicrous that a committee of a similar character should be set up, and that the Prime Minister should summon Members of the Opposition to a committee of that character so as to get the benefit of their experience and knowledge? I trust that the right hon. Gentleman will see his way to do so.

Will regard to loans, I agree with the hon. Gentleman the Member for Smethwick. It is quite impossible to deal with this situation and with this emergency unless you raise a loan—quite impossible—and I am going to urge that that should be done. The Prime Minister, in the speech which I quoted, said that a loan was an essential part of the programme. It must be a loan to enable you, not merely to spread work over five years which will employ at the outside only 80,000 people, but a loan which will enable you to make some impression upon the problem. I know what will be said. I hope that the Chancellor of the Exchequer will not turn this down from apprehension with regard to his Conversion Loan. The Conversion Loan may be a very important matter, but the saving of this country from the evils of unemployment is an even more urgent matter than the Conversion Loan. I am trying to advance these matters, not in a critical but in a helpful spirit, and I hope that the right hon. Gentleman will do what I suggest. We had a computation, made by several of the gentlemen who are now employed by the Prime Minister to examine this problem, which showed that the national savings per year came to £500,000,000. Does the right hon. Gentleman really mean to say that if you raise a loan of £100,000,000 this year, and £100,000,000 next year, for the purpose of dealing with the national emergency, this country could not afford it?

If this country were engaged in military operations, does anyone imagine that we could not raise £100,000,000, and many hundreds of millions of pounds? What is the use of saying that we cannot afford to raise £100,000,000 for the purpose of dealing with a problem like this, which is doing infinite damage to this country? No one has used more powerful language than the Lord Privy Seal about the moral damage which is being done to the people who have been unemployed for all these months. Does he really mean to say that when we, in the face of the enemy, could raise hundreds and even thousands of millions we would be ruined if me raised £100,000,000 per annum for two or three years to deal with this emergency? May I point out that we are borrowing now for the Unemployment Fund. Here we are, spending something like £100,000,000 a year upon unemployment. Would it not really be very much better for the credit of this country that we should try to find work for as many people as we possibly can, so long as that work is necessary work? Upon that point, there is no difference of opinion between hon. Gentlemen opposite and hon. Gentlemen sitting here. All these schemes are schemes which we agreed before the Election were necessary, not merely for relief work, but for the purpose of developing the resources of the country. I hope that the Prime Minister will deal with this matter and will take it in hand himself. He said that there were difficulties—difficulties with local authorities, difficulties with landlords. I think if he makes inquiries he will find that, at the present moment, in various Acts of Parliament he has powers which would enable him to deal with most of his difficulties.

Supposing that he has not. If he says that the powers are inadequate, why did he not ask for powers in time and at the very start? The first duty of the Government in such circumstances was to have taken emergency powers. We realised that when we were considering this problem, and we got some of the ablest lawyers to consider in what respect emergency legislation would be necessary in order to enable our Government to deal with this problem. Have the Government considered that subject? If so, what is the legislation which they require? I hear about the 40 Acts of Parliament that are necessary in order to deal with level crossings. All I can say is that it is a scandal if, in a matter of that kind, you have to ask for 40 little Acts of Parliament and send them all upstairs to Committee and employ lawyers and expert witnesses, and then bring them down here again on the Floor of the House. These small matters are such as ought to be dealt with in a comprehensive Bill. The Government could have dealt with these matters as emergency matters. That does not mean that you would have to incorporate such legislation as part of the permanent machinery of the State. You could treat this problem as an emergency problem.

At any rate what I am asking the Government is, first, that they should carry out the definite pledges which they gave before the Election. If they carry out the proposals embodied in the Prime Minister's speeches and in "Labour and the Nation" with regard to unemployment, in so far as we are concerned, we shall be only too happy to support them—so that at any rate the right hon. Gentleman cannot complain that there would be no majority in this House. The second point which I want to put to him is this. I agree that this is not a problem which ought to be treated as a party problem. I ask the right hon. Gentleman to make co-operation to which he has invited the House a reality, and he can make it a reality by carrying out the pledge which he has already given to set up a Committee, on the analogy of the Committee of Imperial Defence, on which he would have Members of the Opposition, who would have exactly the same access to papers and documents as Ministers. I ask, in the third place, that he should not shrink from the essential need, the essential condition of every programme of national development, and that is to use the credit of this nation to the full for the purpose of this work of development.

Lieut.-Commander KENWORTHY

Is the right hon. Gentleman speaking for his party now?

Mr. LLOYD GEORGE

Certainly. Most decidedly. We are committed as a party to that proposal. I put it forward on behalf of the whole party at the last Election and my recollection is that there was no dissentient voice at any of our conferences, or at our party meetings with regard to that matter. Those three points I am putting with the full assent of the whole of the party. The Government have, undoubtedly, owing to the delay, lost authority. It would have been better for them had they carried emergency legislation immediately after the Election. I agree with the Leader of the Opposition that if they had put forward proposals for emergency powers, then probably the whole House would have accorded them.

Mr. KIRKWOOD

Did you not threaten that you would put them out immediately they brought forward anything of that kind?

Mr. LLOYD GEORGE

No. On the contrary, I have always made it perfectly clear on behalf of my hon. Friends and myself that, if the Government were prepared to carry out the proposals which were embodied in the "Labour and the Nation" pamphlet or whatever it is dealing with unemployment—the specific proposals I have mentioned, which are so identical with ours that we were charged with stealing the programme—that certainly we would support any proposals of that kind. The Prime Minister charged me and charged this party. He said we were like wicked gipsies who had stolen his child. We have offered the child back to him and we have offered to help him to nurse it. All I would say to the right hon. Gentleman the Lord Privy Seal is that what we are offering is the Prime Minister's own child. But the Lord Privy Seal says he will have nothing to do with the brat.

Mr. THOMAS

I will deal later on with the three specific questions which the right hon. Gentleman has put to me, but in order to do so effectively, and to give him a complete answer, I want to know exactly what he means by emergency powers? Is he speaking for his party when he says that they will support the grant of emergency powers to get over difficulties and delays, because I would point out that the first Bill which I introduced asked merely to expedite certain work by six weeks, and a right hon. Gentleman sitting on those benches and speaking for the party below the Gangway—

Mr. LLOYD GEORGE

If the right hon. Gentleman is going to ask me a question I shall give way, but if he is going to answer my speech, I would point out that he is to make a speech of his own later on.

Mr. THOMAS

I want to put it to the right hon. Gentleman that from the benches there it was said that we must not take away any Parliamentary rights. Does the right hon. Gentleman now agree on behalf of his party that if emergency legislation is required to deal with railway Bills and docks Bills and all these other Bills he will be prepared to support us? I only want to know that specific point.

Mr. LLOYD GEORGE

Of course, I do not know the particular Bills to which the right hon. Gentleman is referring and it is unreasonable to ask me, with regard to a Bill which I have never seen, whether I will support it or not [Interruption.] A question has been put to me and I shall answer it. It is a very vital question. We shall support any emergency legislation which will deal with these little obstacles which are impeding the handling of this problem. There are small problems and I have mentioned one of them, namely, that of railway level crossings. I have never said that we would suspend all Parliamentary rights belonging to a railway company or any other company, but any obstacle of a trivial character—[Interrupation.] A railway crossing is a very trivial matter, and the railway crossings are holding up at the present time, I understand, a great many schemes. If the right hon. Gentleman is really trying to find out a basis of agreement, I will answer him. If any legislation of this character is required, that is exactly one of the things that could be considered if the Prime Minister were to set up the Committee which he himself indicated that he was prepared to set up. That would be one of the very first questions that would be considered by a Committee of that character. It is not merely a question of the railway companies. The right hon. Gentleman said there were difficulties with regard to landlords, and when you come up against the landlords, if there are any difficulties, if a dozen or 15 landlords can hold up a great scheme for the benefit of a whole community, and if there are not powers existing at the present moment, we should certainly be prepared to support any Measures brought in by the Government to enable them to deal with an obstacle of that kind.

The PRIME MINISTER

Do I understand my right hon. Friend to say that he would be perfectly content that a Committee should do this civil, unemployment work, upon which he, or one representative or two representatives of his party, should have precisely the same rights of representation as he has at the present moment on the Committee of Imperial Defence?

Mr. LLOYD GEORGE

Certainly, because—

The PRIME MINISTER

Does the right hon. Gentleman not remember that as a matter of fact he is not a member of the Committee of Imperial Defence at all, and is only summoned when it suits me, in view of the particular question which is then before the Committee?

Mr. LLOYD GEORGE

That is exactly what I mean.

The PRIME MINISTER

I will do better than that.

Mr. LLOYD GEORGE

The right hon. Gentleman says he will do better. That is more than he has done with the pledges which he has given up to the present. The right hon. Gentleman says that on the Committee of Imperial Defence I am summoned for a particular question, but the particular question upon which we would expect to be consulted here—I and the Members of the Opposition—would be the problem of unemployment. It is no use the right hon. Gentleman shaking his head in that way. If he really means business, it is not to be treated in that way. I want to put this to the right hon. Gentleman, that there is a vast difference between this and the consideration of a preparation for war, where you have got casual meetings now and again with the Committee of Imperial Defence. Supposing you had the Committee of Imperial Defence meeting to consider a problem which was an urgent and a practical one, you would expect whoever was brought in there to be consulted upon the whole problem, upon the whole scheme, and with regard to the whole of the evidence that came before them.

I put it to the right hon. Gentleman again. It is a question of the spirit in which he is prepared to meet us. I have done my best to make a practical, definite suggestion to extricate this country—I will not say the Government, because that is their business and the business of the party behind them, but to help the Government, as a Member of this House, to extricate this country—from one of the greatest difficulties in which it has ever been placed. I agree with the hon. Member for Smethwick in what he says with regard to the gravity of the problem. I agree absolutely with what he says, that it is all the more grave because you do not get a sort of crisis which is obvious to everybody. It has gone on from year to year. Sometimes it has been 2,500,000, then it has gone down to 1,000,000, then it has gone up to 1,600,000, it is now 1,800,000 or very nearly, and it is going to be over 2,000,000; but the country is getting too accustomed to it. I think, on the whole, it is beginning to get alarmed now, but there is no clean-cut crisis or emergency with which it is confronted, and I appeal to the right hon. Gentleman to act in the spirit of the pledges which he gave before the election, to do his best to redeem those pledges; and if he does, he will get the support at any rate of the hon. Members who are acting with me.

The UNDER-SECRETARY of STATE for SCOTLAND (Mr. Johnston)

With a large part of the comprehensive survey of the position which was put before the Committee by the hon. Member for Smethwick (Sir O. Mosley) I agree, but there are parts of it where, unless I misunderstood him, he rather did himself less than justice, as, for example in his deprecation of the development of export trade. There are large areas in this country where employment depends upon a development of our export trade, and where it is definitely in the national interest that such export trade should be developed. There is the fishing industry. Unless our export trade with Russia in herrings can be developed, there is no prospect of employment for very large numbers of our unemployed in the fishing areas, and the precise reference which the hon. Member for Smethwick made, when dealing with the problem of export trade, to the cycle industry illustrated the danger of pushing his point of view so far as he did. It is precisely the development of our export trade in such matters as cycles which has been one of the most hopeful features of recent years in our Empire trade development; and Coventry and other towns are to-day living upon the very fact that the West African native has been taught to ride a bicycle. I am sure the hon. Member will, upon further consideration, find that his deprecation of the 40 per cent. of our trade which depends upon exports, or at least the development of them, was very unwise indeed.

There is one other point with which I should like to express some disagreement, and that is when he was dealing with the local authorities. I can conceive of no greater turmoil than would be created in this country than by the ruthless attempt at overriding the powers, the duties, and the privileges of the local administrative bodies in this country. However anxious we may be, for example, to deal with the problem of slum housing and the problem of building new houses, it is an extremely difficult matter indeed for a central Executive, particularly a central Executive elected from one side of partisan politics in this country, to override the wishes of the elected representatives on the local authorities, who are composed for the major part of other political parties, and the mere threat that a Labour Government would seek to override the measures taken by county councils composed entirely of members of political parties represented by the Opposition in this House, would have results which can surely be better imagined than described. What is going to happen with the trade unions, with the skilled workers sent away as a mobile labour force into local government areas against the wishes of the local authority?

Mr. BUCHANAN

You are doing that now with your transferred men.

Mr. JOHNSTON

We are not. The hon. Gentleman is wrong. As a matter of fact, when a local authority is not desirous of taking transferred men, there is no power on the part of the central authority to compel a local authority to accept transferred men.

Mr. BUCHANAN

You are transferring people every day, and you know it.

Mr. JOHNSTON

It is a matter within the knowledge of every Member of this Committee that it is only when a local authority is willing to accept transferred labour, and a special grant to go with it, that transferred labour is sent into its area, and in no case, so far as I know, has it been possible for the Central Executive, against, the wishes of the local authority, to import labour into their area. Since the time when Keir Hardie championed the cause of the unemployed in this House, the slogan which has crystallised the attitude of the Labour party towards the unemployed has been "Work or maintenance"—work if it could easily and readily be provided; maintenance, and adequate maintenance, if it could not. Time was, and not so very long ago—indeed, until the eve of the War—when the unemployed man had his unemployment ascribed to his own moral fault. He was told commonly, from Press and platform, that his unemployment was due to his thriftlessness or to his shiftlessness, to his drunkenness or to his wastefulness, but no one to-day in this House is so foolish as to make so palpably inadequate and erroneous a diagnosis of unemployment.

For 10 years, except for a very few days, in one brief period, the unemployment figure in this country has been over 1,000,000, and no one to-day imagines that these unemployed working men and working women are unemployed through any moral fault of their own. [Interruption.] If the hon. Member will be good enough to allow me to state my case in my own way, I shall be obliged to him. Within the ambit of the present method, national and international, of producing and distributing commodities, there is no other method known to me of dealing with the unemployed except providing some of them with what is called relief work, and the others with maintenance. The hon. Member for Smethwick, in his very skilful and elaborate survey, pretended to do no more than to reduce the number of unemployed workmen to what has been called normality. He with his schemes, and every one else with their schemes, pretend to do no more than to diminish in number our unemployed population.

8.0 p.m.

The right hon. Member for Bewdley (Mr. S. Baldwin), who opened the debate, made several quotations from speeches delivered by hon. Members on this side of the Committee. I would call the attention of the Committee to a speech which he made as recently as the 8th of this month at Sheffield. He is reported in the "Times" as saying: It is going to be a great problem in the world and a great problem in the course of the next generation too. What is to be done with the surplus output of the mass production which will take place in many countries? That is the question which he asked, and here is how he answered it: We shall have to leave that problem for its solution to those who are responsible when it becomes more acute than it is. He boldly faces the problem and then he passes on, and we have heard nothing to-day from the right hon. Gentleman, or indeed, from the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) in the way of a positive suggestion as to how this problem can be dealt with. I leave aside for the moment the question of mere machinery. Production to-day is unregulated. It is unregulated by the necessities of consumers; it is chaotic, and it is a scramble of gluts and shortages here and abroad. I have here a cutting from the Press of the 14th March this year of an item circulated by the Central News, which illustrates clearly the real problem that we have to face. It is headed "Imminent disaster; United States producing too much wheat," and it says: Only a severe failure of the coming wheat crop can save America from a financial disaster of the first magnitude. That same economic chaos is now to be found in the production of every alleged civilised country in the world. Farmers have had for two years a good crop of potatoes, with the inevitable result that at Question time day after day hon. Members in all parts of the House who represent agricultural constituencies are asking the Government what they propose to do to save the producers in agriculture from the ruin and bankruptcy which is inevitably produced under the present insane system—

Major BRAITHWAITE

You allow the low-wage countries to send their goods here.

Mr. JOHNSTON

The hon. and gallant Gentleman knows perfectly well that the glut of potatoes in this country is due to the splendid harvest; it is due to greater production and to the fact that Providence has sent sun and rain at the right time.

Mr. BROCKWAY

And low wages.

Mr. JOHNSTON

It is not due in any way to the question of wages. The last two great harvests are due to Providence, and these bumper crops have depressed prices. The extra quantity of commodities smashed prices, and when prices are smashed, the producers do not get a living. While it is true that competition from low-wage countries in certain commodities lowers prices, it does not so apply to such commodities as I have been discussing. The problem to-day is not the problem of insufficient production; it is how to find markets for the surplus produced in ever increasing ratios by the skill and genius of mankind.

The figures with which the Lord Privy Seal has had to deal are not only facing him; they are facing the legislatures and industrial leaders in other lands. Mr. J. M. Keynes was quoted last week as saying that the fall of over 20 per cent. in the general price level since 1924 is a first class disaster. The "Economist" says that the price level has fallen 20 per cent. Too much in the world! The Board of Trade Index shows a fall of 16 per cent. in prices. The League of Nations figures show that between 1923 and 1930 there was an increased production of 3 per cent. per annum, a total over seven years of 21 per cent., against an increased population to consume it of only 1 per cent. per annum. The results of that are inevitable. The Empire Marketing Board, whose figures will be accepted by many hon. Gentlemen opposite, put their Statistical Bureau on to the question of British Empire prices. What are the remarkable figures which they produce? Taking the basic figures as 100 in 1925, agricultural prices had fallen in 1928 to 83, and in 1929 to 65.1—fall of 35 per cent. in four years in the buying power of the primary producers in the British Empire. If their prices fall by one-third, and their buying power falls by one-third, the demand for clothes, boots, gramophones, bicycles and for everything else falls.

Mr. KIRKWOOD

That is an indication of the reduction that has taken place in wages.

Mr. JOHNSTON

In face of these figures, what is the sense in ascribing to any Government or political party, to any group or individual, the steadily rising figures of unemployment? The figures of unemployment are rising steadily and inevitably, and they will grow worse. Side by side with it, as Sir Henry Strakosh has calculated, during the 25 years to 1929, the fall in prices has meant an actual increase of the burden on the National Debt of no less than £1,300,000,000 sterling.

Mr. WISE

Why do you not tax that?

Mr. JOHNSTON

I am not the Chancellor of the Exchequer, and I cannot go into a question of general policy like that. I am putting the fact that side by side with the fall of the purchasing power of the producers there has been a fall in prices which has increased our National Debt by £1,300,000,000. Hon. Gentlemen opposite speak about Safeguarding, Protection or Tariff Reform, or whatever you like to call it. The "Daily Telegraph" one day this week reported that in Germany the unemployed receiving relief on the 15th of the month were 1,953,000, which was 826,000 more than a year ago. Germany has all the benefits of Safeguarding and Protection, and she has a tariff.

Mr. MOND

Did not the Prime Minister say that there were 2,700,000?

Major BRAITHWAITE

Did not—

The CHAIRMAN (Mr. Robert Young)

The hon. Member must remember that he had his say on the last occasion.

Mr. JOHNSTON

In addition to the 1,953,000 men receiving relief in Germany, 800,000, according to the "Daily Telegraph," were receiving no relief. Perhaps many of them were partly employed. At any rate, the total in Germany was nearly 3,000,000—in this land which has all the benefits of Safeguarding, Protection and a tariff. I take another authority, the "Investors' Chronicle." On 19th April this year it had a despatch from America headed "Unemployment Sunday." It says: Unemployment Sunday is to be observed throughout the United States on the 27th April. According to the National Unemployment League, there are 6,600,000 out of work. And that in a State which has a great internal market with all the benefits of a tariff and Safeguarding. It has also been afflicted with this world collapse in prices, which both Free Trade countries and tariff countries have felt. The "Times," which will be regarded as an authority, said on the 24th of this month: Neither Protectionist nor Free Trade, neither mainly exporting nor mainly importing countries, are immune from unemployment. It goes on to say: The percentages of the population unemployed are, in the United States, 4.8; in Germany, 4.4; and in Great Britain, 3.8. I am not saying that that is a desirable state of affairs at all, but do let us face the fact that a Safeguarding and tariff system is in itself no cure for unemployment.

I come to the question whether it is possible greatly to expand the amount of relief work in this country, and under what circumstances it is possible to do it. My view is that the task is too big for any one party harassed by strong opposition to undertake when it is open to all the obstruction and delays inherent in a partisan political struggle. There are local authorities manned, staffed and officered frequently by our opponents. There are areas where not a house has been built; areas where whole villages have been condemned as insanitary; I have one in my mind at the moment, where 432 houses have been condemned by their own medical officer of health as unfit for human habitation and not a solitary new house was built there last year. The Government, through the Department with which I am concerned, have been doing their utmost during the past 12 months to induce that local authority to act—begging them and pressing them, as the Lord Privy Seal reminds me.

Let me give the Committee an illustration of the difficulties we are up against in this matter. I imagined that one of the easiest methods of providing work for the unemployed in Scotland was to deal with piers and harbours. Many of them are going derelict. In many cases heavy seas have washed away the outer bulwarks, and some are silted up with sand. These piers and harbours are as essential to the future development of our trade and commerce as are public roads. The Lord Privy Seal was sympathetic and friendly and willing to do everything he could, and the Chancellor of the Exchequer was putting no obstacle in the way. What was the first thing my right hon. Friend the Secretary of State for Scotland and myself ran up against? A shortage of marine engineers, if you please. We could not get the plans. We cannot improvise marine engineers having the necessary experience. Those marine engineers we could get told us that they would have to make a prolonged study of the currents round the various piers and harbours with which they were asked to deal. They would have to take soundings, they would have to watch the tides-not the tides alone in one month of the year, but in various months of the year. The delays in getting anything done were appalling. These delays are not due to the fact that the Lord Privy Seal or His Majesty's Government are apathetic. Then, when we had got our plans, when we had got our schemes, we discovered that many of these piers are in the possession of private owners—some few of them in the possession of local authorities. When the question arises whether we should be permitted to take over these piers—take them over without compensation, of course—

Mr. KIRKWOOD

That is right!

Mr. JOHNSTON

—and hand them over to the local authorities in a fit condition to conduct the industry of the country, is it so sure that the House of Commons, and another place along the corridor, would give us the necessary, the emergency, powers? Until we can get unemployment and its emergencies regarded as an all-party question in this House; treated as questions were treated in the emergency of the War; obstruction swept away; the pettifogging delays which take place in this House over ordinary legislative proposals abolished; an all-party committee responsible to Parliament, making recommendations to Parliament—unless the House can rise to such a conception of its duties, I do not believe it is possible quickly to expand the area and the scope of relief works in this country. Other expedients for dealing with unemployment have been discussed. The hon. Member for Smeth-wick referred to retiring pensions. I have believed in that plan for years, and I believe in it more strongly now. He also referred to the school-leaving age, a question with which the Government are going to deal. If we can take our aged veterans of industry and their grandchildren out of employment, giving at one end of the scale a better education, as the children of the rich get, and at the other end some little leisure after a lifetime of toil, there may be more opportunity for employment for the able-bodied persons in between those ages.

The First Commissioner of Works has taken a very active interest in the question of migration. Migration has never been tackled except on an individualistic basis, under a system of giving a man a free passage and dumping him down, not on an alien shore, but dumping him down in a land where, perhaps, he has no friends, where there is no Poor Law, where there is no unemployment benefit, where there is no sickness benefit, where there is nothing to tide him over till he can get on his feet. That is one way of running a migration policy. My right hon. Friend has views and conceptions—I wish they were more widely held—under which we should regard the great undeveloped spaces in the British Empire as an Empire heritage, and places like Peace River would be developed on a large scale and the migrants looked after, at any rate be given their unemployment benefit until such time as they have got their houses over their heads and their crops coming up out of the ground. I was glad to see that my views about retiring pensions were reinforced the other day by Lord Melchett. He said: Apart from the ultimate remedy in rationalisation, the augmenting of pensions for workers over 65, raising the school-leaving age and assisted emigration are the most effective immediate remedies for unemployment. I come back to where I began. Everything is impossible unless we are prepared to regard unemployment as we regard the work of the Empire Marketing Board or the Public Accounts Committee or the Local Legislation Committee, or other matters which are regarded as being on a non-party basis. When we were in Opposition on the 4th February, 1926, we made these proposals. On the 8th March, 1927, a late Member of this House, Mr. Greenall, proposed the setting up of such an all-party committee, and I remember being entrusted with the duty of winding up the debate. The Prime Minister himself made the offer on 18th November, 1929, shortly after we took office. The Prime Minister said: As regards an all-party Committee, I should remind the House that when we were in opposition we made such a proposal to our predecessors, who regarded it as impracticable, but if I could see anything which would justify the belief that the parties opposite were prepared to co-operate and that useful results would be obtained always safeguarding the responsibility of the Government, I should be willing to consider representations."—[OFFICIAL REPORT, 18th November, 1929; col. 34, Vol. 232.] That is the problem which is before us this afternoon. The right hon. Gentleman made that offer. Since then we are caught more firmly in the grip of poverty clue to falling prices; and the problems have ceased to be national and have become Empire and international problems. This great issue of our unemployed fellow citizens finding useful social and necessary work can only be tackled if we are prepared to regard it from a national and not from a party standpoint. The right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) took a less adequate view of this question, and talked about the Committee of imperial Defence, the details of which I am quite indifferent about. It is a matter for the Lord Privy Seal to deal with. In this connection may I quote the words of Lord Macaulay: When none were for a party, but all were for the State. We have our views about public ownership and about social control. Hon. Members opposite disagree with us and take other views, but upon the question of whether we can or ought to provide social and useful and necessary work in the building of houses, the making of roads, the building of bridges, the creation of piers and harbours and work of that kind, we should take a national view, and if we do so we shall be able to find work for a much larger proportion of our fellow citizens.

Miss LEE

I would like the Under-Secretary to make it clear whether he was referring to a pension scheme as merely an ultimate ideal, or whether there is any hope of a pension scheme being brought forward by the present Government.

Mr. JOHNSTON

The question of providing pensions is part of our policy. The precise method by which that pledge can be carried out, its precise form and the precise date on which such a Bill can be introduced, are obviously matters upon which I cannot give an answer.

Mr. LESLIE BOYCE

I am very grateful to you, Mr. Chairman, for giving me the opportunity of saying a few words in this debate, and I would crave the indulgence which the Committee always so generously accords to those who are undergoing the ordeal of addressing it for the first time. The main issue at the General Election was unemployment, and the Government were returned to office largely on the strength of the "unqualified pledge" given in the Election manifesto of the party opposite that they would "deal immediately and practically with this question."

We on this side have not tried to take unfair advantage of the Government by minimising the effect that world-wide trade depression has had upon the industries of this country. But, during the five months preceding, the Election, the unemployment figures tell steadily and at the rate of 70,000 per month. Since the moment the Government took office, every time the clock bas struck the hour, both day and night, there has been, on the average, 77 more people on the register out of work. It is difficult to conceive that the vast difference between a reduction of 70,000 per month and an actual increase of more than one a minute can be attributed solely, or even mainly, to causes outside the Government's control.

Last week the Committee had the advantage of hearing from the Lord Privy Seal what the Government have been doing, and what they propose to do, to help our unemployed to find work. He said, in effect, "We have been in office nearly 12 months and it is about nine months since Parliament voted money for my scheme. So far, I have sanctioned expenditure amounting to £95,000,000 which will eventually provide employment for 380,000 people for one year. But it will be only temporary work. At the present time, apart from the railway scheme, the total number of people temporarily employed, both directly and indirectly, as the result of all my schemes is only 100,000." I hope I have not unfairly represented the points I have taken from the right hon. Gentleman's speech. In the whole of his speech there was not one single word about finding permanent employment for anyone.

What has the right hon. Gentleman done to help our unemployed women? The actual number of unemployed women on 3rd June last year was 209,800. What have the Government done to help those women to find work? Nothing. The actual number of women unemployed to-day is 464,500, which is an increase of 254,700 since the Government took office. What is the Lord Privy Seal proposing to do to help them to find work? He is doing nothing. The right hon. Gentleman is not even proposing Measures to enable them to find work temporarily.

I find in an article written by the present Prime Minister, which appeared in the "Daily Herald" of the 22nd of April last year, about five weeks before the General Election, this passage: A Labour Government is the only Government which will deal with the problem of unemployment with courageous determination. Labour has the programme; it only needs the power. As the Leader of the Opposition and the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) have pointed out not a single measure, introduced by the present Government to deal with this problem, has been rejected by Parliament. Not one. The Government have not been refused power. The Prime Minister said this afternoon that if the Government were to cure unemployment they would need a solid Government backing. The Prime Minister knows perfectly well that the Government have always had more power at their disposal than they have sought. I respectfully submit that the Prime Minister's remark implying that the Goverment needed a solid backing to cure unemployment was not a little ungrateful, not only to those who sit below the Gangway, but also to those who sit on these benches. I find in the Election pamphlet: "Labour's Appeal to the Nation," with reference to unemployment, this statement: Our schemes have been before the country for years. What has become of that programme? Where are those schemes? Have we not a right to know? On the date on which the Prime Minister's article appeared in the "Daily Herald," the unemployment figures stood at 1,140,722. Apart altogether from the fact that unemployment has increased by 660,000 since the Government took office, on the Lord Privy Seal's own showing, in his speech last week, the Government, in 12 months, have only succeeded, directly and indirectly, in finding temporary work for 100,000 people. Is that the programme that the Prime Minister had in mind a year ago, when the unemployment figures were standing at more than 1,140,000? Are these schemes, which have so far produced this almost negligible result, the boasted schemes which the party opposite have had before the country for years?

The Lord Privy Seal has told us that the money which he has sanctioned is to be spent in making the nation more efficient—more efficient in industry, in transport, and in communications. What is the ultimate object of all this efficiency? Presumably it is to enable our industries to sell their goods. But will it do so? Many of our industries—nay, most of them—are efficient already; yet, mere efficiency does not enable them to sell their goods. If we were to sacrifice, not £100,000,000, but £1,000,000,000, on the altar of efficiency, I do not believe that that alone would materially assist us to sell our goods. There is only one thing that can do that, and that is markets. In my view, our industrial problem is essentially and fundamentally one of markets. The plain fact is that we are at our wits' end to find markets, and, once we solve the question of markets, our unemployment difficulties, our industrial and financial difficulties, will quickly disappear—and not before.

I submit, therefore, to the Committee that we should ask ourselves two questions. The first is, where are we to find the markets in which we can reasonably look for an expansion of our trade; and the second is, what steps can the Government take to assist our industries in obtaining as large a share of those markets as possible? The first and most obvious place to look for markets is at home. At present, we allow competitive foreign manufactures, produced—in some cases within 25 miles of our own shores—under sweated labour conditions which we will not tolerate for a moment in this country, to pour in upon our home market and throw thousands of our own working men and women upon the streets. That is not the way to reduce unemployment; it is asking for more unemployment, and it is no wonder that we are getting it. It is a striking and eloquent commentary on our present fiscal system that the only markets in the world where many of our industries are able to compete on equal terms with their foreign rivals are to be found, not in this country, but in the Dominions, where they enjoy tariff preferences equal to the disadvantages from which they suffer in respect of production costs, taxation and other burdens.

The Lord Privy Seal advocates rationalisation, and the Prime Minister laid considerable stress on its importance this afternoon. We all agree that rationalisation is necessary in certain of our industries, in order to reduce production costs and thereby to increase our competitive power. The Chancellor of the Exchequer said this afternoon that we on this side of the House only wanted Safeguarding because our industries could not compete successfully in the home market. No amount of rationalisation will enable our industries to compete successfully in the home market against foreign industries which are also rationalised, and which only pay 40, 50, or 60 per cent. of the wages that we pay in this country. No amount of rationalisation will enable our goods to sell successfully against surplus goods of a similar character which are dumped in this country and sold at a price below the cost of production in their country of origin. Moreover, rationalisation is a costly business. Before those engaged in industry embark upon large and expensive schemes of rationalisation, before the bankers advance the money which is necessary to carry out such schemes, it is only natural that they should require to have, as a matter of ordinary commercial prudence, at least, some guarantee, or at all events some reasonable prospect, of a fair return on their money. A safeguarded home market, more than anything else, will give them that security.

Furthermore, part of the object of rationalisation is to obtain a greater production factor per unit of labour. At the beginning of the process, there is a squeezing out of labour, and a safeguarded home market is necessary if the labour so displaced is to be re-absorbed into the same industry, and more besides. I submit, therefore, that, in respect of the home market, the Government are not doing their duty by the unemployed, or by those who are in work, but who may well be out of it Wore long if the present system is allowed to endure.

We are told that we must increase our export trade. We all agree upon that. But to where? Where can we look with any real hope of a great expansion of our markets overseas? Certainly not to foreign countries. Our competitive position in foreign countries is not improving; it is steadily and rapidly growing worse. They do not want our goods, except where they are unable to produce similar articles for themselves. The more they acquire the art of making the goods which we make—and which in some cases we have taught the world to make—the more they exclude us from their markets, and the more they impose and batten upon the foolish hospitality of our markets in this country. Rationalisation will not necessarily help us to sell our goods in those foreign countries that make competitive goods. Our industries are not merely up against their local rivals in such markets. They are also up against the foreign Governments which control the tariffs, and which inevitably have the last word.

If we look across the Atlantic, we see that great economic union of 48 States, the United States of America, all girt about with a high tariff wall in order to keep us and other competitors from entering her market. For several years there has been a great expansion in the production of manufactures in the United States of America—an expansion which has been out of all proportion to the growth of her population, particularly under the restrictions which the United States imposes upon migrants wishing to enter that country. This has resulted, as we see to-day, in over-production and unemployment in many of her industries.

America is faced, therefore, with the necessity not only of tightening up her markets against us, and the rest of the world, but of building up her markets overseas if she is to maintain her present high standard of living. She is daily becoming a more powerful competitor in the world's markets. Her over-production and her unemployment are not arguments against Safeguarding in this country, as the Prime Minister and the last speaker have suggested. On the contrary, they make it more imperative and more urgent than ever that we should safeguard our home markets. Let us suppose that we were to rationalise the steel industry without safeguarding it. If there was an overspill of, say, 10 per cent. or even 5 per cent. in the steel industry of the United States, and if they were to dump that surplus steel into the only free market in Europe—into Britain, the dust-bin of the world's surplus production—what would be the result? The steel industry of this country would be dead, damned and done for if that were to happen—as well it might.

In answer to the challenge of the United States of America we see the coming economic union of the Western and Central States of Europe. Last week, the Lord Privy Seal spoke of what he termed his "short range policy," the net result of which so far has been an increase of 660,000 unemployed. Have the Government any long range policy that has due regard to these important economic developments and counter-developments that are taking place in foreign countries? If such an economic group or unit is to be formed in Europe, where does the Government intend that we shall stand? It appears to me that we shall be faced with three alternatives. The first is that of losing our identity in a protected United States-of Europe. The second is that of endeavouring to stand alone between these two gigantic forces that could drive our trade to the wall in every corner of the earth. The third is to face up courageously and boldly to the position and to form, together with the Dominions and the Colonies, a still greater and more powerful unit in a consolidated, economically expanding and self-supporting Empire.

If the Committee will forgive a personal reference, I am an Australian and have spent the greater part of my life in the Dominions and Colonies overseas. I know only too well that we Should be, and could be, doing an immensely greater trade with the Dominions than we are doing at the present time. We in this country are mainly responsible for the fact that we are not doing so. I cannot make that point too clear. It is certainly not the desire of the people in the Dominions to give employment to foreign workers while their own kith and kin are walking the streets and looking for jobs in this country. It would be a libel to suggest that the Dominions do not ardently prefer to trade with the Mother Country. That this is so is clearly shown by the way the Dominions have held out their hands to us, by the valuable preferences they have given our trade for upwards of a quarter of a century, by the handsome gesture that was made only the other day in the Canadian Budget, and by the tone of the speeches of the political leaders at the party conferences that are now taking place in Australia.

I have sat here on more than one occasion and listened while hon. Members opposite and below the Gangway have bewailed the fact that the Dominions are building up their own industries behind a tariff to the detriment of the industries of this country. Much has been said in the House in the past about Australia in this respect. Nothing we may do can prevent Australia from pursuing her natural and legitimate policy of developing her essential secondary industries. On the other hand, I am convinced that much could be done, by negotiating on the basis of mutual preferences, to arrest the increasing development of non-essential and uneconomic industries in the Commonwealth which is taking place partly at the expense of the industries of this country. It is we in this country who for so long have turned our backs on the Dominions in order to extend a fulsome welcome to the ungrateful foreigner, who have driven the Dominions to adopt the policy of fostering their non-essential and uneconomic secondary industries in order to maintain their populations. I firmly believe also that much could be done by negotiation which would enable us to have a larger share of the Australian market in respect of those goods which do not compete with local but with foreign manufactures. What is true of the markets in Australia is, I believe, in large measure equally true of the markets of the other Dominions.

In conclusion, it is markets we need, and markets we must have if our industries are to have a continuous run with a full load, and if the withering blight of unemployment is to be removed from the land. Great opportunities in the Home market are staring us in the face, the rich and neglected markets of the Empire are beckoning to us from across the seas, and I would appeal to the Government to show more imagination and more courage and not to hesitate to use any instrument, fiscal or otherwise, which will enable our industries to secure the fullest extension of that trade. I am indeed grateful to the Committee for having listened so patiently to what I fear has been a rather long maiden speech.

Colonel WEDGWOOD

I am glad the debate has not closed without the Committee having an opportunity of listening to the authentic voice of Lord Rothermere, and I congratulate the hon. Member for Macclesfield (Mr. Remer) and the hon. Baronet the Member for Bournemouth (Sir H. Croft) on a new recruit in what will be a very effective trilogy. I would ask the hon. Member who has just spoken, however, to consider whether the manufacturing industries of Australia have at present very much market outside Australia. Remember that one of the dangers of excessive Protection is that you may secure the Home market but lose your foreign markets. What I deprecate, not so much about the hon. Member's speech as about so many other speeches that have been made, is these perpetual gibes at the Lord Privy Seal for not having done what they would do. I think everyone is getting a little tired of making this unemployment issue a sort of personal issue connected with the right hon. Gentleman the Member for Derby (Mr. Thomas). Personally I owe him a great debt of gratitude. There are working at Stoke to-day 500 men in Kerr Stuarts who would have been out of work if it had not been for his personal action. The proof of the pudding is in the eating. Those men, and that works, have been saved by what he has done. It is not a question of the expenditure of Government money. It is the expenditure of a little tact, a little intelligence and a little kindly human feeling for people whose lives risked being ruined. I think we must remember that with all his many faults the right hon. Gentleman the Member for Derby has saved the railway workers of this country. They are safe, and anyone who remembers the condition of the railway workers of this country 30 years ago will realise what he has done for these people. I only wish now he could extend his influence in this way. Of all the occasions on which I have admired the right hon. Gentleman I think that to-day I admire him most of all.

We have listened to one of the most eloquent and one of the most dangerous speeches I have ever heard in this House. The hon. Member for Smethwick (Sir O. Mosley) has never come so prominently before the House before. He has made a speech to-day, and no one who listened to it can deny that as he spoke he was converting Member after Member in this House to his views. I watched the Liberal party, with the exception of the four strong men from Cornwall. I watched the Conservative party. Man after man was saying to himself: "That is our leader." Even the hon. Member for North Paddington (Mr. Bracken) could hardly contain himself when he found at last a fellow spirit, because this eloquent and convincing speech was packed with every fallacy of the Tariff Reform programme. It is common form among Tariff Reformers to say, "Do not bother about export trade, think about your home market." I can tell hon. Members that the pottery market is not going to get along without an export trade.

We had the same sort of thing in the hon. Member's reference to the disadvantage of lending money abroad. I think it was the President of the Board of Trade who boasted of the fact that £17,000,000 or £18,000,000 had been voted for loans abroad, and surely every Free Trader must know by now that, if you are lending money abroad you are not sending Bradburys but goods out of the country. We want to send these goods out of the country, and whether money is lent abroad or in Australia, or wherever it is lent, it is equally valuable as far as employing people in this country and producing goods are concerned. The whole difficulty is this. I am not saying this about the hon. Members' speech, because he did not refer to the connection between land and unemployment. The whole gravamen of the speech was that he believes that he can cure unemployment. If he is right, every Member on that bench ought to be with him, and he ought to be Prime Minister instead of resigning. Can you cure unemployment by borrowing money and spending that money on road schemes or unemployment schemes? If you could, the Government would be criminal for not having done it. As a matter of fact, the Lord Privy Seal evidently knows that if you borrow £250,000,000 there will be £250,000,000 less for somebody else to borrow. There is what is called the Treasury view. If it is the Treasury view that two and two make four, it is the true view.

9.0 p.m.

Mr. KINGSLEY GRIFFITH

Is four necessarily a fixed quantity?

Colonel WEDGWOOD

To come down from the heights of Einstein and Oliver Lodge, I am still in the position of believing that two and two make four. I do not see any cure for unemployment by imagining that if you have £500,000,000 of new capital in this country you should take £250,000,000 of that sum and use it for making roads or for unemployment schemes. Obviously, you would have £250,000,000 less for industry to spend. If industries need money they will have to bid higher for it and the bank rate will rise and the whole of the producing industries in this country will be working under the drawback of a high rate of interest. If that is the Treasury view, it is also the view of the ordinary economist.

Mr. BOOTHBY

To carry it to a logical conclusion, does not the right hon. and gallant Gentleman's argument mean, in that event, that no new industry ought ever to be started?

Colonel WEDGWOOD

There is another ally. Surely we are entitled to see that when a new industry is started it should be economically sound. I want the industry which is new and useful to be able to borrow money for the industry as cheaply as possible. I want to avoid such new industry having to pay far more for its necessary capital than it has to pay at the present time. I have often mentioned in public meetings that I have a very good cure for unemployment. It is very popular on the Conservative benches. I point out that if everybody would merely subscribe one half-crown and pass it up to the table and let me get away with it I should be able to employ a chauffeur for my motor car, and then there would be one less unemployed. If you take money from the taxpayers or ratepayers of the country and spend it on unemployment schemes or upon new roads, the ratepayer or taxpayer has no money to spend in buying what he wants for his family. And exactly the same number of people are employed; all you have done is to change the character of some of the employment which is going. What is true about rates and taxes is true about borrowed money. You cannot go into the money market and borrow capital without making the remaining capital more expensive for everyone else who wants to use it.

The right hon. Member for Derby has had the views of my hon. Friend the Member for Smethwick dinned into him, convincingly, as we have heard to-day, for the last year, and he has managed to resist them. I hope that he will go on resisting them. I hope that he will not merely remain sound on his economics, but that he will see sooner or later that the land question is at the root of the unemployment question, and that, if he wishes to have more useful productive work in this country, the simple way is to make it easier and cheaper for labour to apply itself to the land and raw materials.

I do not wish to amplify that matter to-day. I will merely give the House one example of how I dealt with the unemployment problem in one of our Colonies. It was after the picnic in South Africa, which we used to call a war, before we discovered what a war really was. I stayed in South Africa as resident magistrate of Ermelo, a district as large as Wales. I was the absolute ruler of that district; a Mussolini. I was faced there with the unemployment problem. Men who were discharged from the Army came to look for jobs. There was no dole and no Poor Law. If you could not get work in South Africa you went to gaol, but we had blown up the gaol. The people there have more intelligence, in one respect, than the people of this country, because around every town in South Africa, except Cape Town and Johannesburg, you find town lands. [An HON. MEMBER: "And gaols!"] We had blown up the gaol, but you cannot blow up the land. On the outskirts of Ermelo there were 5,000 acres of town land, suitable for growing vegetables, making bricks and getting coal. I said to the ex-service men; "So long as I rule here you can have three acres each of these lands, out of which you can make bricks and get coal. No one shall charge you anything in rates or royalties, or any suchlike nonsense. Carry on the good work."

Everybody there was on rations. They solved the housing problem for themselves by fencing off their plots and by using 40 lb. biscuit tins, and putting some corrugated iron on the top. They borrowed picks and shovels, in the dark. As a result, they produced vegetables, bricks and coal. We got cheap vegetable supplies there. The men found work and got for themselves the full reward of their labour. They were not robbed by landholder, capitalist or the State. I did not throw open the town lands only to ex-service men. I said: "Let them all come." That procedure had unpleasant results. All the employers, manufacturers and builders came to see me, with very long faces, and said: "Captain Wedgwood, how do you expect us to make this a land fit for heroes to live in. How do you expect us to reconstruct Ermelo, when the wages of unskilled labour are £1 a day, and the rascals do not do anything for it?" What had happened? Simply this, that every worker in that town was able to look his employer between the eyes and to say: "If you do not give me the wage that I want, I will go and work for myself on the town land." So long as there was that opportunity of working for themselves on the town land, the working classes were free and were able to get for their labour not merely a living wage but the full reward of their labour. Unfortunately, they dethroned me. What could you expect?

Mr. SKELTON

What happened? Will the right hon. Gentleman repeat it?

Colonel WEDGWOOD

They dethroned me. They established a town council. They did not approve of ex-Service men on the town lands. There is unemployment in Ermelo to-day. I hope that I have not got away from the point. My point is, that where you have free land, any unemployment is voluntary unemployment. If we got the land of this country, all of it, cheaper than it is to-day so that people did not have to pay so much for the use of it, and if we had land which is not being used at all free for any man to use, our unemployment problem would be solved. If the Government, instead of trying to bolster up inefficient concerns and making roads where no roads are wanted, would try to make the land available for the people of this country, all the primary trades—the building trade, the agricultural trade, the mining and quarrying trades—would get up their raw material more easily, and people would be able to start work. If they had the chance of starting work, when they had done their bit they would pass on the job of completing the production and the distribution of goods and everybody else in the community would benefit, but so long as the people in the primary trades are deprived of the opportunity of starting the work which we all want to see done, not only will they be out of work but everybody else who are affected will suffer. That is why, at the risk of boring the House and being barracked by my own party, I urge the Government, when they have rejected the policy of the hon. Member for Smethwick, to remember that there is another way, and that is to make the land of England available for the people of England.

Mr. GRANVILLE

I crave the indulgence which the House extends to an hon. Member making his maiden speech. I do not intend to follow the right hon. and gallant Member for Newcastle-under-Lyme (Colonel Wedgwood) in his excursion through South Africa and elsewhere, and his varied arguments. I have intervened because I represent a rural constituency and because I believe that we shall never successfully deal with post-War unemployment in this country until we have tackled the problem of agriculture. Instead of agriculture absorbing a large number of the unemployed, at the present time we have the stream running in the opposite direction, and we have depression and unemployment in the agricultural industry itself. The figures of unemployment in agriculture have been stated in the House during many debates. Of 600,000 male agricultural workers, we had in February something like 40,000 out of work. Since 1921, there has been a reduction in the number employed upon the land of something like 100,000. One hon. Member during a recent debate said that he had 1,000 unemployed agricultural workers in his Division. In my constituency, in one small country town, there are almost 1,000 men out of work, although they are not agricultural workers.

I submit to the Government and to the Lord Privy Seal that, if they are going to deal with the problem of unemployment, they have to tackle the problem of unemployment in the rural areas, and deal with the distress there. Many of the villages in East Anglia—many of the villages in Suffolk present nothing more nor less than a derelict appearance. I have heard, during the time that I have sat in this House, hon. Members opposite talking about slums. I could show them some of the vilest slums it is possible to see, and those slums are in the heart of rural England. A few weeks ago I called upon a young unemployed agricultural worker in my constituency. He was having his evening meal of potato soup and bread, and around his falling-down, decaying cottage was some of the richest land in Fast Anglia. You cannot expect a country to get post-war prosperity when it allows a condition of affairs such as that to exist.

The hon. Member for Bridgeton (Mr. Maxton) has said to the Government, in many debates: "If you will guarantee that no man or woman in this country shall starve while there is a Labour Government in office, that is the condition upon which I will give my support to the Government." During the coming summer, in village after village in my constituency, the men, women and children will be dependent on the drainings of the roads and the skimmings of the ponds for their water supply. If the Government would give people in rural areas a good water supply they would be doing something, and I should be prepared to give them my support in such schemes. I remember the Minister of Transport saying in one of our debates on unemployment that he was not referring to the question of the agricultural worker filling up a few potholes on unclassified roads. I hope he has not got a Cockney complex in regard to the question of unclassified roads. They are decaying and crumbling because they were never built for the present-day motor traffic. I hope the Minister of Transport will realise that the problem of unclassified roads in rural areas is a national one. How can you expect young agricultural workers to go on tolerating the social conditions which at present exist? Instead of being absorbed on the land they are migrating to the towns.

The people in these rural areas do not understand the complications and perplexities of the problems of unemployment, but they do consider that if this House can go on year after year voting vast sums of money for destruction it should, at any rate, tackle the problem of agricultural depression, the provision of rural houses and the improvement of the social conditions in our villages. There are farmers in East Anglia to-day who have not the slightest idea where next week's wages are coming from or where the cheque is coming from to meet the next tithe demand. They are going out of agriculture. They are not only ceasing to employ agricultural workers, which in itself adds to the number of the unemployed, but they are themselves going out of work and will be unemployed. They are seeking other occupations. It is time the Government realised the relation of the problem of unemployment to the problem of agriculture. I know that the Prime Minister has a tremendous number of burdens to bear at the moment, but I understand that he has undertaken to devote his time to this problem. I beg of him to deal with agricultural depression, and if he can hold out some hope for the bad spots of arable cultivation in this country he will not only earn the gratitude of rural Members and their constituents, but will have gone a long way towards dealing with the problem of unemployment.

I do not quite understand the attitude of some hon. Members above the Gangway on this matter. We have had the problem of unemployment with us for 10 years. We have had over a million unemployed for more than 10 years. They had their opportunity. They had a vast majority of 211 in this House, and they failed to produce any comprehensive scheme to deal with the question. The right hon. Gentleman the Leader of the Opposition is going to do me the honour in a few days' time of announcing his agricultural policy in my constituency. I can assure him that he will get a very excellent reception, because they have arranged for whippet races and all kinds of games, including the game, I suppose, of finding the wicked uncle. But he is two or three years too late. He has had his opportunity. He is going to the rural areas to tell them something about agriculture. Why did he not do it two or three years ago? I want to ask him whether he is in favour of Safeguarding the basic industry of agriculture. I hope he will give me some reply. It is time he made some of these things clear to the House and to the country. There are many voices behind him, but they are the voices of confusion. The right hon. Gentleman will have to make up his mind whether it is to be Nottingham or Fulham; he cannot have both. [HON. MEMBERS: "Yes, he can!"] At any rate, I hope he will put his foot down, as he said at Nottingham, right up to the hilt.

These debates on unemployment have produced several bogies. There is the Treasury point, of view put forward by the right hon. Member for Epping (Mr. Churchill), there is the Lord Privy Seal's point of view, there is the overproduction and under consumption complex, there is the inherent defects in the capitalist system view, and there is the Safeguarding complex. Hon. Members who sit on the Olympian heights opposite and who sometimes criticise their own Government do so because the Government does not apply the Socialist approach to the problem of unemployment. I put it in all sincerity to those hon. Members, do they sincerely imagine that if they have another 30 or 40 hon. Members of like faith on those benches this House would proceed dispassionately and calmly to Socialism, and to Socialism in another place across the passage? I put it to the hon. Member for West Wolverhampton (Mr. W. J. Brown) who touched the root of the matter when he said that if the Labour Government cannot deal with the question of a particular bank it has a poor chance of dealing with a complicated system of economic production. I suggest to him that Socialism, as far as this Parliament is concerned, is out of court and that we have to deal to-day with the realness of the position. The position of the Lord Privy Seal is at least honest, if hopeless. I believe it was the right hon. Gentleman the Prime Minister who said that this Government were going to think on this subject. One Member of the Government has been thinking, and he has been compelled to resign. To-day he is outside the Government.

The Liberal party did a little bit of thinking on this problem before the last General Election. As I listened to the speech of the hon. Member for Smethwick (Sir O. Mosley) I felt that he ought not to join his friends on the Olympian heights but the Liberal party. We succeeded in producing what is called the Yellow Book and schemes for unemployment. I believe that these schemes to-day still hold the field. The Liberal party believes that the nation's resources must be used to-day for reconstruction and reorganisation. We believe that the true path to a permanent solution of this problem of unemployment is by increasing the productive wealth of the country, by bringing about a fair distribution of the produced wealth, and increasing the consuming and producing power of the vast masses of our people. That was the Liberal policy for a great many years. Liberal policy said that when you have found work for the unemployed in this country you would see that they were employed under a fiscal system which maintains the highest real wages in the whole of Europe.

I suggest to the Lord Privy Seal, in conclusion, that this is not the day for timid measures but the day for bold, statesmanlike and bigger measures. It seems to me that the Lord Privy Seal has descended to a kind of Minister for Defence of the Unemployment Figures. If there is to be a Minister for War in the Government, it should be a Minister for war upon poverty, unemployment and depression. I came into this parliament as a new Member, a young man and an optimist. I am still an optimist on this problem. My generation was used for destruction. I believe the nation will compel the use of this House for reconstruction. The Labour Government is about to celebrate its birthday. I appeal to the Prime Minister and I appeal to the party opposite. There are hon. Members who sit above these benches who have seen their party sitting in opposition for more than a decade or a generation. We do not seek the sweets of office, for which our Friends above the Gangway appear to hunger. We do not seek the rare and refreshing fruits of our Friends across the Gangway on the Olympian heights. But we do ask on behalf of the rural unemployed in this country that the second Labour Government shall make a better and bolder attempt to solve this cancer of unemployment.

Mr. WISE

I should like, on behalf of the Committee, to offer congratulations to the hon. Member who has just spoken, for his very admirable, witty and interesting maiden speech, the more so because the hon. Member comes from my own county, and because he has spoken on a subject to which I attach great importance—agriculture. Also, because with a great deal of what he said, I think his opening sentences and his peroration, I found myself substantially in agreement. We on these benches share his views that it is quite time that unemployment was dealt with, not as a decentralised problem to be left to the tender mercies of local authorities in Suffolk and South Wales, but nationally and with far greater vision.

We have listened this afternoon to the hon. Member for Smethwich (Sir O. Mosley) in what the Committee will agree was a very exhaustive, eloquent, and effective handling of the whole problem of unemployment. It would certainly be ungrateful on the part of those of us who sit on these benches if we did not welcome, as we do, most of the criticisms which he levelled at the Government and most of the constructive proposals that he made. So far as the former and the latter are concerned we have for many months been making these criticisms and putting forward, but not with the same vigour as he has, proposals which differed very little from those which he advocated this afternoon. We have not done it with all die valuable information of a Government Department behind us, and we hope that the undoubted impression that he has made on the Committee and the country this afternoon will produce its results. He sits on the slopes of the mountain, but I have no doubt that very soon he will be able to come up higher. I found myself in disagreement with him on one or two points. I share entirely his view—after all, it is a view that we constantly put forward from these benches—that it is quite time that attention was concentrated on the home market. The development of the home market is a matter that is well within the competence of the Government, and that is very little affected by those world causes to which he referred.

I did not agree with the hon. Gentleman in his analysis or in his conclusions about the export market. I think his figures were misleading, and his conclusions therefore went astray. If I understood his argument, because rationalisation to a certain extent has increased production by 20 per cent., and diminished employment by 4 per cent., therefore an increase of the export trade by £200,000,000, because it involves a 25 per cent. increase in the export trade, diminished employment in those trades by 5 per cent. That may be true as an exercise in logic, but it leaves very important factors out of the question. If you increase the export trade by those substantial figures, you are going to increase consumption and, therefore, employment in the coal, electric power and other trades. You are also going to increase consumption in those trades which supply the need of the workers employed in those trades.

I do not regard the hon. Gentleman's argument as sound or his conclusions as based upon the facts. I do not believe it is impossible to increase our export trade, but I cannot see any signs of hopeful action on the part of the Government in that direction. The Government have constantly said that they look to the export trade to carry the burden of our unemployment. In the opportunities that have come to them of dealing with export problems, they have shown very little signs of doing anything at all. We have had many debates on the Export Credits Act, and on the cotton trade, which, after all, is the worst of all the trades from the point of view of unemployment. It is 11 months since the Government appointed a Committee to examine the problem of the cotton trade. Still we are waiting for an answer, for a report or a constructive policy. When the report of that Committee is produced I should be very interested to know how many hours it has met.

I entirely agree with the hon. Member for Smethwick that it is absolutely vital, faced as we are by this world crisis, which affects many branches of our export trade, to deal immediately with the internal situation. The raising of the school age and the extension of pensions are the immediate way of dealing with it. I do not believe that a, pension scheme which singles out just those men aged 60 or over who are prepared in the next few months to come out of industry, which leaves out of account the men already 60 or over, or already on the scrap-heap and out of industry and not yet entitled to pension, a scheme which just takes a very limited number of men and leaves men out of its benefits, is either practicable or would be accepted as just or equitable by the working class population. The moral, in the present circumstances, is to extend the pensions scheme as we on these benches have proposed, and as is embodied in "Labour and the Nation," and the rest of the programme of the party.

I come to the speeches which have beers made from the two Front Benches. The right hon. Member for Bewdley (Mr. S. Baldwin) touched upon a point which was dealt with by the Prime Minister—the special world and other conditions which generally have shaken credit and have caused a bad world slump in trade. The right hon. Member for Bewdley sought to ride off by saying that part of the trouble arose from the uncertainty of prices on account of the duration of the coal crisis and on account of the Coal Mines Bill. If that were any real analysis of the problem, if uncertainty of price were the real cause, he certainly cannot say that it applies to the uncertainty that prevails in regard to every other raw material on which industry depends. The Prime Minister is perfectly right in saying that a world crisis almost unprecedented in its dimensions and devastating in its results afflicts every raw material, every agricultural country. He is perfectly fair in saying that that is a phenomenon which was not anticipated a year ago, but I think he is quite wrong when he seems to leave it at that and assumes that that is a situation which cannot be cured and for which nobody is responsible.

The fact of the matter is, as many economists are agreed, that the temporary glut of commodities is not due to over-production. There is no more than the normal amount of wool, or wheat, or tin, or rubber, or any other commodity in the world at the moment. The trouble is the natural and necessary result of the policy of deflation, in accordance with the orthodox view of the gold standard currency theory which has been prevailing for the last four or five years. If over a period of years you deliberately restrict credit, it inevitably leads to this sort of crisis. Remember that that policy of deflation has largely been led by the Bank of England, which is still the dominating factor in international banking. But to some extent, at any rate, that policy of the Bank of England can be influenced, if not controlled, by the Government of this country.

As a matter of fact, we are aware that the International Bank has been set up with a view to dealing with these world currency problems, but we are entitled to blame the Government that they have left that bank entirely outside the control of any public authority or Government in the world: the bankers have been left to continue, if they please, the policy which has landed the whole world, in this last year or two, in a crisis of unparalleled dimensions. If, when the statutes of the bank were under consideration at Geneva last year, the Government had been prepared to take the line that we were entitled to expect them to take, having regard to the definite views of this party in regard to the control of banking—if the Government had taken the line and had brought the operations of that bank in some way under national or international control, half Europe would have followed and it would have been done. The Government took the opposite line, and if the world situation is now as bad as it is the Government cannot get rid of their share of the responsibility.

The Prime Minister, in dealing with world prices, went on to ask, what can we take as emergency measures to deal with the situation? I confess that when I heard that question I began to hope that a strong and vigorous policy was about to be outlined to us; when he talked of emergency measures I hoped that he was going to indicate that the Government was about to treat this emergency as the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) advised that the Government should treat it. But when I came down to the practical proposal I saw the possibility of direct and drastic action receding. The right hon. Gentleman talked about dealing with the Standing Orders of this House and expediting the passage of private Bills. For months we on these benches have been urging the Government to take in hand the question of Standing Orders procedure. This difficulty should have been foreseen months ago.

The Prime Minister then referred to the slowness with which local and municipal authorities, many of them manned entirely by our political opponents, are putting into operation or producing the schemes which the Lord Privy Seal is waiting to finance. There, again, his practical proposals for dealing with the situation seemed very inadequate. It is possible that the Lord Privy Seal will go into greater details later on. But what conceivable purpose effectively and immediately will be served by convening conferences of the municipal authorities? As the hon. Member for Smethwick said, what the municipal authorities want is not more adjuration or more talk, but simply cash. They want unemployment to be treated as it ought to be treated—as a national burden, and a much larger share of it to be shouldered by the Treasury and the Chancellor of the Exchequer. Then, finally, the right hon. Gentleman touched upon the question of pensions. Here, as I gathered from a later speech by the Under-Secretary of State for Scotland, we may expect a further elaboration of the proposals of the Government. But so far as the Prime Minister was concerned I gathered that he was not prepared to go beyond some general scheme for co-ordination of the existing pension schemes, ranging from Old Age Pensions and invalidity pensions to unemployment allowances, and I suppose Health Insurance and matters of that sort.

How long will that inquiry take? It means, inevitably, a Royal Commission. If we may judge by the speed at which other Committees of the Government go, we cannot expect even a report for months, perhaps a year, perhaps two years, much less effective action to deal with the immediate problem. Then the Prime Minister referred to the question of rationalisation. He expressed a view with which I agree and with which the hon. Member for Smethwick would agree—that we cannot stand aside and allow our industries to remain ill-equipped and out of date compared with the industries of other countries. But what in fact have the Government done in that connection so far? The Lord Privy Seal has assisted in the formation of this bankers' trust company in the City. The Bankers Industrial Development Company was set up under the control and direction and initiative of the Bank of England. As the hon. Member for Smethwick said, in the main problems which are affecting the staple industries, one of the chief difficulties up to the present has been the unwillingness of the banks to let go their securities. Banks are interested parties in this matter, and it will be a very slow process if we are to look to the banks to take the initiative in matters which seriously affect their own treasuries, their own pockets and their own securities.

There is another point. It is perfectly clear that in many of the main industries such as the cotton industry nobody is able to deal with the problem without definite Government authority. There is no other authority which can provide the initiative and leadership in the cotton industry or the woollen industry or, possibly, in the iron and steel industry. To leave this Bankers Corporation to deal with the situation is, I venture to say, just to throw it on one side and to shuffle out of a responsibility which the Government must sooner or later exercise.

I confess that the Prime Minister's speech very seriously disappointed me, and, I have no doubt, many others on these benches. The speech of the Under-Secretary of State for Scotland gave us a little hope that the Government was prepared to change its policy to some extent. Last week we took the course open to us of registering our protest against the failure of the Government to carry out their duty, as we see it, in regard to unemployment by abstaining from voting. We are in a greater difficulty on that matter this week. We do not want to exchange our Front Bench for the Front Bench opposite. The Front Bench opposite bad their chance and failed. We have no hope that they will succeed in dealing with this urgent problem better in the future than they did in the past.

I am speaking in this matter for myself, and not for all of my hon. Friends on these benches. Some of them are so hopeless of getting any aggressive action from the Government that they are prepared to continue in the course which they adopted last week. I myself, and some of my hon. Friends, are not at present prepared to take that course. We will not have it said that we deprived the Prime Minister and his colleagues of the opportunity of handling this problem with all their energies and strength now that the Naval Disarmament Conference is out of the way. But I want to say this—that if the Government cannot show greater initiative and drive in handling this problem which is of vital national urgency and difficulty, if they are not prepared to do what the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) urged them to do and to come to the House with their proposals and to throw on the House the responsibility of turning down those proposals, then, as far as we are concerned, we think it is about time that they gave place to somebody else.

Mr. CHURCHILL

I hope that whatever we may think about the many arguments which have been addressed to us to-day, neither the Government nor the Conservative party will allow themselves to be stampeded by the extremely interested arguments addressed to them from below the Gangway on both sides of the House. In this most grave question of unemployment it is of the utmost importance that we should take wise action, and it is perfectly easy to make a plausible case on any of a dozen proposals—or I might even say, if I were to run the risk of falling into Celtic figures, that a hundred possible cases might be presented, all of which sound extremely well, but which, unless they are related to the major verities and unities of the political and economic life of this country, will only produce more harm than good. There are four main processes by which industry might be stimulated, by which a revival in industry might be forced, or actively promoted. I am not speaking of palliatives, I am not speaking, for instance, of unemployment benefit given to persons who are out of work, nor to pensions schemes for old persons, nor indeed to the stimulation of the activities of municipalities. I only refer to the last mentioned so far as to say that, after a certain point, you will find that you are only paying the municipality 100 per cent. or 50 per cent. for doing what it was going to do anyhow.

Leaving out palliatives altogether, there are four main processes by which a revival of industry can be stimulated. The first is the policy of a great loan. You borrow several hundred million pounds and spend it on public works which it would not pay to construct in ordinary circumstances, which will certainly not be paying or economic propositions according to the ordinary tests of life, but which, nevertheless, when constructed may some day have some considerable or important capital value to the island. This scheme is very largely associated with the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George), who made such an interesting speech to-day and to whom I shall refer in a few moments.

The second of these processes is the manipulation of currency. If you can change the pound sterling to something different from what it is, incidentally you make all your calculations on a new basis, and you can work out a rather better set of figures when you call the pound sterling 17s. 6d. or 15s. or 12s. 6d. or even 10s. Very substantial and important changes can be made in the relationship of the various interests in the country and of the various individuals in the country to one another, by the manipulation of currency.

Those who take that view and who study these matters with great attention are so full of affection for their theories that they think there is no problem which cannot be solved by merely gearing up or gearing down the ratio of gold to commodities. Indeed I must confess that I have been tempted in my time by the idea that if you had an archangel to manage these things—a perfectly trustworthy archangel pursuing these operations over a very long period of time—there might be moments when perhaps by such methods he could just lift a difficult economic situation through a peculiarly embarrassing defile. But that is not the point at the present time.

The third process is Protection or Safeguarding, or a combination of Protection and Safeguarding, whereby a great stimulus is given to productive industries through the security of their home market. That is a process to which the hon. Gentleman opposite referred with an insistence which rather shocked almost his only friend on these benches, and it is one which, in these modern times, by affording the possibility of mass scientific production, seems to give very great advantages in the dominance of industry.

Lastly, there is the rather prosaic and simple process of reducing the burdens upon trade and industry. We should all be in favour of that if we knew where we could get the money from. To reduce the burdens upon industry means not only reducing the tax burden on industry, which is now being heavily increased; it means also reducing other burdens, like the transport burden and the distribution burden, which press extremely heavily on industry in this country at the present time. I must avow my partiality for this policy of reduction of burdens. Whatever we may think of the controversial methods, this at any rate is one that, if we could find the money, we would all of us be glad to adopt.

The late Government, in their de-rating scheme and in the efforts which we made not to add to the taxation of the country, were marching forward on this safe, prudent road of the reduction and mitigation of burdens upon productive industry. Not only were we doing it by the process of reducing rates, but also by the process of reducing freights, on the railways. It is a much better method to reduce freights on the railways than to have a tremendous quarrel with the railwaymen about beating down the standard of life which they have succeeded in establishing. It is far better, if you have to face this question—and undoubtedly our transport charges are much too high—to take the kind of course which we took, by giving what is a virtual subsidy to reduce the cost of transportation. This proved extremely beneficial, although it was applied on a very small scale, and the President of the Board of Trade and other Ministers know perfectly well that highly beneficial results were achieved, especially in South Wales and on the Clyde, by the de-freighting relief given by the late Administration.

The whole problem is where to get the money from, and I have no hesitation in saying, at the point at which our affairs have arrived, that it is my belief that a wisely extended policy of Safeguarding or of tariffs for revenue on manufactures, particularly on the more highly finished forms of manufacture, would produce, in the easiest possible manner and with the minimum of psychological injury to the nation as a whole, a very substantial revenue; and here I speak entirely for myself. If those revenues were, in a proportion, devoted to a reduction in the transportation charges throughout this country, and if this policy of reducing transportation charges was followed up by a very strict and searching attempt to reduce the distributive charges and the immense margin which exists between the wholesale and the retail seller in this country—if that were dove, it seems to me quite possible that a very large, extended, and combined policy could be presented, which would mean a very marked expansion and stimulus to productive industry in all its forms, and need not necessarily involve the slightest injury to the consumer as such.

10.0 p.m.

I have indicated some of the remedies which have to be discussed, and I have indicated my own preference very clearly. Let me come to the right hon. Gentleman the Minister who is charged with the responsibility of this debate. The right hon. Gentleman started badly, because he started handicapped by all the foolish things he had said before he took office and all the vainglorious undertakings that he or his party had made, but I must admit that he was not the worst; in fact, he was one of the least bad. Most of the things of which he delivered himself were far less flagrant than those of others, and I have never myself seen the justice of his having to be the only person to suffer the blame. If the right hon. Gentleman started badly, I am bound to say that I think we all owe him a debt for having, once he saw he could not in any way fulfil the promises that he had made and make good the anticipations that he had created, scrapped the whole lot, with the greatest decision and resolution, and set himself to work, not to throw good money after the bad, not to follow foolish words by foolish acts, but to propound some fairly sound principles.

First of all, he exposed quite clearly the exaggerations and fraud of the present British unemployment weekly statistics; then he made it quite clear that he would not be a party to foolish stunt plans or great sensational schemes of loans; he made it quite clear that he would not allow the process of rationalisation to be impeded, even though it added to his own difficulties; and, finally, he proclaimed—and this is the lifebelt upon which in the future he is going to get to shore off the seas of history—that the remedy for unemployment could only come through a general revival of the trade and industry of this country.

I come to the speech of the hon. Member for Smethwick (Sir O. Mosley), a very remarkable speech and admirable in every way. It would be impossible to have given a more compendious account of the intricate matters with which he attempted to deal, but, as the speech proceeded, I asked myself one or two questions. I remembered hearing the late Lord Balfour, when he was leading the House—this is only partially attributable to the hon. Member's speech—criticising some speech and saying that there were in that speech some things that were trite and some things that were true, but that what was true was trite and what was not trite was not true. I would hardly put it as high as that, but, as the hon. Gentleman proceeded, a sort of feeling came over me, Where have I heard all this before? It seems to me that I have heard a great deal of it before; and, of course, it all comes back to the scheme of the right hon. Member for Carnarvon Boroughs, whom I am sorry I do not see in his place. It is only a variant of his scheme—perhaps a less efficient variant of his scheme. [HON. MEMBERS: "No!"] There is a certain difference, I agree. The right hon. Member for Carnarvon Boroughs said, "We can conquer unemployment," and the hon. Gentleman the Member for Smethwick said, in effect, "I can conquer unemployment," but in principle they are in the same boat, or on the same platform.

This scheme of a great loan to be spent in all sorts of public works, stimulating the construction of roads of all kinds in this already well-roaded country, this scheme and the finance attaching to it, has been examined in every aspect with extraordinary thoroughness over the last 18 months. The late Government examined it. We turned on all our machinery, and we published the result of our examination. We had the incentive to find some very captivating, large policy on unemployment with which to go to the country, but we did not yield to the temptation. When we found that the scheme did not hold water, and would not stand the intensive examination to which it was subjected within the great Departments of State, and within the organism of the Cabinet, we rejected it. We deliberately took our punishment at the General Election. We were jeered at because we were told that we had no great large scheme for curing unemployment; but by our action we saved ourselves, and the phlegm of my right hon. Friend largely assisted to save us from being in the melancholy position in which some other parties find themselves at the present time.

The scheme of the right hon. Member for Carnarvon Boroughs and other schemes of this kind were subjected to examination by another Government. You can hardly exaggerate the differences which exist between me and the right hon. Gentleman the Chancellor of the Exchequer; it is well known that we represent entirely different points of view, but I should like to point out that his Government, when they came into power, had a still greater incentive to find an easy and captivating solution of this grim problem. They, too, had an examination of these complicated matters; they went into the whole matter with an intense desire to do the best they could, and with an intense desire to get out of their straits without doing more harm than they could, and, having examined them, they came to the conclusion that it would not be in the interests of the party to embark on the course recommended by the hon. Member for Smethwick or which was recommended by the right hon. Member for Carnarvon Boroughs. I cannot in the few minutes at my disposal go into any of the arguments on the merits, but I ask the Committee to consider that they must be pretty strong arguments when two Governments, so contrasted and so opposite in their point of view, with every desire to find the quickest way forward and the largest form of practical action, have both, one after the other, turned down these projects.

I am sorry that the right hon. Gentleman the Member for Carnarvon Boroughs is not in his place. I always like to have a Member in his place when I wish to speak about him, but I cannot, for the completeness of the debate, omit a reference to the right hon. Gentleman. I was astonished at the offer which I heard him make to the Prime Minister. We have had to-day a memorable debate, and have assisted at the making, or the attempted making, of history. If I understood the right hon. Member for Carnarvon Boroughs clearly and correctly—and many Members can bear me out—it amounted to this, that he should join a committee as august, as secret, as authoritative as the Committee of Imperial Defence, that he should be given access to every secret of the Government necessary for the discharge of his work, that upon that Committee the should be in consultation with the Prime Minister and other Members of the Government to formulate a policy, or the means of carrying out his own policy, for dealing with the grave problem of unemployment. The precedents which the right hon. Gentleman adduced were perfectly valueless. I am familiar with them. It is true that the late Lord Balfour, after he had retired from all connection with party politics, was invited to joint the Committee of Imperial Defence for the study of the great questions connected with Europe and India. It is also true that on the subject of the Channel Tunnel it is customary to consult the leaders of the parties.

How can you compare these two instances with the right hon. Member for Carnarvon Boroughs going over and sitting in council with the Prime Minister and his colleagues upon the central matter of party fighting and struggle in this country at the present time? He would not only be a colleague; he would be more than a colleague; he would be a colleague with none of the advantages of responsibility. When anything went right, he would say, "We put that through; it was our suggestion—Codlin's plan." If anything went wrong, he would say, "You know how difficult it is to push this old Labour party along." I am friendly with the Prime Minister, although opposed to him in many ways, and I hope that he will not mind my giving him a piece of advice. I should be very careful, if I were he, before I invited the right hon. Member for Carnarvon Boroughs to come over and take charge of the Labour Government. I am sure that, once he was there, with his great knowledge, his immense drive and his grip of every aspect of the administrative machinery of Government, the best course thereafter for the Prime Minister to adopt would be to make a bargain that he should be permitted to go and sit among the Liberal party, and no doubt he would find himself quite happy.

I come, in conclusion, to the speech of the Prime Minister. It is quite true, as the right hon. Member for Carnarvon Boroughs has said, that the right hon. Gentleman has not gripped the crude elements of the statistics of this problem. It is no blame to him, for we know that he exhausts himself in the public service, but this unemployment business is such that it must have the first claim on his attention. We know how he has been engaged on other matters, little though I like them, which have had his wholehearted service, and it was obvious from his speech to-day that he has accepted the figures which have been given to him, by the Departments, but it is important to understand how to read them. I remember in the last Budget which I introduced we were spending £100,000,000 a year—and had done so for four years—on stimulating work in defiance of our principles and of Treasury principles, but that is the way things are done. You proclaim a principle, and then see whether you cannot get something on the other side too.

The hon. Member for Smethwick has been rather hard on his late colleagues. I think he proclaimed a good many rather painful stable secrets when he brutally told us that there was no doubt they were actually spending no more on all this Road Fund business than their predecessors had done, doing what we were so much abused for doing. I am quite sure that if my right hon. Friend the late Prime Minister or I myself had, two years or 18 months ago, recited the figures which the Prime Minister went into action on this afternoon we should have been received with a howl of derision by the benches opposite.

I think the Prime Minister would be very well advised to take the advice of the right hon. Member for Carnarvon Boroughs and devote himself to this problem of unemployment, in order that he may find every method by which it can be coped with, and also in order that ale may hold off foolish and unwise methods which would hamper the natural revival of trade in this country and aggravate the very evils they are meant to cure. I have tried to indicate a few of the means by which this evil can be approached with a view to its mitigation, and it may well be that there is no one method, that it is to be done through a partial application of many and various remedies harmoniously combined in one systematised policy. Mat may well be the case. I would not exclude anything that would help, so long as it was related harmoniously to the rest of the policy and there were no contradictions, as there often are, between one remedy and the other.

The Committee know that all these remedies will be ineffective unless the whole scheme is clamped together by a growth and revival of public confidence. Confidence is what is needed now. There is great want of confidence. Great anxiety is felt throughout the country, real apprehension. I have never known a time when there was so much apprehension. There is a feeling that anything that is gained will be taken away, a feeling engendered by the Chancellor of the Exchequer when, in apologising to his extreme left, he had to say, "This Budget is only one dose. A succession of doses like this will enable us to extract the greater part of the capital of the country"—or words to that effect. [Interruption.] Well, a series of doses like this £50,000,000 is what he contemplated. Can you wonder there is deep anxiety? There is also a feeling, and, I must say it quite frankly, perhaps not altogether justified, that with the Socialist regime in Great Britain this island and this Empire are passing through a period of eclipse Which may well be converted into a period of decline.

There is anxiety abroad, and can we wonder at it! Why should the Government complain? Where is their ground of complaint? Look at all they have said. Look at all they protest they stand for. We know they do not really stand for all that, but look at the way they have proclaimed the nationalisation of the means of production, distribution and exchange, the liquidation of the capitalist system of this country, and so forth; and there is anti-Imperialism in every form. As a matter of fact, they are carrying on in a great many ways with a good deal of sturdy vigour, but can they wonder that anxiety and lack of confidence are caused? They have no theme. The Clyde have a theme. Other parties have a theme, or are developing a theme, but the Government have no theme. They have deluded the masses of their supporters in the country into believing they are about to bring into being some vast, splendid, new world. They have climbed and ensconced themselves upon the structures of Capitalism, and they are shouting to the mob below that they are going to pull them down, while whispering to the bankers and big business that they are going to make them all the stronger. Can they wonder there is confusion and anxiety abroad in the nation; and can they wonder that the electors are showing an increasing reluctance to entrust the task of restoring confidence either to a bankrupt Government or to the eager bidder below the Gangway?

Mr. THOMAS

I understood that the Amendment before the Committee was one for the reduction of my salary. Having listened to the debate and heard the speeches, I am somewhat in doubt as to whether an increase was being proposed and not a reduction. Whatever else emerges from this debate, there seems to be a general agreement that I have at least earned my "screw." The Committee has been treated during the last twenty minutes to another of those brilliant Parliamentary efforts of the right hon. Gentleman the Member for Epping (Mr. Churchill). Boiled down the right hon. Gentleman practically said, "Now I want to show you exactly how I can demonstrate from this side of the House and shatter everything I said when I was on the other side of the House." The right hon. Gentleman knows, when he accuses me or any other Member of this House of breaking election pledges, that no one in this House could have an easier task than to quote contradictions of the speech which he has just made from previous speeches made by the right hon. Gentleman when he was sitting on the other side of the House.

Mr. CHURCHILL

Not in the same year.

Mr. THOMAS

The right hon. Gentleman says, "Not in the same year." That is perfectly true, because he would know that he could not get his object that year, and it would not work. This afternoon the Leader of the Opposition gave as his reason for submitting this Amendment that the Committee was desirous of hearing clearly and definitely not only the reason for the resignation of my hon. Friend, but he said that the Committee was very anxious to know in the struggle that was inevitable who was likely to win. So far as I am concerned, that is exactly the question which I am anxious to put myself. It is quite true that differences were revealed clearly and definitely this afternoon, but it is equally true to say that, while the right hon. Member is anxious to know the result of the contest between my hon. Friend and his friends on the Front Bench, we and the country are equally anxious to know what is likely to be the result of the contest between Lord Beaverbrook and the right hon. Gentleman.

The right hon. Gentleman quite clearly and definitely stated again this afternoon what was said in the debate last week, that, whatever else is proposed as a remedy for unemployment, he and his party believe that there is no remedy other than Safeguarding. [Interruption.] I am sure that the right hon. Gentleman will not disagree with me when I say that his summary of the whole position, at the conclusion of his speech, amounted to this, that there was no other remedy but Safeguarding. Last week I asked the House this question, and I repeat it to the right hon. Gentleman now. There is only one test to be applied. Are the countries which have already adopted Safeguarding free from the problem that we are suffering from to-day? [Interruption.] I have already given the figures of Germany, Italy and the United States—[An HON. MEMBER: "What about France?"] I am asked, what about France? In the first place, I would answer that there is no comparison between this country, dependent as it is upon an export trade, and France; and, secondly, I would ask, if France is to be used as an illustration, would hon. Gentlemen on the other side urge us to adopt the same financial policy that France has already adopted? It is no use merely quoting France as an illustration unless you are prepared to take the same risks and apply the same methods.

I would remind the House of a statement of the right hon. Gentleman the Member for Epping in a speech which he delivered last Saturday. Speaking to a great audience, he said that we, the present Government, had encountered the worst economic blizzard in the history of the world. If that be true, what becomes of the statement that this Government is responsible for the present world position? What we have to ask ourselves is, what have we done as a Government to meet this abnormal situation? [HON. MEMBERS "What have you done?"] My hon. Friend availed himself of the Parliamentary opportunity of delivering to the House a magnificent speech, and, if I might pay him a personal tribute, it would be a tribute for having kept quite clear of personalities. I propose to deal with his speech in the same way. It is true, however, that one effect of his speech will be to prevent the asking of any further questions with regard to the publication of the memorandum, because I think be will agree that his speech this afternoon practically dealt in detail with all that was involved in it.

Sir O. MOSLEY

Not all of it.

Mr. THOMAS

In the main. Therefore, I want to deal shortly—because the time at my disposal will not allow me to go into them all—with the main points raised by him. What must have struck the House as amazing was that, after an hour's speech pointing out to the House that he had a clear and positive remedy that would at least provide immediate employment for 800,000 people—that is the figure he gave to the House—he said that all this could be accomplished by the mere expenditure of £10,000,000 a year. It is only necessary to examine these figures for a moment to see the absurdity of the suggestion. It does not require an economist, it does not require a financier, it does not require anyone above ordinary, average intelligence to see at a glance that to talk about providing employment for 800,000 people at a cost of £10,000,000 a year is grotesque and absurd. Let me also point out this fact. The difference between the hon. Gentleman and his colleagues was that, having prepared a remedy, he submitted that case, not to a biased tribunal but to colleagues who had been in the business as long as he had.

Mr. BECKETT

What has that to do with it?

Mr. THOMAS

I am trying to show that, if there was an opportunity of fairly dealing with that case, surely the tribunal it was submitted to would be the very first to give it a fair and impartial consideration. I go beyond it and say they did give it that consideration. I go beyond it and say on their behalf that they approached the proposal, not only with honesty and with a desire to help, but with a single-minded recognition of the fact that they themselves were as anxious to help the unemployed as he was and, if there could be any remedy suggested, they were quite prepared to face the facts and apply it. What, after all, 5s the charge made? I ask the House and the country to observe the fundamental difference. My hon. Friend said quite clearly and honestly that he refused to believe that we can ever regain our position as an exporting country. In fact he said we may as well abolish any idea of developing the export trade—[Interruption]—as a cure for unemployment.

Let the Committee observe the situation at the moment. What would the position of any party going to Lancashire and saying to the 32 per cent. of the cotton operatives who are out of work, including 267,000 women, all those people unemployed almost entirely because of the collapse in the export market, "There is no hope for you so far as the export market is concerned." We felt that that was not the right policy. We felt that the only real permanent hope is reconstruction at home, re-equipment at home and rationalisation, which will make the factories more efficient, all with a view to enabling us to compete fairly and squarely and with a fair chance for the export trade in the markets of the world.

My hon. Friend's statement that the Government have allowed the banks to take charge of the situation is simply not true. I would ask this Committee, as I have asked my hon. Friend, this question. Supposing the Government were to decide that they would undertake the responsibility of the financial reorganisation of firms, over-capitalised as many of them are, so that drastic reorganisation of that capital arrangement is essential, does any sane man assume for a moment that there would not be such political pressure that it would practically be impossible to reorganise them on a fair, equitable and businesslike basis? It does not follow for one moment that as far as we or the Government are concerned we merely assume that we are to stand idly by and allow the banks—to use my hon. Friend's own words—to reorganise industry. I agree with him that that is not the function of the banks. I agree with him that business and industry can be reorganised only by those who are primarily engaged in it and those who know most about it.

But equally I want to say to the Committee and to my hon. Friend that it is not fair to suggest by speech that his colleagues turned down the pension scheme because they were opposed to the principle of pensions to aged workers. It is true that they turned down his particular scheme, but they turned it down because they believed, and I believe, that nothing could be so absurd and ridiculous as to assume that because of the accident of birth on a given day one person was entitled to draw from the State £1 a week and in the other case, the person who was a day late, should only draw 10s. Everyone knows perfectly well that if we attempted for one moment to apply a principle of that kind it would not be accepted.

I now come to what was, after all, the real appeal of my hon. Friend and one which found very sympathetic consideration in many parts of this Committee. He said, "I beg the Cabinet to allocate a sum of money amounting, approximately, to £200,000,000," so that we could with the money allocated get on with the job. The right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) seemed to acquiesce in that policy.

Mr. LLOYD GEORGE

indicated assent.

Mr. THOMAS

I would ask Members of the Committee, if they were running their own businesses with their own money and were dependent upon the success of their business—[An HON. MEMBER: "Or a war!"]—or a war, or running anything on business lines, would not the better plan be, not to say, "Let us go to the market and borrow the money, and then see how we are to spend it," but "Let us have the scheme."[Interruption.] There is a fundamental difference between the two. I am going to challenge anyone to show that schemes have been held up merely because of the lack of finance. The difference between my hon. Friend and myself and the Government on that point is, that it is sheer madness merely to talk of any sum of money, and after you have raised the money to set about to see how you are going to spend it. The business way is to set about finding the scheme, to examine all the proposals, to test them out in the light of practical experience and, when you have done that, to see how you are going to find the money.

Major Sir ARCHIBALD SINCLAIR

It is time you started doing that.

Mr. THOMAS

My hon. and gallant Friend says that it is time we started doing that. I want to know from any Member of this House where exactly the £200,000,000 is to be spent. Do you want us to build more factories? Do you want us to build more workshops I Do you want us to build more looms? Boiled down, we are forced absolutely to this one simple issue—the road programme. Can we spend £200,000,000 on a road programme? My hon. Friend meets the situation quite frankly by saying: "I believe that you can, if you will take the responsibility of a full 100 per cent." The right hon. Member for Carnarvon Boroughs seemed to agree with him. Before you make up your minds on that point, I ask you to face the fact that you cannot take the responsibility of breaking down local government in this country. If you are to pay a full 100 per cent., anybody can come along and say: "We will do anything." What would be the net effect of it? What would be the end of it? There would be only one end. The answer that I give to my hon. Friend is, that there has been no difference so far as finding money is concerned. The view that we hold on that matter is one that can be stated in a sentence.

I agree absolutely with anyone who says: "Can you find any work of a useful character and of a profitable kind, in the sense that it will add to the advantage of the nation? If you can do that, it is far better to spend money on any such schemes than merely to pay money out in unemployment pay." If we are agreed on that, surely we need not quarrel as to whether the money is raised by a loan or is found in the way that we are doing now. Let the Committee observe that there have been a large number of municipal loans during the past three months, as a result of the very powers that we have conferred upon the local authorities, but I must not fail to observe that I have seen as much as 86 per cent. of them left to the underwriters. These factors must be kept in mind by any Government.

Mr. KEDWARD

What about the Japanese loan?

Mr. THOMAS

My hon. Friend asks: "What about the Japanese loan?" He knows perfectly well that that was a conversion loan. If he does not know it, I will remind him of the fact, and he will observe the difference between the two. When the question is asked, what have you done as compared with the late Government, my answer is this—the question was put by the right hon. Member for Carnarvon Boroughs—that in the last two years of Conservative administration £16,500,000 was the sum total granted by the Unemployment Grants Committee. Up to this afternoon the total expenditure, that is to say the total amount sanctioned, by this Government is £103,000,000. I will examine for a moment the figures and then answer the question as to what is new money. Railways, £20,000,000, that is all new money; electricity, £11,000,000 all new money; docks £7,000,000, sewerage £5,000,000, loans and development £5,000,000, water undertakings £4,000,000, gas undertakings £1,000,000, land reclamation £1,000,000; and all those are absolutely new money.

What about the number of men employed. Our figures show that the £40,000,000 of this year is now becoming operative and that 115,000 people are already employed on these schemes. That is the answer to those who say that we have done nothing. The right hon. Gentleman has asked what is the new money on roads. The hon. Member for Smethwick says that there is very little difference, in fact, no difference at all, between our programme and that of the late Government. On classified roads there has been approved £33,000,000, on unclassified roads £4,000,000, and I am officially informed that out of the £33,000,000, £27,000,000 is new money. The difference between us is this, that when we sanctioned a five years programme on classified and unclassified roads we did so because municipalities under the late administration were unable to say what the position would be the next year. We consider that municipalities should be encouraged to look ahead, and that is why we sanctioned a five years programme. We talk as though our roads were the worst in the world. How many hon. Members realise that since 1920 up to the present year on the maintenance and repair of roads we have spent £515,000,000?

Sir H. SAMUEL

How much of that is maintenance?

Mr. THOMAS

I can get the figures separated for the right hon. Gentleman. I included the whole cost of maintenance as well—£545,000,000. But before I leave that point, let me tell the Committee something on this question of roads. I have always supported every kind of work that could legitimately be done. I sent for one who is regarded as one of the greatest authorities in this country, Sir Henry Maybury. I asked Sir Henry Maybury, when first I took office, to be my adviser. I said to him, "You can hurry up and give me any schemes you like." What the Prime Minister said this afternoon is Sir Henry Maybury's considered judgment. He was told: "Never mind any previous restrictions, treat unemployment as a paramount issue, consider nothing else, tell us exactly what roads could be undertaken under no difficulties of percentage but, actually on a 100 per cent. basis, taking the full and absolute responsibility." His answer is, of course, in addition to the figures I have already mentioned, £ 20,000,000 in a period of five years.

Mr. LLOYD GEORGE

indicated dissent.

Mr. THOMAS

If there is such a thing as experts, we are entitled to consult them, and we are entitled to take their views. Now I come to two questions put by the right hon. Gentleman the Member for Carnarvon Boroughs. First, as to whether his party has been responsible for the blocking of any emergency legislation. My answer is, "No." He went on to say that he was prepared to consider any emergency legislation. I am with him. I want to recall to the Committee some important examples. There is the Charing Cross Bridge scheme, of £18,000,000. It was thrown out by a Committee upstairs. Then Swansea Dock, £3,000,000, which was also thrown out by a Committee upstairs. Hull level crossing was mentioned. The Hull Corporation thanked the Government for their generous offer, and unanimously decided that it was a good offer and accepted it. A poll of the ratepayers rejected it.

Lieut.-Commander KENWORTHY

Will my right hon. Friend excuse me. I have listened most patiently to this about seven times, from the Prime Minister and others. The fact of the matter is that the finance was so ungenerous that the right hon. Gentleman was warned by the Labour Council that there was a danger of the ratepayers refusing. That is what happened.

Mr. THOMAS

The corporation that negotiated with us accepted the terms, and asked me to send them to the General Manager of the North-Eastern Railway and to help to force a Bill through the House. I agreed to do it. The North-Eastern Railway drafted a Bill, and the ratepayers rejected the scheme. [An HON. MEMBER: "A Tory council!"] I am not concerned in saying whether it was the Tories or Labour, but merely in stating the facts, which are exactly as I stated. I want the right hon. Gentleman to realise the kind of powers necessary to deal with it. So far as we are concerned, we welcome any suggestions that can be gone into. The Prime Minister said that so far as we as a Government were concerned the co-operation would be welcomed of anyone who could contribute anything to a solution of this problem. The right hon. Member for Carnarvon Boroughs said—I am sure he had no ground for the suggestion—that he understood I was the barrier to co-operation.

Mr. LLOYD GEORGE

indicated dissent.

Mr. THOMAS

The right hon. Gentleman said so in his speech. The OFFICIAL REPORT will show that that is so. I want to make it quite clear that my attitude from the first has been that this job is a nation's work and a nation's responsibility, and I have never for one moment felt that it was my duty to do other than invite the co-operation of anyone and everyone. Where I join issue is in making it quite clear that the responsibility must always be the Government's. I have never been one to run away from that. Therefore I say to the right hon. Gentleman, "Certainly, through the usual channels I hope there will be an opportunity for the three leaders to discuss in what way a contribution can be made to the solution of the problem. Any suggestion will be welcomed and considered, not alone on its merits, but with a genuine desire to see whether anything more can be done than is being done at this moment." That is the spirit in which we accept the suggestion made.

In conclusion, let me strike a personal note. No one is more sorry than myself that my hon. Friend the Member for Smethwick (Sir O. Mosley) felt compelled by the dictates of conscience to take the course that he has taken. For 12 months, I Nave been battling with this job in most difficult circumstances, not living to-day and forgetting there is a morrow, not believing for one moment that the problem of unemployment is one that can be settled by temporary expedients. I never believed it and never said it, and I do not believe it to-day. But I am entitled to say this: I am up against it. It is not the first time I have been in a crisis. But the more difficult the period the harder I work and the longer I stick to the ship. The more difficult and trying the time the more I felt it was necessary for us all to rally together. That is the spirit in which I approached my job; that is the spirit in which I intend to continue it.

Question put, "That a sum, not exceeding £14,684, be granted for the said Service."

The Committee divided: Ayes, 241; Noes, 270.

Division No. 322.]	AYES.	[10.58 p.m.
Acland-Troyte, Lieut.-Colonel	Dawson, Sir Philip	McConnell, Sir Joseph
Ainsworth, Lieut.-Col. Charles	Dixey, A. C.	Macdonald, Capt. P. D. (I. of W.)
Albery, Irving James	Dixon, Captain Rt. Hon. Herbert	Macquisten, F. A.
Alexander, Sir Wm. (Glasgow, Cent'l)	Duckworth, G. A. V.	MacRobert, Rt. Hon. Alexander M.
Allen, Sir J. Sandeman (Liverp'l., W.)	Dugdale, Capt. T. L.	Maitland, A. (Kent, Faversham)
Allen, Lt.-Col. Sir William (Armagh)	Eden, Captain Anthony	Makins, Brigadier-General E.
Allen, W. E. D. (Belfast, W.)	Edmondson, Major A. J.	Margesson, Captain H. D.
Amery, Rt. Hon. Leopold C. M. S.	Elliot, Major Walter E.	Marjorlbanks, E. C.
Ashley, Lt.-Col. Rt. Hon. Wilfrid W.	Erskine, Lord (Somerset, Weston-s-M.)	Mason, Colonel Glyn K.
Astor, Maj. Hn. John J. (Kent, Dover)	Everard, W. Lindsay	Meller, R. J.
Astor, Viscountess	Falle, Sir Bertram G.	Merriman, Sir F. Boyd
Atkinson, C.	Ferguson, Sir John	Mond, Hon. Henry
Baillie-Hamilton, Hon. Charles W.	Fermoy, Lord	Moore, Lieut.-Colonel T. C. R. (Ayr)
Baldwin, Rt. Hon. Stanley (Bewdley)	Fielden, E. B.	Morden, Col. W. Grant
Balfour, George (Hampstead)	Fison, F. G. Clavering	Morrison, W. s. (Glos., Cirencester)
Balfour, Captain H. H. (I. of Thanet)	Ford, Sir P. J.	Muirhead, A. J.
Balniel, Lord	Forestier-Walker, Sir L.	Nelson, Sir Frank
Beamish, Rear-Admiral T. P. H.	Frece, Sir Walter de	Newton, Sir D. G. C. (Cambridge)
Beaumont, M. W.	Fremantle, Lieut.-Colonel Francis E.	Nicholson, O. (Westminster)
Berry, Sir George	Galbraith, J. F. W.	Nicholson, Col. Ht. Hn. W. G. (Ptrsf'ld)
Betterton, Sir Henry B.	Ganzoni, Sir John	Nield, Rt. Hon. Sir Herbert
Bevan, S. J. (Holborn)	Gault, Lieut.-Col. Andrew Hamilton	Oman, Sir Charles William C.
Bird, Ernest Roy	Gibson, C. G. (Pudsey & Otley)	O'Neill, Sir H.
Boothby, R. J. G.	Gilmour, Lt.-Col. Rt. Hon. Sir John	Ormsby-Gore, Rt. Hon. William
Bourne, Captain Robert Croft	Glyn, Major R. G. C.	Peake, Capt. Osbert
Bowater, Col. Sir T. Vansittart	Gower, Sir Robert	Penny, Sir George
Bowyer, Captain Sir George E. W.	Grace, John	Peto, Sir Basil E. (Devon, Barnstaple)
Boyce, H. L.	Graham, Fergus (Cumberland, N.)	Pilditch, Sir Philip
Bracken, B.	Grattan-Doyle, Sir N.	Power, Sir John Cecil
Braithwaite, Major A. N.	Greaves-Lord, Sir Walter	Pownall, Sir Assheton
Brass, Captain Sir William	Greene, W. P. Crawford	Preston, Sir Walter Rueben
Briscoe, Richard George	Gretton, Colonel Rt. Hon. John	Purbrick, R.
Brown, Col. D. C. (N'th'l'd., Hexham)	Gritten, W. G. Howard	Ramsbotham, H.
Brown, Brig.-Gen. H. C. (Berks, Newb'y)	Guinness, Rt. Hon. Walter E.	Rawson, Sir Cooper
Buchan, John	Gunston, Captain D. W.	Reid, David D. (County Down)
Buckingham, Sir H.	Hacking, Rt. Hon. Douglas H.	Remer, John R.
Bullock, Captain Malcolm	Hall, Lieut.-Col. Sir F. (Dulwich)	Rentoul, Sir Gervais S.
Burton, Colonel H. W.	Hamilton, Sir George (Ilford)	Reynolds, Col. Sir James
Butler, R. A.	Hammersley, S. S.	Richardson, Sir P. W. (Sur'y, Ch'ts'y)
Butt, Sir Alfred	Hanbury, C.	Roberts, Sir Samuel (Ecclesall)
Cadogan, Major Hon. Edward	Hannon, Patrick Joseph Henry	Rodd, Rt. Hon. Sir James Rennell
Carver, Major W. H.	Hartington, Marquess of	Ross, Major Ronald D.
Castle Stewart, Earl of	Harvey, Major S. E. (Devon, Totnes)	Ruggles-Brise, Lieut.-Colonel E. A.
Cautley, Sir Henry S.	Haslam, Henry C.	Russell, Alexander West (Tynemouth)
Cayzer, Sir C. (Chester, City)	Henderson, Capt. R. R. (Oxf'd, Henley)	Salmon, Major I.
Cayzer, Maj. Sir Herbt. R. (Prtsmth. S.)	Heneage, Lieut.-Colonel Arthur P.	Samuel, A. M. (Surrey, Farnham)
Cazalet, Captain Victor A.	Herbert, Sir Dennis (Hertford)	Samuel, Samuel (W'dsworth, Putney)
Cecil, Rt. Hon. Lord H. (Ox. Univ.)	Hills, Major Rt. Hon. John Waller	Sandeman, Sir N. Stewart
Chadwick, Capt. Sir Robert Burton	Hoare, Lt.-Col. Rt. Hon. Sir S. J. G.	Sassoon, Rt. Hon. Sir Philip A. G. D.
Chamberlain, Rt. Hn. Sir J. A. (Birm., W.)	Hope, Sir Harry (Forfar)	Savery, S. S.
Chamberlain, Rt. Hon. N. (Edgbaston)	Horne, Rt. Hon. Sir Robert S.	Shepperson, Sir Ernest Whittome
Chapman, Sir S.	Howard-Bury, Colonel C. K.	Simms, Major-General J.
Christle, J. A.	Hudson, Capt. A. U. M. (Hackney, N.)	Sinclair, Col. T. (Queen's U., Belfast)
Churchill, Rt. Hon. Winston Spencer	Hunter-Weston, Lt.-Gen. Sir Aylmer	Skelton, A. N.
Cobb, Sir Cyril	Hurd, Percy A.	Smith, Louis W. (Sheffield, Hallam)
Cohen, Major J. Brunel	Hurst, Sir Gerald B.	Smith, R. W. (Aberd'n & Kinc'dine, C.)
Colfox, Major William Philip	Iveagh, Countess of	Smith-Carington. Neville W.
Colman, N. C. D.	James, Lieut.-Colonel Hon. Cuthbert	Smithers, Waldron
Colville, Major D. J.	Jones, Sir G. W. H. (Stoke New'gton)	Somerset, Thomas
Courtauld, Major J. S.	Kindersley, Major G. M.	Somerville, A. A. (Windsor)
Courthope, Colonel Sir G. L.	King, Commodore Rt. Hon. Henry D.	Somerville, D. G. (Willesden, East)
Cranborne, Viscount	Knox, Sir Alfred	Southby, Commander A. R. J.
Crichton-Stuart, Lord C.	Lamb, Sir J. Q.	Spender-Clay, Colonel H.
Croft, Brigadier-General Sir H.	Lane Fox, Col. Rt. Hon. George R.	Stanley, Lord (Fylde)
Crookshank, Cpt. H. (Lindsey, Gainsbro)	Law, Sir Alfred (Derby, High Peak)	Stanley, Maj. Hon. O. (W'morland)
Croom-Johnson, R. P.	Leigh, Sir John (Clapham)	Steel-Maitland, Rt. Hon. Sir Arthur
Culverwell, C. T. (Bristol, West)	Leighton, Major B. E. P.	Stewart, W. J. (Belfast, South)
Cunliffe-Lister, Rt. Hon. Sir Philip	Lewis, Oswald (Colchester)	Stuart, Hon. J. (Moray and Nairn)
Dalkeith, Earl of	Little, Dr. E. Graham	Sueter, Rear-Admiral M. F.
Dalrymple-white, Lt.-Col. Sir Godfrey	Liewellin, Major J. J.	Thomson, Sir F.
Davidson, Rt. Hon. J. (Hertford)	Locker-Lampson, Rt. Hon. Godfrey	Titchfield, Major the Marquess of
Davidson, Major-General Sir J. H.	Locker-Lampson, Com. O. (Handsw'th)	Todd, Capt. A. J.
Davies, Dr. Vernon	Long, Major Eric	Train, J.
Davison, Sir W. H. (Kensington, S.)	Lymington, Viscount	Tryon, Rt. Hon. George Clement
Turton, Robert Hugh	Wells, Sydney R.	Wood, Rt. Hon. Sir Kingsley
Vaughan-Morgan, Sir Kenyon	Williams, Charles (Devon, Torquay)	Worthington-Evans, Rt. Hon. Sir L.
Wallace, Capt. D. E. (Hornsey)	Wilson, G. H. A. (Cambridge U.)	Wright, Brig.-Gen. W. D. (Tavist'k)
Ward, Lieut.-Col. Sir A. Lambert	Windsor-Clive, Lieut.-Colonel George
Wardlaw-Milne, J. S.	Whiterton, Rt. Hon. Earl	TELLERS FOR THE AYES—
Warrender, Sir Victor	Withers, Sir John James	Commander Sir B. Eyres-Monsell
Waterhouse, Captain Charles	Wolmer, Rt. Hon. Viscount	and Major Sir George Hennessy.
Wayland, Sir William A.	Womersley, W. J.
NOES.
Adamson, Rt. Hon. W. (Fife, West)	Graham, D. M. (Lanark, Hamilton)	Malone, C. L"Estrange (N'thampton)
Adamson, W. M. (Staff., Cannock)	Graham, Rt. Hon. Wm. (Edin., Cent.)	Mansfield, W.
Addison, Rt. Hon. Dr. Christopher	Grenfell, D. R. (Glamorgan)	March, S.
Aitchison, Rt. Hon. Craigie M.	Griffiths, T. (Monmouth, Pontypool)	Marcus, M.
Alexander, Rt. Hon. A. V. (Hillsbro')	Groves, Thomas E.	Markham, S. F.
Alpass, J. H.	Grundy, Thomas W.	Marley, J.
Ammon, Charles George	Hall, F. (York, W. R., Normanton)	Marshall, Fred
Angell, Norman	Hall, G. H. (Merthyr Tydvil)	Mathers, George
Arnctt, John	Hall, Capt. W. P. (Portsmouth, C.)	Matters, L. W.
Attlee, Clement Richard	Hamilton, Mary Agnes (Blackburn)	Melville, Sir James
Ayles, Walter	Harbison, T. J.	Messer, Fred
Baker, John (Wolverhampton, Bilston)	Hardie, George D.	Middleton, G.
Baldwin, Oliver (Dudley)	Hartshorn, Rt. Hon. Vernon	Mills, J. E.
Barnes, Alfred John	Hastings, Dr. Somerville	Milner, Major J.
Barr, James	Haycock, A. W.	Montague, Frederick
Batey, Joseph	Hayday, Arthur	Morgan Dr. H. B.
Beckett, John (Camberwell, Peckham)	Hayes, John Henry	Morley, Ralph
Bellamy, Albert	Henderson, Right Hon. A. (Burnley)	Morrison, Herbert (Hackney, South)
Benn, Rt. Hon. Wedgwood	Henderson, Arthur, Junr, (Cardiff, S.)	Morrison, Robert C. (Tottenham, N.)
Bennett, Captain E. N. (Cardiff, Central)	Henderson, Thomas (Glasgow)	Mort, D. L.
Benson, G.	Henderson, W. W. (Middx., Enfield)	Moses, J. J. H.
Bentham, Dr. Ethel	Herriotts, J.	Mosley, Lady C. (Stoke-on-Trent)
Bevan, Aneurin (Ebbw Vale)	Hirst, G. H. (York W. R. Wentworth)	Mosley, Sir Oswald (Smethwick)
Bondfield, Rt. Hon. Margaret	Hirst, W. (Bradford, South)	Muff, G.
Bowen, J. W.	Hoffman, P. C.	Naylor, T. E.
Bowerman, Rt. Hon. Charles W.	Hollins, A.	Newman, Sir R. H. S. D. L. (Exeter)
Broad, Francis Alfred	Hopkin, Daniel	Noel Baker, P. J.
Bromfield, William	Horrabin, J. F.	Oldfield, J. R.
Bromley, J.	Hudson, James H. (Huddersfield)	Oliver, George Harold (Ilkeston)
Brooke, W.	Isaacs, George	Palin, John Henry
Brothers, M.	Jenkins, W. (Glamorgan, Neath)	Paling, Wilfrid
Brown, C. W. E. (Notts. Mansfield)	John, William (Rhondda, West)	Palmer, E. T.
Brown, W. J. (Wolverhampton, West)	Johnston, Thomas	Perry, S. F.
Burgess, F. G.	Jones, J. J. (West Ham, Silvertown)	Pethick-Lawrence, F. W.
Buxton, C. R. (Yorks, W. R. Elland)	Jones, Morgan (Caerphilly)	Phillips, Dr. Marion
Buxton, Rt. Hon. Noel (Norfolk, N.)	Jones, T. I. Mardy (Pontypridd)	Picton-Turbervill, Edith
Caine, Derwent Hall-	Jowett, Rt. Hon. F. W.	Pole, Major D. G.
Cameron, A. G.	Jowitt, Rt. Hon. Sir W. A.	Potts, John S.
Cape, Thomas	Kelly, W. T.	Price, M. P.
Carter, W. (St. Pancras, S. W.)	Kennedy, Thomas	Quibell, D. J. K.
Charleton, H. C.	Kenworthy, Lt.-Com. Hon. Joseph M.	Richards, R.
Chater, Daniel	Kinley, J.	Richardson, R. (Houghton-le-Sprinq)
Church, Major A. G.	Knight, Holford	Riley, Ben (Dewsbury)
Clarke, J. S.	Lang, Gordon	Riley, F. F. (Stockton-on-Tees)
Cluse, W. S.	Lansbury, Rt. Hon. George	Ritson, J.
Clynes, Rt. Hon. John R.	Lathan, G.	Roberts, Rt. Hon. F. O. (W. Bromwich)
Cocks, Frederick Seymour.	Law, Albert (Bolton)	Romeril, H. G.
Compton, Joseph	Law, A. (Rosendale)	Rosbotham, D. S. T.
Cove, William G.	Lawrence, Susan	Rowson, Guy
Daggar, George	Lawson, John James	Salter, Dr. Alfred
Dallas, George	Lawther, W. (Barnard Castle)	Samuel, H. W. (Swansea, West)
Dalton, Hugh	Leach, W.	Sanders, W. S.
Davis, Rhys John (Westhoughton)	Lee, Frank (Derby, N. E.)	Sandham, E.
Day, Harry	Lee, Jennie (Lanark, Northern)	Sawyer, G. F.
Denman, Hon. R. D.	Lees, J.	Scurr, John
Devlin, Joseph	Lewis, T. (Southampton)	Sexton, James
Dickson, T.	Lindley, Fred W.	Shaw, Rt. Hon. Thomas (Preston)
Dukes, C.	Lloyd, C. Ellis	Shepherd, Arthur Lewis
Duncan, Charles	Logan, David Gilbert	Sherwood, G. H.
Ede, James Chuter	Longbottom, A. W.	Shield, George William
Edmunds, J. E.	Longden, F.	Shiels, Dr. Drummond
Edwards, E. (Morpeth)	Lovat-Fraser, J. A.	Shillaker, J. F.
Egan, W. H.	Lowth, Thomas	Shinwell, E.
Forgan, Dr. Robert	Lunn, William	Short, Alfred (Wednesbury)
Freeman, Peter	Macdonald, Gordon (Ince)	Simmons, C. J.
Gardner, B. W. (West Ham, Upton)	MacDonald, Rt. Hon. J. R. (Seaham)	Sinkinson, George
Gardner, J. P. (Hammersmith, N.)	MacDonald, Malcolm (Bassetlaw)	Sitch, Charles H.
Gibbins, Joseph	McElwee, A.	Smith, Alfred (Sunderland)
Gibson, H. M. (Lancs, Mossley)	McEntee, V. L.	Smith, Ben (Bermondsey, Rotherhithe)
Gill, T. H.	McKinlay, A.	Smith, Frank (Nuneaton)
Gillett, George M.	MacLaren, Andrew	Smith, H. B. Lees- (Keighley)
Gossling, A. G.	MacNeill-Weir, L.	Smith, Rennie (Penistone)
Gould, F.	McShane, John James	Smith, Tom (Pontefract)

Smith, W. R. (Norwich)	Toole, Joseph	West, F. R.
Snell, Harry	Tout, W. J.	Westwood, Joseph
Snowden, Rt. Hon. Philip	Townend, A. E.	Whiteley, Wilfrid (Birm., Ladywood)
Snowden, Thomas (Accrington)	Trevelyan, Rt. Hon. Sir Charles	Whiteley, William (Blaydon)
Sorensen, R.	Turner, B.	Wilkinson, Ellen C.
Stamford, Thomas W.	Vaughan, D. J.	Williams, David (Swansea, East)
Stewart, J. (St. Rollox)	Viant, S. P.	Williams, Dr. J. H. (Lianelly)
Strachey, E. J. St. Loe	Walkden, A. G.	Williams, T. (York, Don Valley)
Strauss, G. R.	Walker, J.	Wilson, C. H. (Sheffield, Attercliffe)
Sullivan, J.	Wallace, H. W.	Wilson, J. (Oldham)
Sutton, J. E.	Wallhead, Richard C.	Wilson, R. J. (Jarrow)
Taylor, R. A. (Lincoln)	Watkins, F. C.	Winterton, G. E. (Leicester, Loughb'gh)
Taylor, W. B. (Norfolk, S. W.)	Watson, W. M. (Dunfermline)	Wise, E. F.
Thomas, Rt. Hon. J. H. (Derby)	Watts-Morgan, Lt.-Col. D. (Rhondda)	Wright, W. (Ruthergien)
Thorne, W. (West Ham, Plaistow)	Wedgwood, Rt. Hon. Josiah	Young, R. S. (Islington, North)
Thurtle, Ernest	Wellock, Wilfred
Tillett, Ben	Welsh, James (Paisley)	TELLERS FOR THE NOES.—
Tinker, John Joseph	Welsh, James C. (Coatbridge)	Mr. Alien Parkinson and Mr.
		Charles Edwards.

Original Question again proposed.

It being after Eleven of the Clock, and objection being taken to further Proceeding, the CHAIRMAN left the Chair to make his Report to the House.

Committee report Progress; to sit again To-morrow.

The remaining Orders were read, and postponed.