DEBATE ON THE ADDRESS.

HC Deb 03 November 1930 vol 244 cc503-630

[FIFTH DAY.]

Order read for resuming Adjourned Debate on Question [28th October], That an humble Address be presented to His Majesty, as followeth:—

MOST GRACIOUS SOVEREIGN, We, Your Majesty's most dutiful and loyal subjects the Commons of the United Kingdom of Great Britain and Northern Ireland, in Parliament assembled, beg leave to offer our humble thanks to Your Majesty for the Gracious Speech which Your Majesty has addressed to both Houses of Parliament."—[Mr. Charleton.]

Question against proposed.

Mr. CHAMBERLAIN

I beg to move, at the end of the Question, to add the words: But humbly regret the failure of Your Majesty's Government to propose any measures adequate to deal with the crisis in the industrial, agricultural, and commercial situation or to check the continued growth of unemployment. The debate upon the Address, which has now ranged over four days, has covered a pretty wide field, and in moving this Amendment it may be impossible for me to avoid a certain amount of repetition; but although very weighty and powerful contributions have been made from all quarters of the House, I have not yet seen any indication that the members of the Government have taken to heart the criticisms which have been offered, or, indeed, that they have thought it worth while to give any serious consideration to them. I do not know whether I shall fare any better than my predecessors in that respect, but I hope that the President of the Board of Trade, if he is to follow me, will give us a rather more complete and ample description of what the Government have in mind to propose to us in order to deal with the situation in which we find ourselves than anything we have been able to discern in the Gracious Speech or in the speeches of Ministers who have preceded me.

There is one feature of the discussions which must have struck everybody who has listened to the speeches and that is the singular agreement as to the primary importance of one subject and the wealth of suggestions made for dealing with it. The speeches made from different quarters of the House have all offered something in the nature of a contribution to the problem with which we are faced. They have all recognised that we are face to face with a national emergency of the gravest character, due to causes which, whether material or psychological, or a compound of both, still persist, and seem likely, unless they are checked, to plunge us still further into the depths of industrial and agricultural depression. Week by week we see the figures of unemployment going up with painful and monotonous regularity. We are even told that next, winter we must expect to sec the throngs of workless men and women swelled by the ranks of agricultural labourers, who hitherto have at least had as a consolation for the meagreness of their wages the knowledge that their employment was relatively secure.

If we turn to the trade returns, we find little there to encourage us. In the first nine months of the present year our exports have gone down by no less than £102,000,000, and we must remember that out of that total something like £87,000,000 represents a diminution in the exports of our manufactured goods. If we look at, the imports of raw materials, which are generally the best guide we can have as to the trend of events in the future, there, also, we see that they are down in this period by more than £55,000,000 as compared with the corresponding period of last year. The right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) stated that in his conversations with business men he had been unable to find one who could see even a gleam of light upon the horizon. That is exactly my own experience, and I am sure it is the experience of everybody who is at all in touch with industry. Hope and confidence seem completely to have disappeared and the atmosphere can only be described, in the famous phrase of Dr. Johnson, as one of "inspissated gloom."

On previous occasions when we have discussed unemployment we have compared the condition of things with the pledges, promises and prophecies which flowed so freely from hon. Members opposite before they tasted the sweets of office and before they realised the limitations of Governments. To-day I am going to spare them any repetition of those recollections of their dead selves. In due course they will have to answer to their disillusioned and disappointed supporters; and I do not imagine that the results of the municipal elections will encourage them to bring the day of reckoning any nearer. But that is not the charge on which I wish to dwell to-day. The charge I have to bring against the Government is that, alone in this House, they seem to have no sense of the gravity of the situation, and that alone in this House they have no plans, no fresh ideas, indicating how we are to deal with it. No one who read the Gracious Speech without outside knowledge would have any idea that there was anything more than a trifling and temporary set back in the onward flow of general prosperity. It pursues the even tenor of its way through schemes of fresh expenditure and fresh borrowing as though the revenue were as brisk and buoyant as, in fact, it is congealed and depressed. There are Measures for reviving the unhappy memories of 1926, for the postponement of the reform of well-known abuses, for throwing uncertainty into all transactions in land and for the hampering of trade. We cannot find a solitary instance of any constructive plan which might give any fresh stimulus to our industry or agriculture.

4.0 p.m.

When we consider the pronouncements of Ministers we are driven to the conclusion that they have now abandoned all hope and all effort, and are sitting helplessly by waiting for something to turn up. I read a speech delivered on Wednesday last by the Lord Privy Seal. He stated that they had now abandoned the idea of a short time policy, and were trying to concentrate on getting down to the roots of unemployment. He took credit for the fact that, as he said, by the end of the year and in consequence of schemes exclusively promoted by the present Government upwards of 200,000 people would have been found employment. Even he was not able to derive very much satisfaction from that fact. He well knew that those 200,000 would be employed only temporarily for certain specific jobs, and that side by side with that increase of employment we have to put the register of 2,200,000 unemployed, a substantial number of whom, as he pointed out, had lost their employment owing to causes over which we had no control and which were likely to be permanent in their character. He said some of the most valuable of our export markets had gone for ever, and although he did speak of developing our home market he gave no indication that the Government have any idea of how that is to be done, apart from expressing a vague and pious hope that industry might see its way to cultivate efficiency. I came to the conclusion, after reading that speech, that the new Lord Privy Seal had followed in the footsteps of the old. He was down and out, and nothing further was to be hoped from any effort of his. But I could hardly believe that the speech of the Lord Privy Seal really represented the whole mind of the Government. I could not help thinking that there must be some plans of which he had not been told, or, perhaps, which he did not understand, and that one ought to be able to find something more substantial than the platitudes with which he regaled us last Wednesday. Then, I remembered, there was a by-election about to take place at Shipley. [HON. MEMBERS "Paddington!"] It will be of even more interest to hon. Members—a by-election which is going to turn largely upon unemployment. I felt certain that the Prime Minister must be anxious about that seat, even although he had a large majority at the General Election, and I felt sure that he would put his best foot forward and make the best case possible in any communication he might make. I inquired whether he had written a letter to the candidate, and I have it now before me. The first thing I noticed was that it was a very long letter. That seemed to me rather of ominous import, because I always notice that the Prime Minister's letters are longest and his voice is loudest when his case is weakest. He begins, of course, with the customary objurgation of the Tory party and their tariff policy. Then he goes on to tell us what the Government have to propose. I will read this passage: The Government, on the other hand, takes the view that what is needed is a steady unremitting effort to secure greater co-operation among the nations of the world to promote their mutual well-being and raise the standards of life all round; a businesslike development of trade within the Empire; and a reconditioning of industry so as to make it efficient enough to profit by the tide of world trade when it turns. He went on—I skip a few words not of importance— To find work is no easy matter, but our agricultural and educational programme this Session shows the way to do it and the ideas to be applied to the problem. What emerges from all these words? The effort to secure greater co-operation among the nations of the world resolves itself into the Tariff Truce. Not even the President of the Board of Trade, I think, has suggested that that is going to raise the standards of life in this country. A businesslike development of trade within the Empire appears at present to be under the influence of a powerful anæsthetic. The reconditioning of industry has had the life knocked out of it by the increase of taxation which has been imposed by this Government. Nobody can suppose that the raising of the school age or the Land Settlement Bill is going to provide a solution of the unemployment problem, and we are left to wait until the tide of world trade turns. I say that that is an intolerable attitude on the part of the Government. It is one to which I am quite certain the country will not submit. It has often been alleged to excuse the shortcomings of the Government that they have not been able to carry the Measures which they would like because they are in a minority. The fact is that the very contrary is the case. The trouble to-day is that neither offers of help nor threats will drag the Government out into the open. They are cowed and desperate at the same time. They are like a frightened puppy glued to its kennel, with its tail between its legs, snapping and yapping, but always determined on one thing—that it will never come out.

To turn to the criticisms that have been made in the course of the debate, one would naturally expect that as they have come from every quarter of the House very wide divergences of views would be expressed, but what particularly struck me is that all the speakers who put forward constructive ideas seemed to express a certain fluidity of mind and willingness to consider new methods, which is in very marked contrast to the attitude of the Government. I understand that the Liberal proposals for dealing with unemployment are to be published to-morrow. I do not know what they are. I dare say that when I see them I shall find in them a great deal with which I cannot agree, but, at any rate, they have a plan, and, over and over again, they have expressed their desire to discuss their plan, and, if need be, to modify it in the light of discussions that might take place. The hon. Member for Withington (Mr. Simon) last summer startled some of the older Members of his party by boldly questioning the infallibility of Free Trade. The right hon. Gentleman the Member for Carnarvon Boroughs has recently stated that he was willing to consider even tariffs without prejudice, provided always that those who advocated tariffs were willing also to consider Free Trade in the same way—a very difficult condition not to accept. The hon. Member for Smethwick (Sir O. Mosley) gave us a very careful and thoughtful analysis of the situation which covered a wide field, and was attractively presented in a form which made some very old ideas sound like new ones. Some of the suggestions he made appeared to us to be impracticable, and even dangerous. Others, like the plan for the rationalisation of the gold of the Empire—a scheme which, I think, has been advocated for some years by Mr. J. F. Darling—appear to us, in present circumstances at least, to be premature; but, on the other hand, there was quite a large part of his speech, that particularly which dealt with the home market, with which I do not think we should find ourselves in very serious disagreement.

Even the hon. Member for Bridgeton (Mr. Maxton) has a plan which, fantastic as it may appear, apparently has some approach to reality, because, unless he was incorrectly reported, he stated on Saturday night that he himself was on the side of the Protectionists. Lastly, we who sit on these benches have a plan which we are ready to put into immediate operation, a plan which I might describe in a sentence as immediate Protection in one form or another, by one method or another, of the home market, and the ultimate attainment of economic unity throughout the Empire. Although we may differ on many points of detail, I venture to think that that is a programme which will find support from all quarters of the House. Amidst all these contributions towards the common stock, only the Government have nothing whatever to offer except a steady, dull, continuous opposition to any proposals that are made by anybody else.

I want to offer a few general observations upon the problem. I should like to suggest to the House that the key to the situation is not to be found, as has been so often argued, in the export market. It is to be found in the home market.. The hon. Member for Smethwick said that we exported 30 per cent. of our manufactured goods. I do not know where he got that figure, because I have been unable to find any such separation of manufactured goods from other goods as to enable one to pronounce with accuracy what is the precise proportion of the exported manufactured goods, but in 1924, when there was a census of production, we saw that the proportion of all goods produced in this country which was exported was about 30 per cent., and, although we have had no corresponding figure since, I have no reason to suppose that the proportion has very much altered since then. This 30 per cent of exports, which amounted last year to something between £700,000,000 and £750,000,000, is what we require to sell abroad in order to pay for our imports, and the difficulty about it is that it is this vast export trade, so necessary to us, which we find it most difficult to retain. If it were 20 or 10 per cent. instead of 30 per cent., things would be easy. It would be easier to retain what is left, because you could afford to sacrifice your price on some small portion of your production although you could not afford to sacrifice it upon the whole, or any very substantial part of it. Therefore, if you increase our home trade, and so diminish the proportion of our export to our total trade, in that way we should make it easier to retain what export trade we have.

But there is a more important relation than that between the two kinds of trade. What are the imports which require us to keep up this high level of export trade? During the first nine months of this year they amounted altogether to £710,000,000. Out of that, £165,000,000 represented raw materials that we cannot do without. Another £329,000,000 represented food, drink and tobacco, and, probably, if we were properly organised in this country, we could supply about 20 per cent. of that amount here. Then there was another £216,000,000 which consisted entirely of manufactured goods. I want to suggest to the House that that last figure is the vital factor in the situation. What does it mean? It means that our imports of manufactured goods amount to no less than 43 per cent. of our imports of raw materials and food supplies, or, if I may put it in another way, we have increased our obligations to find export trade by one half as much again as they would have been if we had been able to keep the home market for manufactures to ourselves.

My arguments lead me to this conclusion: The protection of the home market has become essential to this country not only for the purpose of providing more work for our own people, but also because, to that extent, it would relieve us from this perilous necessity of maintaining our export trade at a level which every day becomes more insecure. As to what method is to be employed to obtain this protection, I am convinced myself that tariffs form the simplest and easiest means and would be the least disturbing to trade. I recognise that there are articles, and that there are conditions, to which a tariff is not the most applicable method and our general position here is that every article ought to be examined on its merits and the conditions that attach to it, and that we should apply to each article that form of protection which is most likely to achieve the object that we have in view.

There is another aspect of this case which is of first importance to working people. I do not know whether any hon. Member has chanced to see an article in a recent issue of the "Economist" by Mr. Loveday, head of the Economic and Intelligence Section of the League of Nations, a man of international reputation and authority. In this article it is shown that the most alarming feature of the decline of British trade is not the failure of the older and more primary industries, but the relatively slow progress of the newer and comparatively prosperous industries. The author of the article arrives at the conclusion that the whole of British industry is to-day being handicapped in world competition by artificial restrictions and checks, by taxation which undermines the sources from which alone industry can be maintained and reconstituted, by insurance services that are not provided by other countries, and by what he calls the artificial rigidity of wages. This is the economist's language, but it is obvious that we all know what he means. He asks at the end of the article whether it is not possible to bring back elasticity into British trade, to cut losses, to embark upon a thorough reconditioning of industry and bring back the fluidity of wages. I do not think anybody objects to a thorough reconditioning of industry. It is merely a matter of seeing that there is sufficient capital available for the purpose, and sufficient confidence that when that capital has been expended there will be an adequate return for it.

Is there no alternative to the lowering of general wages and conditions of labour to which this article points? I think there is. The hon. Baronet the Member for Smethwick (Sir O. Mosley) asked in his speech how you can expect to maintain the price of labour if you do riot maintain the price of the article produced by labour. I do not know what is the answer to that question. It is because I believe that the only hope of maintaining the present standards of wages and conditions lies in the protection of the home market that I say that to attain this protection matters more to the worker than to anyone else.

I know very well that the working man is often told that the benefits of a tariff will go to the employer and not to him. Personally I do not believe that to be possible. But I do not want to see the British public exploited by the use of tariffs, and I am perfectly prepared to consider, and consider favourably, any safeguards than can be devised to prevent that explotation, or to prevent inefficiency arising from the use of a tariff. I have only to say that if any such safeguards can be devised they should not be such as to impose undue restrictions on the free play of industry. I want to see profits made, but I want to see profits made by the reduction of costs and not by the raising of prices, and I do not believe it passes the wit of man to devise means by which that purpose can be achieved.

I want to say a few words about the other part of our policy which is concerned with the development of Empire trade. I say at once that I am not one of those who imagine, or want other people to imagine, that we can arrive at Empire ecomonic unity by a gesture or at a single conference. I do not even believe that any steps we can take towards it now will bring immediate prosperity to the people of this country. On the other hand, I am profoundly convinced that if it can be brought about its influence on the world and its value to the peoples of the Empire will rank among the most momentous events in history, past or future. Sometimes I wonder to myself whether we realise how great a readjustment of outlook is necessary before we attain a true conception of Empire economic unity. The text upon which so many speeches have been made recently "Our own country first," represents accurately, I suppose, the state of public opinion in all the countries of the Empire at the present time. It seems to me that until we can learn to put Empire first, until we can have full and complete confidence that we can best help ourselves by helping the Empire first, our gaze is in the wrong direction.

Perhaps I may illustrate what I mean. Suppose that to-morrow we can give our Dominions a wider, better, and more secure market for their primary products in this country. No doubt we should receive in return some further measure of preference, but it is very possible that in present conditions the effect of that preference might appear almost trifling in the vast mass of our oversea trade. On the short view people may say, "What do we get out of this bargain?" Surely we have got a longer vision than that; and surely we can look ahead into the future. We can see that by giving this better market we are increasing Dominion prosperity, we are enabling the Dominions to expand their resources, to absorb a larger population, to increase their purchasing power, and, if we can be assured that by a system of mutual preference the increased purchasing power will net go to the purchase of foreign goods but to the purchase of goods in the Empire and in this country in particular, then in a decade or two that preference which seems so trifling at first might rise to be something which would give a stimulus to our industry, and enable us to maintain, and perhaps even raise, our standards to an extent which would be comparable with that produced by the industrial revolution that followed the Napoleonic Wars.

I believe it was Heine who said what a good thing it was that the Romans had not to learn Latin grammar, for if they had they would never have had time to conquer the Roman Empire. So it seems to me that, if we spend too much time scrambling among ourselves as to who shall get the biggest share, we may well fail to realise the united greatness which is going to increase the sum total and give a bigger share to all. I believe that the attainment of this unity could be materially advanced by the creation of an Imperial secretariat, constituted to carry on a continuous survey of Imperial problems, and promoting a scientific system of Imperial rationalisation. I fear there are many misunderstandings as to what is the meaning of that word. As I see it, it does not merely mean the amalgamation of one firm with another; it means the co-operation of a whole industry here and in the Dominions on an Imperial basis, working as an Imperial service, so controlling the expansion of productive capacity that it shall steadily increase according to the natural growth of demand, instead of by spasmodic jerks followed by contractions which always mean a loss of capital and sudden bursts of unemployment. It may be a long road we have to travel before vie reach the final goal, but at least we can make a beginning and we shall deserve well of those who come after us if we lay well and truly the foundations upon which they can build afterwards.

The charge that I bring against the Government to-day is that, in the most serious crisis which any of us in this House can recollect they have utterly and completely failed to show that they have any plans, or even any conception, of the gravity of the situation. Just as they have failed to give a lead to the Imperial Conference and yet refuse the proposals made to them there, so they have failed to give a lead to the House of Commons, and yet they will not accept the suggestions made so liberally here. I submit to the House that a Government which is afflicted with such a paralysis of the brain and will is a danger to the country, and I ask the House to accent this Amendment with all its implications.

The PRESIDENT of the BOARD of TRADE (Mr. William Graham)

I think the House will have listened with a good deal of surprise, if not of amazement, to the attack which the right hon. Gentleman the Member for Edgbaston (Mr. Chamberlain) has made in his speech this afternoon. I expected a very powerful and searching indictment of the Government's policy, but it is probably not unfair to say that the right hon. Gentleman was violent only in those passages which must be included in all such speeches, and was singularly moderate and restrained when he came to practical propositions. If a personal word may be forgiven, I fear that I am a perfectly hopeless choice for the purposes of mere party debate, and my object this afternoon in intervening immediately after the right hon. Gentleman has spoken is rather to summarise for the use of the House the facts of the commercial and industrial situation as these are open to us in official and other documents, and then to notice the two main propositions of the right hon. Gentleman's speech, which are, firstly, the proposition to effect a great change in the tariff system of this country, and, secondly, the proposition relating to the reorganisation of our industry.

It. would be idle for anyone to deny that the existing situation is grave. I am not going to pause to remind the House that our opponents had five years of overwhelming majority in this House, and that during that time the unemployment total practically never fell below 1,000,000. We should be entitled to make a good deal of that this afternoon, hut I prefer to pass to a situation which is very much more tragic, in which during the past 12 months another 1,000,000 have been added to that total, until to-day we have more than 2,000,000 people out of work, and by common consent an aggravation of home and world problems on a scale that I do not, think any student of economic issues contemplated in October last. One primary, and, indeed, the main, contributory cause of that state of affairs has been the remarkable and dra- matic downward plunge in commodity prices. Hon. Members are familiar with the state of affairs in the United States of America. It was perfectly plain that there was a great deal of speculation which bore very little relation to the strict facts of even a relatively prosperous American industry, and that the time must inevitably come when the boom must break. It did come, and it extended to the Continent of Europe and to other countries; and the downward movement in commodity prices has continued until many leading and basic commodities are to-day actually lower in price than they were in pre-War times.

Of course, it is remarkably difficult to say what the unemployment totals are in other countries, because their systems of reckoning are very different from ours, and in many cases largely incomplete; but it seems beyond doubt that there are 3,000,000, 4,000,000, or 5,000,000, and probably many more, unemployed in the United States. [An HON. MEMBER: "12,000,000!"] Certainly, there are from 2,750,000 to 3,000,000 people unemployed in Germany. It has been calculated lately that there are 21,000,000 people in Europe directly or indirectly in receipt to-day of some form of public assistance, and that under systems which are very largely Protectionist—not Protectionist in terms of the very moderate revenue tariff of which the right hon. Gentleman spoke; not even in terms of the more substantial Protection to which he and his Front Bench may be driven by the forces behind them: but in terms of almost a prohibition, so high is the tariff applied to many goods that those countries would otherwise import. That is the state of affairs which we as a Government have frankly and firmly to face, and I am the last to complain of any capital which may he made of it by hon. Members opposite or in any part of the House. We are here, like every Government, to be criticised and attacked, because it is by that process in this country that we hammer out proposals and submit them to the judgment of the electorate; but personally I have no fear, subject to the one condition that the facts are stated to the electorate, that they will appreciate the meaning of this national crisis.

It is a very interesting question whether that downward movement in commodity prices has reached its lowest point and when a revival will begin, and the House, irrespective of party, will quite properly ask me this afternoon whether there is any information which I can give from the official and other sources at our disposal. May I observe in passing that there is at least one factor which has to some extent further penalised the markets, or at all events has retarded their recovery? While that great downward movement in commodity prices has taken place, it has not been passed on to consumers in retail prices to anything like a corresponding extent; and I find leading industrialists in this country, including Conservatives in Manchester who are largely interested in the cotton industry, who are selling their goods at very low prices to-day, and who say quite candidly that there is no justification for the retail rates which are being charged in many establishments, and which are further penalising an already weakened demand.

What are the prospects of an upward movement? There are authorities in the United States of America, in this country, and on the Continent, who are impressed by the fact that the prices of certain commodities are now so much below even pre-War levels that that state of affairs cannot continue, and a number of them have placed the beginning of the recovery at about the end of this year, while others place it in the spring. At all events, just at this moment there is a rather more hopeful outlook in that international situation which profoundly affects us in this country, an island community very largely built up by world trade. I can only express the hope that these prophecies of an early recovery are correct, but in that sphere as in every other sphere you get a bewildering variety of suggestions. The right hon. Gentleman touched upon one when he referred to the so-called "Rex" proposal with regard to currency within the British Empire, and, without in any way committing himself to a plan of that kind, which has many monetary difficulties, said that at all events an adverse judgment upon it would be premature.

At the last meeting of the Assembly of the League of Nations there was presented a report on the world gold situation. That report was only a preliminary document relating to the output of gold and the extent to which it entered as the basis of credit into industry and commerce, and a further report was promised. I cannot pronounce in any way on financial policy this afternoon, but I think I am entitled to remind the House that there is a very considerable body of influential opinion—banking opinion to some extent, and certainly industrial opinion—which suggests that the mal-distribution of gold in recent times is responsible in part for, or for aggravating to some extent, the downward movement of commodity prices. That is a problem which is under the consideration of leading authorities in the Central Banks, and I very much hope that that consideration, and the second report which is to come from the economic side of the League of Nations, will throw early light upon that vital question, because, now that we are living in a world very largely anchored to gold, it must he plain to everyone that upon the gold situation depends the credit which is essential, not only to the avoidance of penalisation of the markets, but to sound industry and commerce; and if any part of that credit is being restricted by an undue restraint upon gold, that is a situation for which we must find a remedy without delay. I might continue for a very long time in the international field, but all I can say at the moment is that, everything considered, the note is just a little more hopeful than it has been for some time; there are signs of the beginning of an upward movement, and I very much hope that our industry and commerce will participate in it.

Now I approach what is undeniably a far more controversial field. We are revelling this afternoon—or perhaps I ought not to use the word "revelling," for this is too great a tragedy for any revelling—we are having an open discussion upon the problems of unemployment and the remedies which should be suggested to the electorate in Great Britain. There were two currents running through the right hon. Gentleman's speech. One was the tariff current, and the other that of the reorganisation of the great industries in the State. May I try to summarise the tariff problem as we see it under existing conditions? I want to make it plain that, while on balance I think the great majority of my colleagues who are Members of this House have said that the interests of this country are best served by a free fiscal system, we have never regarded it as a final cure, and do not so regard it to-day, for our industrial troubles. I have never in all my public speeches, if I may be forgiven a personal word, put it higher than a useful and valuable contribution to a sound and better policy for this country, which must be backed up by a re-organisation which goes right down to the roots of ownership and control. I will, however, concentrate for the moment on the right hon. Gentleman's proposition.

When I think of all the Beaverbrook and Rothermere campaign outside, of the so-called glories of Empire Free Trade, of this hot and strong movement for the taxation of foodstuffs with no qualification whatever—for that is the demand which is addressed to hon. Members opposite—what a pale reflection, what a disappointing reply, the right hon. Gentleman has offered this afternoon. In effect, what did he say? He said, "I am prepared to analyse commodities one by one, or industries one by one, and see how far these tariffs can be applied to those industries," subject to some general recommendation which he made with regard to a revenue tariff. Was not that precisely what hon. Members opposite were doing under the Safeguarding of Industries Act? Were not they analysing industries one by one through these Committees? Even if you alter the procedure and machinery, the right hon. Gentleman must find some method of analysing these industries and of applying it in that way; and I cannot think that that is going to comfort the great body of his supporters or the electorate to whom he is looking for support along the lines of a tariff solution for this problem.

Whatever may be the precise proposals, we have to stand up to one or two very important considerations. I entirely agree that we are in the midst of a profound industrial depression, with 2,000,000 people out of work, and when we appear to be almost in a position of economic isolation as regards fiscal policy in the world, there is a very strong tendency on the part of large numbers of industrialists to say that this is the only cure, and on the part of large numbers of people to say, "Well, we must have a remedy of any kind; let us try tariffs. We cannot be worse than we are now." That is precisely the kind of economic danger in the State that we have to meet. It is no use talking in terms of the old controversies of 1903. We have a great range of commercial treaties covering an enormous part of our trade in this country. There is a certain concentration at, the moment on what is called dumping that takes the form of offering goods in this country at very low prices with which admittedly we could not compete, or it may take the form of imports at prices not so low, but still well below ours, not in terms of this temporary inrush, but over a longer range of time. But I have never been able to get from hon. and right hon. Gentlemen opposite what they would do in those circumstances other than denounce those treaties, which they must denounce as a preliminary to any effective step in this scheme. I want the House to understand that I am not underrating for a moment the gravity of this part of the problem, because we all understand that it is not so much the quantities of commodities that are offered at these very low rates as the demoralisation of the market that those very low prices may cause for the time being. I should fail in my duty if I did not say that.

Hon. Members opposite would not, I think, find a remedy very easily even if they were in office to-day. Take the illustration which has already been debated in the House, of those bounty-fed cereals from Germany. That system has been temporarily suspended for reasons with which hon. Members are familiar, but, in any case, it was perfectly plain that there was no method of dealing with it at all unless we were prepared to denounce the Anglo-German Commercial Treaty of 1924, and in debate in this House that was acknowledged by hon. Members opposite. I believe there was at one stage a proposed provision in the Treaty to deal with this question, but it had to be dropped. In any event, the Treaty was concluded without a provision of this kind. Is the House prepared to denounce that Treaty at 12 months' notice or whatever the period may be? Is the House prepared to run the great risk of disturbing and impeding the £40,000,000 of trade flowing one way or the other between Central Europe and our island community? There is very much the same problem in the case of the so-called Russian dumping at present. The quantity of those cereals has increased within recent times, but there is a modus vivendi, a temporary agree- ment regulating the trade of Russia, with this country which must be denounced at six months' notice before that problem can be treated, and again we have to consider what may be the consequences affecting that great country covering a large part of the world's surface, whether we are prepared to run the risk of the loss of this trade or some part of the trade which we are doing at present. For whatever view of political doctrine or economic practice any hon. Member takes, this remains an undeniable fact; that until that vast area of more than 100,000,000 people is brought effectively into the European economy, there can be no real European recovery, and we may as well make up our minds to that.

The right hon. Gentleman the Member for Darwen (Sir H. Samuel), if I remember the figure aright, was pointing out in a speech he made some time ago in the country that in those great markets of India, China and Russia we have one-half of the population the world—approximately 900,000,000 people out of about 1,900,000,000 as the total of the world population. Those are precisely the areas in which we find unrest and dislocation applicable to hundreds of millions of people; and if only trade could be stimulated we should have the greatest contribution to the solution of the economic problem of this country. You would have literally a revolution in the position of affairs here. If I thought for a single moment that a prohibitory tariff, or a small tariff, was going to help unemployment, I do not think I should hesitate to take that line, because we cannot very much longer tolerate this great suffering.

There is not the slightest doubt that, having regard to the most-favoured-nation treatment accorded to us almost everywhere, and remembering the great extent to which we depend on foreign countries in existing conditions, the only result would be retaliation at our expense and further tariff walls, because they can do it where we cannot. In other words, there is hardly any part of the line—and, believe me, I have analysed it impartially during recent months—at which we do not stand to lose on the transaction, and, therefore, this country has to make up its mind whether it is going to play the game of tariffs and retaliation or whether it is going, how- ever great the difficulties, to try to support fiscal freedom in another way.

Now may I approach the alternatives? Hon. Members opposite have poured all kinds of ridicule upon the Economic Conference at Geneva, but I want to tell them one or two rather important things. First of all, there was that World Economic Conference in 1927. It was representative of a great body of industrial opinion and commercial and banking opinion. It recognised that the economic nationalism of Europe was a very grave danger to Europe, and it said that there should be some determined step to get practical results from a policy of tariff reduction which was urgently necessary for recovery, especially when we remember that these post-War boundary readjustments in Europe had added about 20,000 kilometres or more to European customs barriers. No result followed from that, but from the discussion of last year we at least secured this—and it is the positive side of it that hon. Members opposite always ignore—we got the agreement of a large number of European countries so far to stabilise those commercial treaties as not further adversely to affect their trade relations with this country and our trade relations with them.

All that we undertook at the same time was, for a limited period and pending the analysis with a view to reduction of the tariffs say on specific groups of commodities, not to impose in this country protective tariffs, an obligation of which we can be rid on 1st April next year by giving notice on 1st February, but under which I very much hope we are going to get those negotiations on specific commodities, and that they are going to lead to practical results. I have never disguised from hon. Members opposite the very great difficulty of this campaign, but I never had a moment's hesitation in believing that, hard and difficult as that road is, it is a far sounder road for this country than the road of tariffs and retaliation, because they have such power of damaging our trade, and they can exercise it almost without delay; and it is a reversal of what we all in our hearts know to be a sound policy, because of those great post-War burdens under which Europe in particular and a very large part of the world labour to-day.

I do not quite know what hon. Members opposite propose, and it is indistinguishable from the speech the right hon. Gentleman has just addressed to the House. He has said not a single word as to whether their tariff programme involves the taxation of imported wheat and foodstuffs and raw materials into this country. He said something about Empire trade but, if a fair interpretation is placed upon that, it can only bear one meaning, and that is that duties are to be applied to those imported foodstuffs and raw materials, because without those duties large scale preference becomes a meaningless proposition. Duties on manufactured articles have very little Empire meaning, and I am not sure that they would help us even against foreign countries, but we had no declaration to-day other than something which faintly suggests a revenue tariff. In other words, there is nothing but disappointment for the campaign outside these walls which the Tory party is carrying on for extreme courses in fiscal matters. The next part of this programme is undoubtedly that which affects the Empire. The House will recognise at once that speak to-day under a handicap while the Imperial Conference proceeds. There has been some criticism because certain of my colleagues on these benches have made declarations in the country regarding our fiscal faith during the Conference, but I see no objection to that course. Those were always our views. They were principles which were perfectly familiar to the House and to our colleagues in the Imperial Conference and, just as they came with certain proposals, so we arrived with our faith at the Conference.

I will say nothing about probable solutions, but I should fail in my duty in replying to the right hon. Gentleman if I did not summarise as clearly and simply as I possibly can the two choices—I say nothing about the Government—which are before the delegates in that body. Mr. Bennett has made a public statement, or, at all events it was afterwards available to the public, regarding his plan. In simple terms it is proposed to put an additional 10 per cent. on the duties which are applicable to foreign goods imported into different parts of the Empire, and it rests upon a general agreement within the Empire, on which so far, of course, no opinion has been vouchsafed. In other words, it is an increase against foreign countries, but there is no immediate proposal of a diminution as regards the so-called preferential tariffs. These in many cases are prohibitive and it is common property—and I am here only repeating the public declarations of the Dominion representatives, and I do not complain of them—that they intend above all to develop what they call their secondary industries, their manufacturing industries, and I should be very much surprised if there was a prospect of any immediate or drastic reduction of these duties, which after all, are the duties which are of main interest to the manufacturers of Great Britain. That is a plain statement of the position, and I do not care a brass farthing whether we are Conservatives, or Liberals or Socialists. It is that statement of facts with which we have to deal.

5.0 p.m.

Moreover, we have to consider the distribution of our world trade. We arc sincerely anxious of doing everything in our power to cultivate those great resources of the British Commonwealth, but let us recall that at present we do one-third of our trade within the Empire, we do one-third with Europe and another third with other foreign countries. In other words, we do two-thirds with the rest of the world, and any change over towards inter-Imperial trade must proceed in terms of a careful and sound adjustment as regards our foreign trade, our commercial treaties and our trade with the rest of the world. I hope the House will not mistake me in suggesting that that need involves any diminution in the aggregate volume of trade. Very far from it. But in so far as it involves any immediate transition or change over, it is a situation which requires to be watched with the very greatest care. Take, for example, the repercussions of any change in the purchase of wheat in the Empire on our trading organisations in South America, and more particularly in the Argentine. In South America we have approximately £1,000,000,000 of British capital. We do a very large trade with that part of the world. It is a trade that is vital to the employment of great numbers of people in this country. While I want to see those Empire resources developed, it is a consideration of that kind—and it is only one consideration applicable to the rest of the world—that we must have very clearly before us. All these things are under discussion.

But may I say a word about the other part of the alternative? It is my fervent conviction, that, apart from any tariff change, which could have any meaning at all only if it were applicable to imported foodstuffs coming into this country, there is a great field that can be cultivated within the British Commonwealth on lines of what I should call voluntary preference. The right hon. Gentleman referred to one of the most interesting subjects which have been discussed within recent times—Empire rationalisation. That is, as he knows, very much inure than a reorganisation of an individual industry. It may involve the reorganisation of production within the different parts of the Empire. It will mean the analysis of the position in certain great industries along these lines as to whether part of that production can be undertaken in the United Kingdom, and another part in Canada or Australia, or whatever the case may be. That is only one proposition.

There are other propositions affecting bulk purchase. There are propositions affecting import hoards. There are the so-called analogies on the lines of the Anglo-Argentine trade agreement which has now been brought into operation. There are all kinds of steps which can be taken in marketing, and there may be, for all I know, possible financial plans. But, at all events, I do wish the House to believe, since the right hon. Gentleman has referred to it and since I should fail in my duty if I did not make a reply, that these things have been analysed and discussed with very great interest, and while I cannot. anticipate a single conclusion of that Conference, he is wrong in suggesting that we have entered it without a policy or without a view as to what will be accomplished in that Conference. It may be that this Government have suffered a little from failure to advertise their wares. If all these things had been plain to the House, a very large part of the speech of the right hon. Gentle- man would not have been delivered or would have been substantially modified this afternoon.

Now I will approach, in conclusion, and very briefly indeed, the other subject which he raised. If we assume for a moment that we are not going to get into the toils of Protection—the taxation of foodstuffs, raw materials and manufactured articles—but are going to concentrate upon this voluntary field which I have described, there is one great contribution which we must make, and that is a drastic reorganisation of great industries in this country to respond to new and totally different conditions of world commerce. It is idle to discuss that problem unless we take specific industries, more particularly large industries, and are able to tell the House what we intend to do. The right hon. Gentleman says, "Here is a Government which sits helpless and ineffective." I feel that remark a little keenly at the end of about 16 or 17 months in which I have been engaged every day—and I am only one of many—in immediate contact with these industries, and as far as one of them is concerned in the production of a Bill in this Chamber which excited mild controversy through the crowded months of its career. If we take coal, it is plain to all of us that some kind of reorganisation was required. You have a certain pithead organisation at the present day. You have the amalgamation commission which will be appointed. You have the beginning of a movement for the federation of those collieries. It has been discussed with many of the leaders of the industry, and you have certain other steps which are to be taken for the express purpose of trying to stimulate the export trade in coal without which there can be no better inland prices and no sound employment for a very considerable section of the mining population. My hon. Friend the Secretary for Mines led a deputation to Scandinavia by which the whole situation was fully reviewed.

We have taken steps, not only in coal but in regard to our other great industries in different parts of the world. In the vast market in China we have an industrial commission at the present time with a sub-commission devoted to cotton, because unless that market can be recovered, there is very little hope for a fair section, it may be a large section, of Lancashire's employment. But in coal you have an industry in which the element of compulsion was applied to the reorganisation, to which contribution was made from at least two parts of the House, and which was resisted throughout by the other part, though in the long run we triumphed over the opposition. But there you have a beginning in that great basic industry.

We have taken steps by inquiry into iron and steel, and in cotton, and before the right hon. Gentleman charges us with complete failure to handle the situation, I am going to ask him and those who will speak for him, his supporters, later in this debate what they propose to do in iron and steel, in cotton and in the other great industries which must be reorganised if the export trade and the home trade of this country are to be recovered and employment provided for our people. The situation in these industries is clear. It so happens that in iron and steel there is a very strong tariff agitation. There are 3,000,000 tons of imported iron and steel products, and I beg hon. Gentlemen and right hon. Gentlemen opposite to remember that the leaders in the industry are discussing a prohibitive tariff. They are not discussing anything in the terms of the Safeguarding Duties, even if we put them as high as 33⅓. They arc telling this country to-day in their public pronouncements that nothing short of a virtually prohibitive tariff will meet the situation, and that only by the virtual exclusion of that 3,000,000 tons will their establishments run to capacity in such a way as to enable a reduction of overhead charges and prevent a further increase in the price of the home products. I think it is the duty of hon. Gentlemen and right hon. Gentlemen opposite to tell the House and to tell British industry whether they propose to respond to that demand and, if they propose to respond to that demand, to tell us at the same time what doctrine they are going to offer to the shipbuilding areas and what they are going to say to the great enterprises on the Clyde and the north-east coast and other parts when these industries are coming to us and begging for support in a plan which I shall have to submit to the House in a few clays' time for facilities for insurance, the ordinary markets not being able to cover a great proposition like the Cunard construction.

We have not heard a single word on these subjects. We have had a general speech this afternoon, but general speeches are no use unless we tell these industries how they are to be affected. What message have hon. and right hon. Gentlemen for the iron and steel trade? Do they propose this prohibitive tariff? Is it to be completed, or is it going to be some pale reflection of some doctrine with which these gentlemen will go away absolutely unsatisfied? Let me pass to one other thing. Everybody in that industry knows that something resembling regional reorganisation is required. A number of these plans must be made. They have to be applied to other commodities, and applied in terms which will meet the changed conditions. The second question is whether that can be done on voluntary lines, or whether some form of compulsion must be applied. When I spoke in this House before the Recess, I made it clear that the Government have no desire—we have not a majority in this Chamber—to become involved in further compulsory legislation—I doubt very much if you can obtain a majority for these compulsory powers—and, accordingly, we made it perfectly clear that the aim must be to proceed in terms of a voluntary reorganisation, stimulated and encouraged so as to be as rapid as possible. No one excludes this difficulty, that if they do not seriously attempt to recover those markets and the unemployment continues to grow worse, the House generally will have to stand up to another proposition. I make no pronouncement upon it this afternoon. I am only telling the House what may be the state of affairs.

In the big cotton industry—I give that only as an illustration—we have four or five sections. There is the raw material, the spinning, the weaving, the finishing trades and the merchants. It is common knowledge that there is no agreement within any one section in the Lancashire cotton trade as to the remedy for the present state of affairs. There is a population of 500,000 workpeople dependent for its livelihood upon that industry in one of the most important counties in the land. In spite of all the depression of last year, we exported about £130,000,000 worth of cotton goods. It is still our largest exporting industry, but one-half of Lancashire's population, or nearly one-half, is out of work. It is a failure of system with which we have to contend. It is a state of affairs which has grown up under another industrial regime, and which has been confronted by a revolution, for it is a revolution, in world markets. The establishment of foreign production in competition is a very great change which every impartial mind in economic affairs must face.

What is the situation? There is so far no agreement in that industry. I pay my tribute to the work and efforts of the different interests—employers and trade unions alike—who are sitting in Lancashire on the Joint Committee even now trying to work out a solution. But the tendency of one section is to blame another. You do not get agreement upon vertical amalgamation or horizontal amalgamation—more weight on the second than on the first. You get a widespread division of opinion as to external factors, monetary changes, currency and the rest, and the presence of high rates and charges for social services, and very often a disinclination to undertake the remedies in the industry itself. We are going to try our very best, in further consultation with the different sections, to promote agreement. I venture to say that if hon. Gentlemen opposite were in office at this hour, they would not pursue other than that policy, though I am not suggesting that it is final or conclusive, because the same underlying consideration which applies in Lancashire cotton applies also to the iron and steel industries and other industries to which I have already referred. That, in very brief summary, is the situation. We have covered a great deal as a Government in that field. We are going to tell the House of Commons very frankly and very candidly in succeeding months what the position is, and it may be we shall be compelled to consider other measures on which, again, I make no declaration this afternoon.

A final word about a passage in the speech of the right hon. Gentleman which is of profound importance to the millions of the masses of this country in this great problem of industrial reorganisation. The right hon. Gentleman was very guarded in that part of his speech, hut in effect it came to this, that he really stated that in presence of such a fall in commodity prices a reduction in money wages must follow. A very large part of our industry and commerce cannot get remunerative terms or return any at the existing prices. There is strong criticism that the money wages have been maintained at too high a level and there is this choice, apart from any change in the industrial system, facing the British people—are those wages to be brought down as is suggested in many quarters to enable that industry again to compete at home and abroad, or is a drastic reorganisation of industry itself to be undertaken? The right hon. Gentleman seemed to think that under a tariff system we might be able to get rid of this trouble, this great problem, but what meaning has a tariff unless it is a duty on goods which come into this country, and what benefit does it bring to the protected industries and the vested interests unless it raises the price of the article? Is not that just exactly saying that you are going to reduce the real income of millions of our people. In that way you would achieve your wage reduction in what I conceive to be the most disastrous conditions, conditions which, if we have any genius at all, can be avoided even in our present great difficulties in Great Britain.

I make it perfectly plain that our reorganisation must be wholehearted and drastic. I am perfectly satisfied that reorganisation will be not assisted, as the right hon. Gentleman thought, but hindered by a tariff wall and by the dislocation of our trade in the terms of tearing up commercial treaties. It is the duty of those on every side to see to it that we do not fall back upon the expedient of lowering the standard of life for millions of our people, thereby defeating our recovery in the home market. We have not been idle in these matters, we have done a very great deal under great handicap and in the presence of an industrial system which we do not defend now any more than we have defended it in the past. There is one tragedy that must oppress every Member of this Assembly. It is a remarkable fact that there are millions of people to-day who are denied the opportunity of full and remunerative employment while, on the other hand, there are hundreds of millions of people in China, Japan, India, the European countries and other parts of the world whose demands, not for luxuries, not even for the conventional necessaries, but for the necessaries of life, food, clothing, shelter and better education have not yet been fully satisfied. It is the gulf between the production that would produce if it had the chance and the consumption that would consume if it had the consuming power, that must be bridged. I make no apology in addressing to the House this final word on this fundamental fact that you will not find a remedy for such a state of affairs within the limits of the existing industrial organisation. To a very large extent the old competitive system is perishing in our hands, a great number of national and international combinations, syndicates and trusts are coming into play, and I say to hon. Members opposite that that, irrespective of whether you have a fiscal free trade system or a tariff system, is a fundamental problem with which we in this House and the people of other lands are confronted to-day, and it is in the solution of that problem that we shall find the economic salvation of our people.

Sir HUGH O'NEILL

The President of the Board of Trade is, I suppose, one of the most respected Members of this House and one whose speeches always command the very closest attention in all quarters of the House. If I might suggest a reason why the right hon. Gentleman is always so well received here I would say that it is because he is so essentially moderate, sensible and: reasonable, attributes which appeal to, the average man in this country. He has just made a speech of a very quiet type, but quietude, it seems to me, is not the attitude which we must adopt towards the industrial and fiscal problems at the present time. We want action of a drastic and definite kind in one of the most momentous crises that this country has over had to face. The right hon. Gentleman places great faith in the reorganisation of the basic industries of this country. He instanced the reorganisation of the coal industry. The comment that I would make on that is that that industry has been placed under the most violent form of Protection which you could possibly imagine, an attempt to set up committees to fix prices below which coal is not to be sold in the home markets—Protection run mad. The right hon. Gentleman also dealt with the Government's policy in regard to the Tariff Truce. The whole conception of the Government in these matters is entirely removed and different from the conception which we have on these benches. They are thinking only of trying to conciliate and to make arrangements with foreign countries in these matters while we are thinking and trying to give more work and better wages to the workers of this country. There was one statement made by the right hon. Gentleman which surprised me. On this point I thought he was going beyond his usual moderation. He said that perhaps one of the faults of the present Government has been that it has failed to advertise its wares. If there was ever a case of a. Government having advertised, over-advertised and advertised again its wares it was the advertisement policy of the present Government which took place before the last Election.

The right hon. Member for Edgbaston (Mr. Chamberlain) gave a very clear analysis of the position to-day and of the remedies which are put forward in different quarters to meet it. He told us that the only party which has no remedy is the party which constitutes the present Government. We have a remedy, and the right hon. Gentleman outlined it very clearly and fully. Our remedy is Protection of the home market and the development of the Empire market. The Liberal party have a remedy and I believe they are to tell us to-morrow what it is. The Members of the party opposite who sit below the Gangway have a remedy. Their remedy is the public ownership of the production, distribution and exchange of wealth. They want that to come about at once but that is very far from being the remedy of the Government. Except possibly in the last few sentences of his speech, I do not think there was any mention of that subject in the right hon. Gentleman's speech. Socialism in our time is very far removed from the immediate policy of the present Government. Looking at the King's Speech I was struck very much by the fact that there is no mention of the nationalisation of mining royalties. That, I suppose, is a form of Socialism and I understood last Session that it was to be one of the principal economic planks in the im- mediate future policy of the Government.

The Government party alone have really no definite drastic remedy for the present appalling state of affairs. Of course, all the remedies that are being put forward in different quarters are not going to be panaceas for the present serious state of things in which we find ourselves. There is one aspect of the position which has been very little discussed in the debates that we have had in the last few days. If we are going to bring about a better state of affairs it is vital that there should be rigid economy in public finance and public expenditure. Far from suggesting economy, the Government suggest various Measures which will mean increased expenditure. The Education Bill, which is to be read a Second time this week, will mean, I understand, at least £5,000,000 a year more expenditure. The Unemployment Insurance Fund is going from bad to worse. £10,000,000 more is to be borrowed a few weeks hence and another £10,000,000 will certainly be required within a few months. Where is the economy in those Measures? The whole policy of the Government as set forth in the King's Speech was a policy of expenditure.

When he introduced the Budget the Chancellor of the Exchequer said that he was in favour of economy, that everybody wanted economies hat that he was never told where he could economise. The time has come for individual Members of this House to give expression to their views as to where it may be possible to make economies in public expenditure. First of all, I would say definitely that no new commitments must be entered upon of a type like the Education Bill. The country simply cannot afford it. With regard to Unemployment Insurance—I am not going to refer to the matter in detail—it is common ground that the Unemployment. Insurance scheme requires drastic reorganisation. I do not think that anyone more fully realises that fact in their hearts than do hon. Members sitting opposite, but the most they propose in regard to it is a Royal Commission. What I say is that there should be no new borrowing passed by this House for the Unemployment Insurance Fund until reorganisation has taken place. It is urgent and clamantly needed. It is admitted on all sides of the House that numerous abuses have arisen—

Mr. DEPUTY-SPEAKER (Mr. Robert Young)

I am not quite sure which part of the Amendment can be applied to this.

Sir H. O'NEILL

I was dealing with the failure of the Government to meet the financial, commercial and unemployment situation, and merely referring in passing to the system of unemployment insurance because I maintain that it is through savings on that that economy should be promoted and extended. That is my point, but I am not going to elaborate it because it was fully dealt with last week in the debate on the general question. On this question of economy, one naturally looks to see first the suggestions which the Government have for reducing the great burden of national expenditure which exists to-day. They always say that the most unproductive form of expenditure is that of the Fighting Services and, therefore, it is natural, according to their view, that those are the directions in which they first look for economy. In view of all that has happened and is happening in the world to-day, and in view of the great reductions which have taken place recently in the Navy, I do not think this Government are likely to propose many further economies in that direction.

I suppose they would say that the most fertile prospect of saving national expenditure in the immediate future is by a big conversion operation in relation to the National Debt. Indeed, the Chancellor of the Exchequer, in a speech in the City of London only a few days ago, stated that it was his intention to carry such a conversion operation through as soon as the times were favourable. I was impressed by the speech of an ex-Minister the other day—the hon. Member who was Secretary for Mines up to a few months ago, and who, like the President of the Board of Trade, is respected by all parties in this House. He was talking about saving money and economising, and he said that we ought to reduce the interest on the National Debt. From the way in which he said it I do not think he meant reducing the interest on the National Debt by a legitimate conversion operation, but that he meant the old policy which many irresponsible people advocate of an arbitrary reduction of the rate of interest on particular loans. In other words, repudiation of the national obligations. That to any Government or to any responsible person is an absolute impossibility, and nobody knows it better than the President of the Board of Trade.

A legitimate conversion operation of the 5 per cent. War Loan is quite another matter. The term of that loan is now up. It was possible to deal with it in 1929 and, consequently, it may be converted at any time when the money market is suitable for such an operation. But the essence of a conversion of that kind is that you have to offer to repay in cash those who do not wish to convert. The conversion of the 5 per cent. War Loan is certainly an object at which to aim. It is most desirable, and it looks as though the Chancellor of the Exchequer, either by good management or good luck, was bringing the money market of this country into a state in which that conversion may be practical and practicable in the course of a very short time. I should like to utter one word of warning with regard to National Debt conversions or the conversion of the 5 per cent. War Loan. Suppose you convert the 5 per cent. War Loan and issue in its place a new security bearing interest at 4 per cent., that is assuming that the rate of money is on a 4 per cent. basis. You will then save £20,000,000 a year, but that saving and that conversion will bring no benefit to the country and no advantage to unemployment unless at the same time it is accompanied by economy and a reduction in taxation. What is the use to those who hold War Loan to-day, whether they are private individuals or great corporations, getting I per cent. interest less on their money if that saving is going to be spent by the Government on unproductive expenditure and not in some kind of relief to the taxpayer. I put forward the suggestion that unless the saving on the National Debt services which would be brought about by a War Loan conversion is going to be reflected in economy and reduced taxation it will have a deleterious and dangerous effect on unemployment in this country.

Unless the expenditure of this country is reduced we shall very soon be up against a very difficult and dangerous Budget situation. The Chancellor of the Exchequer, and I am sure also the Presi- dent of the Board of Trade, will admit that at the present time we are getting very close to the limit of possible direct taxation. The other day the Chancellor of the Exchequer told us that he would do his best not to increase taxation, because he, like all those people who take an interest in finance, knows perfectly well that the time is coming when you may put sixpence or one shilling on the income Tax, or two shillings on the Surtax, or another 10 per cent. on Death Duties, and the result will be, not an increase of revenue, but a decrease in the productivity of those taxes. It is very easy to spend money when you have only to put on a few more taxes to get it in to spend, but it is very difficult to spend money—and shortly it will become impossible—when you find that you cannot get the money by the taxes which you hope will produce it. Not only in this country but throughout the world we are seeing a period of great commercial and financial crisis. Australia is already right up against the very difficulties which, unless we economise and save, we in this country will be up against before long. We must economise, we must spend less—

Mr. MacLAREN

On the Northern Parliament.

Sir H. O'NEILL

In a discussion of this sort the hon. Member might keep out such irrelevant kind of interruptions. They have not very much bearing on the very serious matters which the House of Commons is discussing. We have to economise; we have to save. We have, somehow or other, to get rid of this terrible state of the country in which there is such an enormous number of working people in receipt of some kind of payment at the expense of the State for doing nothing. That is a very serious state of affairs, and it is not only highly dangerous to the financial position of the country but is becoming highly dangerous to the moral character of many of the people of the land. We have to try to bring about a change in our national politics which will save us from the dangers which are looming ahead. These matters will have to be faced by whatever Government is in power. The present Government, which has no remedy to put forward, may drift on for a little longer, the country may go from bad to worse, there may be more people on the dole, but the reckoning will have to be faced sooner or later and the only thing which is obvious to all must be that the longer that reckoning is postponed the greater it will be when at last it has to be faced.

Mr. COCKS

Everyone in the course of this debate has said that we are meeting in a time of grave crisis. Over 2,000,000 people are out of work and their numbers are increasing every day. Many people believe that before Christmas unemployment will reach the figure of 2,500,000. That is the crisis which we are discussing. In this Parliament we have a Government which has to deal with the problem. But it is in a minority in this Assembly. There is the problem—a grave crisis of unemployment in the State and a minority Government here. Although I am a party man, and although as a rule I believe in party decisions, surely this is a time when one might expect the best brains of every party to be brought to bear on the problem, and expect the parties to rally together in order to make this Assembly something in the nature of a council of State and bring about some solution of this terrible problem. Instead of that, we find every organised party in the House, and especially the parties opposite, in a state of disruption and disagreement almost unparalleled in our Parliamentary history. We have certainly most excellent speeches being made from the back benches of all parties, but the speakers have not been speaking for their parties. There have been speeches made from this side, and by hon. Members opposite which are almost in agreement—speeches which came from those who, perhaps, represent the younger generation of this country and who are rather tired of affairs being ruled by a pre-War generation in every party in this House. But as far as any solution of this problem coming from hon. Members opposite as organised parties is concerned, we have had nothing offered.

The Opposition have moved to-day an Amendment which states that the Government have not brought forward any adequate Measures for dealing with unemployment. I dare say it is an Amendment with which many will agree. I dare say that the Government themselves will regret that it has not been possible as yet to produce adequate Measures for remedying unemployment. But hon. Members opposite have no policy for dealing with unemployment either. That is admitted. They do not come here as an organised party and say that they are in agreement regarding any policy. The party opposite used to boast of being the best organised party in the country, of being perfectly disciplined, and so on. We look before us to-day and see, in their own words, a set of hungry sheep following many hungry shepherds, and following in many different directions. The Opposition at the moment reminds me of nothing so much as the state of the Roman Empire at the time when it was ruled by what were called the 30 tyrants. We have the tyrant of Burton, the tyrant of Eastbourne, and the very disrespectful tyrant of Macclesfield, all perfectly willing to wear the purple if only they can get rid of the Emperor, but he, of course, is in the position of our own King Charles II, who said that no one was going to get rid of him in order to make his brother king.

That is the position of the Leader of the Opposition. But what is his policy? We have heard from the right hon. Member for Edgbaston (Mr. Chamberlain) something about Empire economic unity; he said he was in favour of Empire economic unity. Is he is favour of Empire Free Trade? He did not use those words; he substituted another phrase called "Empire economic unity," which he hopes will be attained at some time or other, probably in the days of distant generations as yet unborn. I do not know exactly what is the position of the Leader of the Opposition on the question of the taxation of food, as a means of getting a preference from the Colonies and giving employment to our people in return. As far as I know, the right hon. Gentleman has not vet accepted the full policy of fond taxation: he has not yet crossed the Rubicon, or perhaps I should say the Beaverbrook. But many of his followers have passed across, and others are preparing to cross. In the words of an Ancient and Modern hymn which may be familiar to hon. Members opposite: Part of the host have crossed the flood, And part are crossing now. It seems to me that if this continues the only thing for the Leader of the Opposition to do in the future is either to pursue his army to Rome, where political assassination awaits him, or to retire like Cincinnatus to the barns and the beeves of Bewdley. Then what about the Liberals? Here is a debate on this important subject and the Liberal benches are absolutely empty. I suppose that the members of the Liberal party have gone away to find a policy. It is a pity that they could not have drawn it up before the debate, so that we could have had the benefit of their investigation of the subject for many years past. The trouble with members of the Liberal party is that when they do adopt a policy they drop it the next day. They have a leader of great activity, and in comparison with the Leader of the Opposition the is certainly a very active leader. But it is an activity without any continuous direction. When the right hon. Gentleman gets up to speak one never knows whether he is going to attack the citadel or defend the ramparts. I remember that a few months ago, in a debate, there was a point on the Finance Bill which affected the question of unemployment. The right hon. Gentleman got up and made a terrific and very unexpected assault on the Government; he dashed into the breach like the leader of a storming party at the siege of Badajoz, but when he looked round he found that half his army had retreated to Lisbon.

It is that sort of conduct which is causing the people of this country to lose faith in the Liberal party and in any solution for dealing with unemployment that may he put forward after their meeting to-night. It is the irresponsibility, the change of conduct and mood with every varying political situation which at the next election will result in the extinction of that particular party, so that the name of "Liberal" will be heard no more in this country. As has been said this House is on its trial. People are looking to us to give them a lead on this question. They find two of the great historical parties rent asunder and unable to give any lead whatever.

What about the Government policy? What about the Labour and Socialist party? We have differences in our ranks and it is no use denying the fact. One knows it from the speeches which have been delivered so far this Session. We have our divisions, but on the whole our divisions are rather different from those which have torn the parties opposite to pieces. In the Labour party the word "division" is used almost in a military sense. The divisions are the various divisions which make up the army. The Labour party is advancing over very difficult country on a broad front. We have our vanguard up on the "mountain", spying out the land, and, perhaps, as often happens to people on mountains, the vanguard is a little bit in the clouds. We have our left wing and our right wing and our centre, and we have a rearguard, where, under the tarnished banner of the gold standard, grim and implacable, there rides the last of the Ironsides. I have some differences of opinion and have had some in the past, and no doubt will have some in the future, with the Chancellor of the Exchequer, but I recognise that his actions and decisions are always actuated by honourable and conscientious motives. I recognise his fine fighting qualities, and, in passing, I cannot help paying a tribute and offering a salute of respectful admiration for the fighting qualities which he possesses.

But here we see the House divided into various sections of thought on this question of unemployment, in a way that we have not seen it divided for a hundred years. Out of that what hope is there for England? That, I believe, is what people are asking now. I was very glad when I looked at the King's Speech to see that the Government are doing something for unemployment, although they are not doing as much as I would like them to do. The last speaker said that he was very sorry that at this stage the Government had decided to raise the school-leaving age. But surely, apart from its educational value, that is one of the temporary measures for dealing with the situation of 2,000,000 unemployed? The right hon. Member for West Woolwich (Sir K. Wood) shakes his head.

Sir KINGSLEY WOOD

That is not what the late Lord Privy Seal said.

6.0 p.m.

Mr. COCKS

Certainly the President of the Board of Education has a right to speak on the subject. He said that the proposal would keep 400,000 children at school for another year, and that would give employment to 150,000 people who now are probably drawing unemployment benefit. It seems to me, therefore, that the raising of the school-leaving age is a definite contribution to the solving of our problem. The right hon. Gentleman who spoke last referred to economy. I fully agree with him. But I would point out that economy does not always mean merely keeping money in your pocket. Economy often means wise expenditure. I consider that that proposal would be wise expenditure, and I only wish that the Government had gone a step further and tackled the problem at the other end also. I wish they bad found it possible—it may be that they will find it possible before the Session ends—to grant retiring pensions at the age of 65. I asked a question on this subject. a few months ago, and I was informed that if people of 65 who now have pensions of 10s. a week were offered an additional 10s. in the case of single people and 20s. in the case of married people, on condition that they retired from industry and made room for younger workers, that 400,000 people would probably apply for such retiring pensions. The Treasury stated that they were not certain as to how many jobs would be filled as a result, but they estimated that the scheme would cost £15,000,000 in the first year and would run up to £25,000,000 in 10 years' time. We need not think now of the position in 10 years' time. Let us think of the present moment. Against that estimated cost of £15,000,000 must be placed the fact that a large number of people between the ages of 20 and 60 would go into employment, and we should save a very considerable sum in unemployment benefit. The actual cost therefore would be much less than £15,000,000, and I consider that the results would be well worth it.

I cannot understand why the Government have not yet agreed to a Measure which has been pressed upon them from many quarters—from their own ranks as well as from the party which at the moment has disappeared from the political scene, apparently in anticipation of the next Election. I cannot understand why the Government will not agree to raising a loan of £200,000,000 for purposes of national reconstruction, for building houses, improving communications and other works which would employ people and benefit the country. The Prime Minister the other day said that he was temperamentally against anything spectacular—that it went against his grain very much to do anything spectacular. There are times, however, when it is necessary to be spectacular, when it is the right thing to be spectacular and when good results can be achieved in that way. Last year the Prime Minister made a speech in the United States Senate and I suppose that was the most sensational thing that had been done by a British Prime Minister for many years. As a result of that action and largely as a result of its spectacular character, the right hon. Gentleman aroused a passion for peace in the hearts of the American people and created a situation which has, I hope, removed for ever the fear of war between the two nations. I believe that if the Government issued a great loan for national reconstruction it would, apart from the money altogether, show the people that something was being done on a big scale. Such action would not merely give employment, but would help to lift the people out of the apathy, the despair, the pessimism, the depression in which they are being plunged more deeply every day.

It has been said that such a step would have to be accompanied by inflation. I understand that the Treasury point of view is that if £200,000,000 were raised by loan from the British people, it would decrease the amount of money available and required for investment elsewhere. I do not think that that is true and even if the orthodox view is right, that it would be so at the present moment, when a state of depression prevails, whatever might be the case at a time when trade is booming. But the statement that such a step must be accompanied by a certain measure of inflation does not frighten me at all. What we are suffering from and what we have been suffering from for the last 10 years is a policy of far too great and too rapid deflation. It is that deflation which has closed our factories, thrown our people out of work and more than doubled the burden of the National Debt. If the House doubts the statement that it has more than doubled the National Debt I have here an extract from the monthly review issued by the Westminster Bank for last August: The deflationary policy pursued by Great Britain as compared with France which stabilised at 4s. in the £, and Italy at 5s. 5d. in the £, has resulted in doubling the burden of time National Debt between 1920 and 1925 and increasing it by a further 36½ per cent. between 1925 and 1930. That is the view of the Westminster Bank monthly review and it is also the position taken up by many experts on the monetary question. If it be true that this loan would have to be accompanied by some measure of inflation as I say I am not at all afraid of that. It seems to me that the Bank of England and the Treasury have been sitting on the chest of British industry for so long that our lungs have been absolutely deflated. It is time that they got up, and that we took a breath of inflation, and filled our lungs again with a good deep breath of cheap credit, so that our blood well-oxygenated will flow again rapidly through the arteries and veins and limbs of our industries.

It has been said in this House that, if we are to have inflation, we ought to accompany it with a measure of insulation. I have been brought up as a Free Trader. I have, in the past, used with a certain amount of dexterity the orthodox Free Trade arguments. But it is agreed I think that some of the arguments on which the old orthodox Free Trade case was based no longer exist. It used to be said that one of the reasons why this country should be a Free Trade country even in a Protectionist world—of course everybody agrees that a Free Trade world would be a desirable ideal—was that we depended so much on our exports. It was said that it was necessary for us to obtain a supply of cheap food and cheap raw materials and to keep our costs down as low as possible, in order that we might export at a profit. It was admitted a couple of nights ago, however, by the Lord Privy Seal that same of our export markets have gone for ever. He said that we must in future concentrate more and more upon our home market. If, in order to do that, it is necessary, as the hon. Member for Smethwick (Sir O. Mosley) said, to insulate that market by some system of import boards, by licenses, by embargo or even, in certain exceptional cases, by temporary tariffs, many of us would not object at the present moment, provided that such measures were coupled with safeguards as to cost- ings and so on, as mentioned by the hon. Member for Smethwick, so as to ensure that the workers would have the benefit of such arrangements.

There is a point which has not yet been mentioned in this debate but which I am confident will, in years to come, be mentioned more and more. Everybody must admit that industry all over the world and especially in Europe is suffering from an intolerable burden owing to the arrangements which exist as to reparations and inter-Allied debts. The Government recently said that they wished to abolish or eliminate memories of the War and they issued a circular letter to various nations on the subject of wreaths. I suggest that it would be desirable for the Government, after taking the appropriate soundings of course, to issue a circular letter suggesting that ill view of the world-wide economic crisis there should be a moratorium in connection with inter-Allied debts and reparations for five or ten years. I suppose nobody believes that in 80 or 90 years' time people will still be paying off these debts. I do not think anybody believes that these preposterous arrangements, drawn up at international conferences, will be going on 80 or 90 years hence. Now, when everybody is suffering from industrial depression, is a suitable time for the suggestion of a moratorium and I believe if such an arrangement were made that at the end of five years or ten years it would be agreed to wipe out these debts altogether, which would be a great benefit to industry. I read on Saturday a speech by the chairman of the Canadian Pacific Railway, Mr. E. W. Beatty. He was not speaking of a moratorium but of the damage done by these debts, and ibis is what he said, addressing an audience of Americans: Many of your ablest public men have expressed the view that one way in which this old world can be restored, trade revived and prosperity regained would be by lifting from the shoulders of the nations of the world the burden of war obligations.…It is not surprising that your men of great vision have reached the conclusion that, if these debts were removed, industry would be stimulated, trade would expand, prosperity return, and out of the revivification of world conditions would inevitably come great benefit to the United States. I agree with a previous speaker who said that in the present state of the country the most rigid economy should be pur- sued—provided that it is true economy. It seems absurd that in spite of having incurred thousands of millions of pounds of War debt, the country should go along with reckless extravagance, just as though the War had never taken place. We have 2,000,000 people out of work, but in the West End of London the scenes of luxury are greater than ever. Everybody knows that there is more luxury to-day than there was in the mid-Victorian period, when everything was doing very well. There is far more wasteful expenditure, and it is not merely on the part of very wealthy people; it extends to large sections of the population. I am not by nature a spoil-sport. I am not, a bigoted teetotaller or anything of that sort, but when I see the country spending £600,000,000 'a year on betting and drinking, in the present state of affairs, it seems to me a little excessive.

It. would be a good thing if the Government made an appeal to the nation to set an example of more Spartan, more Roman simplicity, instead of going on in the way of Byzantine extravagance which has marked the end of all Empires. I say, in all humility, that I believe the Government have a great opportunity at the present time, one of the greatest opportunities any Government has ever had, and an opportunity greater than has ever come to this House before. I believe the people of this country are waiting for a lead, and that if that lead were given them, they would respond with terrific enthusiasm. They are bewildered, sunk in depression and pessimism, and they want a lead out of this depression and this defeatism. I believe that they would respond, and, if I may quote the words of Milton, I would say: Methinks I see in my mind a noble and puissant nation rousing herself like a strong man after sleep, and shaking her invincible looks. Methinks I see her as an eagle mewing her mightly youth, and kindling her undazzled eyes at the full mid-day beam. If this House knew the country was threatened with an invasion of 2,000,000 men, the House would sit together as a Council of State, and we should use all our resources to repel that invasion. The country is faced by a menace just as great as that, because we have an army of more than 2,000,000 people encamped within our shores. Why should we not do as we did in the War, and just as we organised the resources of our nation for the pur- poses of destruction and death, why should we not organise and mobilise all our resources for the purpose of construction and life at the present time? Let the Government give the lead; let the Opposition withdraw their Amendment; let the whole House rally together for the support of an emergency scheme for a national emergency, and then the Commons of England will be able to lead the people of this country out from their present discontents to a finer future and a nobler destiny.

Sir HILTON YOUNG

A nicer sense of humour might have prevented the hon. Member for Broxtowe (Mr. Cocks), who has just sat down, from rising in that particular position in the House to give us a lesson on the question of party discipline. A deeper sense of the realities of the position would see in this debate an occasion for more of the grain and less of the chaff of Parliamentary discussion. He has made one striking contribution to our debate. He said that he is not afraid of inflation. He is a very brave man, but I doubt that it is the courage that is born of ignorance. Let me confess that I am afraid of inflation. I have had the peculiar advantage of seeing the ill-effects of inflation carried to an extreme in various Continental countries. I have seen the social misery which it creates; I have seen the actual social disruption, and that experience has taught me to be afraid of inflation.

In a situation with many grave symtoms, I find no symptom more grave than the speech of the right hon. Gentleman the President of the Board of Trade. My right hon. Friend the Member for Edgbaston (Mr. Chamberlain), who opened the debate, charged the Government with suffering from the disease of paralysis and lethargy. There could be no more striking example of the prevalence of that disease than the speech of the President of the Board of Trade. What was grave in that example is that the disease should be so widespread and so strong in its attack that it should have overcome even the great personal qualities of the right hon. Gentleman the President of the Board of Trade. When he becomes bankrupt of ideas and helpless in counsel, what is there left, on the Front Bench opposite?

What contribution has he to make to our discussions? He dwelt at large, in that spirit of hopelessness which one sees exuding from all the speeches of the Government, on the difficulties in the way of making any alteration in our fiscal system. There are great difficulties in the way. We are bound by treaties that require notice to be given of their termination in order that our hands may be free to act. We can at any rate begin to give notice of termination, once we have made up our minds that there is a question about our policy. But when the right hon. Gentleman the President of the Board of Trade comes here to tell us that our hands are tied and bound, we turn to him and say, "Thou art the man!" It was he on whose initiative and action it was that the strongest tie was put upon our hands, by the recent Tariff Truce at Geneva. It was a reckless act. It will be admitted at least that this fiscal issue has to be fought out. A change in fiscal policy is a matter upon which the country has not yet made up its mind. We know that on this side as well as you on that. It is a matter that may not yet have been fully thrashed out. It deserves discussion. It requires that the country should make up its mind. But in the meanwhile it requires that our governors should keep the country's hands free in order to adopt the best solution. It was both reckless and premature to prejudice the issue in the manner in which the President of the Board of Trade has done by the fiscal truce.

The attitude of the right hon. Gentleman is an attitude of vague optimism tempered by fear. He is afraid. He is afraid of any change of fiscal policy for fear of the reactions which it might excite in other countries. Is that the spirit in which difficulties are overcome? Is that the spirit in which this nation is going to march forward to fresh victories of peace? Surely not. What is it, after all, that we propose to do? All that we are proposing to do is that we should place ourselves as regards international trade in precisely the same position as that of most other nations. When we claim to stand upon the same status, with the same fiscal machinery as any other nation, are we to fear the resentment of others at that claim? That is a new attitude for this country to adopt. That is the element of fear in the right hon. Gentleman's attitude. It is tempered by a vague optimism.

There is no more discouraging circumstance in the utterances to which we have to listen from the Government at the present time than their willingness to turn away from the facts of the case to the consolations of the hope that something may turn up, if we will only wait. The whole of the speech of the right hon. Gentleman was about the sort of things that might turn up if we would only wait. The principal thing which he hopes may turn up is a general improvement in trade—the passing on of the wave, so that we come out of the trough once more on to the crest. This optimism of his is not shared by many of those who try to understand the present situation. Hon. Members who have taken the trouble to examine the situation as regards the production of the world's prime commodities, and particularly the primest of all commodities, wheat, know that there is still great over-production, large accumulated stocks waiting to be worked off before prices can be expected to recover. General prosperity and general prices cannot be expected to recover until the prices of the prime commodities begin once more to resume that level at which their production will be remunerative.

But let that pass. Suppose that is right and suppose that the world has only to stand still and trade will soon improve. Even if that be so there is another question awaiting us and our governors. That is that when prosperity begins to return elsewhere, is this country in a position to take advantage of it? Here is the gravity of the situation. If it were ever wise to prophesy—and it is never wise—acquaintance with the facts would make one content now to prophesy that if we do nothing, if we are content to continue in our present inactivity, in our present acceptance of outworn policy, the return of general prosperity to the world at large will for our country only mark fresh losses, and a further fall into depression. The gain in the fresh prosperity will go to others, and the losses will be accumulated upon us.

I am one of those who, in the past, fought the fight of Free Trade. I believed, and I still believe, that when we had a lead in the world's markets, that was the best policy for us. But I believe that now that we have lost that lead, now that, owing to world-wide in- fluences, we are falling back in the race, that is no longer the best policy for us. One hopeful circumstance certainly emerges from our debates, and that is the deep underlying good will, underlying all party strife, to find some practical solution of our problem of lost markets, some practical way of hope, if it can be done. Beyond the lightning flashes of debate that proceed from bench to bench we see emerging that good will, that strong common intention to help the nation, that reminds us of a more terrible day in the past when the nation had the same good will to sink difference for help. In that good will we can find common ground.

We have all a similar intention, the intention to maintain, if it may be, the standard of living of the people unimpaired. I make no distinction of class in this. I mean we have all the intention to see that life for all in the country is as good as it was in the past. The word that needs to be said on such an occasion as this, and I think it needs to be said even with brutal clarity, is that no decisions of policy can ever be based in truth unless they are based upon the fact that at present the nation is not earning the standard of living which it is enjoying. It is living upon the accumulations of the past. It is impossible that it should continue to do so. Every stroke of policy, every act of political craft that is designed to conceal that fact from the nation is concealing from the nation the truth which it is most important that it should discern. We cannot maintain our present standard of living unless we increase our. production.

Here is the essential vice of the general policy of His Majesty's Ministers. Their policy is designed to conceal from the country the necessity for increased production. They do so by devising ever fresh mechanism for the re-distribution of wealth. All the distribution that you can make will not suffice to maintain the standard of living in this country unless the country succeeds in increasing its production. If proof be asked, then proof is ready to hand in the unemployment figures. It is because the country is consuming more than it is fairly earning, and because those in employment are living at a standard which is not being maintained by the earnings of the country as a whole, that 2,000,000 others have to pay by their unemployment. There are forces of nature too strong for any Government or any Parliament to overcome. Those forces are now at work averaging things out between the employed and the unemployed. Just in so far as you try to maintain an unearned standard of life for the employed, the forces of nature average it out by putting others out of employment.

What is the remedy? It is not to be found in any of these devices for the fresh distribution of wealth by taxation. The remedy is not to reduce the standard of living, but to enable the country to maintain it by earning it. As to increasing production, there are two problems before us. There is first the problem of the old staple industries, cotton, wool, steel and iron, and then there is the problem of the new industries that we must seek to establish. About the former problem I will not say much. It has been already much discussed. The essence of the problem is undoubtedly in the new forms of production which the country must seek, and in the policy which is to be directed to that end.

My right hon. Friend who opened the debate emphasised for the purposes of discussion the home market and not the export market. I would attempt to supplement his argument by saying that if you emphasise the importance of the export market you come to precisely the same conclusion as he did. I do not think that it is possible that this country will ever get back to a prosperity equal to pre-War prosperity without fresh conquests in the export trade. I do not think that it is possible wholly to replace our export trade by the home market without a generation of depression. So much of the capital, machinery, habit, tradition and established plant of the country are organised to deal with the export trade. If, therefore, we are to regain prosperity, without reduction of population, we must direct our attention to the recapturing of some fresh external markets in place of those which we have lost. The lesson is being learned with ever greater certainty day by day that a large part of the markets for our old staple commodities, textile and metals, are probably gone for ever. The other countries of the world have learned to make their own prime necessities, and they do not need us to make them for them. Much can undoubtedly be done even for the sake of our old staple trades, our textiles and iron and steel manufactures, by building up, in the manner described by my right hon. Friend, fresh sheltered markets in the Dominions and Colonies overseas, and by winning the needed shelter there by the preferences which it is necessary to give.

But if that were all, if that were the only hope of better trade before this country, I should say that the hope was not enough, and that we were condemned never to be as prosperous as we were before. But there is other hope. It is the hope that lies in the inexhaustible and unconquerable resourcefulness, in the ceaseless initiative of our race. Relying on those, we may look forward to a fresh era of prosperity. But how is it to be gained? It can only be gained by replacing the markets that we have lost for our old staple manufactures by fresh markets gained by manufacturing for the world's fresh needs. There has got to be a difficult period, during the conversion of much of our capital apparatus for those new forms of manufacture. That conversion can be done; but it earl only be done with every help and assistance which the Government of the country can give through policy. We look round to find what help a Government can give in order to stimulate the transfer and the reconditioning of our capital apparatus to provide the fresh needs of the world, in place of the markets for primary needs which we have lost. There is one help that it can give immediately. It is, during the period of the establishment of these new trades, to secure to them the home market. That is the most practical help that can be given to start the country afresh.

There is another. The reconditioning of trade and industry for the establishment of these new manufactures needs every penny of capital that the country can save. You are taxing the country too much. You are draining it of the funds which it needs for the development of its capital apparatus, for industrial research, for the discovery of new means of supplying new needs. While you do so, and as long as you do so, no forward step will be made out of the morass. To order that industry may start forward to new courses you must give it the home market, and the further help of savings flowing more freely in from the pockets of the people. For that you must reduce taxation. The most practical of all help that you can give is to put no artificial difficulties in the way of production. There is much in the present policy of the country in regard to unemployment insurance which is directly putting an almost insuperable obstacle in the way of the re-employment of labour in the fresh trades that are needed. The whole effect of our unemployment insurance is to stagnate labour in the old forms of employment to which it is accustomed. What is most needed in the organisation of labour is to promote in every possible way the free flow of labour out of old trades where there will be no job again into new trades in which there will be a job. That the Government's policy of insurance discourages.

Hon. Members on the other side twit us with a. desire to depress the standard of living. It is hon. Members opposite who are depressing the standard of living by keeping 2,000,000 unemployed by their policy. It is we who desire to raise the real value of wages in this country, by obtaining employment for the people on these new forms of manufacture by which the country has got to find salvation. The country watches for a decision. It is awake now to the fact that it is no good just waiting for providence to restore us to the prosperity which we have lost. It is not content with mere inertia on the part of its governors, and it will demand the government that can give it action.

Mr. RHYS DAVIES

I hesitate to follow the right hon. and gallant Gentleman the Member for Sevenoaks (Sir Young) for I know how well versed he is in national and international finance. He has, however, made one or two statements which must receive some attention from members of the party on this side of the House. He said that the nation is not earning the standard of life which it now enjoys. I am not competent to say whether that is true, but. I hope that he will agree with me that some members of the community are enjoying more than they are now earning, and that thousands, if not millions of people of this country are not enjoying what they ought. to from the proceeds of their labour.

I have listened to most of the speeches in the debate on the Address, and have read those I have not been privileged to hear, and there are several points in some of them which interest me. The predominent point in the debate has been that in regard to our fiscal policy. I am not versed in economics, and know little of the world conditions that have brought about depression in trade; nor am I familiar with the reasons why the cost of commodities has declined. I have, however, visited several countries during the last few years, and have endeavoured to find out what is it that gives the working people of those several countries their standard of life, what are the conditions under which they are employed, what are the fiscal systems of those countries, and what relation a fiscal system of any country has to the wages and conditions of life of the workpeople.

I have come to the conclusion that the fiscal system of a country has very little relation to the standard of life of its people. Before I deal with that point, however, may I say that the Government in the King's Speech make important fundamental proposals for alleviating unemployment. One Bill which the Government is bringing forward has so far received little notice, in spite of the fact that the Opposition Amendment refers in particular to agriculture. It matters little whether in this or any other country we have Protection or Free Trade, Safeguarding or good wages, or any other of the factors that have been mentioned in the debate, unless the people have means whereby they can work on the land there is little hope of salvation. In spite of the depression people are still leaving the countryside for our urban districts, when they ought to be engaged upon the land. If, therefore, the Government by their Agriculture Bill can in duce any number of our people to return o the land, they will contribute greatly to the solution of unemployment.

One or two speakers have contended that the raising of the school leaving age will not affect unemployment. I have sat on a local education committee for many years, and I am assured by people who are dealing with education every day that the raising of the leaving age from 14 to 15 will, for one year at any rate, remove approximately 200,000 children from the labour market. To make it impossible for 200,000 children to enter the labour market for one year is the biggest contribution of which I have heard to the -solution of the unemployment problem. That probably is not saying very much, but it is an important item.

I have been particularly interested in other suggestions made by hon. Friends behind me. One suggestion that is continually made is that we ought to remove old workers from industry in order to make room for younger people, and that we ought to give pensions to those over 60 years of age—say £1 a week for a man and 10s. to his wife—and ask them to enter into a contract to give up remunerative employment for good. I have endeavoured to find out how many people are already receiving retiring and other pensions from the State, for I would not like to ask any man to give up his job in exchange for a pension when there are already hundreds of thousands receiving pensions without that disqualification. There are 29,804 teachers receiving pensions without any disqualification whatever as to following another occupation. [Interruption.] Some of them are of course contributory pensions, and some are not. There are 4,782 civil servants in receipt of pensions, 23,878 Post Office employés, 32,219 ex-policemen, 1,600 prison officers, 82,321 naval pensioners, 1,254 pensioners from the Air Force, and 119,679 ex-soldiers from the Regular Army in receipt of pensions. If we add to those figures the 644,200 adults who are receiving pensions in respect of the last War, we shall find that there are at least 939,767 adult persons in this country in receipt of pensions or retiring allowances from the State. Some of them, as stated, have made contributions towards their pensions, but the majority made no contributions—except, of course, in the matter of the service they have given to the State. These people, numbering nearly 1,000,000 have never been told that they must not follow any occupations in future merely because they are receiving these pensions; and I submit that it is grossly unfair to suggest to a workman in return for a pension of £1 a week at the age of 60, "You shall not work in the future." I do not think that is a solution of our difficulties.

If the right hon. Gentleman who moved this Amendment represents the attitude of the Conservative party towards international affairs, he might just as well have said that the League of Nations and its activities are worthless. He appears to stand for the British Empire, and that alone. I did think that he or someone else would have uttered a word or two regarding our commitments to other foreign countries.

I speak as an ex-coal miner, and I am not at all satisfied about two points in relation to industry which have not been mentioned at all. I think the right hon. Member for Sevenoaks just mentioned the subjects casually in passing, and wish he had dwelt a little more upon them. I have no hesitation in saying that business of retail distribution, insurance and the like are being carried on in this country to some extent at the expense of manufacture and production. It is a strange fact that an article produced in Lancashire, for instance, whether it be a pocket handkerchief or a piece of wearing apparel, can be sold in London at about three times the price paid for it wholesale at the mill; at any rate, an addition of 100 per cent. to the price can be easily proved in many cases. The House of Commons and Governments will have to inquire not only into the problem of rationalisation and increased production, but into the leakage between the cost of producing a commodity and the sum which the consumer has to pay for it over the shop counter. The leakage is enormous, and I am told that it has grown since the War.

One thing can be said in connection with national finance and income and the earnings of the nation as a whole, and that is that the last War undoubtedly made the rich richer than they were, and the poor -poorer. An hon. Member shakes his head, and I will not challenge him, because I am not so sure that lie knows more about it than I do, but I have looked into the figures in that enlightening Blue Book called "Abstract of Statistics," and it is astonishing to note what has happened during recent years. Not only have the rich become richer, but there has been an undue diversion of the wealth of the nation into the hands of the distributors of goods, into the hands of those who have never touched production at any point. It is true to say that the nearer the workman gets to the production of the necessities of life the less he can earn.

When hon. Gentlemen talk about tariffs and dumping and sweating, I would like to put this question to them, and shall be anxious to hear their reply. We are told by hon. Members opposite and from this side of the House also that we ought to prohibit the importation of sweated goods. I would ask anyone who makes that statement to reply to this question: If the standard of life of some of our own working people, such as hank clerks, distributors of goods and insurance agents, is to be compared with that of the life of the miners of this country, is not every ounce of coal produced in this country sweated coal? Could not every foreign country buying our coal treat it as sweated? What is the meaning of the word "sweated"? Take the wage of the miners to-day. There are miners in my division working six days a week, and yet if they bring home at the end of the week they are lucky people, though they are producing as much coal to-day as they did prior to the war.

We are told also that one of the remedies is to make the British Empire into one great economic unit. I would like to ask another question of hon. Members on both sides of the House. Is it not a fact that when you have put up a tariff wall the next thing you have to do is to maintain it with armies and navies? If there is one thing above another which has dawned upon European civilisation, it is that the last war came about as the result of the fight for markets among the industrial countries of the world. People must remember that other countries can retaliate. Hon. Members want to build tariff walls against this, that and other commodities. Let me remind hon. Members on my own side of the House that one of the planks in the programme of the American Socialist party at the moment is a protest against the tariff walls of the United States. They will go to the country—in fact, they are before the country now, in the present State elections—demanding the abolition of the tariff walls of the United States, and they are arguing on behalf of organised labour in the United States that unemployment there is the result of the Ameri- can tariffs. Both arguments about tariffs cannot be right.

On the point of retaliation I will give the House a simple illustration of what happens. Some time ago I was in Iceland, and though that is not a very great country yet it provides some interesting illustrations in respect of tariffs. It is a Free Trade country. Two or three years ago the Icelandic people decided that they would have total prohibition of alcoholic liquor. The vote in favour of it was very nearly unanimous, and the Government of Iceland decided to put the will of the people into operation, a thing which is not done by all Governments, by the way. As soon as they submitted their Bill to Parliament, Spain and Portugal gave them a warning that if prohibition were placed on the Statute Book then Spain and Portugal, who purchase most of their fish from Iceland, would not buy any more of it. That is a case of retaliation. That is what tariffs do. That is what the spirit of hatred does. As I said at the commencement of my speech, I know very little about economics, having had no education in the higher realms of finance, but of one thing I am certain: In the 12 foreign countries which I have visited during the last six or seven years, I have found everywhere that this is what happens. They put up a tariff wall, and as soon as a commercial traveller from a foreign country hears of it he goes home and complains to his own Government, and then the diplomats of his country become alarmed, and so in the end there must be armies and navies to break down the tariff wall. For the sake of the peace of the world, therefore, I stand unhesitatingly in favour of Free Trade as a fiscal policy.

Earl CASTLE STEWART

The President of the Board of Trade made a truly astounding speech. He began by telling us that the United States were very largely to blame for the present trade depression. I grant that there is a certain amount of truth in that, but he did not go on to say what the Government were going to do about it, or, indeed, what could be done about it. He then went on to tell us, as though he had just made the discovery, that the scarcity of gold, or the mal-distribution of gold, was having some effect in bringing about the constant and steady decline of prices, but again he did not tell us what either he or the Government proposed to do about it. He spoke at great length of the interference which foreign tariffs caused to our trade, but I understood from him that should we tread upon even a single corn of any foreign nation we might expect two black eyes in return within the next two minutes. In fact, I thought he might well have concluded his speech with some words from Napoleon's favourite doctor, who used to say that the art of medicine was not the art of curing diseases but the art of treating them with the hope of curing them and of soothing and satisfying sick people. No wonder the Government put up the President of the Board of Trade. At least he can soothe and satisfy sick people.

7.0 p.m.

We had a great trade depression during the period from 1874 to 1896 which was not very unlike that through which we are now passing, and the American Government, as well as the British Government., appointed Commissions to investigate the reasons for it. The American Commission found no less than 180 heads under which to classify the causes of trade depression. I have no intention of inflicting on the House a list of them, but I would draw attention to a few of the causes which were advanced in 1874 and which are current in all economic discussion to-day, because I think that from those we might realise some lines on which the Government might proceed to do something for the recovery of our trade. I have a very short quotation here from an investigator who wrote in 1874, and these are some of the causes which he gives for the trade depression at that time:— The scarcity and appreciation of gold We have heard about that this afternoon— the depreciation of silver, restriction of the free course of commerce through protective tariffs on the one hand and excessive and unnatural competition caused by excessive foreign imports continued in the absence of fair trade and protection on the other, excessive speculation and inflation"— This would particularly please the Noble Lady the Member for Plymouth (Viscountess Astor) if she were here to-day— excessive expenditure on alcoholic beverages. It. must be clear, surely, that the causes which were prevalent or alleged to be prevalent in 1874 are alleged to be prevalent to-day. For instance, the President of the Board of Trade himself tits afternoon in his speech alluded to the constant decline in prices of commodities. That was so in 1874, and it fell very hardly upon industry. But what was the cause of that decline? Quite clearly, to a very large extent it was caused by a scarcity of gold at that time. France, the United States and America, which had been on a bi-metallic basis, started in 1874 on a gold basis and began to buy up gold. There came a shortage of gold, and prices began to decline and did not recover again until the new gold mines were found in the Transvaal. That is exactly what is happening now. Half the countries in the world are scrambling for gold. France and the United States have collared half the world's gold supply and, because they are not using it, prices are declining. Meanwhile, what are the Government doing?

At the moment silver is more important to us than gold. There is a golden opportunity for the Government to do something, because the United States are in this' position: They are losing their market in the Far East, and they know that at the present moment the price of silver is affecting it. If I may quote the words of one of the best known American mining engineers, Mr. John Hays Hammond: Did silver play an unsung part in the 1930 business depression? Yes. When silver falls to 35 cents an ounce, the Orient's buying power drops 50 per cent. India and China import less American cotton. Then United States grocers, radio dealers and automobile men make fewer sales. The United States realise what the fall in the price of silver means to them, and at this moment there is a sub-committee of the Senate considering a plan to make a fresh silver loan to China. Are the Government communicating with the United States about this problem? I am positive that, if they did, they would receive a warm welcome, and they would also be welcomed if they did something themselves. It is only a few years since we reduced our silver coins from nine-tenths fine to five-tenths fine. We could lend a hand. The French could lend a hand. Within a year they are under an obligation to purchase silver to redeem their small denomination notes. Now there is an opportunity for the Government to approach the French and United States Governments and help the price of silver. I leave it to Lancashire Members to imagine what the effect would be on the trade of China and the Far East.

I do not wish to dwell upon the tariff problem which has been under discussion a great deal during the last few days, but there is a problem, which has only been dealt with so far by an hon. Member on that side of the House this afternoon, to which I wish to refer with all possible circumspection. It is in regard to debts and disarmaments. I have a great many personal friends and quite a number of relations in the United States. I have only a desire to see America give the world a lead at this moment when the world needs a lead, and I believe that America is the only country to-day that can give the world the necessary lead which it requires in regard to debts and disarmament. At the present moment unquestionably the trade of the whole world is held up to a large extent by the nightmare of debts, by the difficulty that we have, for instance, in paying our debts. We cannot pay them in goods to the United States if every time we start to pay they raise higher their tariff barriers. I am convinced that now is the time to point out to the United States one thing, which they will be ready to perceive, namely, that they made a more favourable settlement with Italy and France on their debts than they gave to us. I believe they are beginning to see the justice of our claim that at least France and Italy and ourselves should be put upon the same basis in relation to America. If the American Government were approached on that one point alone, it might be possible to re-open not merely our debt settlement but I believe the whole question of debt settlements in relation to disarmament.

Some day some Government of this country must go to the United States and put the British point of view plainly. If I may, I would put what seems to me our point of view. We have honoured our debts, we have carried the League of Nations when America retired from the League, and, in carrying the League of Nations, we guaranteed the frontiers of France and Germany. When we had done all that, when we had accepted those obligations, then quite frankly we were treated at the last Geneva Naval Conference as the scapegoat for disarmament and, in spite of our burdens and commitments in every part of the world, our Navy has been reduced to parity with the United States Navy, whereas they have doubled their navy in comparison with what it was before the War. We have honoured our debts, but the United States makes it more difficult for us every day by continually raising their tariffs against the goods which pay those debts. America has an unparalleled opportunity to-day to do a great service to the world if it would allow even a fraction of its debt question to be reopened. I am certain that they would see the justice of one fraction of it, namely, the fraction which was represented by the advantages that they gave to our trade competitors, Italy and France, when they made their debt settlement with them as against the settlement they made with us.

Leaving tariffs on one side for a moment, if the Government are unable to give a stronger and wider lead to foreign Powers for dealing with trade depression either by getting a conference on gold or by an arrangement to raise the price of silver or by some arrangement for linking debts and disarmaments, if they cannot give a stronger lead than that which has been given in regard to the Geneva Tariff Truce, it will be said of them that they, who ought to be. the vanguard and the spearhead of a great attack upon world trade depression and upon unemployment, are, in fact, a mere platoon of dummies whose greatest act of courage, in the face of the greatest world industrial depression that anybody in this House can remember, has been to repave a few street corners and build a bathing hut along the banks of the Serpentine. That is what the country will say. Even when the Government are not frozen into immobility by a Cobdenite Oedipus complex, it is certainly paralysed by a lethargy which can only be described as Lidoesque.

There is one thing which at this moment the Government can do. I hope I am not disrespectful of them if I say what might he done at this moment. We have got the Imperial Conference here in London and we have the Dominion Prime Ministers here. Here is a moment, when leaving tariffs on one side, they might, as regards three of the greatest influences bringing about trade depression, make a joint manifesto to the nations of the world that England has been carrying their burdens too long and it is time that they made some arrangement with us for a better distribution of the world's gold supply so that smaller countries might have their lair share of it and a better opportunity of getting cheaper credit. They should also under the signature of the Dominion Prime Ministers, tell the world that nothing can be done to restore the trade of the world as a whole unless you restore the power to Asia to buy, as Asia contains the largest part of the population of the world; that the time has come when the British nation can no longer bear the greater share of the burdens, and that it is time for the United States, with an idealism which I believe is fundamental in their character, to come forward and say that at this moment of trade depression they are going to give the world a lead by a moratorium or by cancelling some of the debts which the European nations are bearing to-day. The Dominion Premiers are here in London, and, if they are in agreement with that small measure of policy and it were put out under their joint signature as an appeal to the world to assist in saving the standard of value of the West, which is gold, and the standard of value of the East, which is silver, and the world from what is to-clay a moral injustice, the continuation of a too overwhelming burden of debt, an arrangement might well be entered into that as debts are cancelled so European countries will disarm.

Sir HERBERT SAMUEL

The House has had to-day a most interesting debate on what is by common consent by far the most important and the most urgent of the matters that will come before its attention during the course of this Session. The attitude which hon. and right hon. Members who sit on these benches take towards this matter is well known. The Government invited all three parties to consult together and to make this question of unemployment a national issue, to frame, if it were possible, a national policy, and to devote to its solution a national effort. Hon. Members above the Gangway, for reasons which I do not question, found themselves unable to accept that invitation. They were of opinion that, unless they had some assurance that a protective policy would be a possible or probable outcome from those deliberations, they were not prepared to join thorn. We of the Liberal party took a different view, and we entered into frank consultations which have now proceeded during several months with representatives of the Government with a view to arriving at a common policy. On the second day of this Session, my right hon. Friend the Member for Carnarvon Boroughs (Mr. Lloyd George), speaking on behalf of the Liberal party before this Amendment was placed on the Paper, stated what our attitude was. He said that, as the outcome of these consultations we were awaiting the presentation of the Government's plans this Session, and we were awaiting their reply as to the proposals which have been laid before them and which were about to be made public. He said that we should be glad to cooperate with the Government if their proposals were fashioned in such a way as to make them acceptable. That policy was announced as recently as Wednesday last, and on this occasion we shall take precisely the same attitude as we stated on that occasion. I confess that the Government have made it very difficult for us to maintain that attitude. There seems to be an inactivity, a lack of zeal and a lack of drive, which we have frequently found it necessary to criticise and which we are obliged to emphasise again to-day.

We come to this House from our constituencies. We know the state of trade and the extreme distress that prevails among great numbers of the population. In my constituency of Darwen, a cotton town with a wholly working-class population, no less than 54 per cent. of the people are unemployed at the present time, and in most of the neighbouring cotton towns in Lancashire the position is much the same. In these circumstances, the whole Rouse does look to the Government for a much more earnest and zealous spirit of energy, of effort, and of drive than they have hitherto manifested. I think the terms of the King's Speech, in its reference to unemployment, came as a great disappointment not only to those of us who sit on the Liberal benches, but also to many hon. Members opposite, and to the country as a whole. The King's Speech was almost as lacking in substance in that respect as King's Speeches which we were accustomed to have when hon. Members above the Gangway were in office.

A few days ago there was a somewhat remarkable incident in the House which attracted my attention at the time. I have attended many debates on the King's Speech—this is the twentieth I have attended—and after the general debate when the Government have been attacked, and a Member of the Government makes the official reply on behalf of the Government of the day, as a rule there is great interest in that reply and much enthusiasm, and the Minister generally sits down amid a roar or thunderous applause from his supporters. Two or three nights ago the Lord Privy Seal, responding to the general debate on unemployment on behalf of the Cabinet, at this moment of crisis made such a disappointing speech, which was quite empty of substance, that when he sat down there was not even a murmur of approval from any quarter of the House.

It is true that the President of the Board of Trade, speaking with his accustomed force and skill, evoked a somewhat larger measure of support, but the right hon. Gentleman, while he spoke with much ability on many things, left out one subject—he did not say anything at all about the unemployed. The President of the Board of Trade said that they did not advertise their wares sufficiently, but the contrary is the fact, because the policy adopted has been all advertisement and no wares, and that is the criticism which we have to make on the Government in this connection.

The President of the Board of Trade struck a. more hopeful note, and it is the same note that we heard year after year from the late Chancellor of the Exchequer. I only hope that that note will be justified by the event, but I do not think that the House, or any part of it, will be content to accept merely optimistic or melioristic assurances from Ministers as to the future state of trade. The noble Lord the Member for Harborough (Earl Castle Stewart) made an interesting speech on currency questions, and he said very truly that the essence of the problem is partly there. Gold is too dear and silver is too cheap, and that that accounts for very much of the depression throughout the world. The President of the Board of Trade said very truly that this was a vital consideration, and he expressed the hope that more light might be thrown upon it at an early date by reason of certain inquiries which are now being made. The Government have been requested to urge the Macmillan Committee, which is now sitting, to speed up their inquiry on this question, make their report as soon as possible, and let the world know what conclusions they have come to in order that such practical measures as are possible may be adopted in the immediate future. On the second day of the Session there was a whole series of questions put by Members of the House showing a desire to have more enlightment on this most essential part of the problem. I hope the President of the Board of Trade will not be content by merely saying that he hopes to see an early elucidation of this question, and I trust that he will press the Macmillan Committee to issue its report as soon as possible.

In the rest of his speech the President of the Board of Trade spoke only of the reorganisation of industry. No doubt that is one of the fundamental issues involved in this problem. The right hon. Gentleman told us that the Government had passed the Coal Mines Bill which was promoting reorganisation of that industry and possibly amalgamations and rationalisation. The House will remember that when the Coal Mines Bill was introduced there was very little in it about reorganisation, and not a word about amalgamation. May I remind hon. Members that those proposals were only dealt with in response to a stimulus which was applied from this quarter of the House. [HON. MEMBERS "No!"] Certainly, that was the case, and hon. Members opposite cannot deny it. They were proposed from these benches and inserted by the Government at our request to meet our wishes. The President of the Board of Trade is now claiming that as a most valuable portion of the Coal Mines Bill.

I do not know whether a reorganisation of the cotton industry will follow from the report of the inquiry into that industry. The right hon. Gentleman did not say a word in the whole course of his observations about national development or agricultural reform, which we have been led to understand forms an important part of the proposals of the Government this year, together with town planning on a large scale as well as important schemes relating to housing. Neither did the right hon. Gentleman say anything with regard to unemployment insurance. All the world knows that the present working of the Unemployment Insurance Act is unsatisfactory. Here again there has been a three-party committee sitting for a long time, and it is with profound disappointment that we see that the principal consequences of that committee seem likely to be nothing more substantial than a Royal Commission.

We all know that for months past there have been many matters connected with unemployment insurance which needed inquiry. Last February, from these benches, I urged that there should be an immediate inquiry into the working and the effects of unemployment insurance in rendering labour more immobile; and, secondly, in tempting employers to work more short time and to cast the maintenance of their workpeople more and more upon the nation by means of the Unemployment Fund. These facts are well known, and yet the Government, instead of taking immediate and vigorous action, simply propose a Royal Commission. How long that Commission will sit. we do not know, but we remember that when the right, hon. Gentlemen opposite were in office in 1924 they dealt with the problems of national trade and unemployment by appointing the Balfour Committee, which issued a report after an interval of four years.

It is quite plain to all that the condition of British industry is largely due to the fact that the costs of production are too high, and it is quite essential to lower those costs as soon as possible. How to do that without lowering the standard of life is the problem which faces the nation to-day. In order to do that we must reduce overhead charges in industry. First of all, we must reduce our national overhead charges. My right hon. Friend the Member for Northern Cornwall (Sir D. Maclean) urged upon the Government most strongly this Session the need of drastic economies in many directions, but no response whatever has been made to that appeal, or to similar appeals which have been made from other quarters.

Mr. J. JONES

Tell us where you are going to begin economising.

Sir H. SAMUEL

A volume which we are going to publish to-morrow will contain specific proposals on this question. The fact remains that during the last 12 months there has been a fall in the general price of commodities and of materials of between 17 and 18 per cent., and there has been a fall in the price of raw materials amounting to nearly 20 per cent. It is an essential factor in the economic situation at the moment that there has been a fall of 20 per cent. in the cost of materials, and as a consequence of this fall there ought to be a very large reduction in costs of all kinds. Throughout the nation taxation, rates and services in general ought, to be put upon a corresponding economic basis totally different from what they have been in the past. There is no suggestion on the part of the Government that they propose to take any measures to effect a reduction in national expenditure such as should follow from this change in the general economic situation. As the House is aware, we are about to publish detailed proposals dealing with the question of unemployment in general, and with same of these matters in particular. This is a two-days debate. It will continue tomorrow, and my right hon. Friend the Member for Carnarvon Boroughs (Mr. Lloyd George), who is speaking tomorrow, will lay more specifically before the House the proposals which he and his colleagues have made.

In the meantime, the House is discussing an Amendment which has been moved by the right hon. Gentleman the Member for Edgbaston (Mr. N. Chamberlain). He painted a very dark picture of the commercial and industrial situation, but I do not think it was in any degree too dark. He stated quite truly where we now stand as a producing country. He might have added that this year, as compared with last year, according to the figures of the League of Nations, the production of Great Britain has fallen by no less than 8 per cent. That is a tremendous decline in a single year. The right hon. Gentleman did not quote that, perhaps, because if he had done so he would have been obliged in candour to mention also that in the Protectionist United States the corresponding falling off was 14 per cent., and that in Protectionist Germany there was a reduction of 16 per cent., or twice the fall in productive capacity that has taken place here.

The Amendment which is now before the House complains that the Government have not taken adequate measures to deal with the present situation. Certainly, practically the whole House would agree that they have not taken adequate measures. The Conservative party thinks so; the Liberal party thinks so; hon. Members representing Clydeside and other districts think so too. Most of the Labour party think so as well, and I think that even the Members of the Government, if they were in a Palace of Truth, would all admit that the measures they have taken are not adequate to meet the situation. But what are the adequate measures which are envisaged by the present Amendment for which the House is invited to vote? The last time right hon. Gentlemen above the Gangway moved a Resolution condemning the Government for their inactivity in matters of unemployment, they said what their own policy was. They said quite frankly that they asked the House to deplore the depression in trade and the increase in unemployment resulting from the policy of the present Government, And they asked the House to say that it regretted the refusal of the Government, not only to extend Safeguarding or Imperial Preference, but even to declare their intentions with regard to the maintenance of the existing Safeguarding and McKenna Duties, and so forth. They stated quite clearly what their alternative was. To-day they do not do so. Why is that? I think there are two reasons.

Mr. J. JONES

Rothermere and Beaverbrook!

Sir H. SAMUEL

Precisely; but they unite to form one reason. The first reason why right hon. Gentlemen above the Gangway cannot put down a Resolution in favour of a Protective policy is that they cannot frame it in such words as would secure unanimity of support from their own followers. Even my right hon. Friend the Member for Epping (Mr. Churchill) made a strange and plaintive complaint a few days ago in his own constituency. He said: Our policy"— that is to say, the policy of the Conservative party— changes so quickly, almost from day to day, that it is difficult to keep pace with ail the things one has to believe in and to which one has to be loyal. Even his powers of rapid adaptation to circumstances have become strained, and I think he would probably be well advised to wait until the right hon. Gentleman the Member for Bewdley (Mr. S. Baldwin) has finished negotiating his curves, and then to take a short cut across. The other reason, I venture to think—though perhaps I may be speaking with undue arrogance in attaching any importance to the votes of the party on these benches—the other reason, possibly, may be that they wished to frame a Resolution which by its terms would not prevent Liberals from supporting it if they so desired. They say different things to different people. To their own supporters they say, "This Resolution of ours means Protection," and the speech of the right hon. Gentleman, of course, was quite frankly a Protectionist speech. To us they say, "It does not say Protection; there is no Protection in it; you can support it" Hon. Members above the Gangway may support it because it is Protectionist, and we are supposed to support it because it is not Protectionist. They have got into the habit of these divergent interpretations from the devious and difficult course which they have to pursue with regard to food taxes. To Lord Beaverbrook and his friends they say, "We do not reject food taxes far from it." To the industrial populations of the North they say: "We do not promote food taxes: we are very far from such an idea." But., unfortunately, the message which is delivered to the one is heard by the other, and Lord Beaverbrook denounces the Opposition bemuse they do not promote food taxes, while the industrial populations of the North are suspicious of them because they do not deny them. Indeed, in the pending by-election at Shipley, to which the right hon. Gentleman the Member for Edgbaston (Mr. Chamberlain) referred, a large poster has been issued within the last few days by the Conservative candi- date, Mr. Lockwood, to whom the right hon. Gentleman the Member for Bewdley has just sent a letter of support. The poster says: Don't believe Liberal and Socialist lies. Lockwood won't tax food. In these circumstances, it is not surprising that right hon. Gentlemen above the Gangway think it more advisable not to put down a Resolution such as the last one which they placed upon the Paper, but merely an open Resolution of general condemnation of the Government. But the right hon. Gentleman who moved the Amendment stated a fresh defence of the Protectionist case, and he made one announcement with regard to it which is new. It seems almost inconceivable that anything new could be said in these days in the fiscal controversy, but the right hon. Gentleman's speech did mark one new development. He said that, as a part of the Safeguarding policy, he would be frankly prepared to adopt measures to prevent exploitation and inefficiency—to prevent, that is to say, exploitation of the consumer and inefficiency of the manufacturer. How can that be done? By what conceivable process can you enact legislation which would prevent inefficiency as the result of Protection and which would prevent the exploitation of the consumer? Has it been done in any country where Protectionist tariffs prevail? [HON. MEMBERS "Canada."] Not effectively. But it is of interest to observe now that our Protectionists find it necessary to assure the country that they will adopt safeguards against Safeguarding. The fact remains that the outcome of this policy must be a rise in prices, must be the exploitation of the consumer. Hon. Members above the Gangway ask for the policy of the free hand. It is the policy of the free hand in the open pocket.

Lastly, the right hon. Gentleman said that he was eager to promote a measure of Empire economic unity. That is a motive which would meet the wishes, and, indeed, the zealous desires of all sections of the country; but surely, when it is remembered that three-fourths of the trade of the Empire is with foreign countries, and only one-fourth is within the various parts of the Empire itself—I quote that on the authority of the Imperial Economic Committee, of which Sir Halford Mackinder is the Chairman— when you have three times as great a bulk of trade with foreign countries as you have within the Empire, it is the merest folly to take measures with regard to the one-quarter which would have the effect of restricting, hampering, and lessening the three-quarters. That is why we say that all these policies of Empire tariffs are injurious to the very cause of Empire unity itself, and, so far from endeavouring to evoke Empire patriotism by taxing food, surely it should be obvious to those who have the unity of the Empire really at heart that you tan never build a right spirit of Empire patriotism at the cost of taxing the food of the poorest classes of the community. An Empire policy of development—yea; but there can be an Empire policy of development without tariffs, and it is along those lines that I trust the Government are proceeding in the present Conference. In the main, therefore, we see this Amendment which is now before the House frankly for what it is. It is something other than its printed terms, and we have no intention of lending it any support.

Mr. MORLEY

A good many curious remedies for unemployment have been put forward from time to time by speakers on the Opposition benches, but I think that perhaps the most curious remedy which has been proposed for unemployment is that put forward by the right hon. Gentleman the Member for Sevenoaks (Sir H. Young) when he said that what we ought to do was to increase our productivity. At the present time we have the utmost difficulty in finding markets for our present products, and I fail to see how any increase in productivity can possibly be an avenue of escape from the difficulties in which we find ourselves at present. Of course the right hon. Gentleman may have meant increased productivity at a lower level of payment. If that be his solution of our present difficulties, it is one which will find no support whatever on these benches, and no support from the party in the country which we on these benches represent. If there is to be any reduction in the standard of living, we say that the wealthy people should suffer that reduction first.

The right hon. Gentleman the Member for Edgbaston (Mr. Chamberlain) in his opening speech, accused the Government of having no plans to meet the present unemployment situation, and of being inaccessible to fresh ideas; but he himself put forward no definite plan. What plans he did put forward were certainly not new. The only remedy he had for unemployment was the very ancient remedy of tariffs. That remedy has been tried before in this country. During the first 50 years of the last century we had taxes upon almost every article—food, raw materials, manufactured articles—imported into this country; and that policy of taxation of imports, which was our policy in the first 50 years of the last century, signally failed to have any effect upon prosperity or to decrease unemployment at the time. Also, at the present time, as has been quoted on several occasions before in this debate, there are countries which have the most scientific systems of tariff, which have very high protective duties—like Germany, the United States of America, Canada and Australia—and which are in full possession of the complete remedy put forward by the right hon. Gentleman the Member for Edgbaston, and yet are suffering from unemployment to a degree even greater than we are. I fail to see, with the lesson that we have from history and with the experience of contemporary events in other countries, how anybody can seriously put forward the argument that tariffs can be a remedy for unemployment.

The right hon. Gentleman the Member for Sevenoaks put forward another suggestion, which has been a commonplace of debate on the Conservative benches during the whole of this Parliament, the suggestion that we are suffering from unemployment because taxation has so entrenched upon savings that there is not sufficient capital to finance existing industry or to equip new industrial ventures. As a matter of fact, during the past month we have had capital issues to the extent of £30,000,000 a larger figure than for a number of months past. Practically every capital issue that has been put on the market during the past 12 months has been fully subscribed before the term of the issue had expired and, under those circumstances, it is difficult to see how it can be argued that industry is suffering from a lack of new capital to finance existing industry or to start new industries.

I should like to turn from the question of tariffs and taxation to what, it seems to me, is the chief factor in the prevailing unemployment depression. At least practically every economist of repute in Europe says this is the chief factor in the causation of the present abnormal unemployment. It has already been mentioned on one occasion during the course of the debate but it has not been altogether fully explored. Every economist of repute in Europe says our present abnormal unemployment is due to the catastrophic fall in wholesale commodity prices which has taken place during the past five years. During the past 12 months we have had a fall in the prices of wholesale commodities of no less than 20 per cent. That fall has discouraged buyers, who are waiting until prices reach bottom before they buy. It has concomitantly impoverished sellers who, not receiving good prices for their commodities, are not themselves such good customers in turn. It has reduced the margin of profit available to manufacturers in this and other countries and since, unfortunately, we still live under a system where the chief incentive to production is the hope of making a profit, anything that materially reduces the margin of profit to manufacturers has the effect of reducing the production. This fall in prices has a particularly marked evil effect so far as agricultural production is concerned, because there is a very considerable time lag between the expenses of production and the receipts which in 12 months or so the farmer gets for his products.

But from the Socialist point of view the most harmful effect of this constantly falling price level during the past five or six years has been that it has redistributed the national income in a manner favourable to the creditor and to the rentier. Those people have been receiving tens of millions of pounds of increment which they have in no way earned and, when I hear hon. Members opposite on both the Conservative and Liberal Benches complain because here and there a few of the unemployed have managed to get a few miserable shillings to which they were not perhaps fully entitled, that ought to direct their attention to these people who have been taking millions of pounds through the process of deflation. There is no crisis so far as these people are concerned. You can go to almost any seaside town—Torquay, Bournemouth, Worthing or Eastbourne—and you will see rows and rows of new, elegantly built, handsomely furnished villas, inhabited in the main by people belonging to the rentier class whose incomes have been so substantially increased during the past six years owing to the deflation of the currency and to the fall in prices. Therefore, if we wish to deal immediately with the question of unemployment, we ought to take steps to stop this constant fall in commodity prices. The reason for the fall in the commodity prices is very well known. The first period of deflation in 1920 threw many hundreds of thousands of men and women on to the streets. We were getting over that when in 1924, during the period of the last Labour administration, we had what was comparatively speaking a boom year with unemployment less than it had been in the previous year.

Then in 1925 a great calamity befell the British people. The right hon. Gentleman the Member for Epping (Mr. Churchill) became Chancellor of the Exchequer and, with that romantic precipitancy which has been so characteristic throughout the whole of his career, against expert advice he restored the gold exchange standard and, since we adopted the gold standard, many other countries have followed our example, until to-day 60 per cent. of the peoples of the world have their currencies linked to gold. Whilst production has been increased owing to the increasing use of improved machinery, the supply of gold necessary to finance the exchange transactions arising from that increased productivity has not kept pace with the increased production, with the result that the value of gold has appreciated something like 28 per cent. since 1925 and, as gold becomes dear, everything else becomes cheaper, and it is due to that very largely that we have the present world wide depression.

In those circumstances we are entitled to ask this Government, more particularly the Chancellor of the Exchequer, what action they are taking, at Geneva or elsewhere, to secure a better rationing of the gold supply among the gold using nations of the world. The committee of the League of Nations which recently published a brochure on the subject states that in the banks of the gold using nations there is to-day an excess of 2,750,000,000 dollars of gold above what is necessary for a 33⅓ per cent. cover for notes. The Genoa Conference of the League of Nations a few years ago laid it down that efforts should be made to ration this gold supply amongst the gold using nations of the world through the agency of the central banks. I hope that the Chancellor of the Exchequer will tell us what efforts the Government have made to secure the rationing of gold amongst the gold using nations.

Is it necessary after all to take international action? We were almost the first country to make the mistake of returning to the gold standard after the War. Might we not be the first country in Europe to come off the gold standard and to substitute for it a managed paper currency on the basis of a somewhat devaluated pound? If we took that line of action, the fall would be stopped so far as internal prices are concerned. It would certainly mean a mild degree of inflation but I am not afraid, and I think no one who has examined the subject need be afraid of a mild degree of inflation. It might mean that to some slight extent the foreign exchanges would move against us but, even if that were so, it would in effect be a bonus on our export trade, which is very much required at present. I may be told it is impossible for a minority Government to take the somewhat extreme step of coming off the gold standard and substituting a managed paper currency, but gold and the City have ruled us too long. Perhaps they will have to go on ruling us until we get a Socialist majority in this assembly.

If the Government will not take the somewhat extreme step of coming off the gold exchange standard, cannot they make conditions within the gold standard which would render more elastic our currency and note issue? We have a limit to our fiduciary issue of £260,000,000. I have never been able to discover what particular virtue there is in the figure of £260,000,000. It is difficult to find why that figure was fixed as the limit of our fiduciary note issue. In order to get further light on the subject, I read a speech delivered by the late Financial Secretary to the Treasury in 1928 when introducing the Bank Notes and Currency Bill. As far as I could discover, the limit was fixed for all time because £260,000,000 happened to be the maximum note issue for the year 1927. It seems to me foolish to fix our maximum note issue for all time at the limit that was reached in 1927, a comparatively bad year. I suggest that there is a very good case for altering the limit. There is no need under existing circumstances for such a large gold cover as we have at present. It is an absurd state of things that the currency should be determined, not by the amount of exchange transactions that British industry demands but by the amount of gold reserve that there happens to be in the Bank of England. I am fortified in believing that that is rather an indefensible state of things by the opinions of some people whose opinions certainly are worth taking notice of in a matter of this kind. For example, on 14th May, 1928, when the Bank Notes and Currency Bill was introduced, the present Chancellor of the Exchequer who was then in opposition gave utterance to these sentiments: If the fiduciary limit laid down by the Bill is sufficient for the present, it certainly is not sufficient to meet a legitimate expansion of trade. It will make the currency static within very narrow limits. The old idea of a huge gold cover never had any more substantial foundation than convention and superstition. No huge gold hoarding for the purpose of covering paper issues is any longer necessary. The only use of the gold now is to meet the needs of the foreign exchange. I hope in the perplexities of his high office he has not altogether forgotten those words. They were still further strengthened by the expressions of another Member of the House, who occupied a position scarcely inferior to that of the Chancellor of the Exchequer. The present Financial Secretary to the Treasury also took part in that debate and said: I come now to this particular Bill which proposes to fix the fiduciary issue at £260,000,000 … It means the encasement of the life of a nation in a straight jacket."—[OFFICIAL REPORT, 14th May, 1928, col. 728, Vol. 217.] I hope, if the Chancellor of the Exchequer has forgotten his statement with regard to the limit of the fiduciary issue, the Financial Secretary, who gave utterance to similar sentiments, will on a suitable occasion remind him of it.

8.0 p.m.

I want to ask the Government what measures they are taking at Geneva to secure the rationing of gold among the gold-using nations of the world? Failing that, are they willing to consider the abandonment of the gold standard and the substitution of a managed paper currency or, failing that., will they take measures, by increasing the fiduciary limit of the issue of notes by the Bank of England, to make our currency more easily able to be expanded in order to meet the expanding needs of industry? I do not ask these questions with any feeling of hostility towards the right hon. Gentleman the Member for Colne Valley (Mr. P. Snowden). I admire him in this House as a man who stands for high dialectical qualities and splendid powers of will, and I admire more particularly his defence of imports being admitted untaxed into this country. I want to say that not all of us on these benches have become infected with the microbes of Protection which appear to float about in the congenial winds of Birmingham. We have heard some very strong phrases from accredited spokesmen of the working-class movement from these benches in these debates during the past week. We have heard the phrase "the insulation of this country from the shock of world conditions." I am not going to discuss that phrase because I am not quite certain what the phrase means. I often wonder whether hon. Members who use it are quite certain what it means. I believe it was a phrase which was first used in the 1906 controversy by the late. Lord Balfour, and as far as I can understand the phrase it is merely another alias added to the many aliases of the existing vocabulary of Protection.

We have also heard from these benches an even more sinister phrase, Economic nationalism. "The phrase" economic nationalism is totally alien to the whole history of the British working-class movement from the time of the First International to the present day. It is totally alien to the spirit of the British working-class movement. We have never stood for economic nationalism. We have always stood for economic internationalism; for the international regulation of hours, wages and conditions of labour. Under that flag, we have fought the battle of the working-class move- ment for the past 30 years. We are not the people to turn the ship simply because we have struck a patch of dirty water. If we did, we should merely be landing her on the rocks. The term "economic nationalism" may seem very acceptable in the mellifluous accents of the Italian language or the more guttural accents of Bavaria, but we are sure that it will not be acceptable as far as the British working-class are concerned. I make that diversion, because I want to say that I think it will be difficult for the Chancellor of the Exchequer and for the present Government to maintain a system of untaxed imports into this country unless at the same time they take measures for some expansion of our system of currency and credit in order to meet the expanding needs of modern industry.

There is another thing which I should like to mention. There is a tremendous spread-over between wholesale prices and retail prices. Wholesale prices have fallen during the past year by 20 per cent.; retail prices have fallen by only 7 per cent. That must be due either to excessive transport charges, to excessive distributive costs, or to excessive retailers' profits, and each and all of these things ought to be very seriously considered in any programme for dealing with unemployment. I welcome the fact that the Government have re-introduced the Consumers Council Bill into their programme for this Session. I believe that the Bill, when carried into law, will be one of the most useful Measures they have been able to put forward, but I hope that in the future we shall be able to go much further than that. I do not think that we can control prices unless we can control supply. The retail tobacconist is obliged to sell his tobacco at a certain price, because, if he does not sell his tobacco at a certain price, the monopoly which controls the supply will not allow him to sell tobacco at all. I hope to see the time when the Government of the country will be in the position of the universal wholesaler. When it is in the position of universal wholesaler it will really be able to fix prices, and make a proper adjustment between wholesale and retail prices. I urge upon the Government the necessity of considering this currency position very carefully. Short of the organised Socialist state, which we on these benches all desire, the quickest and most immediate solution of our present unemployment difficulties would be the expansion of currency and the fixing of reasonable retail prices.

Mr. BOOTHBY

With a very large part of the speech of the hon. Gentleman the Member for Southampton (Mr. Morley) I find myself in agreement, particularly with that part of it relating to currency. I am very glad indeed to see that some Members on the opposite side of the House have begun to flog the horse which some of us have been flogging on this side of the House for the last four or five years. There is one correction which I should like to make in the speech of the hon. Gentleman when he said that the late Chancellor of the Exchequer, my right hon. Friend the Member for Epping (Mr. Churchill) decided to return to the gold standard in the teeth of expert advice. It is not the case. The overwhelming weight of expert advice which was accorded to him at that. time was in favour of an early and immediate return to the gold standard, and, indeed, the whole financial policy in this country ever since the days of the Cunliffe Committee had been designed to lead up to that return—a policy endorsed and carried out by the right hon. Gentleman the present Chancellor of the Exchequer when he was in office in 1924. I believe that the hon. Member is right in attaching fundamental importance to this question and I propose to refer to it in a moment.

There was another part of his speech with which I did not find myself in complete agreement. He said that he did not know what the hon. Member for Smethwick (Sir O. Mosley) meant when he talked about insulation. I have a pretty shrewd idea what he meant, and I think he knew what he meant too. He meant Protection. We mean Protection too; and I would say to the hon. Member who declaimed so vehemently against the doctrine of economic nationalism that we have tried economic internationalism pretty hard and pretty thoroughly for several years, and it has landed us in a pretty mess; and there is no indication at the present time that it is going to land as in anything else but a mess in the visible future. He said that he did not want to put the ship about; but we are afraid that he will put the ship under water altogether, for that is where economic internationalism seems to be leading us at the present juncture.

I do not suppose that any hon. Member on either side of the House would deny that we are meeting here to-night in a situation amounting to national emergency. For weeks, for months, for years past, we have had a gradually deepening depression, and now it looks as if it must culminate in crisis in the fairly near future, unless some drastic measures are taken. What has interested me about this debate is, first of all, the realisation on both sides of the House of the nature of the crisis; and secondly, the large measure of agreement at which we seem to have arrived as to the causes of the trouble. The right hon. Gentleman the President of the Board of Trade in the House this afternoon did not appear to have any conception of the extent of the crisis, and offered no remedies of any sort or kind. In fact, he concluded his speech on a note of absolute despair. He said the main problem was to relate consumption to production, but he did not know how to do it. He said that the only thing to be done was to reorganise the industries of this country, but he did not know how to do it. He offered no suggestion of any sort or kind as to how either of these two aims and objects were to be achieved. If you read the speech—it was lucid, clear and able, as are all his speeches—there was not a single hopeful or constructive suggestion from the very first word to the last: and that is what is making some of us on this side of the House begin to despair.

From both back benches in this debate has come a realisation that the trade position occupied by this country to-day differs fundamentally from that which we occupied before the War. Before the War world demand exceeded world production capacity, and we commanded the world markets. We were indeed in a monopolist position. To-day, instead of commanding world markets, we have, in the words of my hon. Friend the Member for Westmorland (Mr. O. Stanley), to talk in terms of possible industrial equality. We are in a period of glut instead of the period of comparative scarcity which prevailed more or less right up to 1914. And the position is aggravated very much, as the hon. Mem- her for Southampton rightly pointed out, by the continuous fall in commodity prices. The fall in commodity prices has gone on year after year, never stopping, and it has been accentuated during the last few months. No producer on earth can stand up for ever against a continuous fall in commodity prices, because of the gap between his costs of production and his realised assets. That is why producers all over the world are now in such a parlous position. The right hon. Gentleman the President of the Board of Trade had nothing whatever to say upon this vital and, I believe, fundamental question.

There is another equally alarming development in the present situation—the improvement all over the world in methods of mass production, which ultimately is going to have the effect of enabling sweated labour to compete on more or less equal terms with our own workers. You cannot get away from this fact. You get it in Japan, you are getting it in China, and you are getting it in India. These methods of mass production are making it. possible to employ cheap native labour to do the same kind of work as our skilled workers do at wages which our trades unionists will rightly not tolerate. How is internationalism going to help you out of this position? It will not do much. I want to know how you propose to meet this situation. And there is another aggravation. The very countries to which, before the War, we used to send manufactured goods in large quantities are now beginning to make those goods for themselves, and to make them behind almost prohibitive tariff barriers. How are we going to find a way hack into those markets again?

Finally, there is another factor, not stressed in the debate, and that is that we in this country have in recent years made very large investments overseas. In order to repay interest on these investments, foreign countries have been compelled to cut down their imports to a minimum, in order to obtain a favourable trade balance; otherwise they cannot repay the interest on the investments, which they owe to us. The same thing applies to reparations and to international debte. But how are you going to meet that situation? I suggest, in parenthesis, that the whole question of the volume, and the wisdom, of overseas investment deserves the closest investigation at the present time. The hon. Member the late Financial Secretary to the Treasury wrote an interesting article on the subject the other day. We ought carefully to consider our overseas investment position. We hear and read occasionally in the "Times," once every three or four months, that there is in existence an Economic Advisory Council which occasionally has lunch at No. 10 Downing Street. We have heard nothing more about it, or from it. So far as most of us are concerned we have no other reason to suppose that it exists at all. If it does exist, and if it functions, here, at least, is a question. which it would be well to consider.

What are the results of these various causes which I have set out? Nobody would dispute that agriculture is practically down and out; that the heavy industries of this country are virtually at a standstill; that unemployment is well over 2,000,000 and rising steadily; that our export trade is down by 20 per cent.; and that our share in the volume of the world's trade has dropped considerably during the last six or seven years; that the imports of manufactured goods from foreign countries are steadily increasing year by year and month by month; and, finally, that there is in this country a general feeling of lethargy and helplessness and a complete lack of confidence not only in the future of industry but even in the future of Great Britain.

Where do the remedies lie? I am not in the habit of turning to the hon. Member for West Wolverhampton (Mr. W. J. Brown) for inspiration, but I am going to turn to him this evening. I am going to quote from a speech that he made in the debate on the Address a little earlier. He had the usual things to say about the establishment of Socialism; but he knows as well as I do, and as well as everybody in his own party knows that if hon. Members below the Gangway opposite are to wait for the establishment of Socialism until the present Government gives it to them, they will wait until the crack of doom. There will be no Socialism in our time so long as this Government lasts. Of that the hon. Member may be quite certain. The hon. Member for West Wolverhampton quickly left that distressing subject. He went on to say: There is a second line, and that is to recognise the implications of the present stage of capitalism, and to endeavour to insulate this country, because upon that insulation depends the maintenance of existing standards of life and of our present social services. One of these two lines they must take. If they do not, democracy will pass a much more swift and radical judgment upon this movement than on either of the two parties opposite, and the judgment that will be passed will not merely be a judgment passed on parties and leaders, but upon the democratic institutions of this country which will have been jeopardised because of our failure to meet the needs of our day and generation."—[OFFICIAL REPORT, 29th October, 1930; col. 119, Vol. 244.] I agree with every word that was said by the hon. Member on that subject. We come back to the vital question which was shirked by the President of the Board of Trade this afternoon, namely, the home market. Is it or is it not a fact that if we are to recover prosperity in this country we must look to the home market, first and foremost as the best, indeed, I think the only means of achieving a substantial measure of recovery? If that is so, we have to face up to the question of Protection. I do not care about methods at the moment; I am concerned only with the principle. I do not care whether you call it insulation or Protection. The country must face up to that question. And I venture to suggest that it is about time that the people of this country as a whole began to face up to many more things besides Protection. For the last 10 years we have not, as a nation, faced up to the realities of the modern age. The people of this country, the electors of this country, have not been demanding resolute Government, nor even constructive Socialism, but money for nothing; and now they are getting it. That is all that we are getting from the present Government, and it is ruining the country in the process.

We have got to recognise that conditions have changed fundamentally since the War, and with them nearly all the standards and values which we have known hitherto. We have not dared to recognise that fact, and that is why to-day there is hardly a sphere of human activity in which we are not being led by the rest of the world, instead of our leading the rest of the world. For the past 10 years on both sides of the House we have clung to the outworn economic creeds of a century ago, and to ideas which have no meaning in the modern world, in the pathetic belief that, sooner or later, things would go back to what they once were, and that until that happened we should muddle through. Unfortunately, things do not go back; they have a distressing habit of going forward. They do not even stand still. And I am certain that we shall not muddle through this time, but that drastic action of some kind or other must be taken. We have to recognise that, in the words of Sir Josiah Stamp: The present uncontrolled international monetary system has tacitly assumed its power to provide sufficient stability to obviate injustice and economic disaster but has failed signally to provide it. You must have a stable measuring rod of value. Without a stable measure of value capitalism must break down; and so must Socialism; and so must any economic system of exchange. The gold standard, uncontrolled, has failed. We must also face up to the fact that without some kind of Protection it is impossible for agriculture in this country to survive. Of that, I am certain. You may talk about organisation, land settlement, marketing schemes, and so on, but until you give the farmer for the stuff that he produces prices that will give him and his workers proper recompense for their labour, agriculture is bound to sink into decay, and nothing will stop it. [An HON. MEMBER: "What about derating?"] De-rating will help. Anything that will help is welcome, and derating is the last thing that has been done by Parliament to help agriculture. We must also recognise the fact that without Protection in some form or another, the workers of this country are going to be faced next year with general demands for reductions of wages.

Mr. J. JONES

They are already faced with it.

Mr. BOOTHBY

They will certainly be faced with it next year unless we protect the home market. Why should we be faced with a lower standard of life for our workers, or with a protracted and bitter series of wage struggles, conducted over a wide field, to no purpose, and which can do nothing but illimitable damage to the whole of the industrial future of this country We shall be faced with that unless we protect the home market so far as manufactured goods are concerned. Finally, we have to recognise that, over a very wide field, our industrial organisation is obsolete as compared with our most formidable competitors, Japan, Germany and the United States. The machinery of Government, too, is obsolete. And we might as well admit the fact that this House is obsolete. We are trying in this House to operate a machine which was designed for conditions and purposes entirely different from those which prevail in the world, and in this country, to-day. When are we going to try to reform our whole system of Parliamentary procedure, and our whole system of Government? Last, but not least, we have to face up to the fact that this particular Government is not merely obsolete, but decaying, and nearly dead.

I believe that the three main heads of an emergency policy—and we shall have to have an emergency policy sooner or later—ought to be: First, a monetary policy designed to check the disastrous fall in commodity prices. I believe this to be of fundamental importance. I do not care how you bring it about, so long as it is brought about. We might create an Empire currency, pooling the resources of gold within the Empire, and using them through an Empire bank for foreign exchange purposes; still remaining on the gold standard in relation to the rest of the world, but. keeping a separate and stable internal commodity price level. These questions are, of course, very technical. And I should like to know what has happened to the Macmillan Committee. It has been sitting for months without any result, like every other committee set up by the Government. [An HON. MEMBER: "Or by any other Government."] I suppose that is why the Government have set up a Royal Commission to inquire into unemployment insurance. We have not had a word from the Government on this vital question. The second main head of an emergency policy should be the protection of the home market, with suitable safeguards for the consumers. Hon. Members opposite say that we cannot safeguard the consumer under a protective system. Why not? Why not set up a commodity board for each industry, with power to license imports in eases where a required standard of efficiency, imposed upon the industry, is not maintained? It is easy to safeguard the consumer, and quite easy to devise machinery to do it. We shall never get prosperity for industry in this country unless we protect it against what the hon. Member for Smethwick calls the shocks of world competition, and world conditions, which are chaotic at the present time. And the third should undoubtedly be the development of a sheltered export market within the British Empire. As to methods, I would exclude none—Empire currency, tariffs, import control, quotas, licences, prohibition, I do not mind.

These economic problems are practical problems, and they should be treated in a severely practical spirit. They are physical problems. They are not, like religion, metaphysical problems. They are practical problems, and we should adopt the best and most practical method, in each case. We should examine each ease on its merits, as the right hon. Member for Edgbaston (Mr. Chamberlain) suggested earlier this afternoon. We should take each case, each commodity on its merits, and apply the most practical form of protection. If that fails it should be thrown out, and another tried in its place. Unless you tackle the question of protection in that spirit you will never get very far. If you tackle the question either from a purely Socialist point of view, or from the point of view of being in favour of tariffs with no safeguards, you are running the risk of making a mess of the whole policy of Protection, at a most crucial moment in our economic history. I say examine them all, and apply the one which works best. The home market is about the only asset we have left, and we might as well use it for our own benefit, and not for the benefit of every country in the world except our own.

Take the three key men in the present Government—the Prime Minister, the Chancellor of the Exchequer, and the President of the Board of Trade. What about the Prime Minister? He has devoted his whole time for months on end, and exhausted himself in frantic efforts to stop the construction of a couple of cruisers; to the exclusion of everything else. He has not made a single contribution of any sort or kind to the economic thought of our time, at a time of national economic crisis and emergency. So much for the Prime Minister. Take the Chan- cellor of the Exchequer. Acting on the rigid and completely obsolete doctrine of Free Trade which prevailed during the last century, and which was obsolete long before the Great War, he has perversely removed every existing safeguarding duty for no purpose except to satisfy his own pride, and vent his spleen. There can be no other reason for it. He has heaped burdens on industry for expenditure which is wholly unproductive. He has not sanctioned a single loan scheme en a large scale for productive purposes; yet he has allowed the Unemployment Insurance Fund to go on piling up debt at the rate of £500,000 per week. Where is the sense of that? He has intensified the process of deflation by every action he has taken, and deflation transfers the wealth from borrower to lender, from active hands to inactive hands. On the top of that, the Chancellor of the Exchequer made, in the Budget, a still larger contribution to the Sinking Fund. Everything he has done, every step he has taken, has been for the benefit of the rentier class as against the entrepreneur. When we should he thinking of a suspension of the Sinking Fund, he went out of his way to increase it. What about the President of the Board of Trade? He has been trotting up and clown to conferences at Geneva making futile appeals to foreign countries to stop doing this and that. The hon. Member for Smethwick said all that there is to be said on that matter. He said, what is the use of going to these international conferences, and saying that we are in such a weak position, will you please stop hoarding gold and setting up tariffs against us? I thought the President of the Board of Trade was going to give us some results, but he has failed to produce a single result of any kind.

Finally, we come to the King's Speech. It is a terrible document. It is enough to strike terror into the heart of anyone who has the future of this country at heart. There is not a single constructive proposal in it to deal with the only question that matters—the economic problem. Land settlement, site values, electoral reform, school age, rural amenities, the Emperor of Ethiopia; they are all dealt with in the King's Speech; but the one vital issue which overshadows all the others, the economic problem of industry, agriculture and unemployment, is not touched at all. The most shocking pro- posal is the one to refer the whole question of unemployment insurance to a Royal Commission, that classic weapon of delay. [An HON. MEMBER: "What would you do?"] If I replied to my hon. Friend, I should take until 9 o'clock. We have plenty of ideas. But if there was one subject about which one might have expected a so-called Labour Government to have not only views but a plan as well it is the question of how to handle the unemployed. They have set up two inquiries during the last 18 months, but we have never heard any more of them; and now we are to have another inquiry, in spite of the fact that this fund is running into debt at the rate of over half-a-million pounds per week. The Government are responsible for the government of this country and therefore responsible for the handling of the unemployed question. We complain that they have discarded their responsibility for everything. They have shoved this problem on to a commission or inquiry. They have instructed the Civil Service to buy off anybody who disturbs them too much. All they want is peace and rest. They could get that far better if they went out of office. They dare not face this question; they dare not face anything.

One word, in conclusion, about agriculture. I believe this to be one of the key questions at the present time. I have been going to my constituency every year for the last seven years, and every year the position has become worse. There you have a magnificent country and a magnificent rural population, with some of the best farmers in Great Britain. Everybody knows it. The bigger farmers have been losing money at the rate of £500 or £600 per year. That cannot go on for ever. What is happening now? In nearly every case they are turning their land remorselessly down to grass; and that means a steady drift of agricultural workers into the towns. This process is going on all over Scotland, and in England as well. I do not believe that this country can really revive or get back to a healthy prosperity unless it has a sound agricultural basis. It is, after all, a grand life.

Mr. LOVAT-FRASER

Why did you not introduce a Bill when you were in office?

Mr. BOOTHBY

We did more for agriculture when we were in office than any other Government. There was the derating Act. We reduced their freight charges, and passed the Merchandise Marks Acts, and the Rural Housing Workers' Acts, which is one of the best single Acts ever passed for the benefit of agriculture. What has the present Government done?—absolutely nothing at all. I have asked the Secretary of State for Scotland at least 15 times what the agricultural policy of the Government is, and he has only two answers. One is "I am considering it"; and the second is, "I am considering this question very seriously indeed." I agree with the hon. Member for Basingstoke (Viscount Lymington) that it is possible to absorb another half million workers on the land if we give agriculture a chance; but you will never do that by land settlement or the organisation of markets alone. The only way to get men back on to the land is to give them a chance of earning a living when they get there; and until you do that it is useless to talk about any schemes at all. They only end in bankruptcy. As civilisation becomes more complicated and artificial so the call of the earth becomes more insistent; and a man will be perfectly content to live close to the soil for a four or five per cent. profit. But you must see that he gets that.

It all comes down to a. question of prices. The Government, and this nation, must see that the farmer gets a price which will cover his costs of production, and until you do that—I can see no other method but protection of some kind, although I agree that organised marketing would also be an advantage—you will never get a healthy agricultural industry again. This country has never faced up to that issue, but we shall have to face it now. I think the crisis now coming is comparable only to the crisis of 1918; and no one can say that we did not face the realities of that crisis or that we ran away from the situation then. But in 1918 we had a Government which was not afraid to govern. The right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) was remorseless. Everything was subordinated to the main purpose; everything was swept aside, even this House was swept aside, when it showed signs of getting in the way. Sacrifices were demanded by the Government and made by every class and section of the community. I believe that we must get back to that spirit, and that sort of leadership if we are to get through the present crisis. No one can say honestly that the present Government is likely to instil that sort of spirit or use those sort of methods in leading the country back to prosperity. We must have a government able and willing to tackle the job. We must go on throwing out Government after Government until we do get a Government that will tackle the job; and every one in this House really agrees that we cannot make a better start than by throwing out the present Government.

Mr. L'ESTRANGE MALONE

We have just listened to an extremely interesting speech. Some of it was very reminiscent of the speech of the hon. Baronet the Member for Smethwick (Sir 0. Mosley). One might almost imagine that there had been some collusion in regard to it. I do not want to follow the hon. Member in the very interesting questions that he raised. For instance he referred to the efforts that were made during the War. The position in the War was quite different from the position to-day. Everyone in the country was concerned in winning the War. At the present moment, serious as the situation may be, there are only 2,000,000 unemployed suffering from the present industrial crisis, and the position of national security is not in any way comparable with that during the War. There is not, unfortunately—I say unfortunately—the public support to carry out the great measures which enabled the War Government to come down to the House and to flout it. If the present Government attempted to do anything of the sort, anything in the nature of the work which was done by the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) during the War, the hon. Member for Eastern Aberdeen (Mr. Boothby) would be the first to say that the House of Commons was being flouted by the Government.

I think we are all agreed that the question now before the House is the most important that we have to consider in the present Parliament. This question of unemployment tests the ability not merely of parties but of Parliament to deal with the evils of the present system. I have been surprised at some of the remarks that have fallen from hon. Members. The hon. Member for Eastern Aberdeen told us that the House of Commons had to face up to the evils of the present system. For ten years Members of the House of Commons have not faced up to the question that the present social system has to be altered. Not merely for the last 10 years, but for the last 30 or 40 years members of the Labour party have been pointing out the fundamental evils of the present social system. But I have been surprised by what I have not heard rather than by what I have heard in these debates. I was surprised not to hear in the speech of the right hon. Member for Edgbaston (Mr. Chamberlain) any reference to the question of de-rating. We spent hours and hours and days and days and nights and nights when the right hon. Gentleman and the right hon. Member for West Woolwich (Sir K. Wood) occupied the time in pushing the De-rating Act. We were told that industry was to be put on its feet, that agriculture when relieved of all its rates was going to blossom and flourish. Not a whisper of the De-rating Act is heard to-day. De-rating as a panacea for unemployment is now not merely dead, but damned.

Nor have we heard anything in the debates in the last four days of the famous memorandum of which we heard so much last Session. For weeks and weeks and months and months one of my hon. Friends the hon. Baronet the Member for Smethwick was preparing the ground for the great memorandum that was to cure all our evils, revive employment, and so on. For weeks and weeks and months and months the Press was full of inspired paragraphs telling us what was to happen when the memorandum was published and so on. Then my hon. Friend resigned. I have the greatest admiration for his courage and for the sincerity with which he carried out his work and which led him to resign; but he surely ought to have resigned for something more worth while. No sooner had he resigned, after a month or so of speeches concerning the memorandum, which none of us ever saw or ever heard in great detail, than he jettisoned the memorandum on account of which he had left the Government. After mature consideration apparently he considered that it was impracticable and we hear nothing about it at all now. We have heard nothing about it in this debate. Apparently my hon. Friend considers that it is quite impracticable. That is what I suggest the Government considered many months earlier, and why they came to the conclusion that they could not accept what was known as the Mosley Memorandum.

Now we hear about economic nationalism. It is one of the several names under which Protection is brought forward. At one moment it is Safeguarding, at another moment Empire Free Trade, or Imperial Preference, or insulation and now economic nationalism. My friends who advocate economic nationalism seem to think that the export trade does not matter. If we consider where the unemployment exists in this country, economic nationalism is simply another name for economic bunk. Surely the sensible thing to do is to see where the unemployment is and where the breakdown has occurred. If we look at the figures for unemployment, given in the more recent returns published by the Ministry of Labour we find that one-third of the 2,000,000 unemployed are in the textile and mining industries. The four major industries and trades in this country, textile, mining, building and transport, contain over half of the 2,000,000 unemployed. As regards the building trade I need not say anything except to express the hope that, as 3,000,000 persons are living to-day in slums or houses that are insanitary and unfit for human habitation, when the Labour Government's Housing (No. 2) Act is put fully into operation by the local authorities, there will be no justification for a single operative in the building trade being out of work.

I want to say a word or two about the other two industries in which one-third of the unemployed are concerned, the textile and coal industries. I make no excuse for mentioning two industries neither of which is represented in my constituency, because we are all concerned with these major and basic industries. When there is unemployment in the textile trade, or in the coal trade, it quickly affects such trades as the boot trade in my constituency, because people who are unemployed cannot buy boots and other necessities. I urge the Government to treat the position in the coal industry and the cotton industry as an urgent question, and to take, if necessary, emergency powers to deal with those industries. I do not think that sufficient attention was paid to the speeches last week of the hon. Member for Stockport (Mr. Hammersley) and the hon. Member for Royton (Dr. Davies). They made it clear that as far as the Bankers Industrial Development Company and the Securities Management Trust are concerned, there is little if any hope for the cotton industry. The Government ought to treat the report on the cotton industry, which has just been published, as an urgent matter. The bankers have declined to give any assistance to the industry through the organisations that were formed under the auspices of the ex-Lord Privy Seal, and by means of which it was hoped that reorganisation would take place. The matter cannot be left there. Those financial concerns, as I say, have declined assistance and, if nothing is done within a reasonable time, the State must interfere in the cotton industry and legislation must be introduced on the lines of the Coal Mines Act.

As regards the coal industry, I have read with very great interest the report published by the Secretary for Mines. The recommendations contained in that report ought to he put into operation as soon as possible. Like the cotton industry the coal industry should be treated by the Government as a matter of urgency, and I am sure that if emergency powers are asked for by the Government the House will grant them in respect of both industries. The Coal Mines Act was a great step forward. When I was in Poland some months ago I met the Polish coal-owners who informed me that they came to this country 12 months ago to discuss with the British coal-owners the possibility of arrangements regarding international agreements for quotas and so forth. They came here before the Coal Mines Act had been passed and they found that there were 1,100 or more organisations, coal companies and so on, with which they would have to deal. They could find no central body with which they could negotiate and they went away to wait for the passing of the Coal Mines Act. Now we have a Central Council representing the industry as a whole. I would press upon the Government that they ought to put into operation everything contained in this admirable report which has been published to-day and which explains very clearly and simply how we have practically lost our Scandinavian market for coal through the operations of the Treaty of Versailles—as many of us foreshadowed at the time. The Secretary for Mines deserves every credit for having got on with the job so quickly and efficiently, and having brought out a report which goes right to the heart of the matter. It points out clearly why we have lost certain of our most important coal markets in Scandinavia and suggests how those markets can be regained if we set about it at once.

I have urged the Government to treat the recommendations put forward in respect of these industries as matters of national emergency but in the meantime unemployment is here and the unemployed cannot wait for the "new Jerusalem." The Government might well consider whether it would not be advantageous to increase the internal markets. An hon. Member speaking earlier suggested that we ought to distribute more gold. I suggest that it is worthy of consideration whether it would not be advantageous to improve some of the social services. I should like to see, if the finances could be found, an increase in the rate of the Old Age Pension. Week after week, when I go to my constituency old people say to me "You promised to increase the Old Age Pension. I am only drawing 10s. a week and I cannot live on it." When an old man or an old woman says that, one cannot make any answer because there is no answer. People cannot live in any state of decency on 10s. a week.

Mr. CULVERWELL

You promised them £1.

Mr. MALONE

Yes, but we have not a majority in this House.

Mr. CULVERWELL

Go and seek it.

Mr. MALONE

If it is not possible at present to increase the old age pension, it might be possible to improve the benefits that are paid to the unemployed. I said both to the last Government and to the present Government that 17s. is not enough. No one either on the Front Bench or on the back benches would like to have to live on 13s. a week, and if we could, at the earliest opportunity, raise the rates, at least to those put forward in the Blanesburgh report, we should be improving a social service benefiting the unemployed and increasing the purchasing power of the masses of the people.

As the Minister of Labour is here I wish to say that, quite apart from any question of the rates, the conditions under which benefit is received should be given the greatest possible attention. Those conditions are far too irksome in many respects. There is a tendency to-day to think that just because there are 2,000,000 unemployed, the regulations ought to be tightened up and made more severe. The removal of the not genuinely seeking work condition, as the result of an Amendment which I moved in this House 12 months ago, has been a tremendous benefit to the unemployed, but, now, the second transitional provision, which disqualifies men who are "not normally in an insurable occupation," is being used to deprive men of benefit. Men and women are being caught between the upper and the nether millstones of these conditions. A. man may he at work for 15 years in the same industry in the same factory, possibly at the same bench. Such a man may have fallen out of work two or three years ago. He is offered a job in a non-insurable occupation, such as farming, agricultural work, potato digging, or something of that sort. If he refuses that job, he is disallowed benefit for not accepting a suitable occupation; if he accepts that job, it is probably only a temporary occupation, and when he falls out of work, as he inevitably will after a time, and goes back to the exchange, he will be told that he is disallowed benefit because he is not normally in an insurable occupation. I mention this as an example of the ways in which many are being disallowed benefit.

I want to see all these questions very closely examined, and I am sure they will be examined by the Royal Commission that, is to be set up. I hope the Government will deal with the coal and cotton question, and treat these matters as urgent, introducing emergency legislation if possible, and that in the meantime they will improve the internal market by making the lot of the unemployed man and woman easier.

Major COLVILLE

The significant feature of this debate throughout has been that we have had almost no speeches in favour of the Gracious Speech from the Throne, except those which came from the Front Bench on the Government side, which perforce had to support the Measures outlined in it. But from all parts of the House we have had very free criticism of that Speech. To-night we have listened to an interesting speech from the right hon. Member for Darwen (Sir H. Samuel), explaining the attitude of the Liberal party to the Amendment which we have placed on the Paper. It reminded me of the Duke of Plazatoro addressing his troops and explaining to them the type of manœuvre which was expected of them on the following day. Surely the issue is perfectly plain. The question to be decided to-morrow night is whether this House is satisfied with the measures which the Government have taken to deal with unemployment. A vote for our Amendment is a vote to indicate dissatisfaction with the measures taken by the Government as, to use the words of the Amendment, adequate to deal with the present crisis or to check the growth of unemployment"; and anyone who votes to the contrary, indicates his satisfaction with the action of the Government. I imagine the Liberal party, therefore, in the action which they will take to-morrow evening, will have to justify to the country afterwards as to whether they are completely satisfied with the Government in the steps which they have taken. The question of Protection does not enter into the wording of the Amendment. The right hon. Member attempted to discern what he thinks is the sinister hand of Protection in the Amendment, but it is not there. What is there is a simple statement that we are or are not satisfied with the Government's measures regarding unemployment.

I wonder how many Members of the Socialist party would have been returned to Parliament if they had fought the last election on this King's Speech. A mere handful, I dare say, but they fought it on a very different speech. They fought it on a manifesto, of which I have here a copy, signed by the Prime Minister, the Home Secretary, the Minister of Trans- port, and the Foreign Secretary, and right in the front of that manifesto, occupying the most important position, we read: The Labour party gives an unqualified pledge to deal immediately and practically with the question of unemployment. Its record on unemployment is a guarantee that this pledge will be kept. A little further down it states: When the Labour Government was last in office, it announced to Parliament schemes of a 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. 9.0 p.m.

That is the manifesto on which the Labour party fought and won the last election, yet for every three minutes that they have been in office, two British working men have lost their jobs, until to-day we have reached a figure of nearly 2,250,000 unemployed, the highest since the slump of 1921; and the country will judge, and I hope at no distant date, as to the measure of success which has attended the efforts of the Socialist party in this period of office.

As regards the King's Speech itself, two salient points emerge. There is no mention whatever of any change in our fiscal policy or of any attempt to economise in national administration. Those are the two most prominent questions before the country at the present time, vet there is no mention of them at all in the King's Speech. There is not even a fighting Socialist programme. There is a poor, pink tinged collection of restrictive legislation designed to satisfy the Liberal party and so to keep alive.

During the Recess, two very important bodies in our national life were consulted, and gave their opinion as to possible remedies for the unemployment problem. I refer to the Federation of British Industries and the Association of British Chambers of Commerce. These bodies represent a very wide field of industrial and commercial life in this country. The Federation of British Industries represents very many industries all over the country, producers, those responsible for giving employment, and it also represents many industries which not only produce, but use products which at present are imported from abroad: and that brings a great significance into the findings put forward by this body.

They took a referendum of their constituents all over the country on the subject of fiscal policy, and when the returns were received no fewer than 97 per cent. of all the firms affiliated with the Federation of British Industries voted for a change in our fiscal policy in favour of Safeguarding. That is particularly significant in view of the fact that very many of these firms are personally affected, because they use at the present time a certain amount of imported foreign goods. If I might for a moment make a personal reference, I would say, as being connected with one firm canvassed in that way by the Federation, a firm which uses a certain amount of foreign semi-manufactured material for rolling out into steel sheets, that we carefully considered the whole question and voted in favour of a change in our fiscal policy, realising that those finishing industries in this country will never be on a sound and secure basis until they stand on a British production rather than depend on a foreign production; and until we get Safeguarding for our home industries, we shall not have that secure basis of production. I therefore think the Government might very well pay some attention—and I see no signs of their having done so—to the representations of that important body, the Federation of British Industries, in their canvass of all the industries of the country on the fiscal question.

Passing on to the second body to which I referred, the Association of British Chambers of Commerce, that body represents 125 chambers and approximately 50,000 firms in all parts of the country. Here we have not only the producer but also the trader, who sometimes has rather a different point of view. I can imagine hon. Members opposite saying that the Federation of British Industries would be for Protection because they might be associated entirely with producing industries, but the chambers of commerce represent the trading life of our community, and until recently had rather a Free Trade tendency. An inquiry was directed to the chambers of commerce in this country in regard to this matter. As a member of the executive of the Associated Chambers, I was in a position to see the answers, and as a result of them a paper on the subject of unemployment was prepared by the executive of the council. The recommendations contained in it point to two things—firstly, the safeguarding of our home industries, and secondly, the need for economy in national expenditure and a consequent reduction in taxation. Yet we find in the King's Speech prepared by the Government immediately afterwards no notice taken of the recommendations of these two important bodies. Those who govern this country, instead of scoffing at manufacturers as they are too ready to do, might consider whether those whose life is bound up with industry might not have some suggestions to offer in the present dire crisis.

As regards Safeguarding, it is interesting to notice from the other side of the House a realisation that we must make some effort to retain a larger share of our home market. Surely there are many articles imported which we could equally well make here. The Board of Trade returns show that in the past seven months we imported £1,000,000 worth of boots and shoes, £500,000 worth of furniture, £750,000 worth of builders' materials, £250,000 worth of cement, and £14,000,000 worth of iron and steel. We must not close our minds to getting a larger share of that market for our home producers. The Government, however, seem to close their minds entirely to the possibility of reserving that market for our home producers. Is it always wisest to buy in the cheapest market? Hon. Members below the Gangway would say that it was, and they would be willing to see the grass grow round our factories before they would admit that it was wrong. Yet I believe that we can by Safeguarding—as has been proved in the case of industries already safeguarded— get a larger share of our home market for home producers. A great part of the articles which I have mentioned can be made in this country. The 2,000,000 tons of steel would mean a market for 6,000,000 tons of coal, or work for 30,000 miners if it were made here. A large part of it could have been made here with consequent employment. With regard to the recommendation of national economy, it is significant that taxation at the present time, allowing for the change in money value, is actually as high as it was during the peak time of the War. It is hardly to be wondered at that such bodies as I have mentioned stress the need for economy in national expenditure that will bring about reduction in taxation.

I heard the Minister of Health, when introducing a Bill a year ago, give vent to the most extraordinary opinion on the subject of economy. He said that broadly speaking what a nation wanted sufficiently, the nation could afford. I wonder if he still thinks that, and that it is a pure coincidence that since £46,000,000 of new taxation has been applied, 1,000,000 men have been thrown out of work? I consider that the two things are related. For every £46 of new taxation imposed, a man has been put out of a job. That is the result of the operations of the present Government, and there is no hope in the King's Speech that a halt is going to be called. It has become a frequent practice of Members of the Government to blame the manufacturers for the present position. The Prime Minister in his speech last week said that we lost our chances in the Empire market because we had entered into an arrangement of cartels and marketing agreements which excluded us from certain of our Empire markets. Canada, in particular, was mentioned in connection with certain products.

The position is that manufacturers have had to negotiate in order to save their home markets. They have had to negotiate certain agreements, and give away a share in Empire markets in order to save home markets, which every other country expects their Government to do for them. The manufacturers look to the Government, and will look to any other Government but this with some confidence, to have their home market protected from the present dumping. The present Government give as their excuse for the existing state of affairs that they have struck an economic blizzard in the world. We admit the bad conditions of the world, but the Government have done nothing to stand up for the interests of British trade. At a time when every country is looking for a place to dump its surplus production, the Government are thinking of a tariff truce and of removing anti-dumping legislation from the Statute Book instead of standing up for British industry. In a time of world blizzard, when they should do something to give some protection for our trade, the Government are leaving it unprotected and exposed to the blizzard.

The stock argument that is used on the subject of Protection is that other countries, such as Germany and the United States, are suffering from unemployment and are protected. I am glad to have the opportunity of answering that contention. These other countries have had their good time. In America and Germany a few years ago, I saw no steel workers unemployed. These countries will return to their good times when the blizzard is over, but in our case we will only return to that measure of unemployment which has been with us for several years. It is becoming chronic in our case, and it calls for drastic measures. A further answer to the suggestion that Protection is not helping those countries is this. Would they be better off if they brought down their tariffs? If all countries would sweep tariffs away, that would be best, no doubt, but if single countries were to reduce their tariffs, it would only result in an increase of unemployment in those countries. As an instance, we should be selling steel in America in a week's time if she dropped her tariff, because we can make steel cheaper. Protection is not the cause of unemployment in these countries; it is sustaining a great number of those who are in employment, and we shall have to apply it to this country if we are going to make any impression on the great figures of unemployed that we have.

The King's Speech mentions schemes for placing men on the land. My hon. Friend who spoke before me asked what was the use of placing men on the land if they cannot get a living. I live in a fruit growing country, which was a happy and prosperous part of Scotland once, but they cannot make a living on account of the dumping of foreign fruit and pulp. Then again, in districts where cereals are grown, they have the keenest and most unfair competition through foreign dumping, and there is less land in cultivation in Scotland to-day than for the last 50 years; and that after a year of a Government which undertook to make farming pay. The present proposals of the Government do not impress me, because the first step they must take is to shield the farmer from unfair foreign competition. If the farmers are not given that measure of protection, no matter what steps are taken to settle men on the land, they will not be able to make a living.

The present Under-Secretary of State for Scotland, in less responsible days, very ably characterised the book known as "Labour and the Nation" as a political dog's breakfast—scraps for everyone but enough for no one; and I think the same description is applicable to the present Gracious Speech which we are discussing, because in it there are scraps for everyone and enough for no one. There is no real message of encouragement to trade, no real message of hope for the unemployed, no message to encourage the Government's own hack benchers, and no message to encourage the Liberal party—[Interruption]—except a sop thrown to them in the hope that it will be sufficient to keep them alive for some time to come; but those of us on this side who believe that every day of the Socialist Government is a day's march further from prosperity hope that the Liberal party will summon sufficient courage to-morrow night to vote in the way they must feel they ought to vote, and show that they are not satisfied with the measures which the Government have taken to deal with unemployment. If they vote like that, we shall put the Government out to-morrow night—and not a day too soon.

We have a policy. [Interruption.] That is what we want, an election. We will be glad to face an election. The proof of it will be seen in the extent of our vote to-morrow night. If we get sufficient support from the Liberal party we will bring about the downfall of the Government, and that will secure us an opportunity of putting into force 'the policy which we believe would help the country. [Interruption.] Hon. Members opposite evidently have not sufficient interest in the situation to make themselves acquainted with the policy of this party. It is: Effective protection for our manufacturing industries against foreign competition by the immediate introduction of an emergency tariff;—[An HON. MEMBER: "Do you say that at Shipley?"]—a guaranteed wheat price for the British farmer, combined with a tax on malting barley; the prevention of dumping of foreign oats and other produce; assisting to secure a definite market for home-grown and Empire wheat; and, finally, concerted action with the Dominions in order to promote the economic unity of the Empire. I believe that by that policy we can bring about a measure of prosperity to this land and to our great Empire; and I only hope that to-morrow night the Liberal party will give us the opportunity to put the Government out and to bring that policy into force.

Mr. HOLFORD KNIGHT

The hon. and gallant Member for Midlothian and Peebles Northern (Major Colville) cheered up before he concluded his speech. I was glad to hear it, because at one stage I feared his speech was to be a repetition of the gloom which has pervaded a number of speeches delivered from all sides of this House. We have had an interesting and discursive discussion. As I look at this House, my mind goes back to some previous Houses, which I used to observe from a respectful distance. It is curious how the echoes of past fights in this House are beginning to be heard. I am reminded of a distinguished leader of the Conservative party, who in my youth was known as Lord Robert Cecil, and who bad a habit of thinking aloud. It might be of some service if we just thought aloud as a contribution to this discussion. I would venture to remind the House of two facts which are directly connected with the late War. In my submission, the situation which we are now considering is a direct result of that war. In the first place, let hon. Members reflect upon the enormous expenditure which the War involved and of the great masses of wealth withdrawn from production and given to war expenditure, with the resultant suspension of industrial activity and the accumulation of the vast debt which still rests upon the country.

Years ago, when leaders of opinion appear to have had more courage in the statement of their views than they now have—at any rate, some of them—the House openly discussed what measures should be taken to reduce that war expenditure with a view to diminishing the heavy burden of taxation and debt. No Government has had the courage to tackle it. When the Board of Inland Revenue presented a report some years ago, with a recommendation, the leaders of this House at that time lacked the necessary courage to apply the recommendation. I am not going into the matter closely now, because there is no time, but I would ask the House to remember that the industry of this land is under a weight of taxation unparalleled in our history, that the foundation of that taxation was war expenditure, and that we shall never lift any material part of the burden until we have a Government with the courage to tackle that war debt. Until that burden of debt is diminished and the charges on businesses and industry are reduced, we cannot expect business to revive in this country.

The second matter arising from the War was the contraction of markets which was involved. That War enabled great nations in Europe and in America to enter upon stages of abounding production. In Europe, those stages were largely financed out of reparations. The markets which we had served before the War were closed to us because of the funds placed in possession of, for instance, France and Belgium with which to develop their markets and to produce the goods which we formerly made here. In reminding the House of these simple facts I am thinking aloud, as I promised to do. They are facts which this House must face at some time or another. There appears to be no chance of seeing the first fact faced. It is to the problem arising from the second fact, our contracted markets and the measures to be taken to revive the home market, that the proposals of the Opposition are directed. Here my reflections about old Parliaments come uppermost in my mind. When I heard the right hon. Gentleman open this debate I thought of that day in June, 1903, when, sitting in one of the galleries, I heard his distinguished father present to this House his proposals for Tariff Reform, which are identical in text and intention with the proposals which have been revived by the Conservative party after 25 years. The right hon. Gentleman who opened this debate wants to protect the home market.

How does he propose to do it? The home market is built up by the interchange of goods. It is extraordinary that the most elementary facts about national economy are seemingly unknown to a large proportion of the people and to many journalists. They have got to be revived, and if not in this House, I do not know where. One of the elementary facts—we may dispute about the implications and consequences—on which there can surely be no doubt is that in the main our home market depends upon the interchange of goods which accrues as the result of world trade. If you adopt measures which would have the effect of hampering the flow of goods from abroad, you contract your own market. So far from the imposition of tariffs on foreign imports resulting in an improvement in the home market, the whole of experience goes to show that the result will be that you will curtail the output of your own market, and, instead of increasing employment, diminish it.

There is an aspect of the proposal with which the right hon. Gentleman opposite opened the debate this afternoon which has not been developed by any subsequent speaker. Not only are we dependent for the bulk of our raw materials on foreign imports, but we look for the bulk of our food to foreign markets. What is going to be the effect on the livelihood of our people of checking the flow of imports from foreign markets? The right hon. Gentleman the Member for Bewdley (Mr. S. Baldwin) must have a lively recollection of the last occasion when he put this proposal to the country in 1923. It was that proposal which ended his period of office and inaugurated the first Labour Government in our country. Why? I cannot doubt that the right hon. Gentleman, in that spirit of frankness which always characterises him, will agree that the main proposal which brought about that unexpected reversal in his political fortunes was the proposal to impose again taxes on imported food.

I see in the recollection of that experience an explanation of the evasions which the right hon. Gentleman is perpetually making in any sort of declaration that his present proposals will involve the taxation of imported food. When the matter was first raised by the right hon. Gentleman, I said in my own constituency, and I repeat it to-day, that any political movement in this land which becomes entangled in the proposal to tax imported food is doomed. There may be good reasons for hon. Gentlemen opposite to come in later and support proposals involving such taxation but I venture to suggest, as a matter of practical experience, that if they apply themselves to the task of persuading people that they should support taxes on imported food they are going to disaster. That is the reason why the right hon. Gentleman does not assent to these proposals. Before this debate closes, if it is an integral part of his proposals, no doubt he will take an opportunity of informing the House, aye or no, whether the proposals he is placing before the country as an alternative to the proposals of this Government involve the taxation of imported food. It is high time the electors knew exactly where he stands in regard to this matter.

On the other hand, what are the proposals of the Government? It is said that their policy is not directed to the improvement of this disastrous condition of unemployment. Only political prejudice could assume responsibility for such wild, rash and inaccurate statements. Since the present Government took office they have done their best to tackle the question of unemployment. I say here, as frankly as I have said in my own constituency, that I think their best might have been better and that the instruments of the present Prime Minister for dealing with these tasks might have been better selected. After continuing in office for 12 months a gentleman who was, obviously, not equal to his opportunities, like a wise man the Prime Minister changed the instrument and we have now another Minister in office. During that period I have no personal knowledge of the difficulties which the late Lord Privy Seal encountered. I can only judge him on his public form, and I say with deliberation that that form was not equal to the opportunities of the situation. Whether he was the victim of circumstances or not I do not know, but we on these benches were returned to this House to tackle this question of unemployment. I believe that the Prime Minister and his colleagues have done their best to tackle it. The municipality was asked to frame schemes in the City of Nottingham and the city council, with great energy, prepared a long list of schemes, many of which have been adopted and are now in operation. Other municipalities were urged to the same task; some hesitated and others went forward, and as far as the Government could stimulate their activities, it has been done. New rules of procedure were devised in order to accelerate the way in which the municipalities were undertaking those tasks.

There was one great line of development which, I sincerely regret, the Government have not undertaken. I see the Chancellor of the Exchequer present and, as an old friend, he will allow me to say, in all friendliness, that I have never fully understood the reasons which induced him, according to credible report, to veto the provision of a large loan for development. I have looked upon that loan as analogous to the steps an enterprising man would take in regard to his own business. Having reached a critical stage, corresponding to the position of the country, and seeing opportunities of developing his business, the application of money by way of loan would be the best form of investment which could be undertaken. I apply that analogy in my own mind to the business of the country. I still think the best thing that the Government could do to tackle unemployment would be to raise a huge loan on the credit of the country to finance schemes intended to develop in every possible way, under suitable safeguards, the industrial equipment of the country and every other means which could be pursued to increase 'the country's prosperity.

In particular, there are agricultural credits, to which reference has been made. It is many a year since I stood for election to this House as an agricultural candidate, and I do not presume to speak with any authority upon agriculture. But my impression of the agricultural situation is that if agricultural credits could be supplied to enable men from the towns who want to go back to the country to work smallholdings, and if machinery of co-operation were set up with public assistance, and if land tenure were tackled, together with the proposals of the present Government in regard to taxation of land values—if all these matters were pressed forward, I am satisfied that the proposals in the Gracious Speech, coupled with the provision of financial assistance, would have a tremendous effect in stimulating the industry of the country. This country contains some of the finest land in the world, and it is an appalling fact that large stretches of land are still locked up by private ownership. On this question I think the House is entitled to look for a lead from the Government. If the Treasury Bench will give the right leadership to this House, I am sure they will get all the driving energy which is necessary to carry through the proposals in the King's Speech, and we shall make the best of the situation.

I would remind the front Ministerial Bench of what has been said before in this debate, namely, that people are lasing confidence in the utility of Parliament itself. Right hon. Gentlemen on the Treasury Bench may think that this is a dream, but let them make further inquiry in the country, and they will soon find that it is a reality. There are hundreds of thousands of men and women in this country who are beginning to doubt whether Parliament is a useful instrument for carrying out reforms. Frankly, I do not share the confidence of some hon. Members that they are the accredited leaders of the nation. We must put all the energy we can into the work of Parliament, and I feel sure that if the Government will give the lead which the House wants, not only will they have enthusiastic support from all those sitting on the Labour benches, but they will obtain support from hon. Members on the benches opposite.

Mr. MOND

The hon. and learned Member for South Nottingham (Mr. Knight) might have been a little more practical in the suggestions which he has put before the House. He suggested that the Government should grant a large loan to tackle unemployment in this country, but that is just what the Government have assured us that they have riot the remotest intention of doing. The hon. and learned Member also said that he thought the country was losing all confidence in the House of Commons. I think that is a matter of which hon. Members opposite ought to take note. I can offer a much weightier reason, and it is that we are faced to-day by one of the gravest crises which this country has ever known, and it is very difficult to see how we are going to come through that crisis. I am certain that we shall not get through successfully under the present Government. We have heard a discussion in the Press during the last few weeks about hungry sheep, but I think that the contents of the King's Speech which has been presented to this House to deal with the crisis is like offering an acid drop to a hungry elephant. What is proposed in the King's Speech does not make the slightest contribution towards a solution of the unemployment problem, which has now grown to the most alarming proportions that we have ever known.

We shall be face to face during the next few months with another conflict between capital and the forces of labour. It is not the slightest use trying to blind ourselves to that deplorable and unfortunate fact. The House meets and discusses these questions, but the Government make no contribution whatever towards avoiding those disastrous consequences. All the symptoms which precede this type of conflict are present, and must be present to the Members of the Government. The Minister of Labour knows perfectly well what is happening, and she must be aware of the difficulties through which we are passing. I would like to ask what is going to save the head-on crash between these two forces which, in the past, have always produced such disastrous results, and which, in this case, are going to produce results so disastrous that I doubt whether we shall ever be able to recover from them. I want the House to appreciate what that means. Perhaps this state of things does not matter much to the better-off classes, because they will find opportunities of going to some other country where things are better. I would like to ask what is going to happen to people who have not the opportunity of going to live in other countries? [An HON. MEMBER: "Where will you go?"] I shall remain here.— [Interruption.]

What is going to happen to the people who are forced to remain here, who have no other opportunity? They are going to find themselves in a most deplorable situation. They are going to be forced to a lower standard of living than that enjoyed by any other country in Europe; they are going to find themselves in a position from which there will be no way out, because your markets are closing on you in every direction, and the conflicts which are likely to occur, and which will produce further strikes and further troubles in industry, will finally close even those markets which now remain open to you. It is well known that real wages in this country have been going up for some time past. The cost of living has been continually falling. It has not been falling as fast as the prices of raw materials and other commodities; there is a certain time lag; but anyone who studies the figures will know that the cost or raw materials and the price of commodities have been pursuing a steady trend. [HON. MEMBERS: "Wholesale prices"] Wholesale prices have come down, and retail prices have come down. [HON. MEMBERS: "And wages!"] Wages have not come down anything like as fast, and real wages have increased rather rapidly.

I am anxious to see real wages, and nominal wages for that matter, kept at a high level. The industries with which I am associated have been fortunate enough to be able to afford to pay rather higher rates of wages than are paid almost anywhere else in the world, and we are anxious to see that policy extended and continued as far as we possibly- can. Surely it is not beyond our wit to devise some method whereby this head-on crash, with the disastrous results of which I have spoken, may be avoided. Is there no way in which capital and labour can come together and work out their salvation? Are we simply bound to see two express trains run into each other without making any attempt to solve the problem by some other means? I suggest that a solution of this problem has been put forward from these benches to-day, and many times before, but never with the same urgency as it comes before the country at this moment. On the one hand you have the possibility of a conflict between these forces, which will do the country so much harm; on the other hand, you have the possibility of adopting a change in your fiscal system which will make such a conflict entirely unnecessary.

That is the choice which is being put before the country, and in case of an election I am certain what the country will do. [An HON. MEMBER: "Did you advocate it in 1929?"] In 1929 this policy was advocated by a large number of those who sit on these benches now and who represent the Conservative party, but I hardly think it comes well from hon. Members opposite to talk about consistency in matters of policy. I should like to know where their policies have gone—how "Labour and the Nation" compares with the Gracious Speech from the Throne. It is really rather beside the point to go back into the ancient history of any of the political parties in this House and to demand consistency, because I am afraid it is impossible. I am trying to make a case which does not require consistency, because the emergency with which we are faced has arisen very lately, only within the past few months. What you have to face up to is this: You can either have wages or you can have doles. The policy of the present Government is a policy of doles. The policy which I would urge upon the House, and which has been urged upon the House from the Front Bench to-day, is the policy of wages, and good wages.

We are anxious to insulate, not only this country, but the Empire, which can be a self-supporting unit, from the shocks and disturbances of a very disorganised outside world. Industrial life is a comparatively new factor in human affairs, and no one quite knows how to treat it. The world machine is extraordinarily intricate, and produces some very surprising results, which puzzle even the wisest, and they are not able to manage it with much skill. That is not altogether surprising when we see great territories like Russia and China in a state of absolute chaos. A very large section of the world is in a state of great difficulty. It is very likely that such countries will remain in a chaotic state for many years to come, and that world progress will be by fits and starts. Surely, it is a good thing for us to try to create an Imperial unit which will be insulated from the economic shocks which the world will have to face in the future.

The hon. and learned Member for South Nottingham asked, why should the people of this country think of taxing food The only possible reason why they should think of it is because it may enable them to get jobs in order to earn wages with which to buy food. Apart from that, there would not be much object in their doing any such thing. They have got to have markets in order to get jobs, and those markets can only be obtained by exchanging our manufactured goods for the raw materials and food which can be produced in the world outside. As the Empire can produce all the food and all the raw materials that this country requires, and rather more, why should not we exchange them for our manufactured goods? [HON. MEMBERS: "They will not take them!"] They most certainly will take them, because they will he up against the same difficulty as ourselves; they will be up against closing markets. They will find the world organising itself into. very large units, and they will be left outside just as we may be left outside if we have not the energy, the "nous," the brains and the decision to organise ourselves into one great self-contained unit. The opportunity which presents itself to-day may never be repeated to gather together the great territories that exist within the Empire, with the greatest material wealth that the world has ever seen, in one organisation of the greatest people, with the finest character, the greatest industrial ability and the greatest courage, and set them to produce a standard of living for the people as a whole such as the world has never seen in the past.

Captain EDEN

The President of the Board of Trade, in the course of his speech this afternoon, expressed some surprise at the vehemence of the attack launched by my right hon. Friend the Member for Edgbaston (Mr. Chamberlain). If he was in truth surprised at that early stage of the afternoon, we must presume that no Member on the Government bench will be surprised now if the sense of disappointment that we felt before the right hon. Gentleman spoke has been very deeply underlined since that speech was delivered. I do not think that, when the country comes to read that speech to-morrow, there will be many people engaged in industry, or many of those seeking employment in it, who will not read it with undiluted depression. The right hon. Gentleman did not attempt to deny the evils from which we are suffering to-day, but he wholly failed to propound any kind of remedy. He analysed the consequences of dumping with remarkable accuracy; he laid stress upon the disorganisation caused in our own markets, which is perhaps the most sinister effect of this new form of economic warfare; but he told us, "You may suffer from dumping; it is most unfortunate for you; but on no account must you take any step to remedy the position with which you are confronted." That is a doctrine to which the late Earl of Oxford, surely a perfect example of the intellectual Free Trader, would never have subscribed. "But," said the right hon. Gentleman to-day, "you must not do anything, because you are trading with the Soviet Government of Russia, and if you ask them to try to stop dumping, you would offend a future potential market." Surely that is a very weak attitude to adopt. It is carrying the policy of surrender, which the right hon. Gentleman has embodied in his tariff truce, to an extreme point. We are not the only country in Europe that is confronted with this dumping in its new form, and other countries have been able to take steps to meet it. France has taken immediate and acute steps to meet it by reviving an old law which everyone thought was obsolete. Could not the Government equally consider whether they could not take steps, or are we alone to endorse the theory that on no account may any action be taken whatever?

10.0 p.m.

The right hon. Gentleman said, "Even still less must you consider any question of tariffs, because we have trade agreements with Germany and other countries, and they would first have to be denounced, and they are of great. value to us." Again, we are not the only country with trade agreements. Germany made a trade agreement with us presumably because it is of benefit to her as well as to us, and it is surely not going to be argued that, because we use a weapon which the rest of the world uses, we shall not be able to enter into trade agreements with other countries. I would suggest that, if we arm ourselves with a tariff weapon even, if we do not use it, we might find ourselves in a better position to negotiate trade treaties than we have been in the past. and not in a worse, and I can see no reason why a Britain which is capable of using, if need be, a tariff weapon should he less well able to negotiate an agreement with other countries than a defenceless Great Britain which has no concession in its power to offer. I do not think anyone who can study the present position of British industry would be prepared to endorse the desire of the President of the Board of Trade for a complete and utter surrender, not only a tariff surrender, but also a surrender to any dumping in which any country in Europe chooses to indulge. It was impossible for any of us to find one gleam of comfort in what the right hon. Gentleman had to tell us to-day. He spoke, it is true, vaguely and hopefully of an ultimate improvement in the cycle of trade. It was as though we were now in the darkest hour before the dawn. We are all convinced of the darkness, but while that Government occupies the Treasury Bench we are a little doubtful about the dawn, and we are afraid even yet, so long as the present Government holds office, that dark hour is likely to be unduly prolonged. He held out one item of constructive policy. The Government have sent a mission to the Far East to try to recover some market in China. I very much fear that that mission when it arrives in China, certainly one of our most important markets, will find that the eagerness of the present Administration to surrender our territorial rights in that part of the world has undermined the British position and the possibilities for British trade far more effectively than their trade mission will be able to restore it. Had this Government not been in such a hurry to entrust to a nationalist Government in China, without any mandate except for a limited area, the concessions where we have had immemorial rights, they might have found a useful base for the work of their trade committee.

I heard an hon. Member opposite complaining that this King's Speech is being treated like all others in being attacked by the Opposition for the sake of attack and defended by the Government supporters, but I do not think that is quite a fair description. I do not think this King's Speech is quite similar to all its predecessors. There has never, in fact, been one so remote from the realities of the present time. There has never been a King's Speech which, for all that is contained in it, might have been so well delivered in another age and under entirely different conditions from those that obtain to-day. While we are faced with industrial difficulty which everyone admits to be on an unprecented scale, we are offered, to console us, a measure of electoral reform. But there is an aspect of this King's Speech and of its remoteness from the present state of the country, which is a warning, not only for the Government but for the House as a whole, for, if indeed we are not able to interpret the sentiments and aspirations of those outside the House, we shall be failing as other Parliamentary Governments have failed in Europe before. I would suggest to the Government that they make a close and careful study of the causes of the collapse of Parliamentary government in Europe since the War. It has not always, or even usually, been because those countries are temperamentally unfitted to work the Parliamentary machine. It has been for a far simpler reason, because Parliament has failed. It failed in Italy because it could not adapt industry or agriculture to post-War conditions.

We have had from the right hon. Gentleman the Member for Darwen (Sir H. Samuel) an example of how bargaining may affect the future of Parliament. As he was treading so delicately on that difficult ground, with a wonderful instinct for subtlety which we all envy him, my mind fled at once to recent conditions in Germany which have brought Parliament to discredit in that country. As I listened to him explaining why, not the merits of this Amendment but the possible consequences of another General Election could not be without their influence on the votes cast to-morrow night, I thought again that, if that is our attitude, the Parliamentary system in this country may suffer as it has done in others. But in truth that is the lesson that Europe has to show, and that we have here a Government in cold storage which is not influenced by the currents of opinion or by the temperature of the country outside day by day, the volume of opinion, not only against them, but against the Parliament that keeps them there, will grow stronger and stronger. As one listened to the speech of the Prime Minister earlier this Session and the speech of the President of the Board of Trade to-night, one could not but be depressed by this strange aloofness in which the Government seem to indulge, an aloofness tinged with superiority which is not always agreeable as though they were sorry we could not be as they are. The Prime Minister told us that he was well pleased—or satisfied I think is the word— with the progress that the Imperial Conference was making, and the President of the Board of Trade this afternoon seemed to he of a similar, if slightly more reticent, opinion.

Of course, there are degrees of satisfaction. If the Prime Minister is satisfied with agreement upon the constitutional issue at the Imperial Conference, he may satisfy himself, but he will neither satisfy public opinion in this country nor public opinion in the Dominions. They and this country are interested in, as the outcome of this Imperial Conference, not the constitutional issue but the economic issue. That is the issue which has to be faced in the coming days, and if the Conference fails upon it, then the Conference will have failed in its chief purpose. It is no use to say, "Oh, we shall settle the constitutional issue and then we shall set up machinery to work out the economic issue." That machinery might well have been ready before the Conference met. Everyone knew perfectly well w hat the Imperial Conference wished to discuss, and it would not have passed the wit of man for the Government to have been ready with the necessary machinery if they really wished to give any voice to the economic desires of the Dominions, if their purpose was not to put off decision to a further date. Such an action will disappoint opinion in this country as surely as it will disappoint opinion in the Dominions.

Our complaint of the attitude of the Government on tariffs is precisely the same. They seem to think that for us, there is some particular virtue in a Tariff, that it is a specific for all ills. It is not the end of all. It is simply a means to an end, and if you choose to ignore that means and incur the responsibility of failure I am certain that in the course of time, probably within the next five years, this country will see the introduction of Protection by one Government or another. What I fear is, that Protection will not come for the home market until such time as the recovery of the world trade and the failure of the recovery of our own trade emphasise beyond all possible doubt its need. We have spent our time since the War chasing a swing door which is always shut in front of us. We shall be practising exactly the same process just now if we fail to try to offer tariffs for the protection of our own market until after it becomes evident that the rest of the world is enjoying what we cannot hope to touch.

Hon. Members opposite profess to believe that the object which lies behind our tariff policy is a reduction in the level of wages in this country. Of course, such a charge is easy to insinuate, but it is much harder to prove. I would reply without hesitation that not only is that far from our thoughts, but that unless now or in the near future you are prepared to adopt some form of Protection for our own level of wages in this country, then without the slightest doubt you will see a reduction in the standard of living in this country. We have in the last nine months seen a steady increase in the number of unemployed and, as everybody knows, the moment a man becomes permanently unemployed the standard of life decreases and the curve becomes stronger as time goes on. If we are right in our judgment as to the extent that that deterioration has taken place, the process will become much sharper this winter, and will continue until inevitably the standard of living is forced down. The steps, if they are to be taken, must be taken now in order that they shall protect the standard of living of those who are employed and raise it to those who are not. It is not, of course, true that a tariff is necessarily intrinsically evil any more than it is true that a tariff is necessarily a specific.

As I listened to the right hon. Gentleman the Member for Darwen (Sir H. Samuel) I thought that he and not the hon. Member for Smethwick (Sir O. Mosley) or the hon. Member for Bridgeton ought to be supporting the Chancellor of the Exchequer. He expressed with remarkable courage the very true doctrine of the Victorian era. He should have been sitting beside the Chancellor of the Exchequer, the two of them together crinkling their crinolines, and we should like to have seen them drive away to-night in a growler escorted by gentlemen in mutton-chop whiskers mounted on tricycles. But to-day, in present conditions, there cannot be many in this House who are prepared to endorse that point of view. Hon. Members opposite are sceptical still lest in proposing Protection for the home markets dire consequences should result to wage earners in this country. But safeguards can be taken, have been taken and are being taken to-day, to prevent anything of that kind. Hon. Members have only to look to the procedure in force in Canada to-day to see what in that direction can be done, and believe me when I say without hesitation, I should refuse to support any Government that introduced tariff measures without ensuring safeguards for the wages of those engaged in British industry. Hon. Members will be faced with the alternative either of seeing the standard of living coming down or taking some measures to improve it, which the Government have not. We have proposed our measures and we believe that we can make them effective in the interests of the wage earners of this country as well as of industry itself.

I would like to deal for one moment with a remark made by the hon. Member for Bridgeton and by the hon. Member, I think, for Westhoughton (Mr. Rhys Davies) earlier in this debate. They both attacked what they call luxury spending, and they seem to think through some strange mental process that we on these benches were responsible for that luxury spending. I do not quite know why. It has always seemed to me that one of the chief merits of the financial policy of the right hon. Gentleman the Member for Epping (Mr. Churchill) was that while he was Chancellor of the Exchequer he did endeavour to draw distinction between luxuries and non-luxuries and to raise some part of his revenue by means of luxury taxation. It is a form of taxation which should be pursued. I think that the Government have gone back on all that. A duty on an American motor car is a duty on a luxury. The Government arrange to get rid of that. They are anxious that the user of American motor cars should not be unduly penalised. Does the hon. Gentleman who is going to reply disprove that statement of the Government? If we place duties on American gramophones are we not placing a duty on luxury spending? [Interruption.] If a gramophone is not a luxury, I congratulate the right hon. Gentleman on his financial status. If neither a gramophone nor a motor car is a luxury, well, we shall be reduced to aeroplanes in the present state of the Treasury bench.

For our part we are quite prepared to see steps taken to penalise and tax luxury spending. It certainly does not lie in the mouths of supporters of the present Government to blame us for luxury spending. The spending of money on luxuries will always take place in one form or another—it even takes place in Russia to-day, where anyone would think luxury would be impossible—but you can, as far as lies in your power, tax luxuries. How disappointed the electorate will be when they read the speech that has been made by the President of the Board of Trade to-day. I am confident that many electors at the General Election cast their votes because they thought that the present Government would approach these problems with a fresh mind. They thought, with however little justification, that the late Ministry, at the end of five years, was tired. That is one of the psychological causes which brings about demands for change from time to time. Certainly this Government is infinitely staler than its predecessor or any other Government that has sat in this House for a generation. They have no fresh ideas, no fresh outlook, no fresh proposals to bring before the electorate.

I listened with interest to the hon. Member for Bridgeton (Mr. Maxton) when he was explaining specifically what he thought of the present administration, and I was reminded of the legend, which is probably familiar to many Members of this House and will be familiar to the hon. Member for Bridgeton of the dialogue between St. Columba and St. Oran. St. Oran was dead and St. Columba, the faithful, was engaged in burying him. Unexpectedly, St. Oran came to life and St. Columba, the faithful, was anxious to hear what St. Oran had to say of his experience in the other world. St. Oran said, in one sentence: "Hell is not what we have been told to believe." Thereupon, St. Columba hurriedly exclaimed: "Earth for the mouth of Oran, more earth!" The Government will say: "Earth for the hon. Member for Bridgeton, more earth." I am afraid that it will require more than earth to stop the mouths of the critics of the present administration. One thing, however, might stop criticism and that would be action, but action is precisely what the Government are incapable of.

The Minister of Agriculture has said, frankly enough: "We are always asked, 'Why do not the Treasury Bench do something.' What is the good saying Do something ' unless you tell us what we have to do." That is an attitude of mind which is perfectly intelligible from the present Treasury bench but it is not particularly inspiring for those who would support them either in this House or outside. The right hon. Gentleman made it quite plain in his speech that he had nothing in his mind which he could do to assist the industry of agriculture, with which lie is concerned. He knows quite well, as does everyone in this House, that unless you deal at once with the position in the wheat growing areas you will do nothing effective to restore the prosperity of agriculture. Various palliatives have been tried. The relief of rates has been tried, and yet anyone who knows the arable areas or the market gardening areas knows the condition into which the industry of agriculture is being thrown owing to the unproductive nature of wheat growing. We complain of the Government's lack of policy to agriculture. The Minister of Agriculture has had nothing to say in regard to an agricultural policy and I do not think that the hon. Member who is to reply for the Government to-night will have anything more to say about an agricultural policy.

The President of the Board of Trade said that the fault of the Government was that they did not advertise their goods as they ought to do. Allow me to assure him that that is not our indictment of the present administration. It is not that they do not advertise their goods but that they do not deliver the goods which they advertise. That is precisely the indictment which in due course will be used against them in the country. Then or sooner the Government will be driven to adopt the policy in some form or other which my right hon. Friend the Member for Edgbaston outlined this afternoon. Finally, may I say to the party below the Gangway in all humility; the opportunity to-morrow is there but their decision is one in which we, of course, would on no account intervene. I should hate to have any sort of responsibility for the Liberal conscience, and I would only say that the vote which they cast to-morrow will be cast in the eyes of the country on the merits of this Amendment, and it is on the merits alone that we shall ask the judgment of this House to-morrow evening.

The CHANCELLOR of the DUCHY of LANCASTER (Mr. Attlee)

I do not intend this evening to rake over what I consider to be the rather dusty ashes of the old Free Trade-Protection con- troversy, but I should like to remind the hon. and gallant Member for Warwick and Leamington (Captain Eden) that if it is true that Freetraders should go home in horse-driven vehicles then he and his friends should go home in sedan chairs with Flambeaux. There is really nothing very novel in this protectionist policy. After all, the Corn Laws preceeded Cobdenism. I agree with what has been said in many quarters of the House, that the conditions to-day demand something very different from a mere controversy either on political grounds or on purely abstract grounds. Two notes have been running through the speeches of hon. Members opposite. First there has been the note of Protection, sung in various keys, some rather subdued and some rather loud with varying inflections. The second note from the benches opposite has been this: we have had a continual plea for the Government to interfere in the affairs of industry. The hon. and gallant Member for Warwick and Leamington perhaps does not remember the old days of politics before the War in which this note of horror was always struck, that when there was a Socialist Government in this country it would be constantly interfering in industry. Now we have Conservative politicians and all the industrialists imploring us to interfere with industry. A remarkable change: and what does it mean? It simply means that hon. Members opposite and leaders of industry in the country generally recognise that their capitalist system has failed. It is a somewhat new recognition from hon. Members opposite.

I was interested to listen to the vehement indictment against the late Government by some of their erstwhile docile supporters. There was the hon. Member for Aberdeen East (Mr. Boothby) who a short time ago we knew as a docile Parliamentary Private Secretary sitting behind his chief. He did a kind of war dance on the benches opposite and his indictment was varied and extensive. What happened during the previous five or six years when we were asking what was happening in regard to industry? A great industry was in distress during those years, the coal industry, and hon. Members opposite tried all kinds of methods. They tried the dole, the reduction of wages, and when we asked "what about the coal industry," they said leave it to the free play of supply and demand. It is only last Session that we took in hand the organisation of the coal industry. Hon. Members seemed to object then; they seemed to think that the industry should be left to private enterprise and to the free play of supply and demand. They probably realised that the coal industry is one of the industries that could not benefit by a tariff. Precisely the industries in this country which are most hardly hit are those which hon. Members know perfectly well they cannot assist with a tariff. Does any hon. Member suggest seriously that he could help the cotton industry by a tariff? Is it suggested that the coal industry could be helped with a tariff? As a matter of fact we find that of the total number of unemployed to-day, 874,000 are mainly dependent on our export trade. That is a fact not to be forgotten.

The interesting thing about this debate is that many ideas which have apparently been simmering on the back benches opposite have now been brought forward because the situation has changed within the last twelve months. Hon. Members are now bringing forward all kinds of evidences of the failure of the capitalist system—the failures which they do not seem to 'have noticed before, but which have been brought to their notice by the fact that the number of unemployed has increased enormously. They all recognise that that increase is one which would have occurred if a Conservative Government had been in power. [HON. MEMBERS: "No!"] Some of them do not, but those who speak with authority on finance know that the Conservative Government could not have prevented the currency trouble; they know that we could not have prevented the world fall in commodity prices. What we have to face to-day is an enormous emergency, and hon. Members recognise quite clearly that that is not due to this Government. But that is only one part of our unemployment problem. We have worldwide dislocation, low prices and so forth, and we see the effects of these world causes in this country and in Germany and in the United States. It is quite clear that with regard to those world causes a tariff is not going to be a cure straight away. Apart from world causes, there is our own position here, and it is to that we must direct attention—the actual position of industry in this country. We are living in a very difficult time. We had to begin with an industrial revolution going on, a change in the nature of our industry, a change in the localisation of our industry. We have the change in our markets, and we have what has been alluded to very often, a world movement towards economic nationalism. I quite agree that that has raised a very difficult problem for any Government to deal with. It is a matter that has to be dealt with in a realistic way. When we look at the state of industry to-day we find that what we are really suffering from is a lack of adaptation to new conditions. That point was very well made by the right hon. Member for Sevenoaks (Sir H. Young). We have to take into account changing markets and we have to change our kind production. That is precisely one of the things to which we have been drawing attention constantly year in and year out, and it has always been met by the industrialists with the cry, "Mind your own business; we understand our own business very well." I am glad to find that there is not now quite as much complacency as there used to be on the benches opposite.

I noticed in several of the speeches from the other side a recognition of the fact that you have to reorganise British industry, and I propose to give one or two points in connection with that matter. They are points with which the Government intend to deal. The first is our failure to market our goods abroad. I have been amazed in discussions with representatives from overseas to learn of our extraordinary failures in organising our oversea, market. To take one instance. An hon. Member was speaking about the steel trade, and he said that if the Americans would only take off the tariff the steel producers here could compete there quite easily, but at present they could not get in because of the tariff. I am told by all authorities that our steel trade is not organised as it should be and that, on the other hand, our competitors are organised. The two big United States steel undertakings, although they compete with each other in the home market, unite in the foreign market.

If hon. Members look at the way in which France and Belgium reorganised their metal industries after the War they will see that the units of those industries were organised practically as national regiments fighting in the field. With few exceptions, like the chemical industry, which is, of course, international and not national, almost all our trades are in an unorganised condition. Only the other day one of our trade representatives was speaking to me in reference to one small branch of the textile trade in one single city. I said that I supposed that the trade was quite well organised, but it turned out that there were 16 competing agents there, and cases like that can be repeated again and again. That is one of our biggest failures; and representatives from overseas will tell hon. Members that we have failed to take advantage of the preference which they give, because of our bad selling and our failure to adapt ourselves to the market.

That is one of the indictments against British industrial organisation. There is, secondly, the failure of our industries to adapt themselves to new conditions and to organise production at home. I do not want to weary the House again with the story of the attempts to organise the coal trade. We had the other evening the pitiable story of the difficulties of trying to organise the cotton industry and the same thing is found in the wool textile industry. Industry after industry we find to be unorganised. I am not saying that organisation is not taking place. It is, but that organisation is taking place without any adequate national control, and to my mind what this Government and this country have to put in hand is the reorganisation of our industries on the productive side and on the selling side and in dealing with what I shall call the rationalisation of our economic life.

We have put before us a suggested method of dealing with the troubles of industry, the proposal of a tariff. Well, a tariff does not effect what is necessary in the way of reorganisation. The hon. and gallant Member for Warwick and Leamington has travelled a long way from the position of the old Tariff Reformers, because he admits that you must have safeguards even for Safeguarding. That is a great advance. Let me give the House a little story told me Dot long ago by an industrialist who was called in to overhaul certain businesses with a view to amalgamation and reorganisation. With great difficulty he got all the firms concerned to agree to a plan, and he was just about to put it into force when a Safeguarding Duty was passed. Immediately all those employers wanted to go back to their old disorganisation, and he had the greatest difficulty in getting them to combine. That is the trouble with regard to the tariff. The tariff is not something behind which people Organise.

As a matter of fact, one of the reasons for the slowness of adaptation in this country has 'been the existence of a Conservative party with a tariff policy. You will find over and over again that they will not take the trouble to organise because they hope it is going to be done for them. It is a very common answer— I have heard it from some of the greatest men in industry—that if their trade is flourishing, there is no need to organise. and if their trade is bad, they say, "We cannot organise now." If a trade is getting worse, they say, "Do not do anything to make it worse," and when they are at the bottom they will not do anything but say, "Get us out of our trouble." That is the attitude of far too many industries here to-day, and it accounts for a good deal of the trouble of which we hear. We are not prepared to hand out doles to industry.

The right hon. Member for Sevenoaks is right in saying that the adaptation of our industries is hindered by Government action, and not least. I would add, by Government action of the party opposite, because the party opposite has carried on a policy of doles to industry without exacting any conditions of reconstruction in return. The latest one, of which I do not know why they are so proud, is the De-rating Act, which was simply a dole applied without conditions, without any consideration as to whether this or that part of industry was of use to the country, but was simply handed over. It is absolutely wasted, because doles and Protection are absolutely wasted unless you have got organisation too.

The next point which I make as to why your tariff policy is no use is because what we have to face to-day is a thorough disorganisation of industry.

Attention has been drawn already to-day to the steadily increasing spread between wholesale and retail prices, and I think few observers would deny that to-day there is far too much going to mere retailers. Wholesale prices fell from 100 in 1924 to 74 in 1930, and in the same period retail prices fell from 100 to 84. From 1924 to the present time you have had an increase of 400,000 employés in the distributive trades. That is not due to good organisation; it is due to bad organisation, and what we say on these benches is that the full force of the Government should be used and every possible influence brought to bear to reorganise industry on a basis of efficiency, on a basis of what are the true interests of the community. The tariff—and I am not a particular fanatic who thinks that tariffs come from hell and Free Trade from heaven—is, after all, only a method, but it is a singularly ineffective method, because you do not obtain what we on these benches claim that we should obtain, and that is that where the State is called in to assist industry it should exact conditions in the interests of the community.

I said there had been a steady system of doles to industry, and very largely those doles are frittered away. The worst example was the dole given to the coal industry which was spent in cutthroat competition, but there has been a different line of development, and that is the deliberate reconstruction of industry. The first instance is a Conservative one, but I think certainly it is a very sound one, and that was the Electricity Act. The second is our own Coal Mines Act, which is work that ought to have been done 10 years before. Another one is the Transport Act. Last Session was largely taken up with fighting with great difficulty to reorganise an industry which, by every kind of examination, had come to need reorganisation; and yet there are hon. Members who complain that this House works too slowly. The people who say that are precisely the people who hamper it most by their loquacious methods. That applies to both sides of the House.

I will carry on from that to the policy of the Government as shown in the King's Speech. We have there proposals in regard to agriculture. Agriculture is the industry of all industries that, in the present condition of world trade and in the present circumstances in this country, we ought to develop, and of all industries, agriculture is the least well organised, taking the industry as a whole. There is not any industry in which the middleman comes to such an extent between the producer and the consumer. You can give derating to agriculture, or doles to agriculture, you can give various advantages to agriculture, but as long as it is unorganised, they will be swallowed up by the interests that live on agriculture. The first condition for doing anything for agriculture is to give the employers and workers in the industry the power of organising themselves in order that they may market their own goods. That is the clear line of policy that we have laid down. It is not the only part of our agricultural policy, but it is one which I wish to stress because it is a line on which this Government is proceeding. We know quite well that we have not a majority for full Socialist measures in this House. We know that we were warned at the beginning of the Session that we should not be allowed to introduce Socialist legislation. In the meantime, we intend to use the resources of Government to make industry organise itself. We want industry to organise itself, and this Government is prepared to give every assistance to industry to build up, provided we have conditions in the interests of the community to protect it from exploitation, and conditions which will provide for the efficient carrying on of industry.

We have not set out in specific detail every kind of action that can be taken by industry, but we are proceeding to do everything we can to develop the export trade. The Secretary for Overseas Trade has already taken considerable action in regard to getting together the employers in particular trades to try and get a better sale for British goods abroad. That is not a thing that can be done only by the Government. The Government can only act, as long as industry is in private hands, hand in hand with industrialists, and I should like to see a little more assistance from industrialists in that matter. A good deal of our trouble to-day is due to a defeatist spirit, and that spirit is largely bound up with the tariff campaign. We have to look facts in the face. We could easily run a campaign, if we liked, on the utter failure of the capitalists to deliver the goods at the present time. We could preach a remarkable sermon on the text that the world is so badly organised that, with greater powers of production than ever before, we yet have millions of people unemployed. But I do not think that what the world requires at the moment are sermons on despondency.

I would like to give the party opposite a concrete example of how assistance can be rendered at once. I am reminded of those stories in the newspapers which are printed in instalments. It is always said "You can start now." I am going to show them how they can start now to help British agriculture. It is a method which requires no legislation. Certain hon. Members opposite are introducing a Bill to provide that beer should be brewed only of British ingredients. I remember that the Leader of the Opposition once promised a tax on malting barley, but that it did not materialise. I have never yet met a brewer or a distiller who was not a Conservative, an Imperialist and a Protectionist. The industries of brewing and distilling are highly organised. Why cannot they buy only British barley? Why cannot they do it now? After all the people who buy so many of these foreign goods are not Labour people, but those who vote for Protection. If you look at the masses of imported goods you will find plenty of stuff which Labour people do not buy, which they cannot afford to buy. When it is bought it is bought by Conservatives. I suggest that we should hear a little less preaching of Protection and Imperial Free Trade in this House, and see a little more action on the part of individuals. It is strange to find a Socialist Government pleading for private enterprise to come in and help us, and the Conservatives, on the other side, pleading for Government assistance. The leader of the brewing industry, the right hon. and gallant Member for Burton (Colonel Gretton), 'has been taking most active steps in the cause of Protection and Imperial Preference, even to the point of criticising his own leader, and I am sure that we shall at once see a great improvement in the price of home grown malting barley.

The Government intend, as they have said in the King's Speech, to pursue actively their work for trade and industry. There may be occasions when it is necessary to introduce legislation, but when we are criticised for not having jumped in at once when the cotton report, for example was published and introduced legislation telling' the cotton trade that it must do this, that and the other, it ought to be remembered that if we had done so we should have been accused of having flouted that trade and not given it a chance to reform. I always believe in giving people a chance to repent, but I think there should be a time limit. The industries of this country must take steps to reform themselves, and in time. Our policy with regard to industry is perfectly clear. We do not believe in the capitalist system. We feel that it has failed to deliver the goods, and we should like to see it ended, but the country has not yet said that we shall end it. We have no mandate for that.

Mr. MAXTON

You have not got a mandate for anything else.

Mr. ATTLEE

I hoped I should get a remark from my hon. Friend the Member for Bridgeton (Mr. Maxton). It brings me to my next point. What we have to do is to take this "sorry scheme of thing" and mould it nearer to our heart's desire without shattering it to pieces. The hon. Member for Bridgeton is asking us to shatter it to bits in the economic condition of the country at this time, and that is a thing you cannot do. What we have to do is to carry on the Government of the country in an exceedingly difficult position. There is intense depression in world trade, and it is very difficult to carry on a country in a world economic crisis. In these very difficult economic conditions, the country has got to carry on its economic life and what we, as a Government, intend to do is to assist industry by every possible means —not to throw doles to industry but to use the powers of the Government to help industry, to reform industry and to insist that industry shall be carried on in conditions which are going to make for the good of the community. It may be said that that is an interim policy. This country has suffered a good deal from interim policies. The party opposite were in power for five years, and they believed in some form of Protection, but for political purposes that policy was put into cold storage. We have had two short periods of office and we have not had a mandate for a full Socialist policy. That has led, perhaps on both sides, to the idea that things can be left to go on without direction. I believe the thing vitally needed in our economic life is direction.

I will say a word about rationalisation. It has been used as a blessed word, but it is only a new name for an old thing. We must recognise that we are in the middle of an industrial revolution. Industries are changing—changing in their nature, extent and location, and at the present moment you have the danger of industries being practically left derelict through economic forces. That is what I would call the repercussion of rationalisation. It is almost certain, whatever revolutionary economic movement you have, when you really reorganise some of the great trades, like the textile trade, you will have certain surplus factories and workmen. That is the economic change we are going through to-day, and it can be compared with the change which took place in the great industrial revolution 100 years ago. The great tragedy of that time was that the nature of the change was not realised, and direction over national life was largely surrendered to blind economic forces. I think we have to avoid that to-day, and it needs the work, not of one or two men, but of the whole forces of the Government and everyone else being used to ensure that the transition shall be made in a way that is not going to cause intense suffering and loss to the country. That is the policy of the Government which we have embodied in the King's Speech and which we shall carry out, with greater powers if they are needed, but which it is impossible to define at full length here now. That policy rests on the broad principle of regularisation and support for industry in the interests of the whole community.

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

Debate to be resumed To-morrow.

The remaining Orders were read, and postponed.