DEBATE ON THE ADDRESS.

HC Deb 29 October 1930 vol 244 cc45-174

[SECOND 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 again proposed.

Mr. LLOYD GEORGE

I should like to associate myself with the very warm tributes paid by the Leader of the Opposition and the Prime Minister to those who had the very difficult task of moving and seconding this Motion. It was done with exceptional success, and there was a quality which, I think, made the House feel that they had heard something which was equal to anything that had ever been listened to in the past on these occasions, and, in some respects, far above the average. I should also like to associate myself with the words which fell from the Prime Minister and the Leader of the House with regard to the tragedy of the great airship. It was a tragedy that moved very deeply the public imagination, not merely by its magnitude, but by the character of the circumstances and by the names of those who fell victims on that occasion. I had known Lord Thomson and Sir Sefton Brancker for a great many years. I met both of them in the course of the Great War. I am not sure that my association with Lord Thomson was not longer even than that of the Prime Minister. I remember perfectly well, when he was in Rumania as military attaché—I was at the War Office at the time—the report which he sent to us then with regard to the condition of the armaments of Rumania. Had his advice been accepted by the whole of the Allies, on the information which he gave us, which was very sound and thorough although very ruthless, a very considerable tragedy might have been averted. I had the very highest opinion of his capacity. Under an exterior of gaiety and lightheartedness there was a great quality of mind and will, and I can well understand not merely for public but for personal reasons, because he was such a very attractive personality, that the Prime Minister will feel his loss from the point of view of companionship. I also condole with the Prime Minister upon the loss of an exceedingly able man, with a very clear vision.

Now I come to examine a few of the questions referred to in the King's Speech. I will say a few words in regard to Palestine, but I will not take up much time because clearly that is a matter which ought to be debated in this House. There is a good deal that ought to be cleared up. The Prime Minister says that there is no departure in policy. If there is no departure in policy, it is very remarkable that the whole of the Jews of the world take a different view. Those who are responsible for the great movement, one of the most remarkable movements of modern times, for the colonisation of parts of Palestine, the Leader of the Opposition, the right hon. Gentleman the late Foreign Secretary, the late Colonial Secretary and a man like General Smuts, who is completely removed from our party controversies, all take the view that there has been a very serious departure of policy, and I think it may have very serious consequences unless the whole situation is cleared up more satisfactorily. I do not know if the Government realise that in their policy there is a certain commitment to the Arabs. I do not know whether they have even thought out how they are prepared to materialise that commitment. If there is any meaning in it that we are to assist financially the development of Palestine by means of the surplus Arab population, how is that money to be raised? Is it to be raised on the credit of Palestine? What is the state of that credit? Are we to guarantee it? There are all sorts of implications in this policy, which I can hardly think the Government have quite thought out before they committed themselves to that declaration. One thing is clear and that is that it cannot be left where it is. That it will be the subject of international discussion, I have no doubt. Certainly there ought to be a full opportunity of debate in the House on this subject and a clear statement by the Government of what is intended.

In regard to the Imperial Conference, I am just as much in the dark as anybody else as to what is taking place there. I am not complaining. We can only see from the Press what is and what is not happening, but I am making no complaint of that. These conferences take a long time before they reach any conclusion, and it is important that they should not be rushed. There are very great issues which have been raised, partly constitutional. It is right, constitutionally, that they should be raised. Then there are very important economic issues, which may have a great effect upon the future relations of the Empire. You cannot settle these things immediately or without a good deal of reflection and discussion. I think the Leader of the Opposition is the last man who has a right to complain of the attitude taken by the Prime Minister. Yesterday the Prime Minister said that he would have no food taxes. The Leader of the Opposition has no right to complain of that, because he himself said, in May of this year: I am not, so long as I lead this Party, going to ask for a free hand in regard to food at the General Election. There will be no food taxes at the General Election. That was said in May of this year. Therefore, the right hon. Gentleman has no right to complain that the Prime Minister stands to-day exactly where he stood in May.

Commander Sir BOLTON EYR ES MONSELL

There has been the Imperial Conference since then.

Mr. LLOYD GEORGE

Everybody knew perfectly well what the position of the Dominions was in regard to that. It is true that since then the Leader of the Opposition has run away some distance from that declaration, but he has no right to expect everyone else to run away the moment he bolts. Therefore, I do not think that there is any real grievance against the Prime Minister or those associated with him in regard to the Imperial Conference in that matter. I understand that the right hon. Gentleman suggested a quota. I have only seen what appears in the newspapers, but so far as I can see something of the same sort has been suggested by Ministers. One thing is quite clear. Those who represent the Dominions have stated in public that so far as they are concerned they have no desire for a quota, from which I rather gather that a suggestion of that kind has been made. In every respect there seems to have been a complete identity of opinion and purpose between the Leader of the Opposition and the Prime Minister in the policies which they have put forward. There has been what he calls a kissing of each other and the osculation has resounded throughout the Empire.

I come to the legislation in the King's Speech. If you look at the menu there is a good deal of variety, intended for every taste. You cannot judge the quality of the dishes until you see them and see what the ingredients are. So far as a good many of them are concerned there seems to be a lack of vitamins. With regard to the Trade Disputes Bill, I was one of those in 1927 who voted against the Bill introduced by the late Government. That did not mean that I was opposed to every Clause of the Bill. In my judgment some of the Clauses in the Bill were just and have been justified by the event. I do not know what the new Bill is going to be. I have not seen it. I do not know whether it is going to be a mere repeal or whether there is going to be an Amendment of the Act. It would be idle for me to express an opinion upon a Bill which I have not seen. With regard to some of the Clauses of the Act of 1927, I say that there is no evidence which would justify their repeal. The Prime Minister said that he proposes to introduce the Bill in the interests of peace. I can see no evidence so far as some of those Clauses are concerned of any disturbance caused by them or of any demand for their repeal. I represent a very considerable number of trade unionists, who gave me very sound support at the last election, and they never even sought to obtain from me a pledge that any part of that Act should be repealed. Therefore, I am for "wait and see" until the Bill appears, and we can find out what it is.

I am going to talk about a subject which interests hon. Members behind me and which has been a source of innocent merriment to both the other parties. I refer to electoral reform. I am going to talk quite frankly about that. It seems to be regarded as a great joke. I want to know why. I will give a few figures. At the last election, the Labour party, polled 8,397,000, and they had 288 members. That is one member for every 29,000 votes. The Conservatives polled 8,664,000 votes, which is about 300,000 more, and they had 260 members, or one member for every 34,000 votes. The Liberal party polled 5,300,000 votes, and they have one member for every 90,000 votes cast. What fun! What a joke! Every decent and right-minded man must realise that there is a constitutional wrong which ought to be remedied. I will put it this way. Suppose the situation were transposed [HON. MEMBERS: "It was!"] Very well, if it was have not the faintest doubt that hon. Members opposite were strongly in favour of reform. Suppose the situation were transposed and that Labour had one member for every 90,000 votes. They would have 93 members in this House instead of 288; and, if the Conservatives had one member for every 90,000 votes, as we have, they would have 96 members. If that had happened, I wonder whether they would have seen the point of the joke? Would it have sounded quite so humorous? Grievances of people we do not like are always amusing, especially if we profit by them ourselves.

I am appealing here for a party which is not a small party if it comes to the number of votes cast at the last General Election, but small because the luck of the tables was against us, and I am appealing to the British House of Commons for fair play and justice and for fair constitutional treatment. I am perfectly certain that in the end the appeal we make will not be made in vain. T do not know quite what the Prime Minister meant by his observation hut it seemed to be not, so much to right the wrongs of others as to increase the advantage which he has already. There is a good deal in what he said which provokes a retort, but at the present moment T will postpone it. I appeal to the Government and to the Labour party to do what is right and fair. In the long run they will find it to their own advantage. Electioneering conditions, especially with the electorate we have now, change very rapidly, and the party which may he going in on the flood tide may find it very difficult not to get grounded on the ebb tide. They will forgive my saying so, but Govern- ments generally in the third year find things going badly for them. If hon. Members will look at the history of Government they will find that generally the reaction really begins in most cases about the third year. I remember saying to my friend the late Mr. Bonar Law "We have to make the most of the first two years, because when the third year comes there will be the usual reaction against the Government"—and it came. Hon. Members opposite, I think, will agree with me that there has never been a Government where the reaction has come so quickly, and I very respectfully advise them not to base their figures too much on the last election or on their electioneering ideas or on their notions as to what the electoral law ought to be. They may find that the very proposals we are putting forward are the only proposals which may save them from disaster at the next election.

I must pass on rapidly, and now I come to unemployment insurance. T listened almost with a blush—I am not sure that my right hon. Friend the Member for Epping (Mr. Churchill) did not join me—to the glowing tribute paid by the Prime Minister to what the Unemployment Insurance Fund has done in saving the social structure and in saving so many millions from destitution and wretchedness. He and I collaborated in the initiation of that scheme, and I was responsible for carrying it through to the dimensions to which it has now attained, although I am glad to say I am not responsible for a good many of the amendments which have since been introduced. At any rate, the Prime Minister paid us this unconscious tribute, naturally without mentioning the names of the authors. I never quite expect that from him. There has been a three-party conference on the question of unemployment insurance. There was an invitation from the Prime Minister to the other two parties to associate themselves with him and representatives of the Government in an examination of the problem. It is acknowledged that the representation of the Conservative party and of the party with which I am associated was a, very able representation. They worked very hard right through the Recess, but without a word of warning, without waiting for the report, the Government commit themselves to a policy. I listened to the Prime Minister yesterday, and I should have drawn the conclusion, had I not known that it was contrary to the fact, that this Committee had more or less recommended a commission. The Prime Minister did not say so in so many words, but he said it was the result of this committee, and the implication was that the committee were in favour of it. As a matter of fact, the majority of the committee are opposed to it. The representatives of the Conservative party and the representatives of the Liberal party are opposed to a commission. They do not think that is the way to deal with it. It is important that the House should know this.

It is a real misfortune that the Government, without waiting for the report which I believe is ready so far as the Conservative Members are concerned—ours at any rate was ready to be sent in, and I believe has been sent in—and without considering this report should have committed themselves to this policy. What does it mean? It means that the Chancellor of the Exchequer, or whoever may represent the Labour Department, will come and ask for another £10,000,000 of money and then a commission will be appointed to inquire into all the grievances and abuses—I do not like to use a word against which the Prime Minister protested, but I know of no other. Money is paid at the present moment where there is no real urgent need and which could be so much better spent in the interests of the unemployed themselves. We are to have a commission. We know how long commissions take with the best will in the world: and it is no use pretending. It is not in the interests of the Government to get an early report, because they have very considerable difficulties, which I well understand. It is no use saying that there are not abuses when you have cases, well authenticated, given by the Liverpool Docks, the London Docks, the Bristol Docks and others, of men earning in the course of a fortnight anything un to £9 and being able to receive another £1 or 21s. from the Unemployment Fund, and thus in the course of a fortnight being in receipt of £5 a week. That is an abuse. The Prime Minister says that because it is a legal abuse it is not an abuse.

Mr. W. THORNE

You ought to give cases to prove that.

Mr. LLOYD GEORGE

I can give cases and I shall certainly do so; we shall certainly be able to do so. I was under the impression that the Committee was investigating these things. As a matter of fact, these eases are known to the Committee. If they are legal abuses they ought to be set right before the Government begin to add another £10,000,000 to the burden of the Fund. It is really no use talking about that as if it were a loan. It is as much part of the annual expenditure of this country as any other grant, because you are not going to get it back. Therefore, it is an addition to the burden of this country, and before the Government add to that burden we ought to have a definite and clear statement from them as to what steps they are proposing to take to set the matter right. The real remedy is to put the Fund on a solvent and independent basis, and then to deal with the surplus over and above that by means that will provide maintenance—

Mr. McSHANE

Tell us how.

Mr. LLOYD GEORGE

That is exactly what the Committee had to consider. Instead of allowing the Committee to come to a definite conclusion on the subject, the Government have committed themselves already. I am not going to say here what has already been put into a very elaborate report to the Minister of Labour, but there it is; it has been submitted to her with recommendations. I beg the Government to reconsider their position before they come to the House and ask for a loan without any notion in the world as to how that matter is to be put right.

I come to the measures for dealing with unemployment. I have looked at the King's Speech, and I say at once that I have no idea what the measures are—none. There is something about agriculture; there is something about town planning; there is something about site values. The import once of site values is in the provision of means for the purpose of carrying out these enterprises, and therefore I put it in as an essential part of the schemes which will help unemployment. All these things depend on the magnitude, the scale of the enterprise, and the finance. If it is merely a sort of series of amending and titivating Bills it will have no effect at all. Until we know what the actual proposals are we are not in a position to say whether there is any contribution to the solving of the problem of unemployment in that programme.

If the Government intended big things they have been singularly unfortunate in the way in which they have expressed their intention, because it looks really rather too much like last Session when nothing practically was done, although the Government had an opportunity. I have looked at the way in which the promise is made. It is very rarely that a Government exceeds its promise. The proposals look to me rather puny, pale and rickety, all good in their way, but there is none of the full-blooded and robust statement which we had in the programme before the General Election; there are no red corpuscles in the blood, and I am afraid that when the Government go it will be said that they died of pernicious anæmia. I am hoping for the best, but I am apprehensive of the worst. Everything depends upon the character of these measures. The Minister of Agriculture at any rate had a good training under a Liberal Government, and I am hopeful that when he comes forward he will not come with little measures that will settle only hundreds or even thousands upon the land, but will grapple with the thing on a very big scale. If he does that no one will be better pleased than myself, and no one will give him more hearty support than myself and my Liberal friends.

There is one appeal that I would make to the Government, and that is that they should give greater latitude to the House of Commons in the examination of these Measures. They are a minority Government, and therefore the only way in which they can govern effectively is by throwing themselves on the House of Commons, by restoring the power of the House. If every suggestion that is put forward is to be met not merely by resistance but by a declaration that the Government regard it as a vote of want of confidence, that is not playing quite fairly with the House. By the method I have suggested the Government will get a better Measure, and they themselves will be better satisfied with it in the end; it will emancipate them from the shackles of officialdom, which they are enduring with considerable fortitude. It would be an invaluable method of dealing with these projects.

The Minister of Agriculture and the Minister of Health are to bring in Bills. They will be either great Bills or very small Bills. What I ask is that the Government and the Ministers concerned shall put the Bills on the Table of the House and say, "Help us to fashion and shape these Bills." If they do that they will get Measures of which they will be proud, Measures which will render very great service to the particular industries and causes of which they are officially in charge, and will ultimately redound to the advantage of the Ministry and of the party behind it. I am going to make a special appeal that we shall not be confronted as we were last. year whenever we brought forward any suggestion, by this sort of statement: "You are trying to defeat the Government. You are trying to wreck this Labour Government and wreck this Bill." After all, we have experience—a great many of us—and, if we make a contribution, we want that contribution to be considered upon its merits by the House as a whole and so long as it does not completely wreck the Measure and turn it inside out, then, in that case, the Government ought to welcome every assistance intended for improving and strengthening their Bills.

I was going to appeal to the Prime Minister—but he is not within reach of my voice—that he should put a little more drive into his team. The situation is a very serious one. There is not a week in which the numbers of the unemployed do not go up. What is still more serious, the numbers of those completely unemployed are going up. That is the most serious aspect, because it means that all this half-time business is ending in complete unemployment. I am constantly making inquiries from business men, and they all talk to me in very, very gloomy tones in regard to the prospect, each with reference to his own trade. I do not care how capable individual Ministers are, and I do not want to express an opinion upon their capacity—I do not care how capable they may be unless there is real drive at the back of them. Up to the present—I want to talk quite frankly—the Prime Minister does not seem to have given the necessary drive for the one thing that put him into power. After all, he was put into power to deal with this great national emergency, and he was expected to deal with it. I do not say that he has not worked hard, but he has always worked hard at other things. He seems to be too busy to do his job.

I thought it was a very great mistake last year that he should have given the whole of his time to the Naval Conference when this thing was waiting for him. I say so now quite frankly. I remember the Naval Conference of 1921 which was the first of its kind and therefore very important; a Naval Conference that ended in a very much larger reduction of naval armaments than the Conference of last year; a Naval Conference signed by five Powers which brought about a substantial reduction in the armaments of the five—infinitely greater than that achieved last year. That Conference was conducted by the Foreign Secretary, who was then Mr. Balfour, and by the then First Lord of the Admiralty, Lord Lee of Fareham, and they achieved that result. I say that the same thing could have been done if the Foreign Secretary and the First Lord of the Admiralty had taken on that job. It was a job which involved an enormous amount of mastery of detail and a Prime Minister who had on his shoulders the tackling of the gravest industrial and economic proposition almost of modern times could not really devote the time to mastering all about torpedo-boats and submarines and tonnage and guns and that kind of thing. What was the result? For eight months the one man who had the authority to drive was there in the gun-pit of the battleship.—[HON. MEMBERS: "The gun turret."]—He was not there on deck. He was in the gun turret.

We have the same thing this year. This is the second year and the figures have gone up 1,000,000 beyond what they were this time last year. You have two Conferences. Well, they are very important, hut T want the Prime Minister to apply to himself the statement which he made to the House of Commons yesterday when he appealed to right hon. and hon. Gentlemen to remember that Great Britain was an essential part of the British Empire. It is a very essential part to him. When he said yesterday that this was a programme for three years—[HON. MEMBERS: "He did not say it!"] The Prime Minister said that this programme might take all that time. [HON. MEMBERS: "No!"] That is my recollection, but, if hon. Members say that he did not say so, I am not going to press it. I think if they look at the speech they will find that the Prime Minister did give the impression that these things would he carried on. Suppose that he did not say three years, there was at any rate the indication that there was to be a carry-on. What does that mean? If it refers to the Bills dealing with unemployment, then unemployment is an immediate and urgent crisis, and those Bills to deal with unemployment ought to be carried immediately. Otherwise, they are worthless. The numbers are going up, and the Government ought to take emergency steps. I cannot understand time being occupied with private Members when there is an urgent call from the nation for dealing with these problems.

If all that is required is to get through the Session comfortably, very well, that is the way to do it, but, if there is to be a real attempt to deal with the problem of unemployment, then it ought to be dealt with as a problem of urgency. But there is an impression of inertness, or slackness, of being easily put off by the resistance of the permanent officials, and, if I may say so—having watched it last year—of being much too easily put off by Parliamentary obstruction. It is the business of an Opposition to do that, but it is the business of a Government to overcome it. There is a big load of odds and ends in this King's Speech, but there is no-one driving the lorry—certainly not right through. T hope we are not going to witness another Session like the last. It is a great crisis, but a great crisis also means a great opportunity. It is a great opportunity for putting things right. Those who have been in favour of reforming a great many grievances in this country know the difficulty of getting the necessary impetus from behind. The Government have at the present moment the impetus that comes from a sense of deep emergency in the nation and the desire to be extricated from its difficulties. Let the Government take that opportunity. If they will not, then they will indeed fail.

4.0 p.m.

Major ELLIOT

With the concluding remarks of the right hon. Gentleman, I am sure we shall all find ourselves in agreement. In the debate so far there is a striking sense of unreality. The country is meeting a crisis such as it has seldom had to endure, and we have to consider a King's Speech full of second-rate Measures, and a Royal Commission to deal with the great thing that really counts with the country to-day. What is the position in which we find ourselves? We have had a three-party conference. Like the right hon. Gentleman, I am somewhat astonished by the reference of the Prime Minister to that Commission, and certainly it is worth while to put it on record, that whatever the words meant, they must have meant either that the Prime Minister had concluded that a Royal Commission must be appointed, or that the three-party conference had concluded that a Royal Commission must be appointed. His words were: As a result of that investigation it was perfectly evident that the intricacies of this problem have to be examined and considered, and recommendations made regarding them which would have as little party taint as the report of any Royal Commission can ever secure. That conclusion was come to as a result of the conferences which were carried on with so much helpfulness and so much good will."—[OFFICIAL REPORT, 28th October, 1930; col. 29, Vol. 244.] Those words mean either that that was the conclusion of the conference, or the conclusion of the Prime Minister. wish to put it on record here and now absolutely, that that was not the conclusion of the conference. The minutes of the conference will show that many subjects were discussed and resolutions were come to, but that the final verdict of those concerned was to be enshrined in a memorandum from both sides which was to be submitted to the Minister of Labour. That is what we stand on. That is the only thing to stand on. Those were our considered conclusions, and the Minister of Labour or anybody else can publish the documents and you will not find a word about a Royal Commission to carry out a roving inquiry into all the difficulties of unemployment insurance.

That is the first point. Therefore, it must be the Prime Minister's conclusion. What an extraordinary conclusion to come to, without having had the opportunity of considering the memorandum which was sent in, without the minutes of the last two meetings having been circulated! How can the Prime Minister say that these conferences are worth while if it is possible to come to these far-reaching conclusions on policy before an opportunity has been given of considering the document submitted? What do these three-party conferences mean if one party can come down and pronounce upon the results without the other two parties being taken into consultation, let alone considering what they have said? Then, any of us can come down at any moment and express our opinion of the inquiries of any such conferences, and take the angle of vision which most suits our case at the time. I am sure that anyone ever engaged in such conferences upon a confidential and frank basis, such as this conference, will agree that there are points which would give a serious shock to public opinion if it were disclosed exactly on what lines discussions were going on. Discussions are held confidentially, for the purpose of putting all the cards on the table and arriving at frank conclusions, but if a Minister, not even a member of the conference, is to come down and announce that this conclusion was come to as a result of the conference which was carried on with so much helpfulness and good will, it is a small measure of help and gives very little encouragement.

The fact remains that the difficulties with which the country is faced just now, especially in regard to unemployment insurance, are difficulties essentially connected with finance. Finance is the very gist and essence of this problem, and the finance of unemployment insurance is at present one of the gravest dangers this country has ever had to face in the whole course of its existence. [An HON. MEMBER: "A drop in the bucket!"] A drop in the bucket, but there is not very much water left in the national bucket.

Mr. MAXTON

There is always enough to pay the War debt charges, anyhow.

Major ELLIOT

We are faced not with the sums of money which are being paid for here, but this infinite transformation of the whole social and economic structure of the country which these sums of money represent. There is the whole question of organised short-time. The scheme of Speedhamland became a by-word for subsidising out of rates. You have whole industries which will go bankrupt if forced to carry the whole of the employés on the sums which they themselves derive from the industry, and are not allowed to draw a subsidy from the Unemployment Insurance Fund. You are imposing charges on very poor, hard-up people to keep this fund alive. I beg the hon. Member for Bridgeton (Mr. Maxton) to consider this as a problem of the State, the sleeping partner in industry. The sleeping partner is beginning to have nightmare. You have an Unemployment Insurance Fund whose income is £45,000,000 a year-£15,000,000 from the employers, £15,000,000 from the employed and £15,000,000 from the State, although practically the employers' contribution is a little higher and the employed contribution a little lower. £45,000,000 is the income of the fund. What is its expenditure? £70,000,000 a year. There is a gap of £25,000,000 a year which is more than the whole service of the National Debt before the War. It is proposed by the Chancellor of the Exchequer to leave uncovered in the National Budget a sum equal to the whole pre-War debt service of the country, and to leave that uncovered on a basis which he himself has denounced on more than one occasion.

The danger before us is that there is this great uncovered sum in the Budget, and so long as there is that great uncovered sum is the national finances, you cannot say that this country is on a properly balanced Budget. That is a crisis in the affairs of this country such as it has very seldom had to encounter for any length of time before. It is said that we shall get nut of this by an inquiry. The Government have a very poor record with regard to inquiries of this kind. When the Minister of Labour came down to the House a year ago, not merely for the first but for the second of these Bills, we were told: The definite objective in view in continuing the transitional period is, as I have explained in my opening remarks, to give the Government time and opportunity to examine how best the able-bodied unemployed, who are now outside the insurance scheme, may be dealt with. But that is a year ago, and she further said: This is an interim Measure, designed to take effect during an experimental year."— [OFFICIAL REPORT, 21st November, 1929: cols. 749–52, Vol. 232.] That was repeated from every corner on the Government side. I see the Secretary of State for War opposite. He said: This is a Bill to try and deal with an emergency. When we are told that it will not last for a long time, I say that it is only intended to last for a year."—[OFFICIAL, REPORT, 25th November, 1929; col. 1085, Vol. 232.] A year has passed. What has happened? It is said that a Commission will be set up. Well, the Minister in introducing the Bill a year ago said that a committee had been set up, and on the 25th November, in introducing the Money Resolution, the Minister said: I informed the House When I introduced the Bill that we want this 12 months' space because the Government have already set up a Committee which is at work upon that larger scheme which the right hon. Member for Stafford (Mr. Ormsby-Gore) so eloquently described. I may say quite definitely that there is absolutely nothing in that speech which has not already been in the minds of the Committee. There is no new idea that has come from that bench which is not already in the minds of the Committee set up to consider the larger question, namely, what is to be the plan by the time this Act expires of social relief on a more scientific basis. I welcome the promise beforehand that if we can bring forward a scientific basis for the relief of distress, the party opposite are already committed to the support of such a scheme."—[OFFICIAL, REPORT, 25th November, 1929; col. 1104, Vol. 232.] It was acknowledged by the Minister that there was a committee which had considered a real suggestion which the speech of my right hon. Friend the Member for Stafford envisaged for a drastic dealing with this problem, and here a year later it is suggested that we want a Royal Commission. The difficulty before the House is that until we face up to the question of finance there is no drive behind the urgency. As long as Parliament goes on from year to year, from month to month, can it be supposed that the Chancellor of the Exchequer, who alone can finally deal with these matters, will face up to the difficulties of the situation? The Chancellor of the Exchequer said that he had done his utmost to condemn borrowing, and he has said that this piling up of expenditure was in order to try to bring the finances of this country into an honest and a sound condition. Is he so very pleased with the honesty and soundness of the condition of the country's finances when £25,000,000 a year has to be covered by borrowing for which he sees no prospect of repayment? The drive in all these matters must come, not from the man who merely makes protests against borrowing, but from the Chancellor of the Exchequer when he sees himself faced with a substantial increase in the expenditure of the year, and that is when the Chancellor of the Exchequer should begin to deal seriously with the matter. Yet, in face of this, the Chancellor of the Exchequer goes to the Mansion House and explains to the financiers of the City of London that he hopes to get through next year without imposing any new taxation. He gets through it on borrowing—a course which he has condemned more emphatically than almost any man in the country.

The difficulties of unemployment insurance certainly require reconsideration, but they also require action, and not one of the members of the conference, either my colleagues or the members below the Gangway, ever suggested that inquiry was to be a substitute for action in this matter. The inquiries which are to be conducted must go much closer to the root of the matter than the general inquiry which a Royal Commission can carry out. It is said that you cannot deal with a question like short-time in the cotton trade without holding an inquiry, without hearing evidence for and against. It is true that the cotton trade has got into so desperate a condition that it would be faced with a crisis if the question of short-time were not tackled, but Sir William Beveridge made the suggestion that the Minister should have power to schedule trades which are taking far more out of the fund than they are putting into it. This is extending to other trades, and trades all over the country begin to see that by organising on a short-time basis they can begin to draw out of the fund more than they put in.

A Royal Commission will not deal with that, but if the Minister takes power to schedule an industry, something will happen. A Royal Commission, however, can sit from now till the crack of doom before it can make any suggestion which is likely to commend itself to a hard- pressed Minister who has either to get proposals for expenditure through against the power of the Chancellor of the Exchequer, or proposals for a reduction against opposition which he is bound to meet from below the Gangway. Indeed, this Commission that is to meet has not received much encouragement from the Prime Minister. When he reviewed the problems with which it was to deal, and more particularly the attitude in which it would approach its labours, the Prime Minister said: Is the country quite sure that it is not getting value for its money? That is only yesterday, and he went on: I am perfectly certain that it is."—[OFFICIAL REPORT, 28th October, 1930; col. 31, Vol. 244.] He is perfectly certain. Here is the jury, and here is the verdict. Here is the judge rather, and he gives the verdict beforehand, and says: I am perfectly certain, whatever unfortunate experiences may be contained in it which ought to be cleared out of it, that, taken as a whole, the country has had full value for every 6d. spent.'—[OFFICIAL REPORT; 28th October, 1930; col. 32, Vol. 214.] I hear a cheer from the right hon. Gentleman the Secretary of State for War. He has had some experience of this matter, and indeed he ought to know better than to give those foolish cheers from time to time, which would be justified by nothing except a lack of acquaintance with the subject. What about the numbers who have been attracted on to the Fund who were not in receipt of poor relief or of unemployment insurance benefit? What about the 110,000 people who have come on to the Fund who were previously not in receipt of any public funds whatsoever? Is it supposed that every 6d. of that has been value to the country? [HON. MEMBERS "Hear, hear!"] If that is the attitude of hon. Members opposite, let them vote here and now for a rise in taxation to cover this expenditure.

If there is no opportunity for economy, then there is no point for inquiry, and if there is no point for inquiry, we must challenge hon. Members to deal with that suggestion, which they, not we, brought forward in "Labour and the Nation," that what they stood for was a national scheme in accordance with recommendations long accepted by all familiar with the problem, and that a Labour Government would transfer the maintenance of unemployed workers from the local rates to a great national scheme. Let us then have some example of the organisation of this scheme. Let us see what it is that is proposed, and, if that is the object of hon. and right hon. Members opposite, where is the honesty in coming down to this House with a borrowing Bill and the suggested prolongation of the present state of affairs?

Mr. MAXTON

They did not start the borrowing.

Major ELLIOT

They did not start the borrowing, but they are not merely continuing it; they are extending the borrowing.

Mr. POTTS

You made the position, so do not shout so much.

Major ELLIOT

The hon. Member opposite has not yet recognised that he and his party got into power as a Government of action, and a Government of action which was to deal with this problem, and common honesty demands that they should not squirm out of it on the idea that somebody else should rescue them. The difficulties before the inquiry which is to deal with this problem have certainly to be met. You cannot deal with unemployment insurance finally, unless you also deal with the problem of unemployment, and, unless you reduce the amount of unemployment, it is not possible to reduce the enormous drain upon the Unemployment Insurance Fund. In the first place, it seems urgently necessary to deal with the separation of insurance proper from the national scheme which has been adumbrated. You cannot treat the two things as running on all fours. You cannot demand tests from one man and not from another for the same benefit. You cannot maintain the legal fiction by which one person, who has once upon a time been a member of a certain trade, shall receive relief without a test, and another man alongside, who has not had the fortune to be a member of that trade, is subjected to tests before he can receive relief.

Furthermore it should be possible to use these vast sums which are being poured out, not merely for the relief of distress, but also with a remedial effect, and you cannot make any use of them with a remedial effect so long as you are tied by all the meticulous regulations which are necessary to guard the fund. When you are dealing with relief expenditure as such, and with a state of affairs in which those who have contributed to the fund are receiving their benefit, while those who have not fallen out of insurance are treated under a different scheme of administration, then it should be possible to get some value for this vast sum, amounting to £20,000,000 from the Exchequer and £25,000,000 from borrowing, or some £45,000,000 or £50,000,000 a year—the revenue of a kingdom. It ought to be possible to use it in something more productive than the maintenance of queues at -the Employment Exchanges, which is one of the scandals of present-day civilisation.

The difficulties of unemployment are certainly great enough. I cannot go into the proposals which we have laid before the Minister, because I understand that those proposals are still under her consideration. I find myself at a loss to understand the exact position of the matter, but only this morning I had a letter from the Minister indicating that she does not regard these considerations as concluded, and therefore I am precluded from making reference to the actual proposals which we have brought forward. But we have not shirked the duty of making concrete proposals to the Minister, and the vital difference between us is that we say that nothing should excuse the Government from the necessity of facing the facts, and realising that this borrowing of money is as good at present as a Treasury grant, and that the so-called debt which the Fund is piling up is a sham and very nearly a fraud on the people of this country. The Minister herself has said that she sees no prospect of repaying that debt, and that when it was being piled up before it was sometimes larger and sometimes smaller. Frequently, great sums were repaid, but nobody denies that the prospect of the Fund being reduced by the volume of trade to 1,240,000, at which it will balance, or below 1,240,000, at which it is to begin to repay that debt, is anything more than the vaguest possible prospect.

The difficulties of employment are among the things which the Government is supposed to be considering in the proposals brought forward in this Speech. We all know the views of the Chancellor of the Exchequer with regard to employment, and his famous statement in this House that, if you bring a foreign worker into this country to take the job of a British worker, he puts. a British workman out of employment, but, if the foreign worker produces goods in his own country and sends them here, he is providing employment here for a British worker. If it were possible to deal with employment in that simple fashion, we should all be pleased, and the problem would be quickly solved, but those remedies are entirely fallacious. I have before asked at what point in mid-Channel the balance shifts from a worker who is coming here to take a British job to work coming from the other side to produce employment for a British working man or woman.

The same extraordinary fallacy is repeated in the agricultural proposals of the Government, where we are told that those in this country producing fruit from Perth or the Vale of Evesham are regarded as causing grave danger to producers in Kent, and must be organised against, that producers must be brought into a ring, and that other people must have penal provisions laid upon them if they produce those substances; but if they come from Belgium or Holland, which are much nearer Kent, that is a scourge with which the Government see no way of dealing. Under the Government's proposals, it would pay a British producer to hire aeroplanes and fly their stuff over the Channel, and then bring it back sanctified by shipment from a foreign shore, when it would escape all the anti-dumping provisions of the Government and so would enable them, as the Chancellor of the Exchequer says, to find employment for British workers.

Mr. MAXTON

You do not exactly find it if they come from Australia.

Major ELLIOT

At any rate, we do not pretend that it is possible for us to deal with the matter without regaining some control over imports into this country, which was abandoned, not by the supporters of the hon. Gentleman opposite, but by the manufacturers of this country, in an attempt to get cheap food and lower wages. The proposals of the Government in the King's Speech do not seem to me, and I do not think they seem to any of us, to touch reality in the situation in which the country stands to-day, The constantly rising figures of unemployment seem to us to indicate a grave crisis in the affairs of the nation, which this Speech does not begin to touch. We have had the Chancellor of the Exchequer explaining that he is all in favour of trade with Russia, because, he says: I believe it would help trade, but what I think it would do is to compel the Soviet Government of Russia to throw away the last shreds of Bolshevism and Communism by which it is at present fettered, and it would compel the Soviet Government to have commercial relations with the rest of the world, and to approximate the Russian system to that of other countries with whom they were having commercial relations. Many hon. Members of this House have been in Russia during the past holidays, and they can inform the House whether they see that prophecy of the Chancellor of the Exchequer being fulfilled with arty more exactitude that the other prophecies which he has launched upon an astonished House from time to time when we have been considering these questions.

The danger that is now before us is that not merely one party hut all parties are discredited as long us the present deadlock in this House persists. There is a feeling of impatience, not merely with the Government, but with Parliament itself. That is one of the gravest features of the present situation, and it is not improved by the pettifogging proposals which are brought forward in a King's Speech such as we have to consider this afternoon; it is not improved by the proposals which are being the subject of so much of the old-fashioned logic chopping from one side of the House to another. Here, we have I believe, 2,190,000 people out of work, and we have the great industrial countryside sunk in blocks before our eyes, and we are going through all these proposals in the King's Speech—

Mr. MAXTON

Which will reduce unemployment benefit.

Major ELLIOT

Even the Royal Commission will have to come down to concrete proposals, and we shall be no farther forward, however long they are postponed. The Government declares itself absolutely bankrupt of ideas in the proposals which it brings forward.

Mr. KIRKWOOD

That is what we said about you when you were in office.

Major ELLIOT

It was a long continued complaint of the Opposition about us that the Tories were the stupid party. This Government is not only to be the stupid party, but the incompetent party. The Government have displayed during the past year an amount of incompetence which would be absolutely incredible if it had not actually occurred before our eyes, and in the Speech which is now before us they propose to continue on the same course, without even facing the facts. We, on this side, say, "At any rate, let us face the facts. If the burden is heavy, let us shoulder it; do not let us pretend it is not there. If it means a heavy increase of taxation, indirect or direct, on the Income Tax or by a general tariff, at least let us see where the taxes are to be raised, and let us realise the burden that is before the country." The longer it is put off, the worse it will get, and the country will have all the heavier load to shoulder in the long run. We are staggering into a bog, and if we get no lead from the Government we shall not find an escape so long as they are allowed to sit on those benches. The Chancellor of the Exchequer has said, "Let Parliament face up to the facts." When Parliament tried to face up to the facts, it was given the right-about-turn by the Chancellor of the Exchequer and the Government. Let us have these questions discussed with the financial authorities of the country sitting here in this House, and sitting there at that Box, and not let the unhappy Minister of Labour carry the baby—as no doubt she is fitted to do by her sex, but as she has often had to do in this House. The question of an unbalanced Budget is too big for a departmental Minister to deal with. We say that the difficulties before the country are not being faced in this Speech, and, until they are faced, there will be no reality in our debates and no recovery from our position.

Sir OSWALD MOSLEY

It is to the latter part of the speech of the hon. and gallant Gentleman the Member for Kelvingrove (Major Elliot) that I would direct the observations which I have to offer. There is an increasing realisation in this House, and an almost universal realisation outside this House, that we are to-day faced with a national emergency. As the hon. and gallant Gentleman has said, the country is awaiting some constructive proposals from this House to meet that emergency, and I feel compelled to agree with the hon. and gallant Gentleman to this extent, that not even the Government would claim that a situation of industrial crisis and national emergency was met by the proposals of the King's Speech. Is it not therefore incumbent upon us in our debates to try and evolve some policy, some proposal to meet one of the greatest menaces that this country has ever known? I will attempt at least some analysis of that economic situation, and will put forward, probably in the crudest and most tentative way, some suggestions. Before coming to that, however, I would join in the observations directed to the question of referring the subject of Unemployment Insurance to yet another inquiry. We cannot govern in this state of affairs by the simple process of putting this country into commission. Sooner or later a decision must be taken and action must ensue. It is a painful and unpleasant moment, but it has to come, and we cannot continue simply to dodge from one inquiry to another in every difficult problem which confronts the country.

On the subject of borrowing, I am rather at a loss to understand the suggestion of the King's Speech. The party opposite is at least consistent in rejecting borrowing for all purposes. It is a view on which I have often quarrelled with them. They support what is called the Treasury view, that borrowing by the Government diverts funds from industry which are needed for industry and is detrimental to industrial recovery. That view appeared to be supported by the Chancellor of the Exchequer when we were asking for loans to finance constructive works in order to provide employment, but that view is not apparently supported by the Chancellor of the Exchequer when he finds it necessary to borrow money for Unemployment Insurance. I cannot understand the principle of refusing borrowing power for constructive works, where some assets are set against the money borrowed, and yet tamely submitting to further borrowing for Unemployment Insurance. Therefore, I hope that, whatever their decision be, the Government will take their decision and announce it, and that, when it is announced, we shall be able on an appropriate occasion to discuss its details.

I will turn to the situation of national emergency which formed the principal part of the speech of the right hon. Gentleman who opened this Debate. We cannot deny that the proposals of the King's Speech do not meet that situation. We are every one of us aware that the country is looking to Parliament for relief, that in this crisis Parliamentary institutions themselves are on their trial, that there is an ever-growing unrest and disquiet in the country, and an ever-increasing demand for vigour and for action. How are we here meeting that demand'? We are apparently going to meet this situation by drifting back into the old Free Trade-Protectionist controversy on stereotyped lines. That is clearly, if the present tendency is continued, going to be the end of this Parliament. Surely the evidence all around us shows that neither Free Trade nor Protection of the last century brand has any relevance whatever to this situation. If Free Trade in itself were the remedy, we should not have unemployment here. If Protection of the old-fashioned kind were a remedy, they would not have unemployment in America and in Germany. Whether they have Protection or Free Trade of the last century brand there is unemployment in all the great industrial countries. We may be at the end of a Parliament which so far has produced no constructive proposals from either side. At the end of that Parliament we are going to the country to debate with great heat which is the best of two systems which, on the actual evidence of experience, have both failed.

The old basis of our trade has gone for ever, and the solution of Free Trade as we knew it before the War and the solution of Protection as we knew it before the War are alike irrelevant, and we have to advance and achieve a new solution. To arrive at any such solution, it is necessary to examine and to have some analysis of the new factors affecting our trade which entirely transform the situation as compared with the pre-War situation; and I would advance for the purposes of consideration and debate what seem to me to be the chief factors in this transformed situation. We were originally a country with a virtual monopoly of world trade; we had the command of nearly every market; and in these conditions it was clearly the policy of this country to buy its raw material in the cheapest market and sell its manufactured goods in the dearest market. Some stability of employment was incidentally provided by the process, because there were no serious factors of competition or dislocation intervening in the process. Factors have arisen of recent years, however, which have entirely undermined that position of our trade. They were undermining that position before the War, and the process was brought to a sudden and drastic climax by the War and by post-War developments.

The first of those factors seems to me to be the local industrialisation of markets which we had previously commanded. It was the old Free Trade dream that each country should produce according to the suitability of its production, and should exchange products thus produced with corresponding products from other countries. The great Free Trade conception rested entirely on the belief that in world development that would actually happen. The first thing to notice is that that in fact has not occurred, and that every country to-day, rightly or wrongly, is striving to produce as many as possible of the articles which it consumes. Every country is aiming at being as far as possible self-contained, and, in order to achieve that purpose, is building its industries behind tariff barriers, which in many cases are almost prohibitive to us. So in this local industrialisation our former markets are supplying themselves with articles with which we previously supplied them. In a detailed analysis of the former markets of this country these factors can be recognised as being substantial.

The second factor is the arrival of new competitors on a scale and with advantages we did not conceive in our original position. They are countries with natural geographical advantages over us for the command of markets. America, for instance, has obviously an advantage over us in South America, and Japan has an advantage in the Oriental market and must increasingly, other things being equal, gain ascendancy in those areas. There are other factors which I do not think this House has before considered, such as the superior power of competition possessed by a country like America, which has a very small margin of export trade as compared with a country such as ours, which has a very large margin. We in this country export nearly 30 per cent. of our total production of manufactured articles. America exports only some 8 per cent. Surely it is clear, without much argument, that a country with an 8 per cent. margin has an advantage in competition for commanding markets over a country with a 30 per cent. margin. It is often worth the whole of a business to dispose of a small margin of its production, even at a loss, in order to obtain fresh custom, but it cannot so dispose of a large margin of its total production. Nations are in much the same position. Therefore, in any scramble for foreign markets, that great self-contained unit of America must for these reasons have an advantage over us.

There is a third factor which is largely new and must inevitably be an increasing factor undermining our export trade. That is the development of sweated or backward labour in competition with white labour. That factor was not serious so long as industry maintained the artisan basis. There was great force behind the old Free Trade case so long as industry rested on skilled workmanship and artisanship. I remember in India finding that even in an Oriental market the relatively high paid labour of Lancashire was defeating Indian labour paid about five shillings per week by reason of superior skill and application. The new factor cutting right across that old Free Trade case is the development of mass production methods. When you reduce every industrial operation to the simplest process, you are turning the industrial system into a system even more suited for Oriental labour than for white labour. I remember standing in Ford's works at Detroit watching a man turning a screw to nip a piece of wire which had been placed under the screw by another man. He did that for six or seven hours a day and got £5 or £6 per week for it. Any man can be trained to do that job in five minutes, and the coming of these mass production methods puts the Oriental and backward type of labour on a parity for the first time with white labour. Inevitably the development of these backward countries by capitalism will lead to increasing threats to the white standard of life.

There is a fourth factor, the arrival of the great producers organisations, those great combinations with a power of dumping and under-cutting in the struggle for markets which was never possessed by any organisation before the War. And they have this incidental reaction upon markets, that they are able to maintain prices for a very long time against the falling price level such as we have had during the past few years; but when they collapse, when one of the giants collapses, there is a tremendous downward rush of prices, as in the last year, which dislocates the -whole industrial mechanism of the world. There is a fifth factor dislocating not. only our trade but all the world's trade —and let us remember that as world trade is dislocated we, with our 30 per cent. responsiveness to world conditions, suffer more than do other countries. That factor is the steady fall in the price level due to the inadequacy of the new gold supply in relation to the new production of the world, and, still more than that, the deliberate hoarding and sterilisation of gold by some of the great users of the world.

In that brief summary, I have ventured to submit that there are at least five big, new factors, and we can think of many more, which make the post-War situation fundamentally and completely different from the pre-War situation and undermine the whole basis upon which our trade was built up before the War. In face of those factors have we really any great hope of winning through by a substantial revival of our export trade? If we adopt the view set forward by the late Lord Privy Seal, that the problem all boils down to export trade, can we hope, when we analyse the actual world situation of the day, that along those lines and those alone we can win through to success? I will say something about the export trade we have to maintain a little later on, but surely, if we envisage the chaos of world markets to-day and the forces against us in those markets, we are driven to the conclusion that, if we are to find an outlet for the enormously increased productive capacity of modern machines and, consequently, employment for the men who work those machines, we have to turn to the home market in ever-increasing degree for an outlet? And yet at this moment, when the home market is our main hope, we are being asked still further to reduce that market by a reduction of wages, to be undertaken in the illusory hope of maintaining our competition in the export trade. To grasp at this shadow and illusion of an immensely increased export trade we have to drop the solid reality of the home market, which we hold in our hand, and which we should strive to increase.

To turn to the home market. Are we not driven to the conclusion that if we expose our home market to these shocks, to that world chaos which I have striven to describe, that it is impossible to build in that home market a civilisation higher than that which prevails in the rest of the world? And unless we build that higher civilisation here with a high purchasing power, what hope have we of absorbing the production of modern machinery which now cannot find an outlet? Can that civilisation be built up if our home market is exposed to price fluctuations, to dumping, to the competition of sweated labour, to all these electric shocks from the rest of the world which are daily dislocating our industrial areas? I do not see how you can build up that home market if you expose that market to those conditions and those shocks.

I know that hon. Members opposite have a simple remedy. Their remedy is to put a tax upon everything. In my view, that remedy is much too simple for so complicated a situation. There may have been something to say for it in the past century in the stable conditions then prevailing—though I do not think there was much to say for it—but there is in some ways less to say for it now. How can any tariff meet the factor of price fluctuations? Take the fluctuations in the price of wheat during the last few months and apply to them a tariff and see where you are. It would be utterly ineffective. You fix a tariff one day, and next week the price of wheat, or of any other commodity that may be discussed, takes a great downward fluctuation and the tariff becomes utterly ineffective; or, on the other hand, through the action of some great producers' organisation, prices rise sharply and a reasonable tariff becomes altogether prohibitive and becomes a mere shelter for inefficiency in this country. The factor of price fluctuations in your basic primary commodities makes the tariff remedy utterly irrelevant. You might as well erect a row of wooden stakes to stem the bursting of a modern dam as have a tariff to meet fluctuations in the price of foodstuffs.

We must evolve some more complicated, more scientific system than that. We want a wall or shelter I agree, but a wall of modern design, of varying type and size of brick and of device; and for my part, although I will not go into it at length this afternoon, I cannot see any method to be applied to the primary commodities, foodstuffs and raw materials, which would be as effective as the method of bulk purchase proposed from these benches. I know that some hon. Members think we want to conduct the whole of the trade in food supplies from Whitehall. We have said again and again that we mean nothing of the kind. We contemplate in trades and industries that have broken down the big merger that is always put through in such conditions; but when you are handing over to what amounts to a monopoly the supplies which are vital to the life of this country, you must give some statutory definitions within which it shall operate. Operating within those statutory definitions, however, there is no reason at all why the business should not be conducted by the best brains at present in the trade, and which are being driven out of business at present by world factors and operations over which they have no control whatever.

I submit to hon. Members opposite that, if this problem is approached in realistic mood and with relation to the actual facts, with recognition of the great factor of price fluctuations which makes the tariff weapon ineffective, they will be disposed to admit that there is something in the policy suggested from these benches. I ask them to admit it, because I am now going to make an admission myself which it is probably very dangerous for me to make, but in present conditions we have to face every risk ourselves and to say just exactly what we think, and I propose to do so. I do not see how you can apply the bulk purchase method or any machinery of that kind to the whole area of manufactured goods which come into this country. You have to act rapidly; the situation is an emer- gency one, and rapid and decided action must be taken. Over the whole range of small manufactured articles coining into this country, if you take action at all to shelter British industries from the factors of world chaos which I have tried to enumerate, you are driven to such weapons as the licence and the tariff; and for my part, as I said at the party conference, I am quite prepared to view those weapons and this question without prejudice.

Cannot we now, in the light of modern thought and modern facts, devise a more adequate and scientific system than that yet suggested? The Free Trade case, as I have always understood it, is that if you give the manufacturer Protection he will be in a favoured, almost a monopoly, position upon the home market, and that he will use that position to force up prices against the consumer, not to expand production but to curtail it, not to expand employment but to reduce it, and that in such a monopoly position he can, if he likes, maintain inefficiency in his trade and high prices to the consumer. That is the Free Trade fear about tariffs, and it is a fear with some basis in reality. Cannot we thrash out a policy which gives us the shelter which, in my view, we must have from the chaos prevailing in the world and at the same time gets round those objections? I suggest that it might be possible for a manufacturer who is given the protection of a tariff to submit to a private costing process to ensure that he is not raising prices unduly to the consumer, and also that he might be asked to give satisfaction that the maximum efficiency was being maintained in the industry—that there were the lowest production costs compatible with a living wage to the workers in the trade; for, after all, it is now an established principle, at any rate on this side of the House—it was established in the coal trade—that prices shall not fall to a point which means starvation wages to the worker.

The worker as a consumer does not benefit by low prices which mean starvation to himself and to his fellow workmen. Directly trade unionism intervened in our national affairs artifically, and rightly in all our views, to maintain the price of labour, sooner or later some regulation of the price of the article became inevitable. How can you maintain the price of labour unless you also maintain in some degree the price of the article which labour produces? That is why it has always seemed to me that trade unionism and Free Trade of the old fashioned brand are, in fact, contradictions in terms. It may be said that any such process of interference with the processes of industry would be resented by manufacturers and that the whole thing is impracticable. Could we not devise machinery to get round that I Could we not, in the case of a protected industry, have a commodity board dealing with the imposition of the tariff, on which board should be represented not only the interests of the producers in the industry protected but also the interests of the consumers and the users of the article concerned. Thus, if you are dealing with the protection of steel, you would bring on to your commodity board not only the manufacturers of steel in this country but representatives of shipbuilding as well, and your commodity hoard would have the power to advise the Minister, under licence, to let in foreign products free in the event of that industry not undertaking proper reorganisation to meet the competition of the foreign prices.

5.0 p.m.

It is true that it would still be open to the industry protected to say, "We have reorganised to the maximum extent possible, but still foreign wages are so low that they can undercut us." In cases like that I would say that industry in this country should not be dislocated, men should not be thrown out of work, purely owing to the existence of low wages in other countries. If we can be satisfied that the efficiency in this country is as great as the efficiency elsewhere, and that it is purely the low wage factor which is bringing down foreign prices as against our own, we have got to be prepared to face that fact, and to give some shelter against the competition of sweated labour. Hon. Members may say, "All this is much too complicated. No system of such complication can be undertaken." Must we then go back to the dog fight—one side saying, "A tax on everything" and the other side saying, "Let everything alone till things right themselves"? I suggest that every modern process is complicated. It is very often in its complication that the superiority of the modern process rests. In the old days if a leg were injured they simply cut it off, a very simple process, and gave the patient a wooden leg instead. Now by the development of modern surgical methods you very often have a series of complicated operations to save the leg and restore its use to the patient, which is a much more complicated but a much more effective thing to do. The old fashioned Protectionist says, cut it off and give him a wooden one—it is so simple, thought is difficult and painful and science is new-fangled and a nuisance. This is not the attitude of a the modern age or the modern mind. Unless we evolve a more difficult process to meet a complicated situation, we shall go down simply because the crudities of pre-War days do not meet the necessities of the situation. Hon. Members may say that, even if we settle the difficulties of our home markets, the troubles of our export trade still remain, and so they do. Obviously, we have to import into this country sufficient foodstuffs and raw material to carry on our population and to keep our industries going. But, in addition to this, we also import some £300,000,000 worth of manufactured goods, and we also pile up great foreign investments in the shape of loans to build railways and roads in the Argentine and Timbuctoo, and this at a moment when loans to provide useful work in Britain are refused. The necessity even for much of our export to buy foodstuffs would be removed if by an improved agricultural reorganisation we could produce £100,000,000 worth of foodstuffs in this country which are now imported. All these factors should go far to modify the hysteria of those who see in the increasing difficulties of our export trade the ruin and collapse of this country.

We must not imagine that the only criterion of British prosperity is the amount of goods which we send abroad to foreign countries. We must remember also that some 45 per cent. of our existing export trade goes to Commonwealth countries, and it should be possible by an economic arrangement with out Dominions for us to insulate that market as well as our home markets. That is the most rapidly expanding market in the world. Supposing we had in our hands the tremendous power of centralised buying of foodstuffs in this country which has been suggested. It is a recognised fact that the Dominions for many years to come must be largely agricultural producers, and we must be largely industrial producers. In this natural exchange we have a natural balance of trade, and by using the power of centralised purchase with the Dominions we can then ask for greater advantages in return than we are at present receiving. I agree that it might be useless to ask the Dominions to lower existing tariffs which shelter their industries from the threat of our manufactured goods. But by adopting the suggestion of the trade union conference to set up an economic secretariat, we can allocate and plan future production as between the component parts of the Commonwealth. In this way we can proceed far towards the conception of economic unity, and within it secure a far higher standard of life than prevails in the chaos of the rest of the world.

It is sometimes said that this involves the breaking up of trade relations which we at present enjoy, and we have been told that if we buy more goods from Canada we shall buy less from the Argentine, and, as a consequence, we shall lose trade in that market. At the present time, we import about 38 per cent. of our total wheat imports. from Canada. Even if we greatly increase our purchases from Canada, we shall still have an enormous margin for purchases from the rest of the world which in the hands of a centralised buying organisation would still make us the largest buyers in the world. The method of centralised purchase should give us the power to exact concessions from foreign countries. In return this would help us to maintain and develop our world trade, and at the some time to build up our Commonwealth trade on a sheltered market which would enable us to stand the shock of world competition.

There is one other possibility which I would like to add to that conception, and it is the possibility of developing a more workable monetary system within the Commonwealth. I would very much like anyone who replies for the Government to tell us if this subject has been discussed in the Imperial Conference. We have not time for a debate on a monetary policy to-day, but everyone in this House who thinks over this matter will admit that the chaos which exists in the monetary system of the world in the present state of the gold standard and the fluctuations of prices is one of the biggest factors responsible for the dislocation of our export trade in the markets of the world. How can we meet that difficulty by Commonwealth organisation? If we pooled the gold reserves of the Commonwealth we should have a total reserve of about £250,000,000. In addition, we provide within the Commonwealth 70 per cent. of the new gold supply of the world each year. If we had a central Commonwealth bank with a gold reserve of £250,000,000, and a buying monopoly of the gold produced within the Empire, we should be in a far more powerful position that we are under the present isolated and scattered organisations. More than that, we should be able to enter into international negotiations for bringing order out of chaos in the world money business in a more powerful position.

People may say that there is danger in this plan. It is proposed that we should centralise our buying of foodstuffs, and this would give us an immense lever-age in the markets of the world. We should also centralise our gold reserves and use that enormous power to bring order out of chaos in the monetary system of the world. Some people may say that if that power lay in the hands of one country or one Commonwealth it would be a dangerous thing. You might as well say that it would be a dangerous to place a man in charge of a steam-roller because he might use it to knock down a house instead of for the making of roads. It would not be a conclusive argument against the use of a steamroller. Simply because the power I have suggested might be used by some foolish or misguided people for a totally different purpose is no argument against the use of that power for the beneficent purposes for which it could be employed by this country.

It is no use using soft words upon this subject. It is no good going to international conferences and saying, "We are in a terribly weak position; will you please stop hoarding gold and placing tariffs against us?" It is no use telling us that we must wait until every other country in Europe has come up to our standard before we do anything in this matter. It is no use telling us that we must wait until every anarchical force has been brought under control. It is no use saying that we must wait for the organisation of our trade until all the backward people in the world have come up to our standard of Socialism. If we wait until the sweet small voice of the President of the Board of Trade at Geneva has drowned the strains of "Giovinezza" in every Fascist capital, we shall have to wait for a very long time. If this kind of policy goes on we doom ourselves to wait until a series of unlikely things happen over which we have no control. In the meantime we expose our industries and our trade to all these factors of chaos which are operating in the world market, to the dislocation of our industry by factors over which we have no control, and in the meantime we have to face with equanimity reductions in our standard of life in order to maintain our competitive position.

We drift back to the wage struggle of 1926 and worse; we drift to disaster in helplessness and disorganisation because we shrink from the organisation and the proper use of power. Meanwhile in Parliament we recite the classic cases of Free Trade and Protection like sixth-form boys reciting prize essays which they had not even composed. At the end we go to the country on a general election shouting the meaningless slogans of a century old controversy which has no more in common to the modern age than whiskers and crinolines. True that in the dust and clamour of this 19th century circus we may obscure the failure of two Front Benches and two Parliaments. But in the turmoil England sinks quietly to her final lethargy. For my part, I believe if once we could realise that the old basis of our trade has gone and gone for ever, that we have got to think again, and think harder than before, that we have to face modern problems with modern minds, we should then be able to lift this great economic problem and national emergency far above the turmoil of party clamour and with national unity could achieve a solution adequate to the problem and worthy of the modern mind.

Mr. OLIVER STANLEY

This House had reassembled after some three months, during which the crisis of the country has become graver and graver, and there are many men and women, anxious, careful, thinking people, who have been waiting to hear what the Government propose for this situation. As to the quantity of the remedies proposed they can have no complaint. One man suggested to me that the method on which the programme had been selected seemed to be that the Government went through the whole of the 65 points of "Labour and the Nation," and left out the five that mattered. With the quality it is far different. We find, as the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) said, something for everyone. There is a sop for the trade union officials; there is a sop for the party machinery; there is even, I think, a little something in it for the right hon. Gentleman himself. He thinks not, and he usually knows if there is anything for him. When the country is asking for strong meat, what is the good of giving them this flavouring pill of digestive bread and peptonised milk? What effects are these proposals going to have on the 2,200,000 people who are to-day out of work, on the vast trades in the country that are sinking into bankruptcy, on the many firms who are putting up their shutters? It is only by that test that you can judge the proposals which to-day are occupying the time of the House of Commons, and by that test this legislative programme of the Government must fail.

There is the Trade Unions Bill. We are told that it is to do away with psychological grievances, but there are worse things to-day than psychological grievances—there are real grievances. Who wants to have a general strike now; and what prevents them from having it now if they want it? One lesson that we learned from the general strike of 1926 was that it would be conducted rather on the lines of a league football match, with strict attention to the referee's whistle. A general strike can only succeed if it is revolutionary in its intentions and violent in its methods, and, surely, we cannot believe, despite the letters of the deans and generals and admirals who deplore the slackening moral fibre of this country, that we have reached such a stage that even our "Reds" cannot start a revolution without the sanction of the High Court? There is the question of the political levy. I can understand the psychological factors which affect hon. Members opposite, but what are the real disadvantages? Is it not a fact that, without a political levy, hon. Members have crossed from this side of the House to that, and that they have to-day more members than they have ever had before? Do they really think that, with a political levy, if they fail to solve the problem which has been set them, they will be able to avoid the judgment of the country? If so, they had better ask the right hon. Gentleman whether it is not better to have a good policy than a good fund.

Then there is the proposal to deal with agriculture, the proposal to put men on the land, to increase the agricultural population—one of the most vital things if we are to restore a proper ratio in this country. But what is the good of talking about spending Government money to put more men on the land when there are thousands of men leaving the land to-day because they cannot find a living on it? There are the measures for agricultural co-operation, but what is the good of telling the farmer that you are devising cheaper and more efficient means whereby he can get his goods on the market and sell them, when the goods which he produces are, more often than not, non-competitive before ever he puts them on the cart or lorry? The Minister of Agriculture knows that dealing with things like this without first dealing with the question of price is putting the cart before the horse. The only effect can be the expenditure of many millions of public money and an opportunity for the right hon. Gentleman, who can already claim to be the Don Bradman of Government finance, to set up a further record. He set up a record in regard to housing which is unlikely to be challenged for many years, and this will be an opportunity for him to add further laurels to his wreath.

There is only one important thing in this programme of the Government, and that is important, not for what it does, but for what it fails to do. Unemployment insurance is to be relegated to another Royal Commission. Not much under a year ago we debated unemployment insurance in this House at great length, and I remember that we then urged upon the right hon. Lady the Minister of Labour the necessity for a really comprehensive effort to deal with the whole problem. The right hon. Lady told us, I remember, that we need not really worry much about the legislation that we were passing through the House at that moment, because in a very short time she would come out with a comprehensive scheme which would solve the whole problem. The right hon. Lady was thinking all spring; she was thinking all summer, and, on the various occasions when she came down to this House to borrow more money, we were told, of course, that it was not the time for us to share in her deliberations, but we were promised at least a happy outcome from her reflections.

The right hon. Lady thought all summer, but she did nothing. Then she got hon. Members from this side of the House to come and think with her. They gave up their holidays, they sacrificed their health, and they all sat down and thought with the right hon. Lady. Now more people are to be summoned from all over the country to give up their business in order to think again. I am all in favour of thinking about this matter, but when is somebody going to do something? What is going to be the result of this Royal Commission? We are told that the object is to free the whole thing from political taint. What does the Prime Minister mean? Does he mean that he is going to form a Royal Commission of members entirely free from any party or political bias or affiliation? If he means to do that, he will have to go to Timbuctoo to find them; and, if he did, would it please hon. Members opposite that this question should be decided without representatives of Labour? Or does he simply mean that this Commission is going to be packed with all the conflicting elements of political life to-day, and that then the Government are not going to accept any recommendation unless it is unanimous, and, therefore, free from political taint? Cotton the Government have inquired into; iron and steel they are inquiring into; but in neither case has anything been done. This is merely to add one more to those many inquiries which end in so little. There are many other old friends in this legislative programme, like the Washington Hours Convention and the Factories Bill—Measures which spend 364 days of the year in the pigeonholes of Ministers, and come out on one day to make their bow and receive a few mellifluous compliments from the Prime Minister, after which they go back again for another year.

Now let us turn from this programme, redolent as it is with all the old-world charm, containing things to frighten few and encourage none, framed, obviously, with a desire to play out to the end the old Parliamentary game. Let us turn from that to the realities of the situation. The Chancellor of the Exchequer the other day went to address the bankers. He spoke to them in a tone of benevolent anticipation, like the cat among the pigeons, and in the course of his address he assured them that this country had been through crises like this before. The obvious inference which was intended to be drawn by his hearers was that we had got through crises like this before without the guidance of the Chancellor of the Exchequer, and we need have little fear of emerging from the present situation. In that really lies the whole question—the question which splits, not parties, but the nation. Have we, in fact, ever before encountered a crisis similar to this? Is this crisis merely greater and more extended than, but similar in kind to, the many that the country has successfully weathered before? On that depends, really, the attitude that we are to adopt.

If the Government and the Chancellor of the Exchequer are right, and this is just such a crisis as we have seen before, then, perhaps, the only thing to do is to sit down and amuse ourselves for a little while with electoral reform or a Trade Unions Bill, and wait until the economic blizzard is past, and the sun comes out again, and Parliament can get down to the sole function of present-day government—the discussion of how the cake is going to be cut. Some of us take a very different view. Some of us do not think that this crisis is similar to any that we have ever been through before. Some of us do not think that the economic blizzard is ever going to pass unless we do something to make it pass. Some of us think that, unless we do something to make it pass, there will not only be no cake, but no bread, to cut in the future. We believe that the fundamentals have altered, that the whole condition and conception of our trade is different, that the case cannot be met by mere optimism and patience, but only by cunning and by method.

I accept the analysis which the hon. Baronet the Member for Smethwick (Sir O. Mosley) has given of the difference which exists between our trade conditions to-day and before the War. We have all seen this great growth of competition, which we had not to meet 100 years ago, a competition which is all the stronger because it started after us, because it was able to profit by our mistakes, and because it exists to-day without a great deal of the lumber which clatters and clutters up the industrial tradition of 100 years. That system, with these advantages, has been worked by people as skilful and industrious as ourselves. We see the passing of some of our great natural advantages. Our measure of prosperity in the last century was due to the fact that, in a coal age, we were the greatest coalowners in the world. Gradually, as new coalfields were discovered, part of that supremacy disappeared, and now, with the new motive power, with hydro-electric power as a substitute for coal, the focus of productive activity has shifted from the coalfields of South Wales to the rivers of North America.

Even more ominous is that other factor which is growing up as competition increases and as our competitive power gets less—the factor that more and more markets are being removed from competition altogether, that more and more we find markets into which our goods cannot penetrate, not because they are too dear, not because they are not good enough, but simply because they are foreign, and foreign goods need not apply. Other countries during the last century saw the example of our prosperity. We, perhaps, made no secret of our wealth; we, perhaps, used our power too harshly; but, whatever the reasons may be, we have stimulated the other nations of the world to imitate our example, to abandon all the hardships and difficulties of agricultural life for the cinemas and slums of an industrial system.

They may be all wrong. Some hon. Members would tell them that in abandoning their proper orthodoxy they are committing a foolish act, that it would be so much better for them to go back to a system which would be much better for them and would be likely to be much better for us., But are we really in a very good position to go to France, for instance, with her 894 unemployed, and say to her, "How foolish you are not to adopt that Free Trade system under which to-day we have 2,190,000 men out of work"? Whatever the reasons are, whether they are good or bad, whether the world can in fact survive split up as it is into a hundred economic units, whatever the ultimate result may be, we have to face this fact. Five years ago there were signs that possibly the general trend of world opinion would change, that barriers might be lifted. Can anyone suggest that that is the case to-day? Can anyone deny that the last five years have seen an accentuation of that system Can anyone deny that, for the next generation at least, we are faced with a world in which our goods will be largely denied access to markets?

If that be so, if the hon. Baronet's analysis be correct—and I believe it to be correct—then the whole basis of our old prosperity has vanished, our whole conception of our industrial future has been falsified. We have built up a population, we have built up an industrial system, we have erected a fiscal machine, we have created a standard of life, on the basis of our being the workshop of the world. We find to-day that the world does not want workshops. It wants markets. If that is so, if our old prosperity has in fact vanished, are we forced to maintain for ever a machine which was never its cause but only its corollary Many of us who have in the past been Free Traders, not with the fervour of the Chancellor of the Exchequer, and not perhaps with the unquestioning loyalty of the right hon. Gentleman the Member for Carnarvon Boroughs [An HON. MEMBER: "The Member for Epping!"] Perhaps before long we shall have to include the hon. Member in that category. We have believed in the general advantages of Free Trade in the world we have lived in, but we have come down to earth—not in any mood of exaltation, not in any spirit of having discovered the philosopher's stone which is going suddenly to restore all the old prosperity that we used to enjoy. It is not pleasant to have to realise that your advantages have gone, that, having once enjoyed industrial supremacy, you have to come back into the ranks and that, when you used to talk in terms of inevitable industrial supremacy, you talk now in terms of possible industrial equality.

A further unpleasant fact to face is that we are not going to get over our difficulties by refusing to face them. We realise the dangers and difficulties that lie in the path of an attempt to alter our fiscal system, but we see the dangers and the difficulties that lie in the path before us to-day. We see the dangers and difficulties of trying to keep an unemployed population of 2,200,000 and it is not much good telling a man, when his balloon is on fire, that it is dangerous to jump out in a parachute. We have to face those dangers and to brave those difficulties. A new world faces us, and we have to adopt new methods. The borders are picketed by archaic figures who present arquebuses at us and ask for the countersign and, unless you are lucky enough to say, "Long live Cobden," or "Hands up Hitler," or whatever the proper signal is, they will try to bar your passage. Let us have done with these slogans and shibboleths. You are not going to compress the solution of a nation's difficulties into the headline of a morning paper. Socialism, Individualism, Cobdenism, Protectionism—let us cut the isms. It is only by doing that that we can avert the catastrophe that is looming over our heads. We may differ as to machinery, but I believe there is a general agreement among people, irrespective of party and irrespective of theory, on two fundamental points. The first is the growing and ever-increasing importance of the home market as compared with the export markets on which we depended in the past, and the second is the absolute necessity, if we are to maintain that portion of exports which are necessary for our existence, of using and organising our great consuming power to buy off the nationalist tendencies in the countries with which we deal.

The hon. Baronet has detailed some of the ways in which this has been accomplished. He can point, of course, in the first place, to the possibility of substituting British made goods for the £300,000,000 of foreign manufactured goods that come into this country every year. He must admit that, if that is to be done, it can best be done by means of a tariff, and he makes an appeal to face the danger put up to us by Free Traders of the effect of a traiff on efficiency and on cost. Of course, in certain parts an appeal like that will fall on deaf ears. People like the Chancellor who talk about the whole conception as being a sinister attack upon wages, people with what I may call the cloak and dagger mind—it is no good appealing to them. But surely it is not impossible to avoid the dangers. Why necessarily should a tariff lead to inefficiency? To start with, it creates a great many of the conditions under which alone efficiency is possible. Efficiency is not quite as simple as some people think. It is not just a question of sacking a managing director and getting a new one. Efficiency costs money. You cannot expect an industry to be efficient unless it can get the money to buy its new plant. You cannot expect it to be efficient unless those responsible for its conduct have some confidence in its future and have some basis upon which they can plan the future of the industry for a long time, and those conditions are prima facie given by a tariff. I agree that you must have safeguards for Safeguarding and that, if you give to an industry a monopoly, whether you give it by means of a statutory power, as you do to electricity companies, or whether you give it by means of a tariff, you are entitled to ask for obligations from it, that the efficiency has to be maintained, that the consumers' interest has to be considered. In Canada the other day Mr. Bennett took exactly the kind of course that the hon. Baronet was advocating. Having obtained from a particular industry to which he had promised a tariff a promise that the price at which the materials would be sold would not be increased, when he found that promise was broken, he immediately withdrew the tariff. Is it not possible to impose conditions of that kind, to have the consumers' interests represented and to deal with cases of greed either by withdrawal of the tariff or by allowing the importation of foreign goods under licence?

The hon. Baronet has not touched in any great detail on the corollary of his proposition. That is the essential importance of developing in the country, if it is to fall back upon its internal market, the great agricultural industry. We have in this country a. ratio of agriculture to industry which is far smaller than anywhere else in the world. It is essential that that ratio should be altered in order, first, to absorb unemployed in production on the land, and at the same time to increase the home market for the absorption of our manufactured goods. Do not let us pretend that, whatever we think about tenure or marketing or questions of that kind, any real increase in the agricultural population can be achieved unless you are prepared in one way or another to deal with the question of price. There are many ways in which prices can be dealt with. They all have their advantages and they all have their disadvantages. Do not let us think that an industry with all these ramifications, all these varying problems, all these different difficulties, has necessarily to be met by one universal simple solution which is going to cover every phase and every aspect. Let us take all the remedies and examine their advantages and their disadvantages and with sincerity apply to each particular head the remedy that is appropriate to it.

The hon. Baronet suggested import boards. They have their advantages. They are at least fairly simple. They provide most excellent opportunities for discrimination in favour of purchasers abroad. They would put up an effective barrier against the kind of situation that is created to-day by the dumping of Russian wheat at prices with which no tariff would have been able to cope, and they have the advantage that you can, through an import board, cause the burden that you have to bear to fall as you yourself want it to fall. They have their disadvantages. They may be expensive, they may be bureaucratic, they may be subject to political influence. You have the suggestion of the quota. That has the advantages of the import board, although perhaps the advantages are not so great. They have the disadvantages of the import board, although there, again, perhaps the dangers are not so great. You have the tariff, which seems to be, of all the remedies, the obvious one to apply in the case of foodstuffs which are luxury foodstuffs and where you want to ensure that, if it fails in keeping out the foreign imports, it will at least add to your revenue. On the other hand, you have the disadvantage that it is not elastic enough to cope with the violent fluctuations of commodity prices to-day and, secondly, that it throws the burden that has to be borne in the way which it is least easy to bear. Finally, you have export licences, which you can use to deal with seasonal imports, to regulate supply to demand and to ensure for the producer a regular return and for the consumer a regular price. I do not pretend to go in any detail into these solutions, but I ask that an open mind shall be kept, that the advantages and disadvantages shall be weighed, not in accordance with prejudice or preconceived theory, but in accordance with the actual facts, and that we shall have the sincerity and the courage to apply the remedies which our investigations convince us are those which alone can produce the results.

Finally, the hon. Baronet indicated the possibility of stabilising and extending the export trade to our great Dominions. We can rationalise our own country, but that will not solve our problems. It might solve our problems if we could rationalise the world. That we cannot do, but there remains the middle course of trying to get some rationalisation of the Empire, of trying to get in that great productive unit some allocation of the methods of production, some attempt to prevent us from, in all cases at all times, trying to produce the same things. I will not follow the hon. Baronet into the methods that he suggested, but this at least I will say. Let us recognise that, if you want to adopt this policy, if you believe there are advantages in it, you have to assume a burden in order to obtain them. It is no good thinking that in some way or other you are going to get something for nothing, because you are not. If we really believe it is worth having, if we really believe it is essential for the stabilisation of our export trade, let us face the fact that we have to pay for it. It is up to us to devise how that payment is to be made. It is up to us to say haw the burden which we are prepared to shoulder is to be allotted. But do not let us run away from the fact that, if the thing is worth having at all, we have to pay for it.

No one can fail to sympathise with the Government. They have had to meet a combination of difficulties that is unprecedented in past history. They have had to meet the great economic crisis which has swept all the world, and that at a time when already we were in industrial depression. If their difficulties have been great, their opportunity has been supreme, because they have behind them to-day what you never have in times of prosperity, a country which is frightened, a country which is anxious, a country which is prepared to get its help to find its salvation at the hands of anyone who is prepared to give it to it, which is not prepared to brook interference on petty political lines by somebody who thinks he is really out to do the job. The Government, if they had had courage, if they had had vision, might have cut right across the old historic traditions of this country. They might have achieved something which would have altered the future of this country for generations. They might have united behind them vast sections of the population which to-day are itching to have their hands at each others' throats. Their opportunity has been supreme. This paper which we are discussing to-day is the measure of their failure.

Mr. MUGGERIDGE

The speech to which we have just listened is in itself an acknowledgment, at any rate, of the effect which was made by the statesmanlike speech of my hon. Friend the Member for Smethwick (Sir O. Mosley). There you had an attempt to raise the whole issue of the Debate now taking place on to a level commensurate with the difficulties with which we are surrounded and the attitude of the various nations of the world. The trouble about it is, that while the hon. Member was appealing to us to keep an open- mind and was really trying to ride on the wings of his eloquence into the sphere towards which my hon. Friend the Member for Smethwick had lifted him, his feet were drawn down by the dead weight of his own previous beliefs. He could not get away from tariffs. He really tried to do so. If anyone wants to see the misfortunes which befall others who get a fetish, either a Free Trade fetish or, on the other hand, a Protectionist fetish, they cannot do better than analyse the speech to which we have just listened in which we are trying to rise above the mere daily change of politics into higher realms, and the hon. Member himself conspicuously failed to keep up to those levels. I do not want to go into this fighting between Free Trade on the one hand and Protection on the other. I think it was the hon. and gallant Member for Kelvingrove (Major Elliot) who said that one reason why the country is getting tired of the political parties, and, presumably, of us in this House is, that we are constantly playing with these old topics and throwing these old stones at each other. They feel that it is a sort of theatrical stock that is very old, and they are tired of the performance. It is a misfortune that we cannot—and we have an excellent lead in the speech which has been delivered to us to-night—approach the subject of the King's Speech from a different angle.

I want, first of all, to take the idea of Preference, and really make my contribution quite apart from any of the acknowledged prejudices which naturally arise in the minds of most people who hear the word. I think that it is natural for the people of this country to desire to trade with their kith and kin across the seas. I do not blame the party opposite for saying, "Let us give a preference to other members of the Commonwealth who spring from ourselves." It may have certain limits which are not very desirable. It may make this Commonwealth too exclusive a thing. But it is really as natural as when we in our individual capacities prefer, if we get the opportunity, to trade with a brother or a relative of our own if he supplies the article we want for our own domestic consumption. I can see myself saying to my wife, "Go and buy of so-and-so because he is my brother," and, other things being equal, I would naturally give him a preference. That kind of preference is perfectly natural. The surprise to me is that the people who advocate Preference apparently do not believe in it. Why do they not give a preference at the present moment? I will take a very small matter, not that I want to make any argumentative use of it. I have seen in this House man after man who believes in Preference consuming wine which comes from a foreign country. If he really means Preference, let him put up with the personal inconvenience of drinking, say, South African wine. [An HON. MEMBER: "Or do without it!"] Yes, or do without it. But let him show the preference. If you want tobacco, you can get it much cheaper from the Empire. It has been my experience that hon. Members opposite who believe in Preference are very careful to avoid these products of Empire and that they prefer Havanas or something of that kind. I only introduce this—not as an argument—to show that they have not really made up their minds that what is wanted in the matter of preference is a question of will. Do they really will the preference'? Does this country really will the preference? I believe is does. I believe that the bulk of the working class would rather consume corn from Canada than from the Argentine. I agree that meat from New Zealand, if we are to have imported meat, would be preferred by them to meat from the Argentine.

The point I want to make, provided I am correct in believing that this desire for Preference is not only natural but strongly held, is why the people of the country do not show the preference? Why do we not buy of our Colonies without waiting any longer, and without arranging any new fiscal system? Why not buy now? What is the difficulty? There is a difficulty, I admit, but no one ever refers to it. The real difficulty is that as a nation we have no power of controlling our purchases at all. The articles of consumption which come to this country come through channels over which we have no control. There are importers, dealers, speculators, all sorts of people, who really stand between us and the goods which we consume. We have no national food supply. Our national supply is entirely in the hands of private dealers. For that reason we, as a nation, have no power to express to the Colonials at present in this country our preference by a direct gesture on our part. I want to draw the attention of the House to the fact that if we really desire to exert preference, we ought to organise our purchasing power in such a way that the national will can express itself by the simple act of purchase. At the present moment there is nothing of the kind. Everybody who wants to show the preference thinks that it is necessary to fine ourselves in order that the preference may be exerted. That, to my mind, is a sign that we are content to go on on the old lines.

The nation, for the purpose of giving the preference, should organise its own purchasing power. It should get its functions into the hands of a body which represents it. That is not the case at present. The import board, in my opinion, has the very great advantage that for the first time in our history it enables us as a great purchasing country to show in which direction we wish our purchases to be made. At the present moment we have no such power. It is really ridiculous to think of the many hands through which our food, as one branch of our importations, passes before it reaches the consuming public in this country. All sorts of people are out to get pickings from it. You have the importers, the speculators, the buyers of futures—all sorts of people. Food, or a crop will change hands three or four times even before it arrives at these shores. It is sometimes bought before it is sown. It simply means that at the present moment—and it is one of the causes of our trouble—the whole of our food supply is a matter of gambling in the hands of interested people, dealers and others. It is because of that, it is because we have parted with our rights of purchase, and because we have lost our national volition in the matter of what we shall buy that the other side, presumably, is forced back upon the proposal that we should actually put a duty upon what we import from other countries in order that we may canalise, as it were, the preference through those people who condescend to deal with our food supplies.

Therefore, the object which I have risen to advocate is, that if we are agreed to bind the Empire together and want to make it a real Commonwealth, our first action must be to establish some body which, in our name and in our interests, can control our purchasing power and give the preference to those to whom we desire to give it. That can only be done by the establishment of a purchasing board. Someone has said that Canada has already done this, and that the results have been disastrous. That is not correct. Canada has wheat pools to control the selling of wheat, but that is entirely different from a board which controls the purchase of the wheat. Obviously, when Canada formed these pools it could not control the Argentine nor even Australia. I believe that it has made efforts to make arrangements with the United States of America. These pools have failed from that point of view because they are not complete, but a purchasing board in this country would have complete command of the purchasing market for food from abroad and would, therefore, not be in the same difficulties as the pools formed in Canada. There are many advantages which, I think, ought to be mentioned in connection with a national import board which have a very strong bearing upon other difficulties which confront us at the present moment.

6.0 p.m.

A reference has been made to unemployment. There is only one way in which in future we shall be able to tackle the question of unemployment and that is by increasing our home production pari passu with an increase in our power of consumption. Merely to increase our home production to produce foreign exports does not increase at the same time the power of consumption of our people, but if we within the country itself use every effort to increase production at the same time that we give increased power of consumption to the people, we have gone a long way towards getting on the road to a solution of the unemployment problem. It is because I believe that the process of increasing production in this country has to begin upon our own soil that I believe our attention ought to be turned in the direction of agriculture. What is the great want of agriculture at the present time? It is only certain sections of that industry that are in a declined or a depressed position. Milk, butter and dairy produce generally cannot be described as in the depressed condition of crops, such as wheat and so on.

Why is it that the farmer is turning his attention from ploughing to dairy farming? It has been made clear by those who have studied the facts that the reason is that for his dairy produce, at any rate in the production of milk, he has not only a certain market but he has a fixed price at any given period in the year. In regard to wheat, to take one crop alone, the position is entirely different. According to the results of one research, which has been very carefully carried out by people who are more concerned about the truth than in advocating a particular doctrine, the price of wheat has varied in the course of a century from 18s. to 180s. a quarter, which means that to produce in a country like ours for the wheat market is to engage in a very great gamble. The price has gone up and down in a sharp curve. If we could strike a mean between the lowest price and the highest price we should have a level of prices that would not only encourage the farmer, but would justify and enable the farmer to pay his labourers a proper living wage. We want a fixed medium price, and the only way that we can get that is by removing the shock which takes place every now and then because of these varying world prices. You will not do that by a tariff. A tariff does not follow world prices. A tariff has to be fixed for a given period, unless the whole time of this House is to be occupied in varying the tariff, and for the time that it operates it is entirely inappropriate to the price level that has been reached.

For that reason, we are driven back upon the necessity of having an import or purchasing board. Such a board would be able to establish a definite preference for the produce of the English farmer and to fix prices for certain produce, and the farmer, knowing for these crops, as he does in regard to milk at the present time, exactly what price he could get, would be able to determine with some sense of security what he would do with his farm during the ensuing year. That would lead to a great increase in the employment of the plough on the land, and the growing of grain crops, and would mean the return of large numbers of toilers to the land. At the present time, when the prices are down in the trough, when the farmer is getting something less than his outgoings on his crop, the labourer is turned adrift. He has no unemployment benefit, he is driven into the towns, and he takes what job he can get until he has a card properly stamped and can in his turn, when he is unemployed, get his unemployment relief. That process would be stopped if we could equalise our agricultural prices, and it would do away with the necessity of turning away the labourer when the world price is at the bottom.

There are other advantages about the import board which make it important that the Government should bring it forward and make it clear that it is a definite policy to meet the present situation. It is dangerous that in this country we should, metaphorically, live from hand to mouth as regards the staple food of the people. Many people can recall what happened during the worst period of the War when it was noised about that our food supplies were very low. On what authority the statement was made I cannot say, but I was told that at one period during the War there were not three weeks stocks of food in this country, and that the sea was swarming with submarines preventing other supplies being brought in. That was a moment of very great anxiety. We had been in the habit of living from hand to mouth in regard to four-fifths of our food supplies. There are seasons in the year when we have many months supplies stored in the country. At another period of the year everything is at a low ebb and we are within a very short period of an actual failure of supplies. Therefore, I suggest that unless we have this purchasing board as a nation, we have no control over our food supplies. In order to obviate any such recurring danger, we should store up food in sufficient quantities so that at any one moment we might have supplies for one year or two years.

To show what can be done in this respect, I understand that in Canada at the present time there are two lots of carry-overs. The year 1927–28 was a year when Canada produced more grain than Europe would buy. They had millions of bushels of wheat left over, and they stored it in their granaries or elevators. A year later they produced another surplus because Europe was buying less than previously. Again, there vas an addition to the surplus in store, with the result that Canada to-day has almost sufficient grain stored, even if it sowed nothing at all this year, to supply the probable wants of Europe during next year. That is according to figures that have been published. These facts bear out my point that wheat is storable and that it should be stored in this country. If we were wise, we would store it along with other foods that are also keepable in order that we should not be in danger of our supplies failing at a moment of crisis. I suggest that this would be a wise measure and that these are patriotic views. The import board means to me that, as an Englishman, I should have the satisfaction of knowing that my country in its relations with its kinsmen countries overseas would, by a definite action of its own, a gesture, of its own volition, canalise the supplies of food in such a way that there would be a definite gesture of "hands across the sea" between this country and the Colonies. I wonder whether the advocates of Preference on the other side of the House are really sincere and mean what they say when they want to give a Preference. Did they do so, they would see with me that it is not a matter of juggling with tariffs, but a matter of making an offer to our Colonies and saying, "As a nation we will buy from you, even if we do not ask anything in return." It would not cost us anything.

The import board would buy at a certain price, not an up or down price but the mean price. When they had got themselves established, they would be able to buy over a period of years at the mean price, and therefore there would be no reason why the prices should go up and down. The board would have exercised its true preference. The English farmer under this system would produce at a price that would spell for him a proper return and for the labourer a proper living wage, so that he could bring up his wife and family in as decent a way as the worker in the towns. Having given that preference to the English farmer and the second preference to the Colonies, there will be a very large gap left between the supplies available and the needs of the people of this country. That can be filled in one way—in the open market. If Russian wheat comes along and it is subsidised, take it. The subsidy is a gift to the people of Britain, and instead of Russia being a sort of ogre to us by the subsidising of wheat, she will be a benefactor, because we shall be able to buy this surplus wheat cheap without endangering the position of our home farmers or our colonial producers. In this way we shall find a solu- tion of the difficulties that confront us at the present time. If any mistake was made by the hon. Member for Smethwick, in his elevating and inspiring speech, it was that he wanted to cover too much ground at once. If we control our imports in regard to food supplies we can leave the other matters to be settled in the future.

I believe that along these lines, and not along the lines of going back to old cries and counter cries will the solution be found. In one of the Divisions of London to-day the old stock-in-trade, shop-soiled cries are being used. We hear of "The Prosperity Candidate." Can this House really think that people are so foolish as to be misled by a cry of "Vote for Prosperity"? And do they mean the prosperity there is in America or the prosperity there is in Germany I have seen both, and I do not want them. People who talk about prosperity must realise that even if it is possible to bring about prosperity by the vote of the people, that very prosperity would do nothing but increase the rents of landowners until we get the Bill which is promised in the Gracious Speech dealing with the valuation of land. All so-called prosperity means the raising of the rents of the owners of the soil.

It reminds me of a little song of many years ago, the last two lines of which stick in my memory. It refers to a poor woman, a widow, whose husband died through an accident on the railway at a time when there was no compensation. Her friends clubbed together and got a little money, £50 or £60, and put her into a little shop. The good soul and her friends, not knowing anything about business, went into the shop on a weekly tenancy. She was a very pious old lady, went to church on Sundays and said her prayers every night. She prayed for the prosperity of her business, and, as the song said, every time God answered her prayer the landlord raised the rent. I am afraid that is what. will happen if we are merely content with the cry of prosperity. All this sort of thing shows me that people are out to mislead. The last thing anyone should want to do is to mislead the voters of this country. We are face to face with a very complicated situation, and I appeal to the Government to face it with something more daring than we have at the moment.

I am pleased to see one or two Measures in the Gracious Speech which will have a strong bearing on the future of our country. One is the school leaving age. I have had 20 years' experience of administration in education, and I know the extraordinary results produced by giving the children of all classes in the community a sound four-years' course after their primary course. I believe that if they are given the training to which they are entitled, a sound organised training, they will acquit themselves well and make a greater success of this country than has ever been done before. That Measure alone, if it is passed, will leave a great mark in history. We do not know what its ultimate effects will be, but it will show itself in subsequent elections and also in the policy which will be pursued by this country. Apart from that I really feel that on matters which really come home to everybody, both outside and inside this House to-day, the difficulties that confront us in business, the difficulties in finding accommodation, if we do not happen to possess it, the difficulty of finding work, the difficulties in every direction owing to present world conditions should be approached in a much fresher and more reasoned spirit than hitherto. The suggestion—it is only suggestion as yet—of this purchasing board is a direction in which we should look in order to break fresh ground. If we work it out I believe that we can achieve more than one purpose. If we only settle the old squabble between Free Traders and Protectionists, if we only settle that stale fight, it will be a great gain and it will take us along a new line of thought by which it is possible, by the application of the principles of this party, the collective power of the community, to find a solution for many problems which at present appear insoluble.

Sir DONALD MACLEAN

I envy the hon. Member for Romford (Mr. Muggeridge) his complete confidence in the view he holds that his policy is a solution of all our social and political difficulties. After some experience of public life, I realise, like the late Lord Balfour, how imperfect the world is and how imperfect, and necessarily imperfect, must be any attempt to suggest a solution which is going to cure anything like 80 per cent. of the troubles with which we are faced at the present moment. I was very much interested, and I am sure the House was, in the speeches of the hon. Member for Smethwick (Sir O. Mosley) and the hon. Member for Westmorland (Mr. O. Stanley), both of them young men possessing undoubted intellectual gifts and approaching with great sincerity the difficulties of the present moment. But they were too pessimistic. Anyone would imagine that the world has passed into an entirely different phase after the War, that there had been nothing like it in the history of the world. Anyone would imagine that there was in that War some peculiar quality which completely changed human nature. If they would take the trouble, not to read for the first time, but to renew their acquaintance with the results on Europe, and to a lesser degree on other parts of the world, of the Napoleonic wars, they would find something like the very remedies they are suggesting to-day put forward as a solution of the difficulties of that period.

I was much interested in the suggestion, nibbled at by the hon. Member for Westmorland, with regard to import boards. Anything more disastrous than the experience of this country of import boards after the War it is scarcely possible to conceive. I remember this particularly, because I had a good deal to do with that matter, and I remember the results of the bulk purchases by business men made at the request of the Government in the then condition of the nation. The men engaged on these great transactions were certainly equal to any business men you can produce at the present time and were imbued with a great spirit of national service, which was a more happy legacy of the War. The cost to the nation of these bulk purchases of food supplies and some raw materials was so staggering that we had to take the earliest opportunity of disbanding them. Take the illustration given by the hon. Member for Romford of the Canadian Export Board, or what is called the wheat pool. I am sorry to disturb the equanimity of the hon. Member, but I would suggest that he should examine the results up to the present moment. What does Canada think of this export board?

Mr. MUGGERIDGE

It has guaranteed it.

Sir D. MACLEAN

Last year in Canada the export board held up, exactly as the hon. Member for Romford desires to do now, products in order to get a better price. Selling wheat is very much like selling a horse; you will never get as good a price as the price you have refused. To-day Canada is staggering under the weight of two seasons' crops which she does not know what to do with. It is really ruining the position of Canada.

Mr. WALLHEAD

Ruined by prosperity !

Sir D. MACLEAN

I am dealing with the question of the export board. There is another point to which I should like to draw attention, and that is the amazing statements made by the hon. Member for Smethwick. He talked about capturing and securing the home market for our production. He must have had some reservations in mind in regard to that. What home market can consume the output of our coal fields? Seventy-five per cent. of the output of the South Wales coalfield is export, and there is barely one-fourth of the product of the cotton industry which could be consumed in this country. The rest of it is for the world. Our steel, our worsted, our hosiery—the facts are the same. It is perfectly lamentable that, carried away by a lofty devotion to an ideal, these obvious facts are completely ignored. But these facts remain; and if you are going to make your bulk purchases through an import board, I ask this question: How are you going to make your bulk payments for them? How is that going to be done? Is that to be done also by export boards exchanging goods for those which are bought by the import boards? I hesitate to give the obvious answer that whatever you get in you pay for by some service which you send out. Clearly there is only one way to do it, and that is to adopt the Socialist system; that is the only way. What Socialist State is there with whom we can do business in that way, with whom we can exchange our goods on these terms? You cannot do trade with Russia, except now and then, and in some cases by bartering across the ship's rail, until Russia becomes organised and purged and purified into a state which resembles much more nearly our own. I raise this question because it is something with which we have to deal to-day. If we are to tie our hands in this way with regard to our exports and our imports, we really constitute ourselves a Socialist organisation for foreign trade purposes. Where should we be as a Socialist business organisation with an individualistic world? Anyone who had any knowledge of the Government attempting to do business during the War and after the War realises what that means.

I know perfectly well that slowly and surely, in many directions, this country is moving towards a much larger measure of—I shall not say Government interference, but Government organisation in many of its most vital parts. That obviously is coming. But there are limits to it. You can do that and maintain the essential individuality and freedom of the State. But this is a crude proposition, alarming when we are face to face with so difficult and dangerous a position as that with which we have to deal to-day. An hon. Member said just now that the country was frightened. So it is. But it is not the business of this House to get frightened; it is the business of this House to look at these things steadily, and as far as possible as a whole. There could not be anything more disastrous than that we should be driven into some quack remedy, it might be from the best of motives. We should carefully scrutinise and examine and see how far the new ideas really are an improvement on methods which have been based upon principles that are as much a part of human nature to-day as they have been at any time in the last 1,000 years.

I really wanted to speak to the House on a subject which is not mentioned in the King's Speech. In none of the speeches on the Address yesterday or to-day has there been a scintilla of suggestion that the country is in a serious and dangerous state with regard to its huge national expenditure. Hitherto in a King's Speech there have been three or four words about Estimates being submitted and about due regard to economy. I cannot think that those words have been left out of the King's Speech before us on purpose, but certainly they are not there, and the record, not only of this Parliament but of the Parliament which preceded it, shows that this. House as a guardian of the public purse and as an instrument whereby we can really attempt to get value for the nation's money, has completely and abjectly broken down. I would draw the attention of the House to one or two facts with regard to national expenditure. We are the most heavily taxed nation in the world. Taxation is not less than £15 per head. What is the figure in those countries with which we have to contest for our share of the world's trade? In the United States it is £7, and in Germany about £6.

But here is the sinister fact. With our declining trade, our national expenditure steadily goes up. Let us take the record of the last seven years. In 1923–24 the total of £789,000,000 was the lowest since the War. It has increased this year, with the Estimates that are in—I fear that those Estimates will be very considerably exceeded—to a sum of £884,000,000. That is an increase of £95,000,000 in seven years. How has the increase been brought about? As I understand the facts they are these: £12,000,000 is due to the Ministry of Labour, in connection with unemployment claims; widows' and old age pensions account for £22,000,000; and derating for about £31,000,000. This last item, of course, is a transfer of a burden from one class of taxpayer or burden-bearer to another, and I would only add to that fact the statement that, while in some respects it has relieved some industries, it has put a crushing burden upon the general taxpayer.

Taking those totals, there is an increase of £65,000,000. I am not going to criticise that at all to-night. For the purpose of my argument I leave the figures entirely alone. But the House will see that of the £95,000,000, £30,000,000 is still to be accounted for. That has gone, I think, in increases throughout the spending departments and some that are not spending departments for the expansion of the public services. There is another very interesting fact and it is almost entirely concealed by the public accounts. There have been automatic decreases, first of all, on account of War pensions. Those decreases amount to £20,000,000. Happily there has also been some decrease—there ought to be a far greater rate of decrease—in the number of Government departments whose operations have become unnecessary—Enemy Debts, war stores and a whole range of minor offices. That represents about £5,000,000. Then the reduction of the National Debt has also brought about a reduction in the amount of interest. That amounts to about £13,000,000. But owing to the raids on the various national financial cupboards, the real net result of all that is a reduction of only £3,000,000.

Here is another point: There has been a remarkable fall of about 28 per cent. during the past eight years in wholesale prices. The Government are the biggest buyers in many respects in the wholesale market, and therefore, if they have been buying at a fair wholesale marketing price, as I assume they have done, there is an automatic saving in expenditure which they have made. Mr. Francis Hirst puts that down at £20,000,000. I halve the amount so as to be sure that I am on the right side. The total of the figures I have given is at least £40,000,000. That has gone; there is no sign of it at all. Therefore, the real increase in national expenditure is not £95,000,000, but £95,000,000 plus £40,000,000, or £130,000,000, for which we have to account. Those automatic reductions, if brought into effect, even with all our payments, many of them unavoidable and many of which I heartily support—widows' pensions, old age pensions and matters of that kind—would have brought down the Budget total to-day, not to £784,000,000, but to £835,000,000 or £840,000,000.

Further than that, we should have brought about what is vastly important, the spirit and determination to reduce national expenditure, in place of the hopeless and helpless attitude of this House. I feel as helpless as anyone. Here we are faced with this grave situation and we feel that we can do nothing. If we do not do something with the situation, the situation will do a lot with us; that is clear. Those who have responsibilities in business, who have to keep a very keen eye on world conditions and tendencies, see very little hope. The right thing to do is to face the facts. There must be some years before there can be any adequate trade revival which will enable the people of this country to bear this crushing burden with anything like ease. This House has a duty, and I wonder whether it will perform it. It cannot do it itself. I have come with much regret to that conclusion. Committee of Supply, we know, is the ancient and time-honoured occasion when the House as a whole should apply itself to the duty of controlling national expenditure. We know what happens. Twenty days are allotted but a very large proportion of those days are occupied by what we call "full dress" debates. Something happens in the Near or the Far East and down goes the Foreign Office Vote. Who talks expenditure then and what chance have the back-benchers, many of whom, on all sides of the House, are really keen and anxious to discharge this primary duty of the House of Commons?

I speak with some knowledge. During 17 or 18 years' experience of this House I have had the honour of sitting in the Chair and watching. Debates particularly those in Committee of Supply. I think that of all the hundreds of days that I remember there were not 50 days in the whole of my Parliamentary experience on which the House seriously addressed itself to its primary duty. But we have something else besides the House in Committee. We have the Public Accounts Committee. Now the Public Accounts Committee is a very valuable body but it discusses the accounts and payments of the year which has gone—and most interesting its reports are. Then the House has set up an Estimates Committee. The Estimates Committee is a most valuable body and it produces in any one year a couple of reports on a couple of Departments. They are excellent reports but meanwhile the millions are going out and all that we have by way of check are these reports which are, from time to time, given to us. That will not do. That is not in any way a real check upon this terrible expenditure.

I do not say that all this expenditure is non-productive. Hon. Members know that I do not take that line but such vast expenditure as I have indicated is a matter of the deepest concern. What do I suggest? I know that the Chancellor of the Exchequer has other engagements of an important kind which prevent him being here, but the right hon. Gentleman's effective—I will not say substitute but colleague—the Financial Secretary to the Treasury is here tonight. Now there are two things which you can do. As regards one of them I would quote from a speech made by one of the greatest men who ever occupied a seat in this House, the late Lord Oxford, whose mastery of finance was one of his most distinguishing characteristics. After he had left us and gone to the House of Lords—in June, 1924—with all the weight of his vast experience behind him he made a speech on this subject. He spoke about the Budget of those days, which was many millions below the Budget of to-day though the trade of the country then was far better than it is to-day. He pointed out that there were enormous difficulties in dealing with this matter and that when the question was brought forward there were the usual queries "Are you going to starve national services?" "Are you going to cashier devoted and efficient servants of the State?" "Are you going to cripple or maim the social services?"—the last a query which has always appealed most to the House. Lord Oxford said that he knew the full weight of these questions, and he added: I have come to the conclusion that the Chancellor of the Exchequer, in the performance of this invidious but most imperative duty, must boldly take the line of rationing- the departments. He must say to them, frankly, Your functions are important; your objects are excellent; many of the proposals you make are proposals which as a politician and a statesman command my complete sympathy and approval, but you must cut your coat according to your cloth in the condition in which we find ourselves at the present moment.' What did the Chancellor of the Exchequer say the other day? It showed, I will not say a complete surrender because that is not like the right hon. Gentleman, but complete impotence as far as he was concerned and as far as this situation was concerned. Speaking to the bankers on this great question of national expenditure, he said: Expenditure is determined by policy and it is Parliament and behind Parliament the electorate who decide policy. When that has been decided it is for the unfortunate Chancellor of the Exchequer to find the money to foot the bill. That would not have been the answer of Mr. Gladstone. It would not have been the answer of Sir Michael Hicks-Beach. None of the great Chancellors of the past would have given that answer and I deplore profoundly that we have arrived at a time when the Chancellor of the Exchequer, the trustee and guardian of the public purse, puts up his hands in this way and says "I cannot help it." I think it was Sir Michael Hicks-Beach who as Chancellor of the Exchequer once said "I know what the nation's finances can stand and if I am pressed in this way and the Cabinet is against me I will resign." In our own days a proposal has been made by Members of this House by means of which the Chancellor of the Exchequer might find less difficulty in dealing with this position. There are Members of the House—I regret that as time passes their number grows fewer—who remember 1920 when the vast national expenditure terrified the country and some Members of this House took the line of persistently calling attention to the danger which threatened. What did they do? The Chancellor of the Exchequer of that day, was equally helpless but they set up a committee—if such a committee were set up to-day I would call it a Committee of Public Safety—composed of Members of this House and some trusted representatives outside to go through the expenditure of every Department and to point out, as they could point out, where it was possible to effect great savings.

Take what is happening to-day in some of our Departments. In the case of the Navy the personnel has been reduced to 90,000, or round about that figure, and the civil administrative staff has been increased by about 2,000. The same thing happens in the War Office and in other Departments of State. I hope that something may be done in this matter. notice that the Conservative party in their manifesto state that if a revival of trade is to be brought about, there must be rigorous economy combined with reductions in taxation. But I also remember that in 1924 they said the same thing and that nothing was done, while the increases continued. I earnestly press upon the House the consideration that it is its high and bounden duty to the nation to grapple with this crushing weight which is upon the country to-day. As Mr. Gladstone said, there is a spirit of expenditure. There is a desire, a tendency for expenditure prevailing in the country and insensibly and unconsciously it affects the spirit of the people, the spirit of Parliament, the spirit of the public departments and, perhaps, even the spirit of those whose duty it is to submit the Estimates to Parliament.

If those who are interested in this subject look at history, they will find written large for all who seek it, this truth—that other nations, which, in comparison to the size of the world in their days, were as great and as powerful as ours, have fallen, not so much by the attacks of those who sought to destroy them by military means as by the crushing weight of extravagant, useless, unnecessary national expenditure. From the time of the decline of Rome to the decay of Spain, and right down to the crash of Russia, this has been so, and it is as profoundly true to-day as ever it was that the factors of common sense and homely wisdom which bring about success in private concerns, are those which are really applicable to national finances. Rationalising is a great cry to-day. There is a great demand that we should increase production as swiftly as we can and improve the methods of production but what we ought to do is to rationalise the industry of Government. I say once again that history will make no excuse for this House of Commons, founded as it is on the principle of the control of the public purse, if it fails in its bounden duty to the nation in this time to see that rigid economy in every Department is the spirit of public expenditure.

7.0 p.m.

Mr. W. J. BROWN

The debate to-day began with three important and three courageous speeches on unemployment, but the right hon. Gentleman who has just spoken has diverted the discussion from unemployment to economy. If I begin with a word on economy, it is because certain interests with which I am charged are affected by the demand for economy, but, having said what I require to say on that head, I want to return to the problem of unemployment with which we began this debate to-day. The right hon. Gentleman the Member for Northern Cornwall (Sir D. Maclean) has for many years past, certainly long before I came into this House, made public economy his outstanding interest in politics. His contributions on that subject are always listened to with respect, but it is not sufficient to cavil at the size of the State expenditure without indicating where he himself would economise. At the present time we are spending about £800,000,000 per annum and of that £800,000,000 some £350,000,000 goes in the service of the debt. I and many other Members of the House feel that there is room for tremendous economy on that £350,000,000, because we are paying interest in pounds worth 20s. on money which we borrowed when the pound was worth from 8s. to 10s. Is the Liberal party, is the Conservative party prepared to advocate a reduction in the rate of interest on the National Debt commensurate with the rise in the purchasing power of the pound?

Mr. FOOT

Is the Labour party?

Mr. BROWN

For the moment I am riot obliged to answer that question because the plea for economy to-day has come from the Liberal benches and, when that plea comes, we are entitled to ask the right hon. Gentleman from whom it came to particularise. Is he prepared to do anything with that expenditure on debt, which represents nearly one-half of our total expenditure year by year? Secondly, is he prepared to do anything with regard to the £120,000,000 which is now spent in the service of arms? Those two items together make up an expenditure of nearly £500,000,000 out of our £800,000,000 and in my view it is in that field and not in the remainder of our national expenditure that economies should be looked for. Leaving the service of the debt and armaments, where is it that the right hon. Gentleman proposes to economise

Sir D. MACLEAN

The hon. Member has put those two questions directly to me. I would not be a party to the breaking of any contract between the State and the investor in securities. I want to be perfectly clear with regard to that. With regard to reductions in the fighting or defence services of the Crown, I should say that there would be a large measure of agreement between my hon. Friend and myself with regard to such a reduction.

Mr. BROWN

In those circumstances, I can only express the hope that next time I put down an Amendment to reduce the expenditure on the Army Estimates the Liberal party will come into the Lobby with me and not basely desert me as on the last occasion. Leaving expenditure on Debt and on national armaments, where else does the right hon. Gentleman propose to economise? Is it upon the meagre and inadequate expenditure of the State upon the victims of unemployment Is it upon the inadequate expenditure by way of provision for the aged? Is it on education? Is it on housing? Is it on public health? We are entitled to ask those who claim that economy should be practised to particularise where they propose to practise it. If it is not on those things, is it on the Civil Service? I happen to represent directly the Civil Service, and I should like on some occasion to clear up the profound misapprehensions that exist in this House with regard to conditions in His Majesty's Civil Service. There is a common impression that every civil servant is a highly paid and under worked individual. The truth is that, out of 300,000 civil servants, we have 200,000 who are not getting a living wage. We have 125,000 civil servants in England getting less than £2 10s. a week, including bonus. We have full time adolescent labour employed at 12s. 2d. a week. We have 150,000 civil servants getting less than £3 a week inclusive, and we have not 8 per cent. of the Civil Service getting the minimum wage established for Members of this House. If we are to have an economy campaign, then let the Liberal party and those who speak for it be precise as to the directions in which that campaign is to be exercised.

I did not, however, rise to deal with economy to-day, but with the King's Speech. There are many things in the King's Speech which we on these benches received with pleasure. We are glad to learn that the tyranny of the Trade Unions Act is to be repealed, that the raising of the school age is to be accomplished, and that agriculture is to be taken in hand. For these and other features of the King's Speech, we are thankful and we recognise their utility, but, when everything has been said that can be said in its favour about the King's Speech, the impression left upon my mind—and I am certain upon the mind of the country—is the complete inadequacy of that Speech by reference to existing conditions in the country. If the King's Speech that we listened to yesterday had been produced in the stable conditions of 1905, one might have regarded it as a reasonably good King's Speech in those conditions, but, in the conditions of 1930, the King's Speech that we have listened to at the opening of this Parliament is almost a complete irrelevance to the conditions that face the country at the present time.

I begin by asserting that we must judge that King's Speech in the light of the conditions that exist in our country. What are those conditions? For 10 years we have had an unemployment problem of over a million. In the early days of that problem we were inclined to treat it as if it were an incidental and passing feature of the post-War situation in this country. It is only of recent years that we have begun to look on that unemployment problem as being different in kind and in extent to the periodic depressions that we experienced in pre-War conditions. Indeed, the party with which I am myself associated, has made it a chief object of attack upon the parties opposite that they refused to treat the post-War unemployment problem as being what it was, a serious and permanent change in our national situation, and that they treated it as if it were a repetition of a pre-War periodic depression. We have attacked them for doing it, and now we are occupying the seats of government of this country. Putting it differently, we have in office a Government which, by virtue of its antecedents and of its public pronouncements, might be expected to bring forward a King's Speech that dealt with the post-War unemployment as if it were different in character and kind from the unemployment depressions of pre-War years.

During the lifetime of our Government that situation, already grave, has taken a serious plunge for the worse and we have seen unemployment rise to 2,250,000 without any sign that we are yet at the peak point. The causes for that sudden plunge have been analysed with great clarity this afternoon in the speech of the hon. Baronet the Member for Smethwick (Sir O. Mosley). do not want to pursue that analysis, but I would point out that all the causes that the hon. Baronet referred to fell under two heads, first, the decline in commodity price levels throughout the world and, secondly, the inadequacy of our medium of exchange, namely, gold, to the requirements of the present situation.

The explanation of the Government for that rise in unemployment is that, while the commodity prices are falling, a tremendous volume of purchasing power which would otherwise be effective is restrained, and that it is not until prices reach their bottom that that restrained purchasing power becomes effective and prices rise and the unemployment figure becomes less appalling than it is now. Indeed, we are told that the Government expects that by next spring the bottom level will have been reached and that then the tide will turn. It is the view of those who think as I do that falling price levels are not a cause but a symptom of a cause. Why is it that price levels have been falling in the world during the last few years? They have been falling because the production of the world has been increasing without a corresponding increase in the consuming power of the world. Suppose that it be true that by next spring we reach the bottom of that curve, unless by next spring the causes which have operated to cause a decline in price levels during the past two years have been removed there will be no more stability about the situation reached then than there has been about the situation which has existed since 1920. In that situation what do the Government offer? So far, we have heard no proposals for more closely relating the medium of exchange, gold, to the amount of commodities produced in the world. We have had no proposal of any kind dealing with that particular matter and, as regards over-production, as it is called, the one thing in the King's Speech which refers to that is a paragraph advocating an increased drive towards rationalisation under capitalism. That is the only paragraph directly relating to over-production at the present time.

What is rationalisation? Rationalisation either means producing the same quantity of goods with a less amount of labour, or producing more goods with the same amount of labour. If it is the first that the Government intend to try to achieve, the production of the same amount of goods with a less amount of labour, then it is clear that that very rationalisation will intensify the very evil that it seeks to cure. If it is the second that the Government have in mind, the production of more goods with the same amount of labour, they face the other horn of the dilemma, that steadily to increase the amount of commodities in the world without at the same time increasing consuming power is to perpetuate the decline in commodity values which lies at the root of the sharp upward move in unemployment during the last 12 months. So that, whichever the Government mean by that reference in the King's Speech, it threatens to intensify rather than cure the evil with which it seeks to deal.

Rationalisation might be justifiable and might help to relieve unemployment in Great Britain if, as a result of it, Great Britain were able to secure a larger share of the markets of the world. If that were to happen, it would involve a corollary, that by putting English workmen into work we should put out of work corresponding numbers of foreign workmen. But even if one took the view that our exclusive concern was with English workmen and not with German, French or American workmen, rationalisation as a means of commanding a larger share in the world's markets cannot be embarked upon without certain necessary concomitants. We are not now the only workshop of the world; we are one workshop out of many, some of which have advantages that we do not and will not possess. That especially applies to America, and later on it will apply also to Russia. While rationalisation is pursued by one industrial producing country and the others do not rationalise, the rationalising country may achieve an advantage in the markets of the world which helps it with its own unemployment problem. But if everybody else is rationalising too, at the end of a, period of years the relative position of the competing capitalist States remains what it was at the beginning.

There is another factor. While that process of trying to make the British capitalist system beat the capitalist systems in other parts of the world is going on, certain other things happen. There is no parity of conditions of employment as between the workmen of the various competing capitalist systems in the world, and in any struggle on the part of one capitalist industrial system with others, the system with bad working conditions is at an advantage compared with that in which conditions are relatively good; and in sheer self-defence the capitalist industrial system in which workmen's conditions are relatively good is driven, by stress of international competition, to drive its own wages conditions downwards in order to enable it to carry on that struggle successfully with other Powers.

One of the most striking features of the last 20 years has been the bringing of the coloured races within the area of capitalist exploitation. I remember, in my boyhood days, being always reminded of the inferior conditions which the German workman had to endure as compared with the English workmen, but in the last 20 years we have brought Indians and Chinese into the field of capitalist exploitation, with the result that both the British workman and the German workman are being confronted with the coolie conditions existing in the East. While this drive of rationalisation continues in the hope of enabling the British capitalist system to compete successfully with other capitalist systems, we are going to see the drive downward to coolie conditions in our own country. We have already warnings that the new wages offensive is not far away, and when it comes, as it will come, its effect will be still further to contract the home market, which is the only alternative to the dream of restoring the export trade.

But it goes even further. The speech of the right hon. Baronet who spoke before me is symptomatic of the next thing that is going to happen. In the struggle between the British capitalist system and its competitors, every additional pound of taxation existing in this country compared with them is a disadvantage, and we have Conservatives and Liberals alike pointing out that the taxation per head in Great Britain is £15, while in the United States of America it is £7 and in Germany £6. Then arises another drive, the drive to economise on your social services with a view to relieving that handicap on British capitalism as compared with capitalism abroad. So far has it gone already that the Liberal party—the historic party of social reform in this country, the historic party for developing and maintaining social services—makes as its chief contribution to this Debate on unemployment the proposal of cutting down national expenditure.

So we reach the situation that if we are to pursue the path mapped out by our Front Bench, we must expect, first, continued acquiescence in the lowering of wage standards in Great Britain, growing pressure against social services in various directions, and, at the end of a long period of competition with rival capitalist systems, the same relative position as between ourselves and them as that with which we began; and that is the appalling prospect which is held out to us in the course of the King's Speech at the opening of this Parliament.

Why is it that the King's Speech, which is the Government's speech, limits itself to what is, first, last, and all the time, a policy of capitalist rationalisation? They know, as well as I know, that the root of the problem is not to produce more; that the 19th century solved the problem of how to produce enough and more than enough for everybody; that the problem of the 20th century is a problem not of production but of distribution, but there is not a word in the King's Speech which deals with that under-consumption which results from the maldistribution of income in our society to-day. Why is it? I can conceive of two explanations. One is that the Government are a minority Government and cannot therefore, in their present position, propose what is the only remedy for this problem, namely, the socialisation of the land, the factories, the means of transport, and the means of life of the whole people.

The root of unemployment is that, under capitalism, the mass of the people receive too little by way of wages to enable them to buy the very things that they produce, and the only cure for that, ultimately, is to destroy the system which produces an owning class at one end and a wage-servant class at the other, receiving for their labour less than the value of the goods that they produce. It may be that the Front Bench will say that in present political conditions that remedy is not available and that instead we must proceed by means of social reform. I am not an unreasonable person, in spite of assertions which are sometimes made to the contrary by people who cannot distinguish between emphasis of statement and violence of thought. I am not an unreasonable person, and I can understand the mental attitude of men who say that political conditions preclude that path and that they must take the path of social reform.

But I want to say with great emphasis that the pathway of social reform itself is being blocked up by the very problems that capitalism in its declining stages is throwing up. We are almost reaching the stage where you can only achieve social reform by revolution. We are reaching a stage where, unless you can somehow insulate this country from the shock of world conditions, the very idea of slow progress by social reform which the Government postulate as their alternative to Socialism becomes practically impossible, because unless you can insulate, there is a sense in which every additional social reform, every extra penny on the national Budget, as the right hon. Member who preceded me would say, is a handicap to Great Britain in its struggle to maintain its end in competition with other industrial systems.

By this process of logic, I reach this conclusion, that the Government must do one of two things. They must either take their courage in both hands—and of that I despair—or they must be prepared to effect that very insulation which is the necessary precedent to enabling them to apply their own policy of revolution by way of reform. Unless the Government are prepared to adopt some such policy as has been suggested by the hon. Member for Smethwick, their own dream of proceeding by gradualism, by what I might call the "Drage" system—instalments delivered in plain vans—they cannot even pursue the very pathway which they themselves postulate as the alternative to the method of applying the Socialist remedy.

There have been two very brave speeches made in this House to-day, and I hope that my own is not altogether lacking in courage. One was the speech of the hon. Member for Smethwick, and the other was the speech of the hon. Member for Westmorland (Mr. O. Stanley). Both of them to a considerable extent cut across the orthodox angles of approach of that party and of this. I am very glad to see it, for this reason, that as a result of the insoluble contradictions which capitalism contains and which will make the unemployment problem steadily increase, as a result of the steady pressure upon our own country and the growing inability to maintain our own conditions in the struggle with other Powers, and because it becomes apparent that the line of social reform by the slow, easy, and comfortable method itself is precluded unless we can insulate this country, there is growing up in this country a profound distrust, a profound uneasiness, not merely with the various parties, but with the institution of Parliament and with democratic institutions themselves.

Unless the men on our Front Bench and on those benches opposite can get away from the old angle of approach, unless they can contrive to work Parliament in such a way as to produce a solution, there is going to be something else seen in this country, in my lifetime and in the lifetime of men and women sitting round me now: that is either an attempt outside Parliament to seize power and forge an instrument which will move, or the slow decay of this country under conditions which will make Parliament a complete irrelevance to what is happening in the country. That is growing. If anybody doubts it, let him look at the by-election results. What do they show? They do not show any swing to Conservatism; broadly, Conservatism is no more than maintaining its own. They show a tremendous falling away from Labour and Liberalism. There was a drop of 41 per cent. for the two parties in Bromley.

To what was that drop due? It was due to this fact. For 20 years there has been propaganda that there was no difference between the Conservative party and the Liberal party, and that these parties did not want to use Parliament, but that when we saw a working-class Government in office we would show them that Parliament could be used. To a large extent people have believed that. It was largely as a result of that belief that we were returned in the strength in which we have been returned. Whatever elements of discontent with Parliamentary and democratic institutions there have been during that 20 years have been held back by the belief that once we got a Government of a different character drawn from the work- ing-class community we would have a different use made of Parliament. That tide, which was held back so long by that belief, is now beginning to rise in the country. Immediately, it expresses itself in political apathy and a falling away of our supporters. Later on it will express itself in a turning against Parliament because of the inadequacy of that institution or the inadequacy of the men who run it—one or the other—to make that machine move in conformity with modern requirements. I submit to the House for its serious consideration that in our lifetime we have seen the coach horse give place to the electric train, and the electric train to the airship; we have seen the old post horse give way to the penny post, and the penny post to the wireless and the telephone. In every field of life we have seen a tremendous increase in the pale of life so that problems are thrown up many times quicker than they used to be. The only thing we have not modernised is the machinery of our Government; that remains as archaic as it was 100 years ago. That cannot continue.

There are two policies open to the Front Bench. One is to take their courage in both hands to endeavour to apply Socialism and to stand or fall by the result. I believe that, if they take that line, there is support for them in the country. 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.

Mr. BUCHAN

We have had to-night a very significant debate. We have had speeches delivered from both sides of the House, remarkable speeches full of fresh and original thought and of a true sense of reality. I am not going to follow my hon. Friend the Member for West Wolverhampton (Mr. W. J. Brown) into his always interesting, very able and, to my mind, occasionally luminous speculations, but there is one thing he said with which I agree. He has a real sense of the gravity of the situation to-day, and I heartily agree with his invitation to all parties, if they desire to safeguard democracy, to combine in thinking out new machinery which can combine efficiency and freedom. I find myself in agreement with my hon. Friend also in that I am profoundly disappointed with the King's Speech for the same reason that he is disappointed. It lacks any sense of reality, though I am afraid that my idea of reality may be different from his. It is a conventional programme made up of old articles brought out of stock. Some of the proposed measures are meant to meet injudicious promises made at the last election. With some I am in agreement. For example, I am in sympathy with the proposal to increase the school age, but the point which we dare not forget is that we are living at a moment of grave national crisis and that we cannot afford to do anything, however valuable in theory, which does not help to solve our immediate difficulties.

The Measures proposed in the King's Speech, so far from helping us, may increase our difficulties. Some of them, such as the Trade Disputes proposal, will end in wasting time in bitter partisan controversy. Even measures with which I sympathise cost money, and at this moment we cannot afford one unnecessary penny. The Government, in preparing the Speech, have shown no real sense of the gravity of the situation. They are living in a world of petty dogma quite oblivious of the true facts of the case at a time when every thinking man and woman in this country is seriously perturbed. They go on happily in a policy which has about as much relation to the needs of the hour as Jacobitism or the Divine Right, of kings. Unhappily, there can be no doubt about what the facts of the case are; on that we are all agreed.

The hon. Baronet the Member for Smethwick (Sir Os. Mosley) gave to-day an analysis as brilliant as it was accurate of the main facts of our economic situation. The first fact is that we have lost many of the assets which gave us our industrial prominence in the world. "All can grow the flower now, for all have got the seed." Other rival nations have climbed up to our level. They have found stores of power and minerals as good as our own. They no longer buy our exports in the same quantities because they can make the goods themselves. We find it harder every day to sell our products abroad, and it is only if we sell them that we can live. That is the primary truth, and from it follows the grim fact that we have over two million of our citizens unemployed. Remember, much of this unemployment is not merely a temporary malady, but a chronic disease. It is all very well, as many Government speakers do, to attribute it to the general dislocation of the world. Our troubles began before that universal dislocation, and will go on long after it has finished. Many of our basic industries must face the fact that they must descend to a lower plane because many of their own assets have been lost.

There is another fact. In our days of prosperity we spent a great deal of money in building up elaborate social services, the like of which I do not think can be found in any nation on the globe. That seems to me to have been right, for it was a wise and proper protest against the materialism of nineteenth century economics. It was an attempt to bring quality into the nation's life, and an honest effort to raise the national standard of living. But it cost a great deal of money. It is perfectly true that the expenditure is valuable, even economically valuable, but only in the long run, for there is no quick return. So we are spending money lavishly to-day while the assets from which the income can only come are daily sinking, and some of them have disappeared for good. What will the result be? It can only be one thing. There must come a time if we are to exist at all, unless we change our policy, when we shall have to cut down drastically the social services and gravely lower the standard of living. Does any Member of this House want to see that happen? But it certainly must happen if we go on as we are doing, standing still or drifting.

T am aware that there are many optimists about. I occasionally read them in the Press, and I occasionally read their speeches from Government platforms. I wish I could be an optimist. I am a great admirer of optimism, but I see little value in optimism which is based upon blindness. That kind of optimist has been defined as a man who views with equanimity the misfortunes of other, and a pessimist as a man who lives with an optimist.

There is only one problem before the country to-day, and that is the problem of our economic situation. Everything else should be subordinated to its solution. When you get a tangle of difficulties, you will generally find that there is one key question on which all the others hang. Our key question stares us in the face. We talk a great deal about economics, but we are very shy of mentioning the word economy. I am delighted that my right hon. Friend the Member for North Cornwall (Sir D. Maclean) had the courage to mention that unpopular word, for after all economy is the very essence of our situation. Economy does not only mean saving money, but getting your money's worth. Will anyone maintain that we are getting our money's value from a great deal of our national expenditure to-day? There is the glaring case of the national insurance system on which undoubtedly a great deal of money is being spent without adequate return to anybody. The Government. propose to appoint a Royal Commission, that old plan of wasting time. We have no time to waste before exercising economies. I do not, however, propose to deal with this point., as my hon. and gallant Friend the Member for Kelvingrove (Major Elliot) has already expounded it to-night. The real trouble is that there is no one on the Government side and very few politicians in any party with the courage to tell the nation the naked truth, the truth that by the road of diminishing income and increased extravagance we are marching straight to national bankruptcy. The situation seems to me so grave that I, like many other people in the country, have sometimes toyed with the idea of a national Government, an emergency Government to deal with a state of national emergency. I have the good fortune to have a constituency which is not exacting, and. so I am enabled to travel a good deal about the country, and wherever I go I find the people sick to death of party politics and party cries. They cannot understand why we do not lay our fiddles aside while Rome is burning. The advantage of such a Government would be twofold. It would pool two things—brains and unpopularity. It would bring the best talent in the nation to the solution of our difficulties, difficulties, I fear, which will not be solved by the present fatigued and embarrassed occupants of the Treasury Bench alone. More important still, it would saddle every party without distinction with the necessary unpopularity, so that none would have an advantage over any other. For, make no mistake, any solution of our difficulties will be an unpopular solution. It will demand from the nation and from every class a great effort of discipline and sacrifice. Can we look for such heroic measures from a Government which seems to be happily content with the remainder-biscuit of antiquated creeds?

There is an ugly word used a good deal to-day in the Press and on the platform, the word "defeatist." His Majesty's Government have spoken very nobly on this question. They have told us that they, at any rate, are not defeatists, and that all will still be for the best. A defeatist is not a man who faces up to a danger and refuses to try to escape from it by hiding his head, ostrich like, in the sand. Defeatists are men who are afraid to look at the facts, who are afraid to tell the people the truth, and gloze it over with pious phrases. They are men who distrust the character of their countrymen. They will not ask for a great effort of discipline and sacrifice, and yet there is no instance in our long history where we have made such an appeal to our countrymen in vain.

One last word. We have lost many of our domestic assets, we have lost many of our foreign markets. There is no single cure for all our troubles: but there is one way which offers a special chance of regaining what we have lost and winning new assets. The one hopeful avenue is to explore the possibilities, indeed, the certainties, of Imperial co-operation and Imperial development by means of what, I think, one of my hon. Friends called "specialisation by agreement." The Imperial Con- ference has been sitting. We do not yet know what it has achieved or has failed to achieve, but I confess that I read the speech of the Prime Minister yesterday with the most acute apprehension. Do the Government not realise the crossroads at which the nation stands in? Do they not realise that to-day we have a chance which, if it is rejected, may never come again? One hundred and sixty years ago a Chancellor of the Exchequer, Charles Townshend, succeeded in severing the American Colonies from Britain. Do the present occupant of that high office and his colleagues desire to go down in history as the men who, by their negligence, severed Britain from the British Empire?

Mr. R. A. TAYLOR

The hon. Member who has just sat down has taken upon himself the role of a pessimist, and, if I may say so, it is a role which does not suit him very well. There are other roles in which we find him more entertaining and instructive. It seems to me that he is the kind of pessimist who, when there are two evils, always chooses both. For, so far as I understand the essence of the speech he has just delivered, he seems to think that a necessary part of our salvation is the destruction of the social services we have built up, or at any rate a diminution in the cost of them, and that we must resign ourselves to the fact that we shall not again occupy that place in the markets of the world which we have formerly had. I would like to put one question to him. Does he not think that these social services are the very thing which has enabled Great Britain to face up to a very difficult crisis without social disorder and without any very serious diminution in the total volume of demand in our home market? If money is expended in protection against sickness, old age and unemployment, and is spent by the recipients in buying goods in this country, it does far more to keep trade going in this country than would be done by leaving the money in the hands of the super-rich to be invested, possibly, in competitive industries abroad.

Mr. BUCHAN

I am afraid I must have expressed myself badly. I have no desire to see the social services reduced in any way. My point was that unless we set our house in order there will come a day when there must be a drastic reduction and sacrifices.

Mr. TAYLOR

I wish to enter a strong protest against this general feeling of pessimism, the sort of belief that Great Britain is "down and out." I do not believe the facts justify the view which has been so frequently expressed during this debate. It is true, however, that we have to face a grave and serious problem. There are rather more than 2,000,000 unemployed people. That figure includes 583,000 women and 600,000 or 700,000 temporarily unemployed workers, as well as young people between 16 and 18 and it is also made up of 246,000 persons normally engaged in the cotton industry, 247,000 normally employed in the coal mines, 117,000 normally employed in general engineering, 76,000 in shipbuilding, 63,000 in the woollen and worsted industry, 129,000 in the building trades, and 166,000 in the distributive trades.

What. is the problem as disclosed by those figures? I will divide it into two parts. There are a number of clearly-defined industries in which there has been prolonged unemployment throughout the post-War period. Those industries—cotton, coal, iron and steel, shipbuilding and the textile industries—have to sell a very high proportion of their products abroad. Owing to changes in the Dominions and in the foreign markets which they normally serve it is undeniable that a set of conditions has grown up which is likely to militate against those particular industries recovering in the present state of the world; it is quite unlikely that in the course of the next two or three years they should recover exactly the trade which they formerly had. On the other hand, we have a number of industries, like the motor industry, the artificial silk industry, and certain branches of electrical engineering, in which the number of employés has constantly expanded in the post-War years. Imposed, as it were, upon that background we have during the last 12 months seen a paralysis sweeping over certain of our industries, deepening the existing depression and affecting industries like the distributive trades and the building industry which depend so largely upon the general prosperity.

To what causes are we to attribute this deepening of the normal post-War unemployment problem? Clearly, there are two main causes which go far to explain the present situation. First, is the fact that the world is very seriously disturbed by political unsettlement and strife, In India, in Egypt, in China, in Central and Southern America, and in Spain, the uncertainty and lack of confidence caused by the political conditions has undoubtedly militated very seriously against our export trades selling anything like their normal quantity of goods in those markets. Secondly, there is the factor of the enormous fall in commodity prices, which has been affecting not only Great Britain but every other industrial country which produces commodities to be sold on the world market.

8.0 p.m.

The House has already had a number of speeches dealing with the position in relation to the surplus of foodstuffs, raw materials and commodities of various kinds. It is quite obvious that that factor has temporarily diminished and seriously impaired the power of countries producing foodstuffs and raw materials to buy anything like the normal quantity of goods. Consequently, we have these two factors of instability and economic conditions due to the variation in the price of foodstuffs and raw material, and this constitutes the very serious problem which has existed throughout the last year. It would be a very grave thing for this country if, because of conditions which are likely to be temporary in their character, we applied some quack remedy which might make our position worse than it is at the present time. In spite of all our difficulties we still have for our working people and our unemployed the highest standard of life in Europe. In 1929–30 we exported sufficient to maintain our population at its present standard of existence, and this enabled us to pay for all the imports of foodstuffs and raw material which we needed in this country. As matter of fact, we are employing considerably more workers to-day than we did before the War. Over 10,000,000 insured workers are now employed in this country. In 1929, Great Britain employed 7 per cent. more labour and used 13 per cent. more raw materials than in the year 1913. If that be so, it seems to me that it has been clearly demonstrated that neither tariffs nor the system of import boards and other remedies, so ably advocated by the hon. Member for Smethwick (Sir O. Mosley), can help us to meet our immediate difficulties. We have to face the fact that the best the Government can do, if the causes to which I have referred represent fundamentally the causes of our present position, is necessarily very limited in the absence of a Parliamentary majority more in line with the policy which the Government appealed to the country to support.

I am therefore extremely gratified with the gracious Speech from the Throne, and if all its provisions reach the Statute Book in the lifetime of this Parliament, they will do a great deal to help us to improve the standard of life for the masses of our people, and will enable us to assent to the first great principle on the economic side which the League of Nations has worked out for regulating the hours of labour, which I regard as being of very great importance. I am extremely sorry that the Leader of the Liberal party is not in the House, because I wanted to ask him a question, in view of the criticisms which he passed upon the King's Speech earlier in the day. What is the position of the Government in relation to the problem of unemployment? At the present time the Government are divorced from any control of industry, and they have no responsibility, so far as the vast field of industry is concerned, for the process of rationalisation or the dismissals which are constantly occurring. The Government have not the power to control industry and the distribution of the proceeds of industry. If there has been a failure to solve this problem, it is due to the application of the principles of the private ownership of industry which has failed in the elementary purpose of providing all willing workers with a job. The failure is not due to the application of the principles of Socialism.

The position which exists in this country to-day in connection with unemployment may be compared with the position in relation to education. Every child in the country has a right to demand from the State a place in a school, and the provision of such services as will enable that child to benefit from instruction. This is a social responsibility, and the child must be sent to school; otherwise, the community takes action against the parents of the child. If we had a social responsibility for the control of industry and the distribution of its products, we could deal a deadly blow at the worst side of the unemployment problem very quickly indeed, provided Parliament would equip the Government with the power to do so. It is an appalling thing to meet in our constituencies men who have not been employed for a very long period. They are out of work year after year; they are men who are quite normal and efficient, and who are exceedingly anxious to add their quota to our store of national wealth. We see these men steadily deteriorating mentally and physically because there is no opportunity of employment which they are so anxious to have. It seems to me to be absolutely criminal for any party to agree to a state of affairs in which you have hundreds and thousands of men overworked, working overtime, and working longer hours than are necessary, while on the other hand there are hundreds of thousands of men who cannot get employment in a factory under any circumstances whatever.

If we were to equip the Government with emergency powers, they could insist that every able-bodied worker should he attached to some great industry or distributing service, and those services should not be allowed deliberately to overwork some men while other men, equally capable, are unable to get even a few days' work If the right hon. Gentleman who leads the Liberal party or the Leader of the Conservative party would be willing to give a Parliamentary majority to the Government to deal with this problem along those lines, I am certain that we could make a considerable contribution towards its solution, and do a great deal to restore the moral of the men who feel that they have lost their place in society, and that nobody has any use for them. We know perfectly well that there is not a Parliamentary majority for such a policy. The Government proposals have been described by right hon. Gentlemen opposite as being futile and ineffective, but they know perfectly well that the contribution which the Government can make towards a solution of this problem in limited for control does not rest in the hands of the Government so long as our industries are privately owned and controlled, and when the question of dismissals and the policy of rationalisation are controlled by private individuals. The control of these matters is in the hands of those who appoint the directors of industrial undertakings, who decide these problems, not from the point of view of the interests of the community, or the interests of the workmen or the staff who have spent a lifetime in the business, but from the point of view of material returns to the financiers whose capital has been invested in that particular undertaking.

The hon. Member for Smethwick has been making some very excellent propaganda speeches telling us what the Government ought to have done, but I would have preferred that the hon. Member had used his great gifts in the service of the Government to assist those of his colleagues who are wrestling with the practical difficulties of the situation, and who are not able to indulge in the propaganda which my hon. Friend's freedom permits him to undertake. I urge hon. Members opposite, particularly the members of the Liberal party, not to indulge in unfair criticism of the Government, because, if we have a ramping, raging propaganda in the country ignoring altogether the international causes of our difficulty, and ignoring those economic difficulties which would exist whatever Government takes office, we shall do an exceedingly bad thing for the continuance of Parliamentary government. We may develop a feeling that Parliamentary government is a delusion and a sham, but, in fairness to the nation and to the men and women who are unemployed, we are entitled to insist that responsible politicians should do all that they can to solve the difficulties of those for whom they speak.

Sir HARRY HOPE

The Gracious Speech from the Throne has been made at a time when unemployment is greater than at any other period of this trade depression. We see continued increases weekly in the numbers of unemployed. In these circumstances, we can well imagine that the leading Measure in the Government's programme would be one to bring some alleviation to this serious state of affairs. What do we see? The main Bill promised in the Gracious Speech is an agricultural Bill. We have not seen it yet, but, from the wording of the Speech, we may presume that its main provisions will be to create more small holdings, and also to begin to set up what is called large-scale farming. The Rouse will have to consider very carefully, when this Measure comes forward, whether it will do anything to relieve the serious situation in which we now are, whether it will do anything to bring the land of Britain into the position of contributing its maximum share as a solvent of the unemployment problem.

Let us view in a, dispassionate manner the condition of agriculture as it is at the present time. Those of us who live in or are connected with rural districts know that land is going steadily out of cultivation. At the present time we have the smallest area under cultivation that we have had for 60 years. We all know that it is arable land that provides the largest amount of employment; grassland does not provide employment on anything like the same scale as arable land. One result of the great depletion of the area of arable land is that men are being driven off the land. It is a sad spectacle to see the best of our manhood, who used to-work on the land, being driven from it, and the welfare of our rural districts being reduced. As men go from them, other work and employment is, of course, taken away from those districts. That is the state of affairs in which these new small holdings are going to be created, and this large-scale farming started.

At the present time land does not pay to cultivate. What is the reason? Any of us who has any practical association. with agriculture knows that the main reason at the present time is that dumped produce is coming in from overseas. Last year we had German oats coming in, which made that cereal an absolutely losing proposition. This year the situation is worse; we have all cereals coming in from Russia. on a far greater scale than that on which they came last year from Germany. At the present time, in the county of Forfar, which I have the honour to represent in this House, wheat is only worth something like 24s. a quarter, barley 22s., and oats 14s. Those prices mean that the producer is losing something like £4 an acre on every one of these cereals. It is in that situation that the Government propose, by this coming legislation, to start these new holdings. What chance have they of success? It is an absolutely cruel policy to bring men away from any other work, or even to bring men who are out of work, into a situation where they are only going to be faced with loss, trouble, and probably ruin in a few years.

I have always held that our land can be the means of providing the nation with a most valuable asset in the way of finding employment under the healthiest possible conditions for our men in rural districts. I have had a lifelong association with agriculture, and I know that the men brought up in our country districts are the backbone of the nation. It is from them that we get the stock of healthy manhood which brings to our industries in the towns and cities a virility that is invaluable to use as a, country. We can get that helpful support from our country districts if we will only treat agriculture in a sympathetic and helpful manner.

I know that hon. Members opposite will immediately think: "Oh, yes, that means by taxing the food of the people." We need to be very careful as regards the treatment of agricultural produce, and we need to realise plainly some important differences which exist. In the first place, there are two classes of foodstuffs. In the first class are those products which we do not produce in anything like sufficient quantity to feed our own population, and in that class, of course, I include wheat, meat, bacon and such products. We must import the major quantity of these products, and, therefore, it is idle to think that we can only benefit agriculture by putting a tax upon them. There are, however, other products which we can produce and do produce in almost sufficient quantities for all our own requirements. Those products are, in the main, potatoes, oats, many vegetables, and soft fruits.

If we imported products of this second category under a licence system, taking them in, by all means, when we need them, hut not taking them in when we have sufficient of our own supplies for all our own requirements—a licence system whereby a maximum price would be set up, and, as long as the home produce was in sufficient supply for our own requirements at or under that price, no licence for importation would be granted—such an encouragement would be given to home production that large areas of land would be put back into cultivation, men would be re-employed on them, and increased prosperity would be brought to the rural districts of Britain. I think that, before we take any step to create these new smallholdings or to engage on the large-scale farming which the Government visualise, we should do well to take practical steps to enable all those men who are put into that work to make a success of it. When we can do that in a practical way, by setting up a system of importation by licence, we shall be able to bring about a betterment of our country districts and to make an increased quantity of food produce available for our consumers.

We know how difficult it is for any man to build a house without first of all making a sure and solid foundation. I appeal to the Government to realise that the setting up of this new type of farming to which I have referred can only be made a success if they also take means to enable these men to make a success of their holdings. There is no greater mistake than to think that anybody can be a farmer. Farming is a very specialised industry, and a great deal depends on personality and on individual energy and effort. It is only courting disaster to think that men who have had no experience of farming, men who have lived all their lives in urban surroundings, can take up this new work with success at the beginning; but if, by a system of import licensing, we enable our holders to make a success of their vocation, I am sure that we shall be able to have more smallholdings taken up in our country districts by our agricultural workmen who, getting their foot on the first step of the ladder, will afterwards rise up and become capable and enterprising agriculturists. I think we can do all that, but we must, first of all, take the step of enabling these smallholdings to be a success, and, after that, we can build up a system which will enable more people to live in our country districts, contributing strength to the nation thereby and also producing more home produce for the needs of our people.

Mr. MORRIS

I do not promise to follow the lines of the hon. Member who has just sat down nor, indeed, the general argument to which the House has been listening. The country outside, and all Members of the House, are undoubtedly concerned about the high figures of unemployment and, in a very real sense, democratic Government in this country is on its trial, not so much as the result of the failure of the present Government to devise a cure for the present state of unemployment as from a totally different cause. The different political parties to-day at election time, and indeed upon the platform, are making offers to the electorate and putting proposals before them either that they can cure unemployment in the space of a year or that they are the only people who can cure unemployment if they are given office. The promises are made and result, as they must inevitably do, in a depreciation of the standard of public life. If anyone thinks that many people can be put back into employment in the present state of the world, and makes that promise to the electorate with the present outlook in this country, the promise is a vain and an illusory one.

One turns to our markets abroad. Over a half of the population of the world lives in three countries only, China, India and Russia. China is in a state of war. Her markets are disordered. She is no longer a customer. Political events in India have substantially handicapped trade. Political events in Russia have handicapped our trade to a further degree. How can it be expected that the trade of the world can employ a normal number of people and can hope to recover when one half the population of the world are engaged in the destruction and not in the building up of trade? It is an impossibility. If we come nearer home, if you compare the map of Europe to-day with the pre-War map, you find seven new countries which were not in existence in 1914, and all of them, in addition to the older countries, have determined that they must produce within their own borders all those commodities upon which they depend for their life, particularly in time of war. It may be a right or a wrong conclusion to come to. I am not arguing the old position of Tariff Reform or Free Trade, but they have come to that conclusion, and the one result of attempting to build up those industries has been to decrease the volume of trade and of consumption. The natural result has been to add to the number of unemployed, and you cannot add to the number of unemployed in Europe without adding to the number of unemployed in this country. Before the War they provided 75 per cent. of our foreign markets. To-day, they are providing something like 50 per cent.

That is not the only thing. We have compelled Germany to pay indemnities. It is an old argument but it is well to call it to mind, because it illustrates the frame of mind of Europe and of this country. She can only pay by selling in our foreign markets and underselling us. By rationalising her industries she has added to her own unemployment problem. We have been compelled to compete with her and to rationalise our own industries and to add to our own unemployment problem. That is the frame of mind throughout the world, in China and in India and within Europe itself. We had another illustration in the Canadian wheat pool, an absurd view of trade taken by both the United States and Canada of holding up their wheat supplies in the hope of getting better prices, and you have the position of wheat in Canada and in the United States being used for fuel and at the same time, according to reliable figures, You have two million people in China dying of hunger—a complete disorganisation of the whole world.

To what is that due, and how is a recovery going to be brought about? Why do you have general depression such as the world is experiencing to-day I How do you reach the point where recovery starts? What is the scientific explanation? So far I have not heard one, but clearly the only explanation must be a change of mental attitude and mental outlook by these countries, a change of outlook towards work and towards responsibility, a change of political outlook as far as the three main countries I have mentioned are concerned, a change of outlook in Europe itself and in this country. The only real solution ultimately is for every man and woman in this country to do his and her best to contribute to the solution. We have had put up to-day a plea for economy on behalf of the Government. It is true that it would be a good example, but the force of it is only valid and relevant in so far as every individual man and woman econo- mises too. It is no good for political parties to go on the platform, as they are doing, saying, "We have the only policy that can cure unemployment." No system, however perfect its design, is going to solve the unemployment problem without the good will of every man and woman in the country. That is at present lacking. The one danger to democracy is that the mental outlook of the individual is being undermined, and it is a very serious danger both to the party opposite and to every other party in the State. It is dangerous to the welfare of the country and to its supremacy.

I do not want to pursue that general line of argument. It is clear to my mind at least that the one hope of the future is in the individual outlook and the individual effort in this country. I want to put one specific question to the Government on another subject. One of the major Bills mentioned in the gracious Speech from the Throne is that for the raising of the school-leaving age. The raising of the school-leaving age, coupled, as it must be, with a scheme of reorganisation, means one thing in an urban area and a totally different thing in a rural area. Have the Government prepared any scheme in connection with their Bill, or is it proposed to modify the present method by which grants are paid to urban and rural schools? At the moment grants are paid upon the same basis, under the same formula to the town and to the country district, with the result that it imposes great hardship upon the rural areas. The problem of education and of educational organisation in the country districts is totally different from that in the town areas. In the first place, the sizes of the schools are different. Take, for instance, the county area which I have the honour to represent. Throughout the whole of that county, sparsely populated, there are some 108 elementary schools, 90 of which have less than 100 scholars. The majority of those 90 have less than 50 scholars in average attendance. "What is the result? A country school of 25 or 50 children has to be staffed very differently from a school in a town area. You cannot staff it with one teacher. In a town district it may be possible to put 25 or 50 children into one class, hut in a country district you cannot put them all into one class. Therefore, you must employ two teachers. Any progressive authority would employ, at least for the post of headmaster, a certificated teacher.

Consequently, the cost of education in the country school is very much higher than in the town district. Apart from that, all incidental expenses are relatively higher. If coal has to be delivered to these remote schools the cost of delivery is often very much higher than the cost to the town school.

In a town area the problem is a totally different problem. It is true that the Board of Education say that they distribute grants upon the basis of a formula which is the same for everybody. They pay a grant of 36s. per head per child in attendance at these schools, they contribute 60 per cent. of the teachers' salaries, 20 per cent. for loan charges, 50 per cent. for school medical services, and 20 per cent. in respect of other expenditure. From that gross total is deducted a flat rate equivalent to a 7d. rate, and that imposes another hardship. Last year we passed the Local Government Act. The Local Government Act has, to a great extent, derated the agricultural areas. it has abolished rates upon agricultural land with the result that in county areas, or at any rate in my own county, the yield of a penny rate has been reduced from something like £900 to a sum of about;£600. It is true that the Board of Education gave a higher contribution, but that does not help the rural area, because the basis of the payment of the rate has been reduced and the rate falls to a greater extent upon a smaller number of people. Beyond that, the Rating and Valuation Act, 1925, was passed, and under it new assessments were made, so that to-day the contribution by those subject to the assessment for rates is very much higher than it was three years ago. The whole position, as far as the rural areas are concerned, is totally different.

What is going to be the position under the reorganisation scheme when children are transferred? Is the President of the Board of Education prepared to tell the House that he is ready to consider the special case which exists in respect of the agricultural areas and give a special grant so as to equalise the position between the agricultural area and the town area? Further, in view of the heavy cost of transport, which will not apply to the towns, will he be responsible for the cost of that transport? Is a special grant to be made for transport services? These are very important questions as far as rural areas are concerned, and I hope that it will be possible for the President of the Board of Education to give some information at some time in the course of this debate to the effect that he is prepared to consider the special case of the rural areas for a special grant in order to equalise the position of the rural areas.

Mr. PRICE

I listened with interest to the speech of the hon. Gentleman the Member for Cardigan (Mr. Morris), and I for one hope very much that it will be possible for the particular complaints which he has made to be taken into consideration. I am not able to say anything definite. All I know is, that I have also received complaints, as I presume he has, from the county with which I am associated of the heavy cost of the transference of children from their homes to schools which they say will become even greater when the reorganisation of the schools takes place and when the Hadow Report comes into operation. Therefore this question is becoming an exceedingly serious one. I do not know what are the intentions of the Front Bench, but I certainly hope with the hon. Member that something will be done in the near future to deal with this very serious and important question.

I should like now to refer to the speech of the hon. Gentleman the Member for Forfar (Sir H. Hope) when he referred to that passage in the Speech from the Throne which refers to the proposals for dealing with agriculture. He, I think, was inclined to pour cold water upon the proposal to settle men upon the land or to set up large-scale farming, unless, first of all, there is an economic basis for those holdings. Certainly, I am strongly inclined to agree with him there, but I would point out that in the Speech from the Throne there is a reference to a Marketing Bill, and to the steps which I think the Government are going to take for the purpose of making more efficient our method of distributing agricultural produce. That is just the sort of thing that will be of great assistance to smallholders when the other part of the Government's agricultural programme comes into opera- tion. I am inclined to agree that in matters of large scale farming and the production of wheat and meat on a large scale, the Marketing Bill is not likely to be of much assistance unless it is accompanied by something very much more drastic, and there are many of us on these benches who are inclined to agree with the hon. Member for Smethwick (Sir O. Mosley) in his desire to see something more bold in the way of regulation of foreign trade and of imports into this country of dumped goods from abroad, than we have seen displayed hitherto by any party in this House or in the country. It is most significant in this Debate that we have heard rather unusual points of view expressed from the back benches on this side, and also from one back bench speaker on the other side. We are waiting to hear some less official and less antiquated ideas expressed from the Liberal benches. It is an important sign of the times which tends to show that our old party divisions are opening somewhat and have less meaning than they had hitherto, and that we have to face up to new ideas. On this side we, at any rate some of us, are facing up to new ideas, as was shown by the speech of the hon. Member for Smethwick.

The hon. Member for Forfar referred to the licensing of certain imports of agricultural products. I rather gathered that he did not very much favour the imposition of taxes upon imported food, but rather favoured the licence. I only hope that the views which he expressed will find more common ground in his party and if so, I think he will receive a certain amount of sympathy from this side, and I hope that something practical may come out of it. Hon. Members opposite above the Gangway often attempt to pour cold water on the methods proposed on this side to set up schemes whereby we can stabilise prices and purchase in bulk commodities from abroad, whereby the distribution shall be more efficient, and waste can be eliminated. There is a great deal to be said for the system of the licensed control of imports, or at least of certain imports. That would do away with the inefficient methods of the tariff which we on these benches feel we could never accept. In this respect, I was not inclined to agree with the hon. Member for Smethwick, who referred to the possibility of imposing tariffs in certain circumstances.

It is possible to deal with these problems without handling tariffs at all. I think we can control imports and stabilise prices by other methods. Our main objection to the operation of a tariff is the fact that it is always a premium upon inefficiency. It always protects the inefficient industry as much as it protects the efficient industry. On thing to which I could never agree and to which we on these benches could never agree is to give protection to any industry, least of all if it was entirely in capitalistic hands, if that industry did not give a quid pro quo to the community in that is was efficiently run and doing its duty to the producer and consumer. That is why we condemn the whole system of tariffs, and why we feel that we have to face up to a new method of meeting the industrial situation with which we are faced at the present time. We have probably lost a portion of our export trade for good, and the place of that export trade or of a portion of it must be filled by some other methods—by the extension of the home market. This country can never be entirely dependent upon the home market, otherwise we should be unable to draw the great raw materials from tropical countries which we cannot grow and which we have to pay for either by investments there or by exports of manufactured goods. We have to face the fact that a portion or our export trade has gone and gone for good, and we must push forward national development at home. First and foremost, we must see that our industries are on the very highest level of efficiency. If we look at the situation on the Stock Exchange or in the City what do we find? We find that money is there in abundance, but not, it appears, for industrial concerns. One of the remarkable features of the Stock Exchange in recent weeks has been that, although there is an abundance of money amongst the class that owns capital, they are only concerned with investing that surplus money in gilt-edged securities and bonds of all kinds. In other words, the capitalist class has lost confidence in itself.

Is not this the time when we can expect from our Government a drive forward with a view to utilising the situation to get cheap money for national development at home? Many of us feel that more must be done in this direction. When this Parliament was formed, a. little over a year ago, the situation was very different. The price of money was much higher, and the capitalist class was speculating, until the crash came in the autumn of last year. Now, they have lost confidence in their own system. Many of us believe that the State can come forward and use its influence gradually to direct the social and economic life of this country, and we believe that now is the time for it to come forward to secure the ends which we have in view. We need the money for national development, and we need State assistance for the purpose of re-opening our industries. This country has fallen behind the Continent in many respects in a most curious manner.

In regard to the coal industry, there is some hope now, thanks to the passage of the Act last Session by the Government, that there may be seine greater efficiency in the operations of that industry. It may be interesting to hon. Members to know that in 1928 there were in this country 1,400 coal producers owning 2,000 pits which produced 250,000,000 tons of coal a year. In the same year there were in Germany 70 companies owning 175 collieries and producing 152,000,000 tons of coal per year. The same thing, to an even greater extent, prevailed in the iron and steel industry. In this country there were 20 firms producing 70,000,000 tons a year, which was equal to only one-third of the total production of the Steel Corporation of the United States of America, and almost equal to the output of only one big combine in Germany, the Vereinigte Stahlwerk. It only indicates that this country was far behind the United States and Germany in its methods of exploiting the use of iron, steel and coal. The process of rationalisation is going on, however, and it is the business of the Government to see that it is carried on at an even greater rate. The production of these industries is certainly not going to be assisted by tariffs. They will merely enable inefficient industries to carry on as before and to hide their inefficiency behind the shelter of a tariff.

9.0 p.m.

With regard to the remarks of the hon. Member for West Wolverhampton (Mr. W. J. Brown) as to the effect of rationalisation upon unemployment, I agree that rationalisation, as it is going on to-day, is not going to be a cure for unemployment. It will for a time at least aggravate the situation; but is it not better that there should be unemployment due to rationalisation and increased efficiency rather than unemployment, on an even greater scale, due to the continuance of inefficient methods of production? Surely the answer to that is that we should see that the work is shared out in a more equitable way than has been the case hitherto. In my constituency in West Cumberland, where some of the finest iron ore is produced, the production of iron ore is almost the same as before the War, but less than half the number of men are engaged in working just a few up to date mines instead of from 20 to 30 small mines. That is an example of the way in which rationalisation is working. The hours are the same, and the conditions are the same. Is it not necessary for us to face up to a reduction of hours in order to bring a larger number of those who have been replaced by new machinery back again into the industrial field? I admit that we cannot do that without an international agreement. in the case of those industries which are subject to foreign competition, and that is why I am so glad to see in the Speech from the Throne a reference to steps which will be taken in the, course of this Session to ratify what I take to be the Washington Eight Hours Convention. Conventions of this kind should be the means by which we can bring about a gradual reduction of hours which will do so much towards assisting the unemployment situation in this and other industrial countries.

One word about the development and extension of Imperial trade, which is referred to in the Gracious Speech. We are all agreed that the extension of trade with our Dominions is desirable in every way, and I go so far as to say that we have an opportunity of testing our idea of bringing about a system of bulk purchasing. I am glad that the Government in the course of negotiations at the Imperial Conference have put forward proposals somewhat on these lines, and I am also glad that they have stood out against any imposition of preferential tariffs. By that means we should be merely raising the cost of production to the consumers in this country without any guarantee that there would be any efficient and less wasteful methods of distribution. The right hon. Member for Cornwall Northern (Sir D. Maclean) referred to the failure of the Canadian Wheat Board in its methods and attempts to control the price of wheat, and he held that out as a shocking example of the failure of bulk purchase. Let me point out that the situation is altogether abnormal. We have to face now a surplus of three years wheat production which has to be unloaded upon the markets of the world, and, with the bulk purchasing system in operation only in small portions of the world, how can we expect the Canadian Wheat Board to be in a position to handle the situation so as to prevent losses and difficulties to the Canadian farmers. The right hon. Member for North Cornwall will only be in a position to speak of the failure of the system of bulk purchase when there has been established in all the chief wheat exporting countries of the world a wheat exporting board and in all the chief importing countries an import board, by which large scale contracts can be concluded for the purchase of this most important product.

One word about the protection of labour standards in this country. I am strongly inclined to agree with the hon. Member for Smethwick when he referred to the necessity of insulating our standards of living in this country against the shocks of outside economic conditions. I see in the system of bulk purchase and exports and imports licenses a possibility of making this idea practicable. For instance, we import into this country every year a considerable quantity of pig iron, all of which is used in the manufacture of more highly manufactured goods. The report made by the commission which went over not very long ago to inquire into labour standards in the iron and steel industry on the Continent, in comparison with this country, showed that, while the rate of pay of the unskilled worker in the iron and steel trade in Germany was not very much below that paid in this country, the rates in France, Belgium and Czechoslovakia were very much below our rate. The figures were something like 32s. a week in France, Belgium and Czechoslovakia, and 45s. in Germany., If we had a system of control of imports and licences, we could place our orders in those countries where the labour standards were nearer to ours, and by that means we could protect, not inefficient capital, not the capitalist classes that invested their money in an industry and ran it inefficiently, but we would be protecting the standard of living of our workers in this country and bringing about better trade.

Let me say a few words about one aspect of this problem which has been dealt with only slightly to-night, and that is the effect of world monetary conditions upon the general trade of the world. The facts have been published recently in the very interesting report on the gold reserves of the world by a committee appointed for that purpose by the League of Nations. It is a fact that the world is facing a gold shortage which is, I shall not say alone causing the world industrial depression and unemployment, but is very considerably aggravating the situation and placing still further difficulties in the way of trade recovery and the lessening of unemployment. There is the fact that the quantity of gold produced in the world shows an increase, on the average, of less than 3 per cent. per year, whereas the increase in the commodities produced in the world is over 3 per cent. In addition, in 1929 over £100,000,000 sterling was taken out of circulation and sterilised in the banks of France and the United States.

These facts give a very clear idea of the seriousness of the situation which must ultimately be created unless something is done to expand and make more elastic our methods of monetary payments. I hope that the Government will see their way, by using the channels that are at their disposal, to give due consideration to that report of the League of Nations committee, and that the international banking organisations and the banking centres in this country will be encouraged to get together with a view to economising the use of gold in order to do something towards keeping the wholesale prices of commodities stable.

Captain AUSTIN HUDSON

Everyone who has listened to the speeches so far must have been struck by the recognition of the seriousness of the present situation, and by the earnestness with which so many speakers have put forward their contributions towards some solution of our difficulties. Another thing Which certainly has struck me is the fewness of the speeches which have dealt with what is in the Gracious Speech, compared with the number which have dealt with what the speakers hoped would be in the Speech but which, unfortunately, is not there. I propose to say a few words about what is in the Gracious Speech and how far that will affect the unemployment position, which, by universal agreement, is the one problem above all others to which we should apply our minds.

It is now three months since this House last met, and in that time the conditions in this country have altered very materially. It is true that during the past year trade has been getting worse and worse and that unemployment figures have been rising, but the last three months have shown such staggering rises in the unemployment figures, at a time when normally those figures are at their lowest, that we may undoubtedly say that things have gone from bad to worse. The figure published this morning, of 2,199,000 unemployed, is indeed a figure which should stagger anyone. Going about the country during the Recess one could not help seeing everywhere the appalling results of bad trade and the pessimism which is, unfortunately, rapidly settling down on the business community. Everyone is profoundly disquieted with what is happening in the country, and everyone has been waiting with some anxiety to see what the Government propose to do. The recognised method of announcing to the country what the Government are going to do is by means of His Majesty's Speech from the Throne. There is not one grain of comfort in the Gracious Speech for any manufacturer, producer or workman.

As regards the position of the country, we are told that economic depression unfortunately continues to dominate the markets of the world. Ts it only economic depression that is causing unemployment? It is true that it is doing so to a very great extent. We on this side allow that economic depression has a very great effect on unemployment figures, which is very much more than the party opposite did when they were in opposition; but we also say that the Government in office during the year have had a great deal to do with the present appalling unemployment figures. Their administration, and particularly their finance, have had a very bad effect on the trade of the country. I was amazed to hear the last speaker say something about investors in this country having lost confidence in the capitalist system. They have not lost confidence in the capitalist system, but they have lost confidence in the Labour Government. No one is going to invest money, to start new enterprises and launch out while the present Government is in office. That is why money is being invested in gilt-edged securities and things of that kind and not in industrial undertakings.

There is another reason why the Government are very largely responsible for the appalling rise in the unemployment figures. On this side we have always said, and say now, that one of the great causes of unemployment is the enormous expenditure of public money on what we call relief works. The party opposite, and to a great extent the Liberal party, believe in such works, and month by month increasingly large sums, running into millions, have been spent in this way. We said at the General Election, and before then, that it was part of the policy of the Conservative party that the more money spent upon such schemes, the less would be available for ordinary productive industry and the more unemployed there would be. That is what is happening. The hon. Baronet the Member for Smethwick (Sir O. Mosley) said that we were against borrowing money for such works. It is true that we are against borrowing it, but we are equally against spending it, whether it is got by means of taxation or by borrowing. Each month, sometimes each week, we see enormous sums ear-marked by the Government for this or that public work, for the relief of unemployment. I say that that policy in itself, instead of relieving unemployment, is contributing largely to the very problem which it sets out to try to remedy.

Let me look at the legislation foreshadowed in His Majesty's Speech and try to consider what will be the effect on unemployment of each of those proposals. The first proposal is for the raising of the age of compulsory school attendance. I understand that this Bill, in its main provisions, will follow the Bill presented but not proceeded with last Session. If that be so, it will include maintenance grants, involving an enormous expenditure of money, just when the country cannot afford it and with no possible productive results whatever. Some hon. Members opposite, and I believe sometimes Members of the Government themselves, say that this Measure will have a good effect on employment, because it will take certain children at present in the labour market out of it and keep them in school. But, as the right hon. Lady the Minister of Labour knows, juvenile unemployment is not a very great problem at present. In fact, from a report which was, I believe, presented to her, it can be seen that the figures of juvenile unemployment are not, or were not at that time, of serious effect on the unemployment figures generally, and also that there might be and probably would be during certain years a positive shortage of juveniles for employment. In looking up statements made by leading statesmen on the other side, I happened to notice what was said by the right hon. Gentleman the Secretary of State for the Dominions about the raising of the school-leaving age. The right hon. Gentleman, speaking at a conference of the party opposite, held, I believe, at Brighton in 1929, warned the conference not to assume that the raising of the school age would mean more employment, because, he said, it did not follow that a man would be employed to do the work of a boy. That is perfectly true, and, if the party opposite think that the raising of the school age will do anything towards the solution of the unemployment problem, I think they will be greatly disillusioned. Furthermore, the cost will place yet another burden on an already overtaxed nation.

The next legislative proposal is that for amending the law relating to trade disputes and trade unions. There, again, we shall have to wait and see what is in the Bill. We have to take what it is assumed will be in it, from the accounts in different newspapers, and I agree with hon. Members opposite that newspapers are usually tremendously inaccurate—particularly certain newspapers. But one thing we do know. From trade union conferences we hear time and again the statement that, owing to the Act passed by the Conservative Government, the unions themselves are short of cash and want the levy put back again. I cannot believe that this is a time at which to pass legislation in order that a political party should fill its coffers for its own party advantage. The other parts of that Act were intended to make striking illegal—to make striking difficult. If the Government propose the complete repeal of that Act it means that at this time of unemployment and bad trade what they are saying to the men is this: "We cannot help you to get jobs, but, if you do get jobs, we will make it all the easier for you to lose them again." That will be the result of the repeal of the Trade Disputes Act. I think any hon. Member opposite will have to rack his brain for some time if he wishes to show that this repeal will have the slightest effect on trade or unemployment.

Then there is the proposal for the setting up of a Consumers Council. We know all about that. We had a Bill upstairs dealing with that subject, and I think it was generally agreed that it was one of the most farcical Bills ever brought forward. I cannot believe that the Bill will be presented in anything like the same form. I think every Chamber of Commerce in the country complained about the Consumers Council Bill and said that it would cause much more harm than good, and I cannot see why the Government should, at this time, bring forward the proposal again. Another promised Measure which will have not the slightest effect on unemployment but which will probably occupy months of Parliamentary time, is that dealing with electoral reform. When I first heard the Prime Minister speak about electoral reform I thought he was doing so in order to please hon. Members below the Gangway on this side. In fact, when he mentioned the subject yesterday one could see their pleasure. They were more or less like dogs wagging their tails as soon as he held out that tempting morsel. But the dogs were given a nasty kick and retired with their tails between their legs when he said that the Bill was: to deal with the escapades of parties who are too wealthy to observe the law with strict accuracy."—[OFFICIAL REPORT, 28th October, 1930; col. 32, Vol. 244.] I often wonder why the Liberal party put up with such a lot, but they seemed to put up with that, and we shall now wait and see what the Electoral Reform Bill is to be. But people in the country, realising the seriousness of the situation, and seeing foreshadowed a Measure of this kind, which they know to be highly controversial and which will take up a lot of time, must wonder whether Parliament could not make better use of its time. We have again for about the fifth time running in a King's Speech a reference to an amendment of the Factory Acts. If the Government are not careful, very soon there will not be any factories for which to amend Acts. It is true that the Conservative Government included such proposed amendment in several King's Speeches, but the reason we did not proceed with it was because we realised that it would be a considerable restriction of trade and, even at that time, when unemployment was not anything like what it is to-day, we felt that we ought to do nothing which might restrict trade or cause more unemployment.

Two other Measures are foreshadowed. The first deals with site values. That, I think, will give employment. It will employ a vast number of inspectors. As I have said, one of the troubles of the present position is not only the amount of unemployment but the amount of expenditure by the Government. I warn hon. Members opposite to look into the history of the previous Measure dealing with site values. I think they will discover that it cost more than it brought into the Exchequer, and I cannot see why the Government should now want to proceed with such a risky proposal. Then there is our old friend the Washington Hours Convention. We have always been told that the Eight Hours' Convention was to be ratified, and the reason why those on the other side did not do it when they were in office before was because it would seriously interfere with certain trades, but this time, with such tremendous unemployment, apparently that no longer arises, and a Bill is to be brought forward.

The only productive paragraph I can find in this Speech is that dealing with large-scale farming operations. An hon. Member on this side has already dealt with that subject and all I say is that I shall believe in the enlarged scale when I see it, and not before. When we look at this legislation, which will take a whole Session of Parliament, and consider it in the light of what the effect on employment will be, it makes one extremely despondent as to what is going to happen if the present Government remain much longer in office.

Another passage in the King's Speech refers to a subject on which I have often spoken in this House, namely, unemployment insurance. The unemployment insurance situation at the present moment is very bad indeed. A Bill is to be brought forward within the next few weeks to prevent the fund going bankrupt. Time and time again I have heard those on the other side of the House say, when a much smaller amount of debt was involved, that borrowing was wrong and that, by failing to deal with the situation permanently, we were doing an immoral thing. I remember some weeks ago quoting from an hon. Member opposite who exclaimed that if the party opposite—that was us—dared to do such a thing, what an outcry there would be ! Well, there is an outcry, because I think this is the third Bill for extending the borrowing for the fund. There is no use denying the fact that the Government are deliberately running away from facing the problem. They know perfectly well all there is to know about the Unemployment Insurance Fund, and what has happened. They know they can look to a number of Commissions of well-known people who have thoroughly examined this fund within the last few years. They have the Blanesburgh Committee on which the Minister of Labour sat, and then there is the three-party committee which is at present sifting. They know everything there is to know, but they dare not face up to the situation. The country cannot wait while more and more money is expended on borrowing. There is no use in blinking the fact that at the present time insurance has become simply a gigantic relief scheme. It is impossible to call it insurance any longer. There is absolutely no relation at present between the contributions paid by the man and the benefit which he draws.

Mr. MacLAREN

Insurance against revolution.

Captain HUDSON

There is no insurance about it. Millions are spent on giving relief to people who have not paid their premiums or contributions, and therefore it is absolutely absurd to call it an insurance scheme any more. The Government themselves know, as we have said during the passage of the last two Unemployment Insurance Bills, that sooner or later—and soon it must be—unemployment insurance and relief must be completely cut asunder and divided. I have no doubt whatever, though I have not seen the deliberations of the three-party committee, that the same conclusion was come to by them. Simply to continue borrowing money in this way is to pour money down the drain while refusing to look facts in the face. As far as we can see from inquiries all over the country, there are now practically no safeguards whatever for the Unemployment Insurance Fund. The genuinely seeking work Clause has been done away with, and the result is that a bigger and bigger amount of benefit is going with no proper safeguard. It has become completely unmanageable. When I heard the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) pleading that the Prime Minister should allow more of what he called the fashioning of legisation to this House, I thought of that classic example when the Clause in place of the not genuinely seeking work Clause was fashioned in this House between the two parties, and what a dismal failure it has been.

I hope that the Government may yet make up their minds to deal with the situation themselves, and not run away behind a Royal Commission and waste millions more money on borrowing—which is a system which they and everybody admit is rotten to the core. I have nothing more to say except that the country is getting restive about what is going on, and is not prepared to sit quietly down for the next few months or a year and watch us bickering here over a Trade Disputes Bill and whether the Labour party can get certain contributions from trade unionists or not— nor over an Electoral Reform Bill as to which party is going to get some party advantage out of it. Things are very serious indeed, and something drastic has got to be done. It is up to the Government to do something big, and do it quickly. The Ring's Speech, with its foreshadowing of legislation, has nothing big in it. It is simply a collection of small and trivial matters. If the Government themselves will not really put their backs into it and try to take some drastic action, there is only one thing for them to do, and that is to resign and give way to a Government which will take action.

Mr. SCRYMGEOUR

We on this side are particularly concerned, as is the whole House, about the trade depression at the opening of a new Session of Parliament. We have had the usual magnificent display of jewellery and clothing at the other end of the building, and His Majesty opening the proceedings with a speech on which we shall have something to say. I overheard on that occasion one of the Labour Members speaking to one of the ladyships and saying that the value of that place was just about enough to clear off the debt from the Unemployment Insurance Fund. I thought that there was something in that and it is worth while thinking about when we hear emphasis placed on this question of borrowing for the Unemployment Insurance Fund. It is said that it is not working out well. How could you expect it to when you never face the problem? You are not finding employment, and you have to take people off, even under the improved plans of the Labour Government, in considerable numbers because they do not come up to even the very modified claims of the scheme. The first question the Government have to face is unemployment. There is no gainsaying it, and the very silence on this side of the House gives evidence of it, that the Government have failed. The feeling is deepening among Labour supporters all over the country.

I mentioned to the Secretary of State for the Dominions yesterday that this was a serious situation, and he said it was due to world causes. I said, "Is it not due to the capitalism of which you have complained for many years?" Is that something new? Is that a new departure in any part of the world? It has been operating for many years. It is the capitalist system which led the Labour party to come into the political field and declare that there was no difference between the Liberal and Tory parties. Unquestionably there must be a new move, and on entirely different lines. I do not want to share in any of this unreal business that is taking place in this House to-day. There is not a shadow of doubt that it is quite well understood, particularly on the Labour benches, and especially on the Front Bench, that none of the things which the Government are aiming at in this Speech from the Throne has any bearing at all upon the fundamental case which has been presented against the system that is producing these results.

When we sat on the other side of the House, as against a Tory Government, unemployment was intense, and the complaint was ventilated against that Tory Government that they had not made a move and were doing nothing. We told them to clear out and said that we would tackle the job. A very large number of working people believed in the plea that was put up at the last election that such would be the case; and there is no business doing. Some of the speakers to-day have been touching upon the question. An hon. Member in front of me who spoke not many minutes ago pointed to the gold standard. It is some time since we tried to show here, on some very effective authority, one of whom was acknowledged by the present Chancellor of the Exchequer, that the whole of our financial system was one great swindle.

It is not a question of Protection versus Free Trade. It is a question of masses of toiling people being played with as mere pawns in a game, a question of powerful financial forces manipulating the interests of the nations of the world for their own particular gratification and satisfaction. The banks in this country, in the midst of all this trouble, have been doing exceptionally well, and getting substantial dividends. The same hon. Member in front of me made mention of the fact that there is abundance of money available on the Stock Exchange now, amidst all the inability on the part of the masses of our people to find the means of existence. One could not follow those speeches today without seeing that the whole system is a matter of jugglery and of powerful manipulation exercised by a comparatively small number of people dictating the situation. We have dictators now, and whether they are known individually or collectively does not affect the fact that, as dictators, they are controlling the situation.

Our Government say they cannot touch the situation, because, in the first place, they have not the requisite driving power in the Lobbies, and, secondly, because other parties, outside forces, are not just coming along to face the job up to their standard. The plea that I want to put forward here is, that it is the bounden duty of the Labour Government, knowing within themselves, in this gigantic crisis that is deepening in gloom over the whole country and over other parts of the world as well, that the system is wrong, knowing that nothing less than cutting in upon that system and leading in the direction of changing that system will meet the case—I say it is their bounden duty in this King's Speech to have inserted deliberately that which individually and conscientiously they consider is the essential thing to do, and let the other parties defeat them, and then go to the country in an honourable manner and say, "That is our case, and we fought for it."

They are not going to do that. That is impracticable. They are far-seeing, like other Governments. They are well established. They remember that there has been a committee sitting on the question of electoral reform, which could not agree and which said, "We will not do anything." The Prime Minister says in his difficulty to the right hon. Gentleman the leader of the Liberal party, "We will have a deal after all; we will give you electoral reform." The consequence is that you have had that leader of the Liberal party making the most inane, paltry kind of speech that ever you could have expected that man to deliver. His whole difficulty was, "I have got what I have been after, and I am not going to smash up the Government on the ground that they have not gone on with big schemes and great plans, and got loans of money. I have got them to say they will do something to help to save the Liberal party." That is the most important thing that a leader can do for his party in these days.

Now turn to the other party, the second strongest party in the House. Apparently, 44 of those Members are prepared not only to sacrifice their leader, but also, if need be, to risk serious damage to their party in order to carry forward what they conscientiously believe to be necessary for the interests of the country now. I say that the Labour party ought to take a leaf out of the Conservative party book, and say, "We ought to make the drive in which we have professed to believe, instead of saying we will look after the party first." That is my view of the situation, and that is, to my mind, the real politics. What we are dealing with is sheer drift. Take your Trade Union Act. Crowds of our trade union people would be far more satisfied with the Government if the Government said that the first thing they would do was to tackle the question of unemployment. Of course they would. And it is the same with regard to some of these other proposals that are in the King's Speech. The whole run of the business is most unreasonable.

In our city, in the constituency that I share the honour of representing, the situation is getting worse than ever. The hon. and gallant Member for North Hackney (Captain Hudson), who has just sat down, said that so far as the Factory Bill was concerned, which had been promised by this Government and by previous Governments—it makes a fine bit of window dressing, and comes as a sort of tail end of the procession in the King's Speech—probably there would not be many mills available for running at all before long. That is coming very nearly to realism so far as our own constituency is concerned. We have had a long spell of short time, and now the workers are having to face a demand for a 20 per cent. reduction in their wages. Is the Minister of Labour eventually going to sanction that course if recommended by the trade board? That is a most important issue. I speak for my constituency, which is typical of many others. It is appalling that we should have to face such an amazing condition of affairs, and to meet the men and women who are faced with such miserable conditions only to be able to say that nothing is being done by Parliament. Then there are the old people who want the old age pensions improved. What prospect of improving them is there with a situation like that? The Chancellor of the Exchequer said that we needed optimists, and that in 20 years we shall be going full swing. Many will be smothered by that time. There is anything but cheer in the country, and the feeling of depression is permeating our general business relationships. The whole thing is a serious com- mentary on the working of our national life, and the great prevalence of wealth and the crushing remorselessness of the machine which says, "You are not going to get work."

With reference to the question of giving money for nothing, we give out money for nothing in substantial sums, and no man on any Front Bench will suggest any reduction; but when you tackle that sort of thing in one direction you will find that it will be tackled very courageously in a different direction. Reference has been made to our home markets, and in the King's Speech the Government say they are going to try and improve the position regarding the home and foreign markets. Emphasis has been rightly laid on this side of the House on the need for increasing the purchasing power of the workers, but we have a deliberate and licensed system whereby we actually utilise the purchasing power of the workers to crush not only the workers but the general industries that are of a legitimate character. The President of the Board of Trade and the Chancellor of the Exchequer have from other platforms made specific reference to this business, but we never hear a word about it here. It is left to a Royal Commission to think about. Ministers know that there was a vast wastage during the War; the business interests of the country made a call for it to be stopped entirely; and the whole Press of the country said it was necessary, not, however, in order to stimulate industry, but because manhood was needed for the bloody massacre of mankind. Why has the Government relegated that question to a commission, which may make some paltry suggestions for regulating and controlling the business? No reference is made to the fact that the brewing business has been securing dividends of 6, 10, 20 and up to 70 per cent., while legitimate industries have been lying in the dust.

The President of the Board of Trade referred not only to that, but to the vast gambling and betting businesses in the country which, together with the drink business, absorbs £600,000,000 which is absolutely wasted with no real scrap of genuine employment. Not a man breathes a word here about it, not even the leading representative of the temperance movement on the Liberal benches. Why is there no attempt to tackle the job? It is reserved for Members to deal with on platforms in the country where what they say means nothing. As an independent representative of the Labour movement, I can see what I prophesied years ago would happen, that is, the Labour party developing into a Liberal and radicalised party. That is the position which is becoming consolidated now. The workers are realising their disappointment, and at the next General Election every Labour party man will have a difficulty in explaining his position. Great expectations and great schemes were held before the masses of the workers, but the whole trend of the present system is to dispose of the idea that Liberals or Tories are of any use whatever. Behind the speeches of my hon. Friends on these Benches there was a depth of thought that could not very well be expressed, but it is being expressed in the country. The game of party politics is being played by the Labour party just as readily as by any other party.

Mr. SKELTON

And not so well.

Mr. SCRYMGEOUR

The Prime Minister said concerning disarmament that we can only march as and when others march. That was not the way Keir Hardie spoke. He marched whether anybody else was going or not. The Prime Minister only marches when he finds others are marching too. As long as I am representative of my constituency I am not going to allow to pass any opportunity of denouncing anything that deceives the body of our workers. Let us mean what we say. We may not make much progress. You and I have nothing to do with the results. We must be true to our consciences. We must first seek the Kingdom of God and His righteousness, and all other things shall be added unto us.

Mr. MANDER

The hon. Member for Dundee (Mr. Scrymgeour) said, as I understood it, that the Government were, or were becoming. a Liberal Government. We do not recognise the Government as such. They are far too timid and reactionary to satisfy those who sit on these benches. They will have to do something more radical and drastic, put more ginger into their work, if they are to survive. I hope they will survive. We have had several speeches which indicate that the trend towards Protection has gone very far on the other side. Personally, I dislike Protection just as much when it is called "insulation" as when it is called Tariff Reform, Empire Free Trade, Safeguarding or whatever the latest name may be, and I hope that when things become normal again the party opposite will realise that they are on the wrong path. I hope the Government will make it possible for this Parliament to last for a sufficient period enable the vote to be taken on the fiscal issue after it has been debated in the country in a calmer atmosphere, and not in the sort of mood of despair and depression which would surround an election held at the present time. It is, perhaps, not unnatural that I can speak with some confidence in favour of Free Trade, seeing that I sit for a constituency which was represented here for 63 years by Mr. Villiers, one of the pioneers in leading the attack upon the Corn Tax. It is only fitting and right that I should continue his work by resisting the reimposition of the food taxes which hon. Members above the Gangway are so anxious, or so reluctant, to introduce, at the earliest possible moment. [Interruption.] I am not sure which it is. It may be one or the other. After to-morrow morning we may have more light upon the subject.

One aspect of the industrial situation to which I would refer is the need for co-operation in industry. It is perfectly clear that the situation in this country, and in the world as a whole, does not depend upon Protection or Free Trade. Nothing was more clear in the discussions in the Economic Committee at Geneva than that every country, whatever its fiscal system, recognised that it could only secure a solution of its difficulties by international co-operation. Rationalisation, when it comes, as it must come, for it is vital and essential, cannot achieve its best results unless it is carried out with the whole-hearted cc-operation of the workers and trade unions in this country. We have not got that cooperation at present, and the Government ought to take steps to see whether it is not possible to draw up an agreement which will render possible an advance upon those lines. I would like to refer to the Resolutions passed by the World Economic Conference in May, 1927. Unfortunately, very few of them have been carried out; but there is one which I think may be put into force. It says: Rationalisation must be applied with the care which is necessary in order, while at the same time continuing the process of rationalisation, not to hinder the legitimate interests of the workers; and suitable measures should be provided for cases, where during the first stage of its realisation it may result in loss of employment or more arduous work. It requires, further, so far as the organisation of labour in the strict sense of the term, the co-operation of employés and the assistance of trade and industrial organisations and of scientific and technical experts. Then there is this definite recommendation: To give special attention to measures of a kind calculated to ensure to the individual the best, the healthiest and the most worthy employment, such as vocational selection, guidance and training, the due allotment of time between work and leisure, methods of remuneration giving the worker a fair share in the increase of output, and, generally conditions of work and life favourable to the development and preservation of his personality. 10.0 p.m.

What efforts on those lines have been made in this country? In the last year or two we have had what is known as the Mond-Turner Conference, in which employers and employés have agreed upon steps being taken in the same direction. That dealt more particularly with the recognition of trade unions, with the prevention of victimisation, and with the setting up of more complete conciliation machinery. We had an even more important conference, the Industrial Conference of April, 1919, held at a time when hopes were high and when both sides were willing to make generous concessions. At that time employers and the workers were prepared to agree to the establishment by legal enactment of the principle of a 48-hours week, the establishment by legal enactment of minimum time rates of wages—"to be of universal applicability." That is rather remarkable, and it was agreed to by both employers and employés. There was to be a commission to report within three months what those minimum rates should be. They agreed, also, on the extension of trade boards, and it was laid down that the minimum time-rate agreement between employers and trade unions should be capable of application to all employers engaged in a trade falling within the scope of the agreement. The report also referred to the setting up of a national industrial council, and dealt with other matters.

We in this country, whether employers or employés, are still far too individual, far too conservative, far too unwilling to adopt reorganisation in industry, and it would be desirable for the Government to call into being a national industrial conference such as sat in 1919. A great many changes are required, and concessions are needed from both sides. The time has come to try to draw up a new industrial charter under which both sides will agree to considerable concessions. It is quite clear that there are certain trade union rules, regulations and customs which are no longer applicable to the present situation, and need to be varied and re-adjusted. We require greater output, and the trade unions ought to look more favourably on the system of payment by results. [Interruption.] I am giving one side only at the moment—what would be required of the workers; and I will deal later with the position of the employers. As an example of what I have in mind, there is the question of a man working more looms than he does at present time.

I have had personal experience in industry and I know the results that can be obtained on a partnership basis. I think the necessary changes could be brought about without injustices being created. If the workers are to be asked to agree to changes of this kind they must have something in return. The changes will only be brought about with their active co-operation in planning them and in sharing any profits that may come. The old system under which an employer acted as a dictator and said his works must be run on the lines he planned, have gone and gone for ever. No man can run his business successfully to-day upon those lines. If labour is expected to enter into a partnership of this kind we must set up some such machinery as a national industrial council—at the top—with joint industrial councils in every industry, and have them equipped with statutory powers. I hope the Minister of Labour will be able to say that agreement has been now reached upon this point. On these councils the workers and the trade union representatives, instead of having to fight and to struggle over the wage basis, should be able to take part in building up the industry in a real statesmanlike way, taking a constructive part in building it up instead of merely fighting the employers in a combative spirit.

I suggest the formation of works councils on which the workers should have rights, and on which they would be allowed to take their share in the administration of the factory. I think the ratification of the Eight Hours Convention should be put through without any further delay, and it would be greatly to the advantage of this country that it should be done. If a worker gets the impression that all his efforts will only have the effect of putting money into the pockets of his employers, he will not take the same interest in his work. If the workers are allowed to take a part in regard to any changes that take place, quite a different state of things will be produced. Such changes as these ought to form an essential part in any scheme that is adopted.

One essential part in any reconstruction of the industries of this country is that of arranging for co-partnership and co-operation between the workers and their employers, because that would secure the good will of the workers, and workers and employers would then work together in complete harmony. I know that you cannot force people and above all Englishmen to do what they do not want to do, but there is no limit to what they will accomplish if you approach them in a reasonable and a friendly way. I do not say that what I have suggested will cure all the evils from which we are suffering at the present time, but what I have suggested is something which is urgently required, and that is an essential step which must be taken sooner or later. If we could by agreement obtain legislation embodying an arrangement such as that which I have sketched out, I am sure we should get greater prosperity in the industries of this country, and we should in this way secure far higher dividends not only in cash but in human happiness, distributed not to one section only but to all those who had played any part in their production.

The LORD PRIVY SEAL (Mr. Hart-shorn)

This debate has been characterised by the fact that from its commencement up to the present moment I have not heard any reference to a short-term or a long-term policy. We seem to have given up the short-term policy and the idea of concentrating our efforts on the making of roads and bridges, and we are concentrating upon what has come to be regarded as long-term proposals for dealing with unemployment. I think that is all to the good. We have been concentrating on roads and bridges long enough, and the time has come when we should get to the root of the unemployment problem. I hope in the discussion that will take place between now and the termination of the debate on the Address and the amendments which will follow we shall deal with what I regard as the vital fundamental considerations affecting this great problem.

We have been called upon to defend, on behalf of the Government, works which have been undertaken and schemes that have been approved in order to find employment for the unemployed. After a careful examination of the work done by successive Governments for the last 10 years in the realm of public relief works, I have no hesitation in saying that the Labour Government have a record with which there is no comparison. I state emphatically that no Government since the year 1920 has accomplished anything like what has been achieved by the present Government in providing employment through the medium of public works. Schemes of one kind and another have been approved amounting to no less than £135,000,000. It is quite true that all those schemes are not yet in full swing, but we have at present 150,000 workmen employed directly and indirectly in this country on schemes which have been approved and set in motion by this Government. No less than £28,000,000 has been sanctioned under Part I of the Development Act quite apart from schemes sanctioned by the Unemployment Grants Committee. Every scheme that is approved for grant under that Act has a time limit, and, on the basis of the schemes approved and the time for which they will be in operation, all the evidence goes to show that by the end of this year we shall have employed, directly and indirectly on schemes of work promoted by the present Government, not less than 200,000 workpeople. I say without fear of contradiction that no such record can be traced during the last 10 years as a result of the efforts of any other Government, and I say that having gone through every year's programme of each of the Governments that have been in office during the last 10 years. I have no hesitation in saying that, if all that we had to do were to prove that in that realm we could do, and have done, as much as and considerably more than any previous Government, our task would be a very easy and light one.

I am not, however, so much concerned about the progress that we are making in that direction as I am anxious about the policy that is being developed in the industrial realm. When we look at the unemployment statistics, we find that, roughly, 2,200,000 people are unemployed. We can trace them all in the industries; we know exactly where they are unemployed; we can examine the industry and find out why they are unemployed; and we ought to be able, at least to some extent, to develop a policy for dealing with this problem at its source. That is a matter in which the Government have already done a very important piece of useful preliminary work. We have to endeavour to appreciate the real nature of the problem with which we are dealing. To what extent are the causes permanent in character? To what extent are they beyond our control? To what extent is unemployment measured by the contraction of our markets abroad, and to what extent is that contraction permanent? We have to ask ourselves questions of this kind, and to find answers to them.

When we examine the problem from that standpoint, we shall find that a very substantial number of our army of unemployed are where they are through permanent causes, causes over which we have no control, causes which nobody in this country can counteract. I will give one or two illustrations of what I mean. It does not matter which of the big staple industries you take, they all tell the same tale. Let us take cotton as an example. We have employed in the cotton industry about 554,000 workpeople, of whom, I believe, nearly one half are at present on the live register. I have been looking at this problem of cotton. It is true that at present a very considerable number of the persons unemployed in the cotton industry are idle on account of political unrest due to conditions over which we have no control; but, apart altogether from that political unrest, we have an army of unemployed in the cotton industry which cannot be accounted for by that phenomenon. In pre-War days, in 1913, we exported from this country 7,000,000,000 yards of cotton cloth. Last year we exported 3,700,000,000 yards. Nearly half the total export trade in cotton cloth from this country was lost between 1913 and 1929. We have to inquire why we have lost that trade. When we look at the markets, we find that in India, Japan, China, Hong Kong and the Straits Settlements we had a market representing about 62 per cent. of our total foreign markets for cotton, and 77 per cent. of our loss of markets is accounted for out there. What is the explanation of that? Have we lost that because other people have taken it from us? Have we lost it because they are not consuming as much cotton now as before, or has it gone because they are producing their own, or it is partly due to each of these causes?

Let us take the case of India as an example. In 1913 we sent to India 3,000,000,000 yards. Last year we sent 1,200,000,000 yards. We have lost substantially more than a half of our Indian market. We have lost 1,800,000,000 yards. I want to know, why did we lose it? We lost it for this simple reason, that out there in the East a great industrial development has taken place right at the very heart of our market. Whereas in 1914, in India, Japan and China, there were 10,000,000 spindles, to-day there are 21,000,000. As against 130,000 looms, there are now 278,000. India is not consuming less cotton, but she is producing for herself 1,600,000,000 yards more now than she did in 1913. That market has gone to that extent, and it has gone further than that. We have that fact to face, and we have this further fact to face, that we have not held our own in cotton in any country in the world, and it is largely due to the fact that you have this big industrial development going on right in our own markets. It means that we are not going to employ as many people in future in produc- ing goods for consumption abroad as we have done in the past. The same tale is told in the coal industry. The same lesson is to be learned from the iron and steel industry, and I think there is no doubt that we shall have to employ more of our people in producing for the home market in future than we have been employing in that direction hitherto.

But, while I say that, I want to make my position very clear. Not only are we losing our markets abroad owing to the kind of cause I have mentioned, but if we are going to retain what we have and in any way improve our position, we shall have to concentrate upon creating a higher standard of efficiency in industrial undertakings than exists at present. That is a matter to which the Government have been devoting an enormous amount of time and attention. We have had the advantage of the assistance of an Economic Advisory Council. We have had inquiries into coal, into cotton, into iron and steel. Negotiations have been proceeding between representatives of the Government and those great industries with a view to putting them on a more efficient basis than they have occupied for some time past and, in doing that work, the Government are engaged in real, solid, substantial work for solving this great unemployment problem, and finding work for the people.

It may be said that is a slow process, but we are dealing with the results of a slow test which has been in operation for a good many years, and it is going to take time. I have heard nothing in the House to-day that indicates how we are going to solve this problem except by a gradual process. In order to do everything that it is possible to do you must get down to the root causes and replace inefficiency by efficiency and by that means try to build up our industries in a more effective manner. I said just now that we shall have to develop our home markets. We are consuming in this country every year something like £50,000,000 or £60,000,000 of what are called hog products, bacon, ham, pork, lard and that kind of thing, and also eggs and poultry—£140,000,000 worth of stuff for which we have a market and which we could produce for ourselves and thus find employment for 200,000 people. I see no reason at all why we should not develop that home market and find employment there for our people in the production of the necessaries of life for the people in this country. We are endeavouring to develop an agricultural policy along those lines which will undoubtedly place a considerable number of people on to the land. The extent to which that policy will make progress will depend, to some degree, at any rate, upon the co-operation we get in this House in carrying our measures through.

It is not merely our agricultural products to which we shall have to pay attention. We shall have to pay more regard to our home market for our industrial products. I should be one of the last men in this House to urge anything in the nature of protection for inefficiency. Whatever else comes along we cannot have that. But I do hope that we shall hammer out the matter in this Debate, everybody taking their turn or their responsibility in trying to find a solution, and how best to apply any sort of method that can be devised towards making our own home industries as highly efficient as possible, and at the same time maintaining our home market as fully as possible for those who may be employed in our own country. It is along those lines that I feel convinced we shall find the best results for the unemployed workers in this country. We may go on finding, as we hope to do, as much work as possible in the kind of schemes which have been promoted hitherto. We shall give every encouragement to the local authorities to do all that they can in that direction, together with such grants as we can assure them, but I am hoping that that is not the direction in which Parliament will look for a satisfactory solution to our troubles. I am very much afraid that in the past we have concentrated so much on 'schemes of public work that we have been drawn aside from a study of the real problem with which we are confronted. If in some of our industries we have to face a contraction, and a permanent contraction, as I think is the case, it is no use trying to meet that situation by talking about longer hours and lower wages. Those devices will not make the markets of the same dimensions as in pre-War days and any attempt to expand them to that magnitude by the method of low wages and longer hours must be regarded as a delusion, while arty policy based upon a delusion is bound to lead us in the wrong direction.

When the debate began to-day I understood that it was to be devoted to unemployment insurance, but I think that only about two references have been made to that subject. There will be other opportunities for discussing that matter. The Minister of Labour will deal very fully with it when she speaks. So far as the question was dealt with to-day, we were told that the scheme as an insurance scheme has been smashed to smithereens, or that the bottom has been knocked out of it, that the contributions of the employers, the workmen and the State total £45,000,000 per annum; that the payments being made out of the Fund total £70,000,000, that the £25,000,000 difference has to be made good by borrowing and that the Minister of Labour will have to come to the House to ask for a further loan. The suggestion was made that instead of doing what is suggested in the King's Speech, namely, referring that issue to a Royal Commission, something ought to be done now to rectify matters. We were told that the thing ought to be made to balance, Mat it ought to be put upon an actuarial basis, but no one undertook the task of saying how that was to be done. Is it proposed to reduce benefits? I am afraid we shall not be able to lend much support to that. If it is a matter of increasing contributions, that is a very serious thing for industry. The burdens upon industry to-day are by no means a matter of indifference, and to add to those burdens would have very serious results. It could not be done without very serious consideration as to its effect and its reactions.

The right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) said that he knew of a case whereby working short time, men, I think he said at the docks, had been able to earn £4 10s. a week and afterwards get unemployment benefit. The suggestion was made that the Minister of Labour ought to make provision against that sort of thing in the Bill which she will have to introduce in the near future for dealing with a further loan. wonder whether the right hon. Gentleman would be satisfied if we provided in a Bill that anyone who earns £4 10s. in three days is not entitled to get any unemployment benefit afterwards. Of course, he would not. Nobody would be satisfied with any such proposals. If you go to South Wales among the miners you will find thousands of men who do not get more than 7s. 6d. or 7s. 9d. a shift and when they work three days a week they have 22s. or 23s. By the time their unemployment and health insurance and other insurance deductions have been made they have about £1 left, and when they pay at least 10s. for rent they have 10s. left for the purposes of life.

It is all very well to talk about £4 10s., but, if you are going to apply any rule, you must be very careful that you are not, in the process of removing one evil, or one abuse, or one injustice, reintroducing a dozen difficulties and injustices in its place. If there are cases where it can be shown that people are drawing benefit who ought not to be drawing benefit, if it can be shown that there are abuses of the kind suggested, no one in this House, no matter to what party he may belong, will want to bolster up anything of the kind; but before any change can be made we want to have the light of publicity thrown upon the allegations that are made throughout the country on a very broad scale. For three or four months I have been in close touch with the Minister of Labour in the matter of unemployment, and every case we have seen in the newspapers, every rumour and allegation that has been made, we have checked and tested and tried to trace its source, and I am amazed at the very small amount of evidence that we can get in support of the allegations that are being made. As a Government we say that if the people making these allegations can substantiate them let them go before a Royal Commission and let the light of publicity be thrown upon them. If there are abuses of any kind, if someone is getting something to which in fair play and equity they are not entitled, let the matter be made public. Let those who have evidence of these abuses bring it forward. We do not suggest that there should he a report at the end of a year or two years, but that an interim report should be made dealing with the most pressing matters.

It is not merely a matter of the difference between the contributions to the Insurance Fund and the amount of pay- ments out with which we have to deal. Next March or April we shall have to deal with 340,000 people who, unless Parliament does something in the meantime, will be deprived of benefit altogether. They have nothing at all upon which to fall back. Will anyone in this House say that these 340,000 people should be put on the Poor Law? The Poor Law authorities would not undertake the obligation, and I doubt whether there is any responsible member of the Liberal or Tory party who would advocate it. Everyone agrees that it simply cannot be done. We think, having regard to all the facts, to the way this matter has grown up and developed, that it is of first class importance that the whole matter should be referred to a Royal Commission, that a complete survey of the whole scheme should be undertaken, and when the reports are received that they should be considered with a view to introducing any legislation Which may be necessary in order to bring the law and the scheme into harmony with the best interests of this people of this country.

Sir HENRY BETTERTON

I had not intended to take part in this Debate and I should not have done so but for the concluding remarks of the right hon. Member for Ogmore (Mr. Hartshorn), but having regard to what he has said I really must intervene now. He knows perfectly well that the three-party committee which has been sitting has the status of a Cabinet Committee, and therefore I am precluded—and I want to observe strictly the obligation—from saying anything which occurred at that committee. But I would remind the House that in July last the Minister of Labour invited the assistance of Members of all parties in dealing with this most difficult question. That invitation was accepted, and those of us who served on the committee have spent a great deal of time, longer than some hon. Members realise, during the Recess, in going into this matter. The number of meetings that we have held gives no sort of idea of the amount of labour involved.

So far as I and my hon. Friends are concerned, we protest most strongly against the fact that before our deliberations were finished, when we had been actually asked by the Ministry of Labour to meet again at an early date, before anything we had to say had been considered, and before there has been the slightest attempt to reconcile what may have been divergent views, the Government come down and say, "Oh, no, this is not a matter for you at all; it is a matter for a Royal Commission which is to be set up." What I am entitled to ask and do ask is, why were we requested to take part in these deliberations at all? We were told by the Prime Minister yesterday that he wanted a Commission with as little party taint as possible. I thought that that was the very object of having a non-party committee. As far as I am concerned, I am at least entitled to say that during the whole of our deliberations there has been no trace at all of any one trying to make party capital out of this most serious matter.

As the right hon. Gentleman has just said, there will be other opportunities, which we will certainly take, of going into this matter very fully. For the moment I confine myself to a protest, as strong as I can make it, that we should have been treated in the way that we have been treated, before there has been even the smallest attempt to collect our views, and that we should be told in effect that all our labour is of no use whatever and is not even considered by the Government, and that they are going to set up another tribunal to do what they asked us to do.

Mr. STRACHEY

The Debate until now has been characterised by two kinds of speeches, one kind which showed that the speakers fully realised the seriousness of the crisis in which we are, and the other kind which showed that they did not. Unfortunately it seemed to me that the speech which we have heard from the Government Front Bench fell into the second class. We found no trace in that speech of any realisation of the intense crisis into which this country is obviously moving, and no trace that the Government have had it under their active consideration. It is, perhaps, worth while to try to envisage the form or forms in which that crisis has come upon us. In the first place, of course, it is a budgetary crisis; that is to say, a point will be reached sooner or later—we had better face the fact—at which the cost of maintaining the unemployed, if their number should go up at the present rate, will become so great and the budgetary burden involved will become so heavy—presumably we cannot go on meeting it by borrowing—that the raising of that money will itself become a contributary cause of further unemployment. In that way a vicious circle will be established.

I am not saying that that point has been reached at the moment. I am not saying that we have by any means reached the limit of taxation in this country. But I think it is clear that sooner or later, if unemployment continues to go up with geometrical progression as at present, that point of budgetary crisis must be reached. Those, after all, are the facts that are looming ahead of us. I know that those are the facts that are looming ahead of the Chancellor of the Exchequer, who will be faced, even this year, with a budgetary situation of the very greatest difficulty—with dwindling assets and growing calls upon those assets. But if that be the crisis which the majority of the House have had in mind, we blind ourselves to the fact that there is a more immediate crisis coming upon us, which is likely to cut across the position long before that budgetary situation has been reached. There is the fact that in the present economic situation, it is perfectly clear that sooner or later, and sooner rather than later, a very wide attack must be delivered on the wage standards of this country. It is perfectly clear that there is an enormous amount of production going on in this country already, on an uneconomic basis. The growing figures of unemployment prove that, and surely signs are not wanting that this winter will not be on long, before attacks on the whole wage standards of the workers of this country are bound to be delivered. It has been going on for some time to some extent but it will be enormously intensified as the economic situation intensifies.

I am not here to-night to claim that the employers of this country will launch general and wide attacks on the workers' standards for the mere pleasure of doing so. They will do so because, in the present economic situation, unless something is done to relieve it, unless some new factor is introduced, they will be faced by the sheer alternative of doing so, or of closing down their works and going out of business. That is no academic theory. The notices are up in the pits already; in one industry at any rate that situation is already within sight. Therefore, it is surely clear that there is a situation of crisis; that this is no mere figure of speech, no mere nightmare with which back benchers are trying to frighten the Government. It is an actual thing which is facing the Labour movement of this country. This Government is intimately connected with the Trade Union movement of this country, and we cannot as a Labour Government and a Labour movement look with equanimity and indifference at a crisis of this character developing under our very eyes. It will develop; it must develop; it must be upon us this winter, unless we do something to relieve the economic situation.

That seems to me to be the measure of the urgency of the crisis which is upon us to-day. There is no need for me at this late hour, to go into the question of what produced that crisis. No one of course is suggesting that it is the fault of the Government. Indeed a speaker from the other side has very frankly said that this Government has met with amazingly unfavourable world conditions. There has been a time of unparalleled economic crisis and economic chaos in the whole world, and an instability which we have not known in any year since the War. Even the gold standard, so well-beloved of the heart of the Chancellor of the Exchequer, as a respectable and, he hoped, a comfortable seat on which he might rest, has become more in the nature of an economic water-chute, which has landed the whole world into a catastrophic fall in prices affecting this country more than any other. Of course, no one suggests that the Government was responsible for enormous world movements of that sort. It is indeed a question whether they understood them. But what we do suggest, and what unfortunately is the case, is that, although they were not responsible for causing this situation, they will undoubtedly be held responsible for dealing with it. It is impossible that they should escape that responsibility, and it is a responsibility that everyone in the Labour movement must naturally share with them.

We have in the opening of this new Session of Parliament the Government's proposals—proposals presumably for dealing with the situation. In the King's Speech we have a list of Measures, ranging from site values to a Trade Unions Bill and an Education Bill—all admirable and excellent Measures in themselves—but we are bound to ask what the site value of these Measures is in respect of the economic crisis? That seems to us a question which is most serious, indeed. Again, in this list of proposals I look in vain for any sign of any great cohesion, any sign that they amount in their totality to an organised scheme or policy. We find merely this list of excellent proposals, every one of which we all support, but in which, in nine cases out of 10 at any rate, we can find very little relevance indeed to the present situation, which I have endeavoured to show is of such very intense urgency.

As against that we have heard to-day in several speeches what amounts to the adumbration of an economic policy. We have heard in the speeches of the hon. Member for Smethwick (Sir O. Mosley) and other hon. Members the beginnings of an economic policy. To many Members on this side that policy may have seemed novel, unorthodox and even fantastic. It certainly sacrifices—and every one faces up to the fact that we must sacrifice—some of the economic doctrines we have held on these benches (and which I, for example, have held very strongly), but I would ask hon. Members on this side whether the situation in which we find ourselves at the beginning of this second Session of this Labour Government's tenure of office, is not novel, unorthodox and fantastic. What would have been our feelings a year ago, when Parliament assembled after the last election, if we could have been told we should find ourselves in the economic situation we are in to-day with the unemployment figure at its present level? Surely in a situation so grave and menacing it is time for us to consider, at any rate, proposals which may outrage some of our oldest and deepest prejudices but which yet obviously are, at any rate, on a scale, and systematic enough, to make some real progress to deal with this problem in its entirety?

Those proposals of my hon. Friend the Member for Smethwick and the other hon. Member who spoke in the same strain amount to a policy of economic nationalism. I think we have got clearly to face that fact. They amount to an attempt to mobilise and organise what economic assets this country has in its world economic relations, and use them in order to cure our economic difficulties. That in itself perhaps is a difficult pill for some of us to swallow. We may feel that it runs counter to the internationalist principles to which many of us very firmly adhere; but, after all, in a world such as it is to-day, we must face the fact that something of that sort is necessary. When we look around Europe and the whole world, and find a state of economic disorganisation growing deeper, growing worse every year, may it not be necessary, in sheer self-defence, to cut ourselves off to some extent from a world in that condition? In a period in which the world is growing into an economic mad-house, may not economic nationalism be no more than a measure of self-preservation? As a matter of fact, may not the fact of this country adopting a policy of that sort have a good rather than a bad effect on the economic situation of the world? May it not be that, if the present selfishly disastrous policies which are being pursued in the rest, of the world by foreign nations are continued, this country too must look to its own interests?

May not this have a very salutary effect on countries which are playing entirely for their own hands? I have never been able to believe, although still holding very strongly many of the economic arguments of the Free Trade case, in the economic or political view, expressed very often from the Liberal benches, that it is impossible, by threatening to take an act of economic self-defence, to induce another nation to modify its own acts. I have never been able to see that human nature was so different in international affairs that that kind of arrangement might not be as effective as it is in ordinary affairs.

At any rate, the policy which was adumbrated by several speakers was a policy of that kind. It did envisage the control of our imports. I think the methods and ways by which that control should be exercised have never been fully stated, and perhaps it is impossible to state them fully in a single speech in this House, but let us suggest that we, at any rate, on these benches approach the question of the control of imports—whether by bulk purchase, by import boards, by licence and regulation, or by tariff, if that is not ruled out—as an aspect of national planning, as an aspect of the necessary process of planning out the economic life of this whole community.

We do not believe that we can get through the present crisis without national planning—that is certainly a well-established Socialist position—and we do not believe that it is possible that we can have national planning unless we have control of our imports. We believe that that is an absolutely essential coping stone which must be placed on any edifice of our national planning. At any rate here is the beginning, the adumbration, of a comprehensive economic policy which, cutting across existing methods, can give us some possibility of avoiding the economic crisis for which we are obviously heading, and which I mentioned as so grave a menace to the standards of the workers.

It being Eleven of the Clock, the Debate stood adjourned.

Debate to be resumed To-morrow.