UNEMPLOYMENT INSURANCE (No. 2) BILL.

HC Deb 18 February 1931 vol 248 cc1263-391

Order for Second Reading read.

The PARLIAMENTARY SECRETARY to the MINISTRY of LABOUR (Mr. Lawson)

I beg to move, "That the Bill be now read a Second time."

In opening the Debate on the Money Resolution on Monday, my right hon. Friend set forth the financial position of the Insurance Fund which has made this Bill necessary. Briefly, as my right hon. Friend stated, the present position is that the debt is accumulating at the rate of £1,000,000 a week, and it is essential that this Bill should be passed in order that payments may be made to claimants on the 4th and 5th March next. May I just explain the details of the Bill?

Clause 1 increases the borrowing powers from £70,000,000 to £90,000,000. Clause 2 extends the transitional period by a further six months, that is to say, from 36 months to 42 months, and, as my right hon. Friend stated in opening the Debate on Monday, that extension of the transitional period will cost some £20,000,000. I may point out that Sub-section (3) of Clause 2 contains certain consequential drafting and accounting provisions, which I think it is unnecessary to explain in detail—

Mr. CHURCHILL

By the courtesy of the hon. Gentleman perhaps I may ask you, Mr. Speaker, at the beginning of this Debate, a question for your Ruling as to the scope which the discussion, in your opinion, may take. I would ask you whether this Debate may be treated generally as other Debates on this subject have been treated in the last year or so, and allowed to range over the general question of the main problem of unemployment?

Mr. SPEAKER

I have given this matter some consideration, and it seems to me that it will be for the convenience of the House, and will meet with the general approval of the House, if I allow this discussion to range over a very wide area in regard to unemployment.

Mr. LAWSON

I had practically finished my explanation of the details of the Bill, but I thought I had better draw the attention of the House to the fact that Sub-section (3) of Clause 2, which is a small but rather complicated matter, deals with accounts, the real purpose of which is to keep the transitional benefits and payments separate in the accounts of the fund. It is sometimes assumed that the sole, or the chief, cause of this increase is due to the passing of the Act of 1930. My right hon. Friend pointed out on Monday, however, that at the most that Act was responsible for some £13,000,000 of increase in the cost, that is to say, £5,000,000 for standard benefit and £8,000,000 for transitional benefit. It is well known that the chief reason for the Government having to ask the House for the increase set forth in this Bill is due to the slump which is common throughout the world.

Whatever may be said with regard to abuses, that is a question for the Royal Commission to pronounce upon; the fact still remains that even the points which have been raised only cover a fraction of the increase, and it must be remembered, too, in this connection, that some of these practices which are being denounced have been in operation for years before this Government came into office. I refer particularly to the payment of benefit to short-time workers and persons earning high wages at week-ends. Such payments were lawful and were made under the legislation of the previous Government, and the legislation of the present Government at least has not appreciably affected the position in respect of those points.

The reason why the total expenditure in respect of unemployment benefit, both ordinary and transitional, has risen to the present rate of about £125,000,000 a year is that, owing to the world-wide depression, the total number of unemployed is more than double what it was during the last year of the late Government, and, indeed, more than double what it was at any time since then up to Christmas, 1929. One thing that can be said for the 1930 Act, at any rate, is that it enabled those responsible for the Exchanges to concentrate on placing. That was the original purpose of the Employment Exchanges Act. The proof of this is that in 1930, in spite of increased unemployment, the number of applicants who were placed was 1,727,484, as against 1,554,433 in 1929. That is an increase of 173,000 in spite of the parlous condition of the labour market.

In speaking of this matter generally we have to admit to ourselves that these Debates are perhaps the most dolorous and depressing that take place. The most fertile minds find it very difficult to say anything new as far as the Unemployment Fund is concerned. Sometimes a Debate is enlightened by some attack or is touched by some deeply human appeal. Whatever criticisms there may be of what are called abuses, we know that great masses of our fellow countrymen are eating out their hearts because of enforced idleness, which is alien to their nature. For it is a fact that we all know large numbers of people to whom idleness is positively pain.

The tragedy of all this is that every great industrial country in the world is either in the same position that we are or is rapidly coming to it. The House will remember the telling figures which my right hon. Friend and I gave on Monday night in respect to unemployment generally. What was more striking than those figures to me, when I moved the Resolution for the extension of the Unemployment Committee of the International Labour Office, was the representatives of the countries who had to admit that at last unemployment had struck them. For instance, we were told for quite a long time that Italy, having a, certain method of Government, was immune from unemployment. The representative of Italy had to admit at that gathering that there were at least officially 400,000 unemployed at that time. It was generally considered by people outside, say, Germany and this country, that France and Belgium were immune from unemployment. As a matter of fact, at that time, in October last, it was stated that there was no unemployment at all in France. At any rate, her representatives did not seem to accept that there was any and yet it is admitted, little more than three or four months after, that France had something like 1,300,000 unemployed. I cite that fact to show how rapidly this situation is developing and impressing itself upon the world at large.

Mr. HANNON

What is the hon. Gentleman's authority for making that statement with regard to unemployment in France?

Mr. LAWSON

My authority is the representative of France, who gave the figures to the unemployment committee which discussed the matter and passed certain resolutions. It is being borne in upon the countries of the world not that they should depress the workers' standard of life in order that the private employers of each country should compete with each other to make things worse, but that they should raise the workers' standard of life in order that employers will be able to dispose of the goods they produce. Not only the International Labour Office was taking that course, but every thinking man now sees that a situation is gradually developing which demands new methods, new ways of thinking and the application of new systems. I have myself heard employers of labour use language in the last few months concerning this fact of increased production and the increased possibilities of a higher standard of life on the one hand and, on the other, have heard employers use language which was quite common language upon the lips of Socialists a few years ago, and indeed the right hon. Gentleman the Member for Epping (Mr. Churchill) about the middle of last year, in a very brilliant statement on the position, said that the great problem of the world at present was how to bridge that gap between the people who produce and those who consume—that really the world problem was not one of production now, but one of distribution. I was extremely sorry to see the statement upon this matter by representatives of employers during the last week or so when they practically visualised the wholesale cutting of wages as the only means of meeting the problem and I was as sorry to see their references to the International Labour Office which, if one could only express it, was rather a note of despair than anything else.

4.0 p.m.

As one who has taken an active part in the ordinary conduct of industry, in some section of one great industry, I am bound to say I think that, if there is no hope in the regularisation and raising of the workers' standards through the International Labour Office, I see no hope anywhere in dealing with this colossal programme. If there is no hope of the common regulation of hours, if there is no hope of the raising of the workers' standard of life by common international agreement, it is an ill day for those who desire to see distribution of the great surplus which is at our disposal. Two facts emerge from the present situation. For one industrial nation to be involved is for all ultimately to be involved, and the regular cycle from prosperity to depression which was characteristic of pre-War days has now yielded to the immense productive capacity of the industrial nations of the world. Previously to the War, there was a cycle which it is understood went from something like seven years to 10. The average percent-age of unemployment over a number of years was something like 6 per cent. The average percentage in this country for the last 10 years up to 1929 was 12 percent. The present percentage is 21. In America it is 23.8 and in Germany 25. That would point to the fact that it is just possible the cycle of depression and prosperity, with which we are all so familiar since the War, is ceasing to operate, if not wholly, at least for a considerable time, in the face of the tremendous productive capacity of the present time. If that is so, then extra-ordinary steps must be taken to face this situation, and as it is a common situation suffered by the nations in general, it is very possible that the International Labour Office, where common agreement can be arrived at, where hours can be dealt with and wages regularised, must in the future be more and more important, rather than less important, as has been put forward by the employers. Mr. Butler, the Deputy-Director of the International Labour Office, has recently visited the United States and Canada, and in his report he talks about the effect on the demand for labour by the intervention of the combine, a machine which cuts and threshes the grain. One consequence of its employment is that: Whereas the railways used to transport thousands of men annually from the eastern cities to reap the crops on the prairies, no harvest trains have been run during the last two years, though the crops were up to the average level. That shows a very great increase of productive capacity in a comparatively short time. I take the other extreme. I bad a striking example given to me in my own district quite recently of the changes that have taken place in industry, an example which, although I thought I was familiar with these matters, rather staggered me. There are Members on this side of the House who are familiar with the old hand method of hewing coal, and although we grumbled at and used unparliamentary language, we still had some pride in our calling. But, in recent years, as everyone knows, the cutting machine has developed at a great rate, and, not only that, but the coal conveyor has been developed at a great rate. I was told the other day of certain collieries where, instead of the men filling into the coal conveyor, they have now got a great scoop which scoops the coal on to the machine. The effect of its application in those collieries was to reduce directly the number of men to one-half, and ultimately to one-quarter. We can understand something of what is happening when we get illustrations of that kind in this country and in every country of the world, because their increase really gives us no advantage.

We have heard a good deal about 1926. The statement I am going to make is merely an illustration of what is going on. Since 1926, I think, the miners have increased their output per person by nearly 400 cwt. I think it amounts to something like 20 per cent. increase since 1926. If that is the case, one would assume that the people in the industry would improve their position, and get something like a reasonable standard of life, but, as a matter of fact, their wages have been decreased by 1s. 3d. a day, although they have increased their output by 400 cwts., and there are 45,000 fewer miners working to-day than were working at that time. That is the kind of thing which is going on in industry after industry, and I venture to say that those who do not believe in international regulation will ultimately discover that that is the only solution, or rather the chief solution, to this problem. We are working at the problem in the country whole-heartedly and working at it in detail to make the machine efficient, and as the problem is one of distribution rather than production, the method of advance must be through the International Labour Office for the general raising of the standard of the worker's life.

It may be said, of course, that that is a dream. I remember when I was a boy my father joined a trade union, which was not a common thing to do at the time. He joined that union in order to forge a weapon to raise the standard of life of his children, who sometimes wanted food, through no fault of his. Trade unionism became a real and important fact in the worker's life. When I was working 10 hours a day at gruelling work in a mine as a coal-getter, I remember being told that the eight-hour day was a miner's dream. It is now a fact. I remember, too, very well, reading the accounts of discussions in this House, and the Debates in what was known at that time as the Grand Committee on the Bill piloted by the right hon. Member for Epping. To-day eight hours is a commonplace. What was then a dream has become a reality. I recollect joining a band of younger men to propagate the minimum wage idea. That seemed a dream then; to-day, it is a reality.

It seems that we are in view—it may be this year—of getting an understanding with the various European nations as to a common standard of hours for the miners of the world. Those who have not taken part in discussions of that kind would be amazed how practical the discussions are, and how near the solution is along those lines. What has been done in one industry by application may be done in other industries, and so we may arrive at that stage when the general trend of the world will be the raising of the workers' standard of life, rather than the depressing of it, as is sometimes suggested.

It has been said—and I know the matter will be raised before this Debate goes very far—that there really is no need for Bills of this kind inasmuch as certain abuses were taking place; that the Government had at disposal certain information upon which they ought to have acted at once, and that there really was no need for a Royal Commission. We have stated the position in answer to that from time to time, and, really, there is not very much new that ran be said upon the matter. There is one thing I can never understand, and that is that right hon. and hon. Members opposite should not accept the position that before there is any action upon a matter of this kind there have got to be decisions taken. Those decisions can only be taken after evidence has been given, after the experience of the contributing parties in the industry has been heard and considered. The right hon. Gentleman opposite set up a very important committee, and before he took any action he had to wait a considerable time for the decision of that committee.

On Monday night, the hon. and gallant Member for Kelvingrove (Major Elliot) told us, with a great flair, how in the early part of last century the Government came to a certain decision without any Commission. As a matter of fact, the greatest Commission of all time, which was connected with what is known as the new Poor Law, took a considerable time, and had behind it the authority of some of the most outstanding men of that time. What is quite clear is that it will be impossible, after 4th or 5th March, to pay the great mass of the people who need to be sustained through our unemployment insurance system and to meet the needs of those who are on transitional benefit, unless we get this Bill, and so I will end by formally moving the Second Reading.

Sir ARTHUR STEEL-MAITLAND

I beg to move, to leave out the word "now," and, at the end of the Question, to add the words "upon this day six months."

I have listened to every word the Parliamentary Secretary has said to-day. I listened to every word the Minister and the Parliamentary Secretary said on Monday with reference to the new developments in industry. I hope that there will be time to say a few words later, but the most material point at the moment is this: Not one word that has dropped from the Parliamentary Secretary to-day justifies this House in passing a Bill which gives an extension of borrowing powers twice as large as have ever been given before. The hon. Gentleman has not said one word that justifies our allowing an extension of transitional benefit when the cost of transitional benefit is twice as big as it ever was before. It was much the same on Monday, except that the position has been made even clearer since Monday. The first item of news for which I looked this morning, and for which I fancy, many Members of the House looked, was what had happened with regard to unem- ployment. Another enormous increase! Nearly 13,000 on the register! And that at a time of the year when, normally speaking, a great seasonal improvement can be expected to take place.

The Chancellor of the Exchequer, on behalf of the Government, only a week ago emphasised the gravity of the whole of the financial and industrial situation. That warning is reinforced by the figures this morning, and it is in relation to that grave situation that I ask the House to judge this Bill to-day. It is a financial crisis as well as an industrial crisis that we are in, and the passing of this Bill commits to the uncontrolled action of the Ministry a situation involving the expenditure of £24,000,000 of borrowed money on ordinary benefit, and another £17,000,000 to £20,000,000, as estimated by the Treasury, on transitional benefit. How will the Government justify doubling the amount of borrowing powers for this fund? There is no precedent for it at all. What is more, if the normal Spring improvement takes place, as might be expected to take place even in these times of trouble, it means that the whole control of the situation passes out of the hands of the House of Commons for another six months.

We are asked to extend transitional benefit for six months. What is the need for that? We are told that it is going to cost from £35,000,000 to £40,000,000 in the coming financial year. Why let half of that amount—something from £17,000,000 to £20,000,000—go out of the control of this House for another six months just when we are warned by the Chancellor of the Exchequer that it is a period of extraordinary gravity? I am sure that the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) will agree with me when I say that, time and time again, he has said: "When you have a grave situation, that is the time you want to preserve the control of the House of Commons over matters of great moment." What is the reason? We have had no adequate reason from the Minister. We have had no hint of a reason of any sort or kind from the Parliamentary Secretary why they should want to go beyond all previous precedents. What justification can they give? Let me refer to the one justification that might be alleged. The Minister gave us a significant promise, on behalf of the Government, when she spoke on this question the other day. She made this promise: We have specially asked that they"—the Commission— will give us a report by the end of May. We have pointed out that we must legislate before the House rises for the Autumn Recess."—[OFFICIAL REPORT, 16th February, 1931; col. 913, Vol. 248.] Let the House mark what is to be the subject-matter for the legislation. It is the subject-matter contained in the terms of reference of the Royal Commission. When they consider legislation they are going to consider the subjects which were committed to the Royal Commission—the future scope of the unemployment insurance scheme the provisions which it should contain, and the means by which it may be made solvent and self-supporting, and also be it noted, the arrangements which should be made outside the scheme for the unemployed who are capable and available for work. I ask the House to note that promise of legislation. Moreover, as she herself said at a later stage of her speech, it must deal with the recommendations of the Royal Commission and obviously must have reference to the particular subjects which were committed to them for inquiry.

Therefore, but for one consideration which I hope to mention in a minute, we might be tempted on the strength of that promise to let the Minister have the Second Reading of her Bill. But when we reflect on what has gone before, I wonder whether we are encouraged by the retrospect. The spirit of the Minister may be willing, but the flesh is very weak. She is very frail in these matters. It may quite well be that the intentions are good, but there is another place and end than the reform of the insurance system to which good intentions lead. I ask the House to consider the record as to whether we can trust a Ministerial promise in this matter. Of course, I am not referring only to the Minister because she gave the promise on behalf of the Government, and so, of course, her record is due to Government decisions also.

I would ask the House to notice this fact. Very nearly every time that she has submitted a Bill to the House she has tried to ease its passage by promising an inquiry. We have never come to any results from those inquiries yet. The first time she introduced her main Bill, some 15 months ago, it was to be an experimental year, and during that year she said that The definite objective in view in continuing the transitional period is …. 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."—[OFFICIAL REPORT, 21st November, 1929; cols. 749 and 750, Vol. 232.] An experimental year. It was up three months ago. No results at the end of that year. Nothing. And three months have passed and nothing still. The Minister came to the House for borrowing powers in July, and again to ease the passage of the Bill for borrowing powers she announced the all-party Committee, and she laid stress upon it. It was the first instance of a small Council of State. It is not a very good precedent for encouraging us to rest upon the present promise. It came to an early demise, the reason for it still wrapped in uncertainty, and no coroner's inquest upon it was even allowed by the Government. Once more she came to this House in December to extend the borrowing powers again, and the Royal Commission was trotted out to help to ease her business through: Both on account of finance and on the date of expiry of transitional benefits, the Minister of Labour, whoever that may be, is bound to report again to the House in the early spring. By that time I believe the Royal Commission will have completed its survey of the outstanding problems to which I have referred."—[OFFICIAL, REPORT, 1st December, 1930; col. 1842, Vol. 245.] This time, again, the passage was eased by the confident belief that the Royal Commission would by now have given us the results of the inquiry. I would ask the Minister and the Parliamentary Secretary: What is the need of having six months' extra transitional benefit because the Commission cannot report in time? What have the Government done to make the Commission report in time? Here it is sitting two days a week, with the usual Christmas holiday—which no one grudges it—but if it is a matter of such urgency and importance why should not the Royal Commission be speeded up? They took a year to appoint it, and they are letting it go on at half time now. They are sitting two days a week. The Minister told us the other day that between the two days of sitting they were talking over the evidence that had been given. Why then between the two days of sitting is the Chairman of the Commission doing his ordinary normal business? He cannot be considering the evidence of the Royal Commission and doing his normal business at the same time.

The MINISTER of LABOUR (Miss Bondfield)

I think it is only fair to say, on behalf of the Chairman of the Commission, that I have his authority that nothing is allowed to interfere with the sittings of the Commission as long as it can take evidence, and the Commission is losing no time whatever in taking such evidence as is ready for it. It is held up because statements are not ready.

Sir KINGSLEY WOOD

Is it denied that Judge Holman Gregory is sitting in Court trying cases?

Miss BONDFIELD

It is denied that that fact is interfering in any way with the work of the Commission.

Sir A. STEEL-MAITLAND

Has not the Minister given herself away by every word she has said? The fault lies not with the Chairman but with the evidence not being ready! Who is responsible for evidence not being ready? Not the Chairman, certainly. If there was anything in what the Parliamentary Secretary said, does he mean, or does the Minister mean to say, that they could not have speeded up the bodies who were getting evidence ready? could they not have put it up to them earlier, and could they not have had the evidence more forward than it is now? I never heard such a confession of incapacity. As I say, unless it is speeded up there is no justification whatever for more confidence on this occasion than there was on any of the other occasions when the Minister got her Bill through the House.

I hope we shall not hear so much in the future about bodies not being ready to give evidence. Let us speed them up from now on. I am sure that the Minister will find she will be able to have more than two sittings a week if she puts her back into it. I am sure that my right hon. Friend below the Gangway would not have let it delay like this if it was thought to be vital to the nation; the push and go would have been there. Another reason for speeding up the Royal Commission is the gravity of the general financial situation. Let me refer to the words used on behalf of the Government the other day: I say with all the seriousness I can command that the national position is so grave that drastic and disagreeable measures will have to be taken if the Budget equilibrium is to be maintained and if industrial progress is to be made. An expenditure which may he easy and tolerable in prosperous times become intolerable in a time of grave industrial depression."—[OFFICIAL REPORT 11th February, 1931; col. 447, Vol. 248.] That was the statement given to us by the Chancellor of the Exchequer on behalf of the Government. When it comes to details, it is given in yet more detail in the evidence put before the Royal Commission by the Controller of Finance and Supply Services in the Treasury, again, I presume, putting before the Commission the views of the Government. He was asked this question: Would it be fair to sum up the effect of the first four or five paragraphs of your Memorandum in this way, that apart from borrowing during the year, the actual costs which have to be borne on revenue account by the Treasury under present conditions cannot be met so far as one can see without an increase either of taxation or of borrowing to meet current expenses? Answer: "Yes, I think that is the plain inference from the facts. In the next answer the Controller of Finance and Supply Services in the Treasury goes on to say: All countries, when they are going through a period of economic stress and strain, are naturally watched closely by foreign observers, on behalf of foreigners having large international financial or commercial interests. We, ourselves, on many occasions, have passed adverse judgments upon foreign countries which did not balance their Budgets. We must expect the same thing to happen to ourselves if, in fact, our finance became unsound. … That is a matter which needs to be continually borne in mind. Look at the dilemma the Chancellor of the Exchequer is in, and it is as much owing to Unemployment Insurance finance as to any other item in the administration. He is placed in this dilemma. If he does not balance his Budget, it will be a blow to British credit. It will be a blow which will cause intense hardship to this country in the reactions it will have upon British in- dustry. If he does balance his Budget by imposing fresh taxation, he knows quite well—he has stated so himself on behalf of the Government—he burdens British industry further just at the moment when it is least able to bear additional burdens. What is more, even at this moment everyone conversant with British industry knows that one thing which hampers it is the fact that costs are too high, and one item in costs is taxation. If he has to put on fresh taxation it means that it will be still more difficult for industry to recover, and still more difficult for industry to take proper advantage of the change in the world situation when it comes. Therefore, he is in a dilemma. There is one way out, as he himself has said, and that is a reduction of expenditure. [HON. MEMBERS: "No!"] At any rate it would help. A reduction of misplaced expenditure. [HON. MEMBERS: "Misplaced where?"] Here is an Unemployment Insurance system, the total cost of which is estimated to run from £100,000,000 to £135,000,000 in one year, of which the cost to be paid by the Exchequer is from £50,000,000 to £55,000,000 and the amount of additional debt that is likely to be involved some £40,000,000 to £50,000,000 or more. At the same time, there is every reason to believe, and I say it quite advisably, that a considerable part of this expenditure is not in itself justifiable. [Interruption.] I stand by every word that I have said. I stand to be challenged upon what I have said. Let me point out to hon. Members that if what I say is true, if there is any prima facie case for thinking so, then there is all the more reason for the inquiry being speeded up. We should not be fobbed off any longer than is necessary by the statement that the Commission cannot sit because the evidence is not ready, and the evidence is not ready because the people have not prepared it. There is not a word as to whether they have been asked for it in time or whether they have been asked to hurry up.

There are cries from the other side of the House as to whether there is any unwarranted expenditure. By unwarranted expenditure I mean expenditure which ought not to be possible under a proper insurance scheme. I say quite advisedly that it is clear that there may be, and there almost certainly is, expenditure which would not be warranted under a proper insurance scheme. Here, again, I find myself in agreement with what the right hon. Member for Carnarvon Boroughs said. I remember his speech at Torquay. He said: I have heard every day tales of unwarranted cadging on the dole. He went on to say that millions could be saved without impinging on any meritorious claim.

Mr. BATEY

You do not believe that.

Sir A. STEEL-MAITLAND

The hon. Member says that I do not believe that. I do believe great savings might be made.

Mr. BATEY

Then the right hon. Gentleman has changed since he was the Minister of Labour.

Sir A. STEEL-MAITLAND

And so has the insurance system. If I am asked for my reasons, I will give them. I want hon. Members to realise that I am not imputing illegality to anyone. I am not imputing blame to anyone. The law is there and the conditions are there, and if people take advantage of the law that this Parliament and this House of Commons have made and take advantage of the conditions that this Parliament and this House of Commons have created, the blame does not rest with them, but with this House and those who were responsible for passing them. Let me deal with the actual circumstances of the case. I will do so as briefly as I can. Take the question of working organised short time. That existed under the previous system, just as it does now. The fact that it was obviously becoming a wrongful thing to allow to continue was becoming clear under the previous system, and I take my own share of responsibility for not having dealt with it earlier. Now, when we have a far greater financial stringency, when years have passed and when the amount is more important than ever before, the Government cannot shelter under the fact that at a time when the whole trouble was not half so clear as it is to-day, it was allowed to go on, and that therefore they are allowing it to go on without having taken any steps. The point is not whether it went on before or whether it goes on now; the point is whether or not it is desirable. I could not give a better instance than that which was given by the Minister of Labour herself. She said: I will give one illustration of what may be called the development of short-time working by arrangement.' Then she quoted a colliery leaflet, which said: The pits will be so worked as to qualify the employés for three days unemployment benefit in alternative weeks. The unemployment benefit will therefore more than cover the reduction in wages.

Mr. BUCHANAN

Hear, hear. Very sensible.

Mr. TOM SMITH

I know very well the case that the right hon. Gentleman quotes. Is he aware that that was made by the employers to the workmen and was refused by the workmen and was only eventually made in order to induce the men to give the colliery company a reduction?

Sir A. STEEL-MAITLAND

I am very glad that the hon. Member has said that. It is now quite clear, as I wanted it to be, that I am not bringing these matters forward from the point of view of criticising workmen more than employers, or employers more than workmen. I am bringing the matter forward to show the imperfection in the insurance scheme, from whatever side it comes. I said earlier that I am not imputing blame any more than I am imputing illegality. This was a perfectly legal thing. Let that be clearly understood. One hon. Member said, "Hear, hear!"

Mr. STEPHEN

Hear hear!

Sir A. STEEL-MAITLAND

Two hon. Members say "Hear, hear!" I want to know whether the Government representatives say "Hear, hear!" What does this amount to? Quite clearly, it points to the fact that you are subsidising wages out of the Unemployment Fund.

Mr. BUCHANAN

In the same way that you subsidise profits out of the Local Government Act.

Sir A. STEEL-MAITLAND

I am not concerned to dispute a matter like that, but if it were true, two wrongs do not make one right. It is subsidising wages out of the Unemployment Fund. It means that you are paying money to industry in a way that is legal, but quite clearly ought not to be done. [An HON. MEMBER: "What would you do?"] I will tell the hon. Member what I would do. I would stop it so far as the Unemployment Insurance Fund is concerned. If anyone says, "Is it a good thing or a bad thing?" I would say that the working of short time is, on the whole, a good thing if, under ordinary expectations of trade recovery, you think that all these men and women will get employment again. Then there is a lot to be said for it, but if you are continuing to work short time in an industry which, it is perfectly well known, is never likely to give them full employment again, even when trade generally recovers, it is perfectly obvious that you are continuing a state of affairs which is neither good for the industry nor for the people who work in it.

Mr. POTTS

How must people live?

Sir A. STEEL-MAITLAND

Quite clearly, they can be provided for, but they ought not to be provided for out of the Unemployment Insurance Fund. One hon. Member asked what happened in my time. The trouble is now. We are dealing with this question in relation to the present financial and industrial crisis, and it is a much bigger question than it was then. Let hon. Members take the figures which were given before the present Royal Commission and they will find that comparing November last with November of the year before there was an increase of just on 100 per cent. in the short-time figures. From the point of view of finance those figures mean £8,500,000 to £9,000,000 a year. It means a question of £4,000,000 to £5,000,000 for the half year that is just coming. That is one point on which I have been challenged and which I have answered. I will deal with another point on which I have been challenged, and that is the question of married women and benefit. The present state of affairs is described quite accurately in the evidence given before the Royal Commission.

Mr. BUCHANAN

Whose evidence?

Sir A. STEEL-MAITLAND

The evidence of the Assistant Secretary to the Ministry of Labour.

Mr. BUCHANAN

Shylock the second.

Sir A. STEEL-MAITLAND

I say on my own behalf, and I am quite sure that the Minister would say on her behalf, that I resent that aspersion enormously. I may or may not agree with the laws that the Minister has passed, with regard to which both she and the Government have been faithfully served by the officers of the Ministry of Labour, and to cast an aspersion upon any particular official without having any justification for it is most reprehensible.

HON. MEMBERS

Withdraw!

Mr. BUCHANAN

I do not intend to withdraw.

Sir A. STEEL-MAITLAND

I say quite distinctly, and I think the Minister will agree with me, that the people who are criticised are equal in humanity and feelings to any of the people who set out to criticise them.

HON. MEMBERS

Withdraw!

Mr. BUCHANAN

I shall not withdraw.

Sir A. STEEL-MAITLAND

A question was put to the witness by the chairman: Supposing a woman is living in an area in which there is no employment for a married woman and she marries with the knowledge that there is no employment in that area, is she entitled after marriage to draw benefit? The answer was, "Yes." That is the state of affairs under the present law. She marries with the knowledge that there is no employment in the area where she is going, and she is entitled after marriage to draw benefit. I ask the House to note that when I am challenged I can quote case after case that have been given. I am not imputing blame on anyone but the Government. The law is there, the conditions are there, and so long as the law and conditions remain I am not criticising either the legality or the moral conduct of individuals. But it is clear beyond dispute that there is not one, not ten, not one hundred, not a thousand, but tens of thousands of these cases of married women who have no real intention of working again but who have satisfied the conditions for benefit. If hon. Members will read the actual cases they will find that this is clear beyond doubt, and also that in a large number of cases the husbands are working on full wages. It is not, therefore, a case of need. There is not a single hon. Member opposite who will agree that under such conditions benefit would be given under a proper insurance scheme. This state of affairs is primarily due to the Act passed 15 months ago. The question was asked before the Commission: Is there any outstanding reason far that? The answer given was: The conditions of the 1930 Act made it easier for all claimants to claim benefit and married women in particular. The Parliamentary Secretary spoke with pride of the increase in placings. That by itself is good, but the increase in placings by Exchanges coupled with the provisions of the 1930 Act are not good. What does it mean? It means that the manager of any Employment Exchange, when he has a job to fill, is bound to offer the most suitable person for the job, and, if he does, obviously he does not offer the least suitable person. The least suitable person therefore is never offered for the job and therefore cannot under the Act of 1930 be disqualified for benefit.

Now to take the case of married women. The Minister of Labour has said that: Just as in the case of married women, so with regard to the seasonal worker, there may be a fringe of cases which create uneasiness. There has been an increase of 70,000 in married women's cases over the proportionate increase which previously obtained. The normal increase should have been 30,000 but the actual increase was 109,000, or 70,000 more, and on the financial side it means something under £3,000,000 a year. The Minister when dealing with this matter explained it by saying: It was because the increase in unemployment had been in those districts and trades in which married women were most frequent. Let the right hon. Lady go to the evidence given before the Royal Commission and she will find that there is no foundation for her statement. It is exactly the opposite. This increase in the number of married women coming for benefit is at least as great in districts where there are not so many married women at work as there are in Lancashire and the Potteries. That excuse for the increase in the number of married women claimants goes by the board.

Mr. STEPHEN

Will the right hon. Gentleman give us his authority for his last statement?

Sir A. STEEL-MAITLAND

Certainly. The hon. Member will find it on page 73 of the evidence given before the Royal Commission, in these words: Whatever the forces at work they are operating generally without particular reference to area or industry.

Mr. STEPHEN

Whose evidence is that?

Sir A. STEEL-MAITLAND

It is in the official memorandum submitted, together with all the statistics showing the number of applications and the proportion of married women for the different divisions of the country. Take the case of the seasonal workers. We are told that it does not matter very much. I know they are few in number, but it is quite clear that the same thing is happening and that people are receiving benefit which under a proper insurance scheme could not be claimed. In the evidence given before the Royal Commission it is shown that, in the case of the Island of Lewis, the fisher worker who works for 30 weeks and then gets benefit for 20 weeks, would pay in contributions 17s. 6d. in the year. The employer pays another 20s. per year, and the single man draws altogether £20 in benefit. While that costs some £10,000 a year extra in the Island of Lewis, where the population is small, it is multiplied many times over throughout the country. I hope the Chancellor of the Exchequer, who I see in his place, will take note of the financial effect as revealed by the evidence given before the Royal Commission. There are grave flaws in this insurance scheme and the quicker they are remedied the better.

Let me now deal with the general question and the effect of these abuses. One effect of this misuse of unemployment insurance, these wrong conditions, is that they not only do harm at the present moment but prejudice and postpone our industrial recovery. The moment you begin to subsidise industries in order to keep them on short time you postpone reorganisation, increase the overhead charges, and then, when international competition comes and there is a recovery in world trade, we shall not be capable of competing. The moment you anchor workers in one part of the country, instead of making them more mobile, you again impede our industrial recovery. At the moment they would not find a job in other parts of the country, but before un- employment got so bad as it is to-day workers from the coalfields were able to get a job in other areas, and 900 out of 1,000 were absorbed— [Interruption.] They will get absorbed again when trade recovers. Again, there are lots of small pieces of work which would still be available if conditions were proper—[An HON. MEMBER: "Where?"] I cannot go on giving instances, but I will give them to the hon. Member afterwards. There are lots of small jobs, marginal jobs, mending roofs which are down, and work of that kind, which multiplied a million fold would add to the efficiency of the country and help in our recovery.

The Minister of Labour and the Parliamentary Secretary have said that unemployment is caused by rationalisation. Of course it is, temporarily, and in the future it may lead to international regulation. I am not denying that, but the Chancellor of the Exchequer and the Secretary of State for the Dominions will agree that for this country rationalisation here and now is Hobson's choice. We have got to go through with it. The recovery of this country depends upon whether we can regain our fair share of international trade when world recovery comes. There may or may not be some extra unemployment during the process, and I would have a temporary panacea to cover the dislocation that might be caused, but we have to realise that if we are to get our share of world trade again we must go in for a process of rationalisation. The answer given to me the other day by the President of the Board of Trade was amazingly significant. It was to the effect that during this period of trouble the export trade of Germany had only fallen by 4 per cent. whilst ours had fallen by 18 per cent. What does that mean? It means that while Germany at the moment is in a miserable condition, without the great income from foreign investments which we have, a poor country at the end of the War and under the pressure of Reparations, it is infinitely better able at this moment to take advantage of a recovery in trade than we are.

5.0 p.m.

If we go on with this present system it will stop our industrial recovery. We must put our industries in order, but precious little encouragement is given to industrialists by the Government. They have no control over the home market. They have no confidence in the future; they have no confidence that they will be properly dealt with by the Government. They ought to have security in these respects, and they ought to have a decent allowance for depreciation. If the Parliamentary Secretary had gone on with the report which he was reading he would have seen that in countries like Canada and the United States manufacturers can write off sums for depreciation of obsolete machines quickly. But in this country they have no encouragement to do it. It is to these things that we must look for recovery. Frankly, I say that there will be unemployment in the interval; of course there will be. It is for that reason that, subject to all the safeguards, and there being no undue increase in price, I would put duties on foreign manufactured articles to help us over the difficult transition stage. Those are two things needed for our recovery. Even before the slump a reason for our high level of unemployment was that we were steadily losing ground in international competition. We have now to regain our place. We can do it by increasing the efficiency of industry both from the employers' and the men's point of view, and we can tide over the interval by the amount of employment that can be got as a capital accretion from the point of view of putting suitable duties on manufactured articles.

We were told that this was to be a broad discussion. I have broadened it out for one minute in order to make quite clear that there was a remedy in which we believed—increased efficiency on the one hand, taking a long-range view for employers and workmen, and duties in the meantime. But the Bill on which we have to vote is a Bill to extend by £20,000,000 the borrowing powers of the fund, a Bill to maintain the transitional benefit for six months. £10,000,000 is ample and the voting of such a sum would enable the House to keep control over the situation. Three months is ample time for transitional benefit. Then we should be able to keep the Minister of Labour up to the promise of gingering up the evidence before the Royal Commission in order to get to work more quickly. I put it to hon. Members opposite that from the point of view of proper insurance there is hardly one of them who in his heart of hearts does not know that the criticisms I have made to-day are perfectly true and sound. When we are asking which way we are to vote, let me put this to the Liberal party. [HON. MEMBERS: "Sugar for the bird!"] Probably in vain is the net spread, but there is no reason why I should not hold up their own ideals to the Liberal party, if only for admiration.

Mr. HARDIE

Seeing that you have none of your own.

Sir A. STEEL-MAITLAND

The Liberals said that "the first thing is the pursuit of true economy by the State." At the same time we were told by the same authority that "millions could be saved in unemployment benefit without impinging on any meritorious claim." In these circumstances are Liberals going to give the Government the full £20,000,000, and six months' rope? Are they going to give six months of transitional benefit and acquiesce in a Royal Commission proceeding, whatever the cost, at the leisurely pace at which it is proceeding to-day? Do they realise that if there is waste the country will come to the conclusion that there is a joint responsibility, that there are others who will be held responsible as well as the Government? So far as our own position is concerned I wish to make this quite clear: If the Government were to give an undertaking that we could have a reduction to £10,000,000, and if they would give an undertaking to ask for only three months of transitional benefit, and that meanwhile they would speed up the work of the Royal Commission as much as possible, I for one should not vote against the Second Reading. But if they do not give those undertakings I shall certainly vote against the Bill.

May I be allowed to quote what I said 15 months ago on an Unemployment Insurance Bill? I then said: The figures are nearly 50,000 worse than a year ago. This is the time the Government choose to take a step which, in the opinion of all those who analyse the situation most carefully, is likely to hurt employment and to retard recovery …. The consequences are likely to be of most far-reaching detriment to industry, both by the actual financial burden imposed and by adding to the uncertainty of the depression. …. I believe that the position of the Government would be strengthened if they were to say …. that it was clear that in the stress and strain of the moment they had made a mistake. On the other hand I believe that if they go on this will be one further count in the indictment against them and that it will lead to their undoing."—[OFFICIAL REPORT, 30th January, 1930; cols. 1232 and 1233, Vol. 234.] Every word that I said then has been proved to be true up to the hilt.

Mr. BENSON

I have listened very carefully to the speech of the right hon. Gentleman, and I must say that I was struck by the extraordinary barrenness of his criticism. But that such criticism could be an excuse for rejecting the Bill seems to me to be an outrage. There may be certain abuses under cover of the insurance scheme, but to suggest that these abuses in cash amount to anything really serious is to suggest what no one on this side would accept for a moment. On the other hand, no one on this side would be prepared to defend abuses if they could be proved. But in saying that—I know full well that I can speak for the whole of this party—we are not prepared to agree that, under cover of remedying abuses, there should be a wholesale cutting down of benefit and the throwing of workers off the Unemployment insurance Fund. As a matter of fact, the Unemployment Insurance Fund is the only efficient method of tiding over the present industrial crisis and carrying the men and women who are unemployed. It is essential that we should maintain our Insurance Fund and that the Government should have this money. No other policy is possible.

Hon. Members of the Liberal party depend very largely for their policy upon the development of unemployment insurance schemes. They call for "a bold policy of national development." It is this so-called "bold policy of national development" that I wish to examine rather carefully. I say unhesitatingly that this bold policy, as outlined by the Liberal party, is utterly futile, and so far as the financial side is concerned, it is wildly extravagant compared with carrying the unemployed army on the Insurance Fund. What are the facts? At the moment we have 2,600,000 unemployed. As a, result of strenuous efforts on the part of the Government we have succeeded in putting into employment, directly and indirectly, 200,000 people. That figure of 200,000 men out of a total which would otherwise be 2,800,000 unemployed is probably the peak figure. If it is the peak figure, as we have every reason to expect, so far from dealing with the present crisis it barely touches the fringe of the normal 1,250,000 unemployed we have had since the end of the War. I say that it is the peak figure, because for 10 years one Government after another has adopted the policy of persuading local authorities to accelerate their work. The process of acceleration of necessary schemes has gone on to such an extent that before very long this source of employment will dry up. It is impossible to go on accelerating municipal reconstruction schemes indefinitely. As a matter of fact, already the flow of these schemes is getting smaller and is bound ultimately to dry up.

Let us take the question of cost, which is, after all, a matter of vital importance. The cost of putting these 200,000 men into work for three years is roughly £150,000,000. That is to say, we get 600,000 man-years at a cost of £150,000,000. We are carrying more than 2,650,000 man-years on unemployment insurance for £115,000,000. The difference between the two figures is enormous. To deal with our unemployment at the present figure by the "bold schemes" of the Liberal party—a, loan of £200,000,000 to £250,000,000 would be a mere drop in the bucket—and would require an annual expenditure upon unemployment schemes of £650,000,000. Does anyone suggest that that is within the realm of possibility? Let me deal with the cost which falls on the Exchequer because that is what we are primarily concerned with here. The cost of these 2,500,000 people on unemployment insurance is £115,000,000 yearly, and of that sum, the Exchequer, either by statutory contributions or by loans, contributes £85,000,000. As regards unemployment schemes the Exchequer contribution to the sum of £150,000,000 is almost exactly the same as the contribution to unemployment insurance. It is £84,000,000. In other words, it costs the Exchequer four and a-half times as much to put a man into employment for a year as to keep him on the Unemployment Insurance Fund for a year. That is an important factor. I know that hon. Gentlemen opposite below the Gangway will say: "But you have forgotten that if you keep a man on the fund for 12 months you will get nothing at the end for it, whereas if you put him into employment for a year you will get valuable national assets as a result." I wish to examine that view, and to see how far it is true when we are dealing with Exchequer contributions, and I think I shall be able to show that, so far from receiving national assets in respect of these Exchequer contributions, we are for the most part receiving nothing of any value.

The prime condition under which a grant is made from the Exchequer to a national scheme is that there shall be acceleration—that is to say that a scheme which is not necessary to-day, but which may be necessary in five or six or 10 years hence, shall be started now. The Exchequer contribution is for the purpose of carrying interest for the years during which the scheme is unnecessary. Let me give an example. There is a waterworks scheme at Newport, Monmouthshire, which is costing about £500,000. At the present moment, the scheme is unnecessary, as there is an adequate water supply in Newport, but, in normal circumstances, the growth of population will make such a scheme necessary seven years hence. Under pressure from the Government, they have started the scheme forthwith, but on condition that the Exchequer gives them a grant of 40 per cent. If a scheme is accelerated for seven years the Exchequer has to bear interest at five per cent. for seven years on the cost, and five per cent. for seven years at compound interest is exactly 40 per cent. The Exchequer grant to the Newport waterworks is £200,000. What is the Exchequer getting for it? Is it getting new water-works. No, it is paying seven years' interest on the cost of construction and nothing more. [Interruption.] Hon. Gentlemen opposite may laugh, but surely, at any rate, the right hon. Gentleman the Member for Darwen (Sir H. Samuel) knows that taking present and future values into consideration, the present value of an article or a scheme which does not become requisite until some seven years hence, must be written down at compound interest. That is ordinary strict accountancy, and it is futile to suggest that because the Ex- chequer accelerates a scheme by seven years, and pays interest for those seven years, the Exchequer is thereby creating an asset. The scheme will not become an asset until it is necessary, and that will not be for seven years. If the scheme were postponed for seven years, £200,000 would be saved in interest, which is exactly the amount of the Exchequer grant.

Mr. McGOVERN

Are you arguing for doing nothing at all?

Mr. BENSON

No. I am arguing for doing things in a business-like way.

Mr. McGOVERN

You are even more reactionary than your Front Bench.

Mr. BENSON

I am perfectly willing to admit that there are certain exceptions to this general condition as regards acceleration. There are exceptions in depressed areas, where the Exchequer grant is given primarily because the local area is unable to find the money. There are also exceptions where amenities are created immediately, but these do not represent the major portion of the schemes, and do not entail anything like the major portion of the Exchequer burden. The bulk of these unemployment schemes, as far as the actuarial value of the Exchequer grant is concerned, are nothing more or less than highly expensive schemes of finding work. There is one exception which I would be prepared to make and that is on the question of housing. The Liberal Yellow Book—and no one will say that it was written with any undue moderation as to claims—does not claim to set more than 150,000 building operatives at work. That is not going to solve a problem of 2,500,000, and I have no desire to have houses built by unemployed miners under the Liberal scheme, any more than to have my house repaired by an unemployed cotton operative under the scheme suggested by the right hon. Gentleman the Member for Tamworth (Sir A. Steel-Maitland) in an earlier speech. One is as futile as the other. Let us build houses because we want them or not build them at all. But do not let us pretend that we can solve the problem by setting 150,000 building operatives at work. [HON. MEMBERS: "It would help."] It would help in a small way, but it would not solve the problem.

Let us consider the question of roads. Here the Liberal Yellow Book "spreads itself." It proposes to Set 350,000 men to work on roads at a cost of £145,000,000. I am willing to admit that if we spend £145,000,000 we shall probably get 350,000 man years, and we shall get a very large number of roads, but are those roads going to be national assets? The question of whether a road will become a national asset or not, depends on whether it is essential or not. Does anybody pretend that, at the moment, road reconstruction is essential? [HON. MEMBERS: "Yes!"] Reconstruction may be necessary in some cases, as for instance, the road between Manchester and Liverpool, but, as far as my experience goes, the only effect of road reconstruction in the district where I live, has been, not to enable lorries to move more efficiently, but to enable me to go at 50 miles an hour round a corner which formerly I had to take at 25 miles an hour. This country has the finest system of roads in the world, and it is sheer "bunkum" to pretend that it will increase our industrial efficiency by one-half per cent. if we spend £145,000,000 upon roads. If we want the roads, they will be national assets. If we do not want the roads, then they are not national assets, and it is a mere waste of money to spend it on them. How is the volume of traffic on the roads measured? It is measured by a traffic census, taken in the middle of August, when joy-riding is at its height. What is the commercial value, for instance, of the road from London to Brighton, or the road from Preston co Blackpool, or those magnificent wide roads leading to the various pleasure resorts throughout the country? Those roads may be of value to the pleasure resorts. It may be extremely pleasant to ride upon them in a motor car, but they are not going to help the Lancashire cotton trade or the mining industry.

HON. MEMBERS Hear, hear!

Mr. McGOVERN

Do you hear the Tories cheering you?

Mr. BENSON

I would rather have the Tories cheering me than—[Interruption.]

Mr. McGOVERN

I challenge the hon. Member to deliver that speech in any working-class Division. It is an outrageous Tory speech.

Mr. BENSON

Quite frankly, I have not great faith in the probability that we can achieve anything as far as numbers are concerned by unemployment grant schemes, and I challenge the whole proposition that Exchequer grants help in the creation of assets. These grants merely pay for carrying what will eventually become assets. The only method which we can adopt, of dealing with unemployment, is the Unemployment Insurance scheme. Hon. Gentlemen opposite below the Gangway every now and again start off on great economy campaigns. They are going to try to help the Tories to claw £1,000,000 or £2,000,000 out of the unemployment benefits. [HON. MEMBERS: "Who said so?"] Well, I do not know that they will succeed, but I understand they are going to try. They are ruthless economists. They have even forced upon the House a Committee to see where economies can be made. [HON. MEMBERS: "You voted for it!"] I ask hon. Members to wait a moment and to consider what is the position. Hon. Gentlemen opposite below the Gangway are in the position of the man who, having swallowed the camel without the slightest difficulty, strains at the gnat. [An HON. MEMBER: "Who is that?"] I will not mention his name, but it is a gentleman who got the hump. They are prepared to urge economy. They know that by cutting down the Civil Service Estimates and so on they will get practically nothing; nevertheless they are prepared to urge the most fantastic schemes. They are prepared to urge larger and larger Exchequer grants for the creation of things which are not national assets, for roads which are utterly unnecessary, and for reservoirs which will not be required for seven years, and they try to run in harness with their economy campaign these wild schemes of extravagant spending on things which are not national assets. If they want to spend money on unemployment, let them be a little more generous with unemployment insurance benefit.

Major OWEN

Would that produce an asset in seven years?

Mr. BENSON

Yes, it would produce an asset in improved national health. At any rate, so far as I am concerned, if the Exchequer has to pour money out, I would rather see it poured out in getting decent dinners that are necessary to-day than reservoirs that are necessary seven years hence.

Sir J. TUDOR WALTERS

I have often complained of the dullness of our efforts and of the fact that no new ground is ever broken and no new points of view vouchsafed in these Debates on unemployment, but after listening to the speech of the hon. Member for Chesterfield (Mr. Benson), who has just sat down, I shall not make that declaration again, because that speech has been very informative. I have been puzzling my mind for a long time past as to why the Labour Government were so afraid of anything that was progressive, why they found it impossible to depart from the most sacred shibboleths of ancient private enterprise, and why, in this time of grave depression, when 2,500,000 of our people are unemployed, they found it quite impossible to do anything in the way of giving them work and their only alternative was to keep them in constant idleness.

I stood the other day with half-a-dozen real Tories outside an Employment Exchange, and we were watching a string of men who were coming up for their unemployment benefit. Each one of those good old Tories, in different language, demanded of me, as a Member of Parliament, why I belonged to such an absurd assembly that it insisted upon giving people something for nothing and would not give them an opportunity to work instead. The next time I am asked that question, I shall say that it is because the mentality of the Labour Government, as indicated by one of the principal private secretaries of a Minister, is entirely averse to the expenditure of money in any kind of relief works whatsoever. The hon. Member for Chesterfield really did not touch upon the question at issue. I imagine that he was doing a little sapping and mining, that perhaps he was forestalling the declarations of some of us that active schemes of employment should be put into operation forthwith, and that he was laying a train to blow up any proposal that we might make, to be ready in advance with destructive criticism before they heard our proposals.

What is the problem that we really have before us? Perhaps it might not be a mistake to get back to the consideration of that question. The House asks, for this Bill to increase to £90,000,000 the loan from the Treasury to the Unemployment Insurance Fund, so as to carry on for the next few months. We who sit on these benches view that with grave apprehension, just like our friends above the Gangway here, but for entirely different reasons, and the remedies we suggest are also entirely different. You must have this loan increased if you are to carry on for the next few months, unless you relieve the fund of some of its claims. You must supply the money needed unless you are able to reduce the commitments of the fund itself, and you can only reduce those commitments by withdrawing from it some of the people entitled to obtain relief.

Every 100,000 men who are drawing unemployment insurance benefit cost the State £6,000,000 a year, so that if you could find work for 500,000 men you would save the Unemployment Insurance Fund £30,000,000 a year, and I suggest that it is only in that direction that you can really reduce, to any considerable extent, the money that has to be provided for the Unemployment Insurance Fund. You may, and probably will, after you receive the report of the Royal Commission, find economies in various directions, but in the aggregate those economies will not amount to a very substantial sum, and the only way in which you can reduce that £130,000,000 a year that you have to pay is by taking men off the fund, which you can only do by providing them with work.

I will not trespass upon the patience of the House by traversing to-day the ground that we have previously traversed with our various schemes of roads, sewers, bridges and the like. I dare not do that, after the revelation of the mind of the Government shown by the hon. Member who has just sat down, but I hail with intense relief the one olive branch which he held out. He condemned every form of public expenditure on the relief of unemployment, except housing. Thank God, there is something left I am going to suggest a scheme of housing by which the Government may employ directly 250,000 men, and indirectly another 250,000 men—a scheme by which they may employ 500,000 men and provide an asset by that labour that will satisfy even the Chancellor of the Exchequer, and possibly his private secretary as well.

The LORD PRIVY SEAL (Mr. Hartshorn)

For how long a period?

Sir J. TUDOR WALTERS

The right hon. Gentleman has only to listen. I am going to start with agricultural housing. I want the Minister of Agriculture to undertake forthwith to build 100,000 houses for agricultural labourers, and I will show him the financial result and the method of procedure. You can build agricultural cottages now, all in, for £600 a pair, or £300 each. I think that is a very full price. If you build 100,000 of these, it will cost you £30,000,000. Let us see what is the balance-sheet on that calculation. I will take the individual houses. A £300 house will repay interest and sinking fund in 40 years, by taking into account the subsidy that is paid, with a balance, at a rent of 2s. 6d. a week. Perhaps the House would like the exact figures. I see the Chancellor of the Exchequer looking suspiciously at me, as though I am juggling with something, but I have the figures here, and I will give them.

I will take the £300 house. On the five per cent. table, the annual payment for 40 years to pay off the interest and sinking fund on £300 is £17 8s. 4d; the annual subsidy provided by the existing Acts of Parliament is £11, and that gives you a balance to provide of £6 8s. 4d., which is precisely equivalent to a rent of 2s. 6d. a week, so that if you collect 2s. 6d. a week from the labourer and take the subsidy into account, you will pay off the whole thing in 40 years.

Mr. ORMSBY-GORE

What about repairs and rates?

Sir J. TUDOR WALTERS

I think you might add another 9d. a week to the 2s. 6d. for repairs and maintenance or, say, 1s. If you could borrow money on the 4½ per cent. basis, that would reduce the rent to 2s. a week, exclusive of rates, etc., so that if you put 1s. a week for rates and repairs, even then it would only be 3s. How many men would that employ? This will answer the Lord Privy Seal's question. It takes 1½ men to build one cottage in 12 months. Therefore, to build 100,000 cottages in one year, it would take 150,000 men. There are nearly 200,000 men out of work in the building trade to-day, and receiving the dole, so that you would draw 150,000 men from the existing building trade operatives for the purpose of building these houses in 12 months.

Sir A. STEEL-MAITLAND

This is exceedingly interesting, but would those 150,000 men be bricklayers and other people sufficiently skilled to build these houses?

Sir J. TUDOR WALTERS

Out of the 187,000 building trade operatives now on the dole, much more than the usual percentage consist of skilled workers. It is in fact the carpenters, bricklayers, and the like who are out of work in the building trade.—[An HON. MEMBER: "What about plasterers?"]—There are fewer plasterers out of work than any other trade; they have always been a serious problem, but there is no question whatever that you could draw at least 150,000 men, for the purpose of building these agricultural labourers' dwellings, entirely from people on the dole at the present time. Why am I so confident about that? The unemployed workmen are scattered all over the country. If I were asking you to build 100,000 houses in London, or in Lancashire, or in any one district, there might be a difficulty in obtaining sufficient labour in the locality, but the agricultural labourer's dwellings would be scattered throughout every county in the land, and it is just in these outlying districts, where the demand for houses is most acute, that there is in fact at the present time a surplus of building trade labour available.

There is nothing at all impracticable in the suggestion that I have made. The Minister of Agriculture, with the assistance of the Minister of Health and with the co-operation of the Office of Works, which has a very competent staff of technical experts—the Minister of Agriculture, through his inspectors, is in such close touch with every part of the countryside that he would have no difficulty in selecting suitable sites, and with their finely equipped Government valuation department they could buy the land for the purpose of building these houses on the most advantageous terms. This scheme would be of great benefit, not only in the relief of unemployment, but in developing our country-side. I have heard the Minister of Agriculture promise to do great things for the future settlement of the land. Why cannot something be done for the people who are there already? Why should not the agricultural labourer have a decent house? If you build 100,000 houses on these conditions you will give new life to the countryside. There will be something in the nature of a counter attraction to the town. Why are people leaving the villages? Very largely because of the absence of houses. The State has subsidised over a million houses in the last few years for the urban dwellers, but what has been done for the agricultural labourer is pitiful, contemptuous and insignificant.

The total employment of labour in this scheme would be 150,000 for the immediate building, and 150,000 in materials, transport and the subsidiary work that follows from a great building scheme. Therefore, as a first instalment of the 500,000 workers with whom I am dealing, 300,000 will be absorbed in the building of agricultural labourers' cottages. Does the House realise that 100,000 houses in the villages will mean healthy and comfortable accommodation for something like 500,000 men, women and children, who are now largely inhabiting hovels not fit to live in? I get tired of hearing pathetic appeals in this House and outside about the slum dwellers and the badly housed people. Great demonstrations are held and archbishops and bishops make an appeal to our sentiments, but nothing is done. Throughout our country-side meetings are constantly held, and candidates for Parliament say what they will do when they get to the House of Commons, but when they get here they do nothing. I put upon the House of Commons the responsibility of doing something that can be done now, to provide 100,000 houses for these people, and to remove the disgrace and scandal which rests upon this House that has been so slow in remedying this grave and serious evil. What is the next stage? The hon. Gentleman who spoke before me seemed rather indignant that any expense should take place on road-making. If he had lived in the railway construction era how he would have suffered! If he had seen the construction of the new railways and seen anyone on a pleasure trip on them, it would have made him unhappy for a fortnight. Does he not realise that road construction is in this day and generation precisely what railway construction was years ago?

Mr. BENSON

rose—

Sir J. TUDOR WALTERS

There is no need for the hon. Gentleman to interrupt me; he has had his say. Does he not appreciate the fact that the development of motor traffic is a certainty of the future, and that unless this country has an adequate network of roads, it will fall behind in its commercial development? I am not, however, asking for any more arterial roads; I can suggest some road-making to which even my hon. Friend may not object. I observe in the programme of the Ministry of Health that great cities are arranging five-year building schemes for houses. Roads will be needed for those houses—not arterial roads, but roads on which the houses are actually to be built. My hon. Friend, however, does not like anticipating or accelerating any expenditure. I will give him a reason why we should accelerate expenditure in this case. Any building contractor will tell you that if the roads are made in advance before he has to begin his building operations, he can give you a price of something like £10 a house less than he would have done if he had to carry on his building operations simultaneously with road construction.

The road-making for each house costs about £25. Five per cent. on £25 is 25s., which means a total of £6 5s. for five years. You save £10 in the cost of building, and lose between £4 and £7 by accelerating the road-making programme. These are figures which will find favour even with the Chancellor of the Exchequer. Therefore, I suggest in regard to the great cities, where programmes of housing are to take place, that the Ministry of Health step in and make the roads in advance, finding the money for the purpose. When the building programme necessitates taking up the road frontages, the cost that has been incurred will form part of the cost of the housing scheme generally. I suggest 50,000 men for that purpose. I am not impinging on building trade operatives there; the men required for that kind of work are general labourers, and any sturdy manual worker who can handle a pick and shovel can take his part. If we add to that 50,000, another 50,000 supplementary workers who would follow in indirect employment, we get a total of 100,000.

I have provided for 400,000; what about my last 100,000? I would employ them in one of two ways, and the House of Commons can take its choice. One would be by the acceleration—I must find some other word, because my hon. Friend does not like that word—the expedition, shall we say, of the slum-clearance programme. We could very well accelerate that programme and give direct employment to 50,000 men, and indirect employment to another 50,000. There is an alternative direction in which we may proceed. Our housing schemes in the last 10 years have been carried out on the basis of the Tudor Walters' Report. It has been a very high standard of housing, but the people who wrote that Report—and I know some of them—overlooked the necessity for provision for smaller families. We were very anxious to get the three-bedroom and parlour house and all sorts of wonderful things, and a vast number of houses of this type have been built—over 1,000,000. It is obvious now, however, that we need more houses for smaller families that will provide a lesser accommodation.

I had the pleasure of being associated a little time ago with the building of a fairly large number of two-bedroom houses which were needed by one of the great works for their older workpeople—men whose families had grown up and left them, and who did not want such big houses. It would not be at all a bad idea to provide anything from 50,000 to 100,000 two-bedroom houses in addition to the present programme. There is even another direction in which something ought to he done. I saw the other day some plans prepared by a progressive municipality—Middlesbrough—for a one-bedroom house for aged people, a compact and conveniently planned house, in which old age pensioners could live. So I will give a choice for my last 100,000—either the acceleration of slum clearance or the building of smaller houses.

The employment of 500,000 people means £30,000,000 a year off the dole. Just think of that! It is a curious coincidence that that £30,000,000, which would be saved in the first year if the recipients were given employment, represents the cost of the 100,000 houses for the agricultural labourers, so that really and truly we should get the 100,000 houses for nothing. The Chancellor of the Ex- chequer is smiling, and he probably thinks that if I go on much longer there will be a bonus distribution as well. With regard to the machinery to carry all this out, the curious fact has emerged during the lifetime of this Government that, while we in the older parties are restricted, confined and fettered by ancient traditions and shibboleths, some of which we would like to throw off, the Government party, although having no shibboleths and traditions, will set up idols and fetishes before which they will bow and worship more exactly than the other parties do to theirs.

What is the fetish of this Government in regard to unemployment? Everything must be done through the local authorities. The Minister of Health, in replying to some of my observations recently, said that he was not going to be a Hitler. I did not know what he meant, but afterwards I found that he meant a kind of Mussolini or dictator. The Government are afraid to exercise any of the functions of authority. I thought that the Socialists were people who had enterprise and courage, but I find that they linger shivering on the bank and fear to launch away. Their attitude is, "Oh, no, we must not do anything except through the local authorities." There is something sacred about the local authorities. If you want houses built, the local authorities must do it. If you want a road made, the local authorities must make it. If you want a harbour or dock made, the local authorities must do it. The Government must do nothing. The Government waste time and employ a multitude of officials and have eternal conferences. Whitehall is full of busy people buzzing about and accomplishing nothing, because of the sanctity of local authorities.

6.0 p.m.

The local authorities have been made the burden-bearers of modern civilisation to a degree that has become impossible and cannot continue. All the new legislation passes on fresh duties to local authorities, and the finance of local authorities has reached the point of saturation, and in many cases passed it. It is no use continuing to ask them to do this, that and the other if they have no resources. The only source from which they can get money is the rates. We are not like other countries, where there are other means of taxation—there is nothing but the rates; and by the activities of my hon. and right hon. Friends above the Gangway the area of those resources has been reduced. I do not want a housing scheme for agricultural labourers to go pottering about among all the local authorities of the country, with us trying to get them to agree. I want some central authority to take the matter in hand. It can be done quickly, it can be done economically.

I am almost afraid to make the suggestion in the presence of so many Socialists, but personally I should like to hand over control of housing and development to a good, strong central board, composed of men not afraid to do things, men who did not believe that making reports and holding conferences was the beginning and the end of civilisation. What could not four or five men on a good, strong housing and development board, and with the resources of the State at the back of them, accomplish? I do not suppose my Parliamentary career can last much longer, but I should like to kick up a bit of a disturbance before I leave, and I am so tired of this dull, stupid, jogtrot, fearful way of dealing with matters. [An How. MEMBER: "Turn them out!"] I would not mind turning the Government out if I knew that we should come in. It is my hon. Friends above the Gangway of whom I am afraid. I do not know whether it would not be jumping out of the frying-pan into the fire.

I am afraid I have been speaking an unconscionable time, but this is my last point. I quite agree with what has been said about the gravity of the financial situation, and I should be sorry to suggest anything that would tend to increase our difficulties in that direction. I hope that my somewhat enthusiastic method of speech—housing always affects me like this; if you stay at my house, do not mention housing, or you will not get to bed until three or four in the morning, for I shall keep talking—has not suggested that I am in any sense indifferent to the great financial problems which confront us. I believe there is nothing in the proposal I have made about housing that would in any degree add to the burdens of the Chancellor of the Exchequer. The huge and growing volume of unem- ployment, coupled with the vast sums of money we have to provide under what is called "the dole," is making a deeper impression upon the world at large, and doing more harm to our national credit, than even the combined speeches of the Chancellor of the Exchequer and my right hon. Friend the Member for Carnarvon Boroughs (Mr. Lloyd George). This vast mass of unemployment which we seem unable to deal with is suggesting two things: First, the paralysis of our industry; and, worse than that, the paralysis of our statesmanship. It seems as if this country has lost its ancient power of dealing with problem, though I do not believe that to be true. Believe me, this is not a time for any kind of craven cowardice and fear. This is not a time for slinking away from difficulties. This is pre-eminently a time when courage, resolution, initiation and determination are necessary; and I venture to say that if we give a chance to the ancient spirit of our race to re-assert itself we shall deal with these grave problems and we shall solve them.

Mr. CHURCHILL

The right hon. Member for Penryn (Sir J. Tudor Walters) always speaks so agreeably and weaves his details together in so harmonious a fashion that everyone has greatly enjoyed the feat of prestidigitation to which we have just been treated. How the right hon. Gentleman managed, with that £30,000,000 to build 100,000 houses and keep 500,000 men all the time those houses were being built, paying them, no doubt, the proper rates of wages appropriate to their skilled trades, and at the end find the £30,000,000 has been saved from money that would otherwise have gone out in unemployment benefit, so that we kept all those men in employment and had 100,000 beautiful cottages for labourers for nothing, filled us with admiration. It occurred to me while he was speaking, and putting all these things in such an attractive way, what a very salutory rule of Parliament it is that no formal Motion involving expenditure can be submitted in this House without the assent of some responsible Minister of the Crown. Otherwise, carried away by these rosy schemes and pictures, we should soon find ourselves voting £30,000,000 for housing on Monday, £30,000,000 for roads on Tues- day, £30,000,000 for telephone extensions on Wednesday, and so on, until finally, on Saturday, when the House was sitting no longer, the Liberal party would be able to adjourn and hold a meeting in favour of economy.

It seems to me that two sets of questions are involved in this Debate on the Second Reading of this Bill. The first is a very simple question to answer. Everyone knows the answer. There would be an overwhelming measure of agreement upon the answer. Some, no doubt, would be afraid of blurting the answer out, but on the whole, I believe, everyone knows what the answer ought to be. That question is, What ought to be done about the Unemployment Insurance Fund? There is another question which is the riddle of the Sphinx—what are the causes and what are the remedies for the present world collapse in enterprise and industry? I am going to touch upon both those points, and, if the House will permit me, I will take the first one first, in order to clear the ground. All, or at any rate the great majority, agree that the insurance scheme should be placed upon a sound actuarial basis, that the abuses, what the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) called "cadging on the dole," which are legal, should be purged, and that all those who have run through their benefits—the benefits for which they have paid—should pass out of insurance altogether and should receive aid from the Exchequer through other agencies. Everyone knows there was little or no need for a Royal Commission to give us information on these points. Too well does the party opposite know what they ought to do about the Unemployment Insurance Fund. They do not want the Royal Commission to tell them. They want the Royal Commission not to tell them.

I am bound to say that I think my hon. and right hon. Friends on this bench, and also the Liberal representatives on the joint committee, were very much ill-treated. Let us see what happened about this joint committee. The Government got into office by reviling their predecessors, and by boasting that they could cure or deal with unemployment. After a while we found that, instead of unemployment being cured it was doubled, and more than doubled, and then the Government appealed to their political opponents for aid, and the joint committee was set up. It laboured during the months of the summer holidays. What happened then? Of course, a veil of secrecy has been thrown over its proceedings, and I have not been apprised of what passed behind that veil, but I have a fairly shrewd suspicion of what was afoot. The joint committee was getting too near the meat. They began to see unitedly and quite clearly what ought to be done. The Prime Minister and his Government were alarmed at this deadly danger. I do not blame the Prime Minister; I pity him. I do not blame any man for not committing suicide. But everyone knows perfectly well what to do about the Unemployment Insurance Fund, and everyone also knows that the Labour party is incapable of doing it.

So the Prime Minister acted. He broke up the committee, and the Chancellor of the Exchequer unchivalrously, ungenerously, unscrupulously and inaccurately spread the tale that it was all because the Conservative and Liberal representatives had got no ideas of any value to contribute, whereas the actual case was the exact reverse, that the members of the committee began to see their duty staring them in the face, and that duty was one the Socialist party could never discharge. Then the Prime Minister broke up the committee and established this Royal Commission, in order to stave off the whole matter as long as possible. At the time he did it he felt that he might very soon be dismissed from power. However, he was not dismissed, and the weeks have passed and are growing into months, and, meanwhile, the Royal Commission goes padding along and begins to browse up the same road that the committee took. Hanging over the heads of the Government is the report of this Royal Commission, which will tell them to do things which, whatever their wishes, whatever their convictions, they have not got the civic strength and political virtue to accomplish. Nevertheless, one cannot deny that the evil day has been postponed, and, of course, something may always turn up to change the situation.

Meanwhile, I do not think the extreme Members of the party opposite ought to be too hard on the Government. Undoubtedly, the Government can meanwhile truly and honestly proclaim in their party meetings, and to their supporters about the country, that by every device and by every dodge, by every shift and, almost, by every turpitude, they have managed to keep on paying for the longest time in the loosest fashion the largest doles to the largest number. They have something to show for being Socialists. The Prime Minister and the Chancellor of the Exchequer are quite entitled to say to their friends, "It is true we had no remedies, no plans, no ideas and no energy, but, anyhow, show us any Government in the civilised world which could have shovelled out so much money to the unemployed in an equal time." That is a proud boast.

The Chancellor of the Exchequer has been a party to all this, perhaps an unwilling party. I can imagine his difficulties, probably, better than anyone in the House, because he has been one against many. The right hon. Gentleman cannot dictate to the Cabinet, and no Chancellor of the Exchequer ought to dictate to the Cabinet, but he can of course resign. Any Chancellor of the Exchequer can do that, and have his place filled by a worse man. Nevertheless, the Chancellor of the Exchequer has been a compulsory conniver in these scandals, but he is a conniver none the less. The Minister of Labour said the other day that the abuses of the dole were only a very small part of the problem. That is not true from the point of view of the Chancellor of the Exchequer, because he is the guardian of the public purse. He has to raise harsh taxes; he has to demand sacrifices; he has to practise and try to prove his zeal for economy, and all this depends to a very considerable extent upon the good will and confidence of the taxpaying class; but he is hopelessly weakened and stultified when he himself becomes a party to gross waste and abuse, and when he is in the swim with those who are pouring out the money he cannot check them and dare not reprove abuses. In those circumstances, to the burden of high taxation is added the bitterness and resentment in the breasts of the taxpayers when they see their own affairs crippled for the sake, not of real need, but of real need vitiated by an admixture of waste, folly and fraud.

That is why the admitted abuses, while they remain unremedied, constitute a vast problem, far more serious even than the heavy financial waste which is attached to them would warrant. It is plain that in these circumstances the Chancellor of the Exchequer will preach in vain financial virtues and sacrifices all round and the formation of a sort of sacred union of all parties to meet a great emergency. It is useless for the right hon. Gentleman to suggest, as an example of economy, a reduction of 20 per cent. in Ministerial salaries. Cynical people will feel that action of that kind is like a man with five children in a sledge, who, when pursued by wolves, throws out one of the children in order that he may run on a little longer with the other four. I am sorry for the Chancellor of the Exchequer, and I must say that I feel differently about him this year from what I did last year. Last year the Chancellor of the Exchequer seemed to be going on triumphantly, confidently, and even arrogantly, sometimes. He claimed that all the finances were in pretty good order, that he was rectifying all the evil which had been done by his predecessors, and that everything was going to turn out satisfactorily. Where is the right hon. Gentleman now? I feel like the judges sometimes do when they say, "Unhappy man; I will not add by any word of mine to the pangs and poignancy of your position."

If anything could add to those pangs, it would be the contribution which has been made to the solution of our unemployment problem and the financial crisis by the right hon. Gentleman the Member for Carnarvon Boroughs. As far as I can make out, the right hon. Gentleman has deliberately set himself to make as difficult as possible the task of the Chancellor of the Exchequer in discharging his duty. Here they are, old friends, near neighbours, both residing in the breezy uplands of Surrey, both land taxers, both Radicals, both Cobdenites—the one by conviction and the other by profession; and now they have fallen out because the schemes of the right hon. Gentleman the Member for Carnarvon Boroughs have not been accepted. Now the right hon. Gentleman may console himself by exclaiming with Congreve: Heaven has no rage like love to hatred turned, Nor hell a fury like a 'wizard' scorned. It seems to me that no man in this House is less entitled to be indignant at the result of the election than the right hon. Gentleman the Member for Carnarvon Boroughs, who tried to win on the cry, "We can conquer unemployment," which was broadcast through the country. The right hon. Gentleman's scheme to spend £250,000,000 of borrowed money in order to find employment for 600,000 men was put before the country. Everyone knows that that scheme has been rejected and spat upon by every expert who has studied this question, and by every responsible Minister who has considered it. Suppose that the right hon. Gentleman had been taken at his word, and suppose—I admit it is a very wild supposition—that his scheme had worked out exactly as he said it would, and that the results which he claimed had flowed from it, where would he have been today? The unemployment figure to-day is 2,600,000, and if the right hon. Gentleman had spent £250,000,000 of borrowed money to provide employment for 600,000 men, instead of having conquered unemployment, he would have doubled it, in spite of the expenditure of this vast sum of money, and in spite of all the schemes initiated by the Government to provide employment. No man ought to be more modest, more subdued, and more thankful than the right hon. Gentleman.

I would prescribe for him an exercise of piety. I suggest that he should make a pilgrimage to the Arch-Druid somewhere in the remote recesses of the Welsh mountains and there with alms, ablations and burnt offerings he should offer his profound thanksgiving for his deliverance from a miserable exposure. On this important occasion this great crowning mercy which has been vouchsafed to him would even justify the most extreme measures; he might even sacrifice one of his flock, and I have no doubt that he would have no difficulty in finding a suitable victim. The right hon. Gentleman rarely acts without a purpose, and we have been watching day by day his steady campaign to gain the confidence of what is called the extreme left in British politics. Last year the right hon. Gentleman made a very unkind remark about the Attorney-General. He said that when a man was genuinely seeking work he must not discriminate in regard to the task that was set him. I thought that was a very unkind remark. We laughed but wondered at its bitterness. Now we know why the right hon. Gentleman showed such extraordinary anger and irritation with the Attorney-General in that case. We know now that the Attorney-General has forestalled him and got there first. It must be very annoying to arrive at the head of an angry band of excursionists on a railway platform and find the only saloon reserved for a gentleman whom you expected to be in your personally conducted party.

I sympathise with the position of the right hon. Gentleman. He spoke the other day of the "money barons." I think it is pertinent to inquire, "Who made them barons?" [Interruption.] The industry of my hon. Friend the Member for North Paddington (Mr. Bracken) has unearthed some interesting statistics upon this subject, which, perhaps, I may append to those which have been given in such profusion by the right hon. Gentleman who has just sat down. On the board of every joint stock bank except the Westminster Bank there is a Lloyd Georgian peer. On the board of the Westminster Bank there are two Lloyd Georgian "money barons," while there have been added by the right hon. Gentleman to the Court of the Bank of England two peerages—the only ones of which in recent times there are records—those of Lord Cunliffe and Lord Cullen. The name of Lord Cunliffe is familiar in connection with the committee that recommended the restoration of the gold standard. Here the right hon. Gentleman has been pressing coronets upon the brows of these false guides, these men who misled him so shamefully, who led him to adopt the conclusions of the Cunliffe Committee, to carry out the severe deflation of the Year 1920, to take every step during his time of responsibility, as both his Chancellors of the Exchequer can testify, in order at the proper time to re-establish the gold standard. These men misled him with their sordid veto. They stopped all his schemes for saving the country. And yet he clothed them in ermine and scarlet robes, and added, to the sordid veto that they had in the City, the suspensory veto which is still enjoyed by the House of Lords.

The purpose of the right hon. Gentleman's speech was obvious. The results, unfortunately, are obvious also. A loss of £70,000,000 or £80,000,000 has been inflicted upon British funds at a time which, though I would not for a moment say it was critical, is at any rate a time which requires delicate handling by all those who are responsible. Look at the effect produced by such a speech, say, in Australia. In that great Dominion a tremendous struggle is going forward, in which the whole country is taking part, for sound and honest methods of finance; and yet at that very moment the war-time Prime Minister of this country—a man whose name is a household word, and rightly a household word, throughout the land—sends forth a lot of loose and wild suggestions to excite the cheers of hon. Members below the Gangway, which, if they were followed in Australia, would only mean the downfall of those Socialist Ministers who are fighting for financial probity. [Interruption.] Look at the effect— [Interruption.] Really, the right hon. Gentleman is quite able to look after himself—

Mr. McGOVERN

On a point of Order. I want to know your Billing on this question—if we are to sit here all night listening to this dialectical oratory—[Interruption.]

Mr. SPEAKER

That is not a point of Order.

Mr. McGOVERN

Is this relevant to the subject under discussion?

Mr. SPEAKER

Earlier this afternoon I was asked to give my Ruling as to how far this Debate should be allowed to range, and I think I had the general approval of the House in saying that it should take a very wide range.

Mr. McGOVERN

I want to protest—

HON. MEMBERS

Name!

Mr. McGOVERN

I want to protest against our having to listen to comedians of this type when the working-class are starving.

Mr. SPEAKER

Mr. Churchill.

Mr. CHURCHILL

The hon. Gentleman might really leave it to his Leader to deal with this matter.

Mr. McGOVERN

I would rather have him as my Leader than— [Interruption.]

Mr. CHURCHILL

The people in countries abroad do not understand the context of these speeches, or the atmosphere in which they are delivered; nor do they understand the position of the party which sometimes dictates action. [Interruption.] I have no doubt that in many countries people have drawn in their minds a picture of the right hon. Gentleman leading a band of Cobdenites and Clydesiders to the sack of Lombard Street. [Interruption.] That is not going to happen. I hope that in this matter I may speak for the Conservative party represented on these benches when I say that the position of British finance is solid and will not be easily overthrown. There are forces resident in this country which will rally to the defence of British credit, and which will be strong enough, even at the detriment of party advantage, to support a Chancellor of the Exchequer in doing his duty.

I now turn, if the House will bear with me for a few moments longer, to a much more difficult side of this question, namely, the causes of the great economic collapse in values. I quite understand that the right hon. Gentleman is glad that I have left this to the last; he seems to have manifested a great deal of relief. It is my belief that the United States, before the crash of October, 1920, had come nearer to achieving the joint ideals of capital and labour than any community at any time. There we had the inhabitants of 20,000,000 or 25,000,000 homes making, by mass production under private enterprise, under ruthless Free Trade within a vast protected Empire, a couple of hundred standardised articles which were consumed by those very same 25,000,000 households whose members produced them. There we had Capital interested in high wages and short hours for the workers, and there we had workmen vigilently guarding the interests of the industries with which they felt themselves identified. It is my belief that this process in the United States came nearer to bridging what I have called the mischievous gap between producing and the consuming power than anything we have seen. In striving to climb the perilous ascent, they seemed to have got their elbows on the ledge. They fell off—they were pushed off—and for the moment, but only for the moment, they are in great disorder. Why did they slip off? The immediate cause, beyond all doubt, was what the Chancellor of the Exchequer very properly stigmatised as an orgy of speculation. While this healthy development was taking place, they sought to push it too far, and, by methods of deflation, hire purchase, and so forth, they forestalled the steady growth of wealth accumulation in their country. They will come up again before long, and, with them, a large part of the world.

But I think that the orgy of speculation is not the only cause. There was a vital weakness in the economic structure of the world. What is that weakness? It is not war; it is not pestilence; there is no great cataclysm of nature. On the contrary, peace has reigned for 12 years over the world, and I, for one, believe that the desire for peace is growing stronger year by year. Science and invention have marched forward; bounteous harvests have rewarded the efforts of man. What, then, is this profound weakness? I will try to answer that question in a single word—Asia. That is what is wrong with the world. In China, in India, in Russia, to count only those three countries, you have populations which aggregate to nearly 1,000,000,000 human beings—probably nearly two-thirds of the entire human race. What is their plight China is plunged in anarchy. India is shaking in unrest and insecurity. Russia, whatever view you take of its politics, constitutes to-day an economic factor more strange and more menacing than anything we have witnessed even in the times through which we have recently passed. Once the world War was over, we might have looked for a rapid and steady expansion in the consuming power of these three great regions and their 1,000,000,000 inhabitants. What have we seen? Just at the moment when Europe and the United States stood ready to supply, from plants which had been brought to the highest efficiency, abundant quantities of all kinds of desirable commodities—just at that very moment we have seen an actual decrease in the con- suming power of two-thirds of the human race. It has contracted, taking these three countries together, and making proper allowance for changed values, from £355,000,000 of imports in 1913 to £309,000,000 in 1929. There lies the weakness, and we cannot discern any prospect of speedy improvement.

The welter in China bids fair to continue. The Indian political classes, if power is given to them, have made it perfectly clear that they intend to exclude foreign goods. As regards Russia, consider the bearing of the five-years plan upon our employment. The five-years plan in Russia, no doubt, will fail, but nothing will prevent it from succeeding, we will say, to the extent of 60 per cent. of that ambitious scheme. It will fail in all that makes for the economic well-being of its own people; it will succeed in all that makes for the economic ill-usage of other people. The dumping, not only of food but of raw materials, which is now in progress, will be followed—indeed, the process has already begun—by the dumping of all kinds of special manufactures, which will dislocate in turn every industry to which it is applied. Nothing can stand against exportations by Governments, by whole States, not for trade, not for profit, but for cash and for the accumulation of credits in foreign lands. Nothing can stand against exportations which are set on foot irrespective of profit and of the cost of production. In this case, we are obviously coming increasingly into the presence of facts and processes in the face of which the old-fashioned doctrines of Free Traders and the old-fashioned doctrines of Protectionists are equally obsolete. Among the already vast surpluses of manufacturing capacity of the present time, an enormous new productivity will barge in, which has no relation on any side to economic facts or processes or to commercial values, nor, I would add, to moral facts or values.

I was brought up under orthodox Free Trade and Treasury teachers. I have known all the great officials of the Treasury from Sir Francis Mowatt downwards. Always it was preached to me that a progressive reduction of the cost of living should have a place in the minds of public men, that that would make amends for all, that on that foundation the people would be content, exports would be invincible and enterprise would be buoyant. Obviously, that doctrine is no longer a complete practical view. It is only a partial truth which, applied in isolation, may well lead to actual error. When producers of primary products do not receive the payment or the profit which they require for their commodities, they cannot buy our manufactures. When importers refuse on a gigantic scale to accept the normal payment in export, when reductions in the prices of primary products do not reach the consumer except tardily and partially, none of those fruitful, fertile reactions on which the old economists relied to restore the equilibrium will take place. When that is what is happening now all over the world—we all know it; there is no one to challenge it anywhere—it forms one of the chief reasons why this country is bound to review fundamentally its old-established commercial and fiscal policy.

Do not let us at this juncture lose our heads. Do not let us get into a panic, or throw others into a panic. Do not let us be misled by those who wish to fish in troubled waters. Do not let us add political chaos to economic tribulation. Do not let us aggravate industrial depression by the undermining of credit. In this island there are resources and reserves of energy, sanity, strength, courage and comradeship which are unsurpassed, if indeed they are equalled, in any other great State. Many of the difficulties with which we have to contend are admittedly beyond our control. Much will have to be endured, but we have ridden through many a gale before, and, in the main, our safety and our fortune lie in our own hands. We must study ceaselessly every means, even artificial means, of making this island the best place for carrying on every form of manufacture. We must give our industry and enterprise the stimulus of a tariff and we must relieve it, as far as possible, from every burden, such as high freights, taxes upon its reserves and other burdens, and, above all, as soon as possible relieve it from the burden of political uncertainty. The Government should take counsel betimes with friendly Powers for the international treatment of the problems of currency and trade and concert joint action against the uneconomic exportations which are in increasing measure to be apprehended from Russia. We must reach out our hands in special co-operation to our kith and kin throughout the Empire. All those are courses which lie before us. When the economic revival of the western world comes, as come it will in spite of Asia, we shall be borne forward in its forefront, and normal industry, by reabsorbing into itself a very large proportion of our 2,500,000 unemployed, will reduce that problem once again to manageable dimensions.

Mr. STEPHEN

The right hon. Gentleman has given the House a very entertaining speech, with very little relevance to the subject before the House. There were very few helpful suggestions in it. It appeared to me that it was not a very edifying spectacle, with over 2,500,000 unemployed, that the time of the House should be wasted in the right hon. Gentleman's badinage. No doubt, if General Critchley is successful to-morrow, the right hon. Gentleman may be making a speech at some future date in which he will be saying similar things to the present Leader of the Opposition that he said to his former chief, the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George). Anyhow, to me it appeared to be a very fiddling performance in view of the present economic circumstances of the country. I should like to go back to the subject of Unemployment Insurance which the right hon. Gentleman disposed of in such airy fashion. Probably the reason he found it so simple is because it was evident as he went along that he knows nothing about it. He said there were simply three things to be done, first to put the fund on a sound financial basis; secondly, to abolish abuses; and, thirdly, to scrap the transitional provisions and put the people concerned on the Exchequer in some other way.

To take the last point, what is there to be gained by putting the people who are at present obtaining benefit under the transitional conditions on to the Exchequer by some other form of organisation? It would mean the creation practically of a new Department and a new series of officials. It would involve the creation of so much or more machinery. That, in itself, would cost money. Unless the right hon. Gentleman, in seeking to put the transitional people into this position, was going to reduce the benefits, there would be no saving in expenditure at all. He spoke about abuses, but he did not give us any illustrations. If he had listened to the speech of the former Minister of Labour, he would probably have found that it was a very difficult matter to get any series of abuses on a sufficiently large scale to hold out any great hope of a reduction in expenditure.

That is the right hon. Gentleman's contribution to this question, but we have to face the fact that you have these 2,600,000 people who are unemployed, who are drawing this benefit, who are creating, because of their unemployment, the abnormal condition in connection with the Unemployment Insurance Fund. There are many people who have looked at the Treasury evidence and the statement by the Actuary. In one of the paragraphs of the Actuary's report, he himself is careful to point out that the strongest insurance company in the world could not maintain its footing if it were confronted with a claim experience such as that through which unemployment insurance is passing. I would commend that to the attention of the former Minister of Labour, because there was not, in his attempt to make a serious contribution to this discussion, the slightest recognition of this statement of the Actuary, although evidently he has conned the statement in order to try to get some argument to put forward here to-day. I believe that is perhaps the most important statement in considering this question, that the strongest insurance company in the world could not maintain its footing if it were confronted with a claim experience such as that through which unemployment insurance is passing. If the Government had taken account of that from the beginning, I do not believe there would be any need for a Royal Commission of inquiry into this subject of unemployment insurance.

7.0 p.m.

The right hon. Gentleman the Member for Epping (Mr. Churchill) has said, "Do not let us lose our heads." I am inclined to think that, if this Royal Commission on insurance goes on with its inquiry, and if this great drive is successful, if it is going to result in hundreds of thousands of those in receipt of unemployment insurance benefit being driven off the fund, or the people in receipt of transitional benefit being driven off it, there may be a danger of many people losing their heads. I think it was Lord Derby who, speaking in connection with the payment that was made for out-of-work donations after the War, pointed out that it was an insurance against revolution, and right through those years this unemployment insurance scheme, with the poor, pitiful provision, but yet provision of a sort, for these people, has been a great contributing factor in giving a certain amount of contentment to the great masses of the working-class. In considering the numbers of unemployed, 2,600,000 people, you have to take into account the fact that there is a turnover during the year of two or three times that figure, so that the number of people, who may be involved and have experience during the year of unemployment and have to endure being out of work and dependent on unemployment benefit for a portion of the year, may be anything up to 7,000,000 or 8,000,000. If you add to those numbers those dependent upon them, you find that the majority of the industrial section of the community are most intimately interested in this question through their own personal experience of the hardships which unemployment forces them to face.

I want to put a question to the spokesmen of the Opposition. Do the Opposition believe that these unemployment benefits should be reduced? Should there be a reduction in the case of those who are able to comply with the statutory condition of 30 stamps? If they do not propose any reduction of benefit of that class, do they propose any reduction of benefit to those in receipt of transitional benefit? During the whole of these discussions spokesmen of the Opposition have always turned aside from facing that question. We have put it to them again and again, but they have given no indication, and I am pressing it now. The right hon. Member for Epping, who was their spokesman to-day, said that the present Government had this to their credit, that they had been responsible for the largest amount of doles to the largest number of people which had ever been given. I wonder if the electors in Islington have had these words brought home to them, that the present Government, with all their economy, were nevertheless held up to scorn by the Opposition because of the amount of benefit paid to the unemployed. I hope there will go out to the country from this House the view of the Conservative party that there has got to be a great saving in connection with unemployment benefit and that, according to the Tory party, hundreds of thousands have to be thrown off the fund and turned over to the Poor Law or put in some unspecified category. I hope it will be noted throughout the country that one of the leading features in the Conservative programme to-day is this treatment for the unemployed, that the unemployed are to be thrown off unemployment insurance and that benefits are to be reduced. That is the implication of the speeches we have heard from the Front Opposition bench to-day.

If the Conservative party were successful in achieving that, they would only add to the difficulties of the situation. When, for example, one reads that the number of unemployed has increased in a week by 100,000, it must be realised that they were in receipt of wages on the average of 50s. a week, and that when they go to the Exchange the average payment to them there is, let us say, at the rate of 30s. a week. There is, therefore, on the average a loss of £1 a week. That means that in the homes of those additional unemployed there is a reduction of £100,000 in the money coming into those homes every week. That means that the shop-keeping community obtain £100,000 a week less from those people, that the wholesalers who supply the retailers have their orders reduced by £100,000 a week, and that the manufacturers who supply the wholesalers also have their orders reduced by £100,000 a week. Every time then that there is a large addition to the unemployed, we are making it more difficult for the manufacturer. His orders go down by £100,000 a week and as an employer of labour, he reduces the number of his workers and another impetus is given to the creation of unemployment. If that is the position, then the Conservative party is going to make it worse by lessening the purchasing power by very much more. If they do so, the only result will be the creation of much more unemployment than we have at the present time. I feel that the Government have certainly handled this question badly. The Treasury evidence should never have been allowed to go forward to the Royal Commission in the form it did.

Major BEAUMONT THOMAS

Does the hon. Gentleman not like to have the truth sometimes?

Mr. STEPHEN

I welcome the truth always. The truth will prevail, and when it does it will be a bad time for the hon. and gallant Member and those who sit beside him on those benches. When the working class really discover how they have been robbed, there will be a very bad time for the robbers. I do not object to any expressions of truth in the Treasury evidence, but to the statements of policy in it. An emergency scheme involving reductions of benefits and increasing contributions would remain in force only so long as the state of the fund required it. This document is, obviously, adumbrating the idea of the reduction of benefits. That is altogether wrong, and should have been stopped by the Chancellor of the Exchequer. Let Sir Richard Hopkins or Sir Alfred Watson give any figures they like which are justified by the situation, let them add or subtract those figures and let them bring them forward, but there should not be anything from those individuals which would add to this growing clamour for a reduction of benefits. The Government should not have allowed this to go out. The Labour movement that the Government represent will not allow any reduction of benefits in view of any financial crisis which is supposed to be taking place in this country at the present time. Many in the Labour movement will agree that that financial crisis, about which we hear so much at the present time, is the natural outcome of the reduction of wages which has taken place in this country. It is due to consumption being so far out of reach of production at the present time. Our movement will not tolerate any reduction at all in the unemployment benefit.

I heard the former Minister of Labour making his statement to-day about legal abuses, and referring to the statement of the present Minister of Labour in connection with married women that so much of it was in the cotton districts. He read from the report that it was true of all districts, and that such discrimination could not be made. The House will be concerned to know how the Minister came to make that statement in view of the evidence supplied by the representa- tives of her Department to the Royal Commission. I take it that, when the Minister of Labour made the former statement in this House, she was speaking on the advice of the responsible officials of her Department. When we get a reply to this Debate to-night, I hope we shall get an explanation of this disparity of view among the advisers of the Minister, and I hope the Parliamentary Secretary will convey that question to his right hon. Friend, so that she may reply. The House is entitled to know how it is that her advisers can advise her in one way and then make a contradictory statement to the Royal Commission. There may be some solution of this contradictory evidence, but all sides of the House will welcome an explanation and solution of the contradiction which is evidently involved. With regard to the so-called legal abuses, it is more and more apparent that the abuses are comparatively small in amount. The former Minister of Labour admitted that when he made his statement.

Sir A. STEEL-MAITLAND

May I correct that? I expressly stated they were not legal abuses. So far as I know, they fall within the law, and the fault lies with the law and conditions laid down by this House and by Parliament.

Mr. STEPHEN

The right hon. Gentleman is suffering from a misconception. When I was referring to legal abuses I was referring to abuses within the law. That is how the term has been used in these Debates. The right hon. Gentleman agrees that those abuses within the law, so far as we have evidence of them, were on the whole comparatively small in amount.

Sir A. STEEL-MAITLAND

I did lay stress on the fact that there was a sum total of 70,000 cases of married women in receipt of benefit in excess of what there would have been had the previous proportion continued to prevail.

Mr. STEPHEN

Yes, I recollect the statement of the right hon. Gentleman with regard to the 70,000 women, but I do not take it that the right hon. Gentleman is saying that every one of those women in receipt of benefit under the Act of 1930 should not be in receipt of benefit. I think that on all sides of the House there was agreement that, if the 1930 Act went too far in the opinion of some Members, at least there was need for the correction of some of the difficulties which had arisen from its operation. Consequently, the right hon. Gentleman will agree with me when I say that he does not mean that the whole of the 70,000 cases have been abuses of the law, but only a proportion of them. If you spread that proportion over the 2,600,000 unemployed, the figure must be comparatively small. But here we are all excited and wondering what is going to happen when the Royal Commission reports, as if this had become a scheme to allow people on a very large scale to get benefit which they should not get.

We ought to try to get rid of such a conception. Possibly the Press has helped to spread the idea abroad. Like my hon. Friend the Member for Gorbals (Mr. Buchanan), I want to protest against the way in which the unemployed are slandered by such statements, because the unemployed man or woman feels hurt when there is this general condemnation of the unemployment insurance system. These suggestions, and cries of "Dole dodgers" and all the rest of it, bring the whole of these 2,600,000 people within the range of suspicion in connection with this matter. I think that there should have been much more care exercised by everyone who has spoken on this matter in referring to abuses, and I include also the Treasury experts when they are dealing with this matter.

The right hon. Gentleman said that there was no reason why you should come for £20,000,000 instead of £10,000,000, but in his next remarks it appeared to me that he gave the reasons. There is a big difference in expenditure. There is the additional rate at which we have to provide because of the greatly increased number of people to be provided for. They have increased at twice the rate that they did formerly, and consequently the £10,000,000 will last only half the time. The same thing applies with regard to the people who are in receipt of transitional benefit. I believe that we are wasting a great deal of time by having this Royal Commission of inquiry into the matter of unemployment insurance. I do not think that that is the problem. The problem to which we should have a Royal Commission addressing itself is the problem that was indicated in the second half of the speech of the right hon. Gentleman the Member for Epping.

We have a tremendous volume of production which is constantly increasing. The rationalisation of industry is proceeding, and must proceed. There will be new machines, and more powerful machines. The process of production will constantly increase in its efficiency, and, as it increases in its efficiency, the tendency to improve the machinery of production will increase so much more. The tendency will be for an acceleration in the rate of improvement of the machinery of production. The machinery of production, powerful as it is to-day, but more powerful to-morrow, is going to throw so many more hundreds of thousands out of employment to-morrow. Instead of having to face unemployment on the scale of 2,600,000 people, we may have to face it on the scale of 3,000,000 or 4,000,000, and we may come to conclusions on the report of the Royal Commission on the basis of the present numbers, and the development of industry will make those conclusions absolutely useless.

I wish the House would remember what happened in connection with the Blanesburgh Committee. The Blanesburgh Committee went into those matters, and viewed a situation with 700,000 unemployed as normal. The Minister of Labour of the day brought forward legislation based on that figure, and again and again in the House it was pointed out that to legislate on the basis of 700,000 to 800,000 was nonsense in view of our industrial experience. I pointed it out to him again and again during that series of heated debates. It will be within the recollection of the right hon. Gentleman how often I used to put it before him, and yet we went upon that basis. We built the Act of 1927 upon that basis. It was no sooner working than the Minister was faced with the question as to whether he would have to extend the transitional period. The figures grew and grew. We had the Act of 1930 and we had the series of Acts before that Act.

The Royal Commission is now looking into the question of unemployment insurance to see if a discrimination can be made between two sets of unemployed people. They will bring in a report on the matter, and will possibly suggest the placing of these people into different categories. I was greatly impressed, in reading the evidence given by the manager representing the Central Exchange in Glasgow. In his evidence he pointed out that the people who are in the transitional class are those who are not as fit for employment as the others, and whose moral has been impaired by the length of their unemployment. If we make a discrimination and have two classes, we are going to put those people into a worse position still. We are to have to wait months for the Royal Commission to make a report. What is really wanted, is a Royal Commission to inquire into the working of industry in the country. Is there anybody in this House who is responsible to his constituents and who has seen the devastation which has been wrought by unemployment in the impairment of the moral of men and women in their Divisions, who will have any sympathy with a 33⅓ per cent. reduction in unemployment benefit? Just think of asking a person with 17s. 6d. a week to accept 11s. 4d.! Just think of asking a man and his wife and family with 32s. to accept 21s. 4d.!

The Confederation of Employers' Organisations suggest, in the document which they have sent to the Prime Minister, the Leader of the Opposition, the Leader of the Liberal party, and to every Member of this House, that unemployment benefit should be reduced in this way. The present rates of unemployment benefit, they tell us, are tending to keep wages at a high level. The standards of life in this country are too high! They are responsible for the conduct of industry. They have a great responsibility in connection with this situation, and they tell us that what we have to do now is to reduce the purchasing power, make the orders less, give the people less money to spend, reduce the consumption, when the whole trouble is the glut in the markets because the goods which have been produced cannot be consumed as there is not an effective demand.

Sometimes I wonder whether this House is a mental institution when I hear some of the speeches which are made. The members of every party are in agreement with the analysis of the situation to-day. Rationalisation of in- dustry has created such a tremendous surplus of goods and such a tremendously effective machine that it has dislocated everything. Yet we say that that being the case, we must all save. There is such a tremendous plethora of goods, there is so much of everything we all have to save! Eat less, wear less boots, wear less clothes! There is too much of everything! Does it not appear as if these are the economics of the lunatic asylum? Yet they are the economics which we have to face. The former Chancellor of the Exchequer went on to tell us about what had happened in America and how he thought that they had, or very nearly, bridged the gap between production and consumption there. But he said there was too much speculation. They had forestalled the stores of wealth in their country.

That was the phrase which the former Chancellor of the Exchequer used with regard to America. He said that there was all this speculation and that they had forestalled the stores of wealth in that country. Is not such a statement just simple nonsense? What sources of wealth did they forestall? Boots? The trouble in America is that their boot industry has a productive capacity of 900,000,000 pairs per year, while their usable capacity is only 300,000,000 pairs per year. What forestalling was there in regard to the number of pairs of boots that a Yankee could wear? There was no forestalling of the sources of wealth there. It was simply that there came a famine, because there came a fear that somehow or other credit would be upset. People were living on their £5 to £6 per week, with their wages supplemented by possibly £3 per week of credit given to them on the hire purchase system. The people who ran the hire purchase system had always to get new credits and there was a fear that they would become too large, with the result that there came a tightening of the hire purchase system in America, and that drove the whole financial machine of America into chaos. We in this country and the people in other countries will get into a worse condition if we go along the line of limiting purchasing power. The one way out is to spend snore money. We are not spending nearly enough. If we were to increase the unemployment benefit and if the employers would increase the wages of their workpeople and shorten the hours of labour there would come a tremendous revival of the commercial and industrial prosperity of this country. We should bring consumption within the special machinery of production.

There is, of course, difficulty with the Chancellor of the Exchequer in regard to balancing his Budget. The real trouble in connection with Unemployment Insurance is not the question of the abuses within the law but that there is unemployment on a far vaster scale than ever before, and that is creating a tremendous charge upon the Exchequer and bringing about the difficulty in regard to the balancing of the Budget. I notice that in the Treasury statement it is pointed out that the State cannot go on with this business of providing money for unproductive expenditure. That is taking the orthodox viewpoint in regard to finance. We are told that we cannot go on spending these millions of money, because it will mean that the Budget will not balance. Is not the maintenance of the lives of these men, women and children who are unemployed just as necessary a charge as the charge that is made for the upkeep of the Army, the Navy and the Air Force? Unproductive millions are spent on the Army, the Navy and the Air Force, in the sense that there is not something that comes back in the way of profits representing interest on the capital involved. That is all expenditure that is unproductive, yet it has to be undertaken in order, we are told, to protect the interests of this country, to protect our homes and the lives of the people in this world of competing States. It is just as necessary to keep your manpower fit as it is to be well equipped with munitions of war.

It is a terrible thing that the unemployed people of this country should be put into the position in which they stand at the present time. I place a measure of responsibility for the present position upon the Government for the way they have handled the problem. They ought to have come forward boldly and have increased the benefits, as some of us pressed them to do when we were passing the Act of 1930. They should have taken the risk of not being able to balance the Budget. I find in the "Economist" of April of last year a statement that the national income was estimated in 1913 to be £2,300,000,000, that in 1927 it had risen to £4,250,000,000, and in 1929 to £4,400,000,000. On the other hand, the President of the Board of Trade tells us that the wages of the workers had fallen to the extent of £700,000,000 within that period. In view of these figures, we are told that the country cannot afford the present charges to provide for the unemployed, and we have to set up a Royal Commission to find a back door by which it will be possible to put people out of unemployment insurance and to dump them on the local authorities.

If any difficulty is experienced in finding the money, let the Chancellor of the Exchequer repeal the De-rating Act of his predecessors, which relieves many wealthy corporations of rates and gives them reductions to which they were not entitled. They were relieved, and the expenditure has had to be borne by the State. Those people are the dole drawers, yet these dole drawers sent to us this blue document which I have in my hand, after they have been subsidised in this way by the State, making the suggestion with regard to the poor people who are the victims of their inefficiency, the victims of their powerlessness to get their system to work, that they must be starved or thrown out. It is an intolerable situation that we are called upon to face, and I would ask the Government to face up to the position and to come forward and say that they are going to increase the purchasing power of the people and that they will increase unemployment benefit and increase pensions. Then we can go to our people and say that we have carried out the promises that we made to them.

The Chancellor of the Exchequer has taken the other line, and his predecessor in office pokes fun at him every day. The Chancellor of the Exchequer is defending the City and the interests of the City all the time. He is concerned to balance his Budget and to get this country on to a sound financial basis until, at some future date, a spendthrift like his predecessor will come in and use up anything that he may have saved. Surely, it would be a far more honourable thing for this House to make more adequate provision for the unemployed people and the poor people of this country than is being made at the present time, and I hope that the Members of our party will insist that, whatever may happen in the future, the unemployed are not going to be called upon to suffer. I would say to the Government, to the Conservative party and to the Liberal party: "Hands off the unemployed, unless you are going to improve their circumstances, increase their benefit and give them a hope that they have not got at the present time."

Countess of IVEAGH

I well recollect the first Debate on unemployment to which I listened, and I have lost count of the number of such Debates that have occurred since. At that time, over three years ago, we sat on the benches opposite and those who sit there now told us that the live register, which was then half the figure that it is now, was at such a height that the Government then in power, who had succeeded in keeping the figures in check, were callous of human suffering because they were not able to deal with it more drastically. To-day, after 18 months of the present Government's administration, the figure is more than double what it was then, and the Government and their supporters are just as full of excuses as they were then when they abused the party which now sits on the Opposition benches. I well remember that in one of the Debates on unemployment, I think it was about a year ago, I heard a statement by the hon. Member for Westmorland (Mr. O. Stanley) to the effect that these huge state borrowings for unproductive purposes were tantamount to wiping out the effect of the Sinking Fund. I remember how startled I, as an inexperienced back bencher, felt at that statement, realising all its implications and the warnings that had been given of the road down which we were rapidly travelling: a warning which it was not necessary to give from the Opposition benches in the House of Commons, because the Government then must have had ample opportunity, with all the information at their command, of knowinng months ago exactly the direction in which we were tending.

I commiserate to a great extent with the Chancellor of the Exchequer in his position. We realise the difficulty of his position. He is a Socialist Chancellor of the Exchequer administering the finances of a capitalist country. He realises that anything which interferes with the financial stability of the country means ruin, and he knows that to try to combine the Socialist doctrine of "work or maintenance" with the financial stability of the country, is like trying to square a circle. He is attempting the impossible. He is trying to maintain the financial equilibrium of the country while at the same time he is administering the smallest possible doses of "Socialism in our time" that will content his followers.

There is something besides the bankruptcy of the Insurance Fund which calls for attention, something besides endangering the country's financial stability. I refer to evils which have been created and which, perhaps, we shall fail to counteract even during the rest of the lives of those who are now here. I do not think that the gravity of some of these evils has been emphasised nearly enough. It is a shocking thing to think that young people who have grown to maturity and who are still growing to maturity have never had the opportunity of acquiring the habits of industry. I do not think anyone will challenge, certainly I do not think any parent will challenge, me when I say that those habits have to be acquired. They are not the normal equipment of any but the exceptional young man or young woman. They have to be acquired, and if they are not acquired in youth it is very doubtful whether they will be acquired at all. I should have thought, with a woman as head of the Ministry of Labour, that this aspect of the question would have received far more attention than it has, and I should like to hear from the right hon. Lady whether she, as a, woman, is paying sufficient attention to the gravity of this side of the problem. She should do this or refuse to accept the responsibility of being head of the Department which is ultimately responsible.

Mr. LAWSON

Do I understand the Noble Lady to be referring to the training of the youth?

Countess of IVEAGH

I think more should be done in this regard because of the magnitude of the evil. So far we have not heard of very much, and we feel that much more might be done to deal with this evil which is deep-seated and eating into the life of the nation. Unemployment among women has increased. There are 605,000 women unemployed, or one in every four unemployed persons is a woman. The right hon. Member for Penryn and Falmouth (Sir J. Tudor Walters) contended that it is possible to cure this evil by a large expenditure of money and was at great pains to argue that the pouring out of money would solve the whole of the unemployment problem. He did it by means of an arithmetical calculation which I found it difficult to follow, but he proved to his own satisfaction that the expenditure of money on large-scale works would solve the greater part of the problem. When he reached the point of getting something for nothing, it was very like what we have heard before and savoured more of the western part of this island than the place in which we are now discussing this problem. At any rate, that is the direction in which the Government is really moving, and they have told us repeatedly of the considerable numbers who have been placed in work by means of these subsidised schemes. An hon. Member opposite pointed out very cogently that some of these schemes were being anti-dated and that work was being put into operation to-day which normally would have been undertaken two or three or more years hence. Obviously, these large schemes will not mature in the future and therefore will not help the position of unemployment in the future.

The point I wish to make is that I do not think there is one of these schemes that has put one unemployed woman into employment. In November last the Minister of Labour stated that the practical way of helping unemployed women was by developing schemes of training through the Central Committee. In answer to a question, the Parliamentary Secretary informed the House that the grant of the Central Committee had been increased for the financial year by 25 per cent. over that of the preceding year. How does that increase of 25 per cent. compare with an increase of over 100 per cent. in the number of unemployed women? According to the latest information, the number of training centres has increased from 39 to 44, but the number in training shows no substantial advance at all since the end of 1929. The Minister of Labour has done much in the face of considerable criticism. She has asserted that there is nothing derogatory in domestic service. There is a large demand, a large unfulfilled demand, for domestic servants, and the position is not made any easier by the nonsense which is talked about domestic service. I am not referring to what is said by hon. Members opposite, but to the great deal of nonsense which is talked about it in many quarters. There has been a great deal of very unnecessary and inaccurate statements in the Press on the subject which has to a large extent brought it into disrepute. These misrepresentations, which have no right to be made, have done much to aggravate the evil, and anything that the right hon. Lady does to assist in giving it the dignity which is due to it will receive the warmest support from hon. Members on this side of the House.

There are thousands of women who cannot be absorbed into the industrial life of the country, and who must find alternative means of employment. It is clear that this employment will absorb a great many of them, and we are hoping for an assurance that some effort is to be made to place women in any and all sorts of alternative employment. This country generally is slow to wake up, but I think the time has come when it is fully alive to the realities of the situation. I think that sometimes it is more alive to the realities of the present position than hon. Members of this House. The country is beginning to be seriously alarmed. Is it any wonder? The Unemployment Insurance Fund is admittedly bankrupt, and the Government cannot contemplate doing the right thing from an insurance point of view. Those are the words which the Chancellor of the Exchequer used to his supporters yesterday.

What do they propose to do now? They are barren of all ideas until they are in possession of further facts and further information. What further facts are there which the Government have not sifted? What further evidence can there be? Why are we to wait for the Royal Commission for this information which His Majesty's Government, if they face up to the facts, must have already in their hands? The day will come when somebody will have to answer for this shirking of responsibility. Why is the House to be asked to wait six months before reviewing the situation instead of reviewing it at the end of the first quarter? The Minister of Labour resisted that suggestion only a day or two ago. She told us that she must let this state of affairs continue, pour out a million pounds week by week, until some time towards the end of next summer when she will have before her a lot of information which she has not now, and upon which she can make suggestions and bring legislation before this House. I do not think the country is willing to wait until then. This House has accepted that position chiefly because hon. Members below the Gangway find it necessary not to consider facts first but personal considerations. The country will not be content to wait until the end of next summer, and will suggest that the Government cannot shift their responsibility on to anyone else. The responsibility is theirs alone for dealing with a situation which daily grows more momentous both for the moral and financial welfare of the country.

Mr. TOM SMITH

The right hon. Member who moved the Motion for the rejection of the Bill criticised the Parliamentary Secretary and the Minister of Labour for not dealing with the question of transitional benefit before the Royal Commission reported, and listening to the right hon. Member for Tamworth (Sir A. Steel-Maitland) one would have thought that unemployment and its administration was something which had come into being during the lifetime of the present Government. He described what he regards as abuses, legal abuses, of the Unemployment Insurance Fund. With all due respect to the evidence given before the Royal Commission my opinion is that there is a great deal of exaggeration with regard to these abuses, and I hope the Parliamentary Secretary, or whoever replies for the Government, will give the House some idea of the numbers of those who are alleged to be receiving £5 a day in wages and drawing part-time unemployment insurance benefit. I am sceptical about the evidence of the large number of professional foot-ballers drawing £6 10s. per week and also part-time unemployment insurance benefit. If I know anything about the professional footballer I know that he is not a man who sponges on any fund. In my opinion these are exceptions rather than the rule.

The right hon. Member for Tamworth waxed eloquent and earnest about what should be done with persons drawing transitional benefit, and he also dealt with what he called organised short time. He mentioned a case upon which I think the House has a right to know the whole details. He cited the case of a colliery company in Yorkshire, who some time ago issued a circular to their workmen stating that if they would agree to a reduction in wages they would so work their pits as to give the men three days' work and three days on the Unemployment Fund. No one on these benches agrees with that kind of policy. The colliery company concerned have been notorious for seeking price cuts, and we have condemned that practice as earnestly as the right hon. Member or anybody else. But these pits are closed, the offer was refused, the men had to run the risk, but, eventually, when the pits were closed, they were able to receive unemployment pay. That, in my opinion, is an isolated instance. The right hon. Gentleman must remember that organised short time was in operation during his period of administration. There was also the Five Counties Scheme, the regulation of output, organised short time. Did the right hon. Gentleman then oppose it tooth and nail?

8.0 p.m.

There are two or three ways of dealing with the unemployed. The right hon. Gentleman and his Government had one way, when thousands and thousands of people were knocked off the Unemployment Fund for not genuinely seeking work. I should like to ask him whether he desired the Act of 1927 to continue with the not genuinely seeking work qualification in operation, because if he did we did not, and we removed it at the first available opportunity. If there is one thing about the 1930 Act it is that it has treated the unemployed a lot better than they were treated before. If it has erred at all it has erred on the side of generosity. In the industry which the right hon. Gentleman had in mind when he was referring to organised short time, the mining industry, there is undoubtedly a good deal of unemployment. Whatever may be said as to the cost, the unemployed are not responsible. There are at least 250,000 fewer people employed in the mining industry to-day than were employed in 1924, and the decrease is due largely to two or three specific causes. In the first place we have an annual output of something like 250 million tons, as against 287½ million tons in pre-War days. Much as we would like to see that lost output recovered, I admit that I fail to see where and how we can do it. Another cause is the more economical use of raw coal and the development of substitutes—oil, electricity, water power, hydroelectricity, and so on. But there is a still further cause, and that is the development of machinery. The Parliamentary Secretary to the Ministry of Labour spoke of the changes that have taken place in underground work since the days when he worked in the pits as a hewer. During the last 12 months I have had an opportunity of going into at least six pits, and I have seen the improvement that is taking place in the production of coal. In 1913, out of every 100 tons of coal produced in England, Scotland and Wales, only 8½ tons was produced by machinery. Last year, out of every 100 tons produced, 30 tons were produced by machinery.

The coal mines have machines the like of which we never dreamed of seeing. One of these machines was mentioned by the Parliamentary Secretary to the Minister of Labour. I was in a pit not long ago on some mining business, when the manager invited me to see the new machine. He told me that the men called it the "bug-machine" but he added that he called it a "scraper machine." Then he said, "Would you believe it? We have had 80 tons of coal produced by five men to-day; that is 16 tons a man-shift." Asked to express my opinion about it I said frankly, "Why don't you get a chain round it and pull it all out at once and have done with it?"

This development of machine mining is leaving a problem of displaced men that has to be tackled. If I had my way there would be shorter hours in the industry and all other industries, particularly the heavy industries. It would be interesting to know what the coalowners of the country are doing to meet the re- duction from seven and a-half to seven hours that takes place in July of this year. The older men ought to be taken out of industry. That remark applies not merely to mining but to most of the heavy industries. I think the House will agree that when a man has worked from 13 to 60 years of age in a, pit, at least he ought to be allowed to spend the autumn of his life in something like decency and comfort. That would allow the younger men who are out of work to get back into the pits. In these days, when everyone is preaching economy, that idea may be postponed, but there is still need for its adoption. I am pleased to say that the coalowner in some districts of the country are co-operating with their men to institute what may be termed local pensions schemes, which enable them to give the older men a pension on which they can live.

It is not my intention to deal fully with the mining situation, but there is another point that I wish to mention. The right hon. Member for Tamworth spoke about the mobility of labour and inferred that it was the mining industry he had in mind. He said that thousands and thousands of men had been transferred from mining districts and had obtained work elsewhere. I believe he said that nine out of 10 had got jobs. That may be all right for the right hon. Gentleman, but I can tell him that there were many men sent into other districts who returned despairingly because there was no work for them. The right hon. Gentleman must not forget that in the spring of 1928 he told the executive of the Miners' Federation of Great Britain that he could cure unemployment in the mining industry in three years by transferring labour. I would ask the right hon. Gentleman this question: When he said that he would stop the payment of unemployment benefit to short-time workers what exactly had he in mind? Did he mean that if they worked one day or two days they would get no benefit? Were the men to be content to go home with two or three days' pay at eight shillings a day, and nothing else? We have a right to know.

Unemployment and the administration of unemployment benefit are not new. The problem is, what shall we do with the unemployed? There are people who believe that the unemployed are getting too much. Members of this House have been circularised by a certain body of employers who suggest that the rates ought to be cut down by one-third. My reply to that is that if some of those who have sent that circular had to live on the sum indicated they would change their minds. If you strike off the men drawing transitional benefits do not forget the effect on local authorities. I can remember that during my 10 years' experience in Sheffield we had a big unemployment problem to deal with, and at one time had 53,000 insured workers who were out of work. Rates were rising by leaps and bounds, and we petitioned the House to deal with necessitous areas and to remove the burden from the local authorities to the State. Hon. Members on this side of the House said at the last election that they believed the State ought to maintain the unemployed and that the burden was too heavy for local authorities to carry.

We on this side are not content continually to hear the unemployed described as idlers and wasters, as one Tory newspaper described them this morning. I can say from my own experience that the majority of unemployed are decent men who want work, who would be glad of it, and that they are not wasters and idlers. Until the industrial situation improves and men can get back to work, we have to maintain them. In my opinion we are not maintaining them too highly. In saying that I am not unmindful of the cost. When the Royal Commission reports and we have to discuss this matter again, we must always keep in mind the fact that the unemployment problem is not merely a financial one, but a human one, and we have a right to demand that people who have been thrown out of work by a commercial system that they did not create shall not be left to starve.

Mr. GRAHAM WHITE

I have been much struck, in the course of the Debate, by the fact that many speakers seem to think that the real question we have to face is the question of some amendments of the existing unemployment insurance system. The right hon. Member for Epping (Mr. Churchill), who entertained and delighted the House with his speech, created the impression that there was really no occasion for the appointment of a Royal Commission and that there was a number of small abuses which might be dealt with. When I ventured to address the House on the occasion of the Second Reading of the last Bill of this kind I pointed out that there were questions, such as that dealt with by the right hon. Member for Tamworth (Sir A. Steel-Maitland), relating to married women and seasonal occupations, and things of that kind, which could have been dealt with if that had been the sole object in view. What we are concerned with is not a mere Amendment; we have to re-cast our ideas and our whole system. That is a view which I expressed previously, and I feel that the evidence tendered to the Royal Commission strengthened me in the opinion that I then expressed. One of the important witnesses of the Ministry of Labour said: What we have been trying to do is to graft a problem which in size and characteristic is entirely different from pre-War unemployment, into a system which was not devised for and is in fact quite unsuitable for such a task. That is the position to-day. We all have in mind the solemn warning uttered a day or two ago by the Chancellor of the Exchequer. It is all to the good that the whole country is now familiar with the seriousness of the situation, because the country has had to face emergencies before, and when it has had the facts put fairly before it the country has never failed to respond and to overcome difficulties. The Chancellor of the Exchequer has told us that sacrifices, if only temporary sacrifices, must be expected from all. But if sacrifices are to be tolerable there are certain conditions which will have to be observed. There is one class of the community who have had special reason to make sacrifices. It may be said that perhaps the whole country has already made sacrifices in connection with the system of unemployment insurance, but there is that one class, referred to by the hon. Member for Camlachie (Mr. Stephen) and by the last speaker, namely, the unemployed, which for years past has made great sacrifices. They have made great sacrifices themselves, and they have made great sacrifices in the persons of their dependants and families.

There is not much that one can say in this House without meeting with a contradiction from someone, but perhaps it may be said that there will be the very greatest disinclination among Members individually and collectively, in all parts of the House, to place any further burden or sacrifice on the unemployed. More than one speaker has referred to the statements issued on behalf of the National Confederation of Employers' Organisations. It is a document which Members of the House will do well to read. It contains many harsh unpalatable and unpleasant truths. What pained me, on reading that report was to find right in the forefront of their emergency programme a recommendation that unemployment relief should immediately be cut by 33⅓ per cent. If that proposal were put into operation, it would not help the country in the least. It would merely mean that these unfortunate people would be expected, after deduction of rent and rates, to live on a scale below any subsistence level which could be considered practicable even in the backward countries of the world. It would merely have the result of transferring this burden to the public assistance committees and so far from helping to solve the problem, would make it worse. What concerns me, even more than the fact that such a statement should have been made at all, is that it should have been made without, as far as I can find, one word which showed either consideration for the unemployed or regret at the sacrifices which they have made in the past. If sacrifices have to be made, there are conditions which will have to be observed. If the country has to find large sums of money they will expect that nothing which can be described as an abuse, whether legal or illegal, will be left in the scheme and we were very glad to have the assurance given by the right hon. Lady in the previous Debate that the Government would not hesitate to deal with anything which the Royal Commission found to constitute an abuse on one side or the other.

Mr. SANDHAM

Can there be an abuse?

Mr. WHITE

I also feel that the country ought not to be asked to find large sums of money or to make great sacrifices so long as they are not satisfied that everything possible is being done to provide work instead of paying out money for idleness. I do not need to develop that point because it has been dealt with ably and eloquently by my right hon. Friend the Member for Penryn (Sir J. Tudor Walters). I come to a further consideration which has been mentioned, I think, by the hon. Member for Camlachie (Mr. Stephen) and other Members. It is that there must be a continuous search for a solution of the problem referred to at such length by the right hon. Lady in the previous Debate, namely, the problem of those who are thrown out of work by rationalisation. The right hon. Lady told us that she had made special inquiries and had had research conducted into this matter but that, so far, she had not been able to find any solution and that the facts to-day did not fit in with the theory that increased productivity developed fresh activities and absorbed people into employment. This is not merely a domestic problem. It is world-wide and affects every country which is highly industrialised. In America, in spite of the increased productivity of the last 10 years, there were actually fewer people engaged in industry in 1928, when the country was experiencing the flood tide of prosperity, than there were 10 years ago. It is not true to say that America has not developed subsidiary industries. She has developed such industries to a great extent. She has developed for example an enormous industry in the production and sale of cosmetics. That industry has developed a turnover of £75,000,000, giving an increase of work to the manufacturers and distributors of those products, but it is an unfortunate thing that when a slump comes that is no safeguard against unemployment because industries of a subsidiary nature fail with the rest.

It would, indeed, be a desolate prospect if we felt that there was no possible solution and that we could only go on turning out the human by-products of rationalisation with no hope of doing anything for them. That indeed would be a tragic outlook. But although we may not be able, at the moment, to put our hands upon any policy for dealing with the problem, it can never be said that there is no solution while there are great areas of the world containing people on a very low standard of life, or existence, and while we have, at our own doors and in our own country, large numbers of people with vast unsatisfied needs. That is the proof that a solution can be found and it should also be the incentive to research into the problem. I do not know what efforts are being made by the Ministry now in that direction, but I think it would be well if an effort were made to find out the actual size of this problem; if manufacturers and others were invited, and if necessary required to make returns of all those whom they have been obliged to discharge for the sake of rationalisation.

Mr. SANDHAM

More experts.

Mr. WHITE

I should like to see more attention given to the majority report of the original Commission on the Poor Law in which it was suggested that there should be an employment termination due. I know that many firms compelled to discharge people owing to rationalisation make such compensation as may be within their power to those discharged and in our present emergency, I think we might well have registration of those discharged and we might also consider the desirability of requesting employers to make some employment termination due into the fund of the unemployment insurance system. The right hon. Lady would do well to call in aid in her researches her colleague who is in charge of the Overseas Trade Department. One of the principal causes of our unemployment is that other countries have developed more rapidly than we have subsidiary and new industries. In South Africa and in South America the average household which wants a gramophone will get one which may or may not come from this country. If they want a carpet sweeper it comes from America, if a refrigerator it comes from Sweden and if a wireless set, it comes from that great factory outside Amsterdam. The result is that these people who are good customers of ours for the things which we continue to make have so much less to spend on our manufactures.

It is not true to suggest that we have done nothing in that direction, but at all events we have been left behind by our competitors in the development of the newer industries. I do not think that the people of this country can be satisfied to pay out large sums in unemployment benefit unless they are also satisfied that our manufacturers are taking up these matters and doing their best and, furthermore, that unemployment is not being created by the mere inability or slackness of our manufac- turers in advertising and salesmanship, and in their efforts generally at selling their goods overseas. There, again, I think the right hon. Lady could usefully call in the assistance of her colleague of the Overseas Trade Department to whose work I would like to pay a tribute. The trade missions to South Africa, South America, China and elsewhere are very largely due to the initiative of that Department and the very fact of the appointment of these missions is evidence that our manufacturers have not an up-to-date selling organisation in the countries to which those missions are being sent, and have so far neglected their opportunities that those missions—to which we wish all success—are really attempts to regain ground which has previously been lost and which ought not to have been lost. These are some of the things which I think ought to be a condition insisted upon by the people of the country if they are to be called upon to make great sacrifices to carry the continued burden of unemployment.

Further, I think there should be an end of that system which has spring up under the operation of the continuity rule whereby certain industries have battened on trade and have thus established a system of inequitable taxation and certain trades have withdrawn from the fund large sums of money which have been contributed by other trades. We may also reasonably expect in the case of badly organized businesses which have taken within their ranks far more people than they can employ full time and so have gone on to the fund, that such an unfortunate economic result as that should not be allowed to continue under any scheme that may be brought forward as a result of the work of the Commission.

The course of this Debate has ranged, as was inevitable and indeed proper, over the defects and deficiencies of this scheme of unemployment insurance, but I think it is perhaps as well that we should remind ourselves at times that there is a credit side to all these transactions. If we compare for a moment what is happening oversea, we begin to see where some of the benefits are to be found. For instance, we have no great areas of distress in this country such as they have in the United States of America, and we have not got the additional problem created by vast congregations of unemployed men and women coming into the great cities from the outlying districts of the country in order to get nearer to where they think they may obtain something from charitable funds. There was a trial sample taken recently of 3,000 applicants for relief from the bread lines in New York City, and of them 1,000 were individuals who came from many hundreds of miles away.

Let us think what that means. It is a congregation of people into the great cities until there are, in New York today, probably three times as many unemployed as there are in Greater London. That is one of the benefits that we have under our system, and it is perhaps a prospective benefit that we find that America and other countries are now looking towards us and extending somewhat on our lines so that we who have suffered in international competition from being the pioneers in this particular problem may find some of our disadvantages gradually disappearing.

I think, finally, it will prevent Governments—and I use the word quite generally—from taking the easy road of relying upon relief and unemployment insurance rather than setting out in earnest to get to the root causes and trying to provide work. I remember a speech made by the present Prime Minister some years ago in the country, in which he said there would always be the danger before any Government of choosing the easy road of relief rather than the difficult path of prevention.

Mr. SANDHAM

What did Sir Harry Lauder say?

Mr. WHITE

Whether I am succeeding or not. I would inform the hon. Member who interrupts that I am trying to make a serious contribution to this Debate. I see no reason why we should not come out of our present troubles the stronger for them. There has been the criticism from more than one speaker that the House of Commons is neglecting its duty and losing control over this matter by granting this extra sum of money and by agreeing to an extension of the transitional period. I would ask those who make that criticism if they will tell the House what control there can be except the production of a scheme to deal with this matter upon the Floor of this House, and the passage of such a scheme into legislation. That is what the Commission was set up for, and I think the House will insist upon its being produced at the earliest possible moment.

Major Sir HERBERT CAYZER

I should like to protest against this Bill, because I feel that it shows that the Government have no intention of trying to put the Unemployment Insurance Fund on a sound basis. The last speaker said that our exports of manufactures to foreign countries were losing ground, and he attributed this partly to bad salesmanship. To me, the real cause—and no one denies that our manufactured exports are not keeping pace with those of other countries—is that our manufacturers do not get the same chance as the foreigners get. We have the whole of our market open to the dumping of foreign goods here, whereas practically all foreign countries have protected their workmen and their manufacturers. You will never get this country going until you adopt the plan of this party, and that is to protect our workmen and our interests.

The Chancellor of the Exchequer the other day asked us to make a national effort to meet a national crisis, but the Bill which we are now considering makes rather a mockery of those words, because it shows that the Government are pursuing a policy of drift, that they have given up all idea of trying to bring this fund on to a sound financial basis, and that they are going to let things slide. The debt on the Unemployment Insurance Fund is to be allowed to pile up, and the fund eventually will go into bankruptcy. The Chancellor of the Exchequer asked us to face up to the situation, and I admire him, because I think he is trying to face up to the situation, but I doubt whether he can face up to some Members of his own party. He appears to me to be like a wily old fox, which has been hard run and has got to ground in a hole that is just big enough to hold him and his financial rectitude, which we all admire, but which is not big enough to hold the Prime Minister, who says to him, "It is all right for you. You are snug there, as Chancellor of the Exchequer, but what about me? The pack below the Gangway are biting my tail off." One man cannot control a Government.

I agree that there is a great number of genuinely unemployed people in this country, and I am sorry to say that I am afraid that number is growing and will continue to grow. It has largely been aggravated as the result of the various activities of the present Government. There are not only the various unemployment Acts, but the various commissions and omissions of the Government. The Chancellor of the Exchequer is a very rigid Free Trader, and one of his first acts was to scrap Safeguarding. The industries which were safeguarded provided the few cases in which we saw a great improvement in employment, and all of us on this side hoped that that benefit would be extended to other less fortunate industries, but even that has been denied us, and the result is more unemployment. Taxation, too, is causing unemployment. It was high when we were in power, but it is higher to-day. All those new schemes, such as land utilisation and agricultural marketing, will, if ever they come into force—which I doubt that they will—cause a great deal of extra taxation and will affect the unemployment figures. Dumping is another cause of unemployment.

In all these things the Government seem to be powerless and to suffer from a want of exertion to put matters right. They seem to be quite content to go slipping along, and to see this country go down hill. While there are hundreds of thousands of people genuinely unemployed, for whom there is no work, and for whom the benefits of an insurance system are necessary, there is a large number of people who are not genuinely unemployed. They have had the opportunity made for them of accepting the benefits of the Unemployment Insurance Fund, and they have taken it. That opportunity was given by this Government, so that the fund is now no longer contributory. There are 400,000 workers on transitional benefit; indeed, it cannot be said that unemployment insurance is any longer for those who cannot find work, but for those who do not want to work. I am not saying that of the majority, and I am not blaming the men who have taken advantage of it. They have a legal right to do it, and if they did not take advantage of it they would be fools. I blame the Government for giving them the legal position which enables them to get the benefit. One day the country will ask the Government to give an account of their stewardship.

I am not going through all the cases of abuses, because they are generally known. We know that in many cases it often pays a man to accept the dole rather than to work. I know of cases. A man can work for three or four days, and can get the dole on the other day. We know about the position of married women, and we have heard about professional footballers. People are given the temptation to draw the benefit, and it is affecting their moral. When the ships of my own firm come home, the engineers sign off and automatically sign on for the next voyage. Of late, however, there has been a tendency for many of the engineers not to sign on, but to say that they are going to take a holiday and live on the dole. There is no need for them to draw the dole and take a holiday, but the temptation is there.

Mr. McKINLAY

Give us specific instances.

Sir H. CAYZER

I have given an instance of my own firm. The Minister of Labour says that these abuses are of small extent, and of small cost. It is larger than the right hon. Lady thinks. The Government Actuary says that the cost of abuses is not so small, and he suggests that the improper claims might amount to £13,500,000 a year. I consider that a very large sum, but I have not had the good fortune, as a Minister, of playing with other people's money and of looking at millions as though they were mere pence and shillings. The Chancellor of the Exchequer has told us that there must be sacrifices from us all. I agree that all should make sacrifices, but who are the people who have made all the sacrifices so far? Hon. Gentlemen opposite will deny it, as they always do, but they are the taxpayers. A class of people numbering 250,000 have paid for the whole upkeep of this country for many years, and the number is getting smaller. They have paid £400,000,000 for the social services—

Mr. SANDHAM

Where did they get their money from?

Sir H. CAYZER

—and all the schemes that will have to be paid for have been put forward, because the Government know that this small body of people will in the long run have to pay for them. The sheltered industries and the Government Departments comprise the largest body of workers in the country, and they have not made any sacrifices in wages. Their wages were rightly put up when the cost of living was high after the War. The cost of living has come down, the figure for food being 38 per cent. and the figure all round 50 per cent., but their wages are still double, and in many cases a good deal more than they were before the War. They have not made sacrifices. On the other hand, they are better off than they were before the War. When the Chancellor of the Exchequer asks for sacrifices, let every one make sacrifices. The time will come when the people who have sacrificed so much—namely, the taxpayers—will not be able to carry the load any longer.

The Government must attempt to make some effort to place the Insurance Fund on a self-supporting basis, and that can only be done by the ruthless removal of abuses, by a reduction of the benefit, and by administering the fund on a strict insurance basis. At present it is being administered rather as a public relief and maintenance fund than what it was intended to be, a contributory insurance fund. Under the present Government, every year progressively a smaller number of producers will have to support a growing number of non-producers, and this cannot go on for ever. This continual borrowing is not only sapping the confidence of the whole industrial community in this country, but is seriously prejudicing the whole financial system not only in this country but throughout the world.

Mr. ARTHUR LAW

The question of unemployment was the first political question I ever heard raised in my life. Away back when I was a boy and used to attend Liberal party meetings in the days when Sir Henry Campbell-Bannerman was leader of the Liberal party I once heard him say, in the Manchester Free Trade Hall, that there were at that time 12,000,000 people in this country living on the verge of starvation. Hon. Members opposite would lead us to believe that this is a new problem. It is the oldest problem that ever was. We heard the right hon. Member for Epping (Mr. Churchill) to-night, and if he had gone much further I should think he was joining the Beaverbrook campaign, because he went so far as to say that it is tariffs that we need. I have made a statement in this House before which I will repeat, and I would like it answered—I have never yet found anyone to answer it. I will make a prophecy that the time can be counted in years when there will be no export trade at all in this country, for the simple reason that in the last 30 years the capital invested abroad by our people has risen from £3,500,000,000 to £5,000,000,000, and it is increasing an the last few years by an average of £140,000,000 a year. In the three years 1927–1929 £1,111,000,000 worth of goods came into this country to pay the interest on money invested abroad and for shipping services and other services which this country renders. If the capital invested abroad is going to increase by ££140,000,000 a year there are people now living who will live to see the day when there is no export trade, because everything we need from foreign countries will come in in the form of interest on our capital.

In that state of affairs we must develop our home trade. We have to see to it that we have that trade, at any rate. Hon. Members in the Conservative party say the way to develop our home trade is by putting tariffs on goods coming into this country. It is a moral certainty that interest will come in if hon. Members opposite have their way and all the tariffs in the world will not stop it coming in. What we can do in this country is to equalise better the distribution of the wealth created in our own country. Even the Conservative party honestly believe that this system is wrong. I have here an extract from the "Conservative Clubs' Gazette" for September, 1928. They ran a series of questions and answers for the instruction of canvassers in answering questions on the doorstep at election time. The question put was: Is there any solution to the unemployment problem in this country? and the answer was: No, the number of out-of-works will continue to increase in proportion to the growth of the population. That is from the official "Conservative Clubs' Gazette."

Commander SOUTHBY

Official?

Mr. LAW

We want home trade. It is the lack of spending power among our own people which is the cause of the loss of trade in our shops. I am sorry the hon. Baronet who spoke last has left the House, because I was going to remind him of how shipping companies in this country could employ British seamen instead of lascars and coolies.

Lieut.-Colonel MOORE

They are British subjects.

Mr. LAW

Down at the docks in Manchester and in Hull and Liverpool and Aberdeen one frequently finds thousands upon thousands of seamen wanting a job. They are drawing unemployment pay to-day. If British shipping interests were sincere about doing the right thing then, in place of allowing us to pay unemployment pay to British seamen at Liverpool, Manchester, Hull, Aberdeen, London and elsewhere, they would engage those men to work their ships, even though it did cost them a few shillings more per month in wages. I am going to make a candid confession, that I cannot believe the existing system of society will ever solve anything. Things are growing worse. The "Economist" stated that in 1929 the national income was £4,400,000,000 and that 25 per cent. of the people drew £3,100,000,000. That is to say, one-quarter of the people in this country drew three-quarters of the national income. How in the world can anyone imagine that three-quarters of the people, drawing one-quarter of the income, can buy up 100 per cent. of the goods created by our people? If there is anybody who can solve that problem he will have solved the unemployment problem, but not until then.

An equal distribution of wealth is at the bottom of the whole business. I will quote a daily journal which I believe is the official organ of some Members of the opposite party, the "Daily Express." [Interruption.] Oh, yes, there is one Member of the party there, and they prophesy that there will be another one next week. On 26th November, 1930, the "Daily Express" stated that the Clearing House returns showed that £1,827,000,000 stood in the banks on deposit, awaiting investment. If some of that money had been paid in wages to our workpeople there would have been more trade in our shops and in our factories. The right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) stated in this House on 18th June last that we are saving between £400,000,000 and £500,000,000 a year at present, in spite of the depression. I am going to make an honest appeal. If anybody believes that the unequal distribution of wealth, which represents the earnings of our people, is the cause of our present difficulties—the editor of the "Conservative Clubs' Gazette" seems to think it is—let us give a chance to a new system, because the present one has been tried long enough.

The question of economy has been raised on this Bill. There is an Amendment suggesting we should let this expenditure go on for three months and no longer, because at the end of three months we may be able to knock off some of the money. I shall resist to the last the reduction of unemployment pay to our people. I do not want the burden of the unemployed to be shifted on to the Corporation of Manchester and other local authorities in the country in order to relieve the national Exchequer. If there is any economy to be made, let us make it where it can best be effected. Of every 20s. spent by the State 14s. 2¾d. goes to pay for past, present and future wars. If we are not going to economise on that, surely we shall not economise on the 3s. spent on education, old age pensions, widows' and orphans' pensions, unemployment, health and housing.

Lieut.-Colonel MOORE

Are you going to economise on the disability pensions paid to ex-soldiers?

Mr. LAW

Where we can economise is out of the sum of 9s. 8½d. which goes to the moneylenders. The case of the ex-Service men has been mentioned. What have they been guaranteed? This country gave guarantees to the bondholders, but no guarantee was given to the men who saved the property of the bondholders. [An HON. MEMBER: "What about pensions?"] We were told after the War that never again would ex-Service men have to tramp the streets in search of employment, but there are hundreds of ex-Service men in my constituency who want to know why that pledge has not been carried out. The unemployed to-day are the children of those men who fought for their country during the War and who ought to have the first claim on the resources of this country. In this connection I welcome the words of Henry Ford, who said: There is always much more wealth than money. A world filled with wealth, but suffering want.

Mr. WARDLAW-MILNE

I want to say a few words with regard to the policy of the Government which was attacked by the hon. Member for Camlachie (Mr. Stephen). Of course, the hon. Member will not expect me to deal with the differences between himself and his colleagues, upon the Front Government Bench, but there was at least one part of the speech made by him with which I find myself in agreement, and that was when he said that he saw no reason whatever for the appointment of a Royal Commission to consider this problem, and that if a Royal Commission was needed, it should not be one to inquire into the Unemployment Fund—a matter regarding which, in his opinion, the Government had all possible information at their disposal—but into the whole cause of the depression of industry. The hon. Member for Camlachie, and many others who have spoken from the benches opposite, have not during the course of this Debate given us any reason for opposing the view which has been put forward from these benches that this Bill and the Money Resolution should cover only a period of three months.

9.0 p.m.

There has not been a single speech from any Minister on the Government Bench which has put forward a cogent reason why the Government require the unusual period covered by the present Bill, and therefore we must presume that they are unwilling to face the House of Commons three months hence and explain their position then in connection with this problem. Why do the Government not give some reason to explain why they are following the exceptional course of asking for sufficient money to cover a period of six months, which is double the period usually required? In view of the statement of the Minister of Labour that she hopes and expects to receive the report of the Royal Commission in May next, and the very definite statement that she intends to introduce and pass legislation before the Autumn Recess, the course seems the more extraordinary. Perhaps she will forgive me if I say that my previous experience of her statements in regard to unemployment, even those of other Ministers in similar circumstances, incline me to be doubtful as to whether the hopes she has expressed will be realised. I think it is more likely that there will be other reasons put forward when the time comes, showing the impossibility of legislation being passed by the date she has indicated. If the Minister of Labour really believes that the Royal Commission will report within the period she has stated, surely that is all the more reason why she should have been content to accept our Amendment to the Money Resolution which would provide money to carry on up to the time of the report of the Royal Commission, and then she would have been able to say, "We have now received the report of the Royal Commission; this is what we want to do, and we require a small amount of money in order to carry us on till the recommendations of the Royal Commission can be put into force." No cogent reason has been put forward in support of this Vote, and no reply has been given to our arguments in favour of voting a sum of money for a temporary period of three months, so that the House of Commons can survey and criticise at regular intervals the policy of the Government in regard to the unemployed.

Frequently, throughout these Debates, I have heard the word "rationalisation" used, and I do not think I am exaggerating when I say that there is probably no speaker—certainly none from the Government Benches—who can be regarded as having fulfilled his task without mentioning that sacred word. As one who has been connected pretty intimately with industry for a good many years, I may say that I think there is more nonsense talked about rationalisation than about almost any other subject that the House of Commons discusses. We continually talk as though rationalisation were some brand-new thing which had been discovered within the past few years, but the rationalisation of industry has been going on ever since industry first began, and I very much question whether the rate of rationalisation in the last 20 years has been anything like so fast as the rationalisation—I am referring to changes in machinery and the altera- tions in the science of industry—which occurred in the last 20 years of the nineteenth century. I entirely agree that there is a problem, and I do not for a moment disguise it—the problem of the displacement of labour by amalgamations and by new machinery. The right hon. Lady the other day gave some illustrations. She said that a certain tobacco factory had introduced a new machine by which—I am speaking from memory—with the aid of three men the work previously done by 1,200 was being performed.

Miss BONDFIELD

Seven hundred.

Mr. WARDLAW-MILNE

I beg pardon. For the purposes of my illustration, however, the number is immaterial. The difference between two or three and several hundred makes an immense problem in that particular occupation. I have not looked into this question—I have not the necessary material at my disposal—but I do not think that the right hon. Lady, if she intended us to believe that this was something sudden and new, is entirely accurate. From what little information I have received, I find that this process in the tobacco industry, as in most other industries about which I know, has been a gradual one; it has been spread over a long series of years; and, although that does not alter the problem, I suggest that the right hon. Lady gave to the House, unintentionally, rather a wrong impression, and rather created the belief that this change in the way of rationalisation was some completely new problem.

The point that I want to bring to the notice of the House is that it is not a new problem at all, but a very old problem. Therefore, when hon. Members are speaking of rationalisation, and considering, as arising therefrom, the problem of what, for want of a better expression, I may call the problem of the machine versus the man, it is worth while to remember that it is not something new we are facing. The real question is not only the displacement of men by machinery, but the question why we do not absorb those men into new lines of industrial enterprise and development as we did in similar circumstances 30 or 40 years ago. That is the real problem, and I beg hon. Members to believe that I am not putting this view forward in any combative spirit. The fact is that 30 or 40 years ago industry was able to absorb the men who were then displaced by machinery, whereas to-day, apparently, it is not possible to do so. Another matter which I hear constantly referred to in this House is the fact that production has outrun consumption.

Mr. HERBERT GIBSON

Hear, hear!

Mr. WARDLAW-MILNE

I am sorry to disappoint the hon. Gentleman who says "Hear, hear," but I do not agree with that statement of our problem for one moment. [interruption] If the hon. Member will allow me, I will explain why. I do not believe that there is such a thing in the world as overproduction. I do not want the House to misunderstand me. I am not suggesting that there is not a temporary problem. There may well be a temporary problem, but in the end it is impossible to consider a condition of world over-production, especially as the result of the bountifulness of Nature under the guidance of man, when large masses of the people of the world are under-fed and under-clothed. As long as those conditions exist, there is no real over-production in the world [Interruption.] I thought that, perhaps, I should get back to the hon. Member's point of view. The problem is not expressed by talking about over-production. The problem is, in what way and through what failure in our system have we failed to move the increased production of the world over to the consumers?

It is not a problem entirely for this country; it is a problem for the whole world. It is not a problem that we can regard even as a national problem alone and far less as a party problem; it is much wider than either. The whole world is suffering from under-consumption. The bountifulness on the part of nature as we have seen it in the great crops of the last year or two has given a tremendous supply of raw materials and foods, and their consumption by human beings merely means that man has to work less strenuously for the goods he requires and has more leisure. Therefore, the real problem is one of moving production from the producer to the consumer, and that is the problem that this House should face. I do not suggest that it is a problem which we can solve alone, but I do suggest that, when we continually talk, on the one hand, of rationalisation as if it were something new, and of over-production as if it were something which in itself is harmful, we forget that the discussion of these matters does not touch the root of the matter which is how to pass the production on to the consumer.

I am not going deeply into this problem, but I maintain that, partly at any rate, it is caused by one of the factors to which reference was made by, among other speakers to-day, the right hon. Gentleman the Member for Epping (Mr. Churchill), that is to say, a failure in the means of exchange. That is not going to be cured by any system which merely increases the amount of money that can be spent by people without any means of production to provide it. The idea that, as one hon. Member suggested to-day, the mere increase of unemployment benefit is going to give more consuming power, is a very short-sighted idea. Consuming power can only come originally from the products of industry in its widest sense, and, therefore, we come back to the point that you can only get the people back into industry and out of this unemployment insurance in any large numbers by getting them back into production.

We have failed, not only in the means of exchange, but in another respect; we have failed in this country because our system forgets the producer. We take a great deal of interest in the consumer, and we spend a great deal of thought and care on the middleman and the person who distributes goods, but we have forgotten very largely that everything that we have comes out of productive industry, and that it is the man who produces who really matters. There is no doubt that one of the matters in that connection which seriously affects the condition of this country is the difference between the situation of the real producers—those in the unsheltered industries—and that of those who, whether producers or not, are in industries which are specially sheltered. Unquestionably that difference has a very great bearing on our present difficulties. It may not be easy for one nation alone to deal with the monetary and currency question, which has so large an effect on the dis- tribution of produce, but it is certainly possible for us to deal with the question of our own sheltered and unsheltered industries, because the disparity between them is stopping progress in many respects in this country at the present time.

I want also to say a word about the statement which has been made from time to time on the other side of the House that we who sit on the Conservative benches have no constructive policy. I can imagine many things that might be said against us, but the last thing that I could imagine would be that we had no constructive policy. Whether hon. Members agree with it or not—and that is quite another matter—there is no question whatever that the policy which we have continually put forward for dealing with unemployment is the only constructive policy before the country. [Interruption.] I do not deny that the object of those whom the Socialist party claim specially to represent in this House, is to safeguard the wages and the standard of life of the worker; but we claim that that cannot be done without safeguarding the work of his hands. That is a very definite and a very constructive policy. [An HON MEMBER: "Are you going to safeguard agriculture?"] Unfortunately, the methods of Safeguarding are beyond the scope of this Debate, or I should be delighted to go into them. At any rate, it is clear that those who speak here, as hon. Members opposite occasionally do, of the only remedy being to increase the spending power of the people, without any indication of where that spending power is to come from, have surely a very poor case to argue against us. We have a very definite policy, which is not a spendthrift policy but one which will improve the position in which the Chancellor of the Exchequer finds himself, and would not land him in the difficulties which I fear he will have to face in the next few weeks, largely as the result of the policy of his own Government.

The hon. Member for Camlachie asked if it was the policy of the Conservative party to cut down unemployment benefit. I do not in any way claim to speak for the Conservative party. Speaking for myself however, it is certainly not my view that unemployment benefit should be cut down, but it is my view that un- employment benefit should go to those who really deserve it. By that I do not want the House to gain the impression that I think there is a vast number of people who are getting benefit illegally, or even unfairly. Unfortunately a number of people have had unemployment benefit far too long and, if our policy had been followed, they would have been out of insurance and into employment long ago. Every hon. Member opposite however knows that there are abuses, though I do not say that they are widespread. We are anxious that the money, which is subscribed by the State as well as by employers and employed, should not be given to people who really do not deserve it, and we are pressing and have pressed the Ministry of Labour on that point. The right hon. Lady is undoubtedly, through the action of the present Government, responsible for a part of what I will call the leakage.

The Act of 1930 undoubtedly made it very much easier for people who previously would not have got it, to receive benefit, many perhaps are not really entitled to it, and it is these abuses that we want to see put right. It is only about a year ago that the Attorney-General turned upon his own followers and said—I am not giving an exact quotation—"Do you expect us to pass an Act which will allow a man to sit at home and smoke his pipe and not even look for work?" In spite of the fact that that came from your own Front Bench, you did pass an Act virtually to that effect, and there is no doubt that that Act has led to a good many benefits being paid, which otherwise would not have been paid, and to people who did not deserve the money. The right hon. Lady has given us no reason whatever why she is unwilling to face the House of Commons three months hence and put the whole position before us with the report of the Royal Commission in her pocket. She has given us no reason why she is asking for six months, during which the House of Commons will have no means of checking what is done or criticising the Government.

As long as that is the position and we are without the information we have constantly asked for, we are entitled to say that the only reason why the Government refuse to agree to the suggestion of a three months period is that they expect the continuance of their present policy to increase employment during the next three months, even in spite of the fact that those months are usually the time when unemployment falls with the result that the money will not last anything like the period they say they expect it to do or else they are afraid that three months hence the position will be so bad, and the country so alarmed at the whole situation in which it then finds itself, that they will be unable to face the House of Commons at all.

Mr. CHARLES BROWN

I have no doubt the House has been very interested indeed in the description the hon. Member has given of an economic system which he undoubtedly passionately supports drifting to chaos and ruin but it will not do to place the responsibility for what is happening in the economic world of to-day either on the Government or upon the party to which I belong. It is not often that I agree with anything that is said by hon. Members opposite, but there is one thing the hon. Member has said with which I did agree. He told us that rationalisation was nothing new. I entirely agree with him that there are fashions in words, as there are in anything else, and that this word "rationalisation" is just a word fashionable at the moment to describe the process to which he alluded when he called our attention to the constantly changing technique in regard to methods of production. I do not know whether I agree with him when he sought to convey the impression that probably this process is not going on more rapidly now than formerly. His reference to the subject brought to my mind an experience which I had a little time ago when I was taken over a great ironworks. I went, first, into the old-fashioned casting pit, and then I was taken to see a new process of making cast-iron pipes. I watched the hot metal poured into the revolving moulds, and I saw those pipes, from 9 to 18 inches in diameter and 12 feet long, leave the moulds at the rate of one every five minutes. I think the process to which the hon. Member alluded is undoubtedly in many directions being speeded up.

The Noble Lady who spoke revealed an attitude towards this problem of unemployment which astonished me. I have no doubt that from her exalted posi- tion in society she looks out upon the working classes and seeks to inculcate into them all the habits of industry and thrift which she so passionately advocated. I cannot understand an attitude of mind that looks on one section of the community as always to be in the category of hewers of wood and drawers of water for someone else. That is an attitude of mind I cannot understand at all. We are discussing this problem to-day in rather different circumstances from those in which it has been discussed formerly. I have listened to all the Debates on unemployment which have taken place in this Parliament. I have not taken part in any, but one is sometimes provoked by the things one hears to make comments on various expressions of opinion, and the circumstances of to-day are certainly different from what they have been when we have discussed the problem before.

No one could have listened to the figures given on Monday and again to-day by the Parliamentary Secretary to the Ministry of Labour in regard to the general question of unemployment, without realising that we were in a vastly different situation. May I quote those figures again? The hon. Gentleman told us that 25 per cent. of the industrial workers of Germany were unemployed, 23 per cent. of those of the United States, and 21 per cent. of our own industrial workers. Who can contemplate that picture without realising that the economic insecurity of the vast masses of the working classes of the world is increasing with every passing year? In view of that fact, it is exceedingly difficult for me to understand some of the carping criticisms which are being made from the other side against the Minister of Labour for bringing forward this Bill to-day. What is the nature of those criticisms? The right hon. Gentleman who was Minister of Labour in the last Government said that the Government could have these extended powers if they liked for three months, and could have £10,000,000, but not for six months or £20,000,000.

Surely that is quibbling with the problem? He said he would give us six months, and the problem would pass for that time out of the control of the House of Commons. How ridiculous was that statement! There are a thousand and one ways of raising the problem in the House of Commons at any time the Opposition cares to raise it. The hon. Member went on to talk to us about the unwarranted expenditure on Unemployment Insurance. I was amazed by the argument he used in regard to what he called organised short-time and abuses in connection with that. He said the employers were perhaps justified in other days in keeping men on short-time. The circumstances have changed according to the right hon. Gentleman, and employers are no longer justified in keeping men on short-time. What is the alternative? It is to dismiss these men entirely, and for employers to reduce their staffs. Would that reduce the charge on the Unemployment Fund? Of course it would not. It would mean a heavier charge on the fund.

The speech of the right hon. Member for Epping (Mr. Churchill) was, as usual, an amusing and interesting one, but it was entirely barren—as barren as the money barons of whom he spoke. He certainly put forward no concrete suggestions for dealing with the problem of unemployment. What did he do? In his very best style he drew for us a vivid picture of China in anarchy, of India seething with unrest, and with Russia, of course, as the villian of the piece. Then he told us of 1,000,000,000 human beings crying out for goods they could not get. He is very wise. That is a game that has been played before. It is so easy to fix men's eyes on the ends of the earth, and make them forget the domestic problems at home. I wonder how far his words would affect the miner living on half-starvation wages in some mining village in the north? What would he care about the 1,000,000,000 human beings in Asia? His problem is an immediate and real one, and it is a problem to which this House has got to get down, and with which the Bill we are discussing to-day seeks to deal. I am convinced that the conscience of the community, which, after all, is the best asset of our civilisation, has made up its mind that the mass of the people of this country shall not starve when surrounded with plenty. I congratulate the Government upon what they are striving to do to ease the burden on the toiling masses of the people, who, faced on every side with economic insecurity, have no means of subsistence at all unless we provide for them by this insurance scheme.

Mr. CULVERWELL

I am pleased that one hon. Member opposite is pleased with the performance of his Government. The hon. Member's remarks may be summed up and epitomised in his last few sentences when he asked, what does the miner or industrialist in this country care for the 1,000,000,000 in Asia who have their consuming power reduced? That seems to typify the mental attitude of hon. Members opposite and of the Government themselves. The hon. Member for Camlachie (Mr. Stephen) and the hon. Member for Gorbals (Mr. Buchanan) had the same idea, and were influenced by the same motive. They thought that by increasing the purchasing power of the people in this country you could solve the problem of unemployment and depressed trade and industry. The hon. Members did not seem to realise, as the right hon. Member for Epping pointed out, that the depressed conditions and the lack of purchasing power which the peoples of Asia possess at the present time are very largely responsible for the lost markets and industrial depression in this country. Therefore, it is of vital importance that this country and the Government should pay far more attention to the winning of markets abroad than to the increase of the consuming power at home.

That is where the arguments of hon. Gentlemen opposite break down. The hon. Member for Gorbals, as far as I could gather from his speech on Monday, really would like larger, better, and more generous doles. He is not satisfied with the present distribution of public funds by the Government. Hon. Members opposite are urging their Chancellor and the right hon. Lady to distribute public funds on an even greater scale than at present. [HON. MEMBERS "Hear, hear!"] I am glad that hon. Members agree with me that that is the attitude on which they base their policy. They would be perfectly right if in this country we were a self-supporting and self-contained unit, and could take in our own washing, but, in the conditions in which we find ourselves to-day, we have to purchase our food and raw material from abroad. Therefore, the more you increase the purchasing power and the cost of production in this country, the more difficult is your task in competing in the markets of the world. It is only by our success in competing in those markets that our manufacturers can extend their industries, and take on a greater volume of employment which we should all like to see.

The idea that by a lavish distribution of public wealth and by increased pensions or raising the education age, you can bring about a Utopia in this country in which everybody will be well paid and be better able to buy more shoes and clothing and so on, is a fallacy. It would be reasonable for hon. Members opposite to argue for greater expenditure of public money, for increasing the purchasing power of the people, were that increased distribution of public funds to be spent in this country, but hon. Members opposite are averse from ringing this country round with a fence which will induce people to purchase goods in the home market. You could certainly distribute more public wealth and increase unemployment benefit were you sure that the money would be spent in this country, but, in fact, the money which you pour out in unemployment benefit to the extent of £130,000,000 a year when not spent on cinemas, football, and similar amusements, and on necessities of life, and for many of the requirements of the home, is very nearly spent on employing foreigners to produce the goods consumed in this country.

Therefore, an increase of unemployment benefit in the present conditions and with the present opposition of the Socialist party to Safeguarding for the protection of labour in this country would not be the success hon. Gentlemen imagine. I notice that the right hon. Lady in her speech on Monday was at great pains to try and explain away, and to minimise to some extent, the volume of unemployment which we have with us to-day. Members opposite, I think in all fairness, will remember that they used to spend the major part of their time in deriding the Conservative party for their failure to reduce unemployment below the million mark. One might say that the figure of 1,000,000 unemployed lost us the last election, and now that the figures have increased under a Socialist administration by over 1,500,000 hon. Members opposite are endeavouring to explain away, or to minimise, the volume of unemployment and to disown any responsibility for the increase.

The right hon. Lady reminded us of the fog of depression, the world-wide depression in trade. She gave the figures of unemployment in various countries. She did not mention the differences in population between this country and the foreign countries she quoted, or the fact that each year there are many more workers going on to the labour market in those countries than there are in this country. She gave the figures of emigration. She tried to explain some portion of the increase in unemployment by pointing to the decrease in emigration. I do not ever remember during the last administration that any Members of the then Opposition took pains to point to the reduced tide of emigration. Therefore, the argument of a falling off in emigration as compared with pre-War held exactly the same force under the late administration as it does to-day.

I do not want to deal with the problem of rationalisation upon which my hon. Friend who spoke just now dwelt so much. I should like to say something about the Act of 1930, because we are discussing an Unemployment Insurance Bill this evening. If the party opposite had realised how grave the condition of affairs was becoming when they saw this tide of unemployment mounting and mounting week by week, when they found our trade falling, our exports decreasing and imports increasing, surely they should, in their wisdom, have done otherwise than pass the Act of 1930 which could only increase the difficulties from which we are suffering to-day, and which has, in fact, aggravated the already difficult position. I would remind hon. Members opposite, who seem even now to dispute the facts contained in the Memorandum submitted by the Treasury to the Royal Commission on Unemployment Insurance. Hon. Members opposite still do not seem to grasp the significance of this damning indictment of the Government. I do not suppose there was ever a document produced by officials under the aegis of a responsible Government which was a more damning indictment of the course of action which the Government are pursuing this evening. In fact, the document explains very fully the posi- tion which the Government have to face to-day.

That position is not new. I would remind hon. Members opposite that when the 1930 Act was passing through this House we warned them that they were heading for a fall. Their Attorney-General warned them when he said: Are we to legislate on the lines that the unemployed should think that they need do nothing themselves; that they should wait at home, sit down, smoke their pipes, and wait until an offer comes to them? We were warned by the White Paper which the Government issued at that time that: These two classes of cases"— married women and seasonal workers, on which so much has been said during this Debate— will serve as illustrations of what, in the aggregate, may amount to a considerable group of new claimants, who, so to speak, are not really in the market as competitors for employment, but may hold themselves out as such if they are thereby enabled to qualify for benefit. We all know well that those possible claims have become certain claims and that they hold themselves out for benefit. That is one of the legal abuses we want to correct, and which we urge the Government to correct. I would also remind the House of the words of the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George), when speaking at Torquay, in 1930, just about the time the Bill was passing through the House. He said: Able-bodied men and women must accept the work for which they were physically adapted when it was offered to them by the nation, or they must be deprived of the dole. The whole cost of unemployment ought to be scrutinised. One heard every day tales of unwarranted cadging on the dole—millions could be saved without impinging on meritorious claims. To-day, as I understand the position, the right hon. Gentleman is going to support the Government which for another six months is asking for double the amount of money they have ever asked before. I am afraid that I have not the time to give all the words of wisdom which I have prepared, as there are other and better speakers than myself. I would say, in conclusion, however, that if the Chancellor of the Exchequer would live up to the speech which he made the other day—which I, for one, admired—if he would stand up to the position he adopted in that speech, I believe that the majority of the Members on this side of the House would back him up against the influence of his supporters. The Chancellor of the Exchequer, I noticed, is reported as saying that the acid test of democracy would be whether the leaders had the courage to tell their followers the truth. I believe the Chancellor of the Exchequer is quite right in saying that that is the acid test of democracy, and it is on that point, whether the leaders of the Government tell their followers or not, that this Government will stand or fall in the opinion and the esteem of the nation.

Mr. LLOYD GEORGE

rose—

Mr. J. JONES

On a point of Order. Before the right hon. Gentleman begins, may I be allowed to ask if ordinary private Members of the House are allowed to come in and speak when they like?

Mr. SPEAKER

Hon. Members, whom the hon. Member describes as ordinary private Members, have the same right to catch my eye as other Members.

Mr. JONES

Yes, but I cannot catch it, Sir.

Mr. LLOYD GEORGE

I must apologise to the hon. Member for Silvertown (Mr. J. Jones) and others for intervening to-night. It was not my intention to do so, but circumstances over which I have no control have forced me to take part in this Debate. I regret that the hon. Member for West Bristol (Mr. Culverwell) marred what was a very passable speech by indulging in that stale and, I think, very unjust taunt about the unemployed squandering their money on cinemas and football matches. If he could maintain a wife and family upon the allowance which is granted by Act of Parliament and still have much money to spare for football and cinemas, he would be a very clever man, indeed.

Before I reply to certain observations which were made to-night, and which had direct reference to me, I should Like to refer to the Bill. I apologise for doing so. When I heard that the Government intended to ask for six months, my first impulse was to feel that they were asking for too much, that three months would have been quite ample and that the House ought to have an opportunity again, after three months, of reviewing the position, but when the facts were given with very great fairness and power by the right hon. Lady in charge of the Bill, I felt that she had made out a complete case. Nothing would have been gained if at the end of three months we were more or less in the position we are in now, with no report from the Commission, practically discussing the question upon the same basis. It is very much better that when the House comes to review the position it should do so with the whole of the facts in its possession and with the recommendations of this very independent and able Commission.

But the Government ought not to be given a power which would enable them to go beyond the Session without being forced to come here to have a thorough review, and to ask from the House of Commons sanction for any further expenditure that will be necessary in view of the recommendations which have been made and in view of the conditions at that particular moment. That has been assured by the course taken by the Government. The only thing that I would say to the right hon. Lady and to the Prime Minister, if I may, is that I hope that such pressure as the Government can exert will be brought to bear upon the Chairman of the. Commission to hurry up with a decision. It is very vital that not merely the Government but many Members of the House should have full opportunity of reading the recommendations and the evidence, so that when we come to discuss the matter we can do so after ample reflection and consideration. May I also say, and I think it is the Chancellor of the Exchequer to whom I should make this appeal, that it is a great misfortune that the report of the Macmillan Commission should have been so long delayed. It is very vital, in view of world conditions, that we should have that report at the earliest possible moment. I do not know what influence the Chancellor of the Exchequer can bring to bear upon the Commission to ask them to bring their consideration of these proposals to an early termination. A third committee which I hope the Prime Minister will press to do their work a little more expeditiously, is the very able committee that has been appointed to consider the whole problem of regional town planning. I am certain that a word from the Prime Minister would have the effect of inducing the committee to sit very much oftener than they are doing at the present time.

The right hon. Member for Epping (Mr. Churchill)—I am not coming to him yet; this is only by way of leading to an argument dealing with unemployment—rather sneered at the programme that we on these benches put forward in 1929. He asked what would have happened supposing we had had the responsibility of carrying out that programme. We were submitting proposals then upon the basis of unemployment which was a little over 1,000,000, and we were dealing with the problem in reference to the figures and the facts of that date. May I point out to him that, if he had taken the trouble not merely to flourish the document but to read it, he would find that we made it quite clear that that was only a temporary provisional programme for two years, and that we referred to a long-term programme, some of which has been undertaken by the Government, I am glad to say, for instance, in regard to agriculture. That programme if carried out—if the other place does not listen to the hint that was given here the other night, and if the Bill gets through and the Government undertake afterwards to put the Act into operation—will provide for a very considerable employment for scores if not hundreds of thousands of the unemployed.

There was another matter which we indicated, regional town planning. A very able speech was delivered to-night by my right hon. Friend the Member for Penryn and Falmouth (Sir J. Tudor Walters) on that subject. I have not the faintest doubt that in that direction the Government could find work for a very considerable number of men, and I hope they will do so when they get the report of the Chelmsford Committee. There is no one in this House who has had such experience of house building for the working population of this country as my right hon. Friend the Member for Penryn and Falmouth, who spoke as a man with lifelong experience and practical knowledge of the problem. Then there is the problem of London traffic, which has not yet been touched, and there are the various railway schemes which have been put forward. These are all matters which will have to be dealt with if this country is to be re-equipped for its great industrial task. The right hon. Member for Epping says that all these schemes have been spat upon by every party. They were adopted in this House on Thursday last. Right hon. and hon. Members on the benches above the Gangway dared not vote again them. Where was the right hon. Member for Epping? He must have done his spitting by his own fireside, then.

I agree that all these schemes will involve borrowing on a large scale. I have never concealed that fact. It is quite impossible to carry them through without borrowing. No business man would mix up the borrowing which a great concern has to undertake for the purposes of capital improvements in its business, with annual expenditure. I was talking the other day to a very important business man, who is known very well by my right. hon. Friend the Member for Epping. [HON. MEMBERS: "A money baron?" "Is he in the City?"] No, he is engaged in productive work. Therefore, I need hardly assure the House that he is somewhere in the north. He told me that he had taken advantage of the present opportunity to scrap the whole of his machinery and put in new, with the result that he will be able to compete when the time comes; when trade returns he will be in a position to face all his competitors.

Let me tell the right hon. Gentleman another interesting thing. He talked to me about Russia; the right hon. Gentleman is never safe when he talks about Russia. But having scrapped his machinery, he heard that the Russians wanted to buy machinery of that type and, being a Scotsman, he said, "This is my chance to get rid of the old stuff." He approached the Russians and discovered that they were having none of him, that they were out to buy the very latest machinery. That is an argument in favour of re-equipment and rationalisation. All these competitors of ours, whether they are Russians, or Germans or Americans, are going through this process and it is time we did it ourselves. Does anyone imagine that this very able business man is going to put this down as capital expenditure? Whether he is borrowing the money I do not know, but supposing he did it out of his reserves, he would spread it over the number of years required to cover the value of the machinery. It is, therefore, not a case where it would be regarded as mere expenditure. May I correct the Chancellor of the Exchequer on one point which he hinted at the other day and repeated elsewhere, that I had borrowed at a very ruinous rate during the War. As a matter of fact, as Chancellor of the Exchequer I was responsible for only one loan.

The CHANCELLOR of the EXCHEQUER (Mr. Philip Snowden)

As Prime Minister.

Mr. LLOYD GEORGE

I was just as responsible as Prime Minister for my Chancellor of the Exchequer as the present Prime Minister is responsible for his. Like the Prime Minister, I was very busily occupied with very considerable affairs. I am not criticising the Chancellor of the Exchequer of that time, but the only loan for which I was responsible was a loan at 3½ per cent. at 95, which means 3-5/8ths per cent.

Mr. SNOWDEN

Government credit was below 3 per cent.

10.0 p.m.

Mr. LLOYD GEORGE

The Chancellor of the Exchequer, in fairness, must know that he had in his mind the 5 per cent. loan, and he quite forgot that I was responsible only for one loan at 3–5/8ths per cent., and that another Chancellor of the Exchequer came in and borrowed at 4½ per cent. I am not criticising the then Chancellor of the Exchequer; he may have had good reason for it. The right hon. Member for Epping depicted a condition of snarling hatred between the present Chancellor of the Exchequer and myself. I am not aware of it. As a matter of fact, I do not know that I have any personal hatreds; I have one or two personal dislikes, but neither the present Chancellor of the Exchequer nor the late Chancellor of the Exchequer would be included amongst those dislikes. I have a great regard for both, for very different qualities; and nobody in this House more genuinely enjoyed the sallies of the right hon. Member for Epping than I did, although they were directed at me, and some of them got home. All the same, I wonder why the right hon. Gentleman made that speech. It had nothing to do with the Bill—absolutely nothing. I have heard many Debates on unemployment in this House in the late Parliament, in preceding Parliaments and in the present Parliament, and I have no recollection of having seen one of them graced by the presence of the right hon. Gentleman. Why did he come here to-day? It was not because of his interest in the problem of unemployment, for with the exception of a few perfunctory phrases at the end about employment, obviously tacked on to give an air of statesmanship to what otherwise was really an excellent comic turn, I could not make out why he came here and made that speech. All the same I have been thinking about it a little. It was not mere buffoonery; there was quite a serious purpose. Lord Rothermere has nominated the right hon. Gentleman for the leadership of his party, and that accounts for the comprehensive programme at the end. There was an attack upon antiquated Protection, that was to rally Free Traders to the new party. But there was also a committal to a real tariff, that is in order to get hon. Members here into the new party. Then there were a few chosen phrases about the Empire, trade with the Empire, that is to rally the Crusaders. Then, lest he should lose other support, there was a particularly dexterous phrase about not losing the trade of Europe. The right hon. Gentleman said that the Chancellor of the Exchequer was a Cobdenite by conviction and that I am a Cobdenite by profession. He, I should say, after to-night, is a Cobdenite by conviction and a Protectionist by profession.

He talked about fishing in troubled waters. There is no better judge of that, and he spread his net very wide. He said, "I must have the City behind me," because he has not yet secured the leadership of this party. Lord Rothermere has nominated before him Lord Beaverbrook for the same position, and that rival potentate is engaged to-night in wielding his sceptre in the streets of Islington. May I remind both of them that there is no vacancy on the throne yet, because the right hon. Gentleman the Leader of the Opposition is clinging to its arms with brave and solid tenacity. Therefore they have not got it yet. There is this much to be said for him and Lord Beaverbrook.

They are both starting fair; they have each got one follower in this House. I notice that the right hon. Gentleman turned round and acclaimed that loyal follower with affectionate regard. [HON. MEMBERS: "Who is he?"] The hon. and gallant Member for South Paddington (Vice-Admiral Taylor). They have also what is called equality of opportunity in another respect; the "Daily Mail" has promised both of them constant, complete and loyal support.

There they are. But that is not enough. They are now trying to raise armies behind them. They have adopted methods of recruiting which seem to have come from practically the same historical period. Lord Beaverbrook is recruiting, in the Eastern counties, his Ironsides, as Oliver Cromwell did. That is his new model army. But the right hon. Gentleman wants the trained bands of the City. Well, he found it rather dangerous trying to ride to authority on the Indian tiger. Besides, there Lord Beaverbrook has annexed the tiger. [HON. MEMBERS: "What has this to do with unemployment?"] Hon. Gentlemen were quite willing to listen to the right hon. Member for Epping, and I did not want to intervene in the Debate at all, but hon. Members must learn that if there is an attack they must hear the answer to it. Now the right hon. Gentleman thinks it better, like De Rougemont, to try to ride the turtle.

The right hon. Gentleman in his attack upon—I forget whether it was the Chancellor of the Exchequer or myself—no, I think he approved of the Chancellor of the Exchequer and he got very solid support on this side; for the moment the Chancellor of the Exchequer is one of the pets of the other side. I know perfectly well, however, that when it comes to land values the Chancellor of the Exchequer will not be able to cash that promised support. The right hon. Gentleman said that there had been a fall in securities, due, I understand, to some observations that I made—a fall of £70,000,000 or £80,000,000. Let me remind him that not even the joint efforts of the Chancellor of the Exchequer and myself have reduced securities as low as they were when he was in office; they are higher even now than they were when he left office. As for the gold standard, the right hon. Gentleman knows perfectly well that there is hardly an industrialist in this country who does not condemn the action that was taken then. Lord Melchett, then Sir Alfred Mond, denounced it, and said that it was a deadly blow against our export trade, that it was a bonus upon imports. He was a great industrialist who afterwards supported the late Government, but he never withdrew that statement. The right hon. Gentleman said that I ennobled the gentleman who was responsible for the recommendation. I did not, as a matter of fact. It was done by my predecessor in 1914. He did it before the gentleman ever sat on any Royal Commission. But all the same I think he thoroughly deserved the honour. He was a thoroughly able man; there was never an abler; and frankly I should have been proud if I had done it.

Mr. CHURCHILL

I made an error there. But the right hon. Gentleman conferred upon him the Grand Cross of the British Empire.

Mr. LLOYD GEORGE

There was no man who more thoroughly deserved it for the services which he rendered to the finances and the business of the country. If I repudiate it, it is not because I would have been ashamed in the least if I had done it, for I would have been proud to have done it. But I did not, as a matter of fact. If the right hon. Gentleman wants to know a little more about the other baronies he will learn a good deal about them if he prosecutes inquiries along his own Front Bench. I regret that in a serious Debate of this kind, upon a very momentous issue and at a time of very grave emergency, it should have been necessary to have entered into these recriminations. I should have thought that in the course of one single afternoon—[HON. MEMBERS: "You asked for it!"] Whatever I said was my view, and a view which is shared by a great many industrialists in this Kingdom, as to the way finance has dealt with trade and commerce in this country. I have had communications from several business men who have told me that it is a point of view that ought to be presented. People are afraid of saying it, and I have said it in this House and I stand by it. I regret that it should have been necessary to come to these recriminations. It is a very grave emergency through which this country is passing, in common with all other great industrial countries in the world. But we ought to be taking counsel together with a view of trying to come to some common agreement, with a view of trying to extricate the nation out of its difficulties.

All I wish to say in conclusion is this: When the Government get this new six months' respite I hope they will not regard it merely as getting rid of an embarrassing position for six months. I earnestly press upon them to regard it rather as an opportunity of finding some really practical solution. I do not know what the report of the Royal Commission is to be. I hope it will get rid of a few abuses. I do not believe that the working-class population of this country who fall back upon the dole want to continue a single abuse. On the contrary it is doing harm to those who are honestly living on the State allowance, and they would like to get rid of it. But of this I am convinced: That no amount of recommendation will substantially reduce the liability of this country for maintenance. On the contrary, there is only one way of doing it, and that is by utilising the services of the workless for the purpose of doing work of a kind that will leave this country better and stronger and more efficient at the end of the term. I beg the Government to utilise the six months for the purpose of grappling firmly and boldly with that problem.

Mr. ORMSBY-GORE

The right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) has expressed some surprise at the right hon. Gentleman the Member for Epping (Mr. Churchill) having dared to launch upon him an attack, and has asked the reason for it. The reason is not far to seek. The right hon. Gentleman the Member for Carnarvon Boroughs took the opportunity, following on one of the most important warnings ever issued to the country by any British Chancellor of the Exchequer, to make, on the very next day, one of the most mischievous speeches to British credit ever made in the history of this House. The Chancellor of the Exchequer nods his head. He knows what has been the effect of that mischievous speech of last Thursday, upon the difficulties which now face him, not merely in connection with his Budget, but in connection with any schemes of amelioration, any effort, whether by loans or otherwise, to do anything which can assist us in dealing with the serious economic situation in which the country finds itself. I believe that that speech of last Thursday by the right hon. Gentleman the Member for Carnarvon Boroughs has done more harm to this country than any speech—[HON. MEMBERS: "In what way?"]. I am expressing my opinion, and the opinion of many people outside, and the occasion of the speech was the worst part of it.

We all know why the right hon. Gentleman made that speech. It was not on the merits of what he said—and let us hope that the penguins of the City, or whatever we are to call them, will realise it—but the right hon. Gentleman the Member for Carnarvon Boroughs was doing what he did again to-night. He was playing politics. His object is perfectly clear. It is to drive a wedge between hon. Members opposite below the Gangway, and hon. Members opposite above the Gangway, in order that he may sit on the Treasury Bench in command of the left wing, when he has got the Chancellor of the Exchequer out of the way. That is the clear intention and object of the right hon. Gentleman. If I speak for myself alone, in this party or in this House, I say "Rather the Chancellor of the Exchequer with all the differences of opinion that we have with him, land taxes and the rest of them included, than ever see the right hon. Gentleman the Member for Carnarvon Boroughs back on any Treasury Bench in England." [Interruption.] I have said that I speak for myself. Those are my views, and if there is a new coalition between the hon. Baronet the Member for Smethwick (Sir O. Mosley) and the right hon. Gentleman the Member for Carnarvon Boroughs—well, I shall be glad to be in Opposition.

It is remarkable that no hon. Member on the Liberal benches, and no hon. Member on the back benches of the Labour party, ventured to attempt any reply to-night to the remarkable speech of the hon. Member for Chesterfield (Mr. Benson). That was an important speech, and a real contribution to the study of this problem. The right hon. Member for Carnarvon Boroughs, in dealing with unemployment, says that a manufacturer whom he knows is taking this opportunity of the depression to scrap his old machinery and put in new, so that when a revival of trade comes he will be ready to produce more efficiently, and he argues from that that the nation ought to spend vastly larger sums by means of loans upon more and more roads. There is all the difference in the world between a road, which does not directly produce commodities for the purpose of sale to the consumers of the world, and the re-equipment of a factory that produces articles for sale, and that is why this unemployment problem can never be solved merely by State relief works, however grandiose.

State relief works have been going on and they have been anticipated by successive Governments ever since the depression started. The important thing to realise is that Britain is facing industrial competition in all the markets of the world, that we are peculiarly sensitive to world conditions, and that it is only by taking world conditions into consideration and by far deeper thinking on economic matters that you can possibly deal with unemployment. What the right hon. Member for Epping (Mr. Churchill) said is perfectly true. Any economist of repute knows to-day that the Liberal electioneering pamphlet—because that is all it was—is rotten economics from top to bottom, and that there is no constructive suggestion in any part of it that will really relieve the unemployed or really re-equip this country to its ultimate advantage.

Let me turn to our objections on these benches to this particular Bill. Our first objection to it is that it is still called an Unemployment Insurance Bill. It is not an insurance Bill. Unemployment insurance has really faded out of the picture, and the sooner we face that fact the better. Let us take those who are receiving benefit from the Unemployment Insurance Fund; that is to say, those who are not on transitional benefit, but who are the main beneficiaries. Even last year more than half the benefit paid out to insured persons was not paid out of the fund to which contributions had been made by employers, workers, and the State, but was paid out of borrowed money, and this year it is worse. It has ceased altogether to be an insurance fund when part of the benefits are paid by no contributor but out of borrowed moneys, and the essential vice of continuing this Bill or anything like it one week longer than is absolutely necessary is that you are hiding the fact from the country that the Unemployment Insurance Fund is hopelessly bankrupt, will never be repaid, and can never get back to an insurance basis on anything like its present lines, and that borrowing to pay out benefits week by week is a thoroughly vicious financial system. [An HON. MEMBER: "Put them on the rates!"] If anybody suggests putting them on the rates, that is the most foolish suggestion. Why have the Government not redeemed their promise to take the able-bodied unemployed off the rates?—[Interruption.]

Mr. SPEAKER

If the hon. Member for Salford cannot sit still and not make a noise, he will have to leave the House.

Mr. ORMSBY-GORE

Why is it that many thousands of able-bodied unemployed are still being relieved, not by transitional benefit or out of the Insurance Fund, but out of the rates?

Mr. TOOLE

May I draw your attention, Mr. Speaker, to the fact that you referred to the hon. Member for Salford? I, also, am a Member for Salford.

Mr. SPEAKER

I did not know the designation of the hon. Member to whom I referred, whether it was East or West Salford.

Mr. HAYCOCK

I have not been interrupting.

Mr. SPEAKER

The hon. Member must do what I tell him.

Mr. ORMSBY-GORE

This is one of the most important questions which I want to put to the Minister. In introducing the Financial Resolution, the right hon. Lady declared definitely in regard to future legislation that is to take the place of our existing legislation as soon as the Royal Commission has reported on certain details. This is what she said: It is our considered view that a scheme of unemployment insurance should be a self-supporting scheme, that it should contain the elements of the tripartite contri- bution, that it should cover the able-bodied unemployed, and that we should do everything that we can to see that there is a fund which will cover the risks that it is intended to cover."—[OFFICIAL REPORT, 16th February, 1931; col. 911, Vol. 248.] It is frightfully important that there should no longer be any continuance of different methods of relieving able-bodied unemployed persons. At present we have large numbers on insurance, large numbers in receipt of an Exchequer grant, and large numbers on the rates, particularly in the most depressed areas where the rates can least afford to maintain the able-bodied unemployed, and these three categories, if any scheme is to be effective, have to be dealt with. I want to know if this declaration of policy of the Government means that all the able-bodied unemployed are to be included within the purview of the Government's policy? I have said that our chief complaint is that the right hon. Lady has asked for too long a time in which to carry on this hopelessly discredited system.

Everybody in the face of the Government's own evidence before the Royal Commission admits that, on financial and administrative grounds, the present system of unemployment insurance has to go completely. That is acknowledged on all sides. What is the excuse for having delayed so long in this matter? When they first came into office, the Government were obliged to deal at once with the problem of unemployed and unemployment relief. They had produced "Labour and the Nation," they had Eccleston Square at work in their research department solving all human evils, and when they came in they had absolutely nothing ready. The right hon. Lady came to the House and said that she had set up an Inter-departmental Committee which was going to grapple with this problem, and the Chancellor of the Exchequer wanted 12 months in order that that could be done. The Interdepartmental Committee met and went into it, but produced nothing. It had before it all the evidence now being produced before the Royal Commission, including the possibly mythical football player—an old case. All those facts were in the possession of the Government.

What was the next move? Finding that an Inter-departmental Committee was no help to them, partly because they did not—and let us be frank about it—then dare to face some of their own supporters with the inevitable recommendations of anybody who looks into this problem, they next decided to refer the matter to a nucleus of the Council of State. In order to keep party politics out of it, they asked two members of this party and two members of the Liberal party to come into conference with them. All though the summer Recess two Ministers of the Crown and those four members were meeting. Volumes of minutes were collected. The two Opposition parties submitted long memoranda and recommendations to the Government for their consideration, in the light of the evidence put before them by the Government. Those documents were received, but they were, of course, brushed aside, ignored, and the Government fell back upon the Royal Commission. That Commission was not set up to go into this problem, affecting more than any other the whole finance of this country, until December, 1930, that is to say, 18 months after the Labour Government took office. Eighteen months were lost in facing the financial consequences of going on with this system of borrowing money on a bankrupt fund to pay out week by week benefits to the unemployed.

Everybody agrees that the unemployed have to be relieved, but the whole question is: How can you do that without damaging the credit, the finance, the trade and the industry of this country? Until that question is faced we shall get no solution. It requires courage—and there is a vast mass of prejudice on all sides—to grasp this matter; but it is lack of statesmanship to endeavour to exploit it. It is a problem which all parties will have to face, and face squarely, in the interests of the financial stability of the country. [An HON. MEMBER: "What about the unemployed?"] Ever since the days of Queen Elizabeth the poor have had the right to relief, but that relief depends on how it is administered, and, above all, how the money is raised. We have listened to-night to speech after speech from the back benches opposite which shows that they still think there is a bottomless purse in this country, and that we can go on taxing the rich without its having any effect. It is so easy to imagine that one can redistribute wealth by the method of taxation.

Mr. McSHANE

Have not the unemployed—[Interruption.]

Mr. ORMSBY-GORE

I am not talking about the unemployed now.

Mr. McSHANE

But I am.

Mr. ORMSBY-GORE

It is I who am making the speech and not the hon. Member below the Gangway. I am endeavouring to reply to the point made by a good many hon. Members opposite that we can go on piling up taxation and distributing that revenue through the medium of the Exchequer without damaging the sources of wealth and of industry, and without breaking those economic laws by the proper operation of which production, and progress in production, can alone be maintained. It is easy by taxation to make everybody poorer; it is easy to make the rich poorer; but we cannot by taxation make the poor rich. We can have equality by the operation of the Socialist form of taxation, but do let us recognise, once and for all, that it is, and will always be, an equality of poverty. It is bound to be so.

Our objection to this Bill is that the right hon. Lady, though seeing the way in which we have been drifting through failure to grasp the fundamental problem of financing this distribution of relief to the unemployed, and through failure to deal with the matter and by putting it off to a Royal Commission, is only making it more difficult for any Chancellor of the Exchequer, more difficult also for every industry and for the nation itself vis-à-vis all other nations, to get out of the present economic depression and to get a chance of a restoration of that condition of things which alone will solve the unemployment problem, namely, the condition where men are employed in skilled industries producing goods of quality which they can sell in all the markets of the world.

Mr. R. A. TAYLOR

On a point of Order. With reference to your rebuke to the hon. Member for West Salford (Mr. Haycock), may I ask if you are quite sure, Mr. Speaker, that the interruption came from that hon. Member? Those of us who were near the hon. Member did not hear any interjection from him. Of course we are most anxious not to question your Ruling, and we are prepared to support you, Mr. Speaker, in maintaining order, but I raise this point in view of what happened on the Front Bench opposite the other day.

Mr. SPEAKER

I am not concerned with what happened the other day. I am only concerned with what happened during this Debate, and when I rebuke an hon. Member the only thing to which I can trust is my own observation. My own observation led me to believe, and I still think, that the hon. Member for West Salford (Mr. Haycock) was unduly interrupting.

Mr. HAYCOCK

I do not want to embarrass you, Mr. Speaker, and I do not mind taking punishment if I deserve it. There are many times when I have deserved punishment, but I think that to-night really you have been hitting the wrong head, and I do not think that I have deserved what I have received.

Miss BONDFIELD

I think we are bound to discount the disclosure of indignation, or rather the reality of the indignation of the last speaker if we take account for one moment of the record of his own Government. I want to answer the direct question which the right hon. Gentleman the Member for Stafford (Mr. Ormsby-Gore) put to me about an expression of opinion which he read and which I gave on Monday evening. I think that everything we have done has shown that we desire to try to move towards a scheme that will really cover the able-bodied unemployed, and all the able-bodied unemployed who are in the employable class, and this means those who are really desirous of work. I can give one striking illustration of the fact that we have moved in that direction. When we abolished the not genuinely seeking work Clause, we immediately relieved the local authorities of a large number of able-bodied unemployed who had been denied benefit under that Clause alone. We have constantly pressed towards that end, and it is my earnest hope that the recommendations of the Commission will bear in mind that aspect of the matter from the national standpoint.

Of course, I cannot say at this stage what line the Commission is going to take. It is conducting an entirely independent inquiry, and will take its own line upon the evidence, and we shall have to consider the recommendations when we see them. There are, however, one or two things that I must say in reply to three or four hon. Members who have spoken, both on Monday and to-day, with regard to the work of the commission. Here are the facts. The commission was appointed on the 9th December. It held its first meeting on the 16th December, and the first public sitting to take evidence was on the 19th December. The Ministry of Labour worked at great pressure to produce evidence in order that the sittings of the commission might be kept filled with evidence, but we have now reached a stage where, the official evidence being nearly exhausted, the commission have to wait for the evidence of the three important bodies without whose evidence they really could not come to conclusions. Those bodies are: the Confederation of Employers, the Trades Union Congress, and the local authorities.

It is really very unfair to these bodies to suggest that they can collect evidence and present it within a week or two after the invitation is sent to them. The invitation was sent to them in December, and, while the Government will certainly do all that they can to bring pressure to bear on them to deal with the matter, I do not think it can be held that they have taken any unreasonable time up to now in presenting their case, especially in view of the fact that they must consult their constituent bodies with regard to the points that they propose to bring forward. The chairman himself is not allowing anything to stand in the way of the work of the commission. He has authorised me to say that, as fast as evidence presents itself, it will be considered by the commission. Sittings are being held now twice a week, and the commission are also holding private sittings and are making visits to various parts of the Exchange machinery, to see at first hand the actual process and the nature of the problem that they have to tackle. I must say, on behalf of the commission, that, as far as I am able to judge, and I am very closely in touch with its work, it is working with as great speed as the circumstances of the case permit.

The hon. Member for Kidderminster (Mr. Wardlaw-Milne) and some other hon. Members, including the right hon. Gentleman the Member for Stafford, were evidently not in the House when I gave a very clear explanation of the impracticability of the Amendments moved by the Opposition. It is not a question of being afraid to face the House again; it is a question of the futility and waste of time involved in facing the House until I can bring before the House something on which it can act, and it is from that point of view that these figures and this period have been put into the Bill. A number of points of great interest have been raised, and I am very anxious to cover those that are really germane to the Bill. The hon. Member for East Birkenhead (Mr. White) raised two or three very interesting points with which I should like to deal. There was the question of manufacturers being required to give returns, and the degree to which they could give information. We have nothing of a statistical nature in that direction, but I will see whether it is possible to build up such information.

With regard to the development of subsidiary industries, that is a matter which is receiving very close attention in connection with the work of the Chief Industrial Adviser, as to the quality of which the House is very well informed. One of the points of his work is that he is trying to survey areas and make suggestions on the basis of the experience of one industry or one district which might with advantage be adopted by other districts and other industries. That is a very important question in relation to the expanding power of industry. In those areas—and I may take my own constituency as an illustration—which for a generation have excelled in a particular class of work, they have got the skill and they have got a very great deal of the environment which would enable them to develop subsidiary industries; but, because they have never done it, and do not particularly want to do it, because, perhaps I may say, they take such a pride in leading the way in their great staple industry—shipbuilding, for example—to come down to making small metal goods is "small beer" to them. At the same time, I agree that we have to do that kind of thing, and that they have the skill there lying idle which could be turned to account in subsidiary industries if they would pay attention to them. We are doing everything we can to stimulate that kind of development.

I was a little astonished at the statement made by the right hon. Gentleman the Member for Tamworth (Sir A. Steel-Maitland) when he discussed the experimental year. If he will refer to the OFFICIAL REPORT, he will find that the experimental year does not expire till March, 1931. It is true that I am three months behind if I do not get the Bill till the Autumn Recess, but it will be only three months, and not 12 as he suggested. I think he referred to the question of short time as another of these legal abuses. It is true that a very large number of employers take an attitude quite different from that which they took six or seven years ago on short time, but it is equally true that there are other large numbers of employers—I have had an opportunity of discussing the matter with different groups—who are confirmed in their belief that it is more economical to try to keep their staffs together by a system of short time than to reduce them by permanent dismissals.

I must confess that the evidence I have obtained is so conflicting that I myself am left undecided as to which side the balance falls. I held very strongly a little while ago that the problem of short time was to be judged very largely by the period of time in which it operated in a given shop, that short time was a very good thing for intermittent shortages of work; that is to say, where an order was finished and there was a falling off before the next order began, the period should be filled up by short time. Now we are facing a problem where industries are building up on a system of short time. That, surely, creates a different problem from the old problem of merely filling in between one order and the next, and it has, therefore, to be examined in its wider aspects. I hope we shall not even start to examine this question from the standpoint of right or wrong. It does not seem to me to be so much an ethical as an economic question. Is it good for industry, for efficiency? If we can settle which way is the best, we ought to be quite satisfied, whichever way it falls.

I welcome the adhesion of the right hon. Gentleman the Member for Epping (Mr. Churchill) in his definite statement that he stands for national responsibility—the responsibility of the Exchequer for the able-bodied unemployed. The Noble Lady the Member for Southend (Countess of Iveagh) wanted to know what is being done about juvenile training. I have here some figures giving the last returns. At 24th September, 1930, the number of individual juveniles who had since 1st April, 1930, attended junior instruction centres and classes (in the large majority of cases as a condition for the receipt of benefit) was about 47,000. The corresponding figure for the period 1st April, 1930, to 28th January, 1931, was 91,400, so that we have very considerably increased the number of juveniles in training. In addition to that, we have been able to get 4,000 juveniles who are in receipt of unemployment benefit into classes of different kinds, many of them evening classes where they have been too scattered to enable us to get a centre, and have been able to get them into touch with educational opportunities in connection with evening institutes and class work generally. I feel that the House will be glad to know that cooperation with education authorities is steadily progressing. It is true that, with regard to adult training centres, we have received a slight check in the capacity to place. We have been placing anything from 75 per cent. to 90 per cent. of certain categories which have gone to training centres. We are not placing quite such a high percentage, and we are in consequence slowing up entries into the centres. I regret it, but I think it is wise to do so in order to keep up the percentage of placings after training.

As regards women's training centres, we are expanding. I hope to get another training centre open at an early date in the North of England, and I am working towards the opening of a centre in the London area, coupled with the development of specialised exchange facilities which I think will help us in this direction.

Mr. ORMSBY-GORE

Can the right hon. Lady tell us what the new training centres are to be?

Miss BONDFIELD

Domestic training, such as we have at Leamington. We have such a long waiting list for Leamington that I think we are fully justified in expanding. With regard to the speech of the hon. Gentleman for Camlachie (Mr. Stephen), he referred to what appeared to be a difference between the statistics given to the Commission and the statistics I gave to this House in regard to married women. There is no real difference. They are in a different category. I gave this House statistics of special trades in which married women were employed, and I showed a change in the proportion of that class of women workers. The statistics given to the Commission covered the employment of women throughout the whole country, and showed that in certain areas where married women were not employed after marriage the percentage of women on the register has gone up. There is no real contradiction, but a difference in the areas.

With regard to the speech of the hon. Member for Rushcliffe (Sir H. Betterton), he made what seemed to be a singular slip for him. He is usually so very accurate on points of detail. Speaking of the numbers on transitional benefit, he said: The applicants obtain that benefit without any of the tests which are applicable either to insurance or to the recipients of those who obtain relief from the public assistance committees."—[OFFICIAL REPORT, 16th February, 1931; col. 924, Vol. 248.] That, obviously, is not so. The transitional benefit claim has to be tested by insurance tests. It is true that the contribution qualification is either eight stamps in the last two years or 30 stamps at any time. In addition the claimant has to satisfy the other conditions applying to standard benefit and the additional condition—which only applies to transitional benefit—that he is normally employed in insurable employment and will normally seek to obtain his livelihood by means of insurable employment. That applies an additional test to the transitional benefit members and it seems to have been a slip of memory on the hon. Gentleman's part.

There was one other point, smaller in itself but which was raised to some importance in the Debate, first by the hon. Member for Gorbals (Mr. Buchanan), and then by other speakers, namely the case of the professional football player. I want to make the matter perfectly clear, because the Government Actuary has been most unfairly accused of trumping up a case when he has done nothing of the kind. The situation is that in reading decisions I am frequently confronted with decisions which I frankly confess have been startling to me. A decision is given which suddenly brings in a category or shuts out one which previously had not been so recognised. In this case it was a player in the Northern Rugby Union League over the period 8th October, 1930, to the 11th February, 1931, a period of 18 weeks, in 16 of which benefit was drawn. It cannot be said what remuneration was received by the claimant for all the days of the week on which he played and therefore did not receive benefit. He was however entitled under the terms of his agreement to receive £3 5s. for each match in which he played and which was won by the club, £2 15s. for each drawn game and £2 10s. for each lost game. It is known that in two weeks in which he drew benefit he received £6 10s. for playing football, when he won two matches, and in several weeks he played two days a week. It was not intended to suggest a wholesale legal abuse, although there are numbers of football players working under the Northern county agreement, and in accordance with this decision any of these football players might be put in the same position as this man. It was intended not as a complaint but to direct attention to the importance of the question in order that we might be satisfied whether it is to continue in the law or not. Therefore, it is just to illustrate a particular point. I am perfectly certain neither the Northern Counties Football Association nor any of the players would imagine we desired to cast any slur on them—nothing of the kind was in our minds.

The hon. and gallant Member for Kelvingrove (Major Elliot) paid me the honour of referring to what he said was a pledge that I gave to this House in regard to the Government's policy. He said amongst other things: she said, 'We lay it down as absolute that the fund shall be self-supporting and balance; that the tri-partite basis of contribution shall be maintained and that provision outside the scheme must be made for those who are able-bodied unemployed' and so on."—[OFFICTAL REPORT, 16th February, 1931; col. 1008, Vol. 248.] I would only direct his attention to the words the hon. Member actually read to-night. I want to make it plain, because it is very important. It shows the fundamental difference between the two. What I said was: It is our considered view that a scheme of unemployment insurance should be a self-supporting scheme, that it should contain the elements of the tri-partite contribution; that it should cover the able-bodied unemployed, and that we should do everything that we can to see that there is a fund which will cover the risks that it is intended to cover. That has been my point from the very beginning. I have been asked to administer the Act and pay benefits under a legal obligation from a fund which has never been properly financed; that is the point I make in this paragraph.

The other point I want to raise—and it is the last one of importance in relation to the Bill—is again one raised by the hon. Member for Gorbals (Mr. Buchanan) in which he suggested that a secret letter had been sent out to local authorities. Really it is only by the wildest stretch of Celtic imagination that you can call that a secret document. The terms of reference of the Commission require them to make recommendations with regard to the arrangements which should be made outside the insurance scheme for the unemployed who are capable of and available for work. That is the phrase used in the terms of reference. The point arose, as the hon. Member said, because local authorities are to-day dealing with some cases of able-bodied. They have experience of dealing with them, and in order that the various local authorities who are going to give evidence should not wander all over the shop the Commission compiled a questionnaire, not to confine them to the questionnaire but to give them a sort of lead as to points upon which they would ask questions. It is hoped that the local authorities will deal with the points and give information of their experience to the Commission and any suggestions they can make as to any better method of dealing with the able-bodied unemployed who for any reason whatever cannot be, or are not, included within any insurance scheme.

I think that I have cleared up most of the questions that were raised. Perhaps I have half a minute left to deal with another matter. We have to recognise on this question of the care of the able-bodied—

Mr. GRACE

rose—

Mr. SPEAKER

If the right hon. Lady does not give way, the hon. Member must resume his seat.

Miss BONDFIELD

I want to conclude with one quotation from the right hon. Member for Epping (Mr. Churchill), because it seems to me quite an apt ending to this Debate: It is strange indeed that production which involves so much effort and skill should virtually be unlimited, and consumption which rests upon the boundless desires and appetites of human beings should lag behind it. Many experiments have been made and many of them have proved disastrous. I do not attempt to solve the riddle, but I am bound to say that I do not believe that the key to increasing the consuming power will ever be found apart from a proportionate increase in the economic earning powers of the individual."—[OFFICIAL REPORT, 4th April, 1930; cols. 1727–8, Vol. 237.] We have come back to that point all the time. In this de-sire to get economy, we must never forget that the worst way of dealing with it is to reduce the purchasing power.

11.0 p.m.

Mr. GRACE

The right hon. Lady has referred to the risks which she has to administer. Who has brought about the risks which she has to administer? The Government are like the Bing Boys. They came into office, they stayed, they looked, they listened, and they have done nothing to alter the present conditions in the country. She referred to the Northern Union footballer who for eight months was receiving the dole, and was able to win three matches. I ask her whether at that time he was not a person fit to work, and whether he ought not to have been working instead of receiving the dole? Perhaps she will be good enough to answer that question.

Mr. SMITHERS

If the House will allow me for a few minutes, I should like to say something from a non-party point of view. [HON. MEMBERS: "Oh!"] I assure hon. Members that I have something very sincere to say. Without desiring to go into the details of unemployment insurance, the fact remains that if we pass this Bill the money will have to be raised. A sum of £20,000,000 will have to be raised, and it is of the utmost importance to the country as a whole and the credit of the country that nothing should be done or said to injure the credit of the country and the power of the Chancellor of the Exchequer to raise the money. As the right hon. Member for Epping (Mr. Churchill) said to-night, we must know no party in maintaining the country's credit. I am sorry that the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) is not in his place. I know from my own business experience what I am talking about. The Chancellor of the Exchequer made a courageous speech last Wednesday, which was followed by a speech from the right hon. Member for Carnarvon Boroughs, on Thursday. I will not go into that speech in detail, but it is my sincere conviction that the effect of that speech was to knock down the price of gilt-edged securities by three per cent. Speaking roughly, about £7,000,000,000 of British credit has been depreciated by three per cent. since the right hon. Member for Carnarvon made his speech.

Mr. SANDHAM

He ought to be locked up.

Mr. SMITHERS

I quite agree.

Mr. ERNEST BROWN

Who made you a judge? This is a non-party speech!

Mr. SMITHERS

I want to call attention to the necessity for doing nothing which will injure the credit of the country. I was only answering an interjection and my real feelings were dragged out of me. I would remind hon. Members who are intolerant of any reductions in unemployment benefit or wages that the number of applications for a £20,000,000 Vote is limited and although this country is greater and richer than Australia we are heading in the same direction. If we are not careful it will not be a question of how much benefit we can pay or what wages we can pay but whether we shall be able to pay any benefit or any wages.

Mr. J. JONES

I have listened to a lot of this Debate, and the more I hear and the more I read the less I know. Unemployment has been talked about to-night from the standpoint of insurance. May I remind hon. Members that the Unemployment Insurance Act was the best Measure of insurance, so far as they are concerned, that has ever been passed. It was not insurance against unemployment, but against revolution. What was one of the first acts of hon. Members opposite at the end of the War? It was to bring all ex-Service men into the pale of insurance. Why? Because they had an object lesson in other countries. Soldiers were returning borne, men who had gone through the valley of the shadow, gone through Hell, with nothing to look forward to, and they were likely to be dangerous. You all became generous. Now you have forgotten the War, and all the circumstances arising out of it. What about a land fit for heroes to live in? You all subscribed to it. [Interruption.] The right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) has been the victim, and he is a handsome looking one. Now you have to be a hero to get a living in the land.

You are finding fault with the unemployed women. What did you do with them in the War? When their husbands went out you called them into the factories. They were good enough to use in times of war, and they are good enough to abuse in times of peace. If women were good enough in war time to be brought into the reserves of the nation they are good enough in times of peace to be looked upon as something better than the description I have heard given of them to-night. I am not here to argue details. The City of London is a magnificent place. It is doing very well. It can always find money when it wants it, if it robs the people to get it. There is another city, Glasgow, and there 12 of the greatest financiers cannot get bail. Yet men get on their hind legs in the City of London and talk to us as if we were a lot of "mugs." I know nothing of finance; I know only the want of it. Thank Heaven, I have no one's money but my own.

We are paying out £100,000,000 a year on unemployment. The workman cannot argue about it. He has to work and pay and die. Where does the employer get the money that he pays? He puts the cost of production on the article that he sells, and he gets it back from whom? From Phil Garlic. Then the State also pays. Who is the State? The workers are the State. The workman, after all, has to maintain the whole combination. "The King rules over all, the soldier fights for all, the lawyer pleads for all, and the workman pays for all." Some people suggest that 300,000 people should be knocked off the unemployment bene- fit roll. Where are they to go? To the local authorities, to the public assistance committees. It means £20,000,000 off the national exchequer and £20,000,000 on the local exchequer. We are not having it. The Bill does not go far enough. We are to-day paying £1,200,000,000 a year to keep the rich unemployed. I have been looking at the figures and I have found that when I compare the number of unemployed with their dependants in both ranks of society they are about the same, that is 5,000,000 in each case.

There are, as I say, 5,000,000 rich unemployed—people who have never worked and who never will work, if they can help it. But they do not go to the Employment Exchanges to draw doles. They send for their bankers and their brokers and draw rent, interest and profits. They do not call it a "dole"; it is a, respectable income, and it is costing us £1,200,000,000 a year, and is increasing.

The City of London could raise £20,000,000 for the Government of India the other day in a few hours, although we are told that India is in a depressed condition and although there is great political trouble in India. But the financial experts say that there is no money. Why, if the devil himself were to float a loan to-morrow and guarantee 5 per cent. interest on the flames of hell, it would be taken up. It has been said that the unemployed poor are an asset to the nation and the unemployed rich are a liability. The sooner we get rid of that liability the better, and if this Bill will help the unemployed poor to assert themselves in the affairs of the nation, then we shall compel these people who have been insulting the class to which I belong to justify their existence.

Question put, "That the word 'now stand part of the Question."

The House divided: Ayes, 279; Noes, 218.

Division No. 154.]	AYES.	[11.17 p.m.
Adamson, Rt. Hon. W. (Fife, West)	Cocks, Frederick Seymour	Harbord, A.
Adamson, W. M. (Staff., Cannock)	Compton, Joseph	Hardle, George D.
Addison. Rt. Hon. Dr. Christopher	Cove, William G.	Harris, Percy A.
Aitchison, Rt. Hon. Craigie M.	Cowan, D. M.	Hartshorn, Rt. Hon. Vernon
Alexander, Rt. Hon. A. V. (Hillsbro')	Cripps, Sir Stafford	Hastings, Dr. Somerville
Alpass, J. H.	Daggar, George	Haycock, A. W.
Ammon, Charles George	Dallas, George	Hayday, Arthur
Angell, Sir Norman	Dalton, Hugh	Hayes, John Henry
Arnott, John	Davies, Rhys John (Westhoughton)	Henderson, Rt. Hon. A. (Burnley)
Aske, Sir Robert	Day, Harry	Henderson, Arthur, Junr. (Cardiff, S.)
Attlee, Clement Richard	Denman, Hon. R. D.	Henderson, Thomas (Glasgow)
Ayles, Walter	Dudgeon, Major C. R.	Henderson, W. W. (Middx., Enfield)
Baker, John(Wolverhampton, Bliston)	Dukes, C.	Herriotts, J.
Baldwin, Oliver (Dudley)	Ede, James Chuter	Hirst, G. H. (York W. R. Wentworth)
Barnes, Alfred John	Edge, Sir William	Hirst, W. (Bradford, South)
Barr, James	Edmunds, J. E.	Hoffman, P. C.
Batey, Joseph	Egan, W. H.	Horrabin, J. F.
Benn, Rt. Hon. Wedgwood	Elmley, Viscount	Hudson, James H. (Huddersfield)
Bennett, Sir E. N. (Cardiff, Central)	Foot, Isaac	Isaacs, George
Bennett, William (Battersea, South)	Forgan, Dr. Robert	Jenkins, Sir William
Benson, G.	Freeman, Peter	John, William (Rhondda, West)
Bevan, Aneurin (Ebbw Vale)	Gardner, B. W. (West Ham, Upton)	Johnston, Thomas
Birkett, W. Norman	George, Rt. Hon. D. Lloyd (Car'vn)	Jones, F. Llewellyn- (Flint)
Bondfield, Rt. Hon. Margaret	George, Major G. Lloyd (Pembroke)	Jones, Henry Haydn (Merioneth)
Bowen, J. W.	George, Megan Lloyd (Anglesea)	Jones, J. J. (West Ham, Silvertown)
Bowerman, Rt. Hon. Charles W.	Gibbins, Joseph	Jones, Rt. Hon. Leif (Camborne)
Broad, Francis Alfred	Gibson, H. M. (Lancs, Mossley)	Jones, Morgan (Caerphilly)
Bromfield, William	Gill, T. H.	Jowett, Rt. Hon F. W.
Bromley, J.	Gillett, George M.	Jowitt, Sir W. A. (Preston)
Brooke, W.	Glassey, A. E.	Kedward, R. M. (Kent, Ashford)
Brothers, M.	Gossling, A. G.	Kelly, W. T.
Brown, C. W. E. (Notts. Mansfield)	Gould, F.	Kennedy, Rt. Hon. Thomas
Brown, Ernest (Leith)	Graham, D. M. (Lanark, Hamilton)	Kenworthy, Lt.-Com. Hon. Joseph M.
Brown, Rt. Hon. J. (South Ayrshire)	Graham, Rt. Hon.Wm. (Edin.,Cent.)	Kinley, J.
Brown, W. J. (Wolverhampton, West)	Granville, E.	Knight, Holford
Buchanan, G.	Gray, Milner	Lang, Gordon
Burgess, F. G.	Greenwood, Rt. Hon. A. (Colne)	Lansbury, Rt. Hon. George
Burgin, Dr. E. L.	Grenfell, D. R. (Glamorgan)	Lathan, G.
Caine, Derwent Hall-	Griffith, F. Kingsley (Middlesbro' W.)	Law, A. (Rossendale)
Cameron, A. G.	Griffiths, T. (Monmouth, Pontypool)	Lawrie, Hugh Hartley (Stalybridge)
Carter, W. (St. Pancras, S.W.)	Groves, Thomas E.	Lawson, John James
Charleton, H. C.	Grundy, Thomas W.	Lawther, W. (Barnard Cattle)
Chater, Daniel	Hall, F. (York, W.R., Normanton)	Leach, W.
Church, Major A. G.	Hall, G. H. (Merthyr Tydvil)	Lee, Frank (Derby, N.E.)
Clarke, J. S.	Hall, J. H. (Whitechapel)	Lee, Jennie (Lanark, Northern)
Cluse, W. S.	Hall, Capt. W. G. (Portsmouth, C.)	Lees, J.
Clynes, Rt. Hon. John R.	Hamilton, Mary Agnes (Blackburn)	Lindley, Fred W.
Lloyd, C. Ellis	Oliver, P. M. (Man., Blackley)	Snell, Harry
Logan, David Gilbert	Owen, Major G. (Carnarvon)	Snowden, Rt. Hon. Philip
Longbottom, A. W.	Palin, John Henry.	Snowden, Thomas (Accrington)
Longden, F.	Paling, Wilfrid	Sorensen, R.
Lovat-Fraser, J. A.	Palmer, E. T.	Stamford, Thomas W.
Lunn, William	Perry, S. F.	Stephen, Campbell
MacDonald, Rt. Hon. J. R. (Seaham)	Pethick-Lawrence, F. W.	Stewart, J. (St. Rollox)
MacDonald, Malcolm (Bassetlaw)	Phillips, Dr. Marion	Strachey, E. J. St. Loe
McElwee, A.	Pole, Major D. G.	Strauss, G. R.
McEntee, V. L.	Potts, John S.	Sullivan, J.
McGovern, J. (Glasgow, Shettleston)	Price, M. P.	Sutton, J. E.
McKinlay, A.	Pybus, Percy John	Taylor, R. A. (Lincoln)
MacLaren, Andrew	Quibell, D. J. K.	Taylor, W. B. (Norfolk, S.W.)
Maclean, Sir Donald (Cornwall, N.)	Ramsay, T. B. Wilson	Thomas, Rt. Hon. J. H. (Derby)
MacNeill-Weir, L.	Rathbone, Eleanor	Thurtle, Ernest
McShane, John James	Raynes, W. R.	Tillett, Ben
Malone, C. L'Estrange (N'thampton)	Richards, R.	Tinker, John Joseph
Mander, Geoffrey le M.	Richardson, R. (Houghton-le-Spring)	Toole, Joseph
Mansfield, W.	Ritson J.	Tout, W. J.
Marcus, M.	Romerli, H. G.	Townend, A. E.
Marley, J.	Roabotham, D. S. T.	Trevelyan, Rt. Hon. Sir Charles
Marshall, Fred	Rowson, Guy	Vaughan, David
Mathers, George	Salter, Dr. Alfred	Viant, S. P.
Matters, L. W.	Samuel Rt. Hon. Sir H. (Darwen)	Walkden, A. G.
Melville, Sir James	Samuel, H. Walter (Swansea, West)	Walker, J.
Messer, Fred	Sanders, W. S.	Wallace, H. W.
Middleton, G.	Sandham, E.	Walters, Rt. Hon. Sir J. Tudor
Mills, J. E.	Sawyer, G. F.	Watson, W. M. (Dunfermline)
Milner, Major J.	Scrymgeour, E.	Watts-Morgan, Lt.-Col. D. (Rhondda)
	Sexton, Sir James
Montague, Frederick	Shakespeare, Geoffrey H.	Wellock, Wilfred
Morgan, Dr. H. B.	Shepherd, Arthur Lewis	Welsh, James (Paisley)
Morley, Ralph	Sherwood, G. H.	West, F. R.
Morris, Rhys Hopkins	Shield, George William	Westwood, Joseph
Morrison, Rt. Hon. H. (Hackney, S.)	Shiels, Dr. Drummond	White, H. G.
Morrison, Robert C. (Tottenham, N.)	Shillaker, J. F.	Whiteley, Wilfrid (Birm., Ladywood)
Mort, D. L.	Shinwell, E.	Wilkinson, Ellen C.
Mosley, Lady C. (Stoke-on-Trent)	Short, Alfred (Wednesbury)	Williams, Dr. J. H. (Llanelly)
Mosley, Sir Oswald (Smethwick)	Simmons, C. J.	Williams, T. (York, Don Valley)
Muff, G.	Sinclair, Sir A. (Caithness)	Wilson, C. H. (Sheffield, Attercliffe))
Muggeridge, H. T.	Sitch, Charles H	Wilson, J. (Oldham)
Murnin, Hugh	Smith, Ben (Bermondsey, Rotherhithe)	Wilson, R. J. (Jarrow)
Nathan, Major H. L.	Smith, Frank (Nuneaton)	Winterton, G. E.(Leicester,Loughb'gh)
Naylor, T. E.	Smith, H. B. Lees (Keighley)	Wise, E. F.
Newman, Sir R. H. S. D. L. (Exeter)	Smith, Rennie (Penistone)	Wood, Major McKenzie (Banff)
Noel Baker, P. J.	Smith, Tom (Pontefract)
Oldfield, J. R.	Smith, W. R. (Norwich)	TELLERS FOR THE AYES:—
Oliver, George Harold (Ilkeston)	Mr. Allen Parkinson and Mr. Charles Edwards.
NOES
Acland-Troyte, Lieut.-Colonel	Bullock, Captain Malcolm	Dixey, A. C
Ainsworth, Lieut.-Col. Charles	Burton, Colonel H. W.	Duckworth, G. A. V.
Albery, Irving James	Butler, R. A.	Dugdale, Capt. T. L.
Alexander, Sir Wm. (Glasgow, Cent'l)	Cadogan, Major Hon. Edward	Eden, Captain Anthony
Allen, Sir J. Sandeman (Liverp'l., W.)	Campbell, E. T.	Edmondson, Major A. J.
Amery, Rt. Hon. Leopold C. M. S.	Carver, Major W. H.	Elliot, Major Walter E.
Ashley, Lt.-Col. Rt. Hon. Wilfrid W.	Castle Stewart, Earl of	Erskine, Lord (Somerset, Weston-s.M.)
Astor, Maj. Hn. John J. (Kent, Dover)	Cautley, Sir Henry S.	Everard, W. Lindsay
Atholl, Duchess of	Cayzer, Sir C. (Chester, City)	Falle, Sir Bertram G.
Atkinson, C.	Cayzer, Maj. Sir Herbt. R.(Prtsmth,S.)	Ferguson, Sir John
Baillie-Hamilton, Hon. Charles W.	Cazalet, Captain Victor A.	Fermoy, Lord
Baldwin, Rt. Hon. Stanley (Bewdley)	Chamberlain,Rt.Hn.Sir J.A.(Birm.,W.)	Fielden, E. B.
Balfour, George (Hampstead)	Chamberlain, Rt. Hon. N.(Edgbaston)	Fison, F. G. Clavering
Balfour, Captain H. H. (I. of Thanet)	Christie, J. A.	Ford, Sir P. J.
Balniel, Lord	Churchill, Rt. Hon. Winston Spencer	Forestler-Walker, Sir L.
Beamish, Rear-Admiral T. P. H.	Clydesdale, Marquess of	Fremantle, Lieut.-Colonel Francis E.
Beaumont, M. W.	Cobb, Sir Cyril	Galbraith, J. F. W.
Bellairs, Commander Carlyon	Cockerill, Brig.-General Sir George	Ganzoni, Sir John
Betterton, Sir Henry B.	Cohen, Major J. Brunei	Gault, Lieut.-Col. A. Hamilton
Bevan, S. J. (Holborn)	Colfox, Major William Philip	Glyn, Major R. G. C.
Birchall, Major Sir John Dearman	Colman, N. C. D.	Gower, Sir Robert
Bird, Ernest Roy	Colville, Major D. J.	Grace, John
Bourne, Captain Robert Croft	Courtauld, Major J. S.	Graham, Fergus (Cumberland, N.)
Bowater, Col. Sir T. Vansittart	Courthope, Colonel Sir G. L.	Grattan-Doyle, Sir N.
Bowyer, Captain Sir George E. W.	Cranborne, Viscount	Greaves-Lord, Sir Walter
Boyce, Leslie	Crichton-Stuart, Lord C.	Greene, W. P. Crawford
Bracken, B.	Croft, Brigadier-General Sir H.	Grenfell, Edward C. (City of London)
Braithwaite, Major A. N.	Groom-Johnson, R. P.	Gretton, Colonel Rt. Hon. John
Brass, Captain Sir William	Culverwell, C. T. (Bristol, West)	Gritten, W. G. Howard
Briscoe, Richard George	Dalkeith, Earl of	Guinness, Rt. Hon. Walter E.
Brown, Col. D. C. (N'th'l'd., Hexham)	Davidson, Rt. Hon. J. (Hertford)	Gunston, Captain D. W.
Brown, Brig.-Gen.H.C.(Berks, Newb'y)	Davies, Maj. Geo. F. (Somerset, Yeovil)	Hacking, Rt. Hon. Douglas H.
Buchan-Hepburn, P. G. T.	Davison, Sir W. H. (Kensington, S.)	Hall, Lieut-Col. Sir F. (Dulwich)
Buchan, John	Dawson, Sir Philip	Hamilton, Sir George (Ilford)

Hammersley, S. S.	Mitchell-Thomson, Rt. Hon. Sir W.	Smith-Carington, Neville W.
Hanbury, C.	Moore, Sir Newton J. (Richmond)	Smithers, Waldron
Hannon, Patrick Joseph Henry	Moore, Lieut.-Colonel T. C. R. (Ayr)	Somerville, A. A. (Windsor)
Hartington, Marquess of	Morrison, W. S. (Glos., Cirencester)	Somerville, D. G. (Willesden, East)
Harvey, Major S. E. (Devon, Totnes)	Muirhead, A. J.	Southby, Commander A. R. J.
Haslam, Henry C.	Nelson, Sir Frank	Spender-Clay, Colonel H.
Heneage, Lieut.-Colonel Arthur P.	Newton, Sir D. G. C. (Cambridge)	Stanley, Hon. O. (Westmorland)
Herbert, Sir Dennis (Hertford)	Nicholson, O. (Westminster)	Steel-Maitland, Rt. Hon. Sir Arthur
Hills, Major Rt. Hon. John Waller	Nicholson, Col. Rt. Hn. W. G. (Ptrsf'ld)	Stewart, W. J. (Belfast, South)
Horne, Rt. Hon. Sir Robert S.	Nield, Rt. Hon. Sir Herbert	Stuart, Hon. J. (Moray and Nairn)
Howard-Bury, Colonel C. K.	O'Connor, T. J.	Sueter, Rear-Admiral M. F.
Hudson, Capt. A. U. M. (Hackney, N.)	O'Neill, Sir H.	Thomas, Major L. B. (King's Norton)
Hurd, Percy A.	Ormsby-Gore, Rt. Hon. William	Tinne, J. A.
Hurst, Sir Gerald B.	Peake, Capt. Osbert	Titchfield, Major the Marquess of
Iveagh, Countess of	Penny, Sir George	Todd, Capt. A. J.
Jones, Sir G. W. H. (Stoke New'gton)	Peto, Sir Basil E. (Devon, Barnstaple)	Train, J.
Kindersley, Major G. M.	Power, Sir John Cecil	Tryon, Rt. Hon. George Clement
Lamb, Sir J. Q.	Pownall, Sir Assheton	Turton, Robert Hugh
Lambert, Rt. Hon. George (S. Molton)	Purbrick, R.	Vaughan-Morgan, Sir Kenyon
Lane Fox, Col. Rt. Hon. George R.	Ramsbotham, H.	Wallace, Capt. D. E. (Hornsey)
Leighton, Major B. E. P.	Rawson, Sir Cooper	Ward, Lieut.-Col. Sir A. Lambert
Lewis, Oswald (Colchester)	Reid, David D. (County Down)	Wardlaw-Milne, J. S.
Little, Sir Ernest Graham	Remer, John R.	Warrender, Sir Victor
Liewellin, Major J. J.	Richardson, Sir P. W. (Sur'y, Ch'ts'y)	Waterhouse, Captain Charles
Locker-Lampson, Rt. Hon. Godfrey	Roberts, Sir Samuel (Ecclesall)	Wayland, Sir William A.
Locker-Lampson, Com. O.(Handsw'th)	Rodd, Rt. Hon. Sir James Rennell	Wells, Sydney R.
Lockwood, Captain J. H.	Ross, Ronald D.	Williams, Charles (Devon, Torquay)
Long, Major Hon. Eric	Ruggles-Brise, Lieut.-Colonel E. A.	Wilson, G. H. A. (Cambridge U.)
Lymington, Viscount	Russell, Alexander West (Tynemouth)	Windsor-Clive, Lieut.-Colonel George
McConnell, Sir Joseph	Salmon, Major I.	Winterton, Rt. Hon. Earl
Macdonald, Capt. P. D. (I. of W.)	Samuel, A. M. (Surrey, Farnham)	Withers, Sir John James
Macquisten, F. A.	Sandeman, Sir N. Stewart	Wolmer, Rt. Hon. Viscount
Maitland, A. (Kent, Faversham)	Sassoon, Rt. Hon. Sir Philip A. G. D.	Womersley, W. J.
Makins, Brigadier-General E.	Savery, S. S.	Wood, Rt. Hon. Sir Kingsley
Margesson, Captain H. D.	Shepperson, Sir Ernest Whittome	Wright, Brig.-Gen. W. D. (Tavist'k)
Marjoribanks, Edward	Simon, Rt. Hon. Sir John	Young, Rt. Hon. Sir Hilton
Mason, Colonel Glyn K.	Sinclair, Col. T. (Queen's U., Belfast)
Meller, R. J.	Skelton, A. N.	TELLERS FOR THE NOES.—
Merriman, Sir F. Boyd	Smith, Louis W. (Sheffield, Hallam)	Major Sir George Hennessy and Sir Frederick Thomson.
Mitchell, Sir W. Lane (Streatham)	Smith, R. W.(Aberd'n & Kinc'dine, C.)

Bill read a Second time.

Bill committed to a Committee of the Whole House for To-morrow.—[Mr. Kennedy.]