UNEMPLOYMENT INSURANCE [ADVANCES AND PAYMENTS].

HC Deb 22 June 1931 vol 254 cc67-193

Considered in Committee under Standing Order No. 71A.

[Mr. DUNNICO in the Chair.]

Motion made, and Question proposed,

"That it is expedient—

1. (a) to raise to one hundred and fifteen million pounds the limit on the amount of the advances to he made by the Treasury to the Unemployment Fund under Section five of the Unemployment Insurance Act, 1921, as amended by subsequent enactments, which may be outstanding during the deficiency period; and
2. (b) to provide that the period of twelve months mentioned in Sub-section (2) of Section fourteen of the Unemployment Insurance Act, 1927 (which, as extended by subsequent enactments, is now a period of forty-two months), shall be further extended to forty-eight months; and
3. (c) to authorise the payment into the Unemployment Fund out of moneys provided by Parliament of—
   1. (i) such amounts as may be determined by the Minister of Labour, with the concurrence of the Treasury, to be approximately equivalent to the aggregate amount of the sums which from time to time become payable by way of benefit under Sub-section (2) of the said Section fourteen by virtue of the further extension as aforesaid of the said period; and
   2. (ii) an amount approximately equivalent to the expenses incurred by the Minister of Labour in administering the benefits which become payable as aforesaid."—(King's Recommendation signified.) — [Miss Bondfield.]

Sir HENRY BETTERTON

May I ask, Mr. Chairman, whether you will allow a general discussion on both these Resolutions on the understanding that at the end of the Debate there is no further discussion. There would, of course, be two Divisions. That procedure has been followed on previous occasions. In the second place, I desire to ask your guidance as to whether you will be good enough to give us a Ruling as to the scope of the Debate.

The DEPUTY-CHAIRMAN

In answer to the first question, there is only one Resolution, so the question does not really arise. With regard to the larger question, I have said on previous occasions that the Chair, subject to the Standing Orders and the Procedure of the House, is always willing to meet the convenience of the Committee, but I do want to make a mild protest against the Chair being placed in the position in which it is placed this afternoon. I am placed in the position of having either to deprive the Committee of what is a general wish to debate a subject, or, on the other hand, to set what I consider to be rather a bad precedent. I feel that in all the circumstances a general Debate should be allowed; but, on the other hand, it does put the Chair in the very difficult position of having to allow a discussion of what is contained in a Bill which is introduced. I refer to the Anomalies Bill. While it will not be proper to discuss that Bill on a Motion like this, the Standing Order with regard to anticipation is not quite so rigid in Committee as it is in the House. But it is most improper to discuss the subject-matter of a Bill that is to be subsequently debated in the House on a Money Resolution before the Committee. In acquiescing in what I believe to be the general wish of the Committee, I want to say quite frankly that, from the point of view of the Chair, the precedent is not one that ought to be followed.

Sir H. BETTERTON

When I mentioned two Resolutions, I meant the two Amendments to the one Resolution. We can have a general discussion on both Amendments?

Lieut.-Commander KENWORTHY

Do I understand that, while it would be improper to discuss what is known as the Anomalies Bill in any detail, there will not be any objection to discussing on the Financial Resolution to vote more money what is in the Anomalies Bill?

The DEPUTY-CHAIRMAN

I am afraid that that cannot be allowed. I think the Committee had better avoid making any detailed reference to the Anomalies Bill in Committee and reserve their speeches on this question until the Second Reading of the Bill. What I suggest this afternoon is that without discussing the Bill the Minister might make a broad and comprehensive statement on the Government's policy and on that statement the discussion could take place.

Mr. ERNEST BROWN

Surely the Committee will be entitled, not to discuss the details of the Bill, but its aims? Seeing that the Bill is based on certain evidence given before the Royal Commission would that not be quite in order, because that evidence really is at the basis of the Money Resolution?

The DEPUTY-CHAIRMAN

The Bill cannot be discussed in detail but I am placed in a position to-day that I must allow the report of the Commission to be discussed, even though it may raise certain matters contained in the Bill. It would have simplified matters very much if a White Paper outlining the Government's policy had been issued and the Bill introduced later.

The MINISTER of LABOUR (Miss Bondfield)

Let me say how greatly I appreciate the wide Ruling you have given, Mr. Deputy-Chairman, because it is my great desire to be able to deal with the Financial Resolution in relation to the recommendations of the Royal Commission's Report. I wanted to have an opportunity of dealing with those recommendations under the three heads contained in that report. The nature of the Financial Resolution is all too familiar to the Committee. It is to extend the borrowing power by £25,000,000, namely, from £90,000,000 to £115,000,000; and to extend the transitional period by six months as from 18th October, The present financial position of the fund is as follows: We have, by the last Act passed in this House, borrowing powers up to £90,000,000. The outstanding debt on 13th June was £85,870,000. Borrowing powers, therefore, will be exhausted by the 8th or the latest the 9th of July. On a live register of 2,500,000 the estimated income of the fund is £44,550,000; and the estimated payments for ordinary benefit, administration and interest come to £84,000,000. The Government have each year strengthened the revenue resources of the fund, and, while the fund is now borrowing at a very great rate, it is not because of the legislation passed by the present Government. It is in spite of greatly enhanced revenues which have been placed at the service of the fund.

The immediate question that will arise in the minds of hon. Members is, how long I estimate that this extension of borrowing powers will last? What is the period covered by this extension? On the assumption that the cost of transitional benefit remains approximately as at present, and that the conditions for the receipt of benefit are unaltered, the position is that on an average live register of 2,500,000 this additional borrowing power will last until January, 1932. On a live register of 2,750,000 it will last until November, 1931. On a live register of 3,000,000 it will last until October, 1931. It is quite impossible, as Members of the Committee know, for me to give any firm figure—my Department has no control over that figure—but, taking the reports of the Board of Trade and other evidences as to the state of trade in the world and of the position in different countries of Europe, it is not possible for me to come to the Committee with any optimistic report. In addition to that there is the fact that, while I am glad to recognise that there is increasing activity in all directions among employers of labour and great aggregations of capital in seeing to the work of reorganisation, I must impress again upon the Committee the fact that there is always a time lag. Even if it is assumed that these forms of reorganisation, reconditioning and reconstruction will be effected this year, the lag between the displacement that takes place and the recovery of trade under the new system is bound to be such that we cannot place any reliance upon obtaining any advantage in that respect this year. For those two reasons, I put these very large figures before the Committee lo-day and the estimates of the possible size of the register.

4.0 p.m.

Let me turn for a moment to the financial recommendations of the majority report of the Royal Commission on Unemployment Insurance. If hon. Members turn to the document they will find that the Commission divide their recommendations under three heads—the financial provisions of insurance, the transitional period, and anomalies; and, if the Committee will permit me, I propose to follow that line of argument. In connection with the financial recommendations, the main recommendations are that there be an increase in contributions as follows: Employers 1d., employed persons 2d., the State 1½d. That would bring in a sum of £9,000,000. Then they propose a reduction in the ordinary rates of benefit by 2s., which would mean £7,600,000; a reduction in adult dependant's allowance of 1s., which would mean £1,100,000; and to limit the period of insurance benefit to 26 weeks. That is not a saving so much as a transference. It is a transference of £9,100,000 from the Insurance Fund to the Exchequer. Then it deals with certain special provisions for intermittent workers, casual and short-time workers, married women and seasonal workers, which, they estimate, would mean a further saving of £5,000,000. In all these calculations the Commission take the figure of 2,500,000 as the basis. The present figure is 2,603,000.

I want to stop at this point and deal with these figures, not so much from the standpoint of this House as from the standpoint of observers in other countries. There is very considerable misapprehension as to the meaning of these figures, and I want to emphasise what has often been emphasised before, both by myself and my predecessor, that the live register figure does not mean that 2,600,000 persons are permanently and continuously unemployed. Of those 2,603,000 persons, 1,845,000 are wholly unemployed; 643,000 are temporarily stopped; and 115,000 are casuals. We took an analysis of all the claimants to benefit in February last, and it is very important to emphasise this fact, that of all those claimants, 645,000 men, or 36.2 per cent. of the total number of men on the register, and 222,000 women, or 38.9 per cent. of the total number of women on the register, had been on the register continuously for not more than four weeks, and that in addition 42.7 per cent. men and 38 per cent. women had been on the register continuously for more than four but not more than 24 weeks.

Mr. O'CONNOR

The second percentage includes the first?

Miss BONDFIELD

No, the first percentage is of those who had not been out of work four weeks; the second percentage is of those out of work for over four weeks but under 24 weeks. If we turn to a still further analysis of the figures, we find that unemployment is largely concentrated in some of the basic industries of the country. Mining accounts for 314,000, textile trades for 431,000, and engineering and shipbuilding trades for 319,000, or 12 per cent., 18 per cent., and 16 per cent., respectively, of the total unemployed. These three trades alone account for over 1,000,000 of the unemployed.

The Government have given the most careful and anxious consideration to the interim Report of the Royal Commission, and it is my duty to state the policy of the Government on the whole situation. I can see Members of the Opposition sharpening their tomahawks and polishing their phrases in preparation for a vigorous verbal onslaught on the Government, following up what has already been done in the Press. But, behind it all, I can discern a lively satisfaction that it is we, and not they, who have to deal with the situation. Many of them last Tuesday must have been quaking in their shoes at the thought of having to face their constituents on this issue, and they must have been greatly relieved when the crisis passed and the imminent prospect of a General Election faded away. The Government are faced with the Report of the Royal Commission which, against the strong dissent of two of its Members, recommends two main things—increased contributions and decreased benefits. I am afraid the result would be that the contributions to be made from overburdened depressed industries would be increased, and, secondly, the standard of life of the most unfortunate of our fellow-countrymen would be lowered by the reduction of benefits. Further, more stringent conditions would be imposed which would result, in many cases, in forcing them back on the Poor Law, from which they have been rescued so recently and with so much difficulty.

These recommendations are made expressly as interim and emergency proposals, pending the further consideration by the Commission of the whole problem and the preparation of their final report, which may result in the construction of a wholly different scheme, to which the present proposal may have little or no relevance. Anything which was done now might have to be reconsidered. It is clear that the Commission has under consideration the possibility of fundamental changes in the scheme. In their report the Majority refer to a "reconstructed scheme," and say that one of the questions they will have to consider is "whether or not full maintenance is a desirable objective "—a question involving the whole basis of the scheme. They say, further, that they will have to consider the scope of the scheme, the best method of fixing rates of contribution, whether there should be variable rates of benefit, and whether: a method cannot be found by which.… the scheme can be kept adaptable to the changing needs of the industrial situation. A most important sentence, and one with which I most cordially agree. I have always held the view, in every Debate here, that what this House has got to face is not to cut down the benefits to the unemployed in accordance with some arbitrary financial line, but to find some adaptable means by which the Unemployment Fund can be financed. This, obviously, implies the possibility of great and far-reaching changes in the structure of the scheme, and the Government take the view that the proper time to consider the Commission's main recommendations is when these fundamental changes are also under consideration. Moreover, they are made at a time of unexampled economic depression, when we have a larger number of the population suffering miseries of unemployment than ever before, and when in the distressed areas in particular the prolonged depression has very largely exhausted any resources the unemployed had to fall back on.

In these circumstances, the Government feel that they cannot proceed with the main recommendations of the majority report until they have before them the final conclusions of the Commission. I am confident that every Member on these benches will support the Government whole-heartedly in that decision. In particular, with regard to increased contributions, the Government have consistently held the view that in times of economic difficulties such as the present no avoidable increased burden should be placed on industry—[An HON. MEMBER: "What about the Land Tax?"]—and for this reason the Government feel that to increase the contributions would be unhelpful to industry. With regard to benefits, the Government are not prepared at the present time to reduce the existing rates or the existing dependants' allowances. This is not the time to single out one class, and that the class which can least afford it, for a serious reduction in the already low level of subsistence. Our country is not so poor that it cannot afford to maintain its unemployed at least sufficiently well to preserve them from physical deterioration which would impair their efficiency when the time comes when their services are again needed. It is a gross libel on the working classes to suggest, as is so often done, that any substantial number of them prefer unemployment to work. In some articles that appeared in the "Times" last week setting out the views of a French economist on the causes of unemployment in this country was the following passage: During the period of falling wages, as soon as a certain level is reached he (that is the British workman) prefers to remain idle rather than work for a wage which would amount to little more than what he could get without working. As a generalisation in regard to the British workman, I want to say that that statement is absolutely false. The universal testimony of our exchange managers—and I have talked to hundreds of them on the subject—is that almost without exception the registered unemployed are hungry for work, and are ready and anxious to seize any opportunity to obtain it. We hear much in some quarters about the moral deterioration in the character of the working classes which is caused by the dole. If there is any deterioration, it is caused not by the dole but by the tragedy of unemployment, and as long as our modern civilisation continues to permit the extremes of wealth and poverty, and the over-production and under-consumption which we see all over the world today, we cannot abandon the unemployed victims of modern industrialism, and let them sink below the level of bare subsistence.

I am confident that the tide will turn, and that when it does we shall reap the reward of our financial sacrifices, and that we shall find ourselves in at least as favourable a position to take advantage of returning prosperity as those countries which have adopted the easier course of partial repudiation, and whose citizens might well pause before they attack the financial integrity and the undaunted character of the British people. After every great war there has been a long period of industrial depression. The road to recovery has always been hard and painful. Further sacrifices may be necessary. If so, we shall not fail to face them, but we shall not impose them only on the poorest and most helpless of our people. All classes will have to contribute, and we shall not forget the dictum of the "Times" in its leading article of the 10th instant on the Aus tralian position that a great national sacrifice …to be equitable must be accepted by every section of the nation. There was a very interesting illustration of the manner in which some sections of the community do not share in the sacrifice which is called for, to be found in the publication issued by the Liberal party—" How to tackle Unemployment." It will be remembered that the illustration was given that £1,000 lent in 1917–20 is worth to-day in terms of real values £1,333, so that the burden of interest has increased from 5 per cent. to 6⅔ per cent. I refer to that because I want also to refer to page 33 of the majority report in which they give a very interesting table of the cost-of-living, and I want to apply that some cost-of-living argument to the holders of fixed interest securities. The period taken is 1924–25. In that period the amount paid in interest on the National Debt was £305,000,000. The equivalent of this payment on 1st May, allowing for the fall in the cost-of-living, is about £256,000,000, and the amount that is estimated to be paid in 1930–31 is about £303,000,000. The difference between this amount and the 1924 equivalent is therefore about £47,000,000. That is to say, the holders of these fixed interest bearing securities have had their holdings appreciated by £47,000,000. The wage-earners have already been called upon to make very great sacrifices, and the unemployed of to-day were the wage-earners of yesterday. In the five months of 1931, the wages of 2,000,000 workers were reduced, and the total reduction in the wages of those 2,000,000 workers amounts to a net weekly decrease of £210,000.

I want to come back again to those articles in the "Times," because they are an attack upon Government policy. This French economist, M. Rueff, speaks of the rigidity of the dole, and I am sure that there must be budding economists in the Tory party, who have been lapping this up, in order to have arguments which will vary from the rather stale old line of tariffs. But there are such startling statements and inferences, calculated to influence public opinion against the proposals of the Government, that I feel they must be refuted, apart from the fact that the articles are an amazing revelation of the capitalist system. I want to quote just one or two passages from these articles. M. Rueff says: At that time (that is in 1923) there were 1,200,000 unemployed in England. In other words, the labour supply exceeded the demand by that number. Now, in spite of this"— I call attention to those words— wages suddenly ceased to decline. They have remained at the 1923 level ever since. … In actual fact, the wages level is the result of collective contracts, but these contracts would never have been observed by the workmen if they had not been sure of receiving an indemnity which differed little from their wages. Now what do those passages mean? I submit that they can only mean one thing—that the 1923 level of wages should have been reduced, and the wages to be reduced are in those industries which had already been reduced to a level little above what is called in the article "the dole." The wages of the miners, the engineers, the shipyard workers and the shipyard labourers should have been reduced, and, if you examine the articles carefully, you will find that there would have to be a 35 per cent. reduction. I do not think that any hon. Member opposite would like to stand for that. If they would, I challenge them to do so. In 1923, the wages curve, according to Rueff, encountered some obstacle, and I ask the Committee to mark these words——

Mr. O'CONNOR

On a point of Order. May I ask whether it is in order, in moving this Financial Resolution, to spend so much time in attacking an anonymous Frenchman who is writing for an English newspaper?

The DEPUTY-CHAIRMAN

I understood that the Committee desired to have a general discussion.

Miss BONDFIELD

I was dealing with the articles in the "Times." I was saying that in 1923 the wages curve encountered some obstacle which stopped its fall. These are the words used in the article about this obstacle: This obstacle was obviously unemployment insurance. [HON. MEMBERS: "What article?"] These articles appeared in the "Times," and there was a leading article in the "Times" directing attention to them.

Sir COOPER RAWSON

On a point of Order. May I ask the right hon. Lady if she will——

HON. MEMBERS

That is not a point of Order!

The DEPUTY-CHAIRMAN

I think that the Minister is entitled to make her statement, and, if there is anything out of order, I shall deal with it.

Sir C. RAWSON

Would you mind, Mr. Deputy-Chairman, listening to my request?

The DEPUTY-CHAIRMAN

The hon. Member has no right to insist on putting a question which interrupts a speech unless it is on a point of Order.

Sir C. RAWSON

My point of Order is that we ought to have this question presented from both sides, and a poster has been issued all over France blaming the Socialist Government——

The DEPUTY-CHAIRMAN

Order!

Miss BONDFIELD

Hon. Members opposite will be able to put their side of the case later. This article says that the obstacle which prevented the fall of wages in 1923 was unemployment insurance. Those are not my words. If unemployment insurance is the obstacle which has prevented wages falling to the starvation level, then it is one of the greatest tributes ever paid to the scheme. "Rigidity of wages" due to unemployment insurance is now, apparently, the cause of our troubles, but, when analysed, we find that it really means that employers are not free to impose an unlimited reduction of wages. There is one other passage which I want to quote, because it has a bearing on which I said just now.

Sir AUSTEN CHAMBERLAIN

Was that all part of the quotation? We on this side are unable to distinguish between the times when the right hon. Lady is reading from the Frenchman, and the times when she is reading her own speech.

Miss BONDFIELD

I thought I had made it clear, and that I had distinguished the quotation: This obstacle was obviously unemployment insurance. I am going to quote again from the article—the French article reproduced in "The Times": In a certain country in Eastern Europe the railway signals used to be worked by hand. A simple calculation was sufficient to show that in view of the low price of labour"— I want the Committee to mark those words— and the high rate of interest prevailing, the annual cost of the men required to work the signals was considerably less than would have been the interest charges on the capital required to mechanise the signals. Workers were plentiful and capital scarce. If, however, a minimum wage had been pegged slightly above the existing level, mechanical signals would undoubtedly have been installed and workmen discharged. I ask the House, what does that mean? It means that so long as you are permitted to pay sufficiently low wages, you are not to have mechanical improvements. That is the capitalist system. The capitalist system, according to these articles, offers either the lowest possible wages with no mechanical improvements, or mechanical improvements and unemployment. You can take your choice, but whichever you choose, you will not get your money. [Interruption.] I would not have laboured this, if "The Times" had not done so. I am advised that the diagram printed with both articles is very little more than an optical illusion and that it has no scientific basis. Since the beginning of 1923, that is to say during eight of the 12 years covered by the chart, the index of standard rates of wages has remained almost constant. Therefore, the effect of dividing the wages index by the price index has merely been to invert the price index. For these years, all that the diagram really shows is that when the price level is falling, trade, and consequently employment, is bad, and when it is rising, trade, and consequently employment, is good.

Captain CROOKSHANK

On a point of Order. Is it not a long established practice in the House of Commons that speeches should not be read; and does it not follow that when the right hon. Lady quotes, first a Frenchman, then "The Times," then a chart and then her own speech, that it is absolutely impossible for Members to know exactly what she is saying?

The DEPUTY-CHAIRMAN

There is a long-standing Rule that speeches should not be read, but I am afraid it is often more honoured in the breach than in the observance by Ministers of all Governments at the Treasury Box.

Captain CROOKSHANK

Then, on that point, may I ask, as the right hon. Lady is going to quote from these articles, will she consent to lay them, in full, as a White Paper?

Miss LEE

Further on that point of Order, Mr. Dunnico. Is there any minimum standard of courtesy which you, from the Chair, can impose on hon. Members opposite?

The DEPUTY-CHAIRMAN

We are commencing a very important Debate, and it will be to the interests of both sides to listen to the arguments both for and against. May I say with regard to the statement of the Minister, that she is apparently endeavouring to justify the borrowing of this money for unemployment benefit, and is using certain forms of argument. They may be proper or improper, but they are in order, and the Committee ought to listen to them.

Miss BONDFIELD

I do not apologise for going at such length into these matters, because this is a fundamental question which has to be faced by us all. We take one point of view and, I gather from the prominence given to these articles, that many hon. Members take the other point of view. I think it is important that our point of view should be put before the House. I apologise if I appear to have quoted copiously from notes. So far as these eight years of the diagram are concerned, one could divide any unchanging index, such as an index of average height, age or weight of the population by the price index and prove just as convincingly that unemployment is entirely due to the population being too tall, or too fat, or too old. I understand that, in connection with the Real Wages and Unemployment Commission of the International Statistics Institute, similar tables and diagrams were prepared for all countries for which the necessary data could be obtained. The outstanding inference from these diagrams was that no universal casual relation between the level and movement of wages and the level and movement of unemployment was apparent in them.

The "Times" leader goes one better than the articles. It speaks of a related and equal movement of the indices of wages-price and of unemployment, and of the increase in unemployment "corresponding exactly" with the increase in the wages-price of production. There is no such quantitative equality in the two movements. M. Rueff has never contended that there was. The illusion of equality in the diagram is achieved by adjusting the two scales so as to give the two curves about the same range of movement. The point is that, according to the curves of Rueff, wages would have had to fall by 35 per cent., while the cost of living had fallen by only 16 per cent. The wage-earner would therefore have had to be now about 25 per cent. worse off in real cost-of-living wages than in 1924. There is no reason, either in economics or in equity, why with constantly improving means and efficiency of production, the wage-earner should submit to such an impoverishment.

Sir BASIL PETO

On a point of Order. Am I entitled according to the practice of the House of Commons, to ask the right hon. Lady to produce this chart which probably only a small number of Members have seen and studied? If she is going to base the whole of her argument upon a chart not before the Committee, how can the Committee possibly be supposed to follow the article?

Miss BONDFIELD

I am sorry if I have not——

Sir B. PETO

I should like a Ruling from the Chair.

The DEPUTY-CHAIRMAN

The standing practice with regard to producing quoted documents only applies to Government documents and not to quotations from newspapers.

Mr. O'CONNOR

On a point of Order. Many of us are extremely anxious to follow the argument, but it is almost impossible to follow it without reference to the chart of an anonymous Frenchman—a chart which is not before the Committee—and I ask your Ruling whether it is in order to pursue, at such length, an argument on such a technical basis.

The DEPUTY-CHAIRMAN

It is not for the Chairman to determine to what extent Members of the Committee may quote from newspapers; that is a matter which must be determined by them. I am perfectly sure that if the arguments of the right hon. Lady were listened to with attention hon. Members would follow it much better.

Miss BONDFIELD

I am sorry to have taken it for granted that hon. and right hon. Members opposite read the "Times" newspaper. The articles were given great prominence two days following, with a leading article in the "Times." The charts really, in my opinion, were so misleading that I felt it was necessary to deal with them, and it will not be difficult for any hon. Member to get in the Library copies of the issues of the "Times" in question. I regard it as a most mischievous and damaging line of argument, which ought to be refuted in the interests of the working classes of this country. If high real wages were the cause of unemployment, we ought to have had mounting unemployment throughout the 19th century, but we had, as a matter of fact, nothing of the kind. It is because these articles were published under the honoured name of Sir Josiah Stamp, who has been very careful not to associate himself with the conclusions reached, and because of the prominence given to them in relation to this Debate, that I have felt justified in dealing with them.

I will turn to the transitional benefit, which begins to expire on the 18th October. The recommendations of the majority report are that there should be an extension of the period; that rates should be reduced to the same extent as is recommended for insurance benefit; that the contribution qualification should be eight contributions in the last two years, or 30 in the last six years, instead of as at present eight in the last two years, or 30 at any time; that certain classes should be subject to a means test; and that refusal to accept on fair terms and conditions an offer of work suited to his capacity should entail disallowance of benefit. That last paragraph, paragraph (5), is to a very great extent the present position. The Government propose to extend the transitional benefit for a period of six months, but, for the reasons stated in relation to the general financial proposals of the report, the Government do not propose, pending the final report, to deal with the other recommendations at the present time.

With regard to the recommendation that certain classes of claimants—namely, single persons living with relatives who can keep them, married women whose husbands are in employment and can keep them, and married men whose wives can keep them, and persons in receipt of any fixed income or pension other than a war disability pension or income from savings—should be required to prove that, having regard to their circumstances, it is expedient that benefit should be paid to them, I think it is only fair to the House to say that there are serious administrative difficulties in putting this into operation. It is recommended that the decision whether benefit should be paid and, if so, at what rates should be made by local statutory authorities with a final appeal in suitable eases to a higher authority covering a larger-area. That is practically an entirely new set of machinery as compared with the existing machinery. Apart from the administrative difficulties of the general proposal, this would involve the setting up of this new statutory machinery, which could not be in working order before they consider the final report. The Government accordingly are not prepared to put this recommendation into operation as an interim measure.

Coming to the financial terms of the transitional benefit, the estimated cost in the present financial year on the basis of the existing position is £30,000,000, and the estimate of the additional cost of extension in the present financial year is £5,000,000. Continuance of exceptionally heavy live registers must cause an increasing number of insured population to fail to pass the 30 contributions test, so that out of a given number unemployed, a larger number are likely to be on transitional benefit in the coming months. Therefore, whether or not the total amount of ordinary plus transitional benefit alters, an increase in the cost of transitional benefit is likely. It is a question of balancing between one side and the other of the fund, and it is quite clear that as the months mount up during which certain categories that are wholly unemployed remain in that position, their stamp qualification naturally will alter.

Turning to the anomalies, they relate to four categories of persons. There are the casual and short-time worker, the seasonal worker, the intermittent worker, and the married woman. I am using the order in which these categories are dealt with in the Bill for the convenience of the House, instead of the order in the Commission's Report. As the Report points out, the seriousness of these anomalies consists in the unnecessary expenditure from public funds to which employers, workers, and the State have contributed, their effect on the repute of the scheme, and their encouragement of methods of industrial organisation which may be harmful to trade and employment in general. Those are the main reasons why these anomalous cases should be considered, and they are reasons which vary very greatly. They affect different categories.

The Government agree in principle with the recommendations of the Royal Commission, and they propose to place before the House proposals to give legislative effect substantially to those recommendations. The rules of Order prevent me from referring in any detail to the proposals in the Bill, and I will only say that the Government take the view that, in order to secure the elasticity necessary for administering such restrictions as may be imposed, and thus avoid creating new abuses and injustices in attempting to cure existing anomalies, the best method to adopt is to give to the Minister of Labour general powers in respect of the classes concerned, to be exercised by regulations made after consultation with a Central Advisory Committee. As I have said, we agree in principle with the recommendations of the Commission on these points, but when we came to working them out in detail and trying to frame the actual words of the Bill, we found that the general words which are all that can be put in an Act of Parliament are quite unsuitable for carrying out the object which we believe is common to us and the Commission. If we proceeded in that way, we should be creating fresh anomalies as fast as we removed others.

The Commission, in dealing with this matter, recognise that difficulty also. Let me quote the words used by the Commission themselves, on page 38, in paragraph 103: It is difficult to make provision in an Act of Parliament for unanticipated problems, and it is not surprising that the general provisions of a scheme which is designed to deal with the normal type of unemployment should, in their application to an infinite variety of individual circumstances, operate in some cases in a way which was not within the intention of the Legislature. It would be easy to illustrate this point in a large number of instances, but I need only give one in order to make my meaning clear, and that is about the printing trade. You will notice that certain suggestions are made for exempting certain members of certain trades. The printing trades have a practice of setting up Sunday newspapers. Very often there is a special class of men who do nothing else but set up Sunday newspapers. They work, it may be, two days, or a day and a night, or whatever the time is, and they may earn as much as the ordinary newspaper man earns in the whole of a week of 48 hours. It is generally agreed that those men should not also draw benefit, but if you exempt printers who are now on Sunday newspapers, it may be that in a fortnight's time the Sunday newspaper will close down and the men be out of work. It is no good saying that under those circumstances, being totally unemployed, they should be permanently deprived of the opportunity of belonging to the Unemployment Fund. Those are categories where regular contributions are not in doubt and where payment is made week after week.

That is merely an illustration of the complexity of the problem with which we have to deal, and it cannot be dealt with effectively in any form of words that could suitably be put into an Act of Parliament. It is because of this "infinite variety of individual circumstances" to which the Commission refers and, I may add, of industrial circumstances also, that we think it best to proceed by way of detailed Regulations, made with the advice of a Committee which possesses or can draw upon practical industrial knowledge and experience. What may be right for dockers would probably work quite differently in the case of cotton operatives, or vice versa. We want the right rule for each, and it is only in this way that we can get it.

I have seen criticisms which assume that what we propose to do is to set up another Committee to consider the recommendations of the Commission. That is an entirely erroneous conclusion and a complete misconception of our proposals. The Committee is a Consultative Committee, not a Committee of Inquiry; in fact, it will enable the consultation which would have been necessary in any case to be completed more expeditiously. We have decided that these anomalies must be cured. There is no intention to delay action beyond the very minimum time necessary for finding the form of words which will remove these anomalies without creating fresh injustices. If Parliament passes the Bill—and it is the definite purpose of the Government to get it through before the end of the Session—it will be my duty to take action at once, and I intend to do so.

Meantime, I do not propose to make any apology for asking the House for the funds necessary to carry on the Unemployment Insurance Scheme without any alteration of its main features. We adhere to the main principles laid down in "Labour and the Nation," that to attempt to cheapen production by attacking the standard of life of the workers is not only socially disastrous but highly injurious to the economic prosperity of the whole community, and that so long as the nation chooses to maintain an economic system by which unemployment is produced, the weight must not be allowed to fall with crushing severity either upon its helpless victims or upon the overburdened ratepayers. We believe that the nation as a whole must shoulder the burden and that it can do so, and we have no intention of sacrificing the human needs of our people to the unproved theories of economists or the political expedients of the Opposition.

Sir H. BETTERTON

I beg to move, in line 2, to leave out the words "and fifteen."

This Amendment and the next one on the Paper standing in the names of my right hon. Friends and myself will, if carried, reduce the sum of £115,000,000 for which the Minister asks to £100,000,000 and reduce the period for the extension of the transitional benefit from six months to three months. Whatever may be thought of the speech which the right hon. Lady the Minister of Labour has just delivered, there can be no question at all that it has shown to us a position of extreme and pressing gravity. The right hon. Lady throughout her speech gave no argument whatever that I could hear which justified the Resolution which she has moved. She showed no indication whatever of doing what the Chancellor of the Exchequer has said on more than one occasion we ought to do, namely, face up to the problem. She has shown no appreciation of the seriousness of the position, and in that necessarily brief reference to the Bill which is to be debated in the future, she gave no indication at all of what the savings were likely to be. I cannot help regretting that in the speech which she has made she did not pay rather more attention to the solemn warnings which were given, through his officials, by the Chancellor of the Exchequer to the Royal Commission, and rather less to those of the French economist.

What are the conclusions to which we are driven from the speech we have just heard? We are driven to the conclusion that the warnings of the Chancellor of the Exchequer as to the extreme peril of a continuation of the policy of borrowing are to be disregarded; indeed, we have no indication that that borrowing is to be brought to an end. Further, we are driven to the conclusion that the hopes of the Chancellor of the Exchequer expressed in the Budget speech, that he might find some relief from the embarrassment in which he was placed from the Royal Commission, are already doomed. In the third place, the speech of the right hon. Lady has shown that the Budget which we are still discussing is already unbalanced. The figures which the right hon. Lady gave are familiar, and I need not do more than refer to them. She has told us that the debt is nearly £90,000,000 and that she expects transitional benefit to cost £35,000,000 in the coming year. We know from answers that she has given that that debt is increasing at the rate of something like £1,000,000 a week. I want to draw the attention of the Committee to the solemn warning which the Chancellor of the Exchequer gave last January through his officials——

The CHANCELLOR of the EXCHEQUER (Mr. Philip Snowden)

Really, the hon. Gentleman has no right to associate me with that evidence. It was given by the expert of the Treasury and the Government Actuary to the Royal Commission. They went there to express their views. As a matter of fact, they were directly invited. I was not invited to send witnesses; they were invited directly by the Commission.

Sir H. BETTERTON

This interruption of the Chancellor of the Exchequer raises a most serious question. Are we to understand that he repudiates it?

Mr. SNOWDEN

No.

Sir H. BETTERTON

This is a memorandum of the Treasury to the Royal Commission on Unemployment Insurance. Are we to understand that that memorandum was issued without the assent of the Chancellor of the Exchequer, and without his knowledge?

Mr. SNOWDEN

I stated on a previous occasion that that evidence was shown to me before it was presented to the Commission, but it was not my evidence. Take the case of the Government Actuary. He appeared before the Commission as an expert; I was in no position to alter his evidence in any degree.

Sir H. BETTERTON

I am within the recollection of the Committee, and I remember quite well—the Chancellor of the Exchequer will correct me if I am wrong—that he stated definitely that he approved the memorandum which had been issued. That being so, I will read from it: On the other hand, continued State borrowing on the present vast scale without adequate provision for repayment by the fund would quickly call in question the stability of the British financial system. I will remind the right hon. Gentleman and the Committee that at the time of that statement, which was approved, as we understood, by the Chancellor of the Exchequer, the debt of the fund was £65,000,000. The right hon. Lady is now-asking permission to increase that borrowing from £65,000,000 to £115,000,000, or an increase of 77 per cent. When that borrowing amounted to £65,000,000, it was said that if it continued it would quickly call in question the stability of the British financial system; is not that argument even more potent to-day when the borrowing is to be increased by 77 per cent.? There is another statement in the memorandum, which I understood was approved by the Chancellor of the Exchequer. That is the last paragraph: Whatever the precise method adopted a reduction of the total liability of the taxpayer for this service to an amount substantially below that incurred during the year 1930–31 is among the most pressing financial needs of the State at the present moment. At the time that statement was made the cost of transitional benefit for the previous year was between £21,000,000 and £22,000,000. We now know that the transitional benefit this year will cost £35,000,000. The point I wish to make is that in our view it would be a grave dereliction of duty on the part of the House of Commons, for which we should not be forgiven, if we parted with the control of the finances of this scheme until we saw in the form of an Act of Parliament exactly what the Government are going to do to face up to the problem. When we know that we shall be able to judge whether their proposals are adequate, and how far they go towards avoiding the dangers of which the Chancellor of the Exchequer or his officials have warned us.

It is absolutely essential that we should be told by the spokesman for the Government who is to reply what is the attitude of the Government towards the system of a contributory tripartite insurance. [Interruption.] Many hon. Members below the Gangway are quite frank about the matter and say that they do not believe in it. We know that the Trade Union Congress do not believe in it, for the evidence on behalf of the congress before the Blanesburgh Committee and the Royal Commission was definitely that that is not their plan.

Mr. KELLY

Quite right too.

Sir H. BETTERTON

But we want to know what is the Government's attitude. In giving the following quotation from the Prime Minister, I do not do it in the least with the object of pinning him to something which he said a long time ago; I merely quote it in order to ask the Government whether it represents the views of the Prime Minister and the Government now. This is what the Prime Minister wrote in 1913: The one danger ahead is that we should give them as a charity the services for which they cannot pay. That indeed would be the most terrible of blunders. That would be using national wealth and resources in order to keep these battalions in their present state. The social reformer, especially he who is working to supplant the present economic idea by a human one, may give fervent thanks that the Insurance Act was in the main kept on an insurance basis. That was the view of the Prime Minister at the time he wrote it. When his colleague the Minister of Health gave evidence before the Blanesburgh Committee, he was asked what he thought about it, and he said: We do not accept the view about insurance. There never was a document"— that is, his evidence to the Committee— more carefully prepared than this. Therefore, this must stand against the obiter dicta of Mr. MacDonald. It is perfectly true that, as a movement, we have not stood for insurance. We have stood for some system of maintenance. Both these views are perfectly intelligible, but they are wholly inconsistent. We want to know what at the present time is the Government's view upon the matter. On 16th February this year, speaking in the House, the Minister of Labour 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 a tripartite contribution."—[OFFICIAL REPORT, 16th February, 1931; col. 909, Vol. 248.] Therefore, if it is the view of the Government that insurance should be contributory, we are entitled to have that so stated to-day. If, on the other hand, it is their view that we should have maintenance and not insurance, we are entitled to be told. If the latter be the Government's view, and if they accept the view of the Minister of Health and of the Trade Union Congress, the reference to the Royal Commission asking them to point out how the scheme should be made solvent and self-supporting becomes a mere sham, and the Royal Commission were wasting their time.

I want to remind the Committee in chronological order what has been the history of this borrowing since the present Government came into power, because, when we consider the history, we can decide what sort of confidence we can place in such assurances as the right hon. Lady gave in her speech to-day. At the beginning of this Parliament, the right hon. Lady told us that to go on borrowing would be a dishonest course, because it would be contracting a debt that you saw no possible way of paying off. Therefore, I have dismissed definitely from my consideration any question of increasing the borrowing powers of the fund."—[OFFICIAL REPORT, 25th November, 1929; col. 1103, Vol. 232.] 5.0 p.m.

At the time that declaration was made, the amount of the debt was £37,500,000. To-day it is £115,000,000, or rather more than three times as much. Shortly afterwards, in February, 1930, the right hon. Lady found it necessary to come to the House for further money; she told us, when she wished to extend the borrowing powers by £10,000,000, that there was a committee at work dealing with the whole situation. We have heard nothing about the report of that committee, and I do not know whether it was dissolved before it came to any conclusion. Shortly afterwards, in July of last year, she asked again that the borrowing power should be increased, and we were then told that the Opposition parties would be asked to enter into consultation, and she expressed her deep satisfaction that this consultation was about to take place. That was the genesis of the Three-party Committee, but I do not want to make any further reference to that unhappy episode. Later in the year, in October, we had a statement by the Chancellor of the Exchequer at the Guildhall in which he told his hearers that he had to find £21,000,000 to finance a large class of unemployed persons who had no insurable occupation and added: I think it is the duty of Parliament to face up to this problem and put the Insurance Fund on an insurance basis. Very shortly afterwards the Prime Minister himself said: Unemployment insurance, as an insurance, must be put back on an insurance basis.

Mr. BUCHANAN

When did the Prime Minister say that?

Sir H. BETTERTON

He said that at Bedford on 14th November, 1930. The Minister of Labour himself, when she came for the fourth time to this House, on the 16th February this year, made this very important statement. Referring to the Royal Commission she said: We wish it to be recognised that the Royal Commission will be required to give us what light they can on the additional experience since the Blanesburgh inquiry; and upon the further evidence which they will collect and upon which they will base their recommendations, we shall have to frame the next Bill."—[OFFICIAL REPORT, 16th February, 1931; col. 911, Vol. 248.] The Committee can judge how far those pledges have been carried out, and what value we can attach to them. Quite clearly, by an agreed formula, the three Ministers most concerned—the Prime Minister, the Chancellor of the Exchequer and the Minister of Labour—have said on three separate occasions that this fund must be put back on an insurance basis. I want to ask them when they propose to put it back on an insurance basis, and what exactly they mean by the formula they have used.

Mr. SANDHAM

Just why you insure the lives of cattle—by feeding them.

Sir H. BETTERTON

In January last a statement was made by an official of the Treasury which pointed out in the clearest possible terms the inevitable result of continued borrowing and the inevitable effect of such resolutions as we have before us to-day. It was pointed out that the first effect of all would be an unbalanced Budget. It was pointed out that there was a threat to the actual financial stability of the State. What is the answer of the Government to that warning? It is an answer of contemptuous indifference, because they come to Parliament and ask for borrowing powers on an unprecedented scale. The position in which we find ourselves at this moment is this: In the Budget Debates still in progress we see the Chancellor of the Exchequer, by a ruthless and relentless use of the Closure and the Guillotine, forcing his views upon the Opposition while at the same time he is impotent in his own party to protect us from the very evils against which he himself has warned us. Speaking for myself I think it is a misfortune that his authority should have been so undermined, that his warnings should thus have been flouted, and that he should be subjected to what is obviously a deep personal humiliation. In these circumstances, and for the reasons I have given, I say the Committee have no right to pass this Resolution, and I ask them to carry the Amendment in order to give ample time to the Minister to put into an Act of Parliament those tentative pledges which she has given us this afternoon.

Mr. E. BROWN

Once more Parliament is considering the position of the Unemployment Fund. The fund itself is now in the forefront of all our domestic problems; indeed, unemployment is the greatest of all international issues. The financial position of our arrangements for unemployment insurance and unemployment maintenance is alarming, really alarming, because the problem of unemployment is becoming an alarming one. The problem is not solved by misstating it or by caricaturing it. If I am not allowed to quote from the "Times" perhaps I may be allowed to quote what the right hon. Member for Epping (Mr. Churchill) wrote in the "Daily Mail." His article, headed "Government of the dole drawers, by the dole drawers, for the dole drawers," is an interesting example of sloppy thinking; and the right bon. Gentleman was unfortunate in the night editor, because on the other side of the page we have the headline, "Where does all the money come from?" over an article about the mystery of the huge crowds at the shows and the money they have to spend. To speak of the problem as that of "Government of the dole drawers, by the dole drawers, for the dole drawers" is quite easy if one is possessed of the imagination of the right hon. Gentleman; I could just as inaccurately describe the Government of which he was Chancellor, if I cared to do so, as "Government of the interest drawers, by the interest drawers for the interest drawers." It is quite as simple, and creates just as much prejudice, but prejudice never solved a, problem nor averted a great national calamity.

In that article the right hon. Gentleman told us that 18 months ago superior Americans were asking him whether the present Government would reform the abuses and insolvency of the dole. I think the right hon. Gentleman was unfortunate to quote that, for to-day those same Americans, as Members of this House have good reason to know, are sending special envoys to this country not to look for the abuses of the dole but to look for its uses. Their prosperity has gone, they have a greater unemployed problem than we have, and they are without organisation. I do not want to belittle the tragedy of our problem or its gravity, but I do say that we at least have no bread lines and no unorganised problem such as they have. [An HON. MEMBER: "And no soup kitchens."] Yes, there are some soup kitchens. The hon. Member is wrong. Even the dole and poor relief do not quite cover the problem. The problem cannot be stated merely in terms of the Unemployment Fund. I will try to state the problem in the light of all the facts as I see them, and in terms of unemployment itself, which is the over-riding consideration. It must be considered, first, in the light of a world containing armies of unemployed; second, in the light of the grim facts in the homes of those unemployed armies; third, in the light of the stern financial facts of our national finance—and neither side of the House can afford to overlook those facts; fourth, in the light of a fair examination of the uneasy relation which is existing now and has existed for a long time between what we call insurance and what we call maintenance; fifth, in the light of a policy of concealed subsidies to industries as well as to individuals for which insurance was never designed.

Mr. SANDHAM

Poor old capitalists!

Mr. BROWN

The hon. Member will have an opportunity of making his own speech. I have given more thought to my speech than he has to his interruptions. Sixth, it must be considered in the light of anomalies and abuses—I use the word advisedly—which can only be removed by patient objective examination and action taken on objective lines.

Mr. SANDHAM

On a point of Order. Is the hon. Member entitled to read his speech?

Mr. BROWN

I will proceed with my speech. Seventh, it must be considered in the light of a realisation of the gulf between two sets of burden bearers, those who bear the burden of unemployment on the one hand and those who bear the burden of the consequent taxation, and the House cannot afford to leave either side out of its calculation—if the House does the Chancellor of the Exchequer cannot. Eighth, it must be considered in the light of cool and fair consideration of the nature of the national liability and the limits which can or ought to be set to that liability; and in my judgment, within six months, that will be the over-riding issue to which the House, all parties in the House and the country will have to direct their attention.

The situation demands three things, first, the abandonment of all false hopes of increased benefits and increased commitments. I believe, and I say so bluntly, that that policy is not merely treachery to the nation, but black treachery to the unemployed. It raises hopes that cannot in our present state be realised. Secondly, it demands the abandonment by all parties of any attempt at creating political capital or political prejudice over this tragic issue, either at by-elections or in other elections or in this House. Lastly, it demands the abandonment on the part of leaders and followers of demands that the national liability shall be made larger than it ought to be by demands from those who do not need either insurance benefit or maintenance. Evidence has been given before the Royal Commission by those who desire to see a policy of non-contribution and also increased benefits. Mr. Douglas Cole summed up the whole situation in words which will be found on page 741 of the report: In general, then, I regard the contributory system as indefensible on grounds of economic theory, and I greatly prefer the system under which the entire cost of maintaining the unemployed falls to be met out of the proceeds of general taxation. A form of taxation cannot, however, be discarded on the ground of theoretical unsoundness unless it can be shown either that the expenditure which it is designed to meet is unnecessary or that the sum needed can be raised by less unsound methods in some other way. He added: In the present instance the expenditure "— that is, the contribution— is clearly necessary, and in existing circumstances it would be useless to look to the Chancellor of the Exchequer, harassed as he is by many claims to dispense with a form of revenue to which both employers and workmen have by now grown accustomed. I do not want to add another sentence on that point. That really sums the whole thing up in clear, lucid and adequate language, and I venture to ask all parties in the Committee to weigh the argument.

Turning to the liability, there is no need for me to repeat the figures which I had prepared, but I want to say a word about them. The debt is now £87,000,000 and powers are being sought to increase it to £115,000,000. In my judgment we shall not be able to deal with the main issue until November of this year, and if by that time, as is likely, the unemployment roll rises to 3,000,000, the debt by then or by Christmas may be £135,000,000. I want to put before the Committee that in all our discussions outside this Committee hon. Members ought not to forget that, if we get a live register of 1,275,000 at any time, it means an effective benefit scheme for 900,000 souls. Then the fund will balance, and the fact that for the last two years it has gone above 1,275,000, is no reason why we should leave that out of our calculation. If we get a turn, it will be in entirely different circumstances. The finance should be adapted to an income which will balance if 900,000 claim benefit. The debt is £87,000,000 and the deficit nearly £40,000,000, and I think these facts should weigh with the Committee. I will not labour that point further.

I would like to say a word or two about the report, and I want to discuss it from the point of view of what financial savings we can make. The argument of the hon. Baronet the Member for Rushcliffe (Sir H. Betterton) is that there should be a period of control shorter than that which is working now. For what purpose? The nation is concerned only to save the money, and that is important if it can be done by the Government under a practical and constructive scheme debated in this House and proved. But is that so? What does the report say? The terms of reference were drawn up by the Government and the experts were chosen by the Government because they were impartial. I can speak with some amount of authority on this matter, because I opposed the setting up of the Royal Commission. That Commission has got together a mass of evidence, and I wonder how many Members of the Committee have read that evidence. It is a mass of very weighty and interesting evidence. The right hon. Gentleman the Member for Epping (Mr. Churchill) said in his article that the recommendations of the Commission would save £34,000,000 on the Unemployment Fund. But is that really so? I say it is not so, for this reason. How is it proposed to save the fund? Are you going to save by cutting down the benefit or reducing the contributions, or are you going to shorten the period under which the unemployed are entitled to benefit? The latter is not a saving, because it would simply be a transference from one pocket to another. Therefore, the only real saving must be either by reducing benefits or increasing the contributions? The Committee is entitled to know whether hon. Members are prepared to advocate that either in a suburban or a rural constituency. I cannot conceive any hon. Member going into any constituency and advocating a policy of that kind. The right hon. Gentleman the Member for Epping wrote: The Conservative party would probably not proceed upon a single cutting down of benefits, and an increase of contributions.… it would be guided by the sound principles apparent to those who have studied Sir William Beveridge's recent admirable book. The first of these is the separation of actuarial insurance from compassionate relief in any form, and the treatment of the genuine unemployed who has run out of benefits, and is no longer supporting himself in any way by public assistance committees. I cannot think that the right hon. Gentleman the Member for Epping has read either the book or the evidence tendered to the Commission by Sir William Beveridge with that meticulous accuracy which an article in the "Daily Mail" ought to demand. If the right hon. Gentleman had done so, he would have found that Sir William Beveridge recommended nothing of the kind. The recommendation which Sir William Beveridge made related to the able-bodied, and I hope to show from the evidence given before the Royal Commission that he was dealing with an entirely different proposal. Mr. Churchill in his article in the "Daily Mail" says: These committees would not save money by cutting down the standard of living, but by making sure that the large grants which the Exchequer would have to give to the relief of distress in the present difficult times were proportionate to the proved primary needs of those who throw themselves upon the public bounty. I cannot think that the right hon. Gentleman has read Sir William Beveridge's evidence, or he would not have written that. This statement evades every one of our problems in pretending to solve them. In the first place, it admits the contentions that money should not be saved by cutting down the standard of living, and that disposes of the largest part of the suggested saving of £24,000,000. If those for whom the right hon. Gentleman speaks are not thinking of cutting down the benefits, then there is no point in arguing that the Government are not dealing properly with the results of the Royal Commission. It re-states the problem with a paraphrase of the Government's own terms of reference, and the report says quite plainly that it will be months before this separation of insurance and relief can take a definite and practical shape. In the next place, it ignores the grave problem of the administration of State money by local public assistance committees and the consequent lack of any community of interest in economy between the Exchequer and the local administration. It makes no attempt to define "proved primary needs." Those who have studied the working of the Addison Housing Act know that there was a limit to the local contribution of the amount of a penny rate, but even such an expenditure as that could not be justified when the administration of the Act came to be worked out in practice. If the right hon. Gentleman the Member for Epping proposes to turn them over to the public assistance committees, then he will have to find the money from the State, and there will be no check upon the administration. No Member in this House except the right hon. Gentleman the Member for Epping would argue in that way.

The statement which I have read to the Committee makes no attempt to define "proved primary needs." What are they? The main benefit is 17s. a week. I think it would be a good thing for all Members of this House to visit the homes of the unemployed and talk to them about that benefit. I speak with some feeling, because I happen to know how difficult it was to live on 30s. a week in 1913, and it is much harder now. Sentiment is irrelevant here, because unless in this House any hon. Member is prepared honestly to get up and say here what he will say anywhere else that he means to save money out of the fund by cutting down the benefit, that is a kind of argument that is founded on dishonesty, and cannot stand. No Member of this House has a right to demand a decrease of benefit or an increase of contributions unless he is prepared to make that demand on behalf of his party at a by-election or at the General Election. The facts are against any such arguments. Both the candidates at the Gateshead election declared themselves against the cutting down of the benefit. I read in the "Times" this morning the report of a speech by Lord Hailsham, who, speaking on Saturday last, said: We have our own plans. I believe they are better than those of the Royal Commission. The last thing we should do is to reduce benefits and increase the contributions, but it is essential, if we are to maintain our financial stability, that the Insurance Fund should be put on a proper insurance basis. It is essential that there should be a difference drawn between those who are getting insurance benefits for which they have contributed and those who by their own fault or misfortune—it makes no difference—are out of benefit, and exist on the charities of their neighbours. That is a clear statement made by the Leader of the Conservative party in the House of Lords that it is not the policy of his party to cut down benefit or increase the contributions, and, if that is so, I think we have a right to ask for a statement as to how the money is to be saved in the working out of the scheme. Having given some little thought to this matter for the last 10 years, I should like to see such a scheme produced. I have never believed that the Royal Commission could deal adequately with the major parts of the terms of reference in separate reports. Until the scope of an unemployment insurance scheme is settled, until it is decided whether it is practicable to devise a solvent scheme to include all industries, or whether some of those industries now outside should be brought in or some of those now inside should be left out—until those things are done, we cannot determine the basis or the risks of the scheme, or how many workers it will cover. However wide the limits of an unemployment insurance scheme may be there will be some able-bodied persons who will fail to qualify for its benefits. Not until the Commission has settled the scope, basis and conditions of its permanent insurance scheme can it review those outside and attempt to grapple with the complex and diverse practices now prevailing in the three countries, and in 10,000 occupations. The Commission itself is under no illusion as to the difficulties of working out the generalisations so glibly flung about by the right hon. Gentleman the Member for Epping. I will quote from page 6 of the report which says: During the last 20 years there has been a gradual and unco-ordinated transfer from local to central government of the whole problem of the able-bodied unemployed, and of the distress due to unemployment. We regard as a most important part of our inquiry the determination of the proper sphere of the central Government and of the Poor Law authorities and the best method of co-ordinating their activities, so that the whole problem of the able-bodied unemployed may be properly covered without either gaps and hardship or duplication and waste. Our examination of these problems is incomplete, and it will be some time before we are able to make final recommendations upon them. That is the report of the Commission, and it is in line with all the evidence and all the facts. Any hon. Member of this House who has given any real attention to this problem must have foreseen that situation. I think the Commission will work wonders if they are able to solve the vast and complicated problems involved before the month of October or November next.

I now turn to the Government proposals, not to discuss them in detail, but to look at the outline of their intention, their genesis and the machinery which is proposed. The Bill proposes an interim Measure, having relation to an interim report. It purports to deal with four categories, and it gives power to the Ministry of Labour to legislate by Order—I think the House will need to watch that proposal very carefully—after consultation with the Advisory Committee, which will be a statutory body representing employers and employed. This is the body, statutory in character, which is to make recommendations on which, after examination, the Minister is to legislate by Order——

The DEPUTY-CHAIRMAN

That is a matter relating to the Bill which is to come before the House on Friday.

Mr. BUCHANAN

May I point out that the Minister, in the course of her speech, referred to this proposal, and answered in detail various points which have been raised in regard to it? In view of the fact that that was allowed, is it not in order for an hon. Member to discuss points which the Minister herself raised in making her statement?

The DEPUTY-CHAIRMAN

The Minister in her statement indicated in quite a broad and general way certain policies which the Government proposed to adopt, but that is a totally different matter from discussing the details of the Bill.

Mr. BROWN

I assure you, Mr. Dunnico, that I have said all that I meant to say about the Bill itself. I had no intention of doing more than framing in my own mind, for the purposes of my own thinking, just what the objective of the proposals is, and, if I am not allowed to discuss them in terms of the Bill, I think I can discuss them in terms of what is not in the Bill, namely, the evidence of the Royal Commission, which, of course, I should be allowed to do. I may give that hint also to the hon. Member for Gorbals (Mr. Buchanan); I will give him the reference in a moment.

The DEPUTY-CHAIRMAN

I must safeguard that Bill from being discussed in detail until the proper occasion arises, but, so far as the evidence before the Royal Commission is concerned, it will be in order to refer to it.

Mr. BROWN

May I ask the Committee to consider this problem? If these anomalies are to be dealt with, they ought to be dealt with, not by the Bill which we cannot now discuss, but by another Bill—a Bill to deal at once with a schedule of what is involved. A complex Measure dealing with these complex problems would have to be an exceedingly elaborate Measure, which would be very difficult to draft, and, unless it were considered at length, would be likely to hit both the wrong mark as well as the right one. I saw a statement in a newspaper this morning in which it was calculated that 1,000 categories would be needed, but I am doubtful whether it will be possible to deal with it even with 3,000 or 4,000 categories. The hon. Member for Gorbals may say that the anomalies ought not to be touched, but let me say to him, and to those who think with him, that the reply is, surely, this: If the fund is solvent, and men who do not need it are drawing money from that fund, they prevent a higher rate of benefit being paid to those unemployed workers who have no other resources. [Interruption.] That may be nonsense, but it only means that my standard of nonsense and that of the hon. Member are two entirely different standards. Any man who is drawing—and there is evidence to prove that there are such—£2 10s., £3 or £4 a week, and is also drawing benefit, is taking money which might be applied to his needier brothers, if the fund is solvent. [HON. MEMBERS: "No!"] Hon. Members will be able to state their own case in their own way; that is my view. Alternatively, if the fund is not solvent, such anomalies are helping to drive the fund, not merely into bankruptcy, but into disrepute.

There are two sets of criticisms, and they are very interesting. I heard a whisper about the Leith docks, but I would say that at Leith at any time, as I have said it, and the Leith dockers will back my view. The first criticism is that this is the line of least resistance. It is said that it is a highly significant innovation in the direction of Government by Order. That is true. It is said that the policy now being pursued is a policy of cowardice. That criticism is directed at all Members of Parliament, irrespective of party. That is the criticism from the Right. But there is an equally formidable body of criticism from the Left and from behind the right hon. Lady. That says that these proposals are a new inquisition, more subtle than the old; that they are a new machine loaded against the workers and designed to bring them back to the Poor Law; that they are a danger to the defenceless unemployed, and a new weapon by which the unemployed will be under a scheme operated by successive Governments more and more harshly against them. Surely, however, the Commons of this country between them can draw the line between both these bodies of criticism. I am reminded of a story that was told by Mr. Birrell. At the time of the Boer War, he said, he was howled down in the early part of one week at Manchester for being a pro-Boer, and later in the same week, when the Labour party went to Belgium, he was howled down in Brussels for being an oppressor of small nations. His remark was that a man who was howled down from two diametrically opposite points of view twice in the same week must be right. I give the right hon. Lady that story for her comfort.

May I ask the Committee to consider what I think is the genesis of the idea? It cropped up three times in the evidence before the Royal Commission, on two days, the 19th day and the 26th day. It cropped up twice on the 19th day, first in the evidence of Sir William Beveridge, and, secondly, in another form, in the evidence of Mr. G. D. H. Cole, who, let it be remembered, is a member of the Advisory Economic Committee of the Cabinet. I am not sure whether he was then putting forward his own evidence or his evidence as a member of the Committee. The third occasion on which it cropped up was on the 26th day, in the evidence of the Trades Union Congress, for yet another purpose. Sir William Beveridge raised the matter in this form: The essence of the insurance system as described above being the giving of definite rights for a definite period, provision must be made for those who exhaust their rights to insurance benefit. So long as they remain prima facie able to work and desiring to work, they should he treated as an industrial rather than a social problem, by a central rather than a local authority, that is to say, either by the Ministry of Labour or (preferably) a statutory commission supervised by the Ministry. The fact, however, that they have exhausted their claim on the insurance fund sets up a presumption that they may not be able to recover work on their former terms; their long unemployment makes it certain that further unemployment without occupation of any kind will bring demoralisation. For both reasons, something other than mere tiding over by insurance is required. The relief of these men should be a matter, not of contractual right enforced by quasi-legal process before an umpire, but of need, judged by the administering authority, and would be subject to conditions imposed by the authority; the necessity of side-tracking detailed Parliamentary scrutiny of the action taken in individual cases makes it desirable that this authority should be a commission with statutory powers, and not a Minister directly responsible to Parliament. I do not want to trouble the Committee by reading the references to which I alluded just now, but, if the hon. Member for Gorbals will turn to the proceedings of the 19th day, he will find, on page 742, the whole scheme outlined in the evidence of Mr. Cole, beginning at paragraph 38 and continuing to paragraph 49. I will not trouble the Committee or attempt to evade your Ruling by reading out the details, but, as far as I can see from this evidence, the Bill that we shall be discussing later is really based upon that evidence. It is true that Mr. Cole defended the limitation to five years, but his evidence is there, and Members of the Committee will be able to read it at their leisure. I should like to call special attention to paragraph 49, because here Mr. Cole sums up what he conceives to be the aim of such machinery. He says: I should like to make it clear that these suggestions are not put forward with the idea that they can result in any substantial reduction of expenditure. The squeezing out of redundant short-time workers will not save money; and what can be saved under the other heads is likely to be negligible in amount. The object is to meet public criticism of the scheme, and to increase confidence in the soundness of its working. An 'abuse' which costs the scheme little, may, with endless newspaper repetition, be magnified until it causes widespread uneasiness, and suggests, quite wrongly, that large amounts of money are being wastefully and inequitably expended. That evidence is worthy of discussion at length, but I will leave it for the moment. I desire also to call attention to the fact that, giving evidence on behalf of the Trades Union Congress, the hon. Member for West Nottingham (Mr. Hayday), the hon. Member for St. Helens (Sir J. Sexton) and others, brought forward the idea of a similar body on the 26th day. If hon. Members will turn to page 971 of the evidence, they will see that it was suggested: That an Unemployment Benefit Board should be constituted of three nominees of the Trades Union Council, three nominees of employers' organisations, one nominee from the Ministry of Labour, and one nominee from the Treasury, together with an independent chairman. The Board should be a full-time statutory body with power to make regulations governing the payment of unemployment benefit so far as the conditions on the lines of the general principles laid down in the Act are concerned, but should not have any power to deal with rates of benefit, which would be laid down in the Act itself. The Committee will see, therefore, that this suggestion was raised from two entirely different points of view. I will only trouble the Committee with one more quotation, from the examination of the hon. Member for West Nottingham. With reference to this board, he was asked: That is rather like a trade board, is it not? His reply was: Oh, no, not at all; it is not intended for that; it is intended to fulfill a much more important purpose. We speak of the married women's abuses; we speak of the short-time worker; we speak of the casual worker. As regards that group first, that differs in almost every town in the problem it presents. The board should, in addition, deal with abuses, perhaps, is not the best word, but should be able to recommend some regulations for dealing, not with all insured persons, but with the particular anomalous positions that they are confronted with. Then the Minister of Labour could in that case place a new regulation, perhaps, on the Table of the House of Commons, where it would have to lie, as other orders have to do, for a given number of days, in order that objections might be taken to it, if there were any. The hon. Member for Gorbals will find, when he comes to oppose the right hon. Lady, that he has a very formidable body of evidence to deal with from every part of the House.

I am sorry to have detained the Committee so long, but perhaps they will allow me a minute or two more. I think it would be folly to exaggerate the Government proposals about anomalies, but I think it would be equal folly to minimise them. In my judgment they begin at the right end, and they contain an ingenious, if dangerous, scheme for ending anomalies before an impartial and objective tribunal. I may perhaps describe them as proposals for pruning, and pruning is one of the most skilled and delicate operations of husbandry. Its object is to cut out weak, dead and imperfect parts, in order to strengthen and preserve what is sound and vigorous, but it must be added that it has to be done at the right season. At any rate, this is a question of a complete turn about. Instead of being able to face the problem in terms of promised increases of benefits and a non-contributory basis, which are impossible, the Government have taken the view that, if there are anomalies, they ought to be dealt with, and dealt with objectively.

I frankly confess, for my own part, that the proposals go further than I thought they would, and I think that that is the view of my right hon. Friends and of the Liberal party. The problems of married women, seasonal workers, intermittent workers and short-time workers are in themselves as complex and diverse as is our civilisation. Most of the anomalies arise from the diversity of the conditions even inside a single industry. Let any Members of this House who want to consider this problem turn to the fascinating report of the Committee on Dock Labour Conditions, presided over by my right hon. Friend the Member for North Cornwall (Sir D. Maclean). On page 9 of that report hon. Members will see what a diversity of occupations there is inside one industry—stevedores; ship, quay, wharf, warehouse, dock and general cargo workers; coal porters; trimmers, tippers and heavers; deal porters; timber porters; timber yardmen; prop carriers; measurers; coal porters, dischargers and fillers; grain-weighers, grain elevator hands, granary hands and loaders; iron ore dischargers, fillers, tippers, shippers and stowers; cold storage workers; meat-porters; fruit porters; fish transit workers; and over a score more.

I have troubled the Committee with the list only to show how complex and intricate is the attempt to treat any Bill in terms of a schedule. If that is true of one industry, how much more must it be of the thousands of industries concerned in these difficult problems of short-time and seasonal labour? If the Government will operate this machine fairly, they will deserve well of the House and of the unemployed. Let those who would seek to shut their eyes to anomalies and abuses remember that lack of pruning may spoil the tree. The money asked for will carry the unemployed army till the autumn. By that time the House will reach the real crisis of its existence, for it must then face the final report or the major issues. It must then decide in what way its liability is to be defined. It must in any case stop the borrowing and meet each year's commitments out of the revenues of the year, otherwise our sinking funds are a mere pretence. Lastly, it must decide how to organise work for the workless on a scale never yet attempted, for, in common with ourselves, the whole world is again thinking in terms of armies—not military armies this time, but unemployed armies. I would ask the Committee and the general public outside, when discussing the dole, never to forget that whole army corps of this unemployed army were in that other Army 14, 15, 16, 17 years ago.

Mr. BUCHANAN

I agree with some of the remarks of the hon. Member in so far as the importance of the subject is concerned. There is one thing that this Debate will reveal more than the Debates in the past few months. For weeks we have been debating the Land Taxes and for weeks we were debating Proportional Representation and electoral reform. My own view was that they were divorced from realities. People were concerned not with how the voting machine was to work, but with the results of the voting machine. We are to-day facing the biggest human problem that we can discuss. The hon. Member says that, if you do not correct the anomalies and save this £5,000,000, the money must be taken from the unemployed. Where is his defence for that?

Mr. E. BROWN

If the hon. Member looks at my speech, he will find that I said nothing of the kind, and I never mentioned the sum of £5,000,000. I am profoundly sceptical about it.

Mr. BUCHANAN

The hon. Member says, if you do not take it from the people who are drawing it under anomalies and abuses, it must come from the rest of the unemployed. I took the figure of £5,500,000 from the report of the commission and from the memorandum to the Bill. You might carry it a stage further and say, "Save another £10,000,000, and those who are lucky enough to remain on will get it." I hope, as one who represents unemployed persons in greater or smaller numbers, that I shall never be so base and mean as to make my appeal for the saving of money to one section of the unemployed in order that the others may be a shilling or two better off. If the country is going to face the problem, let it face it on its merits. The hon. Member also said, "Let us face this free from political prejudice and passion." I remember the hon. Member in one of the finest by-elections I ever saw a man fight. The Blanesburgh Report was produced—a non-political report representing all phases of political view. He tore it to shreds and denounced it throughout the division. He talked about honesty and the virtues. I have some few of them myself, and I hate to ask other people to possess many. I am not going to plead nobleness of character. Let the hon. Member apply it to himself.

The issue that we are debating is the greatest human issue. There are 2,500,000 people with their wives, families and dependants. The hon. and gallant Gentleman the Member for Kelvingrove (Major Elliot) once said it directly affects at least 10,000,000 in a given year out of a population of 45,000,000. It affects a far larger number indirectly. It affects small shopkeepers. It affects me. I have relatives walking the streets. It affects all of us. I do not think the hon. Baronet who spoke for the Opposition spoke with the depth of feeling that he usually does. Having made his speech, he walked out. His own people walked out. They have no feeling in the matter.

Major ELLIOT

My hon. Friend has gone to a very important meeting upstairs on India.

Mr. BUCHANAN

If we had been debating the Land Tax they would not have walked upstairs in the same numbers. When the late Under-Secretary was speaking, we had a feeling that the Bill was better than they had a right to expect. The right hon. Gentleman the Member for Edgbaston (Mr. Chamberlain), who is the real leader of the party, though he does not admit it, recently said, "We have our plans." What are those plans? The hon. Member for Leith (Mr. E. Brown) says borrowing must stop in November. I should like to ask him what is to be done when borrowing stops?

Mr. E. BROWN

The answer is very simple. It is far better for the country to meet its commitments out of the revenues of the year, and not bring the finances of the country into disrepute.

Mr. BUCHANAN

If the hon. Member means that borrowing must stop, benefits must remain and, in place of borrowing, there is to be an equivalent financial contribution, I do not mind.

Mr. BROWN

I say quite distinctly that, in my judgment, the long years of borrowing have brought us to such a pass with regard to the fund that we shall ruin the whole case for the genuine unemployed if we imperil the stability of the fund by borrowing. If we have to find this amount, or more, in my judgment we ought to meet it out of the revenues of the year.

Mr. BUCHANAN

We have already borrowed £35,000,000.

Mr. BROWN

I said nothing about the position of the money that had been borrowed. It has to be considered whether we should wipe it out, or have a moratorium, or what not. What the nation will have to do—all parties in the nation—is to see what their liabilities are and meet them. Then we can face the world.

Mr. BUCHANAN

The hon. Member says borrowing must stop. Then we are to raise £45,000,000 next year out of current taxation. I have no objection. When you get £45,000,000, plus £35,000,000 raised for transitional benefit—£80,000,000 in all out of a total expenditure of £125,000,000—you have almost a non-contributory scheme. By his method, next year two-thirds of the scheme will be non-contributory. I do not know why he and his colleagues should boggle at the other third.

6.0 p.m.

It is said that the millions that we are expending represent huge sums of money. Our expenditure this year is roughly £2,500,000 a week on unemployment insurance. That expenditure represents something more than a huge sum. It represents untold misery. Every pound taken off the total of unemployment benefit expenditure means that another soul is, to some extent, being ruined or placed in difficulties. Therefore, when we discuss the amount of money which is being spent, we must also take into account the great misery that is being caused.

We are really discussing to-day the commission's report and the Anomalies Bill. Hedge the matter round as we may, that is the real issue. I want to join issue with the Government on the whole question. The Government were faced with the problem when they came into office. It was a big question at the election. They first of all dealt with unemployment benefit by administrative action in regard to "not genuinely seeking work," and then introduced a Bill. Then there was the married woman problem. The Conservative party used to twit us in the old days about abuses of the fund. It was common for hon. Members opposite to tell us about cases of fraud. It was pointed out in the report of the Blanesburgh Committee that out of 60,000 cases less than 90 were even suspected of fraud. That question went by the board. The Government, after passing a Bill to deal with unemployment benefit, were faced with another agitation in the House of Commons. An outcry occurred in the capitalist Press that married women were getting benefit. The matter did not become serious until a section of the coalition came into it. The right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) got into it, and then the position became serious. He, in a speech in this House, talked about the short-time worker. He talked of the docker earning £4 10s. and being able to draw £l or a guinea a week in unemployment insurance benefit. It had to be stopped. The combined forces of the Opposition protested against those people drawing benefit. It is sad to admit that even now the trade union movement is responsible for the organisation of only a proportion of the workers.

The Press of the country and the political parties of this country began to talk about the abuses of the fund. Even our own people had not common decency. The Secretary to the Treasury, even while evidence was being brought forward and, consequently, before the Commission brought in their findings, began to talk about abuses. The Government set up a three-party committee, with secret findings. It has been said that the three parties—the Tory party, the Labour party and the Liberal party—agreed to a means test. Is that true, or is it not? The three-party committee was turned aside, and then the Government were faced with the appointment of a Royal Commission. Even the proposed Bill is only a put off. Under the terms of reference the Commission must in six months report in favour of knocking men off. The terms of reference mean that they are to make the fund self-supporting and place it upon an insurance basis. The fund never can have an insurance basis with 2,500,000 people unemployed.

An Advisory Committee is to be appointed. We are told that under the Bill we are to be safeguarded. There are to be nine persons of whom three are to be Labour. We could not trust a former Commission with two Labour members out of seven, but we are expected to trust a Committee with three Labour members out of nine. The Morris Committee had two Labour members out of five, and yet the Morris Committee, with the exception of those two, were against the working class. We are told that the proposed Committee of nine will be better than their predecessors. What a fallacy! The Lord Privy Seal knows that it was unfair to send two Labour members into a Commission which was overloaded against them. It was unfair and contemptible. He ought never to have done it.

The SECRETARY of STATE for DOMINION AFFAIRS (Mr. J. H. Thomas)

The Lord Privy Seal is not here.

Mr. BUCHANAN

You have had more sense, and chucked the job. I am sorry. The Secretary of State for Dominion Affairs is now the right designation of the right hon. Gentleman's office. Imagine the Conservatives appointing a Commission and placing upon it five Labour people and two Tories. Not a bit of it. That is what we have done. We did not finish there. We wanted the dice to be properly loaded against the workers. First of all, there was the Treasury action, which loaded against the workers. That was not all. They must send reinforcements. Next they sent the Treasury expert, a gentleman called Watson. He stated the position hotly and strongly about what should be done. It did not finish there. The Minister of Labour had to enter. She sent a most capable official in Mr. Price to give evidence against the workers, too. Please note that not one of them gave evidence against the anomalies that lay against the workers. Anomalies! What has been said against the railwaymen? The insurance of the highly-paid railway-men and the low-paid miner comes out of the common pool of the country. The whole system is anomalous. I would plead with the hon. Member for Leith and his colleague for common fairness.

I see the hon. Member for East Newcastle (Sir R. Aske) here. He made an eloquent speech in one of the previous Debates on the question of anomalies. Here we have a Bill proposing to deal with anomalies, and if the Government intend to deal with anomalies let them deal with all anomalies. I could give for every anomaly relating to married women three cases of refusal. There is the man who goes to Canada. He saves the fund, and goes out and works for two or three years, and when he comes back he is told that he cannot get benefit. There is the case of the boy who has a widowed mother receiving the widow's pension of 10s. a week. Because he does not earn up to a certain sum, his mother is not dependent upon him. There is the man who sank his money in a small business. Woolworth has smashed him. He goes out of business and cannot come back into benefit. What about the anomaly of the old age pensioner? The Prime Minister said in Glasgow that he pledged his word to see that every widow in need should have a pension. The anomalies under the widows' and old age pensions' system outweigh by a thousand per cent. the anomalies with which we are dealing here. They are only anomalies against the poor.

Even when the Bill is passed, anomalies will continue. There is the position of the short-time worker. Let me take the case of the man who earns £3 a week for 52 weeks in a year. He is to be refused benefit. The man who works only 45 weeks but draws £4 10s. a week, and perhaps earns more than the man who works 52 weeks, will get benefit for seven weeks. Talk about anomalies! You are going to say to a man who earns £3 per week regularly for 52 weeks, "No benefit for the three days each week that you are idle," but if a man earns on piecework £5 a week for 26 weeks and is idle 26 weeks, he will get benefit for 26 weeks.

Mr. THOMAS

I would ask the hon. Member whether all the statements that he is making with regard to people coming on or coming off benefit are contained in any Bill.

Mr. BUCHANAN

I expected that. It is rather cute. A sum of £5,000,000 is to be saved. I ask the right hon. Gentleman not to meet me with a grin. Even I am entitled to the courtesy of an answer. From whom does he expect to save the £5,000,000?

Mr. THOMAS

The Bill provides that there shall be an investigation, and that investigation will determine the situation.

The DEPUTY-CHAIRMAN

I have given the Committee every opportunity to discussion of the Royal Commission's report, but we must not have a discussion on a Bill which is to be debated later.

Mr. BUCHANAN

Evidently, the point put by the Dominions Secretary is that we are to save £5,000,000 after investigation. He would have us believe that nobody will be refused and that we can save £5,000,000, with all the people getting benefit. I will leave it at that. This Bill proposes to deal with the married women. We are told that we must allow each district to be dealt with specially. One might expect that from a Cabinet which has four Lancashire members. The Lancashire women will not be treated as the Scottish women are treated. This is the first time that any Government has applied a means test to short-time workers. Whoever thought that a Labour Government would make conditions more stringent than a Tory Government? Never before in an Act of Parliament of this kind have conditions been applied in Scotland which did not apply in England.

The DEPUTY-CHAIRMAN

The hon. Member is now discussing an Act of Parliament. There is no Act of Parliament before us now.

Mr. BUCHANAN

It is intended to save £5,000,000.

The DEPUTY-CHAIRMAN

The hon. Member is entitled to discuss any finding of the Royal Commission, but he must reserve his discussion on any Bill until that Bill is before us.

Mr. BUCHANAN

I am discussing the findings of the Commission. The recommendation in regard to short-time workers is that we should have different standards for Scottish women and for Lancashire women, not because that is right or wrong, but because they are frightened. There are differences in every street. The hon. and gallant Member for Kelvingrove and I represent almost adjacent Divisions. In two streets in each Division there may be as much difference as there is between Lancashire and Scotland. You cannot make different conditions for one part of the country and for another part. If you do, you will have shouts about anomalies. It will be said that Lancashire is getting benefits that Scotland is not getting and that if we can only same money from Lancashire the rest will get benefit. When you begin to create anomalies you create greater anomalies.

We are discussing the very vital question of unemployment insurance. The right hon. Lady said that we were getting back to "Labour and the Nation." I wish we were. I would like us to get back not to the phrase "Labour and the Nation" but to the policy of "Labour and the Nation." You are to take £5,000,000 by any means you like from the unemployed. You are to take it, so we are told, from the people who are earning money. Who will be the married women from whom the money will be taken? Will it be the wife of the dentist or the wife of the labourer? Will you save the money from the wife of the dentist, who is earning big money. No. Why? Because she has social interests. She is a dentist's wife, and perhaps she knows an M.P.'s wife. She will get work and qualify in 10 or 12 weeks, and get benefit again. The woman who is going to be refused will be the labourer's wife. The person you are going to attack under the report of the Commission is not the married woman whose husband is getting big wages, who has social influence and who can get a job and qualify. The person who will be attacked will be the married woman whose husband is a labourer, perhaps unemployed. She will not be able to show any stamps and to show that she intends to continue. The rich person's wife, the dentist's wife, will make an excuse and qualify because of her social influence and power.

The course that the Labour Government are embarking upon is a dangerous and difficult one, I have consulted but few people on my action. I say to the Government: You may embark on this course and you will carry the House of Commons with you. You are in agreement with the Tories. You may not be going far enough to suit them, but the fact that you are tackling this business means that to some extent you are in agreement with their policy. You are in whole-hearted agreement with the Liberals. Your back-benchers, in the main, will support you. There will be a united coalition of Tories, Liberal and Labour who will back you in this Bill, but, for my part, I say that I never was elected and I never stood at any election to take benefits from a soul who is now receiving benefit. No man in the Labour party stood at the last election to say that these people shall be deprived of benefit. For my part, I will fight against your Bill. You may hold meetings upstairs, secret meetings, you may have your organisations, you may even threaten the political lives of people, but I care not. I will oppose the Bill with all the might at my command. I will oppose anything that attacks these poor people.

If the Government were doing their duty, they ought not to be robbing the poor, but turning their attention to the widows, the old men, the orphans and those who are in need. Instead of robbing £5,000,000 from the poor, the Government ought to be looking to other channels. They spend 6d. of the national taxation on unemployment relief and 9s. 6d. in interest on the War debt. If they must save money, why take it from the labourer's wife? Even at the worst all that she is doing is spending her 15s. in order that the wean that is coming, the child that is to be born, may have clothes when it has been born. If you must save, go to the rich, go to the rentier, go to those who can afford it, and leave the poor people alone. Let them have a decent, or a semi-decent chance to eke out their miserable livelihood.

Captain CROOKSHANK

I will leave the Government to answer the hon. Member for Gorbals (Mr. Buchanan), but I must say that we recognise that he is genuine in sticking to his principles. The Government are not genuine. They say one thing at one time and another thing the next day. The hon. Member was a little less than fair to the Commissioners. In their terms of reference they were asked to make the scheme solvent and self-supporting, and they were also invited to consider arrangements which could be made outside the scheme for the unemployed who are capable and available for work. Therefore, it is a little hard on the Commissioners to try to make out that they are intending to thrust everybody off benefit without finding any assistance for them. The objection which most of us feel in regard to this Measure is that there is no proposal in it which is likely to find a job for one person. The only purpose of it is to maintain the present unsatisfactory state of affairs. That is all the Finance Resolution does It does not make any attempt to find a job for any man or woman. It is a question of debt, and more debt, piling Pelion on Ossa, and then piling Mount Everest on Pelion. No attempt is made to deal with the situation, although the Royal Commission, of the Government's own appointing—they chose the members of the Royal Commission—have made every kind of recommendation for dealing at once with the situation.

The Secretary of State for the Dominions, in the first speech he made in this Parliament, when he was the Lord Privy Seal but two, told us of the measures that were being taken to deal with unemployment. He instanced eight committees that were being set up to deal with the problem. The course of unemployment insurance has been very similar. Committee after committee has been set up to answer problems which it is the duty of the Government to answer for themselves, if they are a Government, which they are not. First of all, there was the Government's own committee. Then there was the Morris Committee. Then there was what I might call the Committee of one, the Attorney-General, who was put up to defend certain Clauses of the Bill and was thrown over, as all the other committees have been thrown over. After that we had the inter-party committee, less than a year ago. Then we had the Royal Commission. When the Measure of last December was under debate, we moved a reasoned Amendment from this side. I would recall to the Dominions Secretary the words of the Amendment. We declined then to proceed with the Bill until the Government has declared its policy regarding the admitted abuses now causing a continuing waste of the insurance funds. Were not those words justified? Have they not been justified a hundred times since, not only by what we knew was happening, but by the report of the Royal Commission? That was the time when the right hon. Lady told us that we ought to consider ourselves all sinners alike. The reason for that statement was that when the Labour Government came into office the Unemployment Insurance Fund was in debt. Apparently, because it was in debt in June, 1929, and, because it was in debt, to-day we are all to blame. The debt when this Government took over was £37,000,000, whereas the debt to-day is £86,000,000. Is there no difference in degree? Does not magnitude come into the problem? If the Dominions Secretary were bankrupt, would he think that it was the same thing if he could pay 15s. in the pound or only 15d. in the pound? Obviously, it is a question of degree. Therefore, there is a great difference between the debt of £37,000,000, when the Government came into office, and the £86,000,000 of debt to-day, plus the many more millions which they want to add to it.

This huge debt on the real insurance side of unemployment benefit, and on the dole side, the transitional benefit side, is running away with vast sums of money every year. The cost this year is estimated at £125,000,000. Does the Committee realise what that huge sum represents? Except for the expenditure on the Army and the Navy, that sum represents the total cost of the debt services, education, old age pensions, health, administration and Post Office, for the year before the War, and the Government seem to think nothing of it, because the hon. Lady comes down here in a very self-satisfied way and asks for this further Vote. A year ago the Chancellor of the Exchequer was risking all the troubles of a European outbreak at The Hague, yet here is a colleague of the right hon. Gentleman asking for £25,000,000 without a murmur, without an interjection. [An HON. MEMBER: "Quite right!"] It may be quite right, but it denies absolutely the character of one who poses as an iron Chancellor when he is nothing more than a scrap-iron Chancellor. He is nothing but the puppet of ventriloquists. At The Hague he was no doubt voicing the advice given to him by his experts, just as in giving evidence to the Commission he spoke through his experts, but when he comes to this House and has to defend this Vote he is merely the puppet of those who sit behind him and who are quite prepared to see largess doled out, as the hon. Member for Gorbals invites us to do. The Chancellor of the Exchequer cannot see his Budget wrecked and pretend that he is the one financially correct man in the country.

The right hon. Lady always slides over in her speeches the fact that there are these vast numbers out of work. The figures never appear, and anyone looking up the old Debates would be unable to ascertain the number of people on the unemployment roll on that particular date. The number to-day is 2,600,000; vast figures. It is difficult to form any conception of a million, but, if you imagine that every morning and every evening on every day of every week of every year since the beginning of the Christian Era a person was thrown out of work, it would not yet reach the number of people who have lost their jobs during the time of the present Administration, That is some description of the magnitude of the problem we are facing. To-day the income of the fund is greater than ever before. You have bigger Exchequer grants, coming in not on a loan basis, and the outgoings, of course, are vast. Still the Government take no steps to assist the reabsorption into industry of the vast number of men and women who are at present unemployed. The proposal to go on borrowing is vicious, dishonest and monstrous; that is what the Minister of Labour has said herself, but, apparently, one gets accustomed to vice, dishonesty and monstrosity, because the dose is doubled each time.

All the while, and this is my complaint against the Government, Members of the Government and their supporters, with the exception of the hon. Members for Gorbals, go about the country saying, "We stand by the insurance principle. We have to maintain it." That is what the Prime Minister has said and the Chancellor of the Exchequer—I agree it was at the Mansion House, where perhaps he was influenced by the surroundings of the City—by the Minister of Labour herself and the Parliamentary Secretary, whilst the hon. Member for Westhoughton (Mr. Rhys Davies) has said that from the point of view of the approved societies it was desirable to have decent benefits for a proper scheme rather than run the risk of finding ourselves without a scheme at all on account of the misuse of the fund. Our complaint is that the Government talk like this, but whenever an opportunity recurs, and they keep on recurring, they do absolutely nothing, forget all that they have said and try, unsuccessfully, to show the country that they are a respectable humdrum Government. It is really monstrous——[Interruption]——that this should be allowed to continue. The Government have been told how to deal with the general unemployment situation. They have been told by their own Economic Advisory Council, set up and chosen by the Government, that they must either have a tariff in order to absorb the unemployed into employment or reduce wages. They have thrown aside the first alternative and have adopted the other; they have given their sanction to a policy which must result in a reduction of wages.

The Prime Minister himself in this House told us that money wages had fallen much less than the cost of living, and that the policy is not having a bad effect on the pockets of the workers. If that is true with regard to wage reduction—and here I would invite attention to the Commissioners' Report—if you can afford to put aside the solution which we on this side advocate and go in for a policy of wage reduction because the reduced cost of living does not cause it to have a harmful effect, it is even truer when it is applied to unemployment benefit. In the first appendix to the Commission's Report they give the present cost of living and the corresponding rates of benefit under the Unemployment Insurance scheme, and you will find that an unemployed man with a wife and two-children who is now in receipt of 30s. in 1921 would have been in receipt of benefit equal to money wages to-day of 14s. 4d. It is upon that argument that the Commissioners have based their recommendations. In 1924 they were in receipt of only what corresponds to 18s. 6d. to-day, and I do not recollect that the Government made any drastic efforts to have it raised.

My argument is that the Government having been told the two alternative policies which are necessary in order to bring back prosperity to this country, and having rejected one and gone in for the other, must logically carry through the other recommendations of the Royal Commission. They reject the Economic Advisory Council's other alternative of a tariff. We do not, that is our solution; and when it comes to trying to pass, through this Committee these vast borrowing powers and deny us the opportunity of debating them for months to come we say that it is a grotesque and ridiculous way to treat this House and the country. Curiously enough not one of the Ministers responsible for this Resolution is in the Committee at the moment, and when we look at the Government bench the humble words of the kitchen come to mind, they are all bubble and squeak; incompetence to incompetence succeeds. It is a dreadful outlook for the country. This policy, If you can call it a policy, only means that the country is sliding into the dangers and difficulties with which we are immediately faced, and then we have the kind of lecture to which we listened from the right hon. Lady this afternoon, who quoted great slices of "The Times" and an anonymous French economic writer, whose name perhaps she did not know. Such a method of carrying on a Debate on this most important question calls for the utmost condemnation. The words of a great Lincolnshire poet in "Lockeley Hall" come to mind: "babble, babble, poor old England will go down in babble at last."

Lieut.-Commander KENWORTHY

The Committee of Parliament and the public outside as well, have a distinct grievance at the present time. One day perhaps one of the snap Divisions of the Chief Opposition Whip may really come off and we may have a general election, and, as a result of some misjudgment on the part of the electors, the right hon. Member for Bewdley (Mr. S. Baldwin) may once more be sent for to form a Government. We are to-day discussing an extremely important subject. On all sides it is admitted that the question of unemployment insurance is one of great gravity, and yet we have had no indication from the official spokesman of the party opposite, the hon. Member for Rushcliffe (Sir H. Betterton) as to what they propose to do with reference to the fund. The leader of the Tory party in another place, Lord Hailsham, an ex-Lord Chancellor has said that it is not proposed to cut down benefits or increase contributions. We have just had a remarkable outburst from the hon. Member for Gainsborough (Captain Crookshank). I thought that with the courage belonging to political youth he would have thrown his body into the breach and told us what the Opposition propose to do. He has learned the Parliamentary art with great facility. I thought he would have had the courage to have told us what he and his party proposed. We did not expect such a statement from the Shadow Cabinet opposite, though the public outside want to know. We had the usual polished and carefully thought out speech of the hon. Member for Leith (Mr. E. Brown). He has obviously studied the matter very carefully indeed. He forgot his former justifiable bitterness because a Committee of which he was a Member was wound up. He gave us words of advice, but not a word to indicate what was the Liberal policy. Yet in front of him were the Members of the Liberal Shadow Cabinet, including the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George), the right hon. Member for Darwen (Sir H. Saanuel), and the right hon. and gallant Member for Greenock (Sir G. Collins). There they sat, approving, cheering, egging on the hon. Member for Leith, but not one word of constructive suggestion has come from them or from him except some vague suggestions about pruning hooks.

All that it is proposed to do apparently is to ask this House to decide whether £15,000,000 should be deducted from the limit of the amount that can be borrowed. The hon. Member for Rushcliffe (Sir H. Betterton) told us that the money left would carry us on to the autumn. Suppose that by the autumn the right hon. Member for Bewdley (Mr. S. Baldwin) has formed a Government, and that his plans for dealing with unemployment are no more successful than our carefully thought out plans——[Interruption.] We had everything carefully thought out and cut and dried. The hon. and gallant Member for Kelvingrove (Major Elliot) laughs. He used to be a member of a society that was engaged in research on this question for my party, and the hon. and gallant Member knows what were the efforts of our research department. We were caught by the world depression and by being in a minority, and the right hon. Member for Bewdley may find himself in the same position. He may also find himself dependent on the little finger of the right hon. Member for Carnarvon Boroughs. He may be in a minority; he may not be able to carry out his plans for improving trade, to bring in the various fiscal proposals of the several wings of his party. What is he going to do about this fund? May we have an answer to that question before the Debate is over and before we are asked to go into the Division Lobby? [Interruption.] I occasionally vote against the Government. I make this fair offer to the right hon. Member for Bewdley. If he can tell me honestly and straightforwardly what he proposes to do about this terrible financial difficulty of unemployment insurance, and if he has a better plan than that of the Government, I will go into the Lobby with him and support him, and I can say the same of some of my hon. Friends here. If the right hon. Gentleman has a better plan, fairer to the country and the mass of the people, than the plan of the Government, and if he will put it honestly forward with courage and with his usual brilliance in De-hate, we will go into the Lobby with him. But so far we have had nothing whatever of a constructive nature from either section of the Opposition.

I am sorry for my right hon. Friend the Secretary of State for Dominion Affairs. He has nothing whatever to which to reply; there was nothing whatever in the speech of the hon. Member for Rushcliffe which called for one word of reply—not one proposal of any kind, nothing but abuse, exhortation; and from the hon. and gallant Member for Gainsborough nothing but flippant irrelevancies. I would remind the Committee of two figures. If the terrible upward limit of £115,000,000 is reached after nine years of severe economic depression, I ask the Committee to compare that figure with £111,000,000 which we pay every year even now, after two years of Labour Government, on armaments. That £111,000,000 is paid out of income, out of taxation. Why should we not reverse the process? I suggest this to my right hon. Friend the Secretary of State for Dominion Affairs. Why not borrow for armaments? Then we would have the City of London on our side in cutting down the Estimates, and we could pay for unemployment insurance out of current income. Why not do that? Why is it any more wrong to keep your future cannon fodder efficient than to pile up battleships and artillery and aeroplanes? [Interruption.] Hon. Members interrupt, but the young single unemployed men of to-day will be the soldiers in the next war that the Opposition expects, and for that, if for no other reason, I should have thought that Conservatives would be in favour of keeping these men in physical efficiency in case another war comes. Why not give these young men enough to eat as well as provide the rifles and the equipment for their bodies in the next war?

We are told that the country cannot afford the present cost of unemployment benefit. I cannot resist the temptation of referring to one more journal. We have had references made to the "Times," the "Daily Mail" and earlier in our proceedings to the "Daily Herald." I do not think it is fair to leave out all the Beaverbrook papers. Let me quote the "Evening Standard" of 19th June. The L. s. d. of Ascot "— This relates to the country that is ruined and cannot afford to pay 17s. a week to an able-bodied workman who is temporarily out of work, or 2s. a week for his child— At Ascot one loses the ordinary sense of values. I have been to Ascot once and I may go again, and I can certainly bear out that statement— The amount of money taken is enormous. Yesterday 18,000 people paid for admission to the 6s. enclosure. I also hear that something like 8,000 permits were issued for the Royal Enclosure—4,000 men and 4,000 women. This yields about £40,000. That is for one day's pleasure in the Royal Enclosure only. The total takings at the turnstiles for four days cannot full far short of £250,000 and may quite easily exceed that figure. The record of the Betting Control Board is stated to be more than satisfactory, that the receipts of the totalisator during the first three days were £175,665 and the £200,000 mark will be passed to-night. I see that it was well over £225,000 before the racing was over. That was in a country that is supposed to be groaning under the burden of taxation, and supposed to be unable to pay its way. This is the country that cannot afford sufficient to maintain the physical efficiency of cannon fodder for the next war.

Let me make one or two remarks to my right hon. Friend the Secretary of State for Dominion Affairs. I wish to refer to the Report of the Royal Commission. I believe that I represent as many dockers as any other hon. Member of this Committee. Hull happens to be the third port in the Kingdom, and the dockers mostly live in my constituency. I must say to my right hon. Friend that I am a little alarmed at the Report of the Royal Commission, but I am still more alarmed at what I understood to be the statement of the Minister of Labour, that the Report of the Royal Commission was accepted. With regard to anomalies, a great deal has been made of the coal trimmer who earns several pounds by two or three days' work and then draws unemployment benefit. But it is an isolated case. There are a few cases of men who can earn comparatively big money by working through the day and night on a ship unloading grain or coal. But such men may go for 10 days waiting for another ship and another job.

We have the most horrible system of casualised labour in the docks and this House is responsible for having tolerated it for so long. We ought to have insisted on the dock labourer being decasualised. Then there is the case of the ordinary docker. It suits the railway companies which own the docks, the shipping companies, and the dock-owning companies, to keep men in great numbers so as to have a reserve of labour that can be called upon. At present, owing to the slump in trade, the size of that surplus pool of labour is more noticeable. But it has always been there; there have always been far more men than work could be provided for. It is extremely difficult for even the best workmen to get regular work at the docks. The man who works his two or three days and gets his 24s. or 30s. as a result—from this he has to pay his trade union dues and his health and unemployment insurance contributions—if he has a family, cannot live unless he gets some accession to his income from the unemployment funds. While that system is tolerated such a man has as much right to have his earnings supplemented as any other workman in the country.

Will my right hon. Friend the Secretary for the Dominions kindly state that the anomalies to which reference has been made are not to apply to dock labourers as such, working in the way that I have described, that is men getting the ordinary wage of 12s. (which it is suggested by the companies could be reduced to 10s.) two or three days a week? Will my right hon. Friend state that that is not to be considered an anomaly? I do not believe it is the Government's intention to worsen the condition of these men. The dock labourer, in contradistinction to every other worker, has to sign the book twice a day. He has to be ready for work at 7.30 in the morning. He then signs if not taken on for work. If he gets employment at 12.45, at the second call, he gets nothing for that half-day.

7.0 p.m.

Mr. THOMAS

Seeing that the Debate is taking that line, let me, in response to the request, mention immediately the other side, and say that, so far as the Government are concerned, we not only know the position of the dock workers and of all that is included in this subject, but we have consulted those who are responsible. The anomaly that we deal with is not the anomaly of the man who is working two days and is available for work on the other four, but of the man working two days who does not intend to work the other four. That is the difference.

Lieut.-Commander KENWORTHY

I am very much obliged to the right hon. Gentleman. That was the answer I expected. I also have been in touch with the official leaders of the dockers.

Mr. LOGAN

May I put a question to the right hon. Gentleman as we have more than half-a-dozen dockers in the Scotland division, though not so many as in Hull? What does he mean by the four days of those who do not intend to get work?

Mr. THOMAS

If the hon. Member reads the Royal Commission's Report, he will see that they draw attention to certain people in the printing trades whose work is habitually on Sunday newspapers. They work Friday and Saturday and part of Sunday, and they neither look for nor intend to get other work. We say that those people ought not to draw unemployment benefit, and we intend that they should not.

Lieut.-Commander KENWORTHY

I am obliged for the interruption, though I am not making comparisons with the Scotland division. I do not care whether there are only six dockers in my constituency or not. They are the men who support me, and I shall stand by them. I am glad to learn that the rules will be laid before Parliament. They will be carefully scrutinised. I warn those on the Front Bench that, if they appear to affect the hardworking and hardly used dock labourers, they must expect very close scrutiny and possibly a good deal of criticism. There is one other anomaly in connection with the finances of the fund. Why is it that we are going to deal with one anomaly and not deal with the anomaly of the agricultural labourer? There is very considerable unemployment among the agricultural workers now, and it is not fair that they should be left out any longer. If they were brought into the scheme all over the country, it would strengthen the fund. The same applies to domestic service. What is holding up legislation there? We know that my right hon. Friend the Minister of Labour is always endeavouring to carry out the pledges of "Labour and the Nation" and the bringing into the fund of agricultural labourers was one of the most specific pledges of our party at the last election. I believe we shall do it yet, but I hope the right hon. Lady will explain what are the difficulties and why we are dealing with one anomaly and leaving one which is far worse.

Do not let us delude ourselves with the idea that by the autumn a way out will be found. I believe that the financial situation in the country will be far worse in the autumn. Despite the good news from America of the Hoover proposal, the best thing in the last 10 years, I believe we have got to face another increase of unemployment in this and other industrial countries and that the depression is so serious that it must get worse before it gets better. We have, therefore, to face a worsening economic and financial situation and also an increase of unemployment. We hope it will not be so, but we must face the worst. I believe we shall be forced to worsen the position of the insured workers if the present financial policy is continued.

The whole cause of the trouble—in a nutshell—is this. I am going to put the matter in a way which will remind the right hon. Member for Bewdley of the story of the king who went about with all his courtiers saying, "What wonderful raiment he wears," until at last a child said, "Why, he is naked." The reason for our position is this: The yearly increase of the output of goods and commodities of all kinds in the world is 5 per cent.; the increase of gold is 2½ per cent. As gold is our yard-stick and the measure of our money for the purchase of commodities, it is obvious that the prices of commodities will go on falling. I refer particularly to primary commodities. We keep up the prices of manufactured goods because of the resistance of the salaried and wage-earning classes. That is the cause of the trouble, and, until we can produce more currency to purchase our products we shall go on increasing the trouble. Until that is done, the Government will be driven into a position of greater difficulty and finally even the Opposition will have to pluck up courage and say what they are going to do. We must face the situation seriously and, unless we alter the monetary policy of our country, we shall have to say good-bye, not only to the solvency of the Unemployment Fund, but to the solvency of the realm.

Mr. STANLEY BALDWIN

There is always something so fresh and ingenuous about the hon. and gallant Member that I find it practically irresistible when he invites me to address a few observations to the Committee. But, when he issues an invitation to me to state what I, in the event of my ever being returned to power at some future date, might do in circumstances as yet unknown and to expose that fully in a Debate when we are discussing whether the Government shall be allowed to raise the borrowing powers of the Treasury to £115,000,000, that is a little beside the question to-day. The Committee has to decide whether it will give powers to the Government to increase the borrowing powers to £115,000,000, and our task, as the Opposition, is to make such reasons as we can why the Committee should not consent. No profounder truth was ever uttered than by the right hon. Lady the Minister of Labour when she said, speaking of the Government, "It is our task to deal with this problem." I accept that fully. It is her responsibility, and it may some day be someone else's. To-day the responsibility is the Government's, and we have to show, if we can, why the Committee should be reluctant to grant this extra credit. I should like to congratulate the right hon. Lady on her speech. It has always been an axiom, when you have a difficult position to defend, to attack, and she attacked very well and very merrily. But it was not altogether what I expected of a Member of a pacifist Government, on the eve of a disarmament conference, to take an unhappy Frenchman into the open and to belabour him on the Floor of the House of Commons without any opportunity to reply. Her straits, however, were considerable.

As one who, in the course of a varied career, has been for some years at the Treasury and has had the great honour of being at one time Chancellor of the Exchequer, I desire to discuss for a short time what seems to me the gravity of the situation in which we are drifting. It is a question in which is involved a thousand details of the administration, of unemployment benefit. It is a question beyond all that, because it is a question—and that is directly affected by our vote to-day—of the credit of the country, and it is to that point that I wish to direct the attention of the Committee. I do not wish to belabour the Committee with too many figures or facts but merely to call attention to this, that the outstanding debt is going up by leaps and bounds, that we are adding to it today, and that the Chancellor of the Exchequer and other ministers have spoken with alarm about the growth of this debt, and that they have said as clearly as I could have said myself that it is essential to bring the insurance scheme back to an insurance basis. The Chancellor of the Exchequer has spoken, as any Chancellor of the Exchequer must speak, of the anxiety with which he regarded this growing debt, and it is of that anxiety that I wish to speak. Of course, it is quite true that the Government are very largely responsible for the position in which we find ourselves, and this is quite apart from the growth of unemployment. The increase in unemployment is one of the causes, and a very great cause, but also we must not forget that, at a time when ordinary prudence would have said "No," the Government increased rates of benefit with no corresponding contributions, that they have relaxed conditions, and have not up to now devised any method of reducing this indebtedness and preventing the borrowing. That is precisely the charge which we have against them.

It is clear that this kind of finance cannot go on with any security either to the domestic or the international financial position of the country. It is especially necessary to say that in this House, and it should be especially necessary for the Ministers of a Labour Government, because finance has always been the Achilles heel of a democracy. It has been seen in history over and over again. The reasons are obvious. The reasons are that a large democratic electorate cannot have, on these very difficult and complicated subjects, the experience that qualifies them to judge what may be perilious or safe in the method of conducting national finance. Therefore, they are dependent upon the honest and true statement of facts and of where they may lead from those whose judgments they respect. That is the point on which I feel very strongly. We have heard so many talks during this last year of the sacrifices that will have to be made by the country, by all classes and so forth, but we have heard nothing more about them. I am perfectly certain that if sacrifices were needed right through the country for the extinction so far as is possible of this debt—I do not say it can be done at once by anybody in any circumstances, but it ought to be done—I am quite sure that, if such a demand were made for sacrifices to get a solvent Budget, the country would not be behindhand in making them.

It is easy for anyone to understand what happens if you do not balance your own accounts. We all know that, whether you have a large income or a small one. If you do not pull up, it is disastrous. When you translate from the terms of the individual into the terms of the State it gets much more difficult for most people to imagine what is really happening, and I think the War helped very much to confuse people's minds about that. It seemed so easy, during the War, for those who had not to do it to raise money. It seemed so easy to furnish all the credits wanted until the day of reckoning came. But do not let us forget that those credits which we raised with such apparent ease, both here and in America, have a stranglehold round our necks, and probably will have for generations. The liabilities incurred by the nations of the world during those four years form the principal, almost the insurmountable, difficulty which each nation is up against to-day in trying to get its finances straight and its trade in order. An unbalanced Budget, in its simplest form, is one which provides no sinking fund, and the provision for sinking fund is rapidly being utilised by the borrowing for these purposes—for unproductive and not productive purposes.

An unbalanced Budget is a very dangerous thing in many ways. It is dangerous because, if carried too far, it leads to an unsettled currency and when you once get an unsettled currency the people who get pinched by that, as so often happens in this world, are the poor; and it is to their interest, more than to the interest of any class of the community, that currency should be stable and the finances of the country stable. There are only two courses by which you can balance a Budget, It is "A, B, C," but everybody does not practise it. You can do it by economies, or you can do it by taxation. Both these courses are difficult with regard to borrowing such as this because both taxation and economies touch the people at a thousand points. But that is the problem which faces the Government. If they do not tackle it, if they have no ideas of their own, and do not think fit to apply the ideas provided for them, then, inevitably, borrowing will go on until such time as trade gets better—a very risky moment to wait for—and the Budget will remain unbalanced.

We ought to foot our bill as we go along to the utmost extent in our power. Since the War all nations have been watching each other nervously, wondering who is going to crash. They watch each other and they watch each other's finances. There have been no keener critics in Europe of other countries' finances than we have been. We have criticised them, we have criticised unbalanced Budgets and I rejoice to think that we have been able to be of great assistance in Europe in helping countries to get their finances straight. We have taken our share in providing loans for them, but the first thing we have always laid down has been that, before help can be given budgets must be balanced, and we must remember—and I hope, yet, that it is not close at our door—that if we happen, by unbalanced budgets, to get into a condition of real peril there is no country which would step forward to help us. We have always got to rely on ourselves and help other people. These are all perfectly plain statements of fact, but they are unpalatable, and they are not popular, and have never been popular, and they are least of all popular in a democracy.

Of course, people talk as though democracy were a new thing, and that nobody ever knew anything about it, until we, the pride of the ages, came into existence; but I remember very well, reading a well-known play, written about 2,300 years ago, in a city which was, perhaps, the most famous democracy that ever was born. One character in that play said to another that if men were to stand for a seat in Athens, and one of them said he desired to strengthen the Athenian navy because the existence of a navy was necessary to the existence of Athens, and if another man said that stood for increased doles and no navy, the man who stood for increased doles would get in every time. That is a very interesting statement to have been made as long ago as that, and it shows how democracy's tendency is to concentrate on the thing which makes an immediate appeal to people, and not on the ultimate reality which lies behind. That is where the great responsibility of leaders of all parties to-day lies. They ought, with courage, to explain to the people what is the result of finance which is not absolutely sound and safe and explain what is the danger of borrowing, unless you can see your way within a reasonable time to have borrowing repaid and not to have it piled on to the National Debt.

I have heard it said by some people—I am not sure I have not read it somewhere—" Why not write off all this debt? "You cannot write off this debt. You are paying interest on that money to-day, an average interest of 4¾ per cent., and you cannot write off the debt unless you repudiate altogether, and if you repudiate, then your last state is a great deal worse than your first. There is no doubt about that. We have to consider in our country, with our trade, the effect, not only at home but on international finance, unless that confidence is felt in our finance, which we always like to know that we, as Britons, can feel in it. There are many Members of the party opposite who are never disturbed by these thoughts. There are large numbers who genuinely believe that all this talk about possible financial trouble from over-borrowing is a bogey and they call the people who try to put the truth before them, Cassandras. That is exactly what the men said to whom Cassandra talked when she was alive. But the awkward thing about Cassandra was that whatever she said proved true, which was a very unfortunate thing for the people who used to laugh at her when she was alive.

Then there is another section. I gather this by reading the speeches of hon. Members opposite—not so much the speeches made in the House of Commons, as the speeches sometimes made in the constituencies. There seems to be an idea that the international finance, between countries—the system of exchanges and so on—is really one vast malign influence, controlled by malign people, who use it for putting money into their malign pockets. That again is a good way from the truth. The whole exchange system of the trading world is an exceedingly complicated one, and it has been evolved through many years, as the trade of the world has grown up, and it functions noiselessly and beneficently when it is working all right. But throw it out of gear, and every trader in the country, and, through him, every workman in the country, will suffer and suffer quickly. The Chancellor of the Exchequer will not agree with me in many things but I think he will agree with me in this, that we may well be proud of the work which some of our English people have done in this country and on the Continent of Europe, in trying to get back the functioning of that extraordinarily complicated system of exchange. They have done so by infinite patience and infinite courage. For one thing, these men have had to fight selfishness, greed and ignorance which, when allied, are a very powerful trinity and are found alike in individuals and nations. If a nation either through ignorance or cowardice, will not face up to its financial responsibilities, it is throwing out of gear, or tending to throw out of gear, that mechanism and is doing harm not only to the people in its own country but to the people in the other countries of Europe.

We cannot afford in this country to make experiments. This country is over-industrialised and depends on foreign trade and experiments may be disastrous. [HON. MEMBERS: "Tariffs!"] In Australia and in Russia experiments may be tried, so far as those countries are concerned, in safety, because neither is a highly industrialised country and both countries have agriculture which they can depend on as their foundation. In our case if the complicated mechanism of trade gets out of gear everyone in this country suffers. There is no surer way leading to that getting out of gear than over-borrowing. We on this side protest against this Motion to-day, because we believe that it might have been avoided, had the Government made up their own mind how they would tackle a problem, which, I admit, is one of extreme delicacy and difficulty. The hon. and gallant Member for Central Hull (Lieut.-Commander Kenworthy) asked us what our charge was against the Government.

Lieut.-Commander KENWORTHY

No, what your plans were.

Mr. BALDWIN

The hon. and gallant Gentleman will have quite enough to fight on when the battlefield is reached. Our charge is that the Government have gone on getting into debt without making any attempt to meet it, either by economies or by taxation. We believe that they have been pursuing this policy against the better judgment of those sitting on the Front Bench. They know that financially it is an unsound policy but they are pursuing it. They have thought out nothing; they have set up a Royal Commission and have given up the Three Party Conference of which I had great hopes. They set up a Royal Commission—one of their own choosing. They pressed it to issue an interim report. The interim report has been issued, and they are adopting a small part of it, and with regard to the rest of it they are going to wait for the final report. In the meantime, borrowing goes on and borrowing is likely to go on. Borrowing is, in my mind, a danger and because the Government have taken no steps to reduce the amount of borrowing and bring it into manageable proportions, I and my Friends behind me are going to vote against this extension of borrowing power for which the Government are asking.

Mr. GRAHAM WHITE

The Leader of the Opposition, like the hon. Baronet the Member for Rushcliffe (Sir H. Betterton), has devoted a great part of his speech to a criticism of the handling of the problem of unemployment insurance and of the fund since the present Government came into office. I think in fairness it should be pointed out that that criticism might be carried further back. Indeed, there is no part of the history of this fund since probably about 1920 which might not be the subject, in retrospect, of legitimate criticism. There has been a consistent under-estimation of the volume of unemployment to be faced and of the burden which the fund would have to carry. There have been incidents of another character. This House may remember the Economies (Miscellaneous Provisions) Act of 1926, which depleted the resources of the fund very considerably and which nobody can deny was a factor contributory to the present situation.

I agree with the right hon. Gentleman with regard to the gravity of the situation. It is indeed grave. The Unemployment Insurance Fund and the considerations arising from it are no longer a mere item in our Budget calculations; they are the dominating factor, and they may become a controlling factor. We have been living, since the speech of the right hon. Gentleman the Chancellor of the Exchequer, in a very real sense in the shadow of an impending crisis. There are some who say that we are in a crisis to-day, and there are others who deny it. There is no crisis in the sense that we are to-day still able to act on our own volition. The right hon. Member for Bewdley (Mr. S. Baldwin) is, however, quite right. The situation may become very acute, and the march of harsh events may take control, and we shall find ourselves, as they are at present in Australia, dealing with a situation of very great gravity and one from which it will be exceedingly difficult to extricate ourselves without inflicting suffering on every member of the community.

I draw, with humility, a rather different deduction from the reasons put forward by the right hon. Gentleman, in view of the gravity, which I do not think will be denied in any serious quarter of the House, of the situation in which we find ourselves to-day. It seems to me that the qualities of statesmanship and the demands of patriotism are not to be fobbed off by saying that when the election comes there will be enough to fight about. I say that here and now, if there is a contribution which can be made, this is the place and the occasion on which to make it.

Major ELLIOT

What are your plans?

Mr. GRAHAM WHITE

I will return to the hon. and gallant Member's query later on, but I wish to turn now to the Money Resolution which we are discussing. The right hon. Lady the Minister of Labour was at some pains to defend the institution of an advisory board to assist in the administration which will follow the Bill which we shall have to consider later in the week, if it becomes law. I am entirely in favour of the procedure which has been outlined, for the reasons which have been given in great detail by my hon. Friend the Member for Leith (Mr. E. Brown), not only because of the great intricacies of the problem with which we shall be faced in dealing with anomalies, but also because I believe that the more questions of this kind are taken away from the purely political arena, the better it is for everybody concerned. Another reason is that in the last 10 years there has been built up in this country, in connection with the administration of unemployment insurance, a long record of tradition of very useful service and experience by boards acting under precisely the same composition which is foreshadowed for this advisory body. They have been constituted by representatives of employers and employed, and they have dealt clearly and with common sense with the various problems which have been presented to them.

I pass now to the consideration of one other matter, which is indeed of great importance, and to which I have listened attentively in speeches from all quarters of the House. I do not think there is, in any quarter of the House, any demand that the recommendation of the Commission that the standard benefit should be reduced should be carried into effect. If there is any demand, it has not been made vocal so far. The right hon. Lady gave sound reasons why that recommendation should not be put into effect. If I may trespass upon the time of the House to do so, I would like to give reasons of a more homely character which have brought me to the same conclusion. There has been carried out an investigation into the social conditions on Merseyside under the aegis of the Liverpool University—a very interesting and instructive piece of work. Some years ago Professor Bowley and a colleague, carrying out a somewhat similar investigation in London, drew up and determined after much time and research what is termed the poverty line for any given family in any given area.

That poverty line has been recalculated for the Liverpool area from experience gained in that area, and as a result the poverty line for a man and his wife and an infant child in the big area from which I and some other hon. Members here come is set down as 27s. 7d. a week. If the child had been of school age the figure would have been in excess of 28s. a week. It is a strange coincidence that this figure is practically the same as the unemployment benefit figure of 28s. a week, a figure which has not been arrived at, so far as I know, by any accurate or acute investigation into or scientific relation to the bare necessities of life. It is singular that while the poverty line of 27s. 7d. a week coincides with the benefit paid to a man and wife with just one child, the coincidence disappears directly the family is bigger, then the family goes down below the poverty line. A man and wife, for example, with a family of five would get in unemployment benefit 32s. a week, but the requirements of the poverty line, which means the bare minimum necessary to keep them alive, amount to 37s. 7d. a week, so that they are 5s. below it. If the family is increased to seven, they will get a dole of 36s. 9d., but the poverty line will require 46s. 2d.

What is the deduction to be drawn from these figures? [An HON. MEMBER: "Capitalism cannot afford it!"] What is the serious deduction to be drawn from these figures? Nobody in this country would challenge the statement that the unemployed have to be maintained, and I hope that nobody would challenge the statement that the most serious and devastating loss which this country is facing to-day is the physical and psychological deterioration of the unemployed. The recommendation which has been made is that there should be a reduction of 3s. a week in the allowances to a man and his wife. In view of the figures which I have quoted, I may say that the result of that reduction would not be any alleviation of the situation; it would merely be an aggravation of it, because it would simply mean, and must mean, a correspondingly closer resort to the public assistance committees, and that the local authorities would be called upon to carry a burden which they are quite unable to do.

I said I was going to be homely in the arguments that I should put before the Committee, and I would like to say that for some months past I have been making very careful inquiries among friends and acquaintances in my own neighbourhood who have been under the misfortune of having to live on the dole. Perhaps I ought to have mentioned this before in the sequence of my arguments. This case is not chosen for any special reason, but here is the case of a man and his wife and one child, a baby, living on 28s. a week. Their expenditure is: Rent, 8s.; burial insurance, 8d.; coal, 1s. 8d.; gas, 1s. 6d.; sugar, 6d.; tea, 6d.; meat, 2s.; bread, 2s. 6d.; butter, 1s.; potatoes, 8d.; jam, 6d.; milk (tinned), 6d.; fresh milk for the child, 2s.; clothing and boot club, 3s.; tobacco, 1s.; and extras, 2s. From which of these items is the 3s. to be deducted which will not mean a resort to the public assistance committee or else an acceleration of that process of deterioration, both mental and moral, of the unemployed? Therefore, I am unable to support the suggestion made by the Commission.

In this House we have one after another been quoting freely from the report of the Commission and from the evidence presented before it. I would like to pay a tribute of thanks for the work which has so far been done by the distinguished gentlemen and one lady who have been working on this Commission. There are some hon. Members who thought the Commission ought not to Lave been appointed, and there are some hon. Members who objected to its personnel and to the findings of the Commission, even before they knew what they were, but even those Members who took that view will appreciate the fact that these gentlemen and one lady have given up work of importance which they were doing—because they are distinguished people—and have given of their time to render a public service, for which they are entitled to our thanks. Furthermore, they are pursuing labours which I think will be of profound interest, from both an economic and a social aspect, when they come to present their final report to this House.

I return to the question which was put to me by the right hon. and gallant Member for Kelvingrove (Major Elliot). I do not claim to have any responsibility for offering a solution or a programme to deal with these particular difficulties. I feel very strongly, however, that the whole centre of the finance of the unemployment insurance of this country must of necessity be related, and quickly related, to all the other aspects of our financial obligations. There must be some sort of plan. It is no good drifting on into a position from which it will be difficult for us to extricate ourselves. If I were asked what that plan should be, I should say that it must be related in the first place to the elimination from the unemployment insurance scheme of anything which can be described in the Press or anywhere else as an abuse, and from anything of which men or women who are subject to it can complain as an injustice. It should be related to the need for a very stringent national economy which must be the forerunner, and indeed the essential preliminary, to a plan for the conversion of the higher interest bearing parts of our National Debt.

There should be a far greater activity and determination in all departments of our national life in seeking to provide work. There must also be an examination into the present scope and likely development of the problem of technological unemployment. It will be interesting to know if the right hon. Lady's Department has made an investigation into this, for it is a matter of vast importance. In the United States, in the full blast of their prosperity in 1928, before there was a whisper of a crash, they had 2,000,000 unemployed; it was 1,784,000 according to the calculations of the American Bureau of Statistics, and 2,055,000 according to the President's committee on the recent changes in the economic condition of the country. There were 2,000,000 persons who lost their employment simply through the development of industry and the reorganisation which my right hon. Friend described this afternoon. It is almost an impertinence on my part to go on, but I would suggest that there must be an examination into the present condition and the possible future scope of industry, and unless we are prepared to sit still and see these people in idleness, there must be definite provision of work, either by the State or by other means. That seems to me an essential feature of any solution that is to bring a substantial amelioration.

We have heard of the Five Years Plan, which has received an immense advertisement all over the world. I should like to see for this country a plan for two years or three years or any sort of plan, because we have no consistent plan at all now. Other countries, quite apart from the question of tariffs, have got their definite policy for stimulating and looking after their overseas trade. We are behindhand in that. The Japanese and the French have plans, which go far beyond five years, for looking after the development of their overseas trade. I must apologise for having gone on so long, but I was challenged, and I have done my best to respond to the invitation.

Mr. HAYDAY

In listening to the Leader of the Opposition, I could not help feeling that, while he did not openly attack the proposal for borrowing a further £25,000,000, he hinted in a very subtle manner that the Unemployment Insurance Fund must be balanced. You can only do that by falling back on the old pernicious system, which we so dreaded in years gone by, of Poor Law doles, soup kitchens run by charitably disposed persons, gangs of men parading the country and death and pestilence coming in the form of epidemic disease because of the reduced stamina and resisting power of the people. I wonder which of the two the country would really prefer—borrowing from the Exchequer for 11 years of distress a sum of £115,000,000, or the position as it is in America, or even in Germany where there is to some extent a measure of relief. In Germany there are riots and the use of firearms, and in America there are bread lines.

When the right hon. Gentleman the Leader of the Opposition said that the nations are watching which country will collapse first, he thereby hinted that if we make too full a provision for unemployment and upset our financial equipoise, we shall be the first to crash. I have been in Geneva for three weeks at the International Labour Conference, where world unemployment has been debated. The information you get from other nations is that Great Britain will weather her difficulties with greater certainty than most other nations. In America there is a lack of machinery fully to gauge the measure of unemployment and distress, and a deliberate hiding by the Press of the real state of affairs in order that the world shall not know to the full the crash that is taking place there. America is the land with the millions, the land without any unemployment insurance provision or any machinery adequately to deal with distress. What is the use of their millions in their treasury if they bring about a state of affairs which means bread lines and violence?

The right hon. Gentleman says that we are piling up a debt. Again I say, choose between the two. To whom are we piling up a debt and what for? It is a debt against the fund for which the State charges its full Shylock measure of interest. The fund has to suffer an additional handicap because of the £4,750,000 in interest which goes to the State from the fund every year. What of the debt to the people who have served in industry and have served their country? When an hon. Member was speaking of the numbers of men who served during the War and who were now among the unemployed, hon. Members seem inclined to laugh, but it is true that ex-service men have been suffering more than the others, and it is to those that hon. Members opposite say, "Put your fund right; you have no right to borrow money from the Treasury to meet the demands of unemployment benefit in the form of sustenance."

8.0 p.m.

It is ridiculous for any Member to assume that the nation can get out of its responsibility by refusing powers to pay money from the Treasury, for the only alternative is to reduce the measure of sustenance. I do not blindly accept that there are anomalies to the extent that the Royal Commission has suggested. I want these anomalies, or abuses as some people call them, proved before any attempt is made to deny people any portion of their sustenance allowance. It is not sufficient to say that abuses exist. If you search through the whole evidence given before the Royal Commission for proof as to the existence of abuses, you will find that they do not exist in any volume at all. It was suggested to me, when I gave evidence on behalf of the trade union movement, that surely, if a married woman inherited a fortune of £4,000, I should not agree that she should be permitted to sign on for unemployment benefit. I said that it would indeed be a great pleasure if 250,000 married women could inherit £4,000, and that if they then drew the benefit, the abuse would assume dimensions of which serious note should be taken. All along it has been a case of singling out an abuse and assuming from one case that there is a general abuse. While I agree with the Government in taking one or two of the anomalies as subjects for investigation, I do not look upon their proposals as definitely tying down anybody. I look upon it as suggesting a category of persons who may have their circumstances reviewed by the central board, but it it ought to be proved that there are abuses. For the first time, I believe, in any proposal before this House there remains to us a double check, a check that if the Minister cannot accept the advice of the Advisory Board that Advisory Board's report must be deposited here, with any regulation that the Minister may care to submit, so that the reasons for or against may be properly examined.

I want to submit to the Committee a proposition which, although it has been recognised as a sound one for the past 14 or 15 years, has never yet been accepted. I say that one can only estimate with 70 per cent. of accuracy the liabilities which are likely to fall upon any unemployment insurance scheme. All the estimates of cost and numbers have gone wrong. We cannot gauge these things as illness can be gauged in connection with health insurance, because unemployment is subject to such violent fluctuations. Our figures give a false impression to the world of the numbers actually unemployed if they are counted as indicating six days unemployment per person. It has been said that a person signing the register on the making-up day of the week for only one day's unemployment is returned in the sum total as though he had been continuously signing-on as unemployed. In order that we may have a true reflex of our position, the Department ought to consider whether it would not be possible to publish the volume of unemployment as represented by six days' unemployment per person rather than publish figures which include every person signing-on for one, two, three, four, five or six days. It must not be taken, also, that if 2,500,000 persons are signing the unemployment registers, 2,500,000 persons are receiving what some people call the dole. That is not true by a long way. Only about 85 per cent. to 87 per cent. of the sum total represents the number who are entitled to draw benefit.

I am opposed to any contributory scheme in the sense that we have it now. Hon. Members opposite talk of placing the scheme on an actuarial basis without having given any thought to the problem. It is suggested that the Government have been too generous; otherwise, the debt need not have been so great. That is an intimation that the Government ought to have reduced the measure of benefit or increased the rate of contribution, and, indeed, the Commission said that as a means of rectifying the position a man's contribution should be increased from 7d. to 9d. Is it generally recognised that if I work one hour and earn 1s. or 1s. 3d., the first charge upon those earnings is my unemployment contribution? I must pay 7d. out of those earnings. If I work two hours pretty well the whole of my two hours' earnings are absorbed in health and unemployment insurance contributions. I cannot escape from those payments. Now it is suggested that the contribution should be raised to 9d. I seriously suggest that instead of our having to debate unemployment, and all the agony and distress surrounding it, by coming for borrowing powers, the fund should be placed upon its proper financial basis by raising the money in the form suggested in the evidence given by the Trade Union Congress before the Royal Commission. With a 1 per cent. tax in emergency upon workmen's wages, the £3 a week man would then be paying pretty well what is the equivalent of what is paid now.

The CHAIRMAN (Sir Robert Young)

The hon. Member cannot go into that question now. We cannot discuss alternative schemes not consistent with the Money Resolution.

Mr. HAYDAY

I was only trying to show that while we have a contributory basis we shall never be able to avoid coming to the House to borrow money, and that there need be no borrowings at all if the money were raised in the form of direct taxation. In any case we shall never be able to get rid of our liability to meet the needs of the unemployed. The hon. Member for Birkenhead (Mr. White) spoke of Professor Bowley's investigations. I suggest to the Opposition particularly that before they talk about the Government having been too generous in their allowances for unemployment benefit they should select two or three typical cases in every important industrial town for an experiment. They should pay the rent of the household, buy the food, and estimate the expenditure in boot repairs and so on. They should do that for a month, and then they would be able to see what, on an average, would be the weekly cost per family. I suggest an average family of a man, his wife and two children. I am certain it would work out at much more than Professor Bowley's investigation shows. If, after that, they were prepared to give the measure of sustenance which represents only the bare existence limit they would all be demanding increases instead of reductions. [Interruption.] I do not want to digress, but the hon. Member ought to have heard the speech made from the other side. The Leader of the Opposition said the Government had been too generous. He used those exact words.

Major ELLIOT

What my right hon. Friend said was that the Government had raised the benefits without making any provision to meet them.

Mr. HAYDAY

Very well. To make provision to meet them means increasing the contributions.

Major ELLIOT

What was said was that we have to make provision for meeting our liabilities, and that we had no right to vote more money without providing the means with which to pay.

Mr. HAYDAY

The Leader of the Opposition said the Government had been too generous in its allowances. He used the word "generous." If the term "too generous" does not imply that more has been paid than could be justified, I do not know the meaning of the English language. I said at the outset that his speech was a very subtle way of saying what the Opposition did not care to say in the blunter phrases of the English language. Since the hon. and gallant Gentleman undertakes to champion his leader I am prepared to stand by what will appear in the OFFICIAL REPORT to-morrow. I was saying that if an investigation were properly carried out there would be a demand even from hon. Members opposite for increased sustenance allowances. In view of all the circumstances I cannot say that the Government will not have to come back for more money, but I am not as pessimistic as some hon. Members. I do not think things are going to get worse. I feel they are bound to improve. I want to say, further, that in supporting this proposal to borrow more money and, possibly, in supporting the proposals which are linked up with this application for more money, I shall never give my vote for any Measure that would take away transitional benefit. I do not call that an abuse. I would not turn those people over to the Poor Law authorities, which I am afraid is what some hon. Members wish to do. They want to make the fund actuarially sound by jettisoning a number of those who are in a weak position as the result of the storm and stress through which they have passed.

It is very easy to cast aside the weak, to put them back on to the Poor Law; but it is in just those very districts where the unemployment problem is most severe that the Poor Law authorities will be able to do the least for them. There are localities where unemployment is so severe that the inhabitants cannot meet their rate demands, and shopkeepers are closing down. It is in those places that the greatest numbers will be sent to the Poor Law. The Poor Law will say "No." A gentleman remarked some time ago "You can deal much better with the unemployed in the summer time than you can in the winter. There is the open road for them, there are the green fields, and there are hedges for them to sleep under. They are quiescent during the summer." If adequate assistance were refused in the summer would there be the same rebellion as if sustenance were diminished in the winter? I would solemnly warn the House and caution the Government. After 11 years of distress and hardship we are asked to deal drastically with the unemployed in order to save a few million pounds, while at the same time persons who are addressing savings meetings talk of the millions invested in National Savings Certificates, in the Post Office and in building societies. At a time when there are millions here, there and everywhere we are not in such a low state and we should not be so pessimistic as to refuse the Government of the day a further £25,000,000 to meet the difficulties pressing so heavily upon so many of our people.

Captain HAROLD BALFOUR

The hon. Member for "West Nottingham (Mr. Hayday) has told us of many terrible things which might happen and he has quoted many gentlemen of whom we on this side have never heard. This Resolution has been discussed in a spirit of blank-cheque-right sentimentality or in the interests of sectional delegates representing particular parts of the community whose interests have been put forward at all costs, quite regardless of the interests of the rest of the community. I will take the blank-cheque-right first. As the Leader of the Opposition has already pointed out, if the country is faced with a crisis, the Country will invariably rise to it, and be willing to take the steps necessary to remedy that state of affairs. Hon. Members opposite speak as if there were certain people who were unemployed who, because they were members of a certain community, have a right to be treated the same as those who were insured. [HON. MEMBERS: "Hear, hear!"] I am glad that I have not misrepresented the attitude of mind with which some hon. Members come down to this House. On this side, we say that there should be a differentiation between those who are actuarially sound subjects in the fund and those who are not, and that is a proposal which I shall support. As regards the Royal Commission and its recommendations, it is a matter for those who direct the destinies of the Conservative party to say whether this question should be left over until the election or not. As far as I am concerned, I am going to say what I think and what I intend to support.

The attitude of mind of the sectional delegates is one which is frequently brought forward in these discussions. The hon. Member for Gorbals (Mr. Buchanan) dealt with it when he was dealing with his own Dominions Secretary and the question of the disparity of wage levels in the sheltered railway trade and skilled industries. The hon. Member reminded us that all wages were drawn out of the same pool of national wealth. That is perfectly true, but I ask hon. Members whether they think it is a right point of view to represent some sectional interest, whether dockers or postmen, when they say they are putting forward those proposals for the benefit of their own particular section. If that policy were adopted, I would like to ask how much brotherhood there would be in the party opposite. It is only because sectional delegation has not gone too far up to the present time that the Debates in this Chamber are of some value, and contribute something towards the solution of the problems we are studying.

In the recent by-election at Gateshead the hon. Member who was returned attributed his victory to treating the Report of the Royal Commission with contempt, and repudiating its recommendations. I think that is a typical instance of the sectional delegates' attitude of mind which will not go very far towards solving the important problem we are now considering. Is any party going to have the courage to tackle the bankruptcy of this fund, and is it going to be done without a thought of the votes that will be won or lost by the policy adopted. I think we should tackle the problem with some sort of idea of national benefit and not the particular benefit of one's own constituency.

Mr. McGOVERN

Would the hon. and gallant Member tell us how he proposes to do that?

The CHAIRMAN

The hon. and gallant Member would be out of order if he attempted to do that.

Captain BALFOUR

The Royal Commission's Report indicated that the fund should be divided into two parts, one dealing with those who are actuarially sound and the other dealing with those who are not. Those are recommendations which I should most certainly support. The Government seem to have surrendered without a struggle to the trade union cry that this report is to be scrapped entirely, in spite of the words of the Minister of Labour, who, when discussing a similar Resolution for increasing these payments definitely dismissed any question of increasing the borrowing powers; and in spite of the fact that the Chancellor of the Exchequer told us that it was the duty of Parliament to face up to the problem. This seems to me to be a very disgusting example of political cowardice, and in this way the Government have shelved the issues raised by the Report of the Royal Commission. It seems that they prefer heading for national insolvency to risking a party revolt, that they prefer a demoralisation of the whole principle of insurance to going out and winning, as I believe they would win, the respect of the vast majority of the people of this country.

The hon. Member who spoke last inferred—I do not think I am (misrepresenting him—that some of us on this side were desirous of reducing benefit. I would not reduce the benefit of one man or one woman; I would not reduce the amount which one man or one woman is to have. I have said that the recommendation of the Royal Commissions divide the fund into two, and I would say, "Yes, you can draw benefit at a certain rate if you are entitled to that benefit as a sound insurable subject; or you can be given an amount of money under reasonable conditions which you have to satisfy "——[An HON. MEMBER: "Inquisition!"] No, not inquisition, but possibly training for young men, possibly the development of schemes of work—jobs of work which they are all willing to do. I would say, "You can be given, but not as a right as an insurable subject, an amount which the country realises that you should have, and which is not below the benefits at present paid, but as a condition of receiving it you have to prove that you are willing to work and wanting work." Nobody need be afraid of fulfilling that condition, which I would like to see imposed on those who are not subjects for an actuarially sound fund. It seems to me that, with the unemployment figures rising, possibly, to 3,000,000, we shall see in those unemployed people and their dependants a great nucleus of voters, which, apparently, hon. Gentlemen opposite and the Government are going to make a sort of debauched support for their party.

The Leader of the Opposition, speaking just now, said that finance was the heel of Achilles of democracy, and quoted the case of Athens, where 2,000 years ago one man spoke for benefits and no navy, and another spoke for a navy and less benefits, and, of course, the man who stood for higher benefits and no navy won. That is where I think the Government have been wrong in their tactics. I believe they have been endeavouring to acquire a great block of voting strength by prostituting every decent principle of insurance for the sake of party advantage. That is where they are going to break down, because the national character of this country is sound and good and solid, and in the long run I believe that Labour candidates and agents who go round the country telling people that if they vote for the Tories they will have lower benefits—[Interruption]—already one can hear election cries ringing out, but I believe it will be realised that they are merely cries for party advantage, and not in the national interest. History shows that in the long run wrong finds out wrong and right meets right. I believe that the First Commissioner of Works subscribes to that philosophy. In the long run it will be seen whether we on this side are right or whether hon. Members opposite are right. I think that hon. Members opposite, who are endeavouring to placate democracy and debauch people by promises of something to which they have no right from someone else's pocket, are wrong. Future history alone will tell. About 200 years from now people will look back on this time and see who was wrong and who was right. Personally, I think that the right is on this side, and that for that reason we cannot let the present condition of affairs go on indefinitely.

Colonel WEDGWOOD

It was worth waiting to hear the admirable speech of the hon. and gallant Member for the Isle of Thanet (Captain Balfour). I feel that he represents the innumerable readers of the "Daily Mail" and the "Daily Express," and I would venture to make clear to him, as representing that large body of people, what a hopeless position they are up against. No party in this country is prepared to reduce benefits——

Captain BALFOUR

I am sure that the right hon. and gallant Gentleman does not wish to misrepresent me. I said that, under a proposal which it would have been out of order to elaborate, not one man or woman should be drawing less than the lowest subsistence level which they have at present.

Colonel WEDGWOOD

One must face the facts as they are now. No organised party in this country is prepared to go to the country on the principle of reducing benefits. There is only one way of making this scheme actuarially sound, if you do not reduce benefits, and that is by increasing contributions——

Captain BALFOUR

Cut off the dead wood.

Colonel WEDGWOOD

I disregard the question of what are called the anomalies or abuses; you must either reduce benefits or increase the contributions. Is this country really prepared to put additional taxation, to the amount of anything up to £50,000,000 a year, upon the manufacturers of this country who are making no profits at the present time? That is the fact that we have to face. If you are going to make the fund actuarially sound without calling upon the taxpayers of the country to make good the deficit, you must put an enormous additional burden upon manufacturers in this country who are by the skin of their teeth avoiding bankruptcy at the present time; there is no other way of doing it.

Captain BALFOUR

Come on the taxpayers.

Colonel WEDGWOOD

Certainly. I regard that as the main difference between the Opposition and the Governent. The Government are borrowing money, and hon. Gentlemen opposite are saying that you should come upon the taxpayers. That is a perfectly sound difference of opinion. I want to direct my speech to showing that that would be a disastrous thing to do. Better to run into debt than to increase the burden of the taxpayers of this country. I begin by saying that I am profoundly grateful to His Majesty's Government for scrapping that report. I think that the recommendations in the report as to reduction of benefit are ridiculous and hopeless under the present state of affairs, and that the recommendations as to increased contributions from the manufacturers would be disastrous if they were put into operation. The abuses are being dealt with, but, as regards its main principles, that report is thoroughly bad. The Royal Commission want to restore the actuarial soundness of the scheme. If it cannot be done by increased contributions from manufacturers, they wish it to be done by the State paying instead of by the Fund running into debt. But do let hon. Members consider what we are up against at the present time. No party would reduce benefits; no party would increase the charges on the manufacturer. Everybody is agreed on those two points.

I want now to make it clear that the whole burden of this crisis, which is getting worse and worse, as we have seen during this last year, has been borne by the workers and the manufacturers of this country. They are the people who are suffering; they are the people who are hoping desperately that this magnificent gesture of President Hoover may bring relief. They are the people who have been hit by this crisis—not the rentiers, the money-lenders, but the manufacturers, the people who are called undertakers, and the working-class, who are terrified out of their lives at the present time lest they should lose their jobs. The dole for these men may be large or may be small, but it does not make up, in the minds of the working-classes of this country, for a safe job. During all this last year the lenders of money, as distinct from the users of capital, have so far escaped. Company after company has been passing its dividends on ordinary and on preference shares as well. The man who is using capital to produce goods and to market them throughout the world is today going through a crisis such as has never before in the history of the country happened.

The business of trying to keep a factory together and trying to keep people in employment is making the manufacturers desperate. Whole industries—I am not alluding to cotton, but to the pottery industry—are in the hands of the banks. If their works were sold up, they would not pay the overdraft, and the banks know it. All industry is being conducted to-day with the grip of the bank on the industry. They are not allowed to declare a dividend on their preference shares even if they earn it. The banks hold control, and they would call the money in. They are not allowed to meet the situation by putting any capital into labour-saving appliances or improvements in their factories. Every penny must go to try to meet the bank's interest. Manufacturers are at the mercy of the money-lenders. I ask the House to consider that everyone else has paid, but the money-lender, the rentier, has not paid. He is getting away with it. I do not say he is making more, but, at any rate, while everyone else is being ruined, he is still getting his pound's worth. If you increase taxation, worst of all if you increase the contributions from the manufacturers, there will be less possibility of the manufacturer finding his feet again.

What are we doing to-day? Hon. Members do not know what is happening. The Treasury, for good and sufficient reasons, have put an embargo on foreign loans. That is to say, what capital there is in the country cannot be invested abroad. Do I hear hearty rounds of applause for that action? No! Perhaps people are coming to realise that the result; of an embargo on foreign loans means that the export trades are strangled. When we lend money to Greece or Czechoslovakia or wherever it may be, it does not go out of the country as gold, bur, as goods, and, if you stop that loan, you stop the goods going out. The export trades are beaten. In the pottery trade exports are down not on a week or a month but for the whole of last year 40 per cent. That has spelt ruin to the whole industry. You are keeping up the £, but you are destroying the manufacturers and the export trades; you are preventing gold leaving the country, and you are preventing any exports being sent abroad at the same time. That is the result of this domination by the banks and the moneylenders of the policy of this country. It is not only public debts that are crushing in such bad times as these. The debt of industry to the banks is getting intolerable. Bankruptcy is becoming the inevitable future for a very large number of the factories of the country, and, when bankruptcy occurs, the factory is sold at slaughter prices to some new man. He buys a factory worth £40,000 for £4,000. He starts in on his business with a capital of £4,000 competing against a man with a capital of £40,000. He undercuts him and sends the other man into bankruptcy too. This sort of thing is catching.

We have before us two alternatives. Either costs must come down or prices must go up. By costs coming down, every one instinctively thinks of wages coming down. Everyone agrees that no party in the country is prepared to bring down the benefits, and I do not think any party, as an organised party, is prepared to advocate a reduction of wages. So, if costs cannot come down, prices must go up. The present growing stagnation of industry cannot be left alone to work its own way out, because the final collapse here might be worse even than in Australia. In Australia the Governments have been running into debt. Here private industries are running into debt, and have been ever since the War. The breaking point has been reached. Something has to go, and it had better be the currency that should go. To preserve dollar parity we put an embargo on foreign loans, injuring the export trade. To preserve dollar parity we handicap our export trade, which would benefit enormously by a reduction in the value of the £. Those who lend money do right to object to any change, but they too must now be invited to share the burden of the crisis that is upon us. That is what the growth of this insurance debt means. If the insurance debt goes on as debt, pro tanto, and to however small an extent you get away from dollar parity, you make dollar parity more difficult.

But the problem is not merely that. If you look on Australia, where they have carried what we are going through perhaps to an extreme, it has been a question for the last year of whether they should repudiate or whether they should inflate. Put frankly, that is the position before them. Every newspaper in the country—every financial newspaper at any rate, and all the financial columns of the ordinary Press—has denounced Theodore for his scheme. I defy any Member of the House, if he were a Member of the Australian Parliament, to have put forward a better scheme than Theodore put forward, with repudiation ruled out and inflation as the natural result. I think that is what is before us here too.

Any Government in this country, Conservative or Labour, is bound to be advised from both sides. You get the advice showered upon the Government, as in this unfortunate insurance report, to be honest, to pay your debts, to go on paying your debts even though every industry in the country goes to the wall. You have, on the other side, the advice of people who say clearly enough that there is no hope for industry recovering until something is done to lighten the burden of debt that falls upon our people, just as the burden of debt falling on the people of France and Germany was wiped out. You have on the one side the City Editor of "The Times," and on the other side you have Lord D'Abernon advising a diametrically opposite policy. "The Times" is admirable. I will read the following extract: With frankness and courage, this country, like most others, should be able to emerge from its principal difficulties within a reasonable space of time. With frankness and courage! We know that in the opinion of "The Times" they will neither get frankness nor courage. They will not get the frankness which says that we have to cut down the wages of the working men, even from the Tory party, and they will not get the courage which says that the dole has to come down from either party. So there is a very poor chance of our country, like most others, emerging from its principal difficulties within a reasonable space of time. On the other hand, you have Lord D'Abernon, and, of course, a myriad lesser lights advising what they call, for decency's sake, a managed currency. I think that this Government, like any Government in its place, must sooner or later decide between a managed currency—the cheapening of the pound—and the policy of persisting indefinitely in trying to pay 3d. when you have only got 2d. The National Debt is increasing by leaps and bounds, and the private debts are increasing by compound interest and manufacturing concerns are unable to pay interest. You have that position, and you may hope that some day, by working hard enough for generations, the workers and the manufacturers, the undertakers of this country, may be able to keep on paying interest and compound interest upon it and to restore the country to its pre-war conditions. The manufacturers in this country competing against people abroad who have written off their debts, who have written off their preference shares and their debenture shares, and who are working on a capital representing a tithe of the value of the actual machinery and plant in question, are bound to be cut out of the trade of the world, until we too have gone through the mill. The only question in my mind is whether we are going through that mill instantly without anyone seeing in advance what is coming and without anyone defining what shall be the limits of the inflation, or whether the Government should get the best advice they can, find out the limit to which inflation should go, and decide to carry out the inflation in the manner least likely to involve difficulty. If it is a fact that we cannot make things go at the present value of the pound on dollar parity, we must accept the position that we have to write off something, both of our National Debt and our municipal debt, and above all, of our private debts in order to give this country a chance of starting again on equal terms with other people and taking advantage of any improvement in trade which may come hereafter as a result of the Hoover agreement.

Sir ROBERT HORNE

I think that the Committee will agree that we have listened to a very remarkable speech. It is the first time from either side of the House, as far as I have heard the speeches, that the realities of the situation with which we are faced have been dealt with. The right hon. and gallant Gentleman is perfectly clear with regard to the very grave and serious position of the country. He suggested some desperate remedies. I am not going to discuss the question of whether those remedies are absolutely necessary or not. I am afraid that we shall have to come to these discussions in other Debates, but I entirely agree with the right hon. and gallant Gentleman that the country is facing a monetary condition which calls for the most anxious consideration, not merely by the financiers of the country—if there is any separate body of people who may be called financiers—but by everybody, and especially Members of this House who are taking an intelligent interest in the crisis through which we are going.

The right hon. and gallant Gentleman has advocated inflation of our currency as the only remedy by which we can meet the present situation if we are to save our wage scale. That is a severe remedy, as he knows. I am not going to say here and now that it may not be a course to which, if we go on as we are going, we may have to come. I do not even preclude the possibility of such things arising, if we allow things to drift as we are doing. There was a very remarkable lecture given two or three nights ago by a distinguished economist who said, not so bluntly and not so clearly as the right hon. and gallant Gentleman, but indicating a point of view not at all dissimilar, that as things stood in this country it would be impossible for us, if we pursued our present course, to remain upon the gold standard. And in fact this is what the right hon. and gallant Gentleman means. As I have indicated, I lo not think that this Debate is quite the occasion upon which we should give to such a problem the full consideration it deserves. It is sufficient for me that the House of Commons should recognise the serious monetary position in which we are placed, not due only to our own action, but to the action, to a large extent, of other countries of the world. It is possible that salvation may come through conjoint action on the part of many nations. I do not know. These are matters for larger consideration and fuller discussion.

Keeping in mind the general theme upon which the right hon. and gallant Gentleman has dilated, I would venture for a moment to indicate my point of view in regard to the immediate problem with which we are confronted. What is happening, as we all know, is that a vast sum is being borrowed from week to week for the purpose of meeting the unemployment debt, and we all know that there is not the remotest chance of the Unemployment Fund repaying one penny of it. That is the actual situation with which we are confronted. I would like to bring the Committee back to the Chancellor of the Exchequer upon this matter. As far as I am concerned, I agree with a number of citations, which I am going to give very briefly, from his speeches. He has been confronted with this problem. It has been a matter of the utmost apprehension for him. In October, 1930, speaking at the Mansion House, he said that the cost of unemployment was distressing him beyond measure and that it was the duty of Parliament to face up to this problem and put the Insurance Fund on an insurance basis. I know that there are hon. Members on the opposite benches who perhaps do not take exactly the same point of view, but at any rate they will not quarrel with me very bitterly if I venture to take the same view as does their own Chancellor of the Exchequer. I am not at all surprised that he should have expressed that anxiety at that time, because already he saw the cost of transitional benefit rising far beyond what he had estimated in his Budget. He had estimated the probable cost as £8,500,000, but it was rising by leaps and bounds, and we know that by the end of the year it cost him £22,000,000 instead of £8,500,000.

I come to the examination by the Royal Commission of what unemployment insurance was costing us. Very remarkable evidence was given before the Commission by certain officials of the Treasury. The Chancellor of the Exchequer was a little uneasy this afternoon when those quotations were once more cited for his consideration. While he said that he did not himself draw up the statements, he admitted that they had been submitted to him, and he further said that he in no wise repudiated them or disagreed with them. Accordingly, we may take it that they represent the point of view which he as Chancellor of the Exchequer held. Sir Richard Hopkins in his evidence quite clearly showed that we were tending towards an unbalanced Budget and that an unbalanced Budget meant, as far as we were concerned, although he expressed it in very modest language, disaster. He went on to say this: The question of borrowing for current liability "— which is what he said we were doing so far as unemployment insurance schemes were concerned— is not an academic question, or one which can be settled entirely from the point of view of the internal opinion of the country. We ourselves on many occasions have passed adverse judgment on foreign countries which had net balanced their budgets. We must expect the same thing to happen to us, and in the case of a country with so wide international connections as ours, that is a matter which must be continually borne in mind. 9.0 p.m.

That, so far as we are concerned, is the crux of the thing. We have been and we still are borrowing for current liabilities. We are still doing the thing which Sir Richard Hopkins said must have disastrous consequences to a country like ours. He did not go on to explain why, but as an old Chancellor of the Exchequer perhaps I may be allowed to tell the Committee how the matter strikes me. More than any other country in the world we depend upon our high financial credit. We have done financial business in this country now for a very long period, and we have been in danger of losing it to other countries which are very jealous of our predominance in that respect. Both America and France have tried to seize the opportunity of our difficulties to establish the money markets of the world, one in New York and the other in Paris. Up to now they have failed, but the Committee must realise the consequences to us if they had succeeded. I do not know what the figures are for this year, probably they are somewhat lower than in previous years, but when I was at the Exchequer we were making on account of the business that we did in discount and commission in the City of London between £50,000,000 and £60,000,000 a year. That is a very considerable revenue for this country, and not one that any of us would desire to sacrifice. It does not mean merely the aid which these sums afford to the country's revenue but, as the right hon. Gentleman opposite explained with so much cogency, it enables us to be the lending market of the world. When you lend money the loan does not go out in the form of gold but it goes out ultimately in the form of goods. That means that every loan from this country is really a credit given to the borrower to buy his goods here. That is a very good Free Trade doctrine. It is part of the Free Trade doctrine that I entirely accept, and it is absolutely true. The high credit which Britain enjoys in the world's monetary market is not merely a question of high finance but of bread and butter to our people, of orders for our shops—— [Interruption.] As soon as you are unable to grant foreign loans you are necessarily curtailing your opportunities for employment. We must have that high position of credit if we wish to maintain the high position of prosperity which we have enjoyed. Therefore, what Sir Richard Hopkins said was almost understated. Our credit is absolutely essential to us. We cannot be accused of an unbalanced Budget and maintain our position in the world. We cannot meet our current liabilities by borrowing, otherwise the whole position which we have built up for ourselves will gradually be undermined.

I pass from the evidence of these distinguished Treasury officials and come back to what the Chancellor of the Exchequer said. Not only did he not repudiate anything that they said, but in Debate in this House on national economy on 11th February of this year, he took occasion to rub in the moral of what these distinguished Treasury officials had said. I would remind the Committee of the words which he then uttered: 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 Budget equilibrium is to be maintained and if industrial progress is to be made. … It is quite true that if there were well-grounded fears that this country's budgeting was not sound, then it might have disastrous consequences, and very disastrous consequences."—[OFFICIAL REPORT, 11th February, 1931; cols. 447 and 449, Vol. 248.] Now I come to the Budget. Was the Budget equilibrium maintained? What was the position in which we were left? The Budget left us with a narrow margin of £130,000 of estimated surplus of revenue over expenditure, and it had a gap of £30,000,000 which the Chancellor of the Echequer did not provide for by taxation but which he provided for by adventitious aide which can never occur again. Therefore, so far as next year's Budget is concerned we have to keep in mind that there is a gap in the Budget of £30,000,000. Did he do anything to meet the position which he regarded as full of disastrous consequences, namely, borrowing for current liabilities? He entirely ignored the fact that we were still borrowing for the Unemployment Fund. At the time when these serious words were uttered the amount we had borrowed was something like £65,000,000. Now, if the borrowing which is asked for to-day be sanctioned, we shall have borrowed on the fund almost double that sum, and yet nothing is being provided to meet the disastrous consequences which the Chancellor of the Exchequer described. Is it not time, taking into view the grave position which the right hon. Gentleman opposite has described, to consider whether we are in a position to go on spending as we do and whether we must not contrive some way to meet our difficulties, at least in so far as we can. There may be things which will have to be postponed because sufficient investigation has not taken place, but surely it is our duty to cut down wherever we can if we wish to avoid the consequences which have been happening to other countries, and which if they happened to us, dependent as we are upon our credit, would have far more appalling effects than they have on younger and less complicated countries than ours.

Look at the position we have to face. In his Budget speech the Chancellor of the Exchequer said that he relied upon this Commission to ease his difficulties and to find some way of curbing the expenditure of this year, an expenditure which I must remind the Committee is only £130,000 less than the estimated revenue. He expected to get something from this Royal Commission, which the Government themselves appointed. They have their report. What do the Government propose to do with it? [An HON. MEMBER: "Scrap it!"] I have no doubt the hon. Member believes that that is the right thing to do, but at any rate the Government cannot scrap it. These are the chosen advisers of the Government in this matter, and they must take their report or else provide some other means by which these disastrous consequences can be avoided. I am not going to say that they can deal with the whole of this unemployment problem at once—I do not suggest that—but certain things require consideration. There has been continuous talk about abuses. We all know—let us not disguise it—that there have been the most flagrant abuses of this fund. To-day the men who are paying into the fund are getting no more benefit out of it than those who are paying nothing at all. You cannot keep up a system on that unfair basis. It is bound to collapse; there is bound to be a revolt against it.

What are we going to do? These abuses are obvious. The Chancellor of the Exchequer made it perfectly plain that he intended to get rid of them as rapidly as possible, and the Financial Secretary in the Budget Debate said it was their immediate object to get rid of these abuses. The Leader of the Liberal party was also perfectly explicit. He did not use the word "anomalies" in connection with what has been happening. He said that there had been a lot of "unwarranted cadging" upon the Unemployment Fund, and he said that millions could be saved without injuring a single meritorious claim. Why are we not doing it at a time when it is obvious that the country is really getting into desperate straits; indeed, is in the desperate straits which the right hon. and gallant Member who preceded me has described? We have to meet this position as practical men, and there are certainly some things which can be done. The abuses are obvious they have been flagrant for many months. Yet we are to be fobbed off with yet another form of inquiry, and in the meantime expenditure is piled upon expenditure and a practical House of Commons, composed of business men, takes no action to remedy the situation. It is unworthy of the House of Commons.

Every other country is facing its problems to-day. The Government are bound to find their own suggestions, but the sluice gates for these abuses were opened when the phrase "genuinely seeking work" was cut out of the Act of Parliament. [Interruption.] I say that we are in a distressing position. I do not want to exaggerate, or even to tell the exact truth, because people would immediately say that you are crying stinking fish and ruining the credit of the country, but I want the House of Commons to realise, as I am certain the ex-Lord Privy Seal and the new Lord Privy Seal perfectly realise, that the situation to-day is one which gives rise to the greatest possible anxiety.

Mr. THOMAS

The right hon. Gentleman, I know, will be as anxious as I am that no unfair expression should get abroad. I will deal with the abuses myself, but, if he has read the evidence given before the Commission and the Commission's Report of the abuses, he will find that they are abuses, even according to the evidence that existed long before the genuinely seeking work section was altered.

Sir R. HORNE

The right hon. Gentleman has forgotten something. I have read with great care the evidence given before the Royal Commission and also their Report. If he will look back at the Actuary's Report he will find that when it was proposed to alter that phrase, he predicted the very increases which have taken place. He said that the cost of seasonal workers and married women would undoubtedly mean new claims upon the Unemployment Insurance Fund which had not previously existed. I hope he will keep that in mind. In his evidence before the Commission he said that the things which he had predicted had cost this country between £10,000,000 and £12,000,000. The Commission only refers to £5,000,000 of saving which could be made, but is not that worth saving, and saving at once? I beg the Government to realise, as they must, the difficult situation in which we are if our credit is lost and how quick would be the avalanche which would move to destroy us. I beg the Government to take the earliest means of saving every penny that is possible.

I strongly support the Amendment that has been moved. This Committee should not part with this question for so long a period as is proposed. We ought to grant what is immediately necessary in the shape of £10,000,000, but until the Government have entirely disclosed their hand in this matter, and until we have an opportunity for a complete discussion on the Bill which is to be introduced and into all the elements of the situation, I think we should keep this matter under our control. It is enough for the Government to have £10,000,000 to meet the immediate situation. The Committee should have a further opportunity at an early date of discussing the whole question of the Insurance Fund and, as the Chancellor of the Exchequer said, putting it upon an insurance basis.

Miss LEE

I have heard almost every speech that has been made this afternoon, and, if I were to take those speeches at their surface value, I would give up in despair every simple law of arithmetic or algebra which I ever learned. I have made a real attempt to piece together the policy placed before the Committee by the Opposition. From the outset they have been faced with this difficult situation—that democracy in this country, while still far from dictating its own terms, has at least taught the Conservative party that they must know when discretion is the better part of valour in stating their party's policy. Not a single speaker from the Opposition benches has said that he wished to deal with Unemployed Insurance by reducing benefits. Indeed, we have been repeatedly assured that the policy of hon. Members opposite is to maintain benefits at the existing level. Following that we have had the equal assurance that no Members opposite mean to deal with this problem by increasing the contribution from industry. That puts on one side two sources of income.

The Debate then went on to the ground of whether we ought to borrow money for this fund or whether we ought to meet it out of current revenue. When put into a dilemma by previous speakers who had said that they were not going to decrease benefits or increase the burden on industry, several hon. Members opposite took refuge in the statement, "Yes, but the real question before us is whether we are to meet our liabilities by borrowing money or by raising the revenue from our current account." I was actually beginning to believe that the real quarrel which the Conservative party had with the Government Front Bench was that our Chancellor of the Exchequer had not added an additional shilling or 2s. or 3s. to the Income Tax in order that out of current revenue he might be able to meet the liabilities of funds such as this.

But I was indebted to the right hon. Member for Hillhead (Sir R. Home) for clearing my mind from any such misapprehension, for he made it clear to me that not only did the Conservative party not mean to raise money by reducing benefits or by increasing the employers' contribution, but that the contribution from the State also was not to be increased; indeed that the contribution from the State ought to be decreased. I know of no way of squaring all those statements, except to conclude that the Tory Party mean to spend generally a smaller sum on unemployment benefit. If hon. Members opposite mean to do that, do they really suggest that the £5,500,000 mentioned by the Royal Commission as the saving which we could get by clearing off the so-called anomalies, is in any way worth speaking of in this respect? We are forced to conclude that it was not without reason that the right hon. Member for Bewdley (Mr. S. Baldwin) asked the Committee to take his policy as a kind of pig in the poke, and instead of frankly stating it, preferred to rely on a growing feeling in the country that unemployment should be dealt with in a more positive way. But if we take any statement of hon. Members opposite, we can come only to the conclusion that, given responsibility, they would at once start dealing with unemployment insurance infinitely more rigorously than has even been suggested by the four types of anomalies dealt with in the report of the Royal Commission.

I find it no pleasure, indeed I think it is an appalling catastrophe, that we should be asked to increase the borrowing powers of the fund to £115,000,000. I would be much happier in going into the Lobby to-night if I felt convinced that every possible effort was already being made to provide work in this country. But I find it very difficult, in a constituency such as my own or in the part of the country where my home is, on the other side of Scotland, to convince people that it is necessary for thousands of Scottish citizens to live in houses condemned by the sanitary inspectors, and yet that there is no work for those citizens to do.

The Noble Lady the Member for Sutton (Viscountess Astor) has been present during a considerable part of the Debate. I wish she were still here, because I would gladly enlist her support in the work that some of us are trying to do in getting proper nursery schools and other schools built in different parts of our country. We are met by solid Tory majorities on local authorities, who refuse to budge in the matter. My plea to the Government is simply this: How long are we to see whole areas of our country with people living in houses that have been absolutely condemned, how long are we to see thousands and thousands of children attending schools that look like prisons or barracks? I have been in prisons that have been better and more hygienic and have looked more comfortable than some of the schools I have visited. I ask those who are responsible for Government policy not to consider it an entirely satisfactory answer to say, "We are helping the local authority to the best of our ability, but if the local authority refuses to do all that it might do the people must go on living in condemned houses and must send their children to a type of school that every modern educationist deplores."

The DEPUTY-CHAIRMAN rose——

Miss LEE

I have said all I wanted to say on that subject, Mr. Deputy-Chairman. I do not believe there is an indefinite amount of work waiting to be done, but I do believe that there is a considerable amount of Valuable and necessary work, and I would like all parties in this Committee to bring combined pressure to bear on the Government—pressure which I hope the Government would welcome, because they would be able to say that it was those behind who were shoving—in getting work of that kind done. However, when we put aside anything of a positive kind, we are still faced with the problem that because of a system for which we are not responsible and do not believe in, there are millions of people for whom, if we cannot provide work, we must provide maintenance.

The hon. Member for East Birkenhead (Mr. White) made a very sincere and very interesting speech, in which he dealt with an investigation made in his part of the country, showing that the average unemployed family with more than one child was already reduced to starvation level. To any sane assembly the logic of the facts that the hon. Member mentioned would show that we ought to be busy here in increasing unemployment benefit rather than in finding ways of removing people from benefit. I would be prepared to justify on economic grounds, from the point of view of helping trade and industry, a policy which would seek to increase our allowances to the unemployed rather than to endanger them.

I want to ask the Secretary of State for the Dominions, who, I understand, is going to reply, if he will elaborate a statement which the Minister of Labour made in her opening speech when she said that she was in substantial agreement with the Majority Report, so far as anomalies were concerned. Some of us have a certain amount of personal experience in dealing with unemployed workers and their claim for benefit. We are not going to say that we shall not find here and there somebody who, perhaps, is claiming benefit, and not as anxious to find work as he might be, but I ask, is it our duty on this side to be harrying a handful of unemployed people who are suffering from poverty in their homes and anxious to get a few shillings from wherever possible? Anyone who reads the evidence before the Royal Commission will see that there is very little concrete evidence of this nature which could be brought forward.

In dealing with those anomalies, I know there is the case of the casual labourer, but I ask the Government to keep in mind that you cannot eliminate your casual labourer in the periods when he is not getting work. If he is not getting work, he has to be maintained, and if he is not maintained by a State fund, then he must be maintained by the local rates. That is really not lessening the burden, but shifting it on to other shoulders less able to bear it, and making it still more difficult for us to get work, housing, educational or other schemes through the local authorities. I am not going to deal with all the other class of anomalies—persons who work a day or two, and persons who get a relatively large sum for little work—because numerically they are so small that one cannot possibly legislate for the trifling exceptions which they represent.

But there is a fourth large class, namely, the married women. If there is any intention to have one law in Lancashire and another in Scotland, as far as married women are concerned, the Scottish Members will consider it their duty to scrutinize with minute care every decision made in Lancashire, and the Government will very soon find it will create far more anomalies than it can possibly cure. Only yesterday I was talking to a Dundee councillor and he told me there had been approximately 43 per cent. of the married women in the habit of working. May I say to hon. Members opposite that there is no peculiar mental twist about working class women which makes them prefer to be working at a factory machine in the afternoon instead of entertaining their friends at afternoon tea, or to be working at a machine in the morning instead of being out in pleasant shopping centres? They take no particular pleasure in putting in a day's work in a factory and coming home to do housework, cooking and washing. The inclinations of the average working women are the same as those of women of any class. When they have to do work of this kind they do it not as a pleasure, but because of bitter necessity since their husbands' earnings are not able to maintain the home. At present you have an increase in the number of married women who are being forced into industry, for many a home which was kept on a basis of humble security in earlier years now finds the bread-winner totally unemployed or temporarily unemployed over a long period. You find that not only with the women in the textile districts, but in the mining districts. In increasing numbers they are going into the neighbouring towns, where the factories are, looking for charring, omnibus cleaning or any type of occupation in order to supplement the very inadequate family income.

I ask the Government how they propose to deal with the problem of the married women? I was alarmed at one part of the report which said that if the investigating committee was convinced that there was no available work in the area, then, whatever the intention of the woman, she would be out of benefit. I am stressing that point because I see the possible danger that in places like Lancashire, where you have women working in the factories, it may be relatively easy to decide the question of genuine cases, but in the mining areas, where this growing practice is forced I on the women by economic necessity, some of my people in Lanarkshire may go out seeking work and find it, later become unemployed with absolutely no sign that they can be re-engaged in industry, and then, although having paid for insurance benefit while in work because they are living in particularly depressed and difficult areas they will be faced with the possibility of being cut out of benefit.

I want an answer from whoever replies as to what the Government are going to do with anomalies such as these. After all our discussions we find that we are exactly where we were at the beginning. We cannot possibly knock off any large number of unemployed, because there are no large numbers against whom we can possibly make out a case. Therefore, the wise people who are talking about sound finance had better start looking for money in other quarters, where they can find it in much more adequate supplies. I know the right hon. Member for Hillhead (Sir R. Home) is particularly interested in the financial side. I get shivers down my spine when he says, "Look what I told you. That is nothing to what I know of and could tell you."

Sir R. HORNE

The hon. Lady will remember that I was debarred from saying all I knew by the intervention of the right hon. Gentleman on the Front Bench.

Mr. THOMAS

I should like a confession from both hon. Members.

Miss LEE

I hope there will be a future occasion on which the right hon. Gentleman will speak, because if ever my Socialist principles were to falter I can think of no better stimulant than a speech from the right hon. Gentleman. If you are going out shooting, why not go after the big game when you can bring home a real bag full, instead of small-combing working-class incomes? There is an old saying that it is the poor who help the poor, but we shall have to be very careful in this House or we shall find that on occasion the poor can harry the poor. It is very easy to rouse prejudice against a worker because some person thinks he is getting something he ought not to be getting. The Conservative party is clever enough in taking that as a debating ground on which they want us to join issue. We could find a way of getting the £5,500,000 ten times over without causing injury to a single interest, or hardship to a single section of the community, if only the House of Commons would choose the real debating-ground and get down to the problem of where we can release money for urgent social needs.

The Minister of Labour told us that there had been an additional £47,000,000 going to holders of fixed interest-bearing securities since 1926. I will read her speech to-morrow, and I think I shall find she was not dealing with the whole class of holders of fixed interest-bearing securities. I should say that on a score of occasions authorities such as Sir Henry Strakosch have brought before the country, and I have never seen them challenged, the statement that since 1926, in these years of growing financial stringency, when increase of hardship has been imposed upon the working classes, the mere lenders of money have increased their hold on the national wealth from one-quarter to one-third. We are all very doubtful about saying what the national income is, but a distinguished authority in these matters tells me that it can be calculated at round about £4,000,000,000. As the right hon. Gentleman the Member for Hillhead does not shake his head, I take it that silence gives consent.

Sir R. HORNE

I find myself so embarrassed when I venture to contradict the hon. Lady, that I would not dare to do so.

Miss LEE

I think that the President of the Board of Trade a few months ago gave us that figure, and I ask if some hon. Member opposite will tell us why we cannot collect from the money lenders rather than the workers, since £300,000,000 has been unfairly added to the wealth taken by that section of the community. Even if we lop off what they are already paying in Income Tax, even if we lop off all those small people who are holders, of £5 a week or less, I think I am still entitled to claim that you could get from that source 10 times as much as you hope to save on 30-called anomalies under this Bill, and it would not be rash to say that one could get considerably more than 10 times the amount. I look forward to the day when in the House of Commons we shall not be debating these relatively trifling financial matters—I refer here to the £5,500,000—which are always concerned with reducing something which working-class people are getting, but when we shall deal with the big abuses, when we shall turn to the section of the community which could make large contributions and contributions which would not be sacrifices in any real sense of the Word, but merely giving back to the community what the community ought to have, for common use.

I am sorry that the Government ever were responsible for setting up this Royal Commission. The Government choose the members of the Commission, and I do not see how we can justify ourselves in appointing a Commission, only two members of which were known to have a Labour background. [Laughter.] I am interested in the reaction of that remark on hon. Members opposite. Seriously, would they, if they were appointing a committee or commission, to go into any subject of this kind, not give careful consideration to the personal background, the financial background and the politics of all the members of that body. It is too much to expect of human nature to require that any of us should be able to come to conclusions in a vacuum. All our conclusions are essentially based on the section of the community whose interests we wish to further. We set up a Commission only two of whom were known to have been associated with the Labour movement, and, in doing that, the Government were simply asking for what they got.

Further, I deplore the fact that, having set up that commission, we then drew the terms of reference so narrowly that it is almost out of order in this Debate to deal, not with these few so-called abuses, but with the large classes of workers who are excluded from benefit and are entitled to get benefit. It would be easier for us to deal with these matters if we had both sides of the picture presented to us. I make no apology for saying that I think the Government made a mistake in setting up the commission at all. All that the commission is doing is making an attack on the unemployed, and the one thing which we on this side will not stand for is an attack on the unemployed. The very best thing that the Government can do is to see that the results of its own Royal Commission are not carried out. In all our work in the House of Commons we ought to remember what the hon. Member for Bridgeton (Mr. Maxton) in his very able speech said to the Secretary of State for Dominion Affairs, that in this House we are less than nothing without the support of the working people. We are here as their servants. We are here because they trust us to represent their interests. I hope we shall stand by that trust and not allow ourselves, on an artificial and arbitrary debating ground in this Committee, to be ensnared into doing anything which will take away a single penny from working-class homes.

Sir ASSHETON POWNALL

Most of the arguments of the hon. Lady who addressed the Committee with such charm, were addressed to her own Front Bench, but I wish to reassure her on one point. She seemed anxious lest married women in Lanarkshire should come off worse than married women in Lancashire. I have been many years a Member of the House of Commons; I know something of the Scottish mentality, and, as an English Member, I may say that I have never yet found any case in which the Scottish came off worse than the English. I listened with great interest to the speech of the Minister of Labour. I found some little difficulty in following parts of it, in which it was rather hard to make out what were quotations, and what the right hon. Lady was reading from her own notes, but I observed that, in conclusion, she said that she made no apology for bringing in this Motion to increase the borrowing powers from £90,000,000 to £115,000,000. I was interested in that statement, because I happened to have in my hand the statement which she made 18 months ago in introducing what was, I think, the second Unemployment Insurance Act. I know that the passage has been quoted before, and I would not have quoted on this occasion but for the right hon. Lady's statement that she made no apology for introducing this Motion. She said: If you came forward and wiped out the limit of borrowing powers at £40,000,000 and went on borrowing to £50,000,000 or £60,000,000, it would be a dishonest course, because it would be contracting a debt that you saw no possible way of paying off. Therefore, I have dismissed definitely from my consideration any question of increasing the borrowing powers of the fund."—[OFFICIAL REPORT, 25th November, 1929; col. 1103, Vol. 252.] Since that statement was made 19 months ago, the right hon. Lady has come here, first to get an increase from £40,000,000 to £50,000,000; then, to get an increase from £50,000,000 to £60,000,000. Some of my hon. Friends and I suggested on that occasion, "Why take only £10,000,000; it does not go very far? Why not make it £20,000,000?" I do not say that it was that suggestion which caused her to do so, but she next applied for an increase of £20,000,000 and went from £70,000,000 to £90,000,000 with her next extension of borrowing powers. Now £20,000,000, apparently, is not sufficient, and on this occasion she is asking for a further £25,000,000. One must be thankful that the gifts of political prophecy are not given to us, for I cannot help thinking that the right hon. Lady 19 months ago would have been very unhappy if she could have foreseen the five separate occasions when she was to come forward and take a course which she herself said would be a dishonest course.

With regard to her speech to-day, I listened to it with much interest, as I always do to the right hon. Lady's speeches, but I think she was a little bit hard upon the French gentleman, whose name is unknown to most of us, who had two translated articles, edited by Sir Josiah Stamp, who took no responsibility for them, in the "Times" of last week. She apparently has taken these articles and treated them as an Aunt Sally. She threw all sorts of missiles at them, but she did not, in so doing, give a single justification for her attitude to-day in trying to borrow £25,000,000. Whether she thought we were going to base our arguments on this economist's views, I do not know. As far as I know, it is not contemplated by any of my hon. Friends. He is a French gentleman who is unknown to most of us, and when a quarter of an hour or 20 minutes of her speech were given to discussing the arguments of a French economist unknown to most of us, I thought it was a little bit wide of the mark.

The Government say they have no responsibility for these great increases of borrowing power, but 18 months ago an Unemployment Insurance Bill was brought in which greatly extended the numbers of those who could benefit by the fund. There is a saying that those who sow the wind reap the whirlwind. In this case those who have sown the wind have reaped the economic blizzard. It is not fair that hon. Members opposite should say that the present situation is caused by the economic blizzard, when it is very largely due to the Bill for which the Government themselves were responsible 18 months ago.

What is the position of the members of the Royal Commission? I happen to be one of those who are serving on the Royal Commission at the present time and I know the amount of work that it means. I have had several hours' work on it to-day. This Royal Commission or Unemployment Insurance had great pressure brought to bear on it to bring in a Report by the end of May, in order that, to quote the right hon. Lady's own phrase, used on the 16th February, she might legislate before the House rose for the Summer Recess. I think that anyone who took those words into fair consideration would agree that they would mean legislation based on the Report of the Royal Commission, whose terms were that they should see: what steps could be taken in order to make the Unemployment Insurance Scheme solvent. Can the right hon. Lady really say at the present time that by dealing with so-called anomalies affecting possibly £5,000,000, at the very most, of the £50,000,000 by which we are running into debt every year, she is carrying out her own pledge, made not 18 months ago, but on the 16th February this year, that she would legislate before the House rose for the Summer Recess?

It seems to me that she is absolutely shirking the responsibility which she herself admitted last November. The Government tried to push off this responsibility on to a three-party committee. It would have been very much better if things could have been solved on those lines, but I agree with my right hon. Friend the Member for Bewdley (Mr. S. Baldwin) that there is great danger to a democracy when you are on a slippery slope of this sort. Quite frankly, what happened in the three-party conference last autumn does not encourage this party to continue conferences on those lines. Then we had the six months' interval caused by the Royal Commission, and now we are to have three or four months before the issue of their final Report. At the same time we continually have speeches made by the Chancellor of the Exchequer, the Prime Minister, and others, saying how absolutely necessary it is that we should get the Unemployment Insurance Fund back on to an insurance basis.

The hon. Baronet the Member for Rushcliffe (Sir H. Betterton) quoted earlier to-day the statement made by Sir Richard Hopkins with regard to our present finances in relation to the Unemployment Insurance Fund, but I believe he did not quote the later part of that statement, in which Sir Richard Hopkins said: Apart from the impairment of Government credit which such operations inevitably involves, these large Treasury loans are coming to represent in effect State obligations at the expense of the future, and this is the ordinary and well recognised sign of an unbalanced Budget. That was stated on the authority of the Chancellor of the Exchequer, who tried, lather disingenuously I thought, to get away from the responsibility for that statement made by Sir Richard Hopkins, who is one of the leading authorities on these questions at the Treasury. I really think that, in view of the Government's record, this rake's progress in the political sense, on these matters, the Committee have no right whatever to give them a further £25,000,000 in order that they can carry on with their borrowing powers till January, 1932, or some date of that sort. The Committee, in view of the Government's action, should limit them to £10,000,000, in order that between now and our rising for the Summer Recess at the end of July or early in August the Government may bring forward schemes—it is their responsibility, not ours—for making this fund solvent. That is the least that they can do, but I am afraid we cannot expect it of them. I shall without hesitation vote for the Amendment this evening, and I hope that in the interests of the financial solvency of this country that Amendment will be carried against the Government.

Mr. SORENSEN

I have found it very difficult to know what is the main burden of complaint from the Tory benches to-day. It is quite obvious that the original criticism from that side on this side is being screened. At one time it was contended, very vehemently and emphatically, that the Government were guilty of woeful extravagance, and economy was the great word that was in the air. I suppose we still hear these accents in some quarters, but we have not heard them very plainly to-day. We have been assured more than once that it is not the intention of the party opposite, if they are so unfortunate as to get office in the near future, to cut down benefits at all, but whilst we are assured of that, they are criticising us for debauching democracy.

I dare say the Committee will remember the strictures passed upon democracy, even though in an oblique fashion, by the Leader of the Opposition himself, who drew an analogy, a not altogether relevant or telling analogy, from ancient Greece. He spoke of the way in which democracy in those days was inclined to vote for those who were prepared to give them doles. Others who carried on the Debate later suggested, either openly or indirectly, that the main intention and desire of Members on this side was to give some sop to democracy. In fact, one hon. Member actually stated that we were guilty of sectional interest. It reminded me of Bill Sykes criticising the rest of us for our sectional interest in employing policemen to try to guard our houses against his depredations. I would point out that, so far as the general theory of democracy is concerned, although undoubtedly democracy has its own weaknesses, there is just as much weakness, not necessarily in the same form, but just as sinister, in any other form of society. An aristocracy just as certainly looks after itself as does a democracy, with this difference, that aristocracy has fewer though more powerful friends to support, while democracy after all includes the greater number.

It may be true that those who sit on these benches are continually sensitive of the growing need of those whom we represent—the great masses of the people of this country; but I see nothing of which to be ashamed in that respect, and it is entirely a fallacy for hon. Members on the opposite side of the Committee to imagine that they represent communal interests, and that we represent merely sectional interests and mean interests of that kind. Hon. Members on the other side, consciously or unconsciously, equally represent sectional interests, so that when we come to examine their contention that we are mainly concerned in giving sops to democracy we find on analysis first, that if that be true, they are just as guilty and try to give sops to autocracy and plutocracy; but secondly, on closer examination, that on their own contention that they do not wish to cut down benefit, they are just as guilty of trying to debauch democracy as they claim we are. I should like to ask any hon. Member on the opposite side to explain exactly what their proposals are.

If they do not intend to cut down benefit, as has been stated by more than one Member, what do they intend to do? Either they intend by revenue tariffs or some other means to increase prices, and thus in effect to decrease the real benefits; or they intend to exercise a very powerful discrimination—a kind of new inquisition—among those who have (run out of their nominal benefit, which will have the effect of sweeping large numbers on to the streets and starvation or on to the Poor Law. If the last is their intention, it will mean that the burden on the rates will grow, and as has already been pointed out truly and effectively, that will not merely mean that the burden borne mostly by working class ratepayers will be greater than it is to-day, but it will have a deterrent effect on any means that may be adopted for finding work for some small portion of the unemployed.

The Committee has to face frankly and honestly this position. Either we intend to put the economic screw on the working classes and say to them that the country cannot afford to keep them on a level of semi-starvation, or, if we are not prepared to do that, we should say frankly that we must find this money and keep the unemployed at the present level at least. In that case, we have to ask, if we are not prepared to grant power to raise further money, how the money is to be raised to meet the contingency. I am certain that if hon. Members opposite, who bring forward very impressive arguments against the continuation of borrowing, had their own relations or were themselves in the position that many unemployed are in to-day, they would find arguments quite the reverse of the arguments they have been using to-day. It is quite possible for any ingenious mind to justify any point of view he wishes to put forward. At the present moment, the anxiety of hon. Members opposite is to find every argument that will prove that this fund is unstable, and that either we should turn large numbers of unemployed off the fund, or that we should screw down their benefit"; or, on the other hand, that we should decrease benefits by increasing the cost of living.

10.0 p.m.

I suggest that if hon. Members put themselves in the position of those whom they are analysing and judging, if they conceived themselves as being out of work and having to live on a few shillings a week, they would soon find just as powerful arguments to justify the retention of the present scale of benefit as those they are now finding to denounce those benefits and to advocate some drastic or sinister alteration. From the human standopint, it would be far better, if risks are to be taken and dangers confronted, to say to the nation that we will economise and cut down steel rather than human flesh and blood; that is to say, economise in our fighting services rather than in human life. If a risk has to be taken, is it not a greater risk to screw down human life more viciously and brutally than it is to cut down armaments? England can do with a smaller Navy, but she cannot do with humanity and democracy more impoverished than it is to-day.

Sir HILTON YOUNG

I certainly do not accept the definition of the hon. Member for West Leyton (Mr. Sorensen) of this Debate, that it is, as it were, a "pull devil, pull baker" between conflicting interests. On the contrary, if ever there were a Debate which raised a vital difference of policy on a matter of great national interest, in which it was possible that there should be an honest difference of opinion between Members on this side and Members on the opposite side of the Committee, surely it is this Debate; and, as we are willing to give credit to hon. Members opposite for having thought out their opinions in the national interest—though we are convinced that they are mistaken and based upon a wrong conception of the position—so we may claim from them an equal concession for the point of view which we advance.

This Amendment was put forward by my hon. Friend as a protest, and the only form of protest which we are able to make upon this occasion against the failure of the Government to deal with a great national emergency. It is a protest in the most appropriate form. The failure is that there are here recognised extravagances, anomalies, and abuses which it is urgent in the interest of the nation should be removed, but the Government take no action. The protest then takes the natural and relevant form of asking the Committee to refuse to part with power over the situation in order admittedly that we may put the screw on the Government to take the action which they ought to take. It is entirely in accordance with the traditions, privileges and rights of the Opposition in this House.

What an extraordinary Debate it has been, and surely of the extraordinary speeches the most extraordinary was the speech of the Minister of Labour. I do not go too far when I say that the country was waiting in a state of anxious expectation for that speech. What is the situation all over the world? The nations are engaged, with more or less courage and more or less veracity in facing the difficulties of unemployment with which they are all confronted. We do not want to fall behind other nations in energy, courage, and veracity in dealing with such national difficulties, and on this occasion—it may be mistakenly or foolishly—the country expected some intelligible account of Government policy. It has got none. The right hon. Lady treated us in a part of her speech to the story of the curve which the anonymous Frenchman showed M. Rueff, who showed it to Sir Josiah Stamp, and which he translated in "The Times," from whence the right hon. Lady brought it down here. That curve, it seems, did not prove all that it ought to have proved, but that leaves us quite indifferent. The curve may be right and we may be wrong, or the curve may be wrong and we may be right.

We have received no sustenance from the speech of the Minister of Labour. For the rest when she turned from curves to the straight line she resorted to that inevitable expedient of the embarrassed Minister; she clapped the trap. She told us there was to be an attack upon the standard of living of, the people. We shall certainly not have made our attitude clear if we do not succeed in this Debate in convincing the country at least—as hon. Members opposite are beyond conviction—that what we are honestly striving for is to arrange our national affairs so that the standard of living of the people in general and of the unemployed in particular may be preserved. I must confess that there was a point at which I did a thing which one ought never to do when a Minister is speaking; that is, I lost interest in the speech. That happened when she took refuge in the statement that there are "great administrative difficulties." When a Minister engaged with a problem which is certainly of some national importance comes to the fatal point of saying there are great administrative difficulties in the way of any reform I give up hope of receiving any help from that Minister. That confession by the Minister surely means one of two things: either that she does not want to do anything, which is a very fatal position, or that she has made the mistake, which is even more fatal, of having paid too much attention to her permanent officials. The most fatal mistake of all is the one which suggests it-self as having been committed by the Minister on this occasion—that she has gone to the permanent officials to find good reasons for doing nothing.

The other principal contribution to this Debate was the speech made on be-half of the Liberal party by the hon. Member for Leith (Mr. E. Brown). The effect of his contribution, as I understood him, was that we ought to let the Government get away with it on this occasion and look forward to their doing something when the Commission presents its final report six months hence. I wonder what has given the hon. Member for Leith all this fresh confidence in the final report of the Royal Commission, because, if I remember rightly, when he first spoke on this subject he referred to the appointment of the Commission as a device on the part of the Government to avoid making a decision, an opinion with which I warmly agreed. Why, then, are we now to give the Government another six months in order to come to a decision on a matter which the Government themselves have considered to be of so much urgency that they have been pressing the Commission for an interim report? I imagine from recent speeches of the hon. Member for Leith that it must be his idea that if we give the Government enough rope they will hang themselves. Surely there is enough rope already. I really do not think another inch is necessary. The rope is there, and the executioner is ready, and only a very frail barrier stands between the Government and execution.

Another important announcement upon another section of opinion in this House was made by the hon. Member for Gorbals (Mr. Buchanan). He makes most valuable contributions to this House, because he always provides us on these benches with a very clear and often eloquent statement of the case which, though we think it is wrong, is the case which we desire to meet and fight in the country. He despises the whole insurance principle and would sweep it all away. He would substitute a straight scheme of maintenance. He is quite regardless of the means available for the provision of that maintenance, and—here I am putting my own gloss on his words—he appears to be one of those who are under the illusion that there is an inexhaustible reservoir upon which the country can draw for any social purposes, whatever the condition of the country may be. We have infinitely more regard for that expression of opinion than for the attitude taken up by the Government. This country will profit from the courageous and unreserved statement of opinions, even though they may be wrong, but what is a standing danger at the present time is for the country to find itself in the hands of a Government who are incapable of making up their mind on any important issue at all. Although his opinions are so precisely opposed to ours, I am sure we shall welcome the support of the hon. Member for Gorbals in the Division Lobby. The Government are maintained in power by opinions which are absolutely irreconcilable, and so it is not inappropriate if we put the Government out of power by opinions which are irreconcilable.

Some attack has been directed against the occupants of these benches on the ground that we have put forward no alternative scheme. I have commented before, and would like to comment again, on the sterility and the degradation of a Government who, while they are talking about curves and other irrelevant matters in order to avoid defining their own views, have to fall back upon this means of trying to extract an idea from the Opposition. On this occasion it is surely our duty for the sake of the country to try to pin them down. In view of the interesting reply which we are expecting from the Secretary of State for the Dominions let me reiterate the question to which the Opposition and the country are entitled to an answer. It is a question which goes to the root of the national policy on unemployment. Do the Government still support the declarations made by some of their Ministers in favour of a restoration of the whole scheme of national insurance to a solvent insurance basis? Let us pass over the fact that they are losing another six months and trifling with the country by doing nothing to-day. Is it their intention to effect this reform in the future, or are they going to follow the Minister of Health, who appears to have been captured by the hon. Member for Gorbals?

Since that question involves a phrase—" a solvent insurance scheme "—which provides much opportunity for evasion, let me ask again what exactly do the Government mean by "a violent insurance scheme"? There is a very common-sense meaning to be attached to those words. It is an insurance scheme in which the contributions pay for benefits; in which those who are in insurance receive in benefits as much as they are entitled to for their contributions. We shall not have wholly failed in doing what the country expects us to do in making a beginning of reform if to-night we can get an answer from the Government to that question.

Our indictment against the Government comes under two heads. We say, in the first place, that they have missed a very great opportunity. I do not think I am describing things incorrectly when I say that the country has been waiting expectantly for a beginning in the reform of the extravagances and the abuses of the insurance scheme. The country realises the enormous difficulties in the way. Apparently, the Government thought that the best chance of making a start was through the medium of the interim report of the Royal Commission. My indictment is that the Government have wasted an opportunity in dealing with the matter in this way. I do not say-that the interim report an ideal scheme. On this side of the House we think the report makes a mistake in attacking benefits at the outset as one of the first measures to be taken. That appears to me to be proceeding in the wrong order. There are other grave details in the Report. It leaves £7,000,000 still to be borrowed to meet the deficit, and limitations are imposed upon the means inquiry. But the report of the Royal Commission was invited by the Government, and it would have provided the impetus necessary to get over the dead-lock in reform. The Government had through the Report a chance of making a start in dealing effectively with this problem with the whole country behind them if they had taken action at once. That opportunity has been lost. We have now been promised the appointment of another Committee.

What a task the historian will have before him when he comes to write the history of committees on unemployment. The task of the antiquarian, Mr. Woolley, in digging up the cities of Ur of the Chaldees will be nothing as compared with the task of the historian. However deep you dig there is always another committee below. What is to be the nature of this last Committee? The Minister of Labour defended the appointment of this committee on the ground that it was not an advisory committee but a consultative committee. Perhaps hon. Members opposite will derive some consolation from that statement, but what is the consultation to be about? It is going to be about what the Government are to do to deal with this question and what measures are to be applied. Does not that mean a shirking of the responsibilities of the Government? I find another grave feature about this latest committee. The Government, not unnaturally, on account of some of their affinities, and the affinities of their extreme supporters, have imitated the Russian Government by arranging for the appointment of a kind of Soviet to replace the present legislature. This new tribunal is to take this problem out of our hands and place it into the hands of the new legislature. Some of us would never agree to such a course.

The Government have missed a great opportunity. Our indictment takes also another heading. They have failed in a great duty—a duty to the whole nation. That great duty is to present the nation with a solvent Budget. Does not that underlie the whole question of unemployment? If I am right, if my right hon. Friend the Member for Billhead is right, if the argument addressed to the Committee earlier by the Leader of the Opposition is right, the Budget is not only heading towards insolvency—it is insolvent. It is really beyond dispute between men of common sense that a solvent Budget is the first condition for the solution of the unemployment question. How does the argument go? To get back employment you must succeed in competition with your foreign rivals. To succeed in competition with your foreign rivals, you must have confidence in the country. The very basis of confidence in the country, as my right hon. Friend the Member for Bewdley (Mr. S. Baldwin) has shown, is confidence in the stability of the currency of the country, and the stability of the currency of the country is wrapped up in the solvency of the Budget.

I would like to reduce that simply to one figure. At the present time, on the Budget presented by the Chancellor of the Exchequer—the paper Budget—there is an apparent margin of £52,000,000 available for the Sinking Fund. What the Government are doing to-day is sitting by in flaccid indolence while we go on with a system by which we are going to borrow £52,000,000 a year for unemployment insurance. It is only a coincidence that the two figures are exactly the same. It is an extraordinarily instructive coincidence that the whole margin on the Budget of £52,000,000 for the Sinking Fund is precisely cancelled off by the methods of insane finance by which we are at present financing the Unemployment Insurance Fund. What is left? Is it a neat balance of the Budget? Far from it. There is £20,000,000 from the Exchange Fund, dragged in this year from a capital fund. That is £20,000,000, and more, of true deficit on the Budget this year.

The interim report of the Royal Commission, although, as I have said, it has imperfections—it leaves still £7,000,000 to be borrowed, which is a very grave imperfection—nevertheless, if it had been courageously adopted, would have produced at any rate a temporary solvency. Nay, more. If the Government had then squared up to the recommendations of the Royal Commission on the removal of anomalies, they would have got, as we said, £5,000,000. But what is the course that they have taken? They cannot even square up to that; they cannot even take into their own hands the settlement of this question of anomalies, but have had to shirk it off on to the shoulders of a Soviet. In the result they bring in a further £5,000,000 for the extension of transitional benefit. They leave us at the present time, according to a calculation which it is perfectly impossible for anyone to disprove, with already, without any further Supplementary Estimates this year, an actual deficit on the Budget of £25,000,000.

That involves all the consequences to which my right hon. Friend the Member for Bewdley and my right hon. Friend the Member for Hillhead (Sir R. Horne) have referred. It involves, in particular, the shattering of confidence in all those who are engaged in the struggle of competition in industry. That is a most fatal condition for the basic removal of the great evil of unemployment. That is one duty to which the Government have been false. They have been false to two others. They have been false to their duty to those who are in insurance. We accept the principle of maintaining the benefit in comparison with those who are out of insurance, and that can only be done by admitting a difference in the treatment of the two. [Interruption.]

Mr. KELLY

Are you speaking for your party?

Sir H. YOUNG

Certainly not. I am speaking as any Member speaks in this House. I am speaking for my constituents, and I am presenting the Committee with such thought as I have been able to give to the subject. But, as the hon. Member has challenged me, may I say I do not believe in walking round these questions like a cat walking on hot bricks? I believe it to be absolutely essential in the interest of those in insurance, in the interest of those who have gone out of insurance and are now on transitional benefit, in the interest of those who are in employment, in the interest of the whole country, that you should recognise that there must be some difference in treatment between those who are in insurance and those who are not.

There are two rules only which will enable you to straighten out this miserable tangle of the unemployment business. The first is that those who are in insurance still—whose contributions entitle them to consider themselves in insurance—are entitled to everything which their contributions give them. They are entitled to the full benefits that they receive at present. But those who, through no fault of their own, through misfortune, are no longer in insurance, those whose contributions no longer entitle them to full benefits, are not entitled to the same treatment. They are only entitled to what they need. Take it long or short, put the day off as long as you please or face up to it at once, but you will find that that principle, which is admitted in the interim report of the Commission, is the only one that will enable you to continue the scheme of unemployment insurance at all. It is the principle that insurance must be restored to the basis of insurance and those out of insurance in the present state of the country's finances, with the need that we have for every penny that can be found available for the refreshment of industry, must be prepared to endure strict justice, and strict justice for them is a general means inquiry.

Worst of all is the Government's failure in duty to those in employment by their failure to get themselves out of the dole mind and back into the employment mind. The policy which we advocate is the only policy which can give the root cure for unemployment by getting people back to work. We accept and proclaim, we who know as much about the people as hon. Members opposite, that it is their true desire to get back into work, and the only course to that is rigid economy and reform of abuses. The Government have neglected a great opportunity. They have failed in a great duty. They have passed through three states in their short-career, the state when they deceived themselves and other people into thinking that they had a remedy for unemployment, the second state, in which they deceived others without deceiving themselves, and the third state, in which they have deceived neither themselves nor anyone else. The opportunity that has gone will be recovered by the wisdom and the energy of our people. It may he that it will fall to other hands to fulfil that opportunity. If it does, they must take warning by the evil results of this Government's humbug and not fail in energy, veracity, and courage.

Mr. THOMAS

The right hon. Gentleman the Member for Sevenoaks (Sir H. Young) opened his speech with a statement that this was an extraordinary difficulty. That is the part of his speech with which I entirely agree. It was left until 10.25, speaking, as he said, not for his party but for himself and his constituents—[An HON. MEMBER: "And others!"]—I thought we should get an admission that there are others on that side who subscribe to the view. The view, shortly put by the right hon. Gentleman—and, by the way, it is the only contribution made from that side to-day as far as dealing with the issue is concerned—is, that those folk who are the worst of all victims of unemployment, because their period of unemployment has been so long that they are not even called insurable, are the people, who, we now gather, the right hon. Gentleman and a number of his friends believe should be dealt with immediately. That is the only contribution that has been made in the Debate, which has been extraordinary for some other reasons. When the Division takes place, the only dividing line in the Division Lobby will not be the abuses, not the discrepancy of the fund, and not the great evil to the country, but whether in 2½ months or 4½ months there shall be another Debate on this issue. That is the dividing line between us at the moment.

Curiously enough, we have listened to a very interesting lecture from the right hon. Gentleman the Leader of the Opposition to-day. There are very few people who would quarrel with his statement that the one essential both to democracy and to the workers as a whole, excluding no section of the community, is sound finance and a balanced Budget. I am not going to quarrel with that statement, because it would not only be wrong but highly dangerous to let it go forth that any section of the community was in favour of an unbalanced Budget. The remarkable fact is that, although he was lecturing us on the unbalanced Budget, and although he said to this House and to the country that he was gravely apprehensive of the tendency of a continued deficit in the fund, what he did not tell the House and the country is the fact that in 1924, when he took office following our Government, the deficit was £4,750,000 on this same fund. When he left office it was £36,750,000. [HON. MEMBERS: "General Strike!" "Your Strike!"] It is clearly obvious that I have said something which upsets hon. Members opposite. A mere statement of facts causes annoyance to the other side. The right hon. Gentleman was invited this afternoon, after having made so serious a statement, to announce to the country what he would do in the present situation.

Sir GEORGE HAMILTON

Have a General Election.

Mr. THOMAS

That was not the answer that he gave. The answer that he gave was: "I will declare my policy when the battle takes place." Are we to gather from that statement that, notwithstanding all that has been said to-day, this is only a sham fight? If he refuses to state any policy to the House of Commons, did the Noble Lord, who is the leader in another place, state the policy of the Opposition on Saturday last? Speaking in Tredegar Park, Lord Hailsham made this statement: Speaking of unemployment insurance, we have our own plans, and I believe they are bettor than those of the Royal Commission. The last thing we should try to do is to reduce benefits and increase the contributions, but it is essential, if we are to maintain our financial stability, that the Unemployment Fund should be put upon a proper insurance basis. We are agreed that there is to be no increase in contributions. We are agreed that there is to be no reduction in benefit. Is that agreed? We are agreed that there is to be no increase in contributions, no reduction in benefit and that the fund is to be on a self-supporting basis. Where is the money coming from? That is the answer to the right hon. Member for Sevenoaks. What an extraordinary Debate it is! We have the position that the Noble Lord, the Leader of the Conservative party in another place, speaking on the eve of this Debate and undoubtedly with the full authority of the Leader of the Conservative party, announces to the world that they have a better scheme than that of the Commission but they will not say a word about it, although they condemn us for not adopting a scheme of which they themselves do not approve. In the second place, speaking again as the Leader of the Conservative party in another place, the Noble Lord says there is to be no reduction in benefits, no increase in contributions. [An HON. MEMBER: "For the insured."] I had better deal with that at once. Does it mean that the hon. Member is only concerned with those who are in transitional benefit? The question that we are entitled to put to the other side is this; if those in the transitional stage are to be dealt with there are only two ways of doing so, either the State must accept the responsibility or they must go on to the Poor Law.

Sir GEORGE PENNY

Give them work.

Mr. THOMAS

I am told that there is a third alternative, but it has nothing to do with the Insurance Fund. The third alternative is tariffs. [HON. MEMBERS: "No, work!"] We have already heard that the one way of giving them work is by a tariff, and I will deal with that on the figures given by the Minister of Labour. The right hon. Lady indicated to the House that the three main industries affected were cotton, mining and shipbuilding. Is a tariff a cure for them?

Sir G. HAMILTON

Why not?

Mr. THOMAS

Now we have it quite clear. We have now reached the stage, no reduction in benefits, no increase in contributions, shipbuilding, cotton and mining, work for all, with a tariff. If we are to be condemned for not adopting the policy which, we have just heard, is not the Conservative party's policy, I am entitled to say to the Opposition, "All this talk, all this Press stunt, is not only unfair, but it is actually deceiving the country." In the Gateshead by-election the Tory candidate said, "I am not touching unemployment insurance," and his figures were proclaimed as a moral victory. In the Ardwick by-election neither the speeches of the Tory candidate nor the letter of the Leader of the Opposition in this House contains a word on unemployment insurance. And even to-day, up to 25 minutes past 10, there has not been a solitary word from any Member of the party opposite as to how they would deal with the situation. That being so, I submit that we are dealing with this problem in the only possible way. Would any hon. Member opposite go to his constituency even now and say that he would deal with the short-time docker, the short-time miner, the short-time printer or the married women in different industries, on precisely the same basis? Which hon. Member would dare to do it? None. They are not in a position to say how they will deal with the problem.

We have heard a lot about the Royal Commission this afternoon. Is there any hon. Member opposite who will get up and say that the Royal Commission made any recommendation for dealing with these people? We are condemned, but hon. Members opposite know perfectly well that the Royal Commission was silent on the matter. I will state why. It was because in this matter we are dealing with different sections. Take the case of the printer who from January to December works on Friday and Saturday and into Sunday morning. I have no hesitation in saying, regardless of any criticism, that if that man does habitually work from Friday night to Sunday morning—he does not intend and it is not his business to get work on other days of the week—it would be a perfect injustice that he should receive benefit for the other days of the week. Take the other extreme case of dock labourers, casual workers, textile workers, those who work two days a week and are willing and anxious to get work for the remaining four days. Are hon. Members opposite going to deprive them of benefit? That "is the problem which has to be faced.

Then there is the case of the married women. To our knowledge there are married women—the evidence of the Royal Commission proves it—who are engaged in certain industries on Friday and Saturday, such as co-operative stores and that kind of business where they go on for an extra day or two. Let us be quite fair. I want to appreciate the point made by the hon. Member for North Lanark (Miss Lee). Do not let us assume that they merely want this work because they do not desire to be at home. It is often because it augments the miserable income of the home. You have to differentiate between that woman who does not desire more than two days' work and the hundreds of thousands of women who are anxious and willing to work six days if they can. We are suggesting that it would be impossible for this House to lay down hard-and-fast rules to meet these cases. As a matter of fact, it would be trying to remove one anomaly and creating 101 others. It is because we have refused to deal with it in that haphazard manner that we submit that our plan is the only practical way of dealing with it.

I would remind the Committee that in voting this evening we are voting exclusively for the Money Resolution. There will be an opportunity when the Bill is presented for right hon. and hon. Gentlemen to put down their Amendments. They will then have a practical test and an opportunity of showing what they are prepared to do. As far as the Government's policy is concerned it is this: There are abuses—and I admit frankly that the evidence before the Commission shows that there are—and those abuses must be remedied, but in remedying them we do not intend to do injustices to hundreds of thousands of others. Secondly, on the question of transitional benefit, as far as the Government are concerned the alternative is a simple one. Either the State must accept responsibility or these people will be driven to the Poor Law.

Equally we submit to the House that in the abnormal situation in this country, the conditions in other parts of the world should be a warning to hon. Members who find it so easy to sneer about the dole. It is so easy to pour ridicule on unemployment insurance, but I often ask myself what would have been the position of this country in the past two years if it had not been for unemployment insurance? If you get in your mind the idea that the people of this country will starve you are making a profound mistake. [HON. MEMBERS: "They want work!"] I admit quite frankly that they want work, but the greatest reflection which can be cast upon them is cast upon them by those who talk about unemployed people merely looking for the dole. They want work, but unless we are in a position as a nation to find them work, the Government's policy is that they shall not starve. That is the simple issue before the Committee. Hon. Members opposite will be voting on the Money Resolution and they will have an opportunity of expressing their policy, on the Bill which will follow. For the reasons which I have stated, I commend the Resolution to the Committee.

Question put, "That the words 'and fifteen,' stand part of the Question."

The Committee divided: Ayes, 283; Noes, 236.

Division No. 339.]	AYES.	[10.57 p.m.
Adamson, Rt. Hon. W. (Fife, West)	Graham, Rt. Hon. Wm. (Edin., Cent.)	Maclean, Sir Donald (Cornwall, N.)
Adamson, W. M. (Staff., Cannock)	Gray, Mliner	Maclean, Nell (Glasgow, Govan)
Aitchison, Rt. Hon. Cralgle M.	Grenfell, D. R. (Glamorgan)	MacNeill-Weir, L.
Alexander, Rt. Hon. A. V. (Hlilsbro')	Griffith, F. Kingsley (Middlesbro'W.)	McShane, John James
Alpass, J. H.	Griffiths, T. (Monmouth, Pontypool)	Malone, C. L'Estrange (N'thampton)
Ammon, Charles George	Groves, Thomas E.	Mander, Geoffrey le M.
Angell, Sir Norman	Grundy, Thomas W.	Manning, E. L.
Arnott, John	Hall, G. H. (Merthyr Tydvil)	Mansfield, W.
Aske, Sir Robert	Hall, J. H. (Whitechapel)	March, S.
Attlee, Clement Richard	Hall, Capt. W. G. (Portsmouth, C.)	Marcus, M.
Ayles, Walter	Hamilton, Mary Agnes (Blackburn)	Markham, S. F.
Baldwin, Oliver (Dudley)	Hamilton, Sir R. (Orkney & Zetland)	Marley, J.
Barnes, Alfred John	Hardie, David (Rutherglen)	Marshall, Fred
Barr, James	Hardie, G. D. (Springburn)	Mathers, George
Batey, Joseph	Harris, Percy A.	Matters, L. W.
Bennett, Sir E. N. (Cardiff, Central)	Hastings, Dr. Somerville	Maxton, James
Bennett, William (Battersea, South)	Haycock, A. W.	Messer, Fred
Benson, G.	Hayday, Arthur	Middleton, G.
Bevan, Aneurin (Ebbw Vale)	Hayes, John Henry	Mills, J. E.
Blindell, James	Henderson, Right Hon. A. (Burnley)	Milner, Major J.
Bondfield, Rt. Hon. Margaret	Henderson, Arthur, Junr. (Cardiff, S.)	Montague, Frederick
Bowen, J. W.	Henderson, Thomas (Glasgow)	Morgan, Dr. H. B.
Bowerman, Rt. Hon. Charles W.	Henderson, W. W. (Middx., Enfield)	Morley, Ralph
Broad, Francis Alfred	Herriotts, J.	Morrison, Rt. Hon. H. (Hackney, S.)
Brockway, A. Fenner	Hicks, Ernest George	Morrison, Robert C. (Tottenham, N.)
Bromfield, William	Hirst, G. H. (York W. R. Wentworth)	Mort, D. L.
Bromley, J.	Hirst, W. (Bradford, South)	Muff, G.
Brooke, W.	Hoffman, P. C.	Muggeridge, H. T.
Brothers, M.	Hollins, A.	Murnin, Hugh
Brown, C. W. E. (Notts. Mansfield)	Hopkin, Daniel	Nathan, Major H. L.
Brown, Rt. Hon. J. (South Ayrshire)	Here-Belisha, Leslie	Naylor, T. E.
Buchanan, G.	Hudson, James H. (Huddersfield)	Newman, Sir R. H. S. D. L. (Exeter)
Burgess, F. G.	Hunter, Dr. Joseph	Noel Baker, P. J.
Burgin, Dr. E. L.	Jenkins, Sir William	Noel-Buxton, Baroness (Norfolk, N.)
Cameron, A. G.	John, William (Rhondda, West)	Oldfield, J. R.
Cape, Thomas	Johnston, Rt. Hon. Thomas	Oliver, George Harold (Ilkeston)
Carter, W. (St. Pancras, S. W.)	Jones, Rt. Hon. Lelf (Camborne)	Oliver, P. M. (Man., Blackley)
Chater, Daniel	Jones, Morgan (Caerphilly)	Owen, H. F. (Hereford)
Church, Major A. G.	Jowett, Rt. Hon. F. W.	Palin, John Henry
Clarke, J. S.	Jowitt, Rt. Hon. Sir W. A. (Preston)	Paling, Wilfrid
Cluse, W. S.	Kelly, W. T.	Palmer, E. T.
Clynes, Rt. Hon. John R.	Kennedy, Rt. Hon. Thomas	Parkinson, John Allen (Wigan)
Cocks, Frederick Seymour	Kenworthy, Lt.-Com. Hon. Joseph M.	Perry, S. F.
Compton, Joseph	Kinley, J.	Pethick-Lawrence, F. W.
Cove, William G.	Kirkwood, D.	Picton-Turbervill, Edith
Cripps, Sir Stafford	Knight, Holford	Pole, Major D. G.
Daggar, George	Lang, Gordon	Potts, John S.
Dallas, George	Lansbury, Rt. Hon. George	Price, M. P.
Dalton, Hugh	Lathan, G. (Sheffield, Park)	Pybus, Percy John
Davies, D. L. (Pontypridd)	Law, Albert (Bolton)	Qulbell, D. J. K.
Davies, Rhys John (Westhoughton)	Law, A. (Rossendale)	Ramsay, T. B. Wilson
Day, Harry	Lawrence, Susan	Rathbone, Eleanor
Denman, Hon. R. D.	Lawson, John James	Raynes, W. R.
Devlin, Joseph	Lawther, W. (Barnard Castle)	Richards, R.
Dukes, C.	Leach, W.	Richardson, R. (Houghton-le-Spring)
Duncan, Charles	Lee, Frank (Derby, N. E.)	Riley, Ben (Dewsbury)
Ede, James Chater	Lee, Jennie (Lanark, Northern)	Riley, F. F. (Stockton-on-Tees)
Edge, Sir William	Lees, J.	Ritson, J.
Edmunds, J. E.	Leonard, W.	Roberts, Rt. Hon. F. O. (W. Bromwich)
Edwards, E. (Morpeth)	Lewis, T. (Southampton)	Romeril, H. G.
Egan, W. H.	Lindley, Fred W.	Rosbotham, D. S. T.
Eimley, Viscount	Lloyd, C. Ellis	Rothschild, J. de
Freeman, Peter	Logan, David Gilbert	Rowson, Guy
Gardner, B. W. (West Ham, Upton)	Long bottom, A. W.	Salter, Dr. Alfred
Gardner, J. P. (Hammersmith, N.)	Longden, F.	Samuel, Rt. Hon. Sir H. (Darwen)
George, Rt. Hon. D. Lloyd (Car'vn)	Lovat-Fraser, J. A.	Samuel, H. Walter (Swansea, West)
George, Major G. Lloyd (Pembroke)	Lunn, William	Sanders, W. S.
George, Megan Lloyd (Anglesea)	Macdonald, Gordon (Ince)	Sandham, E.
Gibson, H. M. (Lancs, Mossley)	MacDonald, Rt. Hon. J. R. (Seaham)	Sawyer, G. F.
Gill, T. H.	MacDonald, Malcolm (Bassetlaw)	Scurr, John
Gillett, George M.	McElwee, A.	Sexton, Sir James
Glassey, A. E.	McEntee, V. L.	Shakespeare, Geoffrey H.
Gossling, A. G.	McGovern, J. (Glasgow, Shettleston)	Shaw, Rt. Hon. Thomas (Preston)
Gould, F.	McKinlay, A.	Shepherd, Arthur Lewis
Graham, D. M. (Lanark, Hamilton)	MacLaren, Andrew	Sherwood, G. H.
Shield, George William	Sullivan, J.	Welsh, James (Paisley)
Shiels, Dr. Drummond	Sutton, J. E.	Welsh, James C. (Coatbridge)
Shillaker, J. F.	Taylor, R. A. (Lincoln)	West, F. R.
Shinwell, E.	Taylor, W. B. (Norfolk, S. W.)	White, H. G.
Short, Alfred (Wednesbury)	Thomas, Rt. Hon. J. H. (Derby)	Whiteley, Wilfrid (Birm., Ladywood)
Simmons, C. J.	Thurtle, Ernest	Whiteley, William (Blaydon)
Simon, E. D. (Manch'ter, Withlngton)	Tillett, Ben	Wilkinson, Ellen C.
Sinclair, Sir A. (Caithness)	Tinker, John Joseph	Williams, David (Swansea, East)
Sinkinson, George	Toole, Joseph	Williams, E. J. (Ogmore)
Sitch, Charlas H.	Tout, W. J.	Williams, Dr. J. H. (Llanelly)
Smith, Ben (Bermondsey, Rotherhithe)	Townend, A. E.	Williams, T. (York, Don Valley)
Smith, Frank (Nuneaton)	Trevelyan, Rt. Hon. Sir Charles	Wilson, J. (Oldham)
Smith, Lees-, Rt. Hon. H. B. (Keighley)	Vaughan, David	Wilson, R. J. (Jarrow)
Smith, Tom (Pontefract)	Viant, S. P.	Winterton, G. E. (Leicester, Loughb'gh)
Smith, W. R. (Norwich)	Walkden, A. G.	Wise, E. F.
Snowden, Thomas (Accrington)	Walker, J.	Wood, Major McKenzie (Banff)
Sorensen, R.	Wallace, H. W.	Young, R. S. (Islington, North)
Stamford, Thomas W.	Watkins, F. C.
Stephen, Campbell	Watson, W. M. (Dunfermline)	TELLERS FOR THE AYES.—
Strachey, E. J. St. Loe	Watts-Morgan, Lt.-Col. D. (Rhondda)	Mr. Charles Edwards and Mr. Charleton.
Strauss, G. R.	Wellock, Wilfred
NOES.
Acland-Troyte, Lieut. Colonel	Courthope, Colonel Sir G. L.	Hoare, Lt.-Col. Rt. Hon. Sir S. J. G.
Alnsworth, Lieut.-Col. Charles	Cranborne, Viscount	Horne, Rt. Hon. Sir Robert S.
Albery, Irving James	Crichton-Stuart, Lord C.	Howard-Bury, Colonel C. K.
Alexander, Sir Wm. (Glasgow, Cent'l)	Crookshank, Capt. H. C.	Hudson, Capt. A. U. M. (Hackney, N.)
Allen, Sir J. Sandeman (Liverp'l., W.)	Croom-Johnson, R. P.	Hunter-Weston, Lt.-Gen. Sir Aylmer
Amery, Rt. Hon. Leopold C. M. S.	Culverwell, C. T. (Bristol, West)	Hurd, Percy A.
Ashley, Lt.-Col. Rt. Hon. Wilfrid W.	Cunliffe-Lister, Rt. Hon. Sir Philip	Hurst, Sir Gerald B.
Astor, Viscountess	Dalkeith, Earl of	Hutchison, Maj.-Gen. Sir R.
Atkinson, C.	Dalrymple-White, Lt.-Col. Sir Godfrey	Inskip, Sir Thomas
Baillie-Hamilton, Hon. Charles W.	Davidson, Rt. Hon. J. (Hertford)	Iveagh, Countess of
Baldwin, Rt. Hon. Stanley (Bewdley)	Davies, Dr. Vernon	Jones, Sir G. W. H. (Stoke New'gton)
Balfour, George (Hampstead)	Davies, Maj. Geo. F. (Somerset, Yeovil)	Kindersley, Major G. M.
Balfour, Captain H. H. (I. of Thanet)	Davison, Sir W. H. (Kensington, S.)	Knox, Sir Alfred
Balniel, Lord	Dawson, Sir Philip	Lamb, Sir J. Q.
Beamish, Rear-Admiral T. P. H.	Despencer-Robertson, Major J. A. F.	Lambert, Rt. Hon. George (S. Molton)
Beaumont, M. W.	Dixey, A. C.	Lane Fox, Col. Rt. Hon. George R.
Bellairs, Commander Carlyon	Dugdale, Capt. T. L.	Latham, H. P. (Scarboro' & Whitby)
Betterton, Sir Henry B.	Eden, Captain Anthony	Leigh, Sir John (Clapham)
Bevan, S. J. (Holborn)	Edmondson, Major A. J.	Leighton, Major B. E. P.
Birchall, Major Sir John Dearman	Elliot, Major Walter E.	Lewis, Oswald (Colchester)
Bird, Ernest Roy	Erskine, Lord (Somerset, Weston-s.-M.)	Little, Graham, Sir Ernest
Bourne, Captain Robert Croft.	Everard, W. Lindsay	Llewellin, Major J. J.
Bowater, Col. Sir T. Vansittart	Falle, Sir Bertram G.	Locker-Lampson, Rt. Hon. Godfrey
Bowyer, Captain Sir George E. W.	Ferguson, Sir John	Locker-Lampson, Com. O. (Handsw'th)
Boyce, Leslie	Fermoy, Lord	Long, Major Hon. Eric
Bracken, B.	Fielden, E. B.	Lymington, Viscount
Braithwaite, Major A. N.	Fison, F. G. Clavering	Macdonald, Capt. P. D. (I. of W.)
Brass, Captain Sir William	Ford, Sir P. J.	Maitland, A. (Kent, Faversham)
Briscoe, Richard George	Forestler-Walker, Sir L.	Makins, Brigadier-General E.
Broadbent, Colonel J.	Fremantle, Lieut.-Colonel Francis E.	Margesson, Captain H. D.
Brown, Brig.-Gen. H. C. (Berks, Newb'y)	Galbraith, J. F. W.	Marjorlbanks, Edward
Buchan, John	Ganzonl, Sir John	Mason, Colonel Glyn K.
Buchan-Hepburn, P. G. T.	Gault, Lieut.-Col. A. Hamilton	Meiler, R. J.
Bullock, Captain Malcolm	Gibson, C. G. (Pudsey & Otley)	Merriman, Sir F. Boyd
Burton, Colonel H. W.	Gilmour, Lt.-Col. Rt. Hon. Sir John	Millar, J. D.
Butler, R. A.	Glyn, Major R. G. C.	Milne, Wardlaw-, J. S.
Butt, Sir Alfred	Gower, Sir Robert	Mitchell, Sir W. Lane (Streatham)
Cadogan, Major Hon. Edward	Graham, Fergus (Cumberland, N.)	Monsell, Eyres, Com. Rt. Hon. Sir B.
Campbell, E. T	Grattan-Doyle, Sir N.	Moore, Sir Newton J. (Richmond)
Carver, Major W. H.	Greaves-Lord, Sir Walter	Moore, Lieut.-Colonel T. C. R. (Ayr)
Castle Stewart, Earl of	Greene, W. P. Crawford	Morrison, W. S. (Glos., Cirencester)
Cayzer, Sir C. (Chester, City)	Grenfell, Edward C. (City of London)	Morrison-Bell, Sir Arthur Clive
Cayzer, Maj. Sir Herbt. R. (Prtsmth, S.)	Gretton, Colonel Rt. Hon. John	Muirhead, A. J.
Cazalet, Captain Victor A.	Gritten, W. G. Howard	Newton, Sir D. G. C. (Cambridge)
Cecil, Rt. Hon. Lord H. (Ox. Univ.)	Guinness, Rt. Hon. Walter E.	Nicholson, O. (Westminster)
Chadwick, Capt. Sir Robert Burton	Gunston, Captain D. W.	Nicholson, Col. Rt. Hn. W. G. (Ptrsf'ld)
Chamberlain, Rt. Hn. Sir J. A. (Birm., W.)	Hacking, Rt. Hon. Douglas H.	O'Connor, T. J.
Chamberlain, Rt. Hon. N. (Edgbaston)	Hall, Lieut.-Col. Sir F. (Dulwich)	Oman, Sir Charles William C.
Christie, J. A.	Hamilton, Sir George (Ilford)	O'Neill, Sir H.
Churchill, Rt. Hon. Winston Spencer	Hammersley, S. S.	Ormsby-Gore, Rt. Hon. William
Clydesdale, Marquess of	Hanbury, C.	Peake, Capt. Osbert
Cobb, Sir Cyril	Hannon, Patrick Joseph Henry	Percy, Lord Eustace (Hastings)
Cockerill, Brig. General Sir George	Hartington, Marquess of	Perkins, W. R. D.
Cohen, Major J. Brunel	Harvey, Major S. E. (Devon, Totnes)	Peto, Sir Basil E. (Devon, Barnstaple)
Colfox, Major William Philip	Haslam, Henry C.	Power, Sir John Cecil
Collins, Sir Godfrey (Greenock)	Henderson, Capt. R. R. (Oxf'd, Henley)	Pownall, Sir Assheton
Colman, N. C. D.	Heneage, Lieut.-Colonel Arthur P	Preston, Sir Walter Rueben
Colville, Major D. J.	Hennessy, Major Sir G. R. J.	Ramsbotham, H.
Cooper, A. Duff	Herbert, Sir Dennis (Hertford)	Rawson, Sir Cooper
Courtauld, Major J. S.	Hills, Major Rt. Hon. John Waller	Reid, David D. (County Down)

Remer, John R.	Smith-Carington, Neville W.	Wallace, Capt. D. E. (Hornsey)
Rentoul, Sir Gervais S.	Smithers, Waldron	Ward, Lieut.-Col. Sir A. Lambert
Reynolds, Col. Sir James	Somerville, A. A. (Windsor)	Warrender, Sir Victor
Richardson, Sir P. W. (Sur'y, Ch'ts'y)	Southby, Commander A. R. J.	Waterhouse, Captain Charles
Roberts, Sir Samuel (Eccletall)	Spender-Clay, Colonel H.	Wayland, Sir William A.
Rodd, Rt. Hon. Sir James Rennell	Stanley, Lord (Fylde)	Wells, Sydney R.
Ross, Ronald D.	Stanley, Hon. O. (Westmorland)	Williams, Charles (Devon, Torquay)
Ruggles-Brise, Colonel E.	Steel-Maitland, Rt. Hon. Sir Arthur	Wilson, G. H. A. (Cambridge U)
Russell, Alexander West (Tynemouth)	Stewart, W. J. (Belfast, South)	Windsor-Cilve, Lieut.-Colonel George
Salmon, Major I.	Stuart, Hon. J. (Moray and Nairn)	Winterton, Rt. Hon. Earl
Samuel, A. M. (Surrey, Farnham)	Sueter, Rear-Admiral M. F.	Withers, Sir John James
Samuel, Samuel (W'dsworth, Putney)	Taylor, Vice-Admiral E. A.	Wolmer, Rt. Hon. Viscount
Sandeman, Sir N. Stewart	Thomas, Major L. B. (King's Norton)	Womersley, W. J.
Sassoon, Rt. Hon. Sir Philip A. G. D.	Thompson, Luke	Wood, Rt. Hon. Sir Kingsley
Savery, S. S.	Thomson, Mitchell-, Rt. Hon. Sir W.	Wright, Brig.-Gen. W. D. (Tavist'k)
Shepperson, Sir Ernest Whittome	Titchfield, Major the Marquess of	Young, Rt. Hon. Sir Hilton
Simon, Rt. Hon. Sir John	Train, J.
Sinclair, Col. T, (Queen's U., Belfast)	Tryon, Rt. Hon. George Clement	TELLERS FOR THE NOES.—
Skelton, A. N.	Turton, Robert Hugh	Sir Frederick Thomson and Sir George Penny.
Smith, R. W. (Aberd'n & Kinc'dine. C.)	Vaughan-Morgan, Sir Kenyon

Main Question put, and agreed to.

Resolution to be reported To-morrow.

The remaining Orders were read, and postponed.