NATIONAL ECONOMY BILL.

HC Deb 29 September 1931 vol 257 cc207-75

[ALLOTTED DAY.]

Order for Third Reading read.

Motion made, and Question proposed, "That the Bill be now read the Third time."

Sir ARTHUR STEEL-MAITLAND

I wish to support the Third Reading of the Bill. It is a Measure designed to meet an emergency and an emergency that demands quick and decisive action. The detailed provisions of the Bill have been debated at length in Committee, and my purpose is to commend it to the House on general grounds which in my judgment, and I believe in that of many Members of the House, are overwhelming in their cogency. The Debates on the Bill have produced a cascade of criticism of one kind or another. They have shown very considerable vigour in denunciation by right hon. and hon. Members on the Front Opposition Bench, but the vigour in denunciation has been accompanied by a singular dearth of any constructive proposals. If anyone present at our Debates had not known previously that we were face to face with a great crisis, I do not think that he could possibly have gathered the fact from the speeches made on the opposite side of the House. I do not think that he would have guessed from the speeches made from the Front Opposition Bench that we had to meet a huge deficit in the present year and a still greater deficit in the year to come. What is more, I am quite sure that he would not have realised the fact that, if these economies were rejected, adequate alternatives would have to be found in order to fill the gap.

I take, first of all, one alternative suggestion which was put forward by the hon. Gentleman the late Financial Secretary to the Treasury. In his opinion the Government have been entirely wrong in trying to find means, both by economies and by taxes, to meet the enormous deficits which confront us this year and next year. He was of opinion that the situation ought not to have been met by economies and by taxes, and that it would have been better met, by continu- ing to borrow on a very large scale. He said that there was no need to fear inflation as a result of such borrowing. The hon. Gentleman made that speech 10 days ago. I wonder if he would repeat that statement to-day. To-day there is 20 per cent. of inflation and the hon. Member should realise, if anyone does, that a dangerous degree of inflation, a degree that may ultimately mean the destruction of the currency, may be reached when you have an unbalanced Budget coming on top of an existing substantial degree of inflation due to other causes.

There is another question which I would ask the hon. Gentleman if lie were in his place. From whom would lie propose to borrow He, or at any rate many of his friends, stigmatise existing investors in War Loan as rentiers, as people who live on unearned income and practically as enemies of the people to be treated as such. If he and his colleagues were in power again, I wonder would he anticipate much success in inviting a new set of investors to take up the same position and to be the target of similar attacks. Another alternative suggestion which has been offered is the suggestion of a tariff. I myself believe that a tariff is necessary—

Mr. SPEAKER

We cannot discuss the question of a tariff on the Third Reading of this Bill.

Sir A. STEEL-MAITLAND

I shall keep strictly within the bounds of order, but subject to your Ruling, Sir, I would point out that I am only endeavouring to show that the passage of this Bill is absolutely necessary, because all the alternatives to it are ruled out. I am not desirous, at all, of entering into old controversies. I believe a tariff to be necessary from the point of view of the balance of trade, but I do not wish to discuss it further. All I want to point out is that action in an emergency of this kind has to be quick and decisive if it is to be successful. I trust there is no one in this House who is not an optimist in this sense, that he feels confident that this country will surmount the present emergency, but it is obvious that in order to do so quick and decisive action is necessary. For that reason, if for no other, the tariff cannot be considered as an alternative to this Bill.

As a commentary on the action of right hon. Gentlemen opposite, I may also point out that we have heard circumstantial reports to the effect that they themselves favoured a tariff as an alternative to this Measure. We have heard circumstantial details such as that the majority in favour was 15 to 5, and all I would ask is, why in Heaven's name, if that were so, did they not put it into effect? The only reason that I can see is that they were frightened. They were scared out of their alternative proposal presumably by the Chancellor of the Exchequer. Then, if right hon. Gentlemen opposite disapprove of this Measure, what of the £56,500,000 of economies of which they did approve? There is no good in denying the fact, because it is on record that they gave their approval in principle to those economies. Then came the meeting with the committee of the Trades Union Congress. Some of my friends on this side and some people outside have criticised the Trades Union Congress. I do not. I think there is a great deal more to be said for them in connection with those negotiations than is generally understood, but at any rate the effect of that meeting was decisive. It frightened right hon. Gentlemen opposite for the second time. It frightened them clean off their economies, and, not only so, but it made them abandon any further attempt to meet the situation and was the cause of their resignations.

I ask hon. Members on the back benches opposite, in view of all that happened in connection with the late Government, what credence do they place in the denunciations to which they have listened during the last few days from Members on their own Front Bench? If they do place credence in those denunciations, it shows how extremely ready some people are to believe what they wish to believe. Do hon. Members opposite believe in denunciations such as that which we have heard so often from right hon. Gentlemen—as an excuse and an explanation for having given their assent in principle to these economies—namely, that the situation was all due to a bankers' ramp? [How. MEMBERS: "Hear, hear!"] That expression is cheered by hon. Members. What do they mean by a bankers' ramp? If they mean anything, they mean that the bankers used a sudden emergency, unfairly, to drive some right hon. Gentlemen opposite into actions which were contrary to their better judgment.

The real course of affairs, as I should have imagined nearly everybody knows, was very different indeed. It is a matter of almost common knowledge that the bankers warned the late Government, months before the actual crisis took place, of what would be the consequences of their policy. The fact that they did so was evidenced by the speech last February of the Chancellor of the Exchequer. Not only so, but right hon. Gentlemen opposite, the ex-Ministers in that Cabinet, had their own Economic Council with whom to consult if they wished. It was a council consisting of economists of great reputation and of practical business men who are held in high respect not only for their success but for their ability. They could have gone to them for advice as to, whether the proposals that they received from the bankers were proper to accept or not. Therefore, to say that there was any misuse of a sudden necessity, or unfair use of it, completely disappears when the facts are considered. There was no stampede, and there was no ramp of any sort or kind.

The actual course of events proves, if it proves anything, that the former Ministers took fright again. They took fright at the dangers that they had previously neglected, they took fright at the situation which they had helped to create. Having taken fright, they were at first prepared to take the action which we know that they at first agreed to take, but afterwards failed to take. Three times they were weighed in the balance, and three times both their courage and their constancy was found wanting. It is for that reason, on the history of the plain facts, that I would ask hon. Members, not only on this side, but also on that side, whether they really attach value or credence either to the proposals, the denunciations, or the record of the gentlemen who are their leaders, I suppose, still.

Mr. BUCHANAN rose—

Sir A. STEEL-MAITLAND

The hon. Member will be able to speak later. At the same time, when I listened to those Debates, I also was tempted to ask myself what was the value of recriminations and squabblings in this House, and I agree that in an emergency like the present it does not get us a great deal "forarder." The attitude of this House to these emergency Measures has an effect which goes far beyond the actual results of what may be the passage or the rejection of this Bill, and I would ask hon. Members to look at this problem from an entirely different angle from that from which it has been generally viewed hitherto.

It seems to me that the amount of agreement on different sides of the House that there has been on most of these points is really very much more remarkable than the difference that has existed certainly upon one important detail, and that it is really much more fruitful for us to recognise what might be the effect of that agreement, what it might signify, than to over-emphasize a difference upon one point. Members of the last Government did in fact—and I am not saying this from controversy now—when they were in a position of very great difficulty and responsibility, and having the facts of the emergency to face, agreed to nine out of 10 of the actual economies and taxes which are proposed at the present moment.

I ask the House to recognise that an agreement of that kind may be of very great benefit to this country, not simply from the point of view of the passage of this Bill, not simply from the point of view of the emergency that this Bill is designed to meet, but also in view of the developments which are bound to come after this, and which not only this country has to face, but other countries as well. All Members of this House are, I am sure, quite well aware that this crisis is not only confined to this country, that not only Germany, Austria, Sweden, Norway and Denmark are facing it at this moment, but that it confronts even Holland and that it will be confronting nearly every country in the world. And it is not a phase; it is not just a difficulty which can be surmounted and leave the world much as it was before.

These difficulties, with all their troubles and hardships, really are the pains that go before the birth of a new state of affairs. [Interruption.] It is not Socialism necessarily, nor individualism. It is a new state of affairs, and it is a fact that everyone will be forced to recognise. Some of us distrust international agreements, but we have to recognise that within 10 years from now there will be a regime of international agreements on economics and finance surpassing and going beyond anything hitherto contemplated. It is not a matter of Socialism or of anti-Socialism; it is a mere fact that we have to look forward to, and, what is more, it is quite possible that they will surpass armaments in the attention that they will attract and in their inherent importance.

I recognise that it would be quite out of order on the Third Reading of a Bill of this kind to discuss any of these points that will have to be dealt with in detail, but it would be germane to mention, without discussing them, three things that may have an effect upon our action. Gold will have to be dealt with assuming that it continues to be a basis for currency and the medium of international payments; the international lending of capital will have to be dealt with, and once more there will probably be concerted action for preventing undue fluctuations in trade. I wish to impress upon the House that this kind of action which is coming, whether we wish it or not, will quite intimately affect the welfare of masses of the people in all the different countries. It will affect intimately employment and the standard of living, and I believe it will do so by way of prevention, rather than of remedy, of many of the troubles with which we are familiar to-day.

4.0 p.m.

I would ask hon. Members to mark this: Such developments are not a matter of choice. They will come whether we will or not, and people looking back some years hence will realise that they were the inevitable outcome of post-War conditions. In fact, it is only the jealousies and suspicions of nations and domestic squabblings within nations which have made the approach to them uncertain and fumbling up to now. But when this development comes, Great Britain, from her own position, her inherent power and her position as the national banker, will naturally be fitted to play a leading part, and possibly the most leading part. The ques- tion is: Are we going to play it? Any Government faced with this emergency is bound to take quick and decisive action if it is to be successful. We ask the House to pass this Bill, not because we enjoy the provisions which are contained in it, but because of the greater necessities of the occasion which demand its passage. There has, in fact, been a very great extent of agreement in opinion among the different sections of the House with regard to it. Are we going to exaggerate the points of difference, or are we going to use and welcome the fact of there being so much agreement as there has been in order to enable this country to face the future and to gain the enormouse influence which we can have, if we are united upon essentials, in shaping the new era upon which the world is just entering.

Sir STAFFORD CRIPPS

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

I do not propose to follow the right hon. Gentleman who has just spoken into the somewhat vague generalities with which he has entertained the House. I propose to deal with the Bill which, I believe, is now before the House for its Third Reading, and let there be no misunderstanding upon this point, that those on this side of the House oppose the Bill root and branch. The proposals which are contained in the Bill, and which were foreshadowed in the White Paper which accompanied its publication, were when issued sufficiently unjust and illogical before the recent alteration in the financial position of this country, but to-day, in the completely altered conditions brought about by the abandonment of the Gold Standard, we on this side of the House believe that there is no single argument which can be brought forward to justify this Bill. Indeed, the very arguments which have been advanced by the Government will now recoil upon their heads.

It is a curious reflection upon the mentality of the Government of this country that they are to-day pressing forward the final stage of a Bill which, barely three weeks ago, was introduced into this House as an emergency Measure to accomplish one purpose. That purpose was to save the Gold Standard. Intervening circumstances have completely defeated that object; yet the Government are, apparently, wholly unconscious of the failure of their one purpose, and the one object of their existence. They refuse stubbornly to allow any reconsideration of the provisions of this Bill. That attitude of mind recalls to me the characteristics of that stubborn and stupid animal the mule which has been so aptly described, as this Government might be, as having no pride of parentage and no hope in posterity. Less than a fortnight ago we were told in this House by Member after Member of the Government that if we went off the Gold Standard everything would be altered; that this Bill was really a kind-hearted Measure intended to protect those with whom it dealt; that by means of these cuts the unemployed, the teachers, the armed Forces of the Crown and others who are affected, would have their payments made in sovereigns worth 20s. in gold, and that, to attain that end, it was surely a small thing to ask of them that they should accept a cut of 10 per cent. or 15 per cent. in their salaries or wages.

Whatever justification there may have been for this Bill when it was first introduced, and up to 10 days ago, that justification vanished at the hour in which this country went off the Gold Standard. But the Government care for none of these things. They feel themselves bound to continue to foster that spirit of panic which they have so sedulously created, lest otherwise their whole creation and continued existence become a matter of ridicule throughout the country, and lest they lose the opportunity so eagerly sought by their capitalist supporters, to rush through these unjust cuts before the country wakes up to the significance of what has been done. To put it colloquially, in terms which may be understood by hon. and right hon. Members opposite, they want to get as far as they can in depressing the standard of living of the workers in this country while the going is good. [Interruption.] Several hon. Members opposite may get restless when they hear the truth. [An HON. MEMBER: "We have not heard it yet !"] Let me remind the House of the words which were used by the Prime Minister on 8th September, when the whole world was waiting with great anxiety to hear his statement as to the financial con- dition of this country, and its power to stand up against any further drain of gold. He used these words: One day it would have been 20s. and the next day 10s., and it would have tumbled without control. [Interruption.] I am not scaremongering; I am giving you some history. That happened in Berlin. What, then, would have happened? The Prime Minister then proceeded to inform the world at large, and the inhabitants of this land in particular, that War pensions, old age pensions, health and insurance benefits become worth, as they became in Germany, only the price of a newspaper. In Germany and Vienna people rushed to convert their whole life-savings into some tangible article, or offered everything they had for one square meal. Then, after a few sentences, he proceeded in this way to describe the plight of this country: We have to import a huge proportion of our food and raw materials. Our position, therefore, is far more delicate than that of countries which at one time or another have witnessed flights from their currency. Our people would have to endure far worse evils if only for a period the complicated position of credit and exchange, on which such importations depend, were to be thrown seriously out of gear."—[OFFICIAL REPORT, 8th September, 1931; cols. 21–23, Vol. 256.] That was a deliberate and carefully considered statement designed to frighten the people of this country as to what would happen if we went off the Gold Standard. Our condition would be worse than that of Germany and Austria in their post-War troubles. But this was not enough. The financiers of the world might well read the Prime Minister's statement the next morning, but some of those who were asked to suffer by reason of the cuts in this Bill might miss it; so not only was the ether charged with similar statements, but the "talkies," too, were called in to the aid. The day before this House met—on 7th September—a picture of the Prime Minister was shown throughout the country holding an envelope with stamps amounting to 80 billion marks, and, at the same time, he explained the picture with these words: If the country gets into straits, or if outside in the world it loses confidence, then the first to suffer will be the very poorest of the poor. Not a very enlightening remark, as the poorest of the poor are always the first to suffer, and will always continue to be the first to suffer as long as the capitalist regime lasts. Then he proceeded with these words: I hold in my hand an envelope of a letter posted in Berlin and sent to England at the time the German credit was smashed. You will observe that the postage stamps upon it amount to the colossal sum of 80,000 million marks, a sum which was once equal to £4,000,000,000. That is the result of a smash in the credit of a country. Those of us who are now in power are not going to allow this country to sink into that deplorable position, and so I appeal to you all to do your bit. A perfectly fantastic comparison which every financial authority in this country knew to be wholly unwarranted, but it was well and truly calculated to raise an atmosphere of panic in which legislation of this type might be passed without question or criticism, and, unfortunately, too well calculated to inspire those in other countries who had but a small knowledge of our financial position with a complete lack of confidence. It was to avoid this catastrophic alternative that we were told it was essential that these cuts should be made, and that the Government should be given the wide and unprecedented powers contained in this Bill. The pound must be saved at all costs, and by saving it the real value of salaries and benefits would be preserved and only 10 per cent. or 15 per cent. loss in purchasing power would be suffered by those who were affected. Though all this is completely changed, though the whole basis of the argument that these cuts were the kinder alternative has now completely disappeared, this Government remains as stubborn as ever, and proceeds with this Bill as if nothing had ever happened.

There was but one other argument that was brought forward to show that really all these people affected were no worse off than they were two years ago, owing to the fall in the cost-of-living. The fallacy of that argument has already been well demonstrated, but now it has become not only fallacious but entirely untrue. It is practically certain that before these cuts come to be felt with their full force by those who have to suffer them, the cost-of-living will have risen, and will be higher than two years ago by a very considerable percentage, and if this argument ever had any validity and it was really desired that these people should be no worse off than in 1929, then the same argument must now lead the Government to increase, and not to decrease, the payments dealt with by this Bill. An argument of that type invented after the event in an attempt to justify some action taken for an entirely different reason often recoils on those who advance it, and in so doing demonstrates how unreal and artificial it always was.

I have dealt with the two points which were advanced in justification of these cuts by the Government and stressed throughout the length and breadth of this country by every means in their power. I have attempted to show the House that neither of them can have any relevance in the present financial circumstances of this country. What, then, is the reason for the Government now going forward with this emergency Bill? I ask the House to bear in mind that we are to-day asked to give a Third Reading to a Bill which is not only for the purpose of accomplishing these cuts, but which introduces machinery for bringing them about that is new and quite without precedent in the annals of this House. That machinery puts into the uncontrolled power of Ministers a right to take from a large number of people of this country varying sums of money to which these people are in many cases entitled by statutory agreement. This House has no power whatever to control the amounts of the money so taken, or the persons from whom it is taken beyond a very broad limitation of the classes in the Schedule. It is precisely the same as if an Act were to be passed saying that, there shall be a tax on incomes deductible at source and it were left to the Government and Ministers, without consultation with or control of this House, to settle the amount and the incidence of that taxation.

It was over three hundred years ago that such a course was declared by the Petition of Right to be unconstitutional, and it has so remained up to this very day. [An HON. MEMBER: "What about the War?"] The hon. Gentleman cannot have read the Defence of the Realm Act. If he bad, he would know that the one vital thing which could not be done under that Act was to take money from the subject. That was so held unanimously by the House of Lords in the case of the Attorney-General and the Wiltshire Dairies. This departure from constitutional practice is one that the Govern- ment must justify in addition to the proposed cuts which appear in the White Paper. That document does not in any sense bind the Government or the Ministers, either as to the amount or as to the incidence of the cuts which are there set out. The latter fact is well illustrated by the way that the Government have already yielded to pressure to alter a considerable number of the cuts.

I want, if I can, to get away from the atmosphere of panic that has been so deftly cast round these proposals by the Government, and to examine the possible reasons which may exist in the present financial circumstances for the passing of this Bill. The fact that a monetary crisis exists in the world and in this country does not necessarily call for panic legislation. This country has met crises before in its history and has dealt with them coolly and constitutionally. [An HON. MEMBER: "And without running away!"] The hon. Gentleman seems to take up the attitude, which has been the most remarkable attitude of the present Government, that they refuse to accept their own responsibility and try to shelter behind somebody else's responsibility. We as a party refuse to be stampeded into hasty and unwise legislation by catch words and phrases manufactured to disguise the true issues before the country by a Tory party which has always insolently abrogated to itself the sole claim to patriotic motive.

There seem to me to be three possible reasons which hon. Gentlemen opposite might advance for the passage of this Bill. I propose to deal with each one shortly, and to attempt to show that each reason is unsatisfactory and baseless. [HON. MEMBERS: "Circulate them!"] I am afraid that if I circulated them, hon. Gentlemen opposite might fail to understand them. First, it might be said that we are bound in honour to carry through these proposals as the financiers who helped us to raise the £80,000,000 credits were given to understand that we should do so. On 14th September, the right hon. Gentleman the Minister of Health made this statement to the House: it was the duty of the foreign bankers, when approached, to state under what conditions they thought it possible to raise the money.''—[OFFICIAL REPORT, 14th September, 1931; col. 639, Vol. 256.] If money is raised on conditions, as the House knows, the borrower is generally bound, morally at least, to carry out those conditions. I do not think that any one has yet told us what those conditions were, or whether we are morally bound by them; and I ask the right hon. Gentleman to tell us categorically what are the conditions that he mentioned in his speech of 14th September, and how far we are bound morally to see that those conditions are carried into effect.

The MINISTER of HEALTH (Mr. Chamberlain)

The hon. and learned Gentleman is confusing the issue. It is perfectly obvious to what my observations referred on that occasion. The conditions were not conditions of a bargain; they were the conditions under which the bankers who had to raise the money thought it would be possible to do so in their markets. As my hon. and learned Friend the Member for Rusholme (Sir B. Merriman) pointed out to the House in a very lucid speech on Friday, there were countless people whose opinion had to be taken into account in considering whether or not it would be possible to raise the loan.

Sir S. CRIPPS

I am only too happy to accept the right hon. Gentleman's answer if he means this, and this is what I as a lawyer do not quite appreciate: you ask a lender the conditions upon which you can get money from somebody else. He is to help you to raise the loan. He tells you that there must be certain conditions, and you say, "Go on and raise the loan." Does the right hon. Gentleman suggest that in those circumstances you are not bound to observe those conditions—not legally bound, but morally bound to observe them?

Mr. CHAMBERLAIN

The conditions were merely the conditions under which it would be possible to raise the money. What the late Government had to be sure of was that there would be sufficient confidence in foreign circles in the determination of the British Government to set their House in order and to balance their Budget.

Sir S. CRIPPS

I am afraid that it would be improper for me to continue the cross-examination of the right hon. Gentleman, so I must accept his answer as meaning that we are not bound morally or otherwise by any conditions whatsoever as regards this £80,000,000 credit. The right hon. Gentleman acknowledges that statement by nodding his head. Therefore we can now both, as regards this House and the country at large, remove that hedge behind which the Government has sought to take refuge.

Let me pass to the second reason which may be advanced. The second reason is that this is merely a financial Measure with no other purpose than to cut the payments to certain classes of people who receive those payments directly or indirectly from the State, and that the urgency is so great that all ordinary constitutional procedure must, for the first time in our history, be put aside. No one doubts the necessity of arriving at a balanced Budget, and the methods of arriving at that balance deserve the most careful and detailed consideration of this House and of the country; but now that the one object of rushing these Budget proposals and economies through has disappeared, there remains no valid argument whatsoever for the procedure laid down in this Bill. The Budget deficit for the current year is of comparatively small dimensions. [Laughter.] Hon. Gentlement opposite laugh, but I would draw their attention to the fact that nearly every speaker in the House has stressed that point and that the really vital matter with which we have to deal is the trade balance of the country.

It is far more important that the debit of the trade balance should receive immediate attention than that methods should now be rushed through the House for attaining the balance of the Budget—not only this year's Budget, but very largely next year's Budget as well. We are now asked by this Government, which has no plans whatever for restoring the trade of this country, to rush through as an emergency Measure this Bill, which will deal with the minor matter and leave wholly untouched the major matter of the restoration of the balance of trade. Let me illustrate the absurdity of the position by assuming the most unlikely event that the country desires—a general tariff, to which the Government are rightly afraid to commit themselves. Do right bon. Gentlemen and hon. Gentlemen opposite suggest that, if such a tariff were introduced, it would not entirely alter the budgetary position of this country?

Mr. SPEAKER

I have already ruled that the question of tariffs cannot be discussed on the Third Reading of this Bill.

Sir S. CRIPPS

I naturally bow to your Ruling. I was merely trying to point out the reason why this Bill should not be passed, namely, that it is dealing with a minor matter of importance which should not be dealt with until a major matter has been properly tackled by the Government; but I will pass from that point. So long as we remained upon the Gold Standard, the maintenance of that standard might have been made some feeble excuse for these emergency powers which we are asked to give the Government. Now that we have gone off the Gold Standard, there can be no possible reason to support the granting of these emergency powers. It would not be proper for me to mention on this occasion the various other ways in which the money given by these cuts could be raised—many of them have already been mentioned, and I will not repeat them—hut I do ask the House to draw a clear and definite distinction between a balancing of the Budget by reasonable and constitutional methods and within a reasonable period of time—to which everyone in the House will agree—and the balancing of the Budget by panic measures dictated by financiers and capitalists which the Government are trying to force through and which we are determined to oppose.

Let me now come to the third and last reason for the provisions of this Bill, a reason which I believe to be the true one. Over a series of years now the financial interests and capitalists of the world have been proceeding on a policy of deflation. This policy, they say, demands adjustments in the cost of wages and salaries and in the social services, adjustments which will continually bring down the standard of living as that deflation proceeds. Once you have driven down the prices of raw materials and foodstuffs almost to vanishing point, your prices of manufactured articles must follow, so as to allow the primary commodities to be exchanged for the manufactured goods through the medium of your currency. From the capitalist point of view this procedure possesses many undoubted attractions. The real value of all interest payments on capital rises with the fall in price of commodities. The whole burden is transferred from the shoulders of those who provide capital to the shoulders of those who provide labour. Take, for instance, the purchasing power or real value of the interest on War Loan in this country. It increased enormously during the period 1924 to 1931, and so did the real value of rents and all payments at a fixed rate of interest. These payments, it is said, require no adjustment downwards; only the workers' wages and salaries need to be so adjusted.

The Labour party in this country have, during the past two and a-half years, been a serious hindrance to the making of the so-called adjustments required by the capitalist plan, because they insisted on maintaining and even increasing the social services, and set their faces against any reduction in the standard of living of the workers. One of the most vital factors in the maintenance of the standard of living is the maintenance of the scale of unemployment benefit, which has a most powerful influence upon the maintenance of wage levels. It is hardly necessary for me to remind the House of the continued attacks made inside and outside this House upon the policy of the Labour party in this respect. That policy held up the adjustment of wages which the capitalists thought necessary for the successful carrying out of their policy of deflation. It was, they said, maintaining at far too high a level the standard of living of the working classes of this country, who should naturally, according to their theory, be the first to suffer on a readjustment of this kind.

Mr. DIXEY

Who said that?

Sir S. CRIPPS

The hon. Member will see that any protagonist of the deflation theory has said it constantly. The success of the scale of unemployment benefit in helping to maintain this standard of living cannot be doubted. The violence of the attack upon the so-called "dole" amply demonstrates the fact, and it is for that reason that the capitalists, not only in this country but throughout the world, have for years been anxious that the unemployment benefit should be reduced, so that the reductions in wages and salaries and social services might go forward according to plan. In this crisis they saw their opportunity, and they were not slow to take it. If the right atmosphere of panic could be produced about the risk of going off the Gold Standard, or as to the awful effect of an unbalanced Budget, then the country might be made to swallow these cuts as an act of patriotism without any realisation of their true significance. In this way the bulwarks which the Labour party had built up against a lowering of the standard of life might be swept away in a frenzy of flag-wagging.

The fact that the real trouble was an adverse balance of trade arising almost entirely from the policy which the capitalists had pursued, was to be kept in the background, as the Government had no remedy for it. [HON. MEMBERS: "Your Government!"] The present Government. If hon. and right hon. Gentlemen opposite will ask their Government what remedy they have for it I do not think they will get any answer except, possibly, "A doctor's mandate." This suggestion that there might be some other problem was kept in the background; except for some vague sentences that there were other problems which would arise no emphasis has been put upon it by any Member of the Government in their speeches so far. The two arguments used by the Government, that it was absolutely necessary to remain on the Gold Standard, and that it was essential to take steps which would secure the approval of foreign financial interests, both demonstrate beyond all doubt the determination of this Government to pursue this deflationary policy with its resultant cuts in wages and the standards of life. And nothing is more significant than their determination to continue with that policy in spite of the fact of our going off the Gold Standard.

This system, which may be logical enough to the capitalist mind, meets with no following upon these benches. We believe that such a system never can cure, but will rather aggravate, that from which the world is at present suffering—under-consumption. But, above all, we refuse to follow a system which inevitably enriches the capitalist and the rentier while it reduces the workers of the world to a level of starvation. I believe that the cuts in this Bill are part of a deliberate policy of adjustment designed, at no matter what cost to the workers of this country, to bolster up the very system of capitalism which has brought about the industrial ruin of the world. But, after all, I suppose that this House cannot expect anything else from the Tory Government which is in power, that Government representing a class that has continually used every possible device, and above all the call to patriotism, to protect its own interests. Nothing could be more illuminating on this point than two passages from a speech of the right hon. Gentleman the Minister for Health in this House on 14th September. He was stressing the urgency of the crisis as a justification for the summary procedure to be adopted, giving powers to Ministers to break all contracts—even statutory contracts—and inflicting on millions of the population during the coming winter a cut which will bring them—many of them—below the level of starvation point. He used these words: The lives of His Majesty's subjects may not be in danger, but certainly their livelihood was threatened by the crisis which this Bill is designed to avert. That, of course, was the crisis of going off the Gold Standard. Then, after stressing that we were on the very verge of national ruin, and saying that if the Bill were not passed it might have the effect of "bringing back the very danger from which we had at any rate been saved"—that, again, was going off the Gold Standard—he concluded the passage with these words: The procedure is demanded by the national safety. That is the only but sufficient justification."—[OFFICIAL REPORT, 14th September, 1931; cols. 637–8, Vol. 256.] The House will observe that in the right hon. Gentleman's view the situation was so critical as to justify not only these cuts but the methods of their imposition. The other passage was dealing with the suggestion that to meet the emergency a mobilisation of foreign securities owned by people in this country might be brought about—owned not, of course, by those affected by the present Bill, but owned very largely by the financiers, capitalists and rentiers. On this subject the right hon. Gentleman spoke as follows: Even taking the £100,000,000, it is the fact that not more than a fraction of that amount could have been mobilised without taking such drastic measures as I am sure could not be contemplated in the present circumstances."—[OFFICIAL REPORT, 14th September, 1931; col. 639, Vol. 256.] Could there ever be a more clear demonstration of the capitalist mind? National safety easily demands the reducing of the unemployed to a level of starvation, but it is unthinkable, even when the livelihood of His Majesty's subjects are in danger, that anyone should suggest laying their hands upon the sacred sanctuary of the capitalists' investments. Truly, whatever else has happened, the Tory party have not fallen off the Gold Standard.

Sir WILLIAM DAVISON

You will fall off the soap box soon.

Sir S. CRIPPS

We on this side of the House have long predicted that capitalism as a system would fail. We now see that it has brought the whole structure of finance and industry to ruin, inflicting fresh miseries and sufferings on the workers throughout the world. We shall fight this Bill to the end, because we are certain that these cuts are neither sound financially nor just in their incidence, and because, too, there can be no need, in the existing circumstances, to use the emergency powers that are given by this Bill. We believe that instead of trying to rush through a Bill of this sort the first vital matter to be attended to is the reorganisation and reconstruction of the financial machinery and industries of this country, so that the full benefit may be derived from them, not by those who own the capital, but by the nation as a whole, and to this end the financial and industrial machine must be brought under public control.

The real issue which lies between us and the Government on this Bill is the far-reaching issue of whether this country shall continue to be dominated by the capitalists of the world, whether of our own or some other nationality, or whether, as we believe, and as apparently the right hon. Gentleman who preceded me believed, a complete change must be wrought in our system by bringing under the control of this House the forces of finance and industry which have so great a power over the lives of individuals in this country, a power and influence which in our view has been used in the past with such disastrous effect upon the standard of living of the workers. It is only by controlling that influence that we believe it can be used for the good of the nation as a whole. Once this country is awakened to the reality of that issue, and realises the reason why it has been rushed into this heartless and unjust measure by the capitalists, we shall be confident that it will speak with no uncertain voice in condemning a government of capitalists masquerading under the guise of national saviours.

Mr. BOOTHBY

I can quite understand the gratification of hon. Members opposite at having at last discovered someone who can put up some sort of a show from the Front Bench opposite. [Interruption.] The ex-Solicitor-General has delivered what certainly was a very clever debating speech, scoring a point here and there, in the good old Parliamentary manner of 20 years ago. His speech was very characteristic of the mind of the present Front Opposition Bench, and furnished many illustrations of the sentimental claptrap which we have come to associate with the Labour party, and which has been expounded on every soap-box in the United Kingdom. I think the views of the hon. and learned Gentleman were unusually well expressed; but we on this side of the House are very familiar with all the arguments put forward in his speech; in fact, I think we are more familiar with them than the hon. and learned Gentleman himself. For at some points of the speech to which we have just listened I experienced the peculiar sensation that the hon. and learned Gentleman was being continually surprised by his own clichés. He said that the capitalists had been pursuing a policy of deflation. I would ask him: Does he really believe that the deflation which has taken place during the past 10 years has benefited any single capitalist in this country? As a matter of fact, there is not a producer of any sort in agriculture or any other branch of industry who has been able to make a profit for the last seven or eight years. It is a well-known fact that during a period of falling prices producers never make a profit. The late Solicitor-General knows perfectly well that the causes of the recent deflation are largely due to forces which have not been under the control of any single country, least of all our own. For the hon. and learned Gentleman opposite to get up in this House and solemnly state that the capitalists of this country have deliberately pursued a Machiavellian policy of deflation may be good enough for the soap-box but it will not do for the House of Commons.

The hon. and learned Gentleman was greatly concerned about constitutional practice, and by what he described as the attempt to take money from people by unconstitutional methods. I do not know that that would appeal very much to some hon. Members opposite; but for my part I do not think that we shall ever get through the troubles in which we find ourselves if we spend our time clinging to constitutional procedure which has become outworn, and is no longer effective for the immediate purposes of this country. I hope that the methods adopted in this Bill will enable the Executive to take efficient action to deal with an emergency situation. I would just like to say one further word to the ex-Solicitor-General. In the whole course of the speech which he tried to put over this afternoon he did not advance a single constructive proposal. For the last 10 years the party opposite has been falling between two stools. The 20th century is too stern an age for the sentimental stuff which was indulged in by the hon. and learned Gentleman. We have now to face up to realities; and in this century Governments have to make up their mind whether they will try to maintain conditions under which it is possible for individuals to do the work of the world, or whether they are prepared to take over that work and do it for themselves. The late Solicitor-General belonged to a Government which made no attempt to do either of those two things; they made no attempt either to create a condition of things which would make it possible for private enterprise to function, or to take over the industries themselves to run them and manage them. Consequently, the Labour Government fell between two stools; and for two solid years this country went downhill until we were landed in the mess in which we find ourselves to-day.

I do not think that it is any good mincing words at the present time. I think the last Government was by far the worst this country has ever seen, and I am quite sure that the hon. and learned Gentleman the Member for East Bristol (Sir S. Cripps) is intelligent enough to agree with me upon that point. Certainly, the hon. and learned Gentleman has no cause for the complacency which he has displayed this afternoon, because all the time that the present crisis was approaching what did the late Government do? They simply dithered about, wasting time on electoral reform and the hypothetical taxation of land values two years hence. The hon. and learned Gentleman himself wasted the time of this House for weeks and weeks on that subject, while we were approaching the Niagara which all but he could hear. It was not until the late Government was literally forced by the remorseless march of events to face some of the realities of the situation that they attempted to take any action at all. And what did they ultimately do? They ran away. The late Solicitor-General has asked what is the remedy of the present Government, but I think we are entitled to ask what is the remedy of hon. Gentlemen opposite. Is it to be, as he described it, the social control of those industrial financial and banking forces which exercise such power in this country? If so, what on earth does that mean? Exactly nothing.

I believe that the Bill which we are going to pass is more necessary to-day than it was before we came off the Gold Standard. I said in a speech in this House that I believed the danger of this Bill was that it might have increased the general deflationary process which was going on under the Gold Standard; but now there is no danger of such deflation. The danger to be guarded against to-day is the danger of inflation, and it is a real danger. The only thing that stands between the pound sterling and collapse is the credit of this country in the eyes of the world, and that depends on our having a balanced Budget, and a favourable balance of trade. If we were to abandon the principle of the balanced Budget—a principle which was accepted by the last Government, as the hon. and learned Gentleman opposite has admitted—then I think there would be a very serious danger of the pound sterling falling to such an extent that the standard of life would be reduced far below what can ever occur under this Bill. The hon. and learned Gentle man opposite may try to ride off in any way he likes, but he cannot get away from the fact that the Government of which he was a Member agreed to £56,000,000 of economies; and therefore they are committed -to the principle underlying this Bill. I am aware that right hon. Gentlemen opposite did not agree with all the methods proposed, but at any rate they are pledged to the principle of the Bill, and they cannot escape that fact. The only real difference between right hon. Gentlemen opposite and ourselves is that when the pace got too hot for them they ran away, and we are seeing the thing through. That being said, I should like to say that I do not regard these proposals as the last word in constructive statesmanship. Nor do I regard these particular cuts as being either stable or permanent. Nothing can be stable or permanent in this country until some sort of stability is restored to the currency of this country and of every other country in the world.

5.0 p.m.

I support this Bill as a disagreeable necessity to meet a temporary emergency, which has increased during the last three weeks. I think the cuts which are proposed in this Bill ought to be regarded as flexible, and therefore I welcome the method by which they are to be applied. Sooner or later we all know that the whole problem of how to handle the unemployment question has to be tackled at its roots. [Interruption.] Is it contended by hon. Members opposite that the taxation of land values will solve the unemployment problem? I think if the views of hon. Members opposite were taken on that subject a majority would be found against such a proposal. [Interruption.] We have listened to lecture after lecture from the hon. Member for Burslem (Mr. MacLaren) on the subject of the taxation of land values, each one of them more absurd and fantastic than the last, and the House has displayed great patience—

Mr. SPEAKER

The hon. Member must not allow himself to be drawn into a discussion of matters that are outside the scope of the Bill.

Mr. BOOTHBY

I never introduced the topic of land values—

Mr. SPEAKER

No, but someone else did.

Mr. BOOTHBY

I should like to impress upon the Government one point which is of importance in connection with this Bill, and the importance of which is increasing, namely, the danger of profiteering in foodstuffs in this country during the next few weeks. Hon. Gentlemen on both sides of the House have no doubt noticed that scare headlines are beginning to appear in the Press, like "Food going up," "Prices becoming dearer," and so on, which may give rise to panic—

Mr. SPEAKER

The question of what should be done if the price of food rose does not arise on this Bill.

Mr. BOOTHBY

I bow respectfully to your Ruling, and will leave that point; but I should have thought that the main argument of the Opposition has been that these cuts are unjustified because of the probability of a rise in the cost of living, as they have related the whole of their arguments to the cost of living at any given period. I was only trying to point out that there might be a danger of some advantage being taken of the present situation which might lead to a rise in prices; and, if this Bill is to be carried out, I think the Government ought to bear in mind the possibility of controlling food prices at any given moment.

I agree with the right hon. Gentleman who opened this Debate, that the fundamental problems which concern this country, and which are all closely relevant to this Bill, are really international rather than purely national in character. Reparations, international debts, tariffs, currency—which is so vitally connected with this Bill—all of these problems will have to be solved before prosperity is regained. They are much more important to the future prosperity of mankind than the downfall of the capitalist system. The last Government made no attempt to tackle or grapple with them; or to arm itself with the weapons that, are necessary if we are successfully to conduct the fight for a higher standard of life for the people of this country. The two principal of those weapons are, first, internal solvency, which we are trying to secure this afternoon in the face of every sort of unjust and unfair opposition from the party opposite; and, secondly, the right to exercise some control over imports into this country. For these are the real, fundamental problems that matter. If the present Government would tackle them, I am certain, not only that it would be assured of a long lease of life, but that this country would be able to regain a measure of prosperity in the very near future. But until and unless we get a Government in this country that will tackle these vital international and world problems, I despair of ever seeing prosperity again; and, for my part, I believe that Government after Government will be overthrown until at last we get one which is able and willing to tackle them.

Mr. HICKS

I claim the indulgence of the House as this is the first occasion of my rising to make a contribution to its discussions, although I am not unfamiliar with political controversy outside the House. I am strongly opposed to this Bill and to all the cuts that it proposes, particularly the cuts in unemployment pay and the wage cuts. The curtailment of the wages of workers in public employment, and the curtailment of public works, houses, roads, and so on, suggest to me that, instead of the problem being tackled in the right way, it is going to be very largely intensified. I live in a borough which has not built a house to let during the whole of the past 12 months. There are over 30,000 houses in the borough, and, allowing for a moderate percentage of them going out of repair, at least 300 houses should have been built there during the year, but, as I have said, none have been built to let during the past 12 months either by private enterprise or under any of the Acts that are available. The cuts in housing and roads will affect very materially a large number of industrial workers in this country. In the industry with which I am particularly familiar, we have had for many months past an unemployment figure of over 160,000, and probably by now it will have reached 200,000. All the information that I get indicates that the present Government's proposals for effecting economies, and particularly the proposals contained in this Bill, have resulted in a tightening up of expenditure by local authorities, very few of whom are progressive, and most of whom are particularly anxious to lend an ear to any suggestion for economy, thus intensifying the problem of unemployment. As has been stated by many of my hon. Friends on this side, the cut in unemployment pay is taking food from the hungry. This is not, like Oliver Twist, asking for more; it is Bumble taking away from them what they have already got; and I feel that the present Government ought to be known in history as His Majesty's Bumble Government more than by any other title.

I do not desire, in addressing the House for the first time, to transgress the rules of order, but I should like to point out that unemployment is not confined to those who happen at the present time to be unemployed. Unemployment is at the elbow of practically every worker in the country, and the cuts which are to be made in unemployment benefit are viewed with very great dread, because those who are now in employment will be potential recipients of the same kind of medicine. Moreover, they will have the effect of robbing men of some of their independence. Since I have been in this House, I have heard during the Debates, and particularly those on this Bill, the question of unemployment pay referred to as an insurance against revolution, and I believe there is a very substantial measure of truth in that; but I am also sure that it has been an insurance against blacklegging, and I am particularly apprehensive that, when the cuts take effect, as they apparently will, men will be robbed of independence and will be compelled, much against their taste and desire, to do acts totally different from what their standard of conduct and honour would suggest. On that ground particularly I am opposed to this Measure. It seems to me that the unemployed, the poor, and the working people pay in every case. If the country is on the Gold Standard, they have to pay increased amounts to the rentier class, while if the country is off the Gold Standard they have to pay higher prices for their food. It matters not which way things happen at the present time, they appear to be caught either way.

It is very illuminating to one who, like myself, is associated with an economic organisation outside, to hear the observations of hon. Gentlemen opposite with regard to the conduct of the trade union movement in this country in relation to the present crisis. I have had opportunities of meeting the representatives of the employers' organisations in every industry in this country, and I followed with great concern the declaration made just over 12 months ago by the Associated Chambers of Commerce, and the later statements of the Federation of British Industries, the Confederation of Employers, and the engineering employers; and I have noticed how consistently the same policy is followed by this Government, particularly in their present proposals. These organisations on the other side are the organisations which we might well call the Trades Union Congress of the Tory and Liberal parties, and it seems to me that the legislation proposed in this House reflects very closely their declared opinions and desires. It would be unfair for me, in making ray first speech, to take up too much of the time of the House, but it does seem to me that, in the midst of glutted markets, granaries and storehouses, and colossal harvests of wheat, tea, coffee, sugar, cotton and other natural products, with the capacity of our people to produce greater than ever before, and the statements of economists and statisticians as to the enormous opportunities that we have to increase our wealth, we yet have to ask our people to take something less than they have hitherto been receiving. The proposed reductions in the standard of life appear to me, in relation to these facts, to be totally unreal.

It was stated quite recently by the Economic Section of the League of Nations that between 1913 and 1928 the world's population increased by, roughly, 10 per cent., while the production of raw materials during the same period increased by 25 per cent., and the production of manufactured commodities increased in a still greater proportion. Between 1925 and 1928, in the steel, engineering, shipbuilding and other industries of this country, production increased by over 25 per cent. To-day we are in this position, that practically every individual workman is able to produce twice as much as he did in 1900. Five men to-day can produce sufficient bread to feed 1,000 people; four men can produce sufficient cotton cloth for 1,000 people; three men can produce sufficient woollens for 1,000 people; one person can produce sufficient boots and shoes for 1,000 people. Imagine the enormous capacity that we have, and it is by no means fully developed yet. I am confident that, however far our industries in this country have developed, there are possibilities, provided that brains and effective organisation are applied to industry, of even a still further increase in productive capacity in this country. Then we have this nonsense about economy. I think this Bill demonstrates precious little thinking. It does not think through and beyond the proposals advanced here. In a Budget of anything between £800,000,000 and £900,000,000 there should be plenty of scope to effect economies without having to go to the unemployed.

I am aware that the Bill will be passed, but that will not be the end of the story. The people who create this wealth will not tolerate this state of affairs indefinitely. There is still some pride and manhood left in the British workman. He will want to know why he has to make additional sacrifices in these days of increased capacity. This Bill will burn into their very souls. They will be asking why, now that we have over production, we should have under consumption, why it is that the more they produce the less they shall have, and why, the harder they work, there is more terrible subsequent unemployment. They are asked to intensify their work, and the reward for intensified work is subsequent unemployment with all that that means. They will be asking why industrial progress involves them in greater wretchedness. They are seeking for answers to these questions at present. I have spent a large portion of' my life in consultation with these men, and I come in contact with them now, and I can state very definitely that questions of this character are constantly being asked at our gatherings.

I had hoped—I suppose to put it higher than hope would be asking too much—that in the changed circumstances we might have had some reconsideration of this Measure, believing that, if we set our minds and our brains to this problem in the right way, and attempted to plan the resources of the country into the general mosaic of our life, and believing that by international consultation and planning we could enrich the life of humanity instead of attempting to diminish it, that would be the better and more proper course to pursue. We are playing with human life. We are playing with emotions and destroying the little domestic structures and the economies in the home that these people have built up. We are burning right into their hearts and souls, and, unless we can bring ideas and intelligence to bear to give them some fair play so that there shall be a reward for greater energy, we shall not only disappoint them but with bitterness and tumult they will insist on trying to destroy the system—and I hope they will destroy it—which is constantly asking them to accept handicaps in face of plenty.

Viscount LYMINGTON

I am glad to have the opportunity of congratulating the hon. Member on his maiden speech. I cannot help feeling that in his efforts to examine the Bill he has been far more constructive than the late Solicitor-General. I hope that in the Parliament which will reassemble sooner or later for five years we shall often have the chance of hearing his eloquence from those benches opposite. I support very strongly what my right hon. Friend the Member for Tamworth (Sir A. Steel-Maitland) said about the cogency and the urgency of the Bill. We who have listened to the Debates in this short term have been more struck by the continuity with which the pot has called the kettle black than anything else. We have gone through the Lobbies because it was a necessity in a case of emergency, but very often with grave doubts, and I think there should be a moment before we pass the Bill when we should face exactly the reasons why we are supporting it. I am speaking personally and not for any other Member of my party. Some of us had grave doubts as to the effect of a National Government, which we believe to be an absolute necessity to carry out the balancing of this Budget. Those who have had any experience of National Governments or coalitions know that it is generally a case of making two negatives an affirmative. While I shall never have voted with greater enthusiasm for a gross cut than I shall on this Bill, in its details one cannot help feeling that it is a Measure that has been pushed through, because of the necessity of the situation, with almost undue haste. I do not think we have reached the end of the economies that we might make. At the same time one cannot help feeling that the Bill must be regarded as a preliminary only to the reconstruction that the hon. Member has spoken about, and to that larger international reconstruction referred to by speakers on this side.

If one may turn to these cuts in detail, it seemed to some of us that the education cut of 15 per cent. was a necessity which we accepted loyally or not at all. If it is worth reducing to 10 per cent., it should have been 10 per cent. from the beginning. I said that to someone outside the House, and he said, "That is just like doing a deal. You ask for more than you are prepared to give." I said, "That, after all, is supposed to be the difference between Hebrew finance and Christian government." Take again the defence forces. Of all the cuts that we are asked to vote for in this state of world unrest, the cut in the defence forces is one that one views with more grave misgivings than almost any others. We are rather in the position of someone who is unable to effect an insurance policy on his warehouse and, in order to cut down, sacks the night watchman. A sacrifice of personnel and materiel at this moment is no better than asking Europe to disarm before you have removed the causes of war. There are similar cuts, some of which are justified and some which one feels might have been considerably bigger. For instance, there is the Road Fund. After all we are better roaded to-day than any country in the world, and those cuts which we might reasonably have expected I do not think have been made half strong enough. The only justification for the building of new arterial roads, and the entire remaking of roads, is in those places where the congestion of traffic is such that it materially disturbs the economic carrying out of the transport trade, such as avenues round the great docks and the big centres of urban traffic. In the hurry there has been too great a desire to cut down more reconstructive schemes, such as water schemes and agricultural drainage schemes in general, because the Finance Bill has added to the agriculturists' difficulty while it has taken away the chances of reconstruction on the other hand in the Economy Bill.

The unemployment cut seems to be the most serious of all. I agree with my hon. and gallant Friend the Member for Thanet (Captain Balfour), who spoke last night, about the need for having something in our minds of a datum line below which we should not let our assistance fall. At the same time we must be prepared to face the popular and unpopular, and the unemployment cuts, surely, can only stand as a preliminary to a real reconstruction of the whole system of assistance. I think with this Bill one cannot help going to the whole root of the matter. You can make a cut, like a surgical operation, which will do the patient good in the end, or you can let it fall with a clumsy edge and an unsharpened knife which will only help him to bleed to death. It is the difference between reconstruction and mere blind economy. One cannot help feeling that the cuts in education are only justified as a first step in the complete reconstruction of education, making it more efficient though not necessarily not more expensive than it is now, and that the cuts in grants for agricultural research are only there as a preliminary to the reorganisation and reconstruction of agriculture, and putting it on a sound basis. We are not allowed to mention them in this Debate, but at least there are measures which are dealt with in the finance of the country, both in economy and in expenditure, which might well be made a prelude to reconstruction. Similarly in regard to the Civil Service, unless we are prepared to reorganise the individual cuts are not going to avail us a great deal.

When we vote for this Measure at half-past seven, it will be in the hope that it is the first of a series of measures of real and wise economy, because economies which liberate money to be spent in the proper manner are, after all, one of the means of helping this nation on to its feet and one of the most cogent necessities of the moment. The Knights of the shire were summoned to the House of Commons in order to see that the national expenditure was controlled, but to-day we have forgotten all that, and it is Members of the House of Commons who make expenditure before they see where it is leading them. Let this be the first Bill by which the House of Commons may regain its control of Supplies, instead of continually pushing forward new expenditure the implications of which certainly not more than one in 10 Members of the House can foresee at the present time and not one in 1,000 voters can judge.

Sir BEN TURNER

I want to bring the discussion upon the Economy Bill back to the Bill itself—to the brutality of the Bill. We have discussed very high sounding theories, and hon. Members have put forward criticisms about past Governments, but I want solely to deal with the alleged Economy Bill that is now before the House of Commons and to declare most frankly that it is a costly Economy Bill. There is no economy about it. It is costly in flesh and blood and tears and want. It was conceived in misfortune, and it ought to be buried as quickly as possible. I wish to appeal to the Prime Minister who used to be, and perhaps may be again at some time, a most friendly co-operator with us on this side of the House. [Interruption.] As least I hope so, personally. I am not going to forget friendships and work done during the past 40 years by persons like the Prime Minister, and I am still hopeful that men may amend even if they snake a mistake and get off the rails now and then. I am going to appeal to the Prime Minister to withdraw this alleged Economy Bill because the reasons for it has gone absolutely. As the late Solicitor-General the hon. and learned Member for East Bristol (Sir S. Cripps) has declared, it was brought forward to try to save the pound. The pound has fled. Hysterical speeches were made only a few days ago to try to save the pound. The pound went a week last Sunday, and there seemed to be a joyousness on the Monday because it had gone. It has gone and the reason for this Bill therefore no longer exists.

However, the burdens of the financial crisis are such, we are told, that we must have some sacrifices from somewhere. The sacrifices always seem to come from those least able to bear them, and they are now coming from them to a very extreme extent indeed. There is something wrong with the method also. An imposition is now being applied. It is not an agreed arrangement between contending or opposite parties, but an imposition on the part of the Government by means of Orders-in-Council and similar things, breaking down the machinery that has been established at great cost and trouble by teachers, trade unionists and professional men in connection with salaries and wages. The collective bargaining system has gone. I have a great faith in collective bargaining. It is a great aid towards peace in industry. We have never had a chance of trying it. The present Bill has been put before the House of Commons to impose the will of the Government upon the various employés of the State and the public authorities without attempting to use the collective bargaining machinery which is in existence. Some of our little towns can show an example to the House of Commons, and, perhaps, to the Government. When the de-rating business came along a little town of which I happen to have knowledge had a five-penny rate added to its financial burdens straight away. It was handicapped. What happened? The National Association of Local Government Officers were called into consultation and were asked what they could do to help the town in. its time of trouble. The question was discussed between the employers—the corporation—and the association and an agreement was arrived at. It was not a flat rate agreement of 10 per cent., and not an imposition, but a graduated percentage of 2½ per cent. upon a salary of £100—salaries of less than £100 were exempt—5 per cent. at a given figure, then 7½ per cent., and 10 per cent. at the top figure.

The Government have never tried to meet the teachers or any other organisation with the object of making an arrangement in regard to wages or salaries to meet the situation. They have been breaking down one of the best agencies possible for peace in the national sense and peace by negotiation. They are, in this Bill, doing something which is very vile indeed. Many hon. Members will have read more about history than I have, but I have read a great deal about the hungry 'forties and about the Poor Law of 1830 or thereabouts. We are now reenacting in the Economy Bill not a reformation of the Poor Law system but a Poor Law inquisition. The Bastille was a great word used in the French Revolution. The Bastille system is to be operated under this inquisition by what is termed the public assistance committee. You may call it the public assistance committee, but it is the Poor Law in the very essence. Our respectable, decent working men and women will have to undergo the inquisition of the former Poor Law system, which is not the right way to deal with this business. Most unemployed people and partly unemployed people are decent, God-fearing men and women. Indeed the whole working-class population of the Kingdom are upright, decent folk. But you are going to penalise them in a cruel and heartless fashion by compelling them to go to the public assistance committee to sign documents and forms under what is termed an Act of necessity.

How is the Economy Bill going to work? I am the father of a family, and I have worked out the position in this way. A man, his wife and two children are to get under the Economy Act, 27s. 3d. What does 27s. 3d. mean in brutal, hard facts? It means 10s. for rent and rates. It may be more and it may be less, but that is the average in our provincial industrial towns. There are 84 meals per week for a family of four persons. That only allows for three meals a day, whereas a lad or a lass wants five. Allowing for three meals a day at 2d. a meal per person, the amount comes to 14s. and thus, with the allowance for rent, 24s. has gone out of the 27s. 3d. Then there are clothes, coals and gas and all the other accessories of life to be paid for out of the remaining 3s. 3d. It is impossible. It puts them absolutely below the bread line straight away. In the name of national economy, we are going to starve the bairns and break the hearts of the women.

The other day I was reading a most useful paragraph in a newspaper issued in society. It said, as regards the upkeep of a, child, that if you had a fairly normal mixed diet and the child was able to share in the family meals, 10s. 6d. a week would be the minimum to cover the value of the food. It would include milk, a 1s. eggs at 2d. each, 1s. 2d.; fruit and vegetables, 2s. 4d.; meat, fish and cheese, 2s. 7d.; half-pound of butter, 8d.; and bread and cereals, 2s. Our working class lads and lasses have no chance whatever of a diet of that, character, but they are the same flesh and blood as their more fortunate brothers and sisters. The Economy Bill will destroy the chance of those lads and lasses becoming sensible, sound physical beings. I am reminded of the old verses of the hungry 'forties when I hear all the election talk about these new-fangled schemes —I dare not mention tariffs—referred to by vanious speakers. I am reminded of those hungry 'forties when there were impositions and there was poverty, and it seems that these things are going to be imposed upon our people again. The prayer of the people was: O Lord save us and keep us all alive, Around the table, nine of us, but only food for five. That is what the Economy Bill is going to do. It will break down the family standard of life, and I wish that the Prime Minister, an old agricultural labourer's son, would see it in that particular light. He is destroying the home life of our people and destroying the chance of good men and good women being created. Mention has been made about the Gold Standard having slipped, and about deflationary policy. There has been a deflationary policy in the ranks of the working class during the last three or four years. In my own trade of textiles the employers have imposed, not by agreement, a reduction of wages on two occasions of 21 per cent.

Mr. MACQUISTEN

Gandhi did it.

Sir B. TURNER

Gandhi did not do it. Ours is woollen cloth, not cotton. That is what has happened. Wt have had the cuts already, and we have halftime employment, and we are going to have still more cuts in regard to unemployment benefit. I plead as a Christian father that this crime should not be committed against our working poor, who are the best working folk in the world. Wage cuts, unemployment cuts—that is the way to ruin and revolution. I do not want ruin and I do not want revolution. I want reorganisation and development. I do not want violence of any sort—not even bad language of any kind. I wish these things to be done away with. If money is wanted—and we are millions richer than we were—get it from where it is, but do not starve the people and take away what little is left for the unemployed and the poor.

Mr. HOLFORD KNIGHT

The hon. Member who has just sat down speaks after long service to the cause for which he has pleaded. He has not addressed us from some Fabian essay, but from his great experience of these matters. Let me say, as an old friend and comrade, that I believe he is thoroughly sincere in his attitude. [Interruption.] I am going to ask for the usual courtesy that is extended to an hon. Member when addressing the House. I rise because I think that someone from these benches who supports the Prime Minister in his policy should state the reasons which induced us to support him and to vote for this Bill. The Bill does not pretend to be the complete treatment which this Government intend to apply to national necessities. There is no informed hon. Member opposite who for one moment believes any such thing. The Bill is directed to meet a particular urgency. If it stood alone and if it were the last word which this Government were going to say in this House for dealing with national necessities, I should not support it. The Bill is merely a specific treatment of an urgent situation and it ought to be supplemented—I shall certainly do all that I can to get it supplemented and I hope the people of the country and hon. Members opposite will help in getting it supplemented—by appropriate measures which will contribute to an improvement of the national situation.

I have never changed my view—[Interruption]—t hat in a matter of economy the first direction in which the Government should move is in regard to war debts and armaments, and such opportunities as I enjoy in this House I intend to apply to that end. [HON. MEMBERS: "you vote against armaments?"] Certainly. I spoke against naval armaments in each of the Debates on the subject. The present Debate illustrates the difficulty in which right hon. and hon. Members opposite find themselves. On other occasions their appeal, on large principles, for great schemes of social reconstruction would be in order, but they are entirely out of place in meeting the necessities which confront the Government. The hon. and learned Member who began the discussion appar- ently started a new series of Fabian essays. I found it of particular interest, because it was the first occasion on which I have heard him make observations in regard to political business in this House. He came suddenly and unexpectedly into the overheated atmosphere which he found on the benches opposite, and it resulted in the amazing phrases that he used, to the increasing amusement of those who sit on these benches. He continually denounced the capitalist system. This fine blossom of the capitalist system, who has been rocked and dandled into a legislator! If such denunciations are to be heard in this House, and I agree that they should be heard if they are sincerely held, they might more fittingly come from another quarter.

I want to apply myself to the causes which induced me to support this Bill, in company with the Prime Minister. The hon. and learned Member said that the Government was brought into being to save the Gold Standard. If he were not a newcomer to public business I should question the sincerity of that declaration, because it must be common knowledge that the circumstances which brought this Government into existence were directed to two purposes, (1) to maintaining the Gold Standard, and (2) to balancing the Budget. To that end the hon. and learned Gentleman's associates in the late Government put forward proposals and accepted proposals which represent nine-tenths of the proposals embodied in this Bill—[Interruption.] Certainly. That is the true account of the situation which brought into existence the present Government, namely, in the main the business of balancing the national finances, and their predecessors accepted proposals which, in the main, are the proposals embodied in this Bill.

The item which has, quite naturally, excited the warmest feeling in the House is the proposal with regard to unemployment benefit. Let me say a few words on that subject. The reason why the Unemployment Insurance Fund was particularly pointed to in the discussions in the late Government and in the new Government was the amazing deficit which was rapidly accumulating. It already amounted to £100,000,000, and it was accumulating at the rate of £1,000,000 a week. A Royal Commission was considering the proposals for diminishing the charges on the fund. An interim report had been presented, and a special Act had been passed by this House, which is about to come into operation, designed to curtail as far as possible expenditure under this extraordinary item of Unemployment Insurance. In the discussions there has been disclosed a view of Unemployment Insurance which has no foundation in fact. It has been an advantage to hear hon. Members opposite talk about Unemployment Insurance as if it were some method designed for the better distribution of national income. It is no such thing and never was intended to be.

Moreover, a profound misconception of the purpose of Unemployment Insurance was disclosed in speeches which suggested that the present provision for Unemployment Insurance was intended to be full maintenance. It was never intended to be anything of the sort. Unemployment Insurance, originally, was payment to cover a risk to which the beneficiary had himself contributed. It was subsequently supplemented, owing to urgent necessities, by the provision for transitional benefit. In the upshot, it has resulted in the enormous deficit to which I have alluded. That was the situation—[Interruption.] Hon. Members opposite may disagree with me. In this House we stand to express our own views, and I make no apology to anybody for expressing my view, however ill-informed hon. Members opposite may think I am. I endeavour to inform myself as best I can of all the circumstances, and I am always prepared to correct my view in the light of new facts which may come forward as occasion demands.

I am satisfied, in view of the position of the Unemployment Fund and of the national financial situation to which it has contributed, that the allowances pro vided in the Bill are the maximum allowances which can reasonably be expected. I should, however, like to emphasise the point that in the administration of these reduced allowances the greatest possible care should be taken to effect every possible economy. The situation is going to be eased by the operation of the Anomalies Act. There is not one hon. Member opposite who does not know that in every street in this Kingdom you will find wicked abuses of the Unemployment Insurance Act. [HON. MEMBERS: "Nonsense!"] I have made inquiries, and if hon. Members opposite who interrupt me have also made inquiries, they will have found that unemployed workers and employed workers in the back streets of this Kingdom know of numerous cases—

Mr. LANSBURY

I should like to know whether the hon. and learned Member has inquired from house to house in Park Lane.

Mr. KNIGHT

I think that interruption can fittingly be disregarded. When hon. Members opposite go to face their constituents, they will learn it to be the truth that in every street in this Kingdom in which there are employed or unemployed workers, there are notorious cases of abuse of the Unemployment Insurance Act. [HON. MEMBERS: "Nonsense!"] Yes. Hon. Members opposite may look forward to the election, in which they will range all the spongers to be found in the back streets—[nterruption1]—but against that mob—[Interruption]—of the hon. Lady the Member for North Lanark (Miss Lee) will be a very fitting exponent—

Miss LEE

On a point of Order. I represent a large number of industrial workers and I do not know a single sponger among them. I want the hon. and learned Member to withdraw his remark.

HON. MEMBERS

Withdraw!

Mr. SPEAKER

If hon. Members would allow hon. Members to make their speeches without interruptions we should not get all these recriminations which are always unfortunate.

Mr. BUC HANAN

The hon. and learned Member has said that the hon. Member for North Lanark (Miss Lee) is a fitting representative of spongers—

Mr. KNIGHT

No.

Mr. BUCHANAN

A fitting exponent of spongers. May I ask whether that is in order; and also whether I should be in order in saying that the hon. and learned Member was during the last Government the best sponger in it?

Mr. SPEAKER

As regards the re- mark of the hon. and learned Member it is not one I should have made myself.

HON. MEMBERS

Withdraw!

6.0 p.m.

Mr. KNIGHT

I decline to withdraw any word I have said. I have myself heard the hon. Lady make observations in this House which could be used by these persons to justify their coming to the public funds for any money that they want. Such persons I describe as spongers, and I say, with all possible respect, that expressions used in this House holding out this promise to people who notoriously are known to be living in this way are a public disservice. I say, further, that the people who have the strongest feeling regarding these persons, whom I have properly called spongers, are the employed and unemployed workers, the genuine unemployed workers. I am sorry if I have said anything which has unduly excited the feelings of hon. Members opposite, and I confess that I am astonished that anything I could say should have that effect.

I have said these things because I think they ought to be said, and I have said them in connection with the plea, which I address again to the Government, that I hope by the administration of the Unemployment Fund and the operation of the Anomalies Act, which is designed to deal with notorious abuses, the fund will be so lightened that it will be possible, as speedily as possible, particularly if the cost of living rises, for the Government to diminish the calls upon these unfortunate people. [Interruption.] Hon. Members opposite ought to believe it of their fellow Members that no cut in the benefit of unemployed men and women would be supported except in the sincere belief that it was a dire necessity. [Interruption.] One can only make that declaration, as I do; and I make it as one who has had personal experience in these matters. [Interruption.] I apologise for having been somewhat longer than I intended, but I have been led away. I am entitled to say this, that the old associates of the Prime Minister who have accompanied him in this policy are doing it because they sincerely believe it is required by the interests of the country, and they are united in asking him and his colleagues to lighten this particular burden on the most distressful section of the community as speedily as possible..

Mr. T. WILLIAMS

I have listened with some amazement to the speech of the hon. and learned Member for Nottingham South (Mr. Knight), and we on these benches are prepared to meet such arguments in this Chamber or anywhere else. The Labour party has suffered defeat and loss in the past, we have experienced disappointments in all kinds of ways, but the greatest and most distressing loss we ever sustained was when the hon. and learned Member crossed the Floor of the House. The hon. and learned Member suggested that the proposed benefits in the Economy Bill were the maximum that the country could possibly pay in all the circumstances of the moment, and that he is therefore justified in supporting these cuts. The hon. and learned Member must have been asleep for the past two weeks otherwise he would not have referred to the Gold Standard. If there ever was any justification for any one of the cuts in the Economy Bill such justification went about two weeks ago.

Lieut.-Colonel FREMANTLE

Why?

Mr. WILLIAMS

The hon. and gallant Member does not seem to have learned that despite all the efforts of the Government, despite the fact that they borrowed £50,000,000 and £80,000,000 in order to maintain the Gold Standard, they failed in their object, and therefore any justification there was for the Economy Bill went by the board. This Economy Bill was neither necessary at the time it was introduced nor is there any need for it at the present moment. If hon. Members opposite want to know exactly how the present crisis arose they have only to read one of their leading newspapers of yesterday, the "Evening Standard," to get the real truth. That paper said: The whole Conservative policy since 1925 has rested on the re-introduction of the Gold Standard. It was this that brought about the depression following the year 1925, and eventually and inevitably led to this crisis. If there is any truth in the statement that somebody ran away from acting as a wet nurse to the Tory party hon. and right hon. Members on this side of the House were perfectly justified, for by remaining they would have implied that these severe cats on the unemployed people were necessary, in a process of propping up for a moment the system which hon. Members opposite support, but which despite all their support is actually crumbling before their eyes. What is the proposed remedy? The remedy proposed is that certain sections of the community must be content with a reduced income in wages or benefits. We on these benches have been very good students of good teachers and we have frequently said that to reduce wages, and thus to reduce the purchasing power of the people, is not going to solve the problem but will actually intensify it. Here is a book written eight or nine years ago by a prominent member of the present Administration. Referring to unemployment, he said: A reduction in wages is not a panacea for trade depression. On the contrary, it aggravates the position by lessening still further the effective demand of people who have a great unsatisfied consuming capacity. That was written by the present Chancellor of the Exchequer, and his supporters in this party were satisfied that he had written a truth. What was true in 1921 is true in 1931. If you reduce the spending power of the unemployed, or of any section of the working community, the same thing is hound to result; you will intensify rather than cure the problem. In regard to the question of increased output per person per annum, the present Chancellor of the Exchequer wrote: Some plan must be devised by which the remuneration of labour shall absorb the increased product, and when that has been achieved the objection of labour to increased production and to putting forward its best efforts will have been removed. If the Chancellor of the Exchequer and the present Government had been devising ways and means whereby the redistribution of the national products was made possible there would have been no necessity for these economies. I want to refer to the question of unemployment benefit and to the amazing speech of the hon. and learned Member for Nottingham South. He referred to this "amazing deficiency." That statement has been made by every important and unimportant Member opposite. What are the facts with regard to the deficiencies of the fund. Since 1924 down to 1931 we have borrowed £120,000,000, not all of which is expended at the moment. The present Government in two weeks have borrowed £130,000,000 to prop up the Gold Standard, and they have failed in their object. We have an amazing loan of less than £20,000,000 per annum for the Unemployment Fund, while we pay £300,000,000 in interest on the National Debt and £130,000,000 on the Army and Navy. This colossal sum of £20,000,000 is the thing which dominates not only the Gold Standard but our internal and external currencies as well; it is the one thing upon which depends the prosperity or destruction of this country.

I suggest to bon. Members opposite that when they refer to these colossal debts, as they call them, that there are some people beyond these four walls who are aware of the exaggerated statements which are being made. If it is right for the Government to borrow £130,000,000 in the space of two weeks to preserve the Gold Standard and to make the world safe for the bankers, it is not too bad at all events in the space of seven years to borrow £120,000,000 to help the millions who are denied the right to work. It is true that the present Minister of Labour from time to time has referred to a statement once made by the ex-Minister of Labour, namely, that it was dishonest finance to continue to borrow for the Unemployment Fund. My right hon. Friend persisted in that statement that it was dishonest to continue a borrowing policy. But the previous Minister of Labour had the present Chancellor of the Exchequer to deal with. If she could have had her way she would have refused to persist in borrowing; she would have refused also to reduce the benefits to the unemployed; she would have paid the annual deficit year by year as it was created. That is exactly what ought to have happened.

I want to make a brief reference to the needs test. I am glad to see the right hon. Member for West Woolwich (Sir K. Wood) present. He is a typical Union Jack flag-wagger. He is the person who would condemn the attempt at breaking up the domestic home, separating father from son and destroying family life as it has been done in Russia. I wonder whether the right hon. Gentleman has examined this needs test as it will be applied. Is he aware that when the test if applied it may have the effect of driving tens of thousands of single young men away from their homes? Alternatively has it ever occurred to him or to any of his colleagues that it may have the result where it happens for the moment to be the father who is out of work while the son is working, or the son is out of work while the father is working, that the very fact of applying one's physical qualities with a greater intensity and earning a bigger wage, that the public assistance committee will provide a smaller sum of money in the way of benefit, and that as a result of that the mentality of the man will make him say something like this to himself: "Since the harder I work and the more I earn the less I get, I might as well have an easy life, earn a smaller wage, or produce a smaller output, and get more from the Unemployment Insurance Department." All these possibilities are involved in the application of the needs test. I recommend the right hon. Gentleman and his colleagues in another place to examine the possibilities of the test.

Then as to the cuts in education expenditure. It is true that because the teachers are well organised and capable of bringing pressure to bear they have already secured a concession; but it is also true to say that, notwithstanding the concession, tens of thousands of teachers who have entered into all sorts of obligations will find themselves very hard put to it to meet those obligations as a result of the 10 per cent. cut. I bring to my aid as a witness a right hon. Gentleman on the Government side who stated that the teaching profession was probably the foremost profession in this country, and in referring to the conditions that ought to apply to teachers said: The teaching profession must be made more attractive to men and women of enterprise and ability. The prizes in the teaching profession have been few, and must remain few, but it is necessary that every competent person in the profession should be adequately remunerated, free from worry about pecuniary matters and provided with an income sufficient to support a good social position. The work of a teacher is not less important in social utility than the work of a lawyer, a doctor, an architect or an engineer, and it should be at least as well remunerated. That is a statement made in a book called "Labour and the New World" written by the present Chancellor of the Exchequer. He said that the teacher ought to' be removed from pecuniary worries. As a matter of fact, the cuts made by this Bill will mean that thousands of teachers will be almost worried out of their lives to know exactly what they are to do when the cut becomes effective. I suggest that the Chancellor of the Exchequer would do well to re-examine his ideas of 10 years ago in the light of his present actions. I am convinced that he would not hesitate very long in making up his mind that his new-found friends are no friends at all, and that the policy which they have superimposed upon him is a policy that ought not to be applied. In reference to the present crisis, it is very interesting also to observe the foreword that the present Chancellor of the Exchquer included in this book. He embodied in it a quotation that is well worth recording. The book was written in 1921, but it is very up to date so far as the present crisis is concerned. This is the quotation: The old world must and will come to an end. No effort can shore it up much longer. If there be any who feel inclined to maintain it, let them beware lest it fall upon them and overwhelm them and their households in the ruins. That was a quotation made originally by the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George), but it was embodied in this volume by the present Chancellor. It seems to me that the old world is falling in ruins, and, as the hon. and learned Member for East Bristol (Sir S. Cripps) has said, it is the poor that are called upon to pay the price every time we feel that the props are unsettled and bits are falling from the edifice.

This Bill is typical of the Tory party. It is exactly what we might have expected from that particular source. Wage-cutting and reduction of unemployment benefits have been their policy since 1929. We know what has been behind their minds from the moment the last Government took office. The present crisis is undoubtedly a blessing in disguise to the present Government, because it has permitted them to do what no other circumstances would have enabled them to do. The present Chancellor in 1911, when opposing an Amendment which had for its object the reduction of the salary of a Member of Parliament from £400 to £300, explained the delicacy of the task of a Member in making any reference to the payment at all, and he appealed for the tolerance of Members in all parts of the House. I do not know that I require to appeal for the tolerance of Members in any part of the House, but I suggest that the proposed cut in Parliamentary Members' salaries is a most vicious attack upon democratic representation in this country. In 1911 the Chancellor said that the minimum upon which any Member could carry out his duties was £400. The cost of living today is about 50 per cent. higher than it was in 1911. Yet the Chancellor has become part and parcel of the Tory party and is making it more difficult rather than less for Labour Members to perform their duties in future.

Though little has been made of this vicious attack upon democratic representation, it will not go by unnoticed, and I hope that before long we shall be able not only to revise that part of the Bill, but that we shall be able to see printed and placed over the door of every Tory Member a statement showing that the Tories gloated over the fact that education had to be cut down, public health had to be economised upon, police pay had to be reduced, and unemployment benefits cut down. Such a statement ought to be placed over the door of every Tory Member and of everyone who supports this Bill. I shall have no hesitation in voting against the Bill.

Mr. RHYS

Although I am not making a maiden speech, it is some time since I had the honour of addressing the House, and if I do not claim any indulgence I hope that hon. Members will be as lenient as they can. Since the House reassembled on 8th September, I have listened to most of the Debates in the House, but apart from the speech of the Leader of the Opposition on the first day, which led us to believe that he had some understanding of the crisis, no speaker from the Opposition Benches, apart from paying lip service to that matter, has led us to believe that he appreciates the seriousness of the present situation. It will not be unfair to say that now that three Socialist leaders who sit on the Government Bench have left the party opposite, the Labour party stand once more as an extremist party. The moderating influence of the Prime Minister and his colleagues having been removed they are now advocating the full policy of Socialism.

We are told that now we have gone off the Gold Standard there is no need for this Economy Bill. But one of the reasons why we have had to go off the Gold Standard is to be found in the somewhat irresponsible speeches from the Opposition Front Bench. Right hon. and hon. Members opposite say that the one way in which we should continue these various payments is by borrowing, and that that would be perfectly easy. But who, having any money to lend, would wish to lend it to a Government which had the openly avowed intention of confiscating the savings 'of any capitalist? They admit that if we are to keep up—I should like to see it done if it were possible—the rates of unemployment benefit, that can be done only by borrowing. But where in the various speeches made by members of the late Government do they indicate the sources from which such borrowings should come? Is it Likely, after such ample warning, that lenders would continue to pour their money into the bottomless pit? I am bound to say I do not think it likely.

Right hon. and hon. Gentlemen opposite say that we should not pass this Bill without mobilising foreign investments. But when they have been mobilised and have been used, what then? Where should we go for further supplies when we have used up the great resource which has been left, to us with which to secure foreign currency to pay for our imports of food? It might be possible to stave off disaster for a little time, but the crisis would only recur. The only reason why we on this side support these very unpleasant cuts—we do so with a heavy heart—is that we are convinced that this is no time for argument, but a time for action. Many of us want to see, after the immediate safeguards are taken, a proper investigation into what may appear to be a defect in the capitalist system, when the hoarding of gold in two countries bas reached the present position. But the fact that there may be a defect is no argument that the system itself is wrong. We want to see broad policies of reconstruction. But all these are matters of argument, matters which can be thrashed out later on.

I am sure that the present Prime Minister would not have taken the course that he has taken, supported by the Chancellor of the Exchequer and the Secretary of State for the Dominions, if he had not had a very good reason for it. The real reason is that behind all sources of wealth, as we know it to-day, is the fundamental human desire of a man to be better off at the end of his life than at the beginning; and any system in this world which leaves that fundamental consideration out of account is bound to fail. As we are working to a time table, I shall not address the House at greater length. I conclude by saying that we shall go into the Lobby to-night to vote for this Bill, firmly hoping that it will only be a temporary Measure and that it will be complemented in the future by further policies of reconstruction into which I cannot go tonight. We hope that when those policies are put into force, we shall see once more a circulation of wealth in this country which will render unnecessary the continuance of the cuts in administration and benefit which we are forced to support to-night.

Miss LEE

On a point of Order. I wish to ask for your guidance, Mr. Speaker, on a matter of procedure. Owing to the time limit it will not be possible for me, in this Debate, to reply to the remarks of the hon. and learned Member for South Nottingham (Mr. Knight) in which he said that I represented spongers and that I stated a point of view in this House which encouraged sponging. I consider that these statements are not only lies, but insulting lies, reflecting on the people whom I represent, and, since I cannot intervene at this point to put the contrary view and correct the hon. and learned Member, I wish to ask what protection I can have from the Chair?

Mr. SPEAKER

No point of Order arises. Unfortunately, in this House as in other institutions we have to be bound by time. There is a time limit on everything, and, obviously, every hon. Member who feels aggrieved by a speech cannot have the opportunity of answering that speech. That is quite obvious, and, in the circumstances, I am afraid that I cannot advise the hon. Lady as to how she is to act. As regards the remark to which the hon. Lady refers, I think it has already been pointed out that remarks of that kind are often made, and are, perhaps, regretted afterwards. I do not know what the term "sponger" really means, but I believe there are such persons in every walk of life.

Mr. TOM SMITH

Perhaps the hon. and learned Member may now wish to withdraw his statement.

Dr. DRUMMOND SHIELS

I think it will be agreed that it is not easy at this stage to say anything new about the Economy Bill, as the points involved have been very well covered in the course of the Debate. Before we take a vote upon it, however, it is desirable that we should emphasise what we on this side believe to be the real meaning of this Measure. Is it what it seeks to be, namely, a Bill to ensure economies in order to balance the Budget? If that be so, its authors, whatever their merits or demerits as economists, are certainly bad psychologists. They have failed to convince their victims or the public, that their proposals are fair and necessary and they have aroused bitter resentment among those whose standard of life is being forced down. They have badly miscalculated the human factor and the human reactions, and these are of great importance in connection with all that we do in this House.

They miscalculated those human reactions seriously in the case of the Navy. The loyalty and esprit de corps of the "silent Service" are traditional, and when that Service became articulate in discontent, it did more to produce effects abroad than any of the other reasons for loss of confidence which have been advanced to us. This, it seems to me, is a serious criticism of the Bill and its authors. The teachers also are aroused and united as never before. Even the partial retreat of their alarmed attackers has not mollified the feeling of soreness and injustice among them. The police have been publicly humiliated, and other classes affected have increasingly felt that they have been singled out for special attack.

What of the unemployed? What do they think and feel about it? My hon. Friends beside and behind me have tried to picture to the House their reactions. There is more in it than the actual cut in benefit, more even than the imposition of the needs test, bad as those proposals are. I was glad to hear my hon. Friend the Member for Batley (Sir B. Turner) speak about the domestic side of this matter. It seems to be forgotten that unemployment relief has always been fixed on a subsistence level, which left no margin at all for reasonable sacrifice, and that any diminution of the amount was bound to send the figure below the subsistence level.

Lieut.-Colonel FREMANTLE

The hon. Member says that it has always been fixed at the subsistence level. Will he say that the original 10s. a week in the Insurance Act was the subsistence level?

Dr. SHIELS

I do not mean to say that it has always been accurately fixed at the subsistence level. I meant that the standard was that of the subsistence level, and the standard of subsistence may vary under different dispensations. I repeat that the standard of life of the unemployed man has been fixed on the subsistence basis. There is no question about that, and I need not emphasise the points which have been made already, in regard to the very large proportion which rent and overhead charges bear to the amount received. I believe there is reason to apprehend, if 'this cut is carried out and if the public assistance committees act in the same spirit as the Government, a grave physical condition of semi-starvation among our unemployed people during the winter. One feels special sympathy for the women-folk in the homes of the unemployed. They are the best Chancellors of the Exchequer in the world, but their task this winter will be more than even they will be able to achieve.

These things, have already been said by hon. Members on this side, but the point to which I wish to call attention, and which I think has not been emphasised, is that there is something involved other than the mere deprivation of physical necessities. What hurts great numbers of the unemployed even more is the gesture of impatience with their presence. This Bill is a proclamation of the weakening of the community consciousness of brotherhood and kinship. The unemployed are regarded as a nuisance. The presence of a few impostors and "lead-swingers" among the unemployed must not blind any hon. Members to the fact that in the vast majority of cases they are very sensitive. They have been suffering and many are now in despair. They are the victims of an outworn system for which all of us are responsible except in so far as we try to alter it. The human side of this problem appeals to me. One can picture the humiliation of the husband and the father when he has to make suffer along with him those for whom he would only too gladly work and fight. He has now had added to the miseries of his former condition the advertised contempt of the community. I do not say that this is intended by those who make these cuts. They are merely indifferent to or careless of the workless man's position.

As to the taxpayers and ratepayers —those not personally involved in these cuts—what are they thinking of it? I do not believe I am putting it too strongly when I say that many of the public are definitely uneasy about it all. They see the Income Tax scales extended and the allowances reduced, a condition of things which penalises twice over many of them whose incomes have been suddenly and savagely cut down. They see all those over whose remuneration the Government has any control being compelled to suffer. They see also that the amount of savings effected is only such as could have been equalled by some slight increase of general taxation, direct and indirect, and by dealing more drastically with the Sinking Fund. Surely, then, we are justified in saying, if the Bill is only what it seems to be, that it is as unwise from its promoters' point of view, as it is cruel from all other points of view. The game is not worth the candle, if the Bill is only to be taken at its face value. But as the hon. and learned Member for East Bristol (Sir S. Cripps) pointed out there is something more than the face value of the Bill to be considered.

We have to ask if the authors of this Bill regard it, not so much as desirable or necessary in itself, but as a means to an end. And is that end the lowering of the standard of life of the vast majority of the people? [HON. MEMBERS "Certainly not"] That may seem a hard thing to say, and I believe that many who feel it necessary to support this Bill have no such intention. But, undoubtedly, it has been good Tory doctrine for the last few years. The slogan has been, "Wages must come down in order to have industrial prosperity," and as my hon. and learned Friend pointed out, and as T have always strongly held, one of the greatest achievements of the Labour Government. during these last two years has been that it has been a bulwark between the worker and those who have been just itching to do the very thing that is being done now in this Bill. That has been one of the greatest merits in the existence of the Labour Government.

No doubt this policy of reducing wages is quite conscientiously held by those who believe that it is necessary for the success of industry, and that it will not recover without such a process. There are others, however, who have watched with jealous eyes the corning into power of the common people. I agree with my hon. and learned Friend that undoubtedly an opportunity was seen in this crisis, and it was seized. The Labour Government was left only two alternatives—either to go out or to consent to proposals which were antagonistic to the whole history and ideals of the Labour movement. The country was said to be on the brink of ruin, but now we know that this was never true. [An HON. MEMBER: "Is the hon. Member aware of what was said by a right hon. Friend and colleague of his I"] Many things were said by many colleagues, but, as I say, now we know that this was not true.

Desperate attempts are now being made —some were made this afternoon, and others are being made in the country and will doubtless be made more and more—to fasten a joint responsibility for these proposals on the Labour Cabinet. We repudiate that responsibility! The National Government is afraid and ashamed of what it has done. It claims credit for saving the country, and at the same time it says that the Labour Government must take part of the blame for the way it saved the country. We may regret that the Labour Cabinet listened to their altered Chancellor so long, but we remember the circumstances, and we rejoice that they had the courage to call a halt when they did; and we are proud that that final refusal was on the meanest item of all, the cut on the unemployed. Objection has been taken to the word "plot." It does not matter about words, but what was done by the bankers and by the Tory and Liberal negotiators has at any rate failed in its main intention. It certainly got the Government out, but it did not secure an acceptance of all or any of these proposals, and instead of being wrecked, the Labour party is now stronger and more united than ever in its history.

The fundamental principles of this Bill are, first, to lower the pay of public servants whose standards were hindering wage cuts in industry, and, secondly, to check the development of social services and equality of opportunity and service for all. Many who, for well intentioned but short-sighted reasons, support this Government must have many qualms when they realise what are the forces behind this Bill, and what the Bill is going to lead to. Wages are to come down all round, so that employers may prove that they are as patriotic as the Government. At the same time, the Prime Minister calls for wise and courageous spending. Surely that is a mockery to those millions who are in money difficulties by this Bill, as well as to those with goods to sell. Under-consumption, as has been pointed out very well by a number of my hon. Friends, is the real trouble, and the proposals of this Bill will prevent wise and courageous spending by making and encouraging reduced incomes for millions of people.

The social services again are the avenues of equal opportunity for the common people. A great deal has been said, and rightly said, about the teachers' cut—a very hard one on the teachers, severe and unjust. But the real attack is on the education of the children of the people. This is the answer to the Labour Government's Bill to increase the school-leaving age by one year.

Not very much has been said about the doctors and chemists. I have found that it is not easy to evoke sympathy in this House for doctors, and I have not tried for chemists. They are said to have taken their medicine without flinching, but it was hinted by the hon. and gallant Member for St. Albans (Lieut.-Colonel Fremantle) that they were at the time unaware that more income and petrol taxes were awaiting them. What their present state of mind is we cannot say. Here again, however, the real attack is not on the doctors and the chemists, but on the social service of which they are a part. Royal Commissions have shown that the National Health Insurance system, while good as far as it goes, is quite inadequate. Hon. Members who know these reports know that the provision of specialist services, of services for dependants, and many other developments are required before it can be said to be an adequate service for its purpose. Yet, instead of improvements, we have this setback, and the status of working class medical service is definitely lowered compared with that of other sections of the community.

Lieut.-Colonel FREMANTLE

Will the hon. Member explain if he really suggests that through this Bill or in the White Paper there is any suggestion that we shall cut down the consultant service?

Dr. SHIELS

No, but the hon. and gallant Member knows that I was not referring to that, but that I was referring to the developments foreshadowed by the Royal Commission. Further, I want to point out that this National Health Insurance is a vital service. We do not sufficiently emphasise, in view of the wonderful developments of medical and surgical skill that these ought to be available in full and ample measure to the very humblest members of the community. They are not so just now, and the gesture of this Bill in regard to their medical service is definitely to lower its status. The cuts on the police are very surprising, and these surely can only be made on the principle that all public servants must have their standard lowered. I would, in passing, mention this as further showing the bad psychology in this Bill. We know there have been cases, in London and elsewhere, which have shown that policemen have great temptations to face. We are proud of the standard of our police, we wish to preserve it, and I must confess that a more foolish economy than this would be hard to imagine.

Most of the bad features of this Bill are the products of our own home Toryism of the most reactionary type. It lacks the Disraeli touch! I was glad to notice in the speech of the Noble Lord the Member for Basingstoke (Viscount Lymington) this afternoon that something of that better spirit was revealed. We understand, however, that for the worst features of the cuts the American or British bankers or both were responsible. It has been pointed out by my hon. and learned Friend that there has been a world feeling against our unemployment system, but surely, on what- ever side of the House we sit, when we read of the position in the United States, when we read of the millions there subjected to the soup kitchen type of charity, indiscriminate and inefficient, we must have great satisfaction that our unemployment system here is at least dignified and efficient; and it seems to me an extraordinary thing that we should be submitting to modify our system at the dictation of those who are struggling in America or anywhere else against a proper unemployment relief system for their countries.

The occasion of this Bill was to be, as has been pointed out, to enable the pound to keep at its former level. That necessity has gone, and we have been told that it was the best thing that ever happened, which is very curious. The elaborate calculations about cost of living which the Prime Minister gave us in his broadcast address and elsewhere have all gone. The unemployed will not have 11½ per cent. less to pay for food than they had two years ago; they will have a great deal more than now. The whole basis of argument for this Bill and for these cuts has gone, and therefore we, on this side, suggest that the Bill should be withdrawn. Even yet it is not too late. Even at the eleventh hour it would be to the credit of this Government if they withdrew the Bill altogether. It is not needed to balance the Budget, and what it will do is to unbalance the budgets in millions of humble homes throughout the country. We, therefore, protest against this Bill, and Members on this side of the House, I am sure, have never voted with greater earnestness or enthusiasm against any Measure in this House than they will vote against this Bill to-night.

The MINISTER of PENSIONS (Major Tryon)

I do not know whether there is going to be an election or not, but some of the speeches to which we have listened from the other side seem to suggest that some hon. Members are practising what they are going to say on the platforms, and I hope that, when they do, they will add something which we cannot say here, and that is that the present situation of the nation is a position in which it has found itself after more than two years, for which hon. Members opposite are more responsible than we are. I should like to deal briefly, before replying to some of the points which have been raised, with one or two things about unemployment insurance. The hon. Member who has just sat down was in error, in my view, when he said that the allowances were based on a subsistence level, because if he is right in that, then he means that the Government of which he was a Member were of the opinion that 17s. a week was enough for a man to live on.

7.0 p.m.

This unemployment scheme is based on the principles of insurance, and that is the main reason for the present changes in the policy of insurance. At all events, it cannot be said that the nation is not lending a good hand to help the insurance scheme to keep up its benefits because, whereas when the scheme started the contribution of the State was based on a one-third contribution towards the benefits, at present the State under these new arrangements will be contributing two-thirds towards the benefits. The State, therefore, is making a great contribution towards the unemployed. Those who have spoken from the Front Bench opposite, have been extremely well selected—most judiciously selected in fact—because it has obviously been the policy of the Opposition not to let any Members of the late Cabinet come on the Front Bench at all, if they can help it. The two hon. Members who have spoken have evidently been selected because they are more dissociated from the cuts than other hon. Members who owe it to the House to corns and explain how it was they proposed the cuts which they are now opposing.

Mr. T. SHAW

That is an unwarrantable assertion. There is no Member of the present Front Bench who ever proposed any of the cuts of which he speaks.

Major TRYON

That is taking advantage of the well-arranged fact that the right hon. Gentleman's leader is not in the House. The Leader of the Opposition told us that £56,000,000 of cuts were provisionally decided upon and the right hon. Member for Darwen (Sir H. Samuel) told us that those cuts were laid before the leaders of the other parties and proposed to them.

Mr. SHAW

The right hon. and gallant Gentleman said that the Members of the Front Opposition Bench had proposed those cuts. That is an unqualified error, and bears not a, single scrap of truth in it.

Major TRYON

I resent the accusation of untruthfulness made by the right hon. Gentleman against his leader in this House. With reference to the speech of the hon. and learned Gentleman who was Solicitor-General in the late Government, I feel that he must have had a very unhappy and anxious time in that Government because all the time that he was sitting there, bringing in little Bills which had nothing whatever to do with the real troubles of the country, he knew really what the real solution was. At the end of his speech he put forward proposals which are nothing less than Communism. They are unqualified Communism, as any hon. Member can see when he reads the conclusion of his speech. If he believes in Communism, he ought to sit on the back benches with the other hon. Members who were supporting it all the time.

Sir S. CRIPPS

The right hon. and gallant Member is wrong. I do not believe in Communism, but he does not understand the difference between Communism and Socialism.

Major TRYON

I know that the difference is this: The Communists are the people who believe in Socialism and the "Socialists" are the people who sit on the Front Bench and do not. I appeal to the House to read the concluding part of the hon. and learned Gentleman's speech, and I challenge anybody to deny that that was a very effective pronouncement in favour of Communism. If he is in favour of Communism, he ought not to have been sitting on the Government benches all the time, but higher up among the people who believe all the time in the thing he is only just beginning to advocate. The hon. Member who preceded me spoke of the Tory policy of reducing wages. May I say, having sat in this House as a Conservative for over 20 years, that I regard that statement as an absolutely inaccurate statement of the policy of the Conservative party? If there is anything in the policy of wages having to come down when other things come down, that is the Free Trade doctrine and not the Tory doctrine. The suggestion has been made that all these difficulties can be got over by the simple expedient of taxing the rich and distributing the money, that money would then circulate widely, more employment would be given and everything would be all right. It may be that, if that policy was further developed, it would bring success, but the point I make is that we have had this experiment tried under the late Government when heavy additional taxes were put upon those who were better off, and, so far from the poorer section of the community being better off under the additional taxes of the rich, there was far more unemployment and far more distress.

With reference to the problem of the teachers, one man at all events has somewhat overstated the case in regard to education. Everybody ought to acknowledge that this country and all parties have made great efforts by good will and by financial expenditure to improve the educational system of this country. Mr. H. G. Wells, who does not seem to be very good at figures, said that, when we had increased our expenditure from £31,000,000 to £88,000,000, that was a meagre expenditure on education. [Interruption.] Hon. Members think it is, but my point is that we have enormously increased our expenditure, and that it has been done under all the Governments. Among the cuts which were provisionally suggested, proposed, or whatever the phrase now used is to describe things which were really done, the cut on the teachers' salaries was one. We hear that there was some examination of the idea of making a 20 per cent. cut, as suggested in the May Report, but that the late Government moved rather in the direction of a 15 per cent. cut. That was a view which they put forward in these provisional—or whatever the word may be—proposals. There 'vas another figure, a cut of 12 per cent., which was a proposal made by two gentlemen on the May Committee who are described by hon. Members opposite as representatives of the Labour party. We have, therefore, three possible steps, a 20 per cent. scale, a 15 per cent. scale and a 12½ per cent. scale. It is not for those who submitted proposals or who provisionally suggested a 15 per cent. cut to wax very indignant over the present proposals of the Government which are 10 per cent.

May I add that not many Members of the House can have failed to be impressed by the moderation, the courtesy and the admirable way in which the deputations of teachers put their case. I had a deputation from my own constituency which put the case admirably, more particularly the difficulties of those who, living on a definite scale, had committed themselves in various ways with housing rents or payments for houses. We are all grateful to the teachers for putting forward their proposals and their difficulties in such a moderate fashion. I got my teachers to put their case in writing, which they did in a very admirable and short way, and I sent it on to the Minister of Education. Every Member of the House is glad that it has been found possible to modify the provisional arrangements of 15 per cent. to the more moderate arrangement of a 10 per cent. cut. A reference has been made which might as well have been omitted by the hon. Member opposite to the difficulties in the Navy. I wish he had not raised the matter, but, if he chooses to raise it, he will regret the discussion which he started. There was not a Member on this side of the House who was not shocked at the way some hon. Members opposite treated lightheartedly the sad news that came of the disturbances in the Navy.

Mr. KIRKWO0D

We were delighted with the news.

Major TRYON

I notice that some hon. Members were not quite so delighted when the present First Lord of the Admiralty announced that he had found the arrangements for these reductions prepared before he took office by the late Government.

Mr. A. V. ALEXANDER

That has already been denied.

Major TRYON

I noticed that the right hon. Gentleman tried to get out of it. I am not making an attack on him. The attack I am making is that hon. Members ought not to take satisfaction at grievous national difficulties of that kind.

Mr. SIMMONS

If only the unemployed had that spirit, you would sit up.

Major TRYON

There have also been speeches made with reference to foreign pressure being put on the Government of this country. The real difficulty with reference to foreign pressure is the difficulty, as the late Solicitor-General rightly said, with reference to our trade balance. At present there is some difficulty in paying for our imports, and we may very soon have to pay for our imports by borrowing. I am not going into a discussion which cannot be raised now, but I hope in some way or other that this country will soon be relieved of being in a position so dependent on foreign nations for payments and loans. One thing that has occurred to me, looking on and not being in charge of the Department involved in this Bill, in the very remarkable speed with which the present Government brought forward their proposals. In a great emergency it is remarkable that the Government should so soon and so rapidly be able to bring in proposals of no wick and sweeping a character. I have given rather too much credit to the present Government, because we found that so much of the ground had been prepared beforehand by our predecessors.

Though we on this side of the House are all supporting the Bill and intend to vote for the Third Reading, we know that many of these cuts are serious cuts, and we wish that the nation had never got into the financial position which has rendered these cuts necessary. When the hon. and learned Gentleman the late Solicitor-General in the speech which he made, or rather read to the House—[Interruption.]—I do not say the whole speech was read, but some of the portions which contained the most bitter and most unjust accusations against the Tory party were deliberately read in a cold blooded manner. He made the point very ingeniously that these cuts were no longer necessary, that they had been brought in, proposed and originally planned by our predecessors in order to solve the difficulty of the pound. The difficulty was to keep up the value of the pound. There was the danger of what would happen if the pound fell in value. We all know what would happen. I think that, the hon. and learned Gentleman was a little too light-hearted about the possible consequences to the poor people of this country if the pound goes lower still. After all, we are dependent on an enormous amount of supplies from overseas. He said that we need not have these cuts because the pound has gone anyway. It seems to me, however, that if the pound has gone, the necessity for balancing our Budget remains, and that' there may be an even stronger case for balancing it, because we become more and mare dependent on that in the grave difficulties in which we are involved in connection with foreign exchanges.

There has been some discussion about the question of mobilising our overseas investments, and some Members have suggested that we can get out of our difficulties by mobilising those investments. They gave a very large total for them, but before they gave that total it would have been better to have examined how it was made up. For instance, when they gave a figure of our overseas investments and suggested that they should be mobilised in order to avoid the cuts which are to be found in this Bill, they included the whole of our investments in Australia, where, incidentally, the pound is of less value than it is here. It does not seem to be a very helpful suggestion that the pound in Australia should come to the assistance of the pound here, which is in a better position. An enormous amount of the money invested overseas, we are told, is invested in the Argentine. A large part of that money is in pounds; therefore, it is not in any way available to strengthen the position of the pound here. The plain fact is that the only part of our overseas investments which is of considerable value, so far as I know, are our investments in dollars, but, if we are to go on with our present evil balance of trade, we had better keep those dollar securities and retain our interest on them, which is in dollars, in order to maintain our imports. If you spend in a year or two all your dollar investments, you will very soon find yourself without that very valuable addition to your power to import from the United States and Canada.

It is suggested that one of the ways in which we can avoid these very heavy cuts is that nobody should be allowed to have an income of over £1,000 a year. It was the suggestion of the Independent Labour party. I looked at the Front Opposition Bench when it was made, and I did not see much enthusiasm for the proposal. I venture to say to the Independent Labour party that that is not a complete solution of the problem of equality of sacrifice. Are you going down to £800? Are you going below £360? I want to know where you would stop, and why the hon. Member who has put the suggestion forward stopped at £1,000. I wonder whether that is anywhere near his own income. That point comes out even more fully when I mention the occasion—it was during the Debates on this Bill—when the same hon. Member showed an enthusiasm for the British Army which was not very conspicuous in some of the earlier portions of his career. He was very sorry that the pay of the private soldier was to go down.

Mr. KIRKWOOD

Are you making reference to the Prime Minister?

Major TRYON

No, to the hon. Member for East Leyton (Mr. Brockway). He put forward the suggestion that no one should have over £1,000 a year and mentioned the fact in connection with the one particular point of the pay of a private soldier, which is something under 3s. a day. It seems that the view of the Independent Labour party is that, if they can get £3 a day and the private soldier 3s., the solution of the problem of equality of sacrifice is complete. When he recommends his policy to the constituencies, he will no doubt say, "We should all be free to get £3 a day and the soldiers should get as much as 3s. a day; vote for so-and-so, and equality of sacrifice."

As the Front Opposition Bench seems to be getting rather fuller, I will refer to the attitude of the late Labour Government. That was not the only Labour Government in the world. Reference has been made to the difficulties of other countries, and I will refer to one. There have been almost identical difficulties, though greater in extent, in Australia, but the people of Australia showed a rather different spirit from the spirit shown by the Leader of the Opposition in this House. When he spoke, he spoke of "the movement." The late Solicitor-General has moved up a hit since he was in the Government, and he spoke of "the Labour movement." There was not one word in the speech of the Leader of the Opposition which has any reference whatever to the grave peril of the nation as a whole. It was "the Labour movement" first and all the time, and the nation only came in when he was in office.

What happened in Australia? [Interruption.] It is true that they had a conversion, but they also had cuts in everything, even in war pensions, which I am glad to say are left out of this Bill. The cuts in Australia were far heavier than the cuts we have here. They are getting out of their financial difficulties connected with the balance of trade by discriminating in the matter of their imports and by heavy cuts, heavier than anything we have in this country. They had something which was also different from what we have in this country. They had a Labour Government which, when they found the country in difficulties, stood to their guns. They had a Labour Government which, after being in office for a long time, found the country in difficulties, and they stuck to their job, and they are carrying the country through.

It may be said that it is a strange thing for some of us Conservatives to be sitting next to those with whom we have been opposed. I find myself next to three men who, I think, are by universal acknowledgment three of the greatest men that the Labour movement has produced—the Prime Minister, the Chancellor of the Exchequer, and the Secretary of State for Dominion Affairs. We support them because they are trying to see the country through its difficulties and because they have not run away. They are not sufficiently agile. If they bad only run away, they might have been in "the movement." I am sorry to see that three members of the Liberal party also seem to be in "the movement." We in the Liberal party—[Laughter.] I am speaking to the best of my accomplishments for the Government. I am not speaking as a Conservative Member. If I were, there is a good deal I would say. I am speaking for the Government, and I say that if you find the overwhelming mass of the Liberal party supporting this Bill, as we shall, if you find the Conservative party voting for it, as we shall, it is because we consider that, as the Leader of the Labour party said in an unguarded moment, there is a crisis; it is because we think that the plans prepared by the late Government are the best way in an emergency to deal with this problem. Because there is a grave national emergency, we and the Liberals and a limited number of Members who supported the late Government, will go into the Lobby to vote for this Bill.

Lieut.-Commander KENWORTHY

It is very refreshing to find the right hon. and gallant Member let himself go. I have known him for many years as Minister for Pensions when he was hampered by departmental limitations—[HON. MEMBERS: "Divide!"] I only want to refer to one observation of the right hon. Gentleman's, and I am sure that he does not mind my replying—[HON. MEMBERS: "Divide!"] We are working under the Guillotine and hon. Members must at least allow us our ration. When he talks about the late Labour Government running away, he seems to overlook a recent speech made by the Minister of Health in the country. When this so-called crisis occurred, what did the Prime Minister do? He ran away if that is a correct description. It was stated by the Minister of Health in the country that the Prime Minister went to His Majesty and handed in his resignation. I do not want to go into details, but we know that influences were brought to bear; otherwise the Prime Minister would not be leading the Government now. [HON. MEMBERS; "Divide!"] Running through these Debates has been the accusation that the unemployed are spongers and cadgers. The unemployed can be divided into three sections. There are those who have been deprived of work through rationalisation. That is a natural process; it has happened in every industrial country, and it is certainly not their fault. Another section is unemployed through deflation. [HON. MEMBERS: "Divide!"] That has been a deliberate policy of restricting credit, and men have been thrown out of work. The third section are seasonal, casual and part-time workers. None of these are spongers or cadgers. But I would remind hon. Members of the words of a great Russian philosopher, Chekov: We are all cadgers on God. The trouble is that we misuse and waste God's plentiful bounty and allow people to go short in the midst of abundance—. [HON. MEMBERS: "Divide!"]

It being half-past Seven of the Clock, Mr. SPEAKER proceeded, pursuant to the Order of the House of the 22nd Septem- ber, to put forthwith the Question necessary to dispose of the business to be concluded at half-past Seven of the Clock at this day's Sitting.

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

The House divided: Ayes, 297; Noes, 242.

Division No. 500.]	AYES.	[7.30 p.m.
Acland-Troyte, Lieut.-Colonel	Cunllffe-Lister, Rt. Hon. Sir Philip	Inskip, Sir Thomas
Ainsworth, Lieut.-Col. Charles	Dalkeith, Earl of	Iveagh, Countess of
Aitchlson, Rt. Hon. Cralgie M.	Dairymple-White, Lt.-Col. Sir Godfrey	Jones, Liewellyn-, F.
Albery, Irving James	Davidson, Rt. Hon. J. (Hertford)	Jones, Sir G. W. H. (Stoke New'gton)
Alexander, Sir Wm. (Glasgow, Cent'l)	Davies, Dr. Vernon	Jones, Henry Haydn (Merioneth)
Allen, Sir J. Sandeman (Llverp'l., W.)	Davies, E. C. (Montgomery)	Jones, Rt. Hon. Leif (Camborne)
Allen, Lt.-Col. Sir William (Armagh)	Davies, Maj. Geo. F. (Somerset, Yeovll)	Jowitt, Rt. Hon. Sir W. A. (Preston)
Amery, Rt. Hon. Leopold C. M. S.	Davison, Sir W. H. (Kensington, S.)	Kedward, R. M. (Kent, Ashford)
Ashley, Lt.-Col. Rt. Hon. Wilfrld W.	Dawson, Sir Philip	Kindersley, Major G. M.
Astor, Maj. Hn. John J. (Kent, Dover)	Denman, Hon. R. D.	Knight, Holford
Atholl, Duchess of	Despencer-Robertson, Major J. A. F.	Knox, Sir Alfred
Atkinson, C.	Dixey, A. C.	Lamb, Sir J. Q.
Baldwin, Rt. Hon. Stanley (Btwdley)	Dixon, Captain Rt. Hon. Herbert	Lambert, Rt. Hon. George (S. Molton)
Balfour, George (Hampstead)	Duckworth, G. A. V.	Lane Fox, Col. Rt. Hon. George R.
Balniel, Lord	Dudgeon, Major C. R.	Latham, H. P. (Scarboro' & Whitby)
Beamish, Rear-Admiral T. P. H.	Dugdale, Capt. T. L.	Law, Sir Alfred (Derby, High Peak)
Beaumont, M. W.	Eden, Captain Anthony	Leigh, Sir John (Clapham)
Bellairs, Commander Carlyon	Edge, Sir William	Lelghton, Major B. E. P.
Bennett, Sir E. N. (Cardiff, Central)	Edmondson, Major A. J.	Lewis, Oswald (Colchester)
Berry, Sir George	Elliot, Major Walter E.	Little, Graham-, Sir Ernest
Betterton, Sir Henry B.	Elmley, Viscount	Liewellin, Major J. J.
Bevan, S. J. (Holborn)	Erskine, Lord (Somerset, Waston-s. M.)	Locker-Lampson, Rt. Hon. Godfrey
Birchall, Major Sir John Dearman	Evans, Capt. Ernest (Welsh Univer.)	Locker-Lampion, Com. O. (Handsw'th)
Birkett, W. Norman	Everard, W. Lindsay	Lockwood, Captain J. H.
Blindell, James	Falle, Sir Bertram G.	Long, Major Hon. Eric
Boothby, R. J. G.	Ferguson, Sir John	Lovat-Fraser, J. A.
Bowater, Col. Sir T. Vansittart	Fielden, E. B.	Lymington, Viscount
Bowyer, Captain Sir George E. W.	Fison, F. G. Clavering	McConnell, Sir Joseph
Boyce, Leslie	Foot, Isaac	MacDonald, Rt. Hon. J. R. (Seaham)
Bracken, B.	Ford, Sir P. J.	MacDonald, Malcolm (Bassetlaw)
Braithwaite, Major A. N.	Forestler-Walker, sir L.	Macdonald, Sir M. (Inverness)
Briscoe, Richard George	Fremantle, Lieut.-Colonel Francls E.	Macdonald, Capt. P. D. (I. of W.)
Broadbent, Colonel J.	Galbraith, J. F. W.	Maclean, Sir Donald (Cornwall, N.)
Brown, Col. D. C. (N'th'I'd., Hexham)	Gauit, Lieut.-Col. A. Hamilton	Macpherson, Rt. Hon. James I.
Brown, Ernest (Leith)	George, Major G. Lloyd (Pembroke)	Macquisten, F. A.
Brown, Brig.-Gen. H. C. (Berke,Newb'y)	George, Megan Lloyd (Anglesea)	Maitland, A. (Kent, Faversham)
Buchan, John	Gibson, C. G. (Pudsey & Otley)	Makins, Brigadier-General E.
Buchan-Hepburn, P. G. T.	Gillett, George M.	Margesson, Captain H. D.
Bullock, Captain Malcolm	Gilmour, Lt.-Col. Rt. Hon. sir John	Marjoribanks, Edward
Burgin, Dr. E. L.	Glassey, A. E.	Markham, S. F.
Burton, Colonel H. W.	Glyn, Major R. G. C.	Mason, Colonel Glyn K.
Butler, R. A.	Gower, Sir Robert	Merriman, Sir F. Boyd
Butt, Sir Alfred	Graham, Fergus (Cumberland, N.)	Millar, J. D.
Cadogan, Major Hon. Edward	Granville, E.	Milne, Wardlaw-, J. S.
Caine, Hall-, Derwent	Grattan-Doyle, Sir N.	Mitchell, Sir W. Lane (Streatham)
Campbell, E. T.	Gray, Milner	Moore, Lieut.-Colonel T. C. R. (Ayr)
Carver, Major W. H.	Greaves-Lord, Sir Walter	Morris, Rhys Hopkins
Castle Stewart, Earl of	Greene, W. P. Crawford	Morris-Jones, Dr. J. H. (Denbigh)
Cautley, Sir Henry S.	Grenfell, Edward C. (City of London)	Morrison, W. S. (Glos., Cirencester)
Cayzer, sir C. (Chester, City)	Gretton, Colonel Rt. Hon. John	Muirhead, A. J.
Cayzer, Maj. Sir Herbt. R. (Prtsmth, S.)	Griffith, F. Kingsley (Middlesbro' W.)	Nall-Cain, A. R. N.
Cazalet, Captain Victor A.	Gritten, W. G. Howard	Newman, Sir R. H. S. D. L. (Exeter)
Cecil, Rt. Hon. Lord H. (Ox. Unlv.)	Gunston, Captain D. W.	Newton, Sir D. G. C. (Cambridge)
Chadwick, Capt. Sir Robert Burton	Hacking, Rt. Hon. Douglas H.	Nicholson, O. (Westminster)
Chamberlain, Rt. Hn. Sir J. A. (Birm., W.)	Hall. Lieut.-Col. sir F. (Dulwich)	Nicholson, Col. Rt. Hn. W. G. (Ptrsf'ld)
Chamberlain, Rt. Hon. N. (Edgbaston)	Hamilton, Sir R. (Orkney & Zetland)	O'Connor, T. J.
Chapman, Sir S.	Hammersley, S. S.	Oliver, P. M. (Man., Blackley)
Christie, J. A.	Hanbury, C.	Oman, Sir Charles William C.
Church, Major A. G.	Hannon, Patrick Joseph Henry	Ormsby-Gore, Rt. Hon. William
Clydesdale, Marquess of	Harbord, A.	Owen, Major G. (Carnarvon)
Cockerill, Brig. General Sir George	Harris, Percy A.	Penny, Sir George
Cohen, Major J. Brunei	Hartington, Marquess of	Percy, Lord Eustace (Hastings)
Colfox, Major William Phillp	Harvey, Major S. E. (Devon, Totnes)	Perkins, W. R. D.
Collins, Sir Godfrey (Greenock)	Hasiam, Henry C.	Peto, Sir Basil E. (Devon, Barnstaple)
Colman, N. C. D.	Henderson, Capt. R. R. (Oxf'd, Henley)	Power, Sir John Cecil
Colville, Major D. J.	Heneage, Lieut.-Colonel Arthur P.	Pownall, Sir Assheton
Conway, Sir W. Martin	Hills, Major Rt. Hon. John Waller	Preston, Sir Walter Rueben
Cocper, A. Duff	Hoare, Lt.-Col. Rt. Hon. Sir S. J. G.	Pybus, Percy John
Courthope, Colonel Sir G. L.	Hope, Sir Harry (Forfar)	Ramsay, T. B. Wilson
Cowan, D. M.	Hore-Bellsha, Leslie	Ramsbotham, H.
Cranborne, Viscount	Horne, Rt. Hon. Sir Robert S.	Rawson, Sir Cooper
Crichton-Stuart, Lord C.	Howard-Bury, Colonel C. K.	Reid, David D. (County Down)
Croft. Brigadier-General Sir H.	Hudson, Capt. A. U. M. (Hackney, N.)	Remer, John R.
Crookshank, Capt. H. C.	Hurd, Percy A.	Rentoul, Sir Gervals S.
Croom-Johnson, R. P,	Hurst, Sir Gerald B.	Reynolds, Col. Sir James
Culverwell, C. T. (Bristol, West)	Hutchison, Maj.-Gen. Sir R.	Rhys, Han. C. A. U.
Richardson, Sir P. W. (Sur'y, Ch't'sy)	Skelton, A. N.	Train, J.
Roberts, Sir Samuel (Ecclesall)	Smith, R. W. (Aberd'n & Kinc'dine, C.)	Tryon, Rt. Hon. George Clement.
Rodd, Rt. Hon. Sir James Rennell	Smith-Carington, Neville W.	Turton, Robert Hugh
Rosbotham, D. S. T.	Smithers, Waldron	Vaughan-Morgan, Sir Kenyon
Ross, Ronald D,	Snowden, Rt. Hon. Philip	Wallace, Capt. D. E. (Hornsey)
Rothschild, J. de	Somerset, Thomas	Walters, Rt. Hon. Sir J. Tudor
Ruggles-Brise, Colonel E.	Somerville, A. A. (Windsor)	Ward, Lieut.-Col. Sir A. Lambert
Runciman, Rt. Hon. Walter	Somerville, D. G. (Willesden, East)	Warrender, Sir Victor
Russell, Alexander West (Tynemouth)	Southby, Commander A. R. J.	Waterhouse, Captain Charles
Russell, Richard John (Eddlsbary)	Spender-Clay, Colonel H.	Wayland, Sir William A.
Saimon, Major I.	Stanley, Lord (Fyide)	Wells, Sydney R.
Samuel, A. M. (Surrey, Farnham)	Stanley, Hon. O. (Westmorland)	White, H. G.
Samuel, Rt. Hon. Sir H. (Darwen)	Steel-Maitland, Rt. Hon. Sir Arthur	Williams, Charles (Devon, Torquay)
Samuel, Samuel (W'dsworth, Putney)	Stewart, W. J. (Belfast, South)	Wilson, a. H. A. (Cambridge U.)
Sandeman, Sir N. Stewart	Stuart, Hon. J. (Moray and Nairn)	Windsor-Clive, Lieut.-Colonel George
Sassoon, Rt. Hon. Sir Philip A. G. D.	Sueter, Rear-Admiral M. F.	Withers, Sir John James
Savery, S, S,	Taylor, Vice-Admiral E. A.	Wolmer Rt. Hon. Viscount
Scott, James	Thomas, Rt. Hon. J. H. (Derby)	Womersley, W. J.
Shakespeare, Geoffrey H.	Thomas, Major L. B. (King's Norton)	Wood, Rt. Hon. Sir Kingsley
Shepperson, Sir Ernest Whittome	Thompson, Luke	Wood, Major McKenzle (Banff)
Simms, Major-General J.	Thomson, Sir F.	Young, Rt. Hon. Sir Hilton
Simon, E. D. (Manch'ter, Withington)	Thomson, Mitchell-, Rt. Hon. Sir W.
Simon, Rt. Hon. Sir John	Titchfield. Major the Marquess of	TELLERS FOR THE AYES.—
Sinclair, Rt. Hon. Sir A. (Caithness)	Todd, Capt. A. J.	Commander Sir B. Eyres Monsell
		and Major Sir George Hennessy.
NOES.
Adamson, Rt. Hon. W. (Fife, West)	Gardner, B. W. (West Ham, Upton)	Lee, Frank (Derby, N.E.)
Adamson, W. M. (Staff., Cannock)	Gardner, J. P. (Hammersmith, N.)	Lee, Jennie (Lanark, Northern)
Alexander, Rt. Hon. A. V. (Hllisbro')	Gibbins, Joseph	Leonard, W.
Alpass, J. H.	Gibson, H. M. (Lanes, Mossley)	Lewis, T. (Southampton)
Ammon, Charles George	Gill, T. H.	Logan, David Gilbert
Angell, Sir Norman	Gossling, A. G.	Longbottom, A. W.
Arnott, John	Graham, D. M. (Lanark, Hamilton)	Longden, F.
Aske, Sir Robert	Graham, Rt. Hon. Wm. (Edin., Cent.)	Lunn, William
Attlee, Clement Richard	Greenwood, Rt. Hon. A. (Colne)	Macdonaid, Gordon (Ince)
Ayles, Walter	Grenfell, D. R. (Glamorgan)	McElwee, A.
Baker, John (Wolverhampton, Bllston)	Griffiths, T. (Monmouth, Pontypool)	McEntee, V. L.
Baldwin, Oliver (Dudley)	Groves, Thomas E.	McKinlay, A.
Barr, James	Grundy. Thomas W.	MacLaren, Andrew
Batey, Joseph	Hall, F. (York, W. R., Normanton)	Maclean, Nell (Glasgow, Govan)
Beckett, John (Camberwell, Peckham)	Hall, G. H. (Merthyr Tydvil)	MacNeill-Weir, L.
Bennett, William (Battersea, South)	Hall, J. H. (Whitechapel)	McShane, John James
Banson, G.	Hamilton, Mary Agnes (Blackburn)	Malone, C. L'Estrange (N'thampton)
Bowen, J. W.	Hardle, David (Rutherglen)	Manning, E. L.
Bowerman, Rt. Hon. Charles W.	Hardle, G. D. (Springburn)	March, S.
Broad, Francis Alfred	Hastings, Dr. Somerville	Marcus, M.
Brockway, A. Fenner	Haycock, A. W.	Marley, J.
Bromfield. William	Hayes, John Herry	Marshall, Fred
Bromley, J.	Henderson, Right Hon. A. (Burnley)	Mathers, George
Brooke, W.	Henderson, Arthur, Junr. (Cardiff. A.)	Maxton, James
Brothers, M.	Henderson, Joseph (Ardwick)	Messer, Fred
Brown, C. W. E. (Notts, Mansfield)	Henderson, Thomas (Glasgow)	Mills, J. E.
Brown, Rt. Hon. J. (South Ayrshire)	Henderson, W. W, (Middx., Enfield)	Milner, Major J.
Brown, W. J. (Wolverhampton, West)	Herrlotts, J.	Montague, Frederick
Buchanan, G.	Hicks, Ernest George	Morgan, Dr. H. B.
Bargees, F. G.	Hirst, G. H. (York W. R. Wentworth)	Morley, Ralph
Buxton, C. R. (Yorks, W. R. Elland)	Hirst, W. (Bradford, South)	Morrison, Rt. Hon. H. (Hackney, S.)
Cameron, A. G.	Hoffman, P. C.	Morrison, Robert C. (Tottenham, N.)
Cape, Thomas	Hollins, A.	Mort, D. L.
Carter, W. (St. Pancras, S.W.)	Hopkin, Daniel	Mosley, Lady C. (Stoke-on-Trent)
Charleton, H. C.	Horrabin, J. F.	Mosley, Sir Oswald (Smetbwick)
Chater, Daniel	Hudson, James H. (Huddersfield)	Muff, G.
Clarke, J. S.	Isaacs, George	Muggeridge, H. T.
Cluse. W. S.	Jenkins, Sir William	Murnin. Hugh
Clynes, Rt. Hon. John R.	John, William (Rhondda, West)	Naylor, T. E.
Cocks, Frederick Seymour	Johnston, Rt. Hon. Thomas	Noel baker, P. J.
Compton, Joseph	Jones, J. J. (West Ham, Slivertown)	Noel-Buxton, Baroness (Norfolk, N.)
Cove, William G.	Jones, Morgan (Caerphilly)	Oldfield, J. R.
Cripps, Sir Stafford	Jowett, Rt. Hon. F. W.	Oliver, George Harold (Ilkeston)
Daggar, George	Kelly, W. T.	Owen, H. F. (Hereford)
Dallas, George	Kennedy, Rt. Hon. Thomas	Palin, John Henry
Dalton, Hugh	Kenworthy, Lt.-Com. Hon. Joseph M.	Paling, Wilfrid
Davies, D. L, (Pontypridd)	Kinley, J.	Palmer, E. T.
Davies, Rhys John (Westhcughton)	Kirkwood, D.	Parkinson, John Allen (Wigan)
Day, Harry	Lansbury, Rt. Hon. George	Perry, S. F.
Dukes, C.	Lathan, G. (Sheffield, Park)	Pethick-Lawrence, F. W.
Dunnico, H.	Law, Albert (Bolton)	Phillips, Dr. Marion
Ede, James Chuter	Law, A. (Rossendale)	Picton-Turbervill, Edith
Edmunds, J. E.	Lawrence, Susan	Pole, Major D. G.
Edwards, E. (Morpeth)	Lawrie, Hugh Hartley (Stalybridge)	Potts, John S.
Egan, W. H.	Lawson, John James	Price, M. P.
Forgan, Dr. Robert	Lawther, W. (Barnard Castle)	Quibell, D. J. K.
Freeman, Peter	Leach, W.	Raynes, W. R.

Richards, R.	Smith, Frank (Nuneaton)	Wallace, H. W.
Richardson, R. (Houohton-le-Spring)	Smith, Lees-, Rt. Hon. H. B. (Keighley)	Watkins, F. C.
Riley, Ben (Dewsbury)	Smith, Tom (Pontefract)	Watson, W. M. (Dunfermline)
Riley, F. F. (Stockton-on-Tees)	Snowden, Thomas (Accrington)	Watts-Morgan, Lt.-Col. D. (Rhondda)
Ritson, J.	Sorensen, R.	Wellock, Wilfred
Romerll, H. G.	Stamford, Thomas W.	Welsh, James (Paisley)
Rowson, Guy	Stephen, Campbell	Welsh, James C. (Coatbridge)
Salter, Dr. Alfred	Strachey, E. J. St. Loe	West, F. R.
Samuel, H. Walter (Swansea, West)	Strauss, G. R.	Westwood, Joseph
Sanders, W. S.	Sullivan, J.	Whiteley, Wilfrid (Birm., Ladywood)
Sawyer, G. F.	Sutton, J. E.	Whiteley, William (Blaydon)
Scrymgeour, E.	Taylor, R. A. (Lincoln)	Williams, David (Swansea, East)
Scurr, John	Taylor, W. B. (Norfolk, S.W.)	Williams, E. J. (Ogmore)
Sexton, Sir James	Thorne, W. (West Ham, Plalstow)	Williams, Dr. J. H. (Lianelly)
Shaw, Rt. Hon. Thomas (Preston)	Thurtle, Ernest	Williams, T. (York, Don Valley)
Shepherd, Arthur Lewis	Tillett, Ben	Wilson, C. H. (Sheffield, Attercliffe)
Sherwood, G. H.	Tinker, John Joseph	Wilson, J. (Oldham)
Shield, George William	Tout, W. J.	Wilson, R. J. (Jarrow)
Shiels, Dr. Drummond	Townend, A. E.	Wise, E. F.
Shillaker, J. F.	Trevelyan, Rt. Hon. Sir Charles	Young, R. S. (Islington, North)
Shinwell, E.	Turner, Sir Ben	Young, Sir R. (Lancaster, Newton)
Short, Alfred (Wednesbury)	Vaughan, David
Simmons, C. J.	Viant, S. P.	TELLERS FOR THE NOES.
Sinkinson, George	Walkden, A. G.	Mr. Charles Edwards and Mr.
Sitch, Charles H.	Walker, J.	B. Smith.

Bill read the Third time, and passed.