HC Deb 03 March 1932 vol 262 cc1295-356

I beg to move, to leave out "£150,492,000," and to insert instead thereof "£150,491,900."

To-day we are to discuss unemployment, not a very new subject in this House. I do not remember a week during the last 10 years when we have not discussed unemployment, because it has been so greatly in our midst, and we have wanted to know from various Governments what they may be doing in regard to it. During the period of the Labour Government the Tory party worried the Government regularly upon the matter, but I do not remember that a practical suggestion was ever made by them to deal with it. Today we are anxious to know from the Government whether they have anything in their minds to provide or to encourage employment for those who are in need of it. We want to know what they are doing now. The figures of unemployment are higher than ever. They are increasing and in certain industries they are appalling. In my own industry, the mining industry, the number of unemployed has increased by 151,000 during the last two years. If we look at an answer given by the President of the Board of Trade yesterday to my hon. Friend the Member for Chester-le-Street (Mr. Lawson), as to the reduction of German imports of British coal, I think we may anticipate that the number of miners unemployed in this country will increase during the present year. There are over 400,000 building trade operatives out of work. I noticed in the Ministry of Labour Gazette recently published that the figure given of the total of unemployed was 2,573,552 on 21st December, and that it increased by 220,000 to 2,796,676 on 25th January of this year.

The figures were never so high as they are to-day. In addition, something like 321,000 people have been deprived of any payment by the public assistance committees. Unemployment benefit has been cut down and in thousands of homes to-day people are beginning to feel the pinch of higher prices of the necessities of life, as a result of legislation recently passed.by this Government. Last night we gave a Second Reading to a Bill which h will tax bread and will make the condition of these people infinitely worse. But bad as is the condition of the unemployed, I feel that the provision of work is the most important thing that we can consider. I am concerned more about providing the opportunity of employment, with good wages and under good conditions, than I am about relief of any kind, and so are the unemployed. I ask the Government what they are doing to provide work for those who are in need of it? There are Housing Acts and we know of the insufficiency of good houses and of the number of building operatives who are out of work. Every one of us, particularly those of us who live in our constituencies and are intimate with the people there, know the difficulty which exists to-day of securing proper housing accommodation. There is a Slum Clearance Act. There is the Road Fund—and we know what is being done in connection with the Road Fund. I had a letter the other day from the Minister of Transport in which he said: Up to the present it has been decided to postpone or curtail just over 1,000 schemes. The estimated cost of the deferred work is £30,000,000. The schemes are situated in all parts of the country. The Minister of Transport must be having' an easy time. All the work for which preparation has been made seems to have been stopped or to have come to an end; and in view of a letter like that which I have just quoted, the proposal of one Chancellor of the Exchequer after another, for the abolition of the Ministry would seem to be perfectly justified. Then there is the Development (Loan Guarantees) Act, the Colonial Development Act, the Export Credits Scheme and the work of the Unemployment Grants Committee. I propose to deal particularly with the last two and I want to know, in that connection, what the Government are doing and what they propose to do in the provision of work. Local authorities are anxious to carry out schemes and they ought to be given the opportunity of doing so. The Unemployment Grants Committee since its inception has approved of schemes to cost nearly £200,000,000 and have provided work for hundreds of thousands of people. Most of this has been done during the period of the two Labour Governments. I agree that the most generous terms were given to the local authorities for the carrying out of the work. There are water schemes and there are hundreds of localities without supplies of pure water. There are sewerage schemes, road schemes, bridge schemes and drainage schemes. We passed a Measure during the last few years dealing with land drainage. We know the extent to which drainage is needed in this country at present and that drainage schemes would provide work for scores of thousands of men. Public buildings and many other schemes have also been approved by the Unemployment Grants Committee.

The machinery of the Committee has been fairly good. They have demanded to know every detail of every scheme submitted to them—its cost, its necessity and the amount of work which it will provide. Personally, I do not believe in granting public money for any purpose whatever, except under conditions, and I think that the House should lay down conditions when granting public money for any schemes or on any occasion. The Unemployment Grants Committee have already helped local authorities to improve their areas and to-day there are hundreds of schemes, in the offices of the Committee, and in the pigeon-holes of town halls throughout the country, ready to be put into operation. Architects, surveyors, engineers and accountants have been at work. Is all this preparation to be wasted? If so, it is a form of extravagance of which I do not approve. I think there should be some continuity in these matters which would enable local authorities to get the best out of the skill which they have employed. The work can easily be put in hand because labour is waiting.

I ask the Government, therefore, whether they are going to set this Committee to work or whether they are going to allow the number of unemployed to go on increasing, and going to allow the men and women who are out of work to continue in idleness, on unemployment benefit, Poor Law relief or the charity of their friends. Are we to understand that the policy of the Government is that described by the Minister of Labour on 17th February. When my hon. Friend the Member for Chester-le-Street (Mr. Lawson) asked how many schemes had been started by this Government and how many persons were employed on them he did not get an answer. The Minister of Labour gave a sort of history of the Unemployment Grants Committee but did not say what was being done since this Government came into office. He then used these words: Local authorities have been asked, cajoled, bribed and almost forced into these schemes, which are reflected in increased rates. What has been the result? The result is that, in those areas most distressed and which you most want to help, you have a burden of rates which makes it almost impossible for industry to revive in those areas. Further, the Minister said: What we are asked to do now is to continue this vicious circle of increased expenditure, increased rates, and increased national expenditure. If we do that, that vicious circle will go on revolving and revolving to the greatest possible detriment of employment. He added: This process of spending the money of the ratepayer or the taxpayer for the relief of unemployment not only fulfils no useful purpose, but will add the greatest possible hindrance to trade recovery in every part of the country."—[OFFICIAL REPORT, 17th February, 1932; cols. 1717–1718, Vol. 261.] 4.0 p.m.

I differ from the right hon. Gentleman in those conclusions. If that is the policy of the Government then the Government are hopeless in the matter of providing employment. Yet we are told that it is a Government of all the talents. It is a Government with an unprecedented majority which can do anything it wishes. Only last night we saw the Wheat Bill receive its Second Reading in this House by a majority of 373. I know that these matters with which I am dealing will not cure unemployment, and I am not suggesting that they will do so. But the Liberal party, in their "How to Cure Unemployment," in 1929 said they would, and we have in the Government some of those who said so. Why do they not insist on these things being done to-day? It would save millions of pounds of the taxpayers' money, which is being given now for idleness, and would provide work for those who desire and who need it? We have a Prime Minister who still says he is a Socialist, the Lord Privy Seal and the Dominions Secretary who, upon innumerable occasions, have put forward the Labour policy for dealing with unemployment. They believe, as I do, in work or maintenance. Now that they have this great majority behind them, why do they not carry out the programme, and give men an opportunity to work? It is for the Government to see that those things are done, and I ask, what are the Government doing to-day? We have a right to ask, and we have a right to an answer. Things are getting worse in the country, and what consideration are the Government giving to the question We should like to hear to-day whether or not they can produce anything of a practical nature which is going to encourage and help in the way of employment. I put this to them in a very fair and reasonable manner. I hope that the Minister will say that local authorities are to be encouraged to go ahead with those schemes of work, with assistance from the Unemployment Grants Committee, which are as necessary to-day as they have been at any period since their inception.

The only other matter that I wish to raise, because I am not a believer in long speeches, and I have said so in the present year, is the Export Credits Scheme. This scheme, which was introduced in 1921, empowers the Board of Trade to give guarantees in connection with the export of British goods. It is also for the purpose of providing employment and opening up new avenues of trade abroad. There is an Export Credits Department to-day, and a Statutory Advisory Committee which makes recommendations, but policy is in the hands of the Government. I do not know that at any period the Statutory Committee ever had a free hand. It was to be temporary, but Government after Government have extended the date of its operation. From 1921 to 1926 the total amount of the guarantees was small comparatively, but in July, 1925, the House set up a Credit Insurance Committee to review the question, and, as a result of its report in 1926, a new scheme was devised which was directed towards exploring the possibility of credit insurance as a permanent feature in export trade. This is the scheme which is now in operation. But, again, it was the Labour Government in 1929 which gave it real life. They extended the scheme to Russia, as they had done in 1924, but the Tory party then destroyed it. Russia is a country with a vast population needing many things which this country could supply—a country which is laying down for itself a good economic foundation, and is building in a way which is going to be the envy of the world. Whoever has been a defaulter it has not been Russia since the inception of the Export Credits Scheme. It is the only country which, in 1931, increased its purchases of British goods.

I have the figures here of exports of British produce and manufactures to various countries. In 1929, the total export to the Soviet Republics was £3,743,000; in 1930, £6,771,000, and in 1931, £7,121,000—an increase in each year. To Australia, the exports were, in 1929, £54,325,000; in 1930, £31,677,000; and in 1931, £14,553,000. To the United States, the total exports were, in 1929, £45,558,000; in 1930, £28,704,000; and in 1931, £17,101,000. The value of the orders placed by Russian organisations in 1930 totalled £15,400,000, of which £4,000,000 was for machinery and equipment, and in 1931 they took £15,000,000, of which £9,000,000 was for machinery and equipment. Russia is now the largest purchaser of British machine tools and electrical equipment from this country. In 1931, our exports of machine tools totalled £3,656,000, and more than £3,000,000 of that total went to Russia.

Russia asks—and I agree—that the machinery she gets from abroad shall be provided on credit terms, if they can be given, of from one to three years, according to the type of the article, and in July, 1931, the Labour Government extended the export credit terms to Russia to enable credits up to 30 months for heavy engineering goods, as against the previous period of 12 months, and, as we know, that means larger orders. For the first two quarters in 1931, the orders placed by Russia in this country amounted to £5,166,000, and in the third quarter, £6,560,000; but I hear that there has been a narrowing of the terms under the Export Credits Scheme, which, no doubt, will have its effect, so that we shall not get the Russian orders which we have been getting during the last few months. They will go to foreign countries, and this country needs them very much. From 1st August, 1929, until 30th January, 1932, guarantees have been given by the Export Credits Department in respect of £14,000,000 of British exports to Russia, the Government guaranteeing something like £10,000,000, and of these bills, over £5,200,000 has already run off, and been duly paid by Russia. The premium is from 8 per cent.to 14 per cent., and the Government do not do badly out of this finance. They have actually made a profit of more than £1,000,000.

If I may mention one organisation in Ibis country that has traded with Russia, the British co-operative movement, it has placed trade with Russia to a total of more than £50,000,000 during the last 10 years, and I have not the least doubt that if there were co-operative Members in this House, which I wish there were, as there were in the last Parliament, the House would hear of the satisfactory result of the trading of the co-operative movement.


Will the hon. Gentleman say how much was exports from the co-operative societies to Russia, and how much was imports from Russia to this country?


I could not give the figures from that point of view, I am sorry to say. The Labour Government reduced the insurance premium, and extended the period of insurance. I said that £9,000,000 was for machinery, and that provided work for no fewer than 36,000 people. I say that there has never been sufficient elasticity in this scheme. Many orders are lost because of this narrowness. We ought not to allow, as we are doing, millions of pounds' worth of trade to go elsewhere, when, with a, little foresight and a lengthened period of insurance, we should get that trade for this country, which would provide work for many, many thousands, in the engineering trade particularly, to-day. From July, 1926, to 30th September last, the total contracts entered into and supported by the Export Credits Scheme amounted to £26,066,473. The guarantees given were a total of £18,935,230.

It is a safe scheme, and it ought to be encouraged and extended. The defaulters since 1921 are few, but among them is certainly, as I said before, not Russia. What we want to know from the Minister is, whether the scheme is working to-day, and under what conditions? Does it apply to contracts for all countries? In the past, many Members of this Government, and, in particular, the President of the Board of Trade, have been supporters of this scheme. I could have used in support of this scheme much stronger words than anything I could say, or am likely to say, if I took them from the speeches of the President of the Board of Trade in previous discussions in this House. We need to-day all the trade we can get, and we would welcome it, so that it would provide work. Are the Government using the Export Credits Scheme, or have they in any way crippled its operations since the General Election? I hope not, because the Government ought not to do anything to hamper trade.

I want to know whether the Government are following the policy of drift which is mentioned in the quotation I gave from the speech of the Minister of Labour on 17th February? Do the Government understand the changed economic conditions since the War? Do they realise that in many industrial areas in this country, particularly in the North of England, where there is abundance of fuel power, transport and labour, these areas are becoming derelict I believe that a. determined Government would stop the rot, but when they give financial assistance they should insist upon reorganisation and efficiency. Something must be done, or we shall go from bad, to worse. I ask, what is in the mind of the Government to enable the millions who are now out of work to get going t Will the Minister tell the House and the country that they can do nothing, that they have no policy whatever to meet the critical and calamitous situation of industry, and to set to work men and women whose greatest anxiety is that, they should have an opportunity to work and receive good wages as a result I hope that the Minister is going to be more optimistic to-day than when he made his very pessimistic speech on 17th January. There is a great opportunity and a great need. It is because we believe that the opportunity is in the hands of the Government and that if they cared to use it they could provide work for the people under these schemes, and under many other schemes that may be discussed during the Debate to-day, that I move the reduction of the Vote.


The hon. Member who has just spoken always conciliates opposition, because he is always serious and always sensible. In some respects on this side of the House we agree with him, certainly on one point. He said that instead of having to depend on benefit he would much sooner the men and women of this country could be given work. There is not one Member on this side of the House who does not say "Amen" to that statement. The only thing that surprises us is that on the passage into law of an Act which put duties upon imported commodities the hon. Member should have been found in opposition to that Measure, under which an opportunity will be given to the men and women of this country to obtain employment.


If the figures of unemployment continue to increase as they have done since the beginning of this year, as a result of the policy of the Government, there will be hardly anyone at work by the end of the year.


Naturally cautious as anybody is who comes from the North of the Tweed, I should be sorry to say "Amen" to such a prophecy as that which the hon. Member has just enunciated. Perhaps he will not think me unduly hostile or censorious if I say that, so far as constructive suggestions are concerned, the speech that he has made is typical of many speeches that we have heard on this subject from the Front Bench opposite. I listened most attentively but I could not find one new idea for dealing with the very urgent and very difficult questions that lie before us. I am sure that there are many hon. Members on this side of the House who, after listening to the speech, just as was the case after listening to the speeches on the Vote of Censure a few days ago, have come to the conclusion that, apparently, the party opposite has not learned one syllable from their misfortunes of last autumn, and that if they were returned to power again they would proceed upon the same measures and the same policy which brought them to disaster and brought the country to the brink of disaster.


You do not believe that.


I believe every word that I have said, and, what is more, although I do not belong to the same party as hon. Members opposite, I am sorry that there should be any party in the State which remains so stiff-necked in their sins as the party opposite. The hon. Member called attention to the high figures of unemployment, and in suggesting means of reducing that figure he laid stress on the question of export credits. I will not say that he was not frank or candid, but he was not complete in his remarks in regard to one point, and that is the trade with Russia. He mentioned the growth in our export trade with Russia as a good reason for extending export credits to that country, but he made no mention, or very little mention, of the volume of our import trade from Russia. There should be some little reciprocity in these matters. Any person who takes a business view of the situation must think it somewhat strange that there should be such an urgent need for the extension of credits to a country which is sending to us three times as much in its exports as it is receiving in imports from this country.

The hon. Member referred to the cooperative societies and praised them for the volume of business they have done with Russia, as if they were an example to the rest of us in regard to facilitating exports to Russia, but I should be very much surprised—I have not the figures and the hon. Member has not—if he does not find, on analysis, that the immense preponderance of the trade which the cooperative societies have done with Russia consists of imports from Russia, and that the volume of their exports to Russia have been comparatively small. I may be subject to correction as regards the actual figures of trade with Russia. I should like to bring the Debate on the question of export credits back to real proportions in connection with the problem of unemployment. I do not wish to disparage the value of the system of export credits. In past years, before the slump, from about 1925 to 1929, the development of export credits was all important. In those times there was a period of expanding international trade. In each year from 1926 to 1929 each successive year broke the record of its predecessor. There was an enormous growth in the volume of international trade, and this country was the only exception. We were the only country throughout the whole of that period whose proportion of the whole volume of trade was decreasing. Therefore, if we had any advantage which we could use, such as the use of our capital with which to give credits, it was perfectly obvious that in such circumstances we should use it as far as that could possibly be done.

But at the present time if anyone looks at the conditions they must realise that we are now dealing with a depressed and shrunken world. We have a world depression in trade which has reached a quite definite stage. It has reached the second stage, which is as marked as it is dangerous. Nearly every country in the world is trying, deliberately and consciously, to contract its imports. [HON. MEMBERS: "Hear, hear !"] I agree. It is a lamentable fact and if it was not so lamentable it would be absurd, because the nations of the world are like cuckoos, each trying to lay their eggs in the other's nest. That being so, it is a, good thing to try and retain all the trade that is possible. As far as export credits schemes are concerned, we might do a little here and there, and this is not the time to neglect even small things. We should, however, be taking a disproportionate view of the situation if we thought that at the present time the use of export credits can make a very great impression on the total volume of unemployment in this country.

The hon. Member dealt with the question of road-making and other schemes for providing employment. I do not think that he was very successful in his references to export credits, and I am sure that the case is much weaker which he put forward with regard to work schemes, including road making. As I listened to his speech I seemed to hear the echoes of bygone years of speeches made time and again from the benches opposite urging that these schemes should be multiplied and that more and more money should be spent upon them. It is put forward as a recipe to cure all sorts of unemployment. The Labour party, politically, are like a, political Mr. Micawber. They are always thinking that something is going to turn up, that the future is going to be more prosperous than the present. As a result, they are always when they are in office ready to mortgage the future for a very inadequate return in the present, or when they are out of office they are asking the Government in power to do so.

I would ask the House to examine the work schemes from that point of view. Superficially, road making is an attractive proposition. When you see a road scheme in operation, you see a road being gradually built across country and over the stretch of it you see people employed here and there, and it seems clear that in providing such employment you are giving benefit. It is only when one really analyses the question that the disadvantages appear. I have here a copy of the last issue of the Ministry of Labour Gazette. A mere glance at it shows how extraordinarily inadequate and unsuitable is this palliative of work schemes. It does nothing for all the women who are out of work, who number between 400,000 and 500,000, and when one examines the actual trades that need help most, there may be a few for which road-making is suitable, while there are others for which it is entirely unsuitable. For miners it is suitable.

Let me take the other trades in which there is perhaps the most unemployment. Take general engineering. A limited number of the men in that industry are suited for work on the roads. The cotton trade and the distributive trades furnish the next greatest number of unemployed. The people engaged in those trades are entirely unsuitable for work on the roads. In many cases if they engaged in it they would be entirely unable to perform it, and would break down under the unaccustomed strain. If they did perform it they would go back to their own trades less competent to do their own work. That is the essential flaw in road-making schemes. These so-called schemes for helping unemployment are never worth the money that is spent upon them. They do more harm than good. When you get people who are engaged on schemes of work for which they are not suitable, obviously, they cannot give their money's worth at it. You also anticipate the future by four or five years. As a result, the schemes are not worth 50 per cent. of the cost at the time. It is due to that fact that the fuure is burdened, and we are to-day suffering for the follies of that kind which have been committed in the past.

4.30 p.m.

Take the question of taxation. Last autumn the country and the House were startled at the new taxation which was imposed and the drastic economies that were enforced. I wonder how many people realise the degree to which these things are made necessary and inevitable by the mistaken idea in the past that you can cure unemployment by these schemes. Let me give an instance. I take the expenditure on schemes sanctioned by the St. Davids Committee in the current year. The amount of taxation this year which is necessary in order to pay the interest on those schemes would be enough to cover twice over the whole of the savings under the Anomalies Act, which the Clydeside Members dislike so much. Take the expenditure on road schemes. I do not mean road schemes undertaken in the ordinary course of business, because they are needed, but road schemes accelerated in order to provide employment. This House last year imposed with great reluctance cuts on persons in State employ. I wonder how many of us realise —I did not until I got the figures out—that the amount of money we have to pay in taxation this year for accelerating road schemes owing to unemployment would cover the whole of the cuts both on education and teachers and on national health. That is the price which has to be paid in future years for something the whole value of which, such as it ever was, has long vanished and gone.

That is why I would ask the House not to put too much trust in these appeals for fresh road development. It is not that one does not sympathise with the unemployed or wish to give them work; it is that the House has to decide what in the long run is the best way of dealing with the question. We have to look at the side of taxation and of economies, as well as at what is so easy to understand when one sees a stretch of road being built and people being given a temporary job on it. I do not want to show a bad example by taking up the-time of the House, but, if I am asked, as I might well be, to make a constructive suggestion, I will do my best. Cannot the House and individual Members in it do a great deal more to keep the wheels of ordinary industry moving, in, order that workers may be employed at their own jobs making things which people really want? I want to suggest also that those who employ them should have a little confidence in carrying on and extending their business.

If I were asked how this can be done, I would say that we can in these hard times and under present conditions help by correcting some of the absurd ideas that are current about economy. I am not referring to Government economy, for I am convinced that the need for drastic Government economy is still urgent for the reasons that we all know, namely, that if we are not economical we shall have to impose other taxes and cuts to meet the excess, or else credit and currency will have to go. I would ask hon. Members to consider whether there is not a widespread but mistaken idea that, if strict economy and retrenchment is essential in public expenditure, private individuals must necessarily economise in the same way. We constantly find many people suspending their perfectly normal activities. We find, for example, city corporations suspending their annual dinners, and companies putting off some renewal or some improvement. We find some individuals postponing repairs to houses or the painting of woodwork or personal expenditure. The notion has become prevalent that, just because it is right for the Government to economise, every individual should do the same. Some economies, of course, are enforced; the tax gatherer sees to that. People have not the money to spend which they had before, for they are burdened with taxation. They are paying it quite manfully; they are like Issachar's donkey "crouching down between two burdens" —the burden of taxation on the one hand, and the burden of cuts on the other. If I were a person who believed that this country had its origin in the lost Ten Tribes, I think I could say from what particular tribe it descended. The tax gatherer is responsible, no doubt, for many economies, but, subject to that, we are making an extraordinary mistake if we think that we ought to economise as much as we can although we have money to spend. If the idea, is carried further, it will simply mean that the tide of trade, which is sluggish now, will stop altogether.

My own belief is that the Empire Marketing Board make a great mistake in not covering practically one-half of its whole field of missionary enterprise. In its campaign to "Buy British," it has not emphasised "buying" enough. We want to buy British, and not merely refrain from buying articles of foreign manufacture. We want wise spending on the part of the people, first and foremost by companies or individuals on new equipment or on any other reproductive expenditure; and, second, on articles of permanent value, whether it be in connection with the repairing of property or it be the purchase of furniture. It is better that the ordinary individual should still go on purchasing some of the comforts of life to which he is accustomed, so far as the tax gatherer lets him, than not to spend at all. If the Government could ask the Empire Marketing Board to add that side to its campaign, they would be doing much more to help British industry in a difficult time and to keep it going until the recovery comes than they would by responding to the appeals for expenditure on public works which we have heard from the hon. Member and his associates on the other side.


The right hon. Gentleman who has just spoken is more optimistic in dealing with this question than hon. Members on these benches, because we cannot feel quite so sanguine as to the results of the legislation which the House has passed and is passing. Those of us who sit on these benches and represent great industrial constituencies are, in a time like this, more concerned even than hon. Members sitting on other benches with the effect on the unemployed in industrial centres of legislation during the last six months. I represent a constituency where the number of unemployed is something like one in five of the adult population, and where over 17,000 cases have already been dealt with by the public assistance committee.

There is no doubt that the introduction of the means test, coupled with the cut in the rate of unemployment benefit, has raised certain acute questions con- corning the state of the unemployed. A great deal of the resentment that exists among those who have come under the means test is due to the fact that, in spite of the efforts that have been made by the Ministry of Labour, there is still no clear distinction between those who have come on to transitional payments and those who come under the Poor Law. I know that the Ministry have advised the public assistance committees or the local bodies concerned that applicants for transitional payment are not to be interviewed in Poor Law institutions, but that is not enough. The trouble with transitional payments is that they are anchored to the Poor Law scale.

We have three classes of unemployed—those who are drawing unemployment benefit in the ordinary way, those who have come on to transitional payments and to whom the means test applies, and those who come under the Poor Law, I suggest to the Minister that it might be possible in certain respects to draw a clearer distinction between the second, class and the third, because the paying of transitional payments is chained to the local Poor Law scale. This means that there must be great discrepancies between one area and another, for the Poor Law scale differs from place to place. You may get a situation in which in one district a certain personal allowance is made under the means test for a member of a family who is in work and drawing a wage, and the balance of whose wages goes into the general pool for the maintenance of his family; and in which, only a few miles away, you have a different Poor Law scale, under which the personal allowance which is made for a member of the family in work is quite different. We have such a situation on the two sides of the Tay. The scale in Fife is different from the scale in Dundee. This means that a family on one side of the river is drawing a certain amount of transitional benefit under the means test, and that a family in precisely similar circumstances on the other side of the river is drawing a different amount. Those who are receiving the less generous treatment have a real gievance.

There is another fact which has been mentioned in previous Debates and which has been mentioned to me by many of those engaged in the work of public assistance in my constituency. It is the effect of the application of the means test in breaking up the family. A young man who is anxious to get married may have been putting by a little money from time to time. Then the means test intervenes, and he has to give the money which he was saving towards the support of his father and mother, and a number of cases have been brought to my notice in which young men in such circumstances are leaving home and going to live away from their families.

When the means test was first introduced the Government budgeted for a saving in the neighbourhood of £10,000,000. I would like the Minister to tell us whether he expects that saving to be realised, or whether it is not probable that there will be a very much greater saving as a result of the means test. In Dundee, where we have a perfectly humane public assistance committee, anxious to give sympathetic consideration wherever it is possible, the experience has been that on the 17,000 cases with which they have had to deal up to now they have already saved something over £8,000 a week, and they estimate that their annual saving as a result of this test is likely to be well over £300,000. If that were typical, if those figures applied to, say, a million cases all over the country, it would mean that the saving effected by this means test, that is to say, the money taken from this class to meet the national emergency, would be not merely £10,000,000, but very much nearer £20,000,000. I can only imagine that our experience in Dundee is not typical, but I would like the Minister to deal with that point.

Not merely has the case of those who are on transitional payments to be considered; those of us who are concerned with conditions in the industrial centres cannot help feeling very great concern at the cumulative effect of the various measures which have been taken as affecting the unemployed. Not only have we the means test and the Anomalies Act and the reduction in the rate of unemployment benefit, which affect the state of the unemployed at the present time, but there is also the question of what will be the state of the unemployed after they have gone through another six months under conditions that may very possibly become worse. Although we may differ over the extent to which the Wheat Quota Bill and the Import Duties Bill may cause a rise in the cost of living, I think most hon. Members will agree that they must cause some rise in the cost of living, even though to most of us it may appear to be a, very slight one. I will read a resolution passed a few weeks ago by the Dundee Public Assistance Committee after they had dealt with some 10,000 cases. It indicates the feelings, not of a Socialist body, but of a body of ordinary citizens who for several weeks have spent many 'hours in dealing with this problem. The resolution reads: This public assistance committee, while recognising that a means test is necessary to prevent abuses of unemployment benefit, are of opinion that the basic scale of transitional benefit has brought the recipients below the subsistence level. This public assistance committee therefore respectfully request His Majesty's Government to make such modifications as may be deemed meet and necessary. I would also like to quote an opinion given to me by the convener of the Public Assistance Committee in Dundee. He is not a Socialist. During the election he was a strong supporter of the National Government. He has had to spend many hours, in some cases 30 to 40 hours a week, in dealing with the cases which have come before the public assistance committee, and this is the opinion which he sends to me: My considered judgment as convener of public assistance in a great industrial constituency is as follows: The reduction of the dole from 26s. for two to 23s. 3d. is a tragedy. From a hare subsistence level thousands of our countrymen are now at their wits' end to keep the house going, and are definitely in the poverty stream. With 26s. the house could be kept going barely. There is not a halfpenny over for clothing, hoots, replenishments, etc., with 23s. 3d. The means test has been effective in cutting out masses who have not been requiring extra money and who were battening on the State, and the saving over the country must be enormous; but in the case of decent workers, idle through no fault of their own, it is a scandal that recipients of Poor Law relief are sometimes in a better position than they. That is the opinion of one who has had to spend several months dealing with this question. This is a matter of the very greatest concern in industrial areas, in view of the cumulative effect of the cut in the rate of benefit, the means test, and the probable rise in prices. Though it is not in order to raise the question of policy in this De- bate I think it will be agreed in all parts of the House, and certainly on these benches from which I speak, that equality of sacrifice should be followed by equality of relief.


In rising to address the House for the first time, I must ask for that indulgence which it so kindly grants to those in my position. It is because those whom I represent have been so very hard hit by unemployment for the past few years that I feel impelled to take part in a discussion of some of the methods which have been employed to alleviate the distress of unemployment. I think relief schemes have received a very fair trial in this country. My right hon. Friend the Minister of Labour intimated the other day that no less a sum than £700,000,000 had been expended on relief schemes since 1924. The late Labour Government adopted this policy as their main contribution towards a solution of the unemployment problem, and although they were not able to satisfy entirely the voracious appetite of the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) or, indeed, of all their own supporters, yet they were successful in spending a very large sum of money; and I cannot help feeling that a study of the meagre results of that expenditure must lead one to wonder whether a continuance of such an extensive policy of relief works is really in the best interests of the unemployed.

It would seem that one of the main difficulties with which one is faced in dealing with this problem is the impossibility of gauging accurately the effect of relief schemes upon employment. One can talk vaguely about man-months and man-years, and say that a certain number of men have received employment for a certain limited time, but, whatever figure one arrives at, there can be no doubt that the numbers of those who have obtained employment on relief schemes are a very small proportion of the total of the unemployed. The main question in the consideration of a scheme must be whether it, is increasing production and is leading to the sale of more British goods in foreign markets. I suggest that the majority of schemes in the past two years would not emerge favourably from such a test. No doubt some schemes have been useful from the point of view of productive industry, and have provided employment, but they are a small minority of the enormous number upon which we have embarked.

Relief schemes must be of a temporary nature. I believe that the happiness of the working class home depends far more upon the consistency and the permanence of the weekly income than upon its size. The unemployed man who obtains temporary work on a relief scheme may receive increased remuneration, but during the whole time he is receiving that increased remuneration, and from the very fact of his doing so, his chances of obtaining permanent work are being reduced. There is a belief prevalent in the minds of some hon. Members that the savings of the men and women in this country, the capital resources of the nation, are capable of providing a greater volume of employment if they are passed through the magic portals of a Government Department or through the offices of some local authority. I believe that idea to be a fallacy.

The capital of the nation can provide far more employment, and more permanent employment, if it is left in the hands of those through whose industry it has been accumulated. f know several instances in the last few years of men endeavouring to collect capital to start industrial enterprises who have been unable to do so because that capital was being employed on road schemes from Land's End to John o'Groats. I believe that future generations will look at many of our relief schemes in the same light as we regard the Pyramids or Stonehenge, as works of archaeological interest, no doubt, works which have provided considerable employment in their day, but which cannot be held to have increased materially the wealth of the world or the wealth of this nation. Now that there is a possibility of a trade revival and, as I believe, the probability of such a revival owing to tariffs, our capital resources must be maintained, and I am glad to think the Government will frame their future policy in the light of their experiences in the past and will not follow in the regrettable paths trodden by the late Labour Government.

5.0 p.m.


It is my privilege first of all to offer the congratulations which I am sure the House will desire to offer to the hon. Member for Chesterfield (Mr. Conant) upon his first speech here. Although I cannot pretend that I agree with all the propositions he has put forward, I certainly welcome his joining in the Debate, and I am sure the House will look forward to the next occasion when he can assist us in our deliberations. I want to say a few words on one particular point, and that is the question of export credits to Russia. The right hon. Gentleman the Member for Tamworth (Sir A. Steel-Maitland) has put forward a rather extraordinary proposition. The right hon. Gentleman said that when trade was fairly busy during the years 1925 and 1929, export credits were very useful, and were used rather extensively, and that during the last two years export credits were of less importance. I should have thought that exactly the opposite was the case.


I am sure the hon. and learned Gentleman has no wish to misrepresent me. What I said was that at the present time I have never under-estimated the value of export credits. I agree that export credits in the past have been very useful, but I said that if anyone thought they would be of much assistance in making a large impression on the figures of unemployment, he would be mistaken.


I understood the right hon. Gentleman to mean that export credits were less useful now than in former years.


Less aggregate effect.


I join issue with that proposition. My view is that the greater the scramble for international trade, the more necessary it is to equip our manufacturers with export credits, in order that they may preserve their share of trade. Nobody supposes that the unemployment problem will be solved by export credits, but, at any rate, those credits are an important factor in the export trade of this country. It is important to consider the amount of business done upon export credits in the past. I understand the position is that up to the autumn in 1930, when the late Government extended the period of credits to 30 months, those credits had been practi- cally limited to a year or a little over. When the present Government came into power, they were limited to 12 months, and no discrimination is being shown in the case of any country.

I suggest that the rigid period of 12 months, in view of the longer credits given by other countries, is one which this country cannot afford to perpetuate. Take the case of Germany, where credits for exports to Russia vary from two to four years. In the case of heavy machinery, four years' credit is given by Germany and two years for light equipment, the State, the local governments, and local authorities guaranteeing between 60 and 70 per cent. of the credits. I know that in Austria for a single order amounting to 100,000 dollars they allow two years, and for larger orders four years' credit is allowed repayable by quarterly instalments starting 27 months after delivery. In Italy, periods varying from nine to 52 months are allowed, according to the importance which the orders bear to Italian trade. Some of the credits allowed by the United States have extended to five years in special cases, and those are countries with whom we are, to a great extent, in competiton for orders from the Soviet Republics. I suggest that it is unwise to tie ourselves down to a rigid limit as regards the term of the credits, more especially when we are dealing with different articles from different countries. It is necessary to adjust credits when dealing with particular cases, and if we do not do that, there is a serious danger that our traders will lose export business to Russia.

It is now more important than ever to export more goods to Russia in order to correct the adverse balance of our trade with Russia. The right hon. Gentleman the Member for Tamworth said that although he had not got the latest figures, he thought that the figures he had given were right when he stated that the imports from Russia were at least three times as much as our exports to Russia. In 1931, the position was that we imported just over £32,000,000 worth of goods, of which £3,500,000 was reexported. We exported to Russia in prime exports just over £7,000,000 and we re-exported exports from other countries about £2,000,000. Ships were purchased in this country to the amount of £350,000. The payments for British tonnage and transport amounted to £2,250,000, and credits, commissions and salaries, etc., £4,800,000.

Major CO LV I LLE (Secretary, Overseas Trade Department)

Will the hon. and learned Gentleman give the source of his information?


It comes from the Russian trading organisations. I believe that the figures which have been given to me are accurate, and they have been audited by English auditors. In these circumstances, I think the hon. and gallant Gentleman will find that they are substantially accurate.


The figures which the hon. and learned Gentleman has given do not show that my figures were wrong, although I gave them from memory.


Before we can arrive at an accurate balance, we must take into account visible and invisible exports. Salaries, etc., are invisible exports which are counted in the ordinary trade balance of this country. If we add up all those items, they come roughly to about £16,500,000 for visible and invisible exports. The imports, leaving out reexports, amount to £28,680,000, and that leaves an adverse balance of just over 212,000,000. I do not think it matters much what is the amount of the adverse balance. The point made by the right hon. Gentleman the Member for Tam-worth is that there is an adverse balance of trade. I agree that there has been, in the last year, and over a series of years, an adverse balance, and that makes it all the more necessary to export as much as we can to Russia in order to rectify that balance, and do everything we can to stimulate that trade. As a result of the arrangements made by the Labour Government for extending the period of credits to Russia, there was an order placed in this country for machine tools, and articles of that kind, amounting to the sum of £6,000,000. Last year SO per cent. of the total exports of the tool making industry went to Russia, and it was owing to the extension of credits that the order to which I have alluded was obtained.

As far as I know, that extension of credit was intended to be carried on for the purposes of other orders. The particular matter which makes me anxious at the present time is that I know of one large order of £2,000,000 for steel which is hanging in the balance, and that order will be determined by the amount of credit available. We ought not to stick to the rigid rule that in no circumstances will we give more than 12 months' credit when Germany is offering credit for periods extending to two and even four years, and Italy, Austria and the United States are offering similar terms. I agree with the right hon. Gentleman the Member for Tamworth that export credits will not solve the unemployment problem, but it was estimated that the order to which I have alluded would have given employment to 12,000 people.


I do not question any statement so far as it has been made by the hon. and learned Gentleman, but may I point out that a statement such as he has made that the Russian Government obtains longer or larger credits from Germany, Austria and America usually comes from a Russian source. I would like to ask the hon. and learned Gentleman if he has tested the accuracy of the information. When I was at the Department of Overseas Trade I tested similar assertions, and we were given to understand that it was a method of playing off one country against another, and was simply bluff. It may be that the hon. and learned Gentleman has got reliable confirmation otherwise I should advise him to test that information, and receive such statements with very great caution.


The hon. Gentleman the Member for Farnham (Sir A. M. Samuel) is aware that there is a provision in the case of Germany which lays down the amount of credits available for light machinery and light tools and heavy machinery, and it can easily be ascertained whether all that has been used up. I am informed that it has not, and therefore it is still available. If the hon. Gentleman wishes to test my figures, he can easily do so.


If the hon. and learned Gentleman has not tested the information which he has given to the House, I think he ought to accept those offers of credit to Russia with very great caution.


I am not in a position to give the name of the firm interested in the order to which I have alluded, but I can assure the hon. Gentleman the Member for Farnham that the information I have given comes from an authentic source, and the order has been negotiated by a firm of eminent gentlemen in the City. I merely give that case as an illustration, but nobody can get behind the fact that the export credits arrangements, as laid down by law in Germany, Austria and Italy, allow credits up to periods ranging between two and four years, while this country lays down a rigid limit of 12 months. It is obvious that, in those circumstances, we are unduly handicapping ourselves.

I am not suggesting that in this or that particular area a longer credit should be given, but if we are anxious to do more export business in steel—everybody knows the enormous quantity of steel goods which are being imported into Russia from other countries—we should not put ourselves out of court by having a rigid term of credits which makes it impossible for us to compete with other countries. I ask the Secretary to the Department of Overseas Trade to take this matter in hand and see whether it is not possible to relax the rigid term of 12 months as regards the Export Credits Scheme in order to place ourselves in a better position to compete with other countries which are allowing Russia much longer periods of credit. Competition is becoming keener than ever it was before, and this fact makes it more necessary than ever to have a flexible system for our export trade, and not a rigid one.


I cannot let the observations which have fallen from the hon. and learned Gentleman pass without comment. He speaks, if I may be allowed to say without intending any discourtesy, with an utter ignorance of manufacturing business when he talks about credit for two years. I had to earn my living in business, and, if I may be allowed to speak from personal experience, I will tell the House what I think on the request for giving credit for two years. It is that anyone who needs credit for two years is not worth dealing with. The export manufacturing business of this country and of every other country has been built up on the giving of credit principally by three months' bills, or six months' bills at the outside. As for a period of two years, that is not credit, but finance—it is obtaining capital. I scarcely think that any average firm in Britain doing business with firms in other countries would attempt to do business where two years' credit was asked for. Those countries or customers who require two years' credit for the building of bridges, for locomotives or for railway material or engineering goods, all of which we are very willing to supply, obtain the necessary capital by going into the market and getting the finance or issuing houses to float notes or long or short-dated loans, and it rests entirely with Russia to put herself in that position. Why cannot Russia obtain capital by loan? Dr. Johnson has given the answer by saying, "Depend upon it, Sir, no man is writ down save by himself." Russia has herself wrecked her own credit. She has only to rehabilitate her own credit to show that she is honest, that she recognises her old debts and that she intends to play the game as other countries do, and she has the capital markets of the world open to her.

An hon. Member has spoken of Russia having to pay 8 or 10 per cent. for the guarantee of her credit; just so, the Russian people have wrecked their own credit, and they have to pay for their repudiation. If they wish for two years' credit, or for cheaper guarantees on bills of 90 days or 180 days, they have the remedy in their own hands; all that they have to do is to act like honest men. Then they will not need to beg for their two years' credit. When they want locomotives, railway equipment, machine tools and so on, they will be able to float a loan as well as anybody else. I hope that the Minister for Overseas Trade will point out that this demand for two years' credit is not really for credit, but for finance, for capital, and I hope he will not, to use the words of the hon. and learned Member for East Bristol (Sir S. Cripps), relax the rigid terms which are now imposed on certain transactions under the Export Credits Scheme. Those rigid terms are necessary. We have lost a great deal too much money of recent years by lending credit overseas—


Will the hon. Baronet kindly tell me how much money we have lost in granting credits to Soviet Russia? Not a penny.


No, we have not lost anything, because we have taken the greatest care not to give them an opportunity of defaulting. But the hon. and learned Gentleman must not forget that a large number of pre-War loans to Russia were issued in Britain, not for purposes of war, not for purposes of aggression, but for the purposes of bridges, canals, tramways, municipal housing and water supplies, electric light, slaughterhouses, and so on, all before the War, and on every one of those loans, so far as they are held in Britain, there has been a default and repudiation and British savings have been lost to the amount, as was stated by the present Prime Minister, of £255,000,000.


So has France.


As to France I do not know, and I will not make any invidious distinctions. We have lost a great deal of money abroad, and we cannot afford to lose any more. The reason for these rigid terms in export credits is that we do not dare to risk more losses abroad. Nearly every State in South America, with the exception, I think, of Colombia and Argentina, is in default on their overseas loans raised in this country. We have £1,000,000,000 at stake in South and Central America, and if we carry on an export trade, whether it be with Russia or with any other country, whether we lend money by way of export credits or by way of loans, if we lose that money eventually, we might just as well have exported the goods and given them away without taking the trouble of going through the operations of issuing loans or giving guarantees in connection with export credits. We have to be very careful. I quite agree that we require every pound's worth of export trade that we can get, but at the same time, as used to be said in my old trade, when you are dealing with slippery people, it is better sometimes to cry over unsold goods in your warehouse than to cry afterwards when you have parted with them and lost your money.


It may be convenient if, at this point, I deal with the questions which have been raised relat- ing to export credits, leaving the other matters raised in the speech of the hon. and learned Gentleman to be dealt with later. As there must be Members of the House who are not familiar with the working of the scheme, I shall have to go over some of the details of the Export Credits Scheme, and give a little history in order to bring the position down to date. The Overseas Trade Acts, 19201930, authorised the Board of Trade, with the consent of the Treasury and after consultation with an Advisory Committee composed of bankers and business men, to give guarantees in connection with the export of goods wholly or partly produced or manufactured in the United Kingdom. These guarantees do not extend to munitions of war. I say that in order that some points which have arisen at Question Time may be made plain. The Acts provide that the aggregate amount outstanding at any time shall not exceed £26,000,000. The House should note that the scheme exists, not for the benefit of Russia, as some people seem to imagine, or for the benefit of other foreign purchasers, but entirely for the benefit of United Kingdom exporters.

In 1929, the then Government decided that, as from the 1st August of that year, the Advisory Committee should be free to consider applications in connection with transactions with Russia. It was left to the discretion of the Advisory Committee to determine the conditions on which the guarantees should be given, in the same way in which it has been left to their discretion by successive Governments to determine the conditions on which guarantees should be given in the case of other countries. In point of fact, no guarantee has ever been given except on the recommendation of the Advisory Committee.

I want to explain the position of the Advisory Committee in regard to the scheme. As far as Russia was concerned, the Committee extended gradually the period of credit covered by the Department's guarantees, until at the beginning of last summer the maximum period of credit that they were prepared to recommend in suitable cases reached 24 months from the placing of the order. I should explain that the maximum period was not given as a matter of course, but only when in the opinion of the Committee the circumstances of each transaction justified it. I should also explain that at the same time the periods of credit covered by the export credits schemes of other countries, notably Germany, had also been considerably extended. That brings me to the point which was raised about there having been a marked change at the present time.

It is betraying no secret to say that the Advisory Committee were extremely reluctant to agree to any further extension of credit, because their experience suggested that the Russians were, naturally, trying to play one country off against another in the matter of the length of credit, and that sometimes concessions were used, not for the purpose of placing orders in this country, but for the purpose of obtaining further concessions or longer credit from other countries. Following on certain negotiations which took place last summer, it was agreed that the maximum period of credit for the heavy engineering industries should be extended to 30 months from the date of the order. The Soviet authorities on their part undertook to place orders for £6,000,000 worth of heavy engineering products. That brings me to the end of last summer and the financial crisis which took place in August.

This programme of orders was in process of execution when the financial crisis of last August occurred. The crisis, naturally, made it necessary to review the question of export credits as a matter of general policy in connection with the question of the ability of this country and the Government to give credit, and it was decided by the late National Government to restrict guarantees for all countries to 12 months. I now want to make clear a point on which I think there has been doubt in the minds of hon. Members. While the Government found nothing in the nature of a legal obligation to give guarantees up to the figure of £6,000,000 which I have already mentioned in connection with heavy engineering contracts, they were anxious that no question of a breach of faith should arise, and they agreed that the new limitation to 12 months which they had imposed should not take effect until the £6,000,000 programme had been exhausted and the relative guarantees given. The £6,000,000 programme has now been exhausted, and, after careful consideration of the position, the Government have decided, in the interests of trade and industry, that the Department's Advisory Committee should again be free, as in the past, to consider proposals involving credits of more than 12 months.

On commercial and financial grounds, however, the Advisory Committee are not prepared to recommend guarantees for further credits to Russia for more than 12 months without attaching conditions more stringent than in the past. The House will understand that, in adopting this attitude towards credits for Russia, the Exports Credits Committee are following their normal procedure, which they apply to all credits for all countries. Everyone who is acquainted with the machinery of financing exports will realise that, especially in these days of unusual difficulty, no body of prudent men would grant credits of important amounts, and least of all credits of a certain duration, without the closest examination and without imposing conditions. Those conditions must vary from case to case and from country to country according to the nature of the case.

In view of the financial upheaval of the last six months, it is not surprising that the Committees should feel that some reconsideration is necessary of the conditions on which guarantee generally are given. In the case of Russian business, it is perhaps the more necessary in view of the fact that, in their endeavours to help industry last year, they treated exports to Russia more, and not less, favourably than exports to other countries. Present credit conditions are very different from those of last summer—a point which should be generally recognised—and the Advisory Committee have modified their policy accordingly. They have communicated with the Soviet representatives, but perhaps the House will not ask me to say more at the present time. T can, however, say this, that in their intention to impose more stringent conditions on guarantees of credit beyond one year in the case of Russia, the Committee have the full support of the Government. I want it to be perfectly plain that there is no divergence of opinion, but that the Committee are acting with the full support and authority of the Government in declaring their intention to impose more stringent conditions if credits are to be extended beyond one year.


Could the hon. and gallant Gentleman tell us what those conditions are?

5.30 p.m.


As I said a moment ago, I would ask the House not to press for a statement on that point. Negotiations are being carried on, and obviously it is wise that the negotiators should be left with power to discuss the matter.

The conditions are such as are believed to be justified in the circumstances. The next step lies with the Soviet authorities. I should like to take this opportunity of acknowledging publicly the debt that the Government owe, in common with their predecessors, to the Advisory Committee. They are a body of men who have other heavy responsibilities. They have guided the Export Credits Guarantee Department through a period of exceptional difficulty. One can measure the successful nature of their guidance by the fact that, while the Department has now guaranteed some £32,000,000 of exports, it has not cost the taxpayers any money at all. More than half of that was not Russian business. In fact a steady and regular use is being made of the Department at present.


How much have the actual losses been in the case of other countries than Russia?


There is no actual loss at all. It is amply covered by the receipts. A steady and regular use of the Department is going on and there has been a considerable increase in business outside Russian business in the last few months.

That leads me to say something on the general position of our trade with Russia. Trade between the United Kingdom and the Soviet Union has shown a very unsatisfactory position. Over the last five years imports from the Soviet Union totalled £135,500,000, whilst exports of United Kingdom goods to the Soviet Union in the same period amounted to only £25,000,000. The goods purchased from Russia were on ordinary cash terms. The goods sold to Russia were almost all sold on credit. The visible adverse balance of direct trade between the two countries amounted in five years to £110,000,000. Even if re-exports are taken into account, the adverse balance is as high Its £94,000,000. It may be proper to take into account invisible exports, such as freights and insurances, but that must be reckoned both ways, and the hon. Gentleman did not reckon it both ways. He spoke of the money spent in this country by the Russian trade delegation, but he did not mention money spent in Russia on the other side, which is quite a considerable sum. The figure that he threw out as having been spent here by the Russian trading delegation is a very large figure and one which it would be very hard to find details for. However, even taking into full account the highest figure that has ever yet been set on it, there is an immense balance in favour of the Soviet Union. It has been suggested that, if the trade between the Soviet Union and the British Empire as a whole is reckoned, the balance would be wiped out. I have looked into this, and the figures of the Dominions do not agree with the figures that I have seen that support the argument. In any case, I do not think they are relevant. We must consider here the trade between this country and the Soviet Union as the unit to reckon on.

May I also point out that this adverse balance continues 7 There has been an increase in exports to Russia in the last few years, but there has also been an increase in imports from that country, so the balance has not been improved. The most striking fact is that our imports from Russia have increased rapidly. In 1927, exports were £4,500,000 and imports £21,000,000, giving a visible adverse balance of £16,500,000. In 1931 the corresponding figures were, exports £7,100,000 and imports £32,000,000, leaving a visible adverse balance of £25,000,000, so that, although the amount of exports has increased, we have still a very unsatisfactory balance. The question of the adverse balance of our trade with a number of countries is engaging the close attention of the Government, and it is also engaging the closest attention of the foreign countries, because, owing to the change-over in this country to a Protectionist policy—I say it in no unfriendly spirit—foreign countries are coming to realise the immense value that the British market has been to them in the past and they are anxious to demonstrate their friendliness by increasing their purchases from us. Interruption.] If the hon. Gentleman doubts that, there were two and a-half times as many foreign buyers at the British Industries Fair than there were last year. There is this difference between the Soviet Union and any other country. While the Government of any other foreign country may be anxious to improve the balance of trade between itself and Great Britain, purchases in that country are done by individual traders and the Government cannot accept full responsibility for the state of affairs. In the case of our trade with the Soviet Union, we are dealing with one purchasing agent who makes all the purchases for that country and they take full responsibility for what they purchase. Therefore, in putting it to them that the situation is unsatisfactory, we are putting it to the people who have the power to correct that position.

His Majesty's Government are not at all satisfied with the position. They are in communication with the Soviet Government and they have left the Soviet authorities in no doubt as to their views on the subject. What we have said to them may serve as a useful background for such a discussion. I have made it plain that we consider that more stringent conditions are necessary if we are going to trade on an extended credit basis, that these conditions have been put forward, that over a period of five years there is an enormous balance with Russia in respect of her trading with this country and that it is our desire to improve on the trade position with Russia, but it must be on businesslike terms. The hon. and learned Gentleman spoke of credits that were being given by other countries. It is one thing for the law to say what the limit may be, but that does not prove that the actual credit is being given. The German Government has publicly announced that it will not give any more guarantees for credits to Russia at present, and my information is that such guarantees are not being given. I know that some other Government and private guarantees have been given, but I think this stands out, that the financial policy that is being pursued by the National Government at present is improving and strengthening the position of this country, and confidence is returning. The part that the Export Credits Guarantee Department have to play in that policy may be a relatively small one, but it is important because, if we are going to use the guarantee of His Majesty's Government to help the sale of British articles abroad, they must only use that guarantee on sound and businesslike lines.


I believe the House generally will welcome the important speech that we have just heard. I, who have taken a deep interest in export credits, congratulate my hon. and gallant Friend. I believe he has laid down the lines on which this business should be conducted. May I go back and tell the House the origin of the present scheme. In 1925 I presided over a very distinguished committee which elaborated the present scheme of export credits and worked on the principle that, if the State guaranteed the export of manufactures, it should not be expected to profit on the guarantee, but also it ought not to incur a. loss. On that basis the system of export credits has been run. All the world has followed us. We were the pioneers in the guarantee of credit by the State, the guarantee of that very difficult and intangible thing, the credit of s man who buys your goods and who will pay at some future time. On the whole the terms that we give are more liberal than in the case of any other nation. I quite agree with the Minister on that. If you want to help the heavy industries, the engineering and steel trades, you are obliged to give fairly long terms of credit, for the importer expects to pay back part of the cost out, of the profits earned by the machinery or locomotives or whatever it may be. In the old days the heavy engineering firms sold to their foreign customers at 18 months, two years or 2½ years credit. They took bills from those firms and locked them up in their strong boxes and did not bother about the cash until the time came to collect it. Unfortunately those spacious days have long gone by and now the need for finance is greater, both on the part of the exporter and also on the part of the buyer. In order to guarantee a class of transaction which was rather outside the ordinary banking transaction, the export credit system was started.

This brings me to the case of Russia. I served on the Export Committee and I was on the Export Committee in 1929. I am revealing no secret when I tell the right hon. Gentleman of the grave anxiety that we felt about extending the credit beyond 12 months. As a matter of fact, a 12 months' credit really means a credit of 18 months, because you do not collect it inside the 12 months. The difficulties which exist in Russia are very great. In the first place, you have a single buyer, the Government, as has been said already, and no law court in which you can sue the debtor. If he does not choose to pay, you cannot get your money. Perhaps unconsciously there is a feeling that, as a large amount of British money has been invested in Russia and at present is lost, any extension beyond 12 months is a very serious undertaking. If you are going to lose the country's money, you had far better leave the whole business alone. It is no good selling products without payment. We have to see that no money is lost, and to exercise reasonable precautions to secure that end.

I have always pleaded in this House for trading with Russia whenever we can. I want to export as much as possible. I think that in slump time you should extend rather than retract. In times like these, little things are important. I do not in the least contend that a very large amount of unemployment will be prevented by export credits, but they will do something. Since the scheme of the Committee of 1925 was adopted, no money has been lost. At all events, I think that that is the case. Since you can keep people in work and keep machinery going even to a small extent by export credits, I feel sure that the House would agree that the system ought to be maintained. Since we have valuable trading opportunity with Russia, and since we can extend the possibilities of Russia buying our goods if she observes the conditions which my hon. Friend has indicated, I think that the Government are entirely right in what they are doing. I believe that in the end they will do more good to British trade by coming to a proper bargain with the Soviet Union than by a mere extension without reciprocity of the terms upon which we grant credits. I am certain that that is the real policy. I believe that the Government have followed a course which will be approved in all parts of the House. I confess that I was rather alarmed when I read that all credits were to be cut down to 12 months because of the restrictions of trade, but I understand now that that is to be qualified, and I believe that the Government have come to a right decision.


This is the first occasion upon which I have had the honour to address the House, and in asking for its indulgence I will not take up much of the time of the House. I wish to touch only very shortly upon the question of Russian trade, because it so happens that perhaps I am the only Member in this House who has lived in Soviet Russia, and possibly I can make a few points upon the question as viewed from the other end, so to speak. I do not mean to say viewed through Russian eyes, but through the eyes of an Englishman in Moscow. In coming back to this country from Russia, it seems to me that there are two main objections to the principle of giving credits to that country The first is, that there is a body of opinion here which holds that it is a mistake to facilitate in any way the progress of a country which, after all, is bound to be a commercial rival of ours in the future, if it is not so at present, and particularly to help such a rival in any way which involves us in serious obligations.

That is a logical attitude to take up, but in this particular case it does not fit the facts. Even if we were to withdraw our credits from Russia, and even to close our import market to her to some extent, it would not have the effect, in the long run, of diminishing her competitive power. The Five-Year Plan has progressed so far that they can more or less, if not entirely, do without us. If we cut down our credits and close our market, I do not say that it would not cause a great deal of embarrassment to Soviet finances. I think that unquestionably it would, but the final result would be merely that such business as she does with us would be transferred to our commercial competitors probably in Germany and the United States. If that be so, it is clear that we ought to look at the problem of credits simply and solely from the point of view of our direct interests, to leave Russia out of it, and to leave ourselves to judge how much credit we can safely give in relation to how much benefit that credit would give to our export trade. Another strong, and, I think, well-founded argument which opponents use who doubt the wisdom of credit advances, is the very great risk involved. The Secretary to the Department of Overseas Trade has made it clear that the Government are well aware of all the risks involved, and are proceeding cautiously and are carefully weighing the risks. I have never had any doubt, but I think that the hon. Gentleman's speech completely disposed of any doubts that anybody had.

There is another point I wish to make, again from the Russian point of view. I believe that there is a general feeling in this country that as the Five-Year Plan progresses, and as Russia's commercial and financial strength increases, the risk involved in granting credits is likely to grow, not greater but less. That is a very natural conclusion to form, bat I believe that in actual fact the case is rather the reverse. I have found on my return that the true purpose and the main object of the Five-Year Plan is very constantly misunderstood or not appre ciated in this country. I do not think that it is generally and clearly realised that the Five-Year Plan represents the ideal of economic nationalism and high protection carried to a very extreme point, almost to a fantastic point. The whole underlying purpose of the plan is to render Russia entirely self-supporting, or, to put it more accurately, to render her entirely independent of the capitalist world, so that she can do without the whole of the capitalist world. If that is so, it follows that as the plan progresses she will become more independent of the rest of the world, and so will feel less cogency and less present need to pay her debts, and to pay them punctually. Hitherto, I think, her record of paying off short-term indebtedness has been as good as, or better than, that of any other State in the world. Nobody has lost any money so far in Russia. But as the plan progresses the state of things may rather change.

The Communist party, of course, have staked their whole future upon the plan. Their own fortunes are bound up in it, and a constant supply of new credit is absolutely essential to them if the plan is to proceed, and in order to get that credit it has become desirable to meet short-term obligations at once, and hitherto they have done so. But as the plan progresses and they become more independent, a certain amount of caution will be necessary. I do not mean to imply that they would repudiate for the sake of repudiation. I do not think that that is the case at all, but they may find that circumstances are too strong or too tempting for them in the next couple of years. I do not want to quote figures, which, perhaps, may be inaccurate, but it seems to be the case that Russia has already built up a very heavy load of short-term indebtedness. Whether the figures are precisely accurate I do not know, but it seems to be the opinion that their short-term indebtedness is equal to the whole proceeds of a year of her export trade. In a country which has practically no invisible exports, and still fewer internal financial reserves, that figure is a somewhat dangerous one. In addition to that, if reports are correct, the climatic conditions this winter have been very bad, and there has been a certain amount of confusion or mismanagement in the case of collective farming, and this may result in a drastic cutting down of the grain export next year. If that happens, the Russian financial balances will be further upset, and the position may become very acute and precarious.

The lesson to be drawn from that is, that a great deal more caution will be necessary as from the end of this year, that is to say, the end of the last year of the first Five Year Plan, in granting short-term credits to Russia. As I have already said, the speech of the Secretary to the Overseas Trade Department must have set practically every doubt at rest on that subject. There is a great deal of diversity of opinion about what our trade and other relations with Russia should be, but I think that there will be practically unanimous agreement upon one point, and that is, that it is highly desirable to increase our export trade with Russia. Whatever may be the precise figure of our adverse balance of trade with her, taking re-exports and invisible exports and so on, there is a very large margin in her favour as against us. I am convinced that if we use our potentialities for giving credit, and, further, more, if we use the right, free or restricted, of entry into our markets as a bargaining factor, we shall have no difficulty in coming to an arrangement with Russia. It would be something less one-sided and something which would be as much to the advantage of Russia as it would be to our advantage.

6.0 p.m.


I think the House will agree with me that the speech of the hon. Member for Tavistock (Mr. Patrick), who has just sat down, is one of the best maiden speeches that has been delivered in this House. I am delighted to listen to a fresh mind being brought to bear on this problem of Russia, and I hope the hon. Member will accept my personal congratulations. I suggest that he should be called into the Government. I think the Secretary to the Overseas Trade Department also deserves a vote of congratulation. He gave us evidence that he had gone to great pains to prepare his speech, knowing very well that the men whom he had to face here in the Opposition were well primed on this case and that we had a sound case that would take some answering. I think he gave a very good account of himself in trying his 'prentice hand on us. I am sorry the hon. Member for Farnham (Sir A. M. Samuel) is not in his place. He belongs to one of the reactionary groups in this House as far as Russia is concerned. He said he had had many dealings with Russians, he made the assertion that they were putting the Germans and Americans up against the Britons, and he asked, Why is it that the Russians are always anxious to trade with us?

I happen to be in a position, as the Minister could also be if he liked, to give the reply to that question. The reason is because of our ships and machinery, because the things that we have supplied to them are the best they ever got. In my own experience we supplied a coking mill to the Russians before the War, and it is the best tool that Russia still has, with the result that the Russians are very anxious to deal with the same firm, Duncan Ste warts, the firm with whom I served my time as an engineer. So much so, that I pressed the Labour Government for all I was worth to increase credits. That firm, who are identified with the Beardmore firm, were very anxious, and they got orders recently for forging heavy machinery, orders which the Labour Government assisted them to get. Therefore, I hope the Minister will take to heart the advice that came from the hon. Member for Tavistock and the right hon. and gallant Member for Ripon (Major Hills), who spoke before him and who said that we should stop concerning ourselves about Russia and concern ourselves about Britain. The hon. Member for Farnham wanted us to go back to the Tsarist regime, but if we did that, they too have a good case against us for not meeting all our obligations incurred under a past regime, the reason being that in order to keep Russia in the War this country promised Russia Constantinople. Therefore, the best thing they can do is to let bygones be bygones, and to trade with them.

I want to bring the House back to where we started to-day, which is the most serious problem that it is possible, not only for this House, but for civilisation to face, and that is the problem of unemployment. This House has had it discussed many times. We have had many Governments in my 10 years' experience in this House. The Tory Government of 1926 attempted to face this problem of unemployment, and I can remember at that time how they faced it. I remember the great speech that was delivered at that Box by the present Lord Hailsham, when he piloted through the Bill to increase the hours of labour of the miners of this country. I remember how he said that he would not think about putting that Bill through unless he was thoroughly satisfied that, by asking the miners to make this undoubted sacrifice, it was going to set the wheels of industry in this country humming. Did they hum? They are not humming yet.

That was their advocacy at that time. always coming down to the worker to ask the worker to give something. It has been a case of the horse-leech's daughter all along the line with the ruling class in this country. The working-class has always to give something, in order to get the country round a tight corner. She did not get round the tight corner, although the miners fought, as everyone knows, heroically against the idea, but they were forced, and their women and children were starved in no uncertain fashion. We had to go with the representatives of labour to America to appeal for assistance for the miners in our country, when the then Prime Minister, now the Lord President of the Council, stated that there was no starvation in the mining villages of this country. The Prince of Wales went round, and we are waiting yet for the report that he was going to publish at that time, because the starvation was so acute, and his point of view was quite the reverse of that of the then Prime Minister.

All that was done, all that sacrifice was made by the workers at that time, in order to get round unemployment. Time went on, and they tried something else. They will try anything but what we have suggested. All the Governments will try everything but Socialism. The next thing that they tried was rationalisation and reorganisation of industry. I remember how I pleaded with them in this House for God's sake not to shut down the shipyards, not to throw any of my tradesmen out, not to throw any more engineers out on the street. I pleaded that that was no way to rationalise industry, although personally I am in favour of rationalisation, I am in favour of doing away with work, and you will find that all the boys who are here looking for work are looking for it fur somebody else, not for themselves. I appealed to them then that rationalisation, unless they reduced the hours of labour and increased the wages of the workers, would have a detrimental effect and would only increase unemployment instead of lessening it; but on they went with their rationalisation, and they shut down the shipyards.

In my own constituency they shut down one of the finest shipyards in the world, a shipyard built inside of 20 years, Beardmore's shipyard in Dalmuir. Not satisfied with simply shutting the yard down, they scrapped it, and the yard next to it, Miller and Napier's Old Kilpatrick shipyard, was also scrapped. It was all part and parcel of rationalisation, and men were thrown out on the street. I asked the present Prime Minister then what provision he was going to make for my constituents who were thrown out of work as a result of rationalisation, and this was his reply: "The provision that we make is the Labour Exchange." It was then 17s. a week for men than whom there are no finer workers in the world. Again the workers had to submit. As I have said, I am in favour of rationalisation. I am in favour of reorganising anything at all that is going to do away with work. I have always stood for that, and it is because of all that that you are having unemployment; and you will have more unemployment, but I will come to that later on.

Then, following rationalisation, what does this House do? They find that it is no cure for unemployment, no cure to increase hours of labour, and the next thing they come along with is cuts. They appoint the May Committee. He has a lot to answer for. I remember the then Chancellor of the Exchequer standing over there—he is now a Lord—telling us, when they had decided to appoint the May Committee, that he could write their report then. What was that report? Cuts. Again cuts from the working class, asking the workers to sacrifice. It was a case of cuts, but a great many got cuts who never anticipated getting them. Your professional class never dreamed that they were going to get cuts, and hundreds of school teachers were lobbying out there when cuts came to them. That section of the community never dreamed that there were any cuts coming to them, or there would have been a greater howl raised at the time. Then you had reductions in our social services, and following that you had the Anomalies Act—all cuts on the working class.

Then there was the means test—all part and parcel of this extracting something out of the working class. That is what it means—sucking the life blood out of the workers. How does the means test work? How is it working at the moment? Here is a case in my own experience: A man who worked beside me all the time that I worked—and remember that I worked until the employers of labour said that I should work no more—a man 36 years an engineer, a turner by trade, one of the very best type of artisan, a man who had worked steadily, who had done what he could to educate his family, who had an idea of getting out of the tenements and into a housing scheme—he gets into that, and then he gets thrown out, two years ago, the first time that ever he was idle. A fortnight ago I met him on the road, and one of my boys was along with me. When the man went away, my boy said to me, "What is the matter with him? I never knew he had an impediment in his speech."

Then I told my boy what was the explanation of the impediment in his speech. He had gone through the means test. The means test that Friday afternoon had been put in operation on him, and what did it mean? Formerly he had been in the habit of getting 23s. 6d. a week. He has a son, an engineer like his father, who has not been able to work at his trade for a year. The son has taken on a labouring job at £2 3s. 6d. a week. A young man, 28 years of age, the son of an artisan, who has been reared and trained as an artisan, supposed to be the backbone of your great British Empire, gets a wage of £2 3s. 6d. per week. The man also has a daughter, a shop assistant, and she gets the handsome sum of 17s. a week. There you have the father and mother and the son and daughter, and because that amount of money is coming into the house, the father, the engineer, when this means test is applied, is cut off without a penny piece. And this is being done with a view to relieve unemployment.

The working-classes, the better paid working-classes have undoubtedly made these sacrifices willingly. They have returned this Government to power., They accepted the cuts as inevitable, believing that the Government would do something. But what is it that they are up against? It is not simply unemployment. They are up against a system of society which can produce everything to-day that men and women require for a comfortable life. There is not an article of which there is a shortage. They are seeking for markets away across the seas. Their great ambition to-day, their dream, is to get into China simplybecause China has not yet become industrialised. They would be quite anxious to get into Russia with its teeming millions, but they know perfectly well that, as sure as the sun will rise to-morrow, Russia will overthrow this system throughout the world. It is because the powers behind the throne—I do not mean the King, Captain Fitzroy, although he has a lot to do—those individuals who think they are the big men, know well that if Russia win through, as she will, so will the working-classes in every country win through, and that before very long.


The hon. Member must remember that the House is not now in Committee.


I am very sorry, Mr. Speaker. I am speaking here on behalf of the working classes of this country who are just about at breaking point. If hon. Members of this House think that the working classes are accepting starvation and destitution they are mistaken. They are being crushed; they are full of fear, which is the most powerful influence at work to-day not only amongst the unemployed but amongst those who are employed. The working classes are more crushed to-day than ever they have been in my time. Every man who has a job dreads to stand up like a man, dare not assert himself. Individuality and the right to be a man are denied him in the workshop in a manner unprecedented in the annals of working class life in this country. Here we have a House which is treating it as though everything was all right and that we are just getting round the business. The unemployed—they are only a few, and they are undersized and underfed. You can take it from me that there is great discontent, not only among the underfed and the undersized hut amongst those men and women who have undoubtedly made great sacrifices believing that something would be done by the Government. And nothing is being done.

Here we are, faced with a world teeming with all the good things of life. We are able to produce everything in superabundance. The simplest illustration I can give—I have given it before—is the blast furnace which to-day can produce as much in a week as a blast furnace produced 40 years ago in a year. And everything else is being produced in the same way. We have a machine which is producing 2,500 loaves an hour. The right hon. Gentleman for Carnarvon Boroughs (Mr. Lloyd George) asked us during the War to rain shells on the Germans. We could rain boots and shoes on the people, not only of this country but of every country; and in the midst of all this along comes. the present Government, with all its ability and experience, and proposes to face the situation with a little twopenny halfpenny Bill—a 10 per cent. tariff.

If we were able to take a detached view of what is going on here and what is considered to be legislation to meet this. abnormal situation, we should laugh at the suggestion that it is going to be any remedy. Before the summer is over we shall have added another 500,000 to the number of the unemployed. The hon. Member for Stratford (Mr. Groves) who sits on the Front Opposition Bench is a representative of the building industry which has over 500,000 unemployed. Our folk all over the country, the working classes who produce all the wealth, because nothing is produced except by labour, want new houses. We have been worrying the Government day after day because working people are not able to pay their rents, they are being evicted and ejected. If we could get more houses built it would bring down the price of houses. The Government is supposed to be looking after the interests of the great majority of the people of this country, and the majority are not unemployed, they are not on the Employment Exchange. There is no denying the fact that the majority of the people are living under a great fear.

6.30 p.m.

It has been said that we must look at the savings banks and see how the people are putting something aside for a rainy day. That is not the result of their being well off. To me it is a very serious sign. They are living in fear, in dread, of the day when they may be out of work and are putting as much by as they can for that day. If they were not living in this daily fear they would under normal circumstances be spending that money. They are putting it by because they fear they may one day lose their job. They have seen in their time men and women who never thought that they would be unemployed, who never thought that rationalisation would affect them, who never dreamed that they would have to go to the Employment Exchange. They have seen men and women clothed in rags and shame. They have seen manhood shorn of its glory in the midst of superabundance.

Unless the Government of the day tackle this problem properly, they will bring about their own downfall. There is only one way of dealing with the problem, and that is to make the opposite approach to it. Instead of approaching it by cutting down, instead of appointing a May Committee to inquire how the social services could be cut down, we should have appointed a committee to see how it was possible to increase expenditure. Until we are able to create a new atmosphere throughout civilisation, and get the statesmen of civilisation to approach the problem of superabundance and poverty in the midst of it with the idea of distributing the world's great productive power, we shall have nothing but misery in our midst. I know quite well that there are men and women who have been sent to this House and who believe that it is possible for us to do something. I am quite prepared to listen to their point of view, and I hope that they will allow me to put mine. It is for that purpose that the British House of Commons exists.

As a Socialist, I suggest that the Socialist approach to this unemployment problem is the only one that will ease the situation. To begin with, it is necessary to increase purchasing power. There is no use men saying that on the platform and elsewhere and then supporting here something that is to act in the opposite direction. We have first to increase the allowance to the unemployed. We must start with the unemployed because they represent the lowest standard in Britain. We realise that if the income of the unemployed is lowered there is no income of any worker in the country that is safe. There ought to be an increase in the income of the unemployed. The late Minister of Labour said that we should create an atmosphere to "Buy more British."Fancy! How hypocritical this House is at times! Fancy suggesting to the working classes that they should "buy more British"! I remember a supplementary question put by the hon. Member for Don Valley (Mr. T. Williams) to the Under-Secretary for War as to meat for the Army. The reply showed that we bought beef from the Argentine instead of British beef because it was cheaper. Does anyone think that the British would not buy British beef if they could afford it? But how can they buy British goods when the very British who urge them to do so are reducing them below what is called the British standard. We cannot have it both ways. Then we have to increase the wages of the workers, and to reduce the hours of labour. There is no other way in which to ease the problem of unemployment. I am not looking for work for the unemployed. I am astonished at some hon. Members still talking about looking for work for the unemployed. I remember what happened here. The present Prime Minister set out to tackle the unemployment problem and he put in charge of it one of the ablest trade union leaders that the trade union movement ever produced, although I differ from him in many things. He put him in charge of a special Department of the Labour Government to find work for the unemployed. Did he find work? No.


What about the Canadian ships?


They were mystery ships. Now that Department of the Government has been abolished. They gave this trade union leader the "breeze," and removed him. Then the Labour Government appointed a committee that was to find work for the unemployed. They called it an Economy Committee. The Prime Minister went outside the Labour movement. He said it was such a serious business, that he was going to be free of prejudice and bias and all party ideas. It was to be an all-embracing committee. So he went to the Tory party, and went to one of the hardest Tories that we ever had, Lord Weir, a fellow-countryman of mine, and made him Chairman of this Committee. We worried him to know what the committee had produced. We are still waiting to know. There is no work for the unemployed. The committee gave us a statement as to how they were going to reorganise and electrify the railways. That was something which the Socialists had been propounding for years and years before the railways were obsolete, as they are to-day with their steam locomotives. But I will not go into that. The country sat back and let the Government have their own way in trying all their little, pettifogging ideas, but not one of them has touched the fringe of this problem. Therefore we Socialists can go quite confidently to the country and ask the country to give us a mandate to take control of the country. We shall then put into operation our idea, and that will be to distribute the great productive power that we have to-day. Then, instead of men and women living miserable and abject lives in poverty, there will arise a different type of men and women who will stand like a wall of fire around our much loved island.

Lieut.-Colonel POWELL

This is the first time I have had the honour of addressing the House, and I admit that for the moment I am suffering from a sense of humility that I do not remember since the days when I first joined my regiment. Possibly those who have been in the Army will appreciate what I mean. I take this, my first, opportunity of congratulating the Government on the suc- cess so far of their policy. I have listened throughout the Debate, and there appears to be an idea in certain quarters that the Government have done nothing and that the effects so far of their work are nil. If we could cast our minds back and, from the financial point of view, consider the difference between the state we were in five months ago, and the state in which we find ourselves now, we realise that the change is extraordinary. Five months ago we did not know from one day to the next whether we would be ruined or not. For the first time for probably 100 years, we had to go hat in hand to the foreigner and borrow money. The situation to-day is that, practically without any trouble, we have repaid £90,000,000 of the money that we borrowed. It is astonishing that there should have been such an immense change in such a short time.

From the point of view of employment we were all disappointed, naturally, with the unemployment figures of January. I was one of those who went to see the British Industries Fair, and I must say that I have come hack very encouraged. I cannot possibly agree with the hon. Member who spoke last that there is likely to be another half million added to the unemployed this year, for at that Fair there was evidence on all sides that industry was on the red hot upward grade. I. wished to try to find out at the Fair whether the industries themselves fully appreciated the fact that if they did not take this opportunity of benefiting from the tariffs which we had put on, it might be their last chance. I mention one case. It concerns a small article, namely, a knife. We know that the steel industry, in regard to such articles, is at present in most cases benefiting from the fall of the pound, probably to the extent of 30 or 40 per cent. I said to the representative of the industry: "Some of us who have been supporting you for many years and trying to get tariffs for you, are rather afraid that you will not produce the right article at the right price. Up to now there has been a tendency not to bother about producing the cheaper article which is required by a very large number of our population." I was at once shown a series of knives and it was pointed out to me that whereas, last year, the cheapest kind of knife worked out at 14s. a dozen, a special effort had been made this year to meet this particular demand, and a knife was now being sold, wholesale, at 7s. or exactly half the previous price. That instance did a great deal to remove from my mind the fears which even ardent Tariff Reformers may have, that industry may not take advantage of its opportunity of producing the right article at the right price.

I particularly desire to-night to make a point in reference to unemployment schemes. I have never been able to understand how it can possibly be claimed that, if you collect a large sum of money, in rates and taxes from the people or from the normal course of trade, and use that money, say, to make roads, you can call that an unemployment relief scheme. As far as I can understand the matter, it seems to me that as fast as you collect that money from the normal course of trade, you put men out of work in various places. You cannot see where those men are being put out of work. You cannot tell where they would have been employed if the money had been spent in the ordinary course of trade instead of being taken by the tax collector and the rate collector. You cannot point to the actual men thrown out of work by that process though you can point to the men who are actually working on a road. But it has always been a mystery to me how such schemes can claim to be schemes for the relief of unemployment. Personally, T was very pleased to hear that the Government had definitely decided to stop schemes of that kind which are unremunerative.

There is a consideration which I would put to the Government on the subject of roads. I believe it is admitted that roadmaking is the most expensive method of providing employment, largely because the men employed in that way have to be moved, as a general rule, a long way from their homes. I understand that road schemes have been cut down and I suppose it is not a very intelligent anticipation of the Budget, if one suggests that the Road Fund may be raided again, as I understand it has been raided before. I put forward the suggestion that the Road Fund might be altered in name and called, say, the Road and Housing Fund, and that some of the money from the Road Fund might be allocated for the assistance of house-building, though it might not be possible to do so this year. When I mention house-building I mean to suggest a concentration of effort on the smaller houses. I do not claim to be an expert on housing, but I know sufficient to realise the many objections that there would be to a scheme of that kind unless it were very carefully managed.

The chief objection, and the only one to which I allude at the moment, is that it might interfere with private enterprise. The particular type of house, however, which I am visualising is the cheapest type of house, let at the lowest rent, and I do not think that type of house lends itself to private enterprise. There are two reasons for that, which are, I am sure, well known to hon. Members. The first is that the builder cannot afford to have his capital frozen in property of that kind, and the second is that he naturally wishes to avoid the difficulty and trouble attached to the collection of rents from houses of that class. But I wonder whether even now, in these stringent times, we could not make an exception in this respect as regards unemployment schemes and try to kill two birds with the one stone by having something in the nature of an unemployment relief and small-housing scheme.

There are two ways of looking at the matter. There is the sentimental and the economic side. T think that we may say, without much sentiment, that there is a very urgent and natural demand by the working man for a low rent, a little privacy and a little peace. From that point of view, alone, we might be moved to make some special effort in the direction which I have indicated. There is also the economic side of the question. We are faced, as the Chancellor of the Exchequer told us the other day, with an inevitable rise in commodity prices, with returning prosperity. If we examine the budget of the working man, I think we shall find that the item in regard to which there is most room for economy is that of rent, which is out of proportion to all his other expenses in relation to his income. For that reason I have dared to suggest what I may be told is an impossible scheme, but is, I think, one which ought to be considered. I am not putting it forward as a new idea. Several of us were very pleased to notice speeches by the Minister of Health and the Secretary of State for Scotland during the Recess pointing out the necessity of concentrating, and their desire and intention to concentrate, on this small type of house. If anything that I have said to-night arouses again a little interest in that type of house, which I regard as an absolute necessity, then I feel that I shall not have entirely failed in this, my first 'speech, in the House. of Commons


I feel that the House will naturally expect me to extend on its behalf 'congratulations to the hon. and gallant Member for South-East Southwark (Lieut.-Colonel Powell). Whether we agree with him or not—and I do not—his speech was a, very good effort, and I hope that we shall have the pleasure of hearing him on many future occasions. The Debate to-day has ranged over a large number of subjects, but I desire to bring it back to the question of the possibility of finding work for those who are unemployed. During the last two or three weeks we have had a varied assortment of legislation before the House. We have had the Import Duties Measure and the Wheat Quota Measure among others, but nothing whatever has been done of a definite nature, in the direction of providing work for the unemployed. I think we may truly say that the two chief Measures which have been before the House are Measures which will give a direct benefit to certain sections of the community. While the Government are taking those steps, they are cutting down the benefits of the poor people who are unemployed and it is the poor who will be called upon to meet the cost of both those Measures. [HON. MEMBERS: "No. "] Be that as it may, the National Government is supposed to be national in fact as well as name. They claim to represent every section of the community. It has been boasted in this House that they represent industrial and commercial life, landlords, farmers and the workers. If they do, they have already dealt with two of those classes. What are they going to do with the others?

Are the Government going to make any effort to extend schemes for providing employment? I do not necessarily mean the kind of schemes which we had before. The Government may have thought over this problem and have come to conelu- sions somewhat different from those reached by the last Government. But up to now we have heard nothing at all on this subject and when we realise that the number of unemployed is increasing and that we have a higher number of totally unemployed now than we had six months ago, then we must also realise the necessity that something should be done definitely and without delay. The unemployment problem cannot be left to solve itself. Some step must be taken by schemes or by legislation or in some other way to bring work to the people who are in need of it. The poor are penalised not only in regard to unemployment but in other directions as well. Recent legislation, as I have pointed out, is further penalising them and in consequence they seem to be losing faith in this Government as a Government. At the moment a large number of our people are being transferred to unemployment transitional benefit. I am not going at length into that question because I desire to get on to the question of the roads and of the schemes which have been subject to consideration but I must point out that a large number of people are being heavily penalised by reductions in unemployment benefit or by having that benefit taken from them altogether. What the hon. Member for Dumbarton Burghs (Mr. Kirkwood) has said with regard to transitional benefit applies all over the country.

There is a very strong feeling on this subject, and the Government might apply themselves to this matter in order to try to find some relief for the people from the heavy burdens which they are being called upon to bear. As was stated here yesterday a sum of £6,000,000 will have to be found in order to provide the finances for the wheat quota proposals. A large amount of that money will come from the poorest of the poor among our people. In connection with the Import Duties Act it is estimated that a sum of from £30,000,000 to £40,000,000 will have to be found and a large proportion of that money will, through higher prices, come from the poor people. They will be heavily mulcted in all these directions. Are the Government now ready to accept responsibility for the fact that the unemployment situation has not improved during their tenure of office I Are they ready to explain why their schemes have not been extended and why some definite proposal has not been laid before the House though they have been in office for six months? The last Labour Government was not in office for that length of time before Votes of Censure were being placed before the House.

7.0 p.m.

I would like to know from the Minister of Transport what is being done in the direction of finding more employment. I put a question to him some time ago as to how many schemes in Lancashire had been postponed, curtailed or cancelled, and he replied that 28 schemes in Lancashire had been postponed or curtailed at a total cost of £1,250,000, which at the usual rate of calculation would have found work for 5,000 men a year. This must apply with quite as great force in other counties, but in this one county alone employment has been withdrawn from 5,000 people by the action of the Government in curtailing, cancelling or postponing these schemes. In reply to a further question, the Minister admitted that there was a decrease in the men directly employed on the roads and bridges. I am not like the hon. and gallant Gentleman who has just spoken. I believe that road schemes are the very essence of necessity, with our road transport developing to such an extent. I believe that we shall have to provide roads on which the trade of the country can be carried efficiently, and to meet the requirements of a new and growing industry. Whether we agree as to what kind of roads they should be is a different matter, but it is no use postponing the matter until the tide of trade and commerce is upon us, and we have not the means to carry the matter through. We should be dealing with the matter continuously, until we feel we are masters of the situation. In this connection, I would like to ask the Minister the position about the Forth road bridge, whether it has been definitely cancelled or only postponed? I should also like to ask him about the Humber road bridge and the greater problem of the Dartford-Purfleet road tunnel. I know that the last is the greatest matter, but it has been under the consideration of the Depart. ment for so long that some definite decision should have been arrived at before now.

All the time these works are postponed, people are suffering loss of opportunity for work which cannot be provided elsewhere. It is all very well for Members to say, as one Member did to-night, that in his opinion private enterprise could provide much more work than it is providing. If private enterprise could do it, there would be no need for us to appeal to the Government to do what we believe to be the job of the Government in the circumstances. If private enterprise fails to carry out work which it is able to do, then it is not doing the right thing by the Government at the moment. In answer to a further question I put to my hon. Friend, in which I asked him to state the amount of work and the number of schemes which had been cancelled, curtailed or postponed in the whole of Great. Britain, he replied that just over 1,000 schemes, at a total estimated cost of £30,000,000, were involved. Of course, that is a large amount of money and a very large number of people, who would be provided with work, are suffering with their dependants because that money is not being spent. There are building schemes estimated to cost £50,000,000 to £55,000,000 which are at present in abeyance, either suspended or cancelled. These schemes together come to a total of between £80,000,000 and £90,000,000. If that money were in circulation and providing work, it would bring a feeling of happiness and well-being to a great number of our people.

We must realise the large number of unemployed. We have at the moment 2,750,000 unemployed in our country, and we are likely to have more, because the legislation recently passed is in no wav going to mitigate the unemployment or to solve the problem. These schemes spread throughout the country would have amounted to a total of £80,000,000 to £90,000,000 at a time when we have such a tremendous number of unemployed. I would draw attention to the fact, because the Minister of Health has postponed such a large amount of work, that there are between 300,000 and 400,000 building trade operatives unemployed. There is about the same number out of work in the mining areas, while the textile workers who are unemployed reach about the same figure. As to the building operatives, no one could say that houses, schools and baths are not required. They are undoubtedly required in order to meet the sanitary necessities of the time. If I might make a personal reference to my own Division—and I do not often mention it—we are a congested industrial community with a population of something like 90,000 people. Practically all the municipal building of houses, schools and baths in our area has been postponed or cancelled. For instance, we have a grammar school built a long time ago to accommodate 250 pupils. Yet to-day, when they have 450 pupils, they have been refused permission, or rather they have not yet been given permission, to rebuild their schools, although they lire housing their students in Army huts and other buildings. This is a condition of things which cannot be tolerated for the rising generation. Though we have this depressed area and a large number of workers unemployed, we have not yet been able to enjoy that help and assistance which ought to be given to us. An application to build baths has been turned down.

Special consideration should be given to cases like ours. I do not think it is an isolated case. There are many cases throughout the country, some of them probably more pressing, and the need for these buildings is so great that a move ought to be made as soon as possible. We have in this country about 2,000,000 people under 50 years of age who are unemployed. Probably a large number of these people will never again be employed. We have tremendous numbers of persons between 50 and 60 years of age who have no opportunity, and never will have the opportunity, of again being absorbed in their own industry. If we withhold work from these people and not meet the requirements of our people in a reasonable way, we are simply asking for trouble. The Minister of Transport is aware that there are thousands of miles of roads in this country which are not really fit for the large amount of traffic passing over them. Surely something ought to be done in these cases, which are not here or there, but are spread all over the country. When we have this great diversity of inefficient roads we ought to undertake that task at the earliest possible moment, and thus give an opportunity of employment to a large amount of unskilled labour on road schemes. One speaker to-night said that it would be difficult to find the men who were able to do road work. I guarantee that three-quarters of the people unemployed would be quite able to meet the requirements of making roads, particularly the mining community, the general labourers and the textile workers. They are all well able to undertake work of that kind if the opportunity were given to them. However, it is not given, and we have a large amount of labour idle in the country while there is work which ought to be done.

There are many points I would like to mention, but I am not going to deal with them all. I shall, however, mention one or two. I would like to draw attention, first of all, to the Housing (Rural Authorities) Act, passed last year. Under that Bill, I understand, the number of houses to be dealt with has been cut down from 40,000 to 2,000. That was a great Government scheme and, as many hon. Members know better than I, that work is a great necessity. In my opinion, the Government economy campaign has been rather overdone, and the plea of financial stringency has been carried too far. We heard the statement of the Chancellor of the Exchequer yesterday that we have practically overcome the hard times, and one sees from the Press this morning that the Government have turned the corner so far as finance is concerned, and will be able to give further and wider consideration to many of the problems before them.

Another point not mentioned in the Debate to-day or mentioned in this House for some considerable time, is that we must find some new outlet for our surplus labour. The question of extracting oil from coal has been discussed for many years. According to the Press, there is an opportunity now of making it a real commercial proposition. If that is so, why should not the Government undertake this great work and make a national industry at once I It would relieve every mining area in the country, would relieve the Government from buying their oils from overseas, and in many ways would be a great benefit indeed to the work which has to be carried on by a nation like ours. Of course, it might be said that the industry itself would take a long time to get going. That is quite true but, if the industry were once started, the Government would see it grow year by year.

Private enterprise has failed to meet the requirements of the people of this country. It has not been able to do what it ought to have done in providing employment, and the time has now come when the Government must undertake the work which has fallen upon them. Every year since 1927 the number of houses specified to be built by the Government has fallen below the estimate. That, of course, is reflected in the health and well-being of a large number of our people. The demolition of a large number of insanitary houses and of insanitary slums, which ought to be proceeding, has now been postponed. I would like the Government to consider seriously whether it is not possible to begin the extraction of oil from coal with a view to making the country independent of outside sources. There is another thing which might be done in order to absorb the unemployed. There is a large amount of land in this country, which is lying fallow and which is not being used for any particular purpose. I appeal to the Government to take into consideration as early as possible the question of smallholdings, which in itself would help to provide a large number of people with employment, and would help the unemployed to support their families. In conclusion, shorter working hours are a subject which, in my opinion, will have to be considered. Not only is it an immediate and a burning question, but it is one which cannot be postponed any longer. I ask the Government to consider these schemes of houses, bridges. roads, tunnels, schools and baths and all the other matters which make up the life of the nation, and to give them the greatest consideration possible in order to relieve the people of the burden now pressing upon them, and to give the Government an opportunity of justifying the faith placed in them at the election last year.


I have listened with great care and no little sympathy, but I am sure that the hon. Member for Wigan (Mr. Parkinson) and the House will not expect me to do other than carry out the broad policy of His Majesty's Government, namely, the policy of husbanding our national resources rather than adopt- ing or continuing vast programmes of public work. The Government's policy which is now being carried out has been confirmed by the votes of the nation. I hope that I shall not be accused of lack of appreciation of the predicament of the hon. Member if I say that it is merely a statement that if you do less work you will be able to employ fewer people. If one accepts the task which one has to perform and makes these cuts, then, obviously, there will be less work of a relief nature. I do not wish to introduce any tone of recrimination into the Debate, but I am bound to say that when I took up my office as Minister of Transport I found that the late Government had contemplated the very economies which have since been applied.


The Department contemplated the economies at the request of the Cabinet Committee, as every other Department did, but not to the extent that they have been carried out.


But the hon. Member will recognise the economy figures of from £7,000,000 to £8,000,000. To meet the views of the hon. Members who have put down the Motion would mean a complete reversal of the whole policy 3which I am trying to carry out on behalf of the Government. I would in this connection draw attention to one point which has not been noted. Much has been said as to the value of certain proposals that have been stopped or postponed, and I should like to deal with that aspect of the question. When the May Committee issued their report, their proposals for the reduction of public works, which in the main the Government accepted, were made not primarily because the works were not worth the money to be expended upon them, but because in our state of financial stringency we had not the money with which to carry them out.

If there is any hon. Member who in past times has had to do with a great public undertaking, or with other works, he must know that at any moment either he or his managers would have a long list of improvements put before them which they would like to carry out. Each improvement taken individually would have justified itself from the point of view of a suitable return on the money expended, but the finance of the enterprise was limited. As in private, so in public affairs. We found out, and it came as a great shock to some of us, that what is true of a small business is equally true of a great national business. It had been apparent for some time, particularly to those, and I was one, who had been members of committees, such as the Unemployment Grants Committee and the Loan Development Committee, that we were reaching a point where, by anticipating works beyond a certain amount, we were encouraging local authorities—town councils, urban district councils, and the like—to pledge their credit further than they could afford. I came definitely to that conclusion a year ago. I remember at the time making a statement that in a great many depressed areas a grant of 99 per cent. offered by the Government for certain works would be unfair to the depressed area which was expected to find the balance.

This was the position to which we had come. We had calculated when considering the relief, works, a certain fixed time during which the unemployment and the depression of trade was supposed to last. I do not think that anyone who was connected with any of the committees of 1922 and onwards will deny that the original relief work measures were based by optimists on a three-year period of depression and by pessimists on a five-year period of depression. Not one of us ever calculated on an 11 or 12 years' period of depression. If the value of the work is to be measured in terms of employment given and not calculated alongside the amount of anticipation of public expenditure which is necessary, then the whole theory on which the relief work is based falls to the ground. A great many of the works about which the hon. Member for Wigan inquired with anxiety as to whether or not they are to be proceeded with, would fall into the category of work which, however valuable or good it might be for the money, cannot be purchased by the nation at the present time, because the nation has not the funds with which to purchase it. You can carry this anticipation of matters too far and come to a very dangerous position. The mere argument that work is worth what you pay for it, does not hold water at all.

The hon. Member has asked me whether I am prepared to sanction going on with the Forth Bridge, the Humber Bridge and the Dartford Tunnel. I intimated some weeks ago that we were not prepared to go ahead with those works at the present time. What we are prepared to do with respect to deferred schemes is, so far as possible, to protect the lines of route and to see that any work already done does not fall into decay. We must then wait for better times until it is possible to proceed with them. That is all that I can promise the hon. Member in regard to the works in question. We must bear in mind that it has been established that capital relief works employ about 4,000 men directly and indirectly for one year for each million pounds of expenditure. In a state of financial stringency such as that with which we are now confronted, and with the stern necessity of making both ends meet, I think we must accept the fact that we have long passed the stage when we can put into operation capital works costing £1,000,000 in order to employ 4,000 people for one year.


In the beginning, I must, in words which are becoming hauntingly familiar, crave the indulgence of this House towards a newcomer's positively first utterance. I am comforted by the knowledge that I have gained during the last few months of the unvarying kindness and courtesy shown towards new Members on every occasion by the old Members. I have been emboldened to make a few remarks in this Debate because I have been abroad for most of my time and on returning to this country I have to some extent been able to look at things from the point of view of an outsider, particularly in regard to the great question of unemployment. Moreover, I was a prospective candidate during a somewhat protracted period. During that time in a constituency in South Wales which, as everyone knows, has suffered peculiarly during the intense depression, I had every opportunity of meeting a great many people of all sorts and conditions. It is from those two points of view that I desire to make a few general remarks on the unemployment situation.

The first aspect that struck me on returning from abroad was that, for some reason or other, more than in any other country, the unemployment question in this country had been dragged into the political party arena. That, in my opinion, was a very lamentable thing. It is not for me to try to apportion the blame to any particular individuals or parties, but the fact was that such a position existed, and there was no doubt that it had a grave result, a psychological effect. The continuous discussion of unemployment had a very damaging effect on our country and on our trade. Domestically, it was a stick with which it was easy to beat any Government. Outside this country the publication of the unemployment figures was always useful propaganda for our trade competitors. Therefore, I welcomed very gladly the fact that the present Government have seen fit to change the weekly publication of the figures to a monthly publication. I noticed in a recent Debate that the hon. Member for Chester-le-Street (Mr. Lawson) agreed that that was a sound policy. I was very glad to hear him make that statement, because there can be no doubt that the publication of the figures had been damaging us very greatly.

One other aspect of the situation which I noticed, especially during the period I was a prospective candidate, was the real feeling amongst working men and women that they wanted work. There have been suggestions that many people do not want work. I can only say from my own personal observations and from many visits and conversations that the vast majority of people do really want work. Many people will always take what the law gives them, and there are some who will abuse the law, but, strictly speaking, practically every person I met or knew of bad one desire, and that was to have work and not the dole. That struck me very forcibly during my observations. Like everyone else, when I found myself in the middle of the ever-present tragedy of unemployment I looked around to explore every avenue, as the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) puts it, whereby relief could be found. I read with great care "Labour and the Nation," "How to Cure Unemployment," and "How to Tackle Unemployment," but in all sincerity I must say that I found no permanent remedy and no permanent alleviation of the cancer in any of those publication.

It being half-past Seven of the Clock, and there being Private Business set clown by direction of the CHAIRMAN OF WAYS AND MEANS under Standing Order 8, further Proceeding was postponed without Question put.