UNEMPLOYMENT.

HC Deb 23 March 1932 vol 263 cc1057-143

Mr. DAGGAR

I think every Member of this House will agree with me when I say that there is no more important question at the present time claiming our consideration than the problem of unemployment. If any justification for a discussion of this question is necessary it is to be found in the speech of the Lord President of the Council, delivered by him on the 15th of this month, at Ilford, in the course of which he used these words: This present House of Commons will give the Government authority for anything they want to do, provided it is designed to help the finances, trade, industry and employment in our country. I admit that we shall be judged when the time comes by what we have been able to do for the employment of our people. That is far and away the gravest and most serious question we have to face. The Minister of Labour in a speech delivered at Nottingham on Saturday last made this statement: I believe that we are justified in entertaining feelings of restrained optimism as to the future. 4.0 p.m.

Those of us who occupy these benches entertain feelings of unrestrained pessimism as to the future. The Labour Minister also stated that the figures on the unemployment register were at their peak in September last when they reached 2,825,000. We heard a good deal of criticism of the Labour party when they were in office in regard to the total of the unemployed, but the Minister of Labour has the honour of being a member of a Government under whose administration the greatest number of unemployed persons we have ever known are on the register. I want to be quite frank with the Government, and I wish to say that I do not expect them to solve the problem of unemployment. The object of this discussion is to emphasise again certain aspects of the unem- ployment problem. The Lord President of the Council, in the speech to which I have referred, said that unemployment statistics were very misleading unless they were read with comprehension. I take it that that is an observation which can be made in connection with the use of any figures, but I submit that there are two figures which, with or without comprehension, will never be mistaken either by the single man or the married man who has a wife and two children to maintain, and those are the figures of reduction made by this Government in unemployment insurance benefit, in the case of the single man from 17s. a week to 15s. 3d., and in the case of the married man from 30s. to 27s. 3d. a week. We are told by representatives of the Government that there are more persons in employment since the National Government was formed, but is that statement correct? It depends, in the words of the Lord President of the Council, whether the figures are read with the necessary degree of comprehension. For instance, if we take October, November or December of last year and compare the number of unemployed during any of those three months with the number of unemployed registered in January of this year, we find that there was an increase in January compared with October of 70,700; compared with November, an increase of 145,200; and compared with December, an increase of 227,300.

Even assuming that there are more men in employment at the present time, what earthly consolation is that to the man who has been unemployed for years? According to the official figures, on 25th January of this year, if we exclude persons normally in casual employment, there were upon the register 2,131,298. According to the statement which accompanies those figures there were 128,834 more than a month before, and 255,968 more than a year before. If we include the persons who are normally in casual employment, we have a total figure of registered unemployed of 2,728,411, which, again, is 218,490 more than a month before, and 135,761 more than a year before. If regard is had to the increase as compared with a month before, we find that the increase of 218,490 is the largest monthly increase ever recorded in this country. I am aware that, according to the same source of information, on 22nd February the number of persons on the unemployment register, including those normally in casual employment, was 2,112,927, which was, as was pointed out in the Gazette, 27,238 fewer than a month before, but we must bear in mind the other fact that it means 83,515 more than a year before.

We on these benches are very much concerned about the effort which has been made by the Government to guarantee regular employment for those who happen to be in employment at the present time, and the provision it is proposed to make for the persons who are idle. Quite recently a detailed statement was issued by the National Federation of Building Trade Operatives, according to which schemes have been held up or abandoned by local authorities in the interest of economy to the value of something like £50,000,000, which is 25 per cent. of the normal annual value of building trade work, which is estimated to be within the region of £240,000,000. Had those schemes been allowed to operate, they would have provided 12 weeks' employment for every man in the trade concerned; in other words, it would have provided 12 weeks' employment for 858,170 persons who are trained for this particular kind of work. I am aware that the reliability of those figures has been questioned, but I submit that they have never been corrected, and, until they are corrected by the critics, they stand as being a reliable statement as to the position in the building industry.

What a contrast with what is now proposed in Germany, where there are schemes under consideration which will provide employment for something like 1,000,000 men! I know the argument which is adduced by those opposed to these schemes being carried out: it is that the money cannot be found. I cannot understand why £1,000,000 a week for unemployment benefit is regarded as a burden, while £1,000,000 a day in interest on the War Debt has never been described in this House as a burden. I am comparatively a new Member of the House, and I am amazed at the different language which is used when an effort is made to reduce the unemployment expenditure, and when it is a question of subsidising or giving grants to industry. Whereas unemployment benefit is always referred to as a "dole which demoralises the recipients," doles to industry are "a means of resuscitation." It is always "doles" to the unemployed and "financial assistance" to industry. The recent proposal to grant a subsidy of £6,000,000 does not even carry that degree of honesty, because it is simply referred to as a quota. Many new Members must be amazed at the language selected when industry is to be subsidised. The word "murder" gives one an unpleasant thrill, but substitute the word "homicide," and we are left undisturbed. I am not impressed by the contention that the money cannot be found. Money can be found in this country. If it is possible to find money to destroy life, it is to the discredit of this country that money cannot be found to maintain and sustain life. In any case I prefer the German method of providing employment for the unemployed. The Lord President of the Council, in the speech to which I have already referred, said: It is quite true that there generally is an improvement in trade in the last quarter of a year, but we have to remember that the improvement in the last quarter of last year was not shown in the last quarter of the preceding year. Let us hope that the check that has at last come may form the springing-off ground for those better times so long overdue. The Minister of Labour also stated in the speech to which I have also referred: There is some hope that the corner has been turned. I am pleased to know that there now appears to be some unity among Members of the Government, and that every week-end they have commenced to sing the same song. No word in the speech of the right hon. Gentleman was more frequently used than the word "hope." I submit that our people, particularly the miners, have been living on hope since 1920, that they have experienced considerable disappointment in endeavouring to live upon faith, and that at the present moment many of our people are being supported by charity. I represent a mining constituency. The Division, for local government purposes, is administered by three local authorities. At the top end of my Division, in 1920, there were from 4,000 to 5,000 miners employed, and now there is working only one pit, which employs 220 miners. In the Aber- tillery area there have been five pits closed. In the Abercarn area we have one pit working. So that at the present time, as far as one company's interests are concerned, we have got only four pits working in the whole Division, where, in 1920, there were over 18,000 miners. The Secretary for Mines was in my Division last week, and there was only one pit of the Ebbw Vale Company, and that at the extreme end of the Division, which made it possible for him to see the working of a colliery.

Whenever questions of a commercial or financial character are discussed in this House letters received by Members are referred to, especially if they contain additional orders due to the tariff policy of the Government. I want to read a few extracts from a letter which was recently sent by the education committee of the Abertillery Urban District Council to the Prime Minister—why to the Prime Minister, I hope I shall not be asked to explain. The letter states: Parents are not in a position to provide sufficient food, clothing and boots for their children in attendance at schools of the authority. It is true to say that the position has been somewhat relieved by the introduction of provision of meals to necessitous school children, but much difficulty is experienced in obtaining funds for the provision of suitable clothing and foot-wear. The urban district council have opened a special fund in order that boots might be distributed amongst scholars, but the moneys available are not nearly sufficient to meet the need … It is most pitiful to see some of these little ones attempting to reach school with no soles to their boots, and very poorly clad. That is typical of the conditions in my Division. I have a letter here from the British Legion. I hope I shall not be expected to give the name of the place from whence it came, except to say that it is from my Division. It reads as follows: The joint sections of the above organisation have requested me to make an appeal for assistance to relieve the excessive distress existing amongst the unemployed in. … Owing to the reduction in unemployment benefit, the means test and the chief collieries being closed for the past eight weeks, I can assure you that the distress in this area can truly be regarded as excessive. Although other areas in distress have received wide publicity through the Press and other organisations, this is the first appeal to be made from this district. Any donations, such as cash, new and worn clothing, boots, or any other necessary commodity you can send us will be deeply appreciated, and distributed after the most careful investigation to the most necessitous cases. That is an appeal for clothing for children who are in their present position largely because of the great distress that exists in the Division. That is not an exception. I have also a letter from Merthyr Tydvil, which was printed in the Press. At Merthyr Tydvil there is an insurable population of 20,000, of whom 3,000 are compelled to appeal to the public assistance committee. The letter is signed by the mayor of the town and also by the rector and the rural dean and by a Free Church minister. It says that it is pitiful in the extreme to watch children going to school with their bare feet protruding through their boots.

I have referred to my own constituency because it is typical, not, only of the district of South Wales, but of many of the mining areas in Great Britain, and we want to know, and are entitled to know, what the Government are doing in order to attract new industries of which we have heard a great deal in this House during recent discussions. What are the Government doing, or what are they proposing to do, in order to attract new industries to these districts in South Wales, which cannot by any stretch of imagination be described otherwise than as derelict? We have been told by the Parliamentary Secretary to the Board of Trade that 21 factories are in course of erection, and that statement has been corroborated by the Lord President of the Council, who stated during his speech that: One of the interesting results already of our departure from the Free Trade policy has been a certain influx of foreign manufacturing business. That tendency has been rather exaggerated in the Press, but it is a real movement and I would remind you that we in England have owed a good deal in the past to some of these importations of new manufactures. He went on to point out that these industries which it was proposed to set up in this country were to be set up without the aid of British capital, and he was pleased with the fact that the building of these factories is largely dependent upon capital from foreign countries. Ha continued: We brought weaving, a typical British industry to-day, from the Flemings. It was the French Huguenots who taught us how to make silk; and so it is to-day that we find the toymaker from Nuremburg, the clock makers from the Black Country, the perfumery and toilet accessories made in Paris are coming over to be made in this country, and also the finest kinds of ladies' stockings from Saxony. Those are industries that will be valuable to us because they will not only provide work to meet the demands of our own customers at home, but they will broaden our equipment for competitive orders coming from abroad, and increasing, I hope, our exports and trade. It is very remarkable that an almost identical speech was delivered in February, 1927, by the same right hon. Gentleman. He then stated that the newer industries were flourishing, and that there were more men and women in employment at that time than there were before the War. The only difference between the speech of 1927 and the speech of 1932 is that in 1927 he stated that the increase in population had beaten us. Here is another instance of complete harmony between the members of the present Government. The Parliamentary Secretary to the Board of Trade and the right hon. Gentleman the Lord President of the Council are singing the same song at week-ends, but does either of them believe that the mere making of toys, or clocks, or ladies' silk stockings, or perfumes or face paints, will have any substantial or material effect in reducing the amount of unemployment in this country?

There is a phase of the question of attracting new industries to this country to which, perhaps, I might be permitted to refer. I should like to know whether the Government have considered whether it is more economical to attract new industries into those areas where houses are already in existence for housing the people, or whether it is preferable to leave those in charge of such industries to plant them where they may desire? The question is whether it is not more economical to attract these industries to the areas to which I have referred, or to allow them to be established at places like Slough or Dagenham. I wonder if the Parliamentary Secretary could do a sum for me? If the policy for which he is at present responsible is capable of making possible the erection of 21 factories in so short a time, how long will it be before the whole of this country is covered with similar factories when the complete tariff policy of the Government commences to operate? The Minister of Agriculture has undertaken his task at the proper time. Had he been a little slower, there would, according to the Parliamentary Secretary to the Board of Trade, be no land on which to grow wheat in this country, because, at the rate at which these factories are going up, they will soon cover the whole country.

I have been associated recently with a movement in South Wales the object of which is to attract, if possible, some of these industries into the distressed areas, and the following particulars may be of some importance, as bearing upon the question whether it is not more economical to do as I have suggested, and as has been suggested in this movement, namely, to attract those industries into South Wales. I attended a conference at which 10 local authorities in South Wales were represented, and, in the course of the discussion, my hon. Friend the Member for Ebbw Vale (Mr. A. Bevan) quoted the case of a town of 14,000 inhabitants, and pointed out that the actual cost of building a town to house a population of that size would be between £2,000,000 and £2,500,000, or, roughly, a charge of 150 per head of the population, men, women and children. If it were assumed that all the industries in the localities represented at that conference were becoming extinguished, and the communities were to be moved elsewhere, the cost of re-housing them would be somewhere in the neighbourhood of £25,000,000. That would be the first cost; and, if other items were taken into consideration, the figures became staggering. With these facts in mind. I would ask the Government to consider whether it is not better to attract these new industries into existing areas, instead of allowing places like Dagenham and Slough to be over-populated, as will be the case within a very short time.

I want now to refer to the effect of the French and German quotas upon the employment of miners in Great Britain. I do so with the specific object of ascertaining from the Government whether any importance is to be attached to their declaration that tariffs can be used as a lever. It is true that the 15 per cent. French surtax has been removed from the coal that leaves this country for France, and the Government have prided themselves on that achievement. But what did they do? They did not use the tariff as a lever to compel France to reduce or lift her surtax, but simply arranged an interview between the British coalowners and the French Government. That is all that they did, and even the lifting of the 15 per cent. surtax has not made possible the employment of one miner in South Wales or in any other district in Great Britain. We are told that there is no connection between the Abnormal Importations (Customs Duties) Act and what France and Germany have done with regard to the surtax and the quota. Is that true? I find that the first information made public in this country as to what France intended to do was on the 15th November, and yet, before the 15th November, this Government had introduced a Measure imposing a tariff upon certain articles coming from France into this country. On the 15th November we had the first public news that France intended to reduce her quota of British coal, and on the 20th November the Abnormal Importations (Customs Duties) Act commenced to operate; and to assume that there is no connection or relationship between the attitude of France and the tariff policy of this Government is a reflection upon the intelligence of the French people, because they knew that immediately a Tory Government was in a position to legislate in this country tariffs were the only policy that such a Government would have, other than the policies of the Labour party or of the Liberal party.

In my opinion the Government have done nothing to affect the French quota. Mr. W. A. Lee, the Secretary of the Mining Association of Great Britain, stated, after his return from France, when the French Government had decided to reduce the Surtax, that: The additional quantities of coal from Continental coalfields thus allowed to enter France have resulted in the reduction of the general quota, first to 80 per cent, then to 72 per cent., and, finally, to 64 per cent. In effect this has been discrimination against Great Britain and in favour of Germany. It has been contrary to the interests of the French mines and the French mine owners have, in fact, complained that 500,000 tons in excess of the quota have been imported from Continental countries. 4.30 p.m.

Mr. Lee went on to say that the actual amount is very much more, and also that the British delegation informed the French authorities that they would have to take the matter up again with the British Government immediately upon their return. I desire to know whether it is the intention of the Government to arrange another interview for the representatives of the British coalowners, in order to see if it is not possible to increase the quota of British coal? With reference to the German quota, it has created a very serious situation for the miners. I find that British coal exports to Germany have been reduced from 5,386,000 tons in 1929 to 3,733,000 tons in 1931, a reduction of 1,653,000 tons in two years. Before the War we were sending into Germany something like 9,000,000 tons a year. It is estimated that the reduction in the German quota will put something like another 8,000 of our miners out of work and, in my opinion, that is evidence that tariffs are not an effective instrument and that you cannot hope to secure reciprocity by acts of retaliation. That is borne out by a German, Herr Bennhold, who spoke for the Prussian Administration of Mines quite recently. He said that the real cause of the coal crisis was the depression in German industry and that it was quite understandable that there should be a desire to preserve the limited home market by excluding British coal imports. He also lamented that Great Britain's depreciated currency and new tariff policy were not favourable for an international agreement and said that for some time to come the German coal industry would have to rely upon its own fighting powers. For the Government to assume that there is no relationship between the actions of the French and German coal importers and the tariff policy of the Government is a reflection upon the intelligence of those people, who did not anticipate a change in our fiscal system immediately upon the formation of the National Government. I found this information in the Press on Monday: Germany has secured the Brazilian Central Railway contract for 75,000 tons. It is understood that there is some disagreement as to an amount of money that is due to the Welsh coalowners, and as a result there was no desire on their part to make a bid for this contract. We are also informed in the Press that the Board of Trade and the Foreign Office have had the facts placed before them and that representations are being made to the Brazilian Government in the hope of a settlement being reached on the matter. I am hoping that the Parliamentary Secretary will give us some indication in order that our people may have real hope, and not the false hope that they have experienced recently in statements that there are more in employment and that we are about to turn the corner. That cannot be borne out by statistics even if you use them with comprehension. You cannot convince either the British or the South Wales miner. In 12 months, from February, 1931, to February, 1932, unemployed miners have increased in Great Britain by 54,390, and in South Wales and Monmouthshire during the same period there has been an increase, according to official figures given in answer to questions in the House, of 17,536. Again, I shall be told that Labour was in office during part of that time, but, even if you compare December, 1931, with February, 1932, the increase in the number of unemployed miners in Great Britain has been 37,500, and in South Wales 20,280. It is no consolation to tell us that there are more people in employment when there has been that substantial increase in the number of unemployed miners. I have endeavoured to secure some hope from the last statement made in the House by the Parliamentary Secretary to the Ministry of Labour. He said: I venture to think that the goal that I have indicated, namely a constructive attempt to find other occupations for the unemployed men and women in this country until such time as they are able to be reabsorbed in industry by the revival which we believe will follow the passage of the Tariff Act and an agreement at Ottawa, is well worth many and varied efforts."—[OFFICIAL REPORT, 3rd March, 1932; col. 1412, Vol. 262.] The Tariff Act has not been in operation for any considerable length of time, but surely the effect of the Abnormal Importations Act should be an indication as to whether it is possible to absorb some of our unemployed. What do we find in connection with that piece of legislation? According to figures submitted by the Minister of Labour on 25th January, 1932, in 12 industries which are directly or indirectly affected by that piece of legislation there were no fewer than 334,413 unemployed.

Earlier in my speech I referred to a statement made by the Lord President of the Council. I deliberately did that because I attach more importance to the statements of the night hon. Gentleman, who is a loyal, sincere Conservative, than I do to the unreliable statements of the one-time Socialist who is now Prime Minister. I hope I shall not be asked why it was that the education authorities in my division wrote to the Prime Minister, but in any case they did not write him in anticipation of being promised anything in the form of a humane administration of existing regulations or of new legislation, and they might before writing that letter be informed of this statement, which is to be found in the last speech that the right hon. Gentleman delivered in the House. This is what he promised, if it is a promise: The Government bas approached its work in a spirit of realism. It has examined the whole facts. Observation has to be made over the whole field. I am not committing the Government but the Government has decided to produce legislation. I have shown that it is the mandate that we are carrying out. He completed his speech by saying: I have really very little to say. That is typical of the right hon. Gentleman. He will probably be known in history as the man who could say a lot and mean nothing and take a tremendous lot of the time of the House in saying it. I do not expect this Government to cure unemployment. No Government can. It is a characteristic of all Governments that they legislate after the facts, and this Government more than any, because they believe in perpetuating a system under which all our people cannot be employed. I am asking them to leave alone the authorities who are humanely administering the so-called means test. No more incorrect language has ever been used than to refer to it as the means test. It would be much more correct, much more honest and much more honourable if the letter "s" was dropped and it was referred to as the "mean test." You can only deal with the unemployed by one of three methods. You can either starve them, or sustain them, or shoot them. You have not the courage to do two of those things, and you have not up to now had the decency to sustain them during their period of unemployment.

Mr. O'CONNOR

The hon. Member has criticised one of my right hon. Friends on the ground that he spoke a lot and did not mean very much. He himself has fulfilled, in the last 50 minutes at any rate, one of those criticisms that he directed to my right hon. Friend. Listening to his speech, I felt it a little remarkable that I did not remember having heard his voice raised in criticism of the Administration of which he was a, supporter during the last 12 months, when they were making such a shambles of the country that it may well take the most heroic efforts to get it out. The hon. Member's voice was not raised at this time last year. What was the Government of that time doing, in his own words, to attract new industries to the country? The programme was an original one—to raise the school-leaving age, to limit the number of motor cars at election time, to introduce a Trade Disputes Bill, which would only once again upset and exacerbate the most bitter feeling that had existed since 1926, to introduce a Land Tax, which was not going to be a pennyworth of use in industry, and to subject industry to the heaviest burden of taxation it had ever yet been called upon to pay. Those were their contributions and, at any rate, the achievements of the present Administration can fairly stand comparison with that kind of failure. What can Governments do to attract new industries To my way of thinking, they can do three things. They can provide steady and stable administration; they can reduce taxation, and they can give those industries some kind of shelter behind which they can develop and expand. Under each of those heads, the present Government have, at any rate, embarked on a programme which shows a little more promise than that with which the electorate was gulled during two years of Socialism.

It is not often that the Ministry of Labour gets bouquets thrown at it, and certainly I cannot recollect having delivered one at its door myself, but I think it deserves a tribute for the way in which it has dealt with the local authorities in respect of the requirement that they should administer the means test. They were faced with a very difficult position. They were asking local authorities to carry out a duty which is obviously distasteful, and against which there was a good deal of resentment in different areas and, with a great deal of tact and good temper, they managed to get that system adopted throughout the country with a minimum of friction. Not only is a tribute due to the Ministry, but it is also due in very large measure to public assistance committees up and down the country which are carrying out what is admittedly one of the most difficult and disagreeable tasks that those public-spirited men and women have ever been called upon to perform with, on the whole, great satisfaction and a lack of any hardship. Speaking for Nottingham, a great industrial centre, which has felt its full share of the blast of unemployment, and which has suffered for a great many years, I can say that so far as my constituency is concerned, I have had during the last five months only one complaint of the application of the means test by the public assistance committee, and it proved on examination to be unfounded. At the same time, it is obvious that the unequal application of the test in different parts of the country must bring difficulties and anomalies. Judged by every reasonable and logical test, nobody could expect a system to work which had as many forms of application as there are local authorities, but it is the old example of those instances so frequent in the administration of this country where in practice the theoretical objections prove to be ill founded.

Nevertheless, there is one matter about which I am extremely anxious to have some information from the Minister. Can the Minister tell us, when he comes to reply, whether there is a tendency in any part of the country for the means test to be applied in such a way that what I may call the fixed assets of the unemployed, are treated as spending value rather than—as up to reasonable limit, in my view, they ought to be treated—as capital assets from which a fixed income return ought to be received. In that connection, if there is any such tendency on the part of public assistance committees in different parts of the country to require unemployed men and women to liquidate fixed assets from small cottage property and little investments, and even to come down to furniture, I feel very strongly that it is a matter which the Ministry ought to correct by means of a circular. Obviously it cannot control, but at any rate it can guide, and it can rely upon local opinion following an administrative expression of opinion of that kind.

Mr. ANEURIN BEVAN

Is the hon. and learned Member aware that the public assistance committee has to treat an application for transitional payment as if it is an application for public assistance and therefore must take into consideration the fixed assets of the family?

Mr. O'CONNOR

I am not complaining, and I think that it would obviously be right that the fixed assets should be taken into consideration. I am suggesting that it ought not to be necessary to treat them as assets that could be liquidated and used as current income, and any general tendency of that kind above a reasonable limit I should certainly deplore. If the hon. Gentleman will allow me to conclude, he will find that there is not a great deal of difference of opinion between us upon that line. I would remind the Minister that the signal demonstration of solidarity which occurred in the country last October was very largely due to the fact that property in this country was widely and deeply distributed, and went down by its roots into the very humblest homes of the land. We could not with equanimity contemplate the facing of a renewed crisis when those roots had been shaken and when that ownership of property had been permitted to be dispelled. The idea of many of us on this side of the House is the wider spread of property, and any measure or method which involved the distribution of the property and forcing it into liquid channels would not be in conformity with my principles at any rate.

There is another matter which I should like to mention. Nobody can doubt that unemployment insurance at the present moment is in a chaotic condition. The temporarily unemployed are obviously receiving harsh and unequal treatment. There is not the smallest justification upon the merits of the temporarily unemployed either for the rate of contribution which they are paying or for the low rate of benefit which they are receiving. In a solvent insurance scheme which comprised only those who are temporarily unemployed, leaving out that hard core of unemployment which has broken the back of every attempt at unemployment insurance, leaving that apart, the benefits might be very much greater and the contributions obviously might be very much less, that is, in a watertight scheme of insurance. The obvious answer to that is that nothing can be done, no initiating step can be taken, until the report of the Royal Commission has been received.

I should like to know what the Government are doing to expedite the receipt of that report. The Commission is presided over by a distinguished judge who sits in the City of London. He still sits in the City of London. He held sittings for the greater part of last week and the week before. Surely it ought to be possible, in view of the extreme urgency of this problem and the absolute necessity of devising legislation to make a watertight scheme which will segregate unemployment insurance from transitional payments upon some national basis to make representation to the City of London to release the learned judge to pursue his duties in this connection the whole of the time so that the Report of the Commission may be expedited.

One unfortunate lesson the country learnt from the last Administration—it was almost worth having the last Administration, bad as it was, in order to teach the country that lesson—was that you cannot cure unemployment by expenditure, and that whatever employment you give in that way you merely "cut off," on the other hand, on account of the burden you impose upon industry for the raising of the expenditure. That lesson was learnt quite early in the lifetime of the last Government, and probably their obvious break up both of hopes and of activities dated from the moment when they discovered that the solution of spending money was in fact no solution at all. The solution of expenditure of money is rather like an inadequate eiderdown on a winter's evening; when you cover your shoulders, you uncover your toes. If a Government spends money, industry cannot meet its needs; it slackens down and has to face a burden which is excessive and impossible to carry.

But outside the realm of public expenditure there is a great deal that can be done, and is being done in private directions in the country at the present time, by way of providing, not employment, but occupation for a good many of those unfortunate men. I should like the Minister to tell us what view the Ministry takes of those schemes. There is the well-known scheme at Brynmawr by which derelict refuse tips were transformed into very attractive public gardens. There have been similar schemes in various parts of the country. There has been boot-and-shoe making, and cabinet-making by unemployed men for the benefit of people who were in difficulties themselves, and which has had no profit-making end. There would appear to be a vast possibility of the expansion of useful occupations of that kind for men who are on transitional payments in the areas in which they are not likely at an early date to see any resumption of industrial activity. Nobody suggests that the subject of private profit should come in at all, but by little or no expenditure a good many of those centres could be set up, and especially at a time like the present, when the State itself is an enormous employer of labour.

I suppose that the historian in the future will look upon us as the most absurd and insane people in the world. [HON. MEMBERS: "Hear, hear."] Exactly, I will give the instance which I have in mind. We have the postal service rim by the State. We have about half the facilities we enjoyed before the War, much less efficiency in every respect; we cannot get a telegram delivered just when we want it and so we do not send it; we have no Sunday services, and practically no really efficient express postage servitce; and at one and the same time we have 2,500,000 men unemployed from whom a selection could be made to perform useful public services, not for profit or advantage, but simply in recognition of the fact that those who are in receipt of public, money are entitled to be called upon to do public service for the rest of the community. I hope that in looking through the various types of Government employment it may be found possible for some occupation to be provided for a good many of those men who would be only too delighted to do it for the maintenance of their self-respect and self-esteem and also for the benefit of the community as a whole. When all is said and done, the real hope for the unemployed of this country will not be to-day in a discussion upon the Consolidated Fund Bill. The real hope for the unemployed, if they can only see it, will be when the Budget is introduced after the Easter Recess.

Mr. COVE

Does the hon. and learned Member mean that unemployed men should run about with telegrams, and take letters about? I would like to be clear about the matter.

Mr. O'CONNOR

I have not the slightest hesitation in saying that if in a country area there are a number of unemployed men and there are not enough people to deliver telegrams, and those men are in receipt of transitional payment, they ought to be supplied with bicycles and sent out to deliver them.

Mr. THORNE

Who is going to buy the bicycles?

Mr. O'CONNOR

I would rather buy a few bicycles than see those men standing against the street corners doing nothing.

Mr. THORNE

You say that spending money will not find employment.

Mr. O'CONNOR

Certainly.

Mr. LOGAN

The hon. and learned Member said something about historians looking upon us as absurd—

Mr. O'CONNOR

The hon. Gentleman will have an opportunity to reply, I have no doubt, in a few minutes. The real hope of dealing with the unemployment problem is not, as I say, to-day, but it will occur when the Budget is introduced. In my view at any rate, there is no real hope of stimulating industry successfully without a very drastic reduction of direct taxation. Sir Josiah Stamp, who is by common agreement one of the most eminent economists in the country, has said that every addition of sixpence to the Income Tax adds 500,000 men to the list of unemployed. The date upon which this country turned the corner and began to decline in industrial prosperity was the date when Lord Snowden added his extra sixpence to the Income Tax a oouple of years ago. He "lost the 'bus" on that occasion. Had that step not been taken, conversion operations would have been possible which subsequently were not possible. Industry received a blow from which it certainly has not recovered at the present time.

Many Members of the House are receiving deputations and representations for the restoration of the cuts which were imposed upon various forms of salary last October. I hope that it will be borne in mind that the salaries which are being paid after those cuts are only being provided at the cost of a burden of taxation which is strangling and oppressing industry, and upon the reduction of which the revived activity of industry really depends. The first obligation, if there be a surplus—and surplus seems to be in the air at the moment—will be to apply it towards the reduction of direct taxation. You can only arrive at a solution of the unemployment difficulty by facing the other way and releasing capital for industry so that industry may absorb the men whom Governments have proved continuously unable to absorb.

5.0 p.m.

A lot is being said about the Budget being balanced and that therefore there will be a surplus which can be raided. I hope that nobody in the House is under the misapprehension that except on paper the Budget is in fact balanced. Death duties, for instance, which obviously are capital taxation, during the last 10 years yielded £63,500,000 more than was applied to the redemption of Debt for the same period, so that the destruction of that obviously capital asset has been greater than the amount which has been applied towards the redemption of Debt for the same period. Lord Lothian, who is a Member of the Government, calculated that at least £200,000,000 of the present direct taxation was produced by the sale and destruction of capital, and that was long before the additions to direct taxation made last September. Those additions have resulted in a position in which the direct taxpayer at the present moment is bearing 66.16 per cent. of the total taxation of the country. The indirect taxpayer, not including any yield that may come from the Import Duties Act, contributed at the time when that Act was introduced, only 33.84 per cent.

Those are staggering and startling figures and show that the life-blood of industry is being taken and that industry is being left blood dry. How can we compete with other countries, raise our industrial efficiency and reorganise our industries if at one and the same moment we are depriving industry of the only method by which it can compete and reorganise? There is a great deal to be said for a Soviet There is a great deal more to be said for a Soviet which takes the responsibility of equipping industry and supplying it with its capital than there is for a system which leaves industry in private hands but at the same time deprives private industrials of the power to keep industry going and to keep the wheels of industry going round.

One has only to look at a single instance to see how vital is the reflow of capital into industry. Take the case of the co-operative societies. They are the only retail distributing organisation in this country at the present time which is consistently expanding and going ahead, and the reason for that is that their earnings and reserves are not burdened with this colossal weight of taxation. Therefore, they are able to put aside funds with which to expand and improve their organisation and premises. The conclusion that I invite the House to draw is that never until we turn our backs upon the mounting of direct taxation at anything like the present rate can we hope to see any real revival of industry. Without that there is no hope of conversion and no hope of our really retaining the stability of our exchanges or preventing the flight abroad of capital whose use here we render unprofitable by the present rate of taxation.

Many of us on this side of the House look at the Government and the Chancellor of the Exchequer to stand firm upon this issue and not to be frightened by any threats of resignation from whatever quarter they may come. If they do that, I am sure that they will find that those who threaten resignation upon an issue of this kind are going contrary to the feelings of the vast majority of hon. Members who sit on this side of the House who, I am sure, feel with me that, taking the long view, the only hope for reestablishing industry is by lightening the burdens that are upon its back. If the Government do that, I am convinced that they will do a great deal more than listening to any projects that are put before them to establish industries in this country largely at the expense of the direct taxpayer.

Mr. CAPE

In taking part in this Debate I should like to comment upon the speech of the hon. and learned Member for Central Nottingham (Mr. O'Connor). The hon. and learned Member always interests me when he makes a speech, because he is so old fashioned in his ideas and arguments. He seems to be so forgetful that. one cannot be annoyed with him. One feels a sort of sympathy for him. He has told us what a reduction of Income Tax would mean to industry. He must have forgotten that twice since 1920 the same story has been told to us, not by him, but by other eminent men belonging to his party. They told us that industry would flourish if we had a reduction of Income Tax. Although we have had two reductions in the Income Tax rate during the period to which I have referred, it is a striking fact that the years immediately following the reduction of the Income Tax were the worst that we had during that period. I cannot see that a reduction of Income Tax would give that fillip to industry which the hon. and learned Member has tried to indicate.

He made a point in regard to the absorption of unemployed men. His argument is to exploit the unemployed man to lower the standard of life of the employed man. He gave as an instance the Post Office and suggested that unemployed men might be utilised in the public service for the delivery of letters and telegrams. If we used unemployed men to do that kind of work we should either have to pay the men for the work or we should have to say that we were conferring a boon upon them by allowing them to do something for the State because they happened to be unemployed. We should have to dismiss the rural postmen and the telegraph messengers in order to put the unemployed men into occupation. What else the hon. and learned Member meant I cannot understand. Such an idea would mean that for every man we put into work we should be putting another man out of work. There is one way in which the hon. and learned Member seems to have been fortunate as representative of the Central Division of Nottingham. He tells us that. although he has some doubts as to the application of the means test, in the area that he represents he has only had one case of real complaint in regard to the application of the means test, and that on investigation of the case it was shown that no other course could have been taken than that which had been taken.

I have not been so fortunate. I come from a district where the relief committee is as sympathetic as any committee in the country and has tried to apply the means test orders in the most humane manner, but more than one person has approached me and complained of the hardships which the means test has imposed upon them. I do not want to deal with the question of the means test now. Much as I differ from it, I realise that it is in operation as the result of a vote of this House and that an obligation has been placed upon the public assistance committees to put the means test into operation. I do, however, agree with my hon. Friend that even if the Ministry of Labour cannot dictate what policy shall be adopted by the committees in the application of the means test a circular might be issued to local authorities advising them what things ought to be ignored or taken into account in connection with an application for transitional benefit. It appears to me that the Ministry has made up its mind that it will give no advice whatever, because in answer to a supplementary question this afternoon the Parliamentary Secretary to the Ministry adroitly avoided the real issue by saying that the public assistance committee has discretionary power. We want to get them beyond the Poor Law basis and to say that the income of an unemployed man should not be calculated on the same lines when he is applying for transitional benefit as is done when he is making an application under the Poor Law system.

A large number of the men who have appeared before the committees applying the means test have served their country in its hour of need and have been granted a certain amount of money, not for their service but on account of disability incurred during that service. It is unfair to calculate that source of income against them when assessing the amount of transitional benefit. We should all be horrified if an employer of labour said to an ex-service man: "What pension have you?" "I have 15s. a week," replies the ex-service man. Whereupon the em- ployer says: "I pay £2 10s. a week as the normal rate, but seeing that you have 15s. a week pension, I am only prepared to give you £2 a week." I do not think that any Member of this House would stand that sort of thing. That is why we say that when an ex-service man applies for transitional benefit lit is not fair that his pension should be taken into account. There are also men who have been disabled in industry and who are receiving money as compensation because of the disabilities they incurred when they were working in heavy and other industries under a private employer. In that way they do work for the country, and we contend that in their application for transitional benefit they ought to be fairly treated with regard to their compensation money.

Unemployment has been debated in this House for many years. It was debated before I was a Member of Parliament. It has been an issue at the last eight or nine General Elections, and almost every party has said that it had a remedy for the unemployment problem. I have never made such a statement, because I am satisfied that under the present system of society, the present method of running industry and the stranglehold that the financiers of this country have upon industry, no Government will be able to solve the unemployment problem. It is, however, fair to say that some Governments have made frantic attempts to minimise the problem. Regardless of What the last Government may have done in connection with unemployment, I maintain that if we go into the political history of parties and consider what the Conservative Government did in 1924 to 1929 we shall find that their record is much worse than the record of the last Government, and that record was not a good one. The Conservative Government's record was a bad one. It upset every industry in the country. The Conservative Government from 1924 to 1929 did make slight efforts to make the country believe that they were doing something to solve the problem, and when the Labour Government came into office they also tried to do something towards a solution, but both of them failed. The present Government, however, have not tried to do anything. They have not made any attempt to solve the problem.

In my county, which is not a big one, I find that at the present time the number of wholly unemployed miners is 3,587, or 31.5 per cent., while the temporary unemployed miners number 466, or 4.1 per cent., a total percentage of 35.6 of miners in that county unemployed—the highest percentage of any county in England. That is 2.9 per cent. higher than 12 months ago. These are the figures given in the Labour Gazette. In the iron and steel industry the percentage of unemployment in the county of Cumberland has gone up from 44.2 per cent. to 47.2 and in the iron ore mining industry the percentage of unemployment in 1931 was 30.8 but at the present time it is 40.6.

We are constantly hearing through the Press and in speeches from Members of the Government as to how industry in this country is flourishing. According to these statements it would appear as though employment was rising at a very rapid rate. I have not been able to find out where this increase in employment is taking place; I cannot find out where the boom in industry has occurred, of which we hear so much in the public Press. At any rate, these statements cannot apply to the northern counties of England, because instead of there being any signs of improvement in industry and trade we are constantly hearing of reductions in employment in almost every industry in the northern counties. We are entitled to some information as to what efforts the Government are making to help industry. This Government has made no attempt to solve the problem of unemployment except to put into operation the Import Duties Act. There has not been sufficient time to enable us to say whether that Act is going to have a good effect or otherwise, but we can have our opinion as to what will be the results of the Act, and we look with great fear and alarm to its operation, because even if it put a few more men into work in some industries it will dispossess a great many more and in a year's time we shall have more unemployment than we have to-day.

The Government also have gone out of their way to prevent men working. They have stopped all relief works. I am not one of those who jump up and put supplementary questions to Ministers at Question Time. I sit here listening to the answers given by Ministers and Parliamentary Secretaries, and some of them, I admit, are very adroit, most of them evasive and sometimes they are amusing. Questions have been asked of the Ministers of Health and Transport as to whether they have sent circulars to local authorities telling them to stop any further public works. The answer has been that they have not done anything of the kind, but that they have drawn the attention of public authorities to the need for economy. While they have not told them in direct language that they must not proceed with new works, they have given a strong intimation that 4f they do so they will get into trouble. When a public authority receives a letter from a Government Department warning them not to enter into any further expenditure they immediately say that they must obey the order of the Government and stop all relief works.

At the present moment in my own county there is such a complete stoppage that we have not one public work at present in progress throughout the whole of the county. We had road schemes and bridge schemes, but everyone has had to be stopped; and if you take into consideration the number of men out of work in the heavy industries and the number of men out of work through the stoppage of these relief schemes the unemployment in the county of Cumberland stands about the highest of any county in the British Isles. But the stoppage of these relief works means also that the spending power of these men is reduced, their standard of life is lowered, and the business men of the district are suffering keenly the lack of spending power on the part of the workers in that area. The money that goes into any industry comes from the purchasers of the commodity manufactured by the industry, and if money is not in the community they are unable to buy these goods. It will not matter whether you have an import tax or not, if you cannot sell these goods the industry will still go down. Therefore, I say that the stoppage of relief works reflects on the business people of a locality, and they have to bear a, burden which is probably greater than is generally realised.

In addition, the Minister of Agriculture by an order can give grants for the development of allotments. That scheme has gone. The hon. and learned Member for Central Nottingham (Mr. O'Connor) referred to an estate at Brynmawr, where there was a scheme for the development of allotments. Provision was made for the purchase of seeds at a reduced rate. The Government have entirely washed their hands of that scheme, but the Society of Friends have come in and are trying to do what ought to be done by the Government. If we want to keep some of our unemployed men occupied and help in the raising of foodstuffs for themselves and their families, surely money spent in that direction is well spent? The Society of Friends see that they can be of great benefit to the unemployed man and his wife and children, and also of some benefit to the State. I should also like to ask the Secretary for Mines whether his Department is doing anything in regard to the carbonisation of coal. Have any further steps been taken in this direction? Probably this is not the appropriate time for putting that question, but I hope he will consider the matter.

The Minister of Labour has had a good deal of correspondence with the General Council of the Trades Union Congress in regard to the Anomalies Act. That Act was passed by a Labour Government. I was one of those who was not very much enamoured of its provisions, and that applies to most members of the Labour party. But there is a provision in that Act by which an advisory committee could be called together to suggest certain regulations for carrying out the provisions of the Act. A correspondence extending from 9th December to the 14th March has passed between the Minister of Labour and the secretary of the General Council of the Trades Union Congress. It may be asked why the Trades Union Congress should want to interfere. They have just as much right to interfere as the Employers' Federation. They represent from 4,500,000 to 5,000,000 workers in this country, and they have a, perfect right to put questions to the Minister. I think the Minister accepts that position. They have asked that the advisory committee should be called together to consider the working of the Anomalies Act, but up to the present time the right hon. Gentleman, in his usual courteous manner, has given them a blank refusal and has said that at the moment he is not prepared to do anything. I think he should attempt something in this direction in order to case the position. While I realise that we cannot solve the unemployment problem this afternoon I hope the Minister will give us some indication of the steps the Government propose to take in order to minimise the problem of unemployment 'as it confronts the country to-day.

5.30 p.m.

Mr. SUTCLIFFE

In addressing the House. for the first time may I ask for that leniency and kind indulgence which it so generously accords to one who speaks here in his early days. I have listened with great interest for some weeks to many speeches, in fact, it may be called a constant stream of oratory, and I now feel that the time has come for me to push off from the shore and join that stream. It has been said that the great source of pleasure is variety. If that is so, we who have listened so attentively since we came to this House must have derived very great pleasure from the Debates, because the topics that have been discussed have been so many and so varied. They started at the top with a. tariff Debate and the wheat quota Debate, and getting nearer the bottom we had the discussion on the musk rat and its evil effects on certain members of the community. As representing a constituency almost wholly given over to the cotton industry I feel that I could not do better than join in a Debate on unemployment, especially as so many of my constituents are in the unfortunate position of being unemployed. Let me refer first to the events of last autumn. The outstanding feature of those events was the great rally to the National Government on the part of a vast number of the unemployed in every part of the country. They saw in this Government new hope and a new prospect of finding work—that work which had been lacking in many cases for years. What struck me most was the earnestness, the trust that they imposed in the Government. At last, they felt, there was someone and there was a Government which would find them genuine honest work.

The hon. Member for Workington (Mr. Cape) has said that the Government have done nothing towards providing work for the unemployed. I think the test must be this: Are they discontented and disappointed with what the Government have done up to date? They are not disappointed in any degree whatever. The vast majority of them are content. In some cases, in many cases, they are waiting patiently, but they are content with the knowledge and sure hope that the Government mean to do something definite for their good. I suppose that it is the business of an opposition to oppose. It seems to me that this Debate started with the idea that the Opposition must do something to justify its existence. At the General Election no one said that the unemployment problem could be solved in seven weeks or even seven months. It was said on every platform that the solution would take years and years. I think the House will agree that so far the Government have done well and have gone some distance along the road to a solution of the problem. Surely no Government can ever have done so much in so short a time as the present Government have done. We have only to consider a moment and we see a great return of confidence in the country since the Government came into power, confidence which is the admiration and indeed the envy of the whole world. We have largely restored our financial position in this short time and we are on the way to restoring our trade position too.

Let me look at the figures of unemployment in the cotton industry, with which I am particularly concerned. In January, 1931, there were 43.9 per cent. of operatives unemployed. In January, 1932, the number had fallen to 28.2 per cent., and in February, 1932, it had fallen to 26 per cent. The numbers actually at work at the end of last month were over 75,000, which is no less than 16.9 per cent. more than a year previous. This does show a definite improvement. It is not very long ago since Lancashire had the greatest cotton industry in the world; the whole world relied on Lancashire for cotton goods. In 1912 the production was as much as 8,000 million yards, of which 6,900 million yards were for export. In those days Lancashire goods accounted for nearly three-quarters of the total international trade in such goods. It was not until Japan and India started to compete that England began to lose her priority in cotton manufactures.

The world slump of 1921 also added to the injury. In 1924–25 the demand had gone back to what it was in pre-War days. Meanwhile India had come along to such an extent that no less than 1,000 million yards of Indian trade had been lost. In place of 1,600 million yards in 1927 only 390 million yards went to India in 1931. Meanwhile the percentage of unemployed in the British cotton industry rose from 10 per cent. in 1927 to 27 per cent. in 1931. So the position has been going from bad to worse, largely due, in the case of India, to the Socialist Government, which let matters get entirely out of hand by being so lenient with those who were the greatest enemies of this country. If it had not been for the firm stand which has recently been taken in India by the present Government, we should have lost a great deal more of our trade in cotton goods with India.

Therefore I welcome unreservedly the constructive work which has been done so far by the National Government. We all know that it is only a beginning, and that there is plenty more to be done, but we also believe that we shall have a nice little time in which to do it. In the few months of the Government's existence we have made an extraordinarily good start. I welcome the definite improvement which has already taken place as a result of the firm hand in India. Inquiries from all markets there are improving and arriving in larger numbers, even from Bombay, which is the centre of Congress activity. I also welcome the tariff policy of the Government, because it is likely to lead to greatly increased employment even in the Lancashire cotton trade, though that trade is not so dependent on tariffs as are some industries. Whatever hon. Members opposite may say, taking the situation as a whole there has been such an improvement as did not seem possible last autumn, and I am sure we, can all look forward to further increased prosperity as the months and the years of this National Government go by.

Mr. GORDON MACDONALD

As a Lancashire Member it gives me great pleasure to extend the congratulations of the House to another Lancashire Member on his maiden speech. It is not my intention to follow him in his remarks about the cotton industry. The hon. Member did his business very well indeed, and I think that his constituents in Royton will be quite pleased with a Member who will see to it that cotton interests are not in any way neglected in this House. We have raised this question of unemployment for three reasons. In the first place we want to remind the House of the desperate plight of the unemployed. We also want to show that the lot of the unemployed has not improved since the present Government was formed. Thirdly, we want, if we can, to get some better statement from the Front Bench as to improved treatment of the unemployed in future.

As to the first reason, it should not be necessary to spend any time in proving that the plight of the unemployed is desperate. I was rather surprised that the hon. and learned Member for Central Nottingham (Mr. O'Connor) should have tried to show that the Government had brought about some improvement in the lot of the unemployed. I speak mainly for the mining industry, and when I compare the latest figures issued with the figures of 12 months ago, I find that the increase in unemployment in the mining industry is nearly 6 per cent. In Lancashire and Cheshire it is 7 per cent. We fail to find any satisfaction in the activities of any Government when the figures at the end of six months show a substantial increase in the number of unemployed in the mining industry.

When I turn to another industry, the building industry, I find again that during the same period the increase of unemployment has been 7 per cent. Needless to say the increase of 7 per cent. in the mining industry in Lancashire means a very heavy increase indeed. We are not satisfied that all that could be done to find employment for the unemployed miners is being done by the Government. On many occasions we have called attention to the various methods of treating coal. We have been put off times without number by statements that the matter is being investigated, and that the Government hope to make some definite announcement on the question at an early date. We hope that to-day the Secretary for Mines will be able to give us more encouragement than we have had in the past regarding the various methods of treating coal which have been put forward by the authorities.

One other question I want to refer to is the means test. We have been told on many occasions that the Minister of Labour cannot do more than he is doing and that a commission is now sitting. Cannot he do something to expedite the report of that commission? Let us find out what the commission think about the matter. I call his attention to what is happening in the country, especially in Lancashire. We find, in Lancashire, that some authorities are treating persons under the means test in a vastly different way from others. The Minister yesterday in reply to a question stated that the percentage of those applying, who were disqualified under the means test, was 26.1 for the county area of Lancashire, and in one of the boroughs, namely, Wigan, the statement is that the percentage disqualified was 11.6. My Division happens to surround Wigan. Most of the unemployed in Wigan are unemployed for the same reason as the unemployed in the Ince Division. They have worked at the same collieries and have been stopped for the same reasons. But we find that men who have worked together and circumstances of whose cases are almost identical, are being treated differently, simply because some of them live inside the Wigan borough and others outside it, in the Ince Division.

I hardly think that the Minister or the Parliamentary Secretary can approve of a system of applying the means test which treats differently, almost identical cases, because one man happens to reside in the borough area and the other in the county area. We hope that the Minister will take action to remedy that state of affairs. Lancashire has been severely hit by unemployment, and it is being treated worse by the public assistance committees than almost any other county. There was some reference in the Press to the possibiltiy of the Minister having to intervene in Glamorgan because Glamorgan had been too generous. If generosity is a reason for intervention I hope that the Parliamentary Secretary, as a Lancashire man, will agree that meanness is also a reason for intervention.

I refer to two cases, to which my attention was called last week-end, to show how this system is working. I take, first, the case of a man with a wife and two children who is living with his father-in-law. Because of that fact the father-in-law has been allowed one pound instead of 23s. 3d. The man now states that there is a possibility of his wife getting work, and he has been informed by a member of the local guardians committee that if that should happen, and if he should have an increase of income in that way, he can take it for granted that there will be a further reduction in the transitional benefit paid to his father-in-law. I realise the limitations under which the Parliamentary Secretary has to work, but if a wife is prepared to go out and work in such circumstances as these to augment the family earnings I hope that it is not to result in a further deduction from the transitional benefit of the father-in-law. I have another case of a miner with a wife and one son. They gave the son a secondary education for which they went into debt. Now the son is earning just under £3 a week as a clerk, and, being single, he has to pay Income Tax. The whole of the father's transitional benefit has been knocked off on that account, and the son, for whose education his parents are now in debt, has to keep them. I know the difficulty of dealing with such cases, but I hope that instances of this kind will receive the attention of the Minister.

The Government have evidently decided not to do anything directly to find work. The recent speech of the Parliamentary Secretary indicated that the Government do not think that there is any hope in that direction. They regard it as a wrong policy, and, taking that view, they are entitled to discontinue that policy. But, since they have implicit faith in tariffs, and have decided not to create work schemes, we ask them to see that these unemployed people are treated properly. We of this party have stood in the past for work or maintenance. We still stand for that principle. Our contention is that the man without a job is as much entitled to a job as any man who is in a job. We have always contended that the man without a job is as willing to work as any man in a job. If the Government are unable to provide work for these people—and it is work that they want—surely we cannot be charged with asking too much, if we say to the Government: "At least provide these people with an income which will keep them in a physical condition to be able to perform their work in case they do get employment." The present 15s. 3d. is too little.

The hon. and learned Member for Central Nottingham says that if there should be a surplus ion the forthcoming Budget it should be used for the reduction of direct taxation. He argues that by that means employers will be enabled to find more employment. I hope that the Minister as a Member of the Cabinet will see to it, if there should be a surplus, that the 10 per cent. deduction, made in the name of equality of sacrifice, is restored to the unemployed. Surely no Member will say that there ought to be a reduction in direct taxation as long as the unemployed are suffering a cut of 10 per cent. Our case is that in the interests of the country the 10 per cent. ought to be restored. Last Friday night I spoke to a friend—not a supporter of mine but a supporter of the National Government—who keeps a boot and shoe shop. He was at the door of his shop and I asked him, "How is business" He replied, "Very bad indeed." In front of the shop stood 20 or 30 children, not one of whom was properly shod. I said to him, "Surely there is a need there for boots and shoes?" and he said, "There is the need but they have not the means. These are the children of unemployed people. How can they buy boots and shoes with the present rate of benefit?"

If an increase in purchasing power means employment, I think that the nation would gain an advantage by the restoration of the 10 per cent. cut, because it would enable the fathers and mothers of those children to buy the boots and shoes which they need. Our approach to the problem of unemployment differs from the Government's approach to it. We frankly declare that we see no hope of solving the problem under the present system. We admit that there is no hope of that system being changed by this Government, but, in the meantime, while waiting for the day when people will sit on those benches opposite who are determined to change the economic system—while waiting on that glorious day to come—may we not ask this Government to do a little more to see that those for whom they do not intend 10 find work by direct schemes at least get such a rate of benefit as will enable them to provide reasonably for their dependents and at the same time assist trade? I hope the Minister will realise that our sole purpose in raising this discussion is to get a gleam of hope from the Government, an indication that they intend to do something in the direction of finding work, and also that they will see to it, should there be any surplus in the forthcoming Budget, that the unemployed get fair treatment.

Mr. MORRISON

No Member of the House, in whatever part he may sit, will complain of this subject having been raised before we separate for the Easter Recess, and I am certain that all have appreciated the tone of the Debate up to the present. In spite of the great events which have taken place this Session, the unemployment question has been in the minds of hon. Members all the time. It has been a sort of recurrent and persistent base to the proud music of triumph that has been heard. As the hon. Member for Abertillery (Mr. Daggar) said, it is a matter of the gravest concern to anyone who has sufficient imagination to visualise the condition to which so many of our citizens have been brought particularly in depressed areas like South Wales.

My reason for intervening is to direct attention to three points. The first is a point which was touched upon just now by the hon. Member for Ince (Mr. G. Macdonald), namely, the question of direct taxation and unemployment. Whatever we may think about the condition of the unemployed and the adequacy of the pittance by which they are kept alive to-day, there can be no doubt in the mind of any hon. Member as to the existence of a relation between the incidence of direct taxation and the amount of unemployment from which this country has so long suffered. If we are bending our energies to curing unemployment, which means giving work, rather than merely alleviating unemployment by a pittance, then it seems to me that this question of the load of taxation upon our people must be faced with as open minds as we can bring to bear on the subject. The position of our industry is surely this. In order to maintain in work our vast industrial population we must either have foreign markets which will absorb the products of our people, or, if that foreign market is taken from us by circumstances outside our control, we must see that the home market is, as far as possible, reserved for their energies and is made as capable as possible of purchasing the goods which they produce.

We have made an alteration in the fiscal system, designed to preserve to some extent the home market for the activities of our own people but I urge upon the Government that there is no use preserving the home market, in order to give employment, if that home market is exhausted by heavy direct taxation and is unable to purchase the goods when it is reserved. All taxation is bad, but from the point of view of its effect upon unemployment, direct taxation has a worse effect than indirect taxation. If you impose indirect taxation it may be said that you will send up the price of some goods, but, if the purchasing power is there, untapped at the source, it will find its way into freer channels. If it cannot be expended upon the purchase of the taxed goods, it will find some other way of expressing itself that will give work. But in the case of direct taxation you tap the source of the reservoir of purchasing power and that is the wrong way to help the position of the unemployed. The position is this: The purchasing power of the people is like a reservoir. If it can flow at all it will give work and set the wheels going. If there is a leak in the reservoir, or if it is tapped at the source then the feeble trickle that escapes cannot turn any wheels or give any work.

6.0 p.m.

The House has been disappointed by the increase in the numbers of the unemployed in the early months of this year, but the House has been exhilarated by the figures published in the newspapers showing the magnificent response that has been made by the direct taxpayers to the great calls that have been made upon them. Surely the two filings are coincident. It cannot be denied that the general conditions for industry in the first few months of this year have been better than for a long time past, but there has been some countervailing influence at work which has prevented us from reaping the full benefit of that improved spirit in the country, and I suggest that it is to be found in the fact that you have, in the first three months of this year, drawn out of the pockets of the direct taxpayer this vast sum of hundreds of millions of pounds. They have found it, but how? Let us try to follow it out.

Taking the higher range of incomes for the moment, it has meant that a man who has been called upon to pay this big sum has had to postpone for this year building that new wing, buying that new motor car, or going in for some other form of expenditure which would give work. In the moderate ranges of income, it has meant perhaps that a man has had to give up that long-cherished dream of a piano that he wanted to buy, or some such article as a wireless set or a gramophone on which he has set his heart—on such things people do set their hearts—and which, if he had realised his ambition, would have given work, but he has had to put it off till the taxes are paid. If you come to the lowest range of direct taxation, you find a man perhaps who has had to give up the hope of that bedroom suite in Jacobean oak, to be delivered in a plain van, or a new carpet for the parlour floor, or who has had to make his wife go without a new hat, or who has had to make his three years' suit last for four years.

That is the way in which the money has had to be found, and that is not the end of the story. A great deal of this direct taxation that has been paid in this quarter has been paid on money borrowed from the banks, and it means that the ordinary citizens, faced with this call, having borrowed the money, perhaps, for the first time in their lives to pay this national obligation, are in the position of men who have a debt with their banks. It means, from the banks' point of view, less money to lend for industry, and, from the point of view of the man with the overdraft, that he must economise until he is clear of the debt. What does economy mean in the long run? It means sacking men, putting people out of work. If a man is discharged from a factory because of bad trade, the employer is the hand that gives him that fatal push, but the arm behind the hand is the consumer, who has had to economise and not buy the wares of the employer, and the shoulder behind the arm and the hand is the benevolent, all-wise State, which has by taxation lowered the purchasing power of the community in that respect.

Every time we in this House increase direct taxation we present to hundreds of thousands of our fellow-citizens, in the pay envelopes which they receive at the end of the week, an intimation that their services are no longer required, and every time we fail, when the opportunity arises, to reduce direct taxation, we are sending a fresh message of hopelessness to the men who are in the queue; and, for my part, I do not think the unemployed man who has suffered the sorrows of unemployment would thank you for a prolongation of that unhealthy financial condition, even if you did give him an extra sixpence or shilling for his unemployment pay. Indeed, I think that that was the mandate that we got at the last election. They have discovered that this policy of high direct taxation brings misery to thousands and thousands, and they resolved to try the other way, and I hope the Government will be democratic and follow what the people want.

The second point that I would like to mention is that I hope the Government will not pin its faith, for an improvement in our conditions, solely on what is called rationalisation. In my view, these schemes for the reorganisation of industry are more theoretically than practically sound. There is a limit, in my view, to the extent to which you can gain economy and increase efficiency by grouping together organisations under the same directing head, and that limit is to be found, in the first place, in the scarceness of super-men who can run these vast and unwieldy organisations. If you carry it too far, you get the control so diffused in Departmental channels that it ceases to be humane or efficient when it comes to the man who is employed.

I would rather that the Government should turn its attention to the development of industry by the small producer. The larger organisation is vulnerable by its very bulk; when it falls, it involves thousands in its ruin. I would sooner see industry developed along separate cells of independent producing units, bulk-headed, as a ship is bulk-headed, for safety, than I would see the rationaliser's dream of paradise, of one board of directors for every industry in the country. I submit that at the present time there are great agencies working for that. The development of electricity has rendered it no longer necessary for men to crowd under one roof in order to get the power, and at the same time great developments have been going on in the way of hiring the complicated and expensive machinery of modern production and so enabling small producers to acquire those engines that are necessary for their purposes without purchasing them. I hope that that tendency, which is a natural tendency and a natural reaction from some of the bad features of the present system, will be encouraged by the Government.

The last point to which I wish to refer is the question of markets. When we are seeking new markets in which to sell our goods, we should look oversea, I agree, but in looking oversea we should not forget to look at home. There is a great market, a vast potential market, at home which has never had a chance for a hundred years of absorbing its proper quantity of the nation's manufactures. I refer to our depressed agricultural community. Let us give a chance to the people of the countryside to get a reasonable prospect of prosperity. You have there a field which would well repay the most generous cultivation by the Government. It would repay it in increased employment for industry as well as increased financial stability and in a better balancing of rural and urban life in the whole nation. It is a market which is nearer than China, and it is a, market, too, which is more populous than that of Australia; and I hope that we shall develop it. It has the great advantage that we should have no dangerous repercussions on our currency or exchange, and it is the best way of correcting the balance of trade. So, while I rejoice at the steps taken by the Government towards improving the condition of our agriculture, I would urge them to go still further and faster along the line of advance. It will repay them handsomely to follow it in dealing with this great, human, troublesome problem of unemployment.

Mr. BATEY

When this Debate opened, my hon. Friend the member for Abertillery (Mr. Daggar) carried my mind hack to the Debates that used to take place in this House on unemployment six or seven years ago. We believed then, in all sincerity, that unemployment was as bad as it could be, but we have learned in the intervening years that it has simply got worse and worse and worse. Each year, each month, it seems to have got worse. Last Friday night I went to one of our large mining villages in Durham, and the poverty that one met with there simply staggered one. When I left that mining village, I made up my mind that, if it was possible to intervene in this Debate, I would do so for the purpose once again of directing the attention of the House to our distressed mining areas. The poverty in these distressed mining areas is simply appalling, and I am certain that if we could succeed in getting the Minister of Labour to go up to the county of Durham and to spend his recess there going into these distressed mining areas, the Minister himself would not be satis-fled with things as they are, but, in the goodness of his nature, would want something more to be done than is being done at the present time.

In my opinion, the poverty in our distressed mining area of Durham is due to two causes. One is unemployment, and the other is low wages. I will deal first with the question of unemployment, and I am glad that the Minister of Labour is here, because I want to say to him that the unemployment benefit which men are receiving now may be sufficient to feed them, but it is not sufficient to provide them with clothes. When one sees these people that one knew so well just after the War, clean, and respectable, and well-dressed, and sees them now in their distressed condition, one can see that the unemployment benefit fails to provide either clothes or boots or shoes, and one sees the stamp of poverty upon them straight away. The means test is making the poverty in our distressed mining areas worse. The Minister of Labour told us that in the county of Durham we have no fewer than 223,671 cases that went before the public assistance committee. A quarter of a million cases going before the public assistance committee—far more people than there are in some of the large provincial towns. And of those cases, 14,794 were cases in which the benefit was reduced and 7,000 have had their claims refused. The policy of the Government in this means test is simply a policy of making poverty and distress worse in our mining areas. As a matter of fact, the means test is a human outrage upon our people.

The Prime Minister is not here this evening, but I hope the Minister of Labour will convey to him two points to which I should like to draw his attention. The last time the Prime Minister was in Durham, visiting his Division, he was talking of the means test, and that night he deliberately promised that he would have the means test looked into. I want to ask whoever will reply to-night whether or not the Prime Minister has carried out that promise. If the Prime Minister had been here, I should have put the question to him, and I should have expected an answer. Therefore, I want the Minister who replies to tell us whether the Prime Minister has done anything to carry out his promise. We recently had three large demonstrations in the north of England, and my colleague on the Front Bench was the speaker at the largest. A north of England paper, which is not a Labour newspaper, set down the attendance as 150,000. At these demonstrations resolutions were passed protesting against the means test. They were sent to the Prime Minister, and I would like to know if he received them, what was his answer, and what steps he proposed to take?

The hon. Member for Cirencester and Tewkesbury (Mr. Morrison) said that the Government made their policy perfectly clear at the last election, and that they made it clear that they meant to reduce unemployment expenditure. If I understood the hon. Member properly, he seemed to agree with that policy. There is one thing which the Prime Minister did not make clear, and he did not spread the net before the bird as he ought to have done. He did not make clear to the people of Durham that the Government meant to pursue a policy like this. He took an altogether different line, and if he had not, he might not have been a Member of this House. The Minister of Labour delivered a speech recently. One always speaks with respect of what he says; he is worth a far better post than the one he has got. He said: What is more important, the number in employment in September was 9,326,000 and those now in employment number 9,403,000, an increase of 77,000. These bald facts do, at any rate, justify some hope that the corner has been turned. Does such an increase justify the Minister of Labour in saying that the corner had been turned? I put a question to the Minister of Education to-day asking how many boys had left school. I determined to put that question after I read the statement of the Minister of Labour. The Minister of Education said, in answer to my question, that in three years 905,800 boys had left the elementary and secondary schools; that is, nearly 1,000,000 boys had left school in three years. Can the Minister of Labour tell us how many of those boys have entered industry? These boys ought to be entering industry year after year, but, if only 77,000 more persons are employed, it is clear that they are not entering industry. Does the Minister of Labour or the Education Department take an interest in these boys, and follow them up to see whether they enter industry?

Mr. PIKE

Will the hon. Gentleman tell the House if trade unions are taking the interest that he suggests that the Government should take?

Mr. BATEY

The trade unions are organised for one thing, and we pay for that one thing. We pay the Government for another thing; we pay the Departments to do this sort of work, and we expect them to do it. I believe that the great bulk of these boys are not entering industry. In our own county we have thousands of boys leaving school who ought to be entering the coal mines but cannot do so, and they are simply drifting. Mr. Justice McCardie, speaking a few weeks ago, said that crime in this country was worse than it had been for the last 60 years. What else can we expect if young boys on leaving school cannot get work? It is only natural that they will drift into mischief. Most of the serious crime that is happening to-day is committed by young men between the ages of 17 and 202. Only yesterday a report appeared in one of the northern papers of the case of a young lad who had been tried at a Durham court. During the hearing the police chief made this statement: It is time some of these lads were brought to their senses. They are neither use nor ornament. Like others, if they have money they gamble, and, if they have not, they interfere with other people. Unless something is done to provide employment for these young lads, they will drift, more and more into mischief and will simply go from bad to worse.

The last time I spoke in an unemployment Debate, I dealt with the question of the machinery of the Unemployment Insurance Fund. I would like to ask the Minister if we have made any progress with regard to this machinery. I notice in a White Paper that has been issued by the Ministry giving the figures for the year ending 31st March, 1931, that the cost of administration has jumped enormously. We used to think that the cost was excessive when it was £5,000,000. I see in this White Paper that the cost of administration is now £6,319,292 12s. 2d., which, I take it, does not include the new administration of the means test. The House of Commons has a right to know what will be the cost of the new administration on the top of this excessive cost of administration. The Minister of Labour has got away in answering questions by saying that the Ministry is not in a position to make a statement at the moment. After so many months in which the public assistance committees have been at work, during which the machinery has been created, the Minister of Labour ought now to be able to tell the House the cost of that new machinery so that we can know the total increase in the cost of administration.

I have not time to deal with the cost of training, or transference, or the cost of the courts of referees, which has been increased four times since 1927, or the cost of the umpires' courts. I would like, however, to deal with the cost of the interest upon the debt of the fund. This White Paper says that the cost for last year for interest was £2,521,352 3s. 2d. In the last 10 years £10,000,000 has been debited against the fund for interest. The Government should take steps to reduce this interest. The interest charges vary from 4½ per cent. to 5¼ per cent. That is an excessive percentage, especially when we remember that we are sitting on this side of the House and the Government are in power because of the use that was made of the Post Office Savings Bank at the last election. [HON. MEMBERS: "Oh!"] That is so; the Labour party were charged at the General Election with using the money of the Post Office Savings Bank for the Unemployment Insurance Fund. The people who invest in the Post Office Savings Bank get only 2½ per cent., but the Unemployment Insurance Fund is having to pay up to 5^* per cent. for the selfsame money. The Minister should take some steps to reduce that.

We are in a worse position than we have been for years in the provision of work. In 1929 the Labour Government laid upon the Lord Privy Seal's office the duty of finding employment. [Interruption.] He may not have done very well. Do not tell we what we did in 1929. The Government have got the man who was leading us then; he did nothing for us, and he will do nothing for this Government. The Lord Privy Seal on 29th October, 1930, said: When we look at the unemployment statistics, we find that roughly 2,200,000 people are unemployed. We can trace them all in the industries. We know exactly where they are employed. We can examine the industries and find out why they are unemployed, and we ought to be able at least to some extent to develop a policy for dealing with this problem at its source. That sounded hopeful then. I am wondering whether all the machinery of the Lord Privy Seal's office has been destroyed, or whether that machinery, which then looked so well, has been transferred to the Ministry of Labour. I want to hurry on. [Interruption.] Well, I am sorry.

HON. MEMBERS

Order!

Mr. BUCHANAN

What is the "Order" about? Give this man order.

6.30 p.m.

Mr. BATEY

I want to deal with the question of low wages, and I regret that the Minister of Mines has left the House. The very low wages received to-day by our people in Durham do not enable them to make any provision for the time when unemployment overtakes them. We have, roughly speaking, 100,000 people employed in the coal-mining industry in Durham, and the average earnings last year were only 35s. 5d. per week—[An HON. MEMBER: "On part-time"]—as compared with 41s. 2d. in 1929. The total wages paid in Durham last year amounted to £10,000,000, against £13,000,000 in 1929. That drop was due, I confess, to part-time. The average number of days per week worked during 1931 was 4.49, against 5.18 in 1929. The men were ready to work, but there was not the trade. The number of shifts worked last year wan 27,000,000, compared with 35,000,000 in 1929. Those figures show that our people are getting wages which are not decent wages and do not enable them to provide for a single day's unemployment.

I shall not attempt to go into the arguments about the loss of our export trade.

We are one of the districts, with South Wales, which is suffering on account of the tariff policy of the Government. [Interruption.] Well, we believe that, whether we are right or wrong. Also, I am not dealing with criticisms in regard to Germany or France. I wish to emphasise a point which was brought up in a supplementary question to-day, and that is that the Government ought to be careful, at the Imperial Conference at Ottawa, about giving any more concessions to countries like Canada. Last year Canada bought less than 1,000,000 tons of coal from us, and more than 11,000,000 tons from America, and as long as that is the position the Government ought to be careful about giving any more preference to Canada.

Now that the Minister of Mines has come back there are one or two things to which I wish to draw his attention. My colleague from Cumberland referred to the need of the Government doing something to promote the extraction of oil from coal, because in that direction, I believe, lies the salvation of the coal industry. I know that it would be expensive to set up the necessary machinery, but I believe it is the one essential means of providing employment in the mining industry; and it is also a necessity from the point of view of the country. We are spending this year £50,000,000 on the Navy and £17,000,000 on the Air Force, but without foreign oil our battleships and our aeroplanes would be useless. If war broke out and foreign countries cut off supplies of oil our battleships would not be able to leave these shores and our aeroplanes could not rise from the ground. In the interests of this country it is essential that the experiments in extracting fuel oil from coal ought to be developed, and I would like to see the Ministry of Mines institute an inquiry into it. One sees in the Press that it would cost £8,000,000 to set up plant to deal with 1,000 tons of coal a day, and that is a staggering figure, but the Ministry of Mines ought to start an inquiry into the whole question and see whether something cannot be done in so important a matter.

Another thing I would like the Ministry of Mines to inquire into is the use of machinery in mines. A previous speaker stated that he does not believe in rationalisation, and neither do I. I believe that one of the mistakes of the Labour Government in 1929 lay in giving too much support to rationalisation. I question whether the use of machinery in mines does reduce the cost of production; certainly, the price of coal does not indicate it. Machinery is being installed in our mines and our people are being thrown out of employment, and there is no other employment they can get. I am sorry that I have occupied so much time, but this is a subject on which I feel very keenly.

Dr. LEECH

As a new Member, I rise with some sense of embarrassment, and also of perturbation, to venture to address this great and historic House, and I must beg your indulgence, Mr. Speaker, together with the indulgence of the House during my effort, hoping that its consideration will be extended to me as generously as it has been extended to other Members who have proceeded me. Although I am a new Member of the House I am not a stranger to it. During the last 30 years I have spent many hours in the gallery, and have heard many great speeches. I have heard the eloquence of many Members reverberating through this House—great oratorical efforts by Members even of the present day; and I have been very much impressed with the atmosphere of the House. I may be pardoned, perhaps, for making these observations, but the rhetoric of Disraeli, the diction of Bright, and the eloquence of Gladstone made indelible impressions upon the minds of some of us in past days. Though I am a young Member of Parliament I am not altogether young in years, and I recall that the subject of unemployment which we are now considering is not a new one. I have heard it debated in this House—from the Gallery—on many, many occasions. It is one of the most menacing problems with which the country has been confronted for, perhaps, the last 100 years, and it will be understood that it is has a special concern for me as representing a great industrial constituency in the North of England, Newcastle.

I would claim that Newcastle was the birthplace of the iron and steel industry, and of the shipbuilding industry, but the spectacle to be seen there now is a picture of tragedy. For miles and miles along the river front of that great waterway the Tyne stand smokeless chimneys, empty shipyards, empty steelworks, and blast furnaces which have been closed down. Altogether it is a picture of tragedy beyond parallel. I have been amazed on all occasions, and more particularly this afternoon, by the denunciations of the Government for their attitude on the unemployment question and their incapacity to deal with it. Those denunciations from right hon. and hon. Members opposite sound strange indeed when one remembers that during the time they were in office the unemployment figures were more than doubled. I firmly believe that the only cure for this great and menacing trouble is work. This is not a time for political theories or class ideals. It is a time for practical thought and practical action, and in answer, to those who have spoken from the other side I claim that the present Government, during the short time they have been in office, have sown the seeds of success. The Government were sent here with a mandate from the country. Beyond question the people had realised at last the gravity of the nation's peril, and were determined to put an end to it. They put their confidence in the National Government candidates and sent us here with a mandate to get on with the job, and since the Government took office much has been done. The seeds have been sown, they are now germinating, and ere long we shall see the consummation of our greatest hopes and our noblest desires, a rehabilitation of our depressed industries and a resuscitation of trade generally such as will bring about the general happiness, contentment and prosperity of our people.

This subject has, at different times, been approached from all angles, and so many arguments have been used that they are now entirely exhausted. At any rate, I do not propose to traverse the many paths which have been trodden to-day, because that would be but repetition, and the taking up of unnecessary time, and it is not my intention to keep the House more than a few minutes. I have referred to the germs of success which have already been sown, and now I want to refer to the year 1903, when it was my pleasure to hear a speech delivered by Mr. Joseph Chamberlain in the Olympia at Newcastle when he made his great pronouncement on fiscal reform. That speech made a great impression on the 3,500 people who were in that building, because Mr. Chamberlain spoke with great forcefulness. I have also some recollection of the address which Mr. Joseph Chamberlain gave in Glasgow. I remember that at Newcastle Mr. Chamberlain, who was a victim of gout, came on the platform in great pain, and he said: I have come before you not because of the gout but in spite of it, to declare my policy on fiscal reform. Mr. Joseph Chamberlain was undoubtedly a great statesman endowed with great vision and foresight, and he was able to see clearly through the industrial fogs on the horizon at that time. He knew what was necessary. He knew that he must have the people with him, and he made a declaration to the effect that it was necessary to make a great change in order to lay the foundations of our liberties and maintain our national institutions. He had great faith in the people, and he declared that it was necessary in some way to get the greatest number of men and women to take their share in the responsibility of Government, and to achieve that object he was in favour of an extended franchise to men and women. Mr. Chamberlain knew that it was necessary to have the men and women of the country with him by extending the franchise, which he advocated, and his son the Chancellor of the Exchequer has now put into practical operation the policy which was advocated by his father 30 years ago, and he will have the satisfaction, ere many months have passed, of seeing in operation she noble aspirations and hopes which his father held within his breast.

I said at the outset of my remarks that, in my judgment, it was necessary, in order to relieve unemployment, to get the wheels of industry revolving, and until that is accomplished we shall not make much progress. We cannot get over the fact that we have been living in a Free Trade country for many years, but now the time has come when some change must be made. I admit that Cobdenism in its time was right, and played a great part in this country, but, owing to changed circumstances, national and international, we ceased to be the leading manufacturing country of the world. At one time we were delighted to admit all raw and other materials because we were the chief manufacturing country of the world, but things have greatly changed, and a new fiscal system has necessarily been brought about.

I want to say, as forcibly as I can, that what we are now doing is no experiment, because it is something of which we have had experience already under the Safeguarding Acts. I think it has been generally recognised in this House that during the time the Safeguarding Acts have been in operation, thousands of people have been employed who were not employed before those Acts were passed, and who before that time were walking the streets. We know that in every industry where the Safeguarding Acts have operated they have been a success. The industries have been restored, although some of them before the adoption of those Acts were passing into oblivion. Not only were those industries restored and more people employed, but in no case was there any increase in the price of the goods manufactured in those industries. That fact, at any rate, is very significant, and it is a telling story in favour of the introduction of the fiscal changes which have been introduced by the present Government.

I will now come to the question of steel, because that is one of the great industries in Newcastle. I have been reminded that in 1930 no less than 3,000,000 tons of manufactured steel were imported into this country. I am told that 40,000 men are employed in the manufacture of 1,000,000 tons of steel, and therefore if the 3,000,000 tons of steel which were imported into this country in 1930 had been manufactured here, 120.000 people would have been employed. That total embraces steelworkers and craftsmen of all kinds, and English craftsmen are the finest in the world. British workmen are being deprived of all this work in consequence of the old policy of Free Trade. The manufacture of that 3,000,000 tons of steel in this country would have involved the consumption of millions of tons of coal, with the consequent employment of a large number of miners. It would also have meant much to the transport service both by rail, water and road. I think it is sufficient to point out to Members of this House that while only 457,000 tons of steel were manufactured in this country in one month in 1931 the imports of steel for the same month were 278,000 tons, or 61 per cent. of our total manufacture.

The subject is so vast that I do not know how to deal with it further without traversing the paths which have been trod this afternoon by others experienced in these matters. I repeat that we can reduce unemployment only by getting the wheels of industry going, and we can find work for our people only by the means which have been adopted by the Government. We have scarcely had enough time to see our schemes maturing, but that time will come as sure as I am standing here. I thank you, Mr. Speaker, and I thank Members of the House for the forbearance and courtesy which has been shown to me and I am satisfied that we are in for a good time. We have had to wait a long time but there is a good time coming for our industries which I believe will bring happiness and prosperity and contentment to the people of this country.

7.0 p.m.

The PARLIAMENTARY SECRETARY to the BOARD of TRADE (Mr. Hore-Belisha)

The hon. Member for West Newcastle-upon-Tyne (Dr. Leech) has told us that he was privileged years ago to hear speeches made in this place by Gladstone, Disraeli and John Bright. I congratulate the hon. Member upon now having himself spoken in a House which contains for him so many great memories. If as he looked down on those statesmen he conceived an aim to sit on the same seats which they occupied, I congratulate him further upon having attained his ambition. The hon. Member for Abertillery (Mr. Daggar), who opened the Debate, called attention to certain difficulties which our export trade was encountering and he suggested that the curtailment of the purchase of British coal by certain foreign countries was in the nature of a retribution visited upon this realm for having revised its fiscal arrangements. This country would indeed be in a humiliated position if it were to sacrifice its autonomy to regulate its own affairs as seemed to it best. I think a reference to the dates will be sufficient to disprove the charge which the hon Member has made. The Abnormal Importations Bill was introduced on 18th November, 1931, and the Import Duties Bill on 4th February, 1932, whereas the French quota system came into existence on 1st August, the Belgian on 15th October and the German, in so far as it is a matter of complaint, on 1st October. [Interruption.] My hon. Friend the Member for Chesterle-Street (Mr. Lawson) is making a speech sitting down. I am dealing with this matter historically. I under stand that the hon. Member is going to speak and the House will have the advantage of hearing any corrections he is able to make of my narrative. I call attention to the dates, and say that to anyone who considers the dates, it is obviously impossible that these quotas were in the nature of a riposte to any action of ours.

Mr. DAGGAR

The hon. Member does not do me justice. My statement was that the first public intimation of the attitude of the French buyers of British coal and of the French surtax was on the 15th of November, and that Bill was under discussion in this House and became operative on 20th November, five days later. In addition to those facts which cannot be disputed, it is a reflection on the intelligence of the French people if they did not anticipate that with the advent of a Tory administration, tariffs would be our policy.

Mr. HORE-BELISHA

The fact remains that the surtax was imposed in France two days before the Financial Resolution of the Abnormal Importations Bill was introduced into this House. Therefore, it is not true to suggest that these measures taken by foreign countries are retaliatory upon us. Even if they were, we could not give up our rights to self-government. Although the German system of import licences has been in existence for many years, it was on 1st October that the first material restriction was made in our apportionment. On that date it was reduced from 420,000 tons to 300,000 tons per month. Subsequently, on 1st February, it was further reduced to approximately 200,000 tons per month. On 1st March it fell to 150,000 tons, and I understand that it is to fall still further on 1st April to 100,000 tons. The reasons given at the time these restrictions were made were the depression in the German coal industry and the strain which they were under in obtaining foreign exchanges. Those were the explanations offered by the Germans to us—not the explanations which were given by the hon. Gentleman who opened the Debate.

The Government and the British people are sympathetic towards the troubles which confront the Reich, and they have given tangible proof of their sympathy. Nevertheless we have a right to complain if any reductions which are made in the German quota do not fall equitably upon all the countries concerned. That is the ground of the protest which we have made. Our commercial relations with Germany are regulated by the Anglo-German Commercial Treaty of 1924 and, under that treaty, neither Power can impose or maintain on the imports of the other prohibitions or restrictions which do not apply equally to the imports of like articles produced or manufactured in any other foreign country. It is because in our view these restrictions are a discrimination imposed against this country that we have made representations in Berlin, and within the last few hours we have had the full text of the reply. The House would not expect me to comment upon it at this stage until it has been studied in detail, but the Government does not desire to minimise the serious effect which this German action has had and is having upon our coal industry. Whatever its rights may be in the matter, it expresses the hope that the German people will wish to preserve the amicable relations that exist between the two countries and that they will see the justice of our point of view. After all, our market is far more valuable to Get-many than the market of Germany is to us.

That is the history of this matter, and I have brought it up to date. It is not only a question of restricting coal. This quota method has put a new complexion upon the commercial relations of all trading peoples. It is a feature that has come into great prominence lately. France not only restricts the coal exports from this country into her own domains, but she restricts the importation of certain agricultural produce and has recently extended her quota system to cover a large number of manufactured articles, such as toys, sheet and hoop iron, wireless apparatus, electrical material, enamel ware, leather, hardware, furniture and machine tools. That identical system operated by France has been followed by other countries, and it is becoming a very serious factor to other exporting nations. In France this system dates from August last. Latvia and Esthonia, also operate the system. The Netherlands has recently applied it to shoes, to woollen and worsted piece goods, to knitted wear, to raincoats and to clothing and also to certain cotton goods. Switzerland has applied it to a large number of articles of which the only one with which we are concerned is motor cycles. Czechoslovakia, Turkey and various other countries have followed suit.

Mr. LAWSON

Does this apply to this country or to all countries?

Mr. HORE - BELISHA

To all countries. The quota system is becoming a very serious factor in commercial relations, and it is a fresh development to which we must adjust ourselves. There used to be a doctrine that imports paid for exports. It had an almost universal validity but, where a quota exists, the doctrine is falsified at once. You can regionalise your mines, you can nationalise your mines, you can rationalise your mines and you would not sell one scuttleful more coal to France and to these countries which operate a quota than the apportionment which they give you. We are at a grave disability as an exporting nation. No matter how cheaply you wish to sell, you could not find a purchaser for your goods in excess of the quota. I say to the House that it is no good trying to operate a commercial system in accordance with a theory which no longer exists. This is not the world which Adam Smith knew, this is not the world which Cobden knew, this is not the world which we knew up to a few months ago.

Sir STAFFORD CRIPPS

Will he tell us for our information how we can pay for imports if we do not pay for them by exports at the present time?

Mr. HORE-BELISHA

My hon. and learned Friend has participated very actively in Debates on Measures taken by this Government to adjust our balance of trade. It is not a doctrine of Free Trade or of sanity that a country should buy more than it can pay for. Obviously France is quite ready to sell any amount of goods we may take, but if we cannot export goods to that country perhaps he will tell us how we can pay for goods bought in that country.

Sir S. CRIPPS

The only way we can pay for imports is by exports.

Mr. HORE-BELISHA

We are back at the same point I made. If you are not allowed to send your goods to France in excess of the quota how can the doctrine of exports paying for imports prevail? You cannot pay for those goods, you cannot take those goods except by sending gold, which is a very inconvenient method to which there are distinct limitations. My hon. and learned Friend has tried very hard to create a new heaven and a new earth and one happens to have been created without his assistance. I can understand his chagrin that no number of questions which he may address to me in his best forensic style can get over the facts.

There is another limitation upon trade to which we must also have regard and which relates to the second point raised by the hon. Member who opened this Debate and that is the restrictions upon exchange. You can sell to a large number of European countries, to a number of Baltic countries and to a number of South American countries, but you cannot receive payment owing to the restrictions they place upon exchange. The consecrated method of doing business is to draw a bill upon your customer which you get discounted and thus finance the transaction. You cannot, to-day, get a bill drawn upon many foreign countries discounted because those countries prohibit the purchase of foreign exchanges. That has further modified the familiar aspects which we used to recognise in our commercial transactions. Brazil is one of those countries in the category of which I am speaking. As the hon. Gentleman said Brazil has entered into an arrangement with Germany which comes to this, putting it into commonplace language, that Brazil delivers coffee and Germany delivers coal, and there is a transaction known as barter. I do not quite know why the hon. Gentleman raised the point unless it were to suggest that we might have put ourselves in the shoes of Germany and accepted Brazilian coffee in return for the delivery of coal. If that be the suggestion I shall answer it at once.

Mr. DAGGAR

That is not the suggestion I made.

Mr. HORE-BELISHA

The hon. Gentleman raised this matter and I cannot see the point of raising it unless the suggestion be that we should put ourselves in the shoes of Germany.

Mr. DAGGAR

I gave the transaction as an example and as it affects the miners. It was simply one of the three points I made which included the effect of the quota in Germany and in France. Here is another instance where we have been injured. In addition I quoted the fact from a commercial newspaper which stated that the Foreign Office and the Board of Trade were aware of the difficulties the South Wales coalowners had in connection with the transaction to which I referred.

Mr. HORE-BELISHA

I am very glad that I did draw the right deduction. The only way in which you could help the miners on those lines would be to put yourself in the place of Germany and accept a delivery of coffee, which, apparently was the transaction that Brazil desired, in return for a sale of coal. That is what I thought the hon. Member must have meant. The answer is that we do not want the Brazilian coffee; we buy our coffee elsewhere. We bought last year from Brazil only 8,000 cwts. of coffee out of a total purchase of 764,000 ewts. Consequently, if we had taken coffee from Brazil, we should have taken less from those countries from which we now buy it, notably Kenya.

Mr. DAGGAR

I did not make any suggestion that this Government should enter into a similar transaction. The point that I endeavoured to emphasise was that, according to the newspaper report, the South Wales coalowners were not anxious to enter into such a transaction with Brazil, because of previous difficulties with that country, and I wanted to know what the Government are doing in connection with that matter.

Mr. HORE-BELISHA

I have no desire to do the hon. Member any injustice. At any rate, I have presented what I thought was an answer to the question that he was raising, without any malice or any suggestion of making any specious point against him. If he says that statements have appeared in the Press to the effect that the South Wales coalowners were not particularly desirous of obtain- ing this contract, they must be the judges of what is lucrative business, because they have to satisfy themselves, not only as to the possibility of making profits, but as to the possibility of paying wages. So far as Brazil owes us money, I can only assure the hon. Member that representations have been made to the Brazilian Government on the point, and that certain instalments are being received in respect of debts due to us.

As I have already pointed out, these are some of the disabilities under which export trading nations are suffering, and we have to adjust ourselves to these new circumstances. We have to become less dependent upon these new circumstances, and to place our reliance upon more certain and stable foundations, such as making for ourselves, so far as possible, what we previously purchased from abroad, and, for the rest, purchasing from those countries, notably Imperial countries, where we get ordinary transactions carried through without difficulty. The hon. Member asked what would be the effect of the change of policy and the abandonment of the traditional course that we have pursued, and he recalled that, in moving the last Order under the Abnormal Importations (Customs Duties) Act, I had referred to the setting up of certain factories here. He poured scorn on the types of articles that he said were being made. He thought it monstrous that ladies' stockings should be made here instead of in Saxony. [Interruption.] He had better address his complaints to the workers who are making those stockings. Anyhow, I am in a position to give him the information which he desires. Since I mentioned this matter in the House, on the 3rd February, the number of cases notified to the Board of Trade, the Ministry of Labour, or the Home Office—cases in which foreigners were desirous of establishing factories here—has increased from 250 to 438. There have been 195 German concerns who have made inquiries; 34 Belgian; 24 from the United States of America; 21 Swiss; and 97 from other countries; and, in addition, there have been 67 British concerns contemplating an extension of production with the aid of foreign experts. The trades mainly concerned were textiles—76 cases; hosiery —48 cases; leather trades—29 cases; electrical trades—22; radio—23; clothing (ex- cept hosiery)—24; and production has already started in 35 factories.

The hon. Member asked what was being done towards getting these new factories established in the distressed areas. I must tell him at once what will, indeed, be obvious to him, that anyone who is going to set up a factory must be allowed to choose his own site, and he will have regard to the rates and transport facilities. In so far as the Industrial Adviser of the Board of Trade can persuade him to go to distressed areas, that is the policy which is pursued. An industrial development organisation has been formed in every district. These industrial development organisations are representative of all the interests concerned, including the trade unions, and it is their business to try to encourage the attraction of factories to their particular districts. The Government is assisting in every way that it can. Incidentally, all the information collected by the regional surveys is placed at the disposal of these industrial development organisations.

I hope I have dealt fully with the points that were raised by the hon. Gentleman who initiated the Debate. I have called attention to the difficulties which stand in the way of expanding our export trade; I have called attention to certain changes, upon which we should all ponder, in the commercial relations of peoples, such as the establishment of quotas and the exchange restrictions, which do make it impossible for an exporting country to extend its export trade outside a certain limit. We have had to take account of these facts, and we have offered to the country a policy which is intended to meet the difficulties which they present. At any rate, we have made a breach with the past, because the conditions which governed the past have altered. One door is closed, and another has been opened.

Mr. TINKER

Every time we enter upon these Debates, the gravity of them seems to become greater. Times without number we have seemed to have some hope for the future, but, when we get the reply of the Government, things always seem to be going from bad to worse. The Parliamentary Secretary has been very glib in his replies, telling us what the retaliation means and the steps which the Government are taking to try to get over it. We think, however, that the policy of the Government has not helped much. We think that the policy of tariffs will only bring retaliation, and that ultimately the result will be different from what is expected. I am not going to deal with that question on this occasion. The country decided at the last election that power should be given to what is called the National Government, and, while the National Government is in power, we have to try to get the best conditions that we can for the unemployed. We want to prevail upon the Government until the measures which they are adopting do something for the unemployed by reducing unemployment, at least to take such steps as will ensure that the unemployed shall be better protected than they are at present. That is our chief argument in these Debates.

I desire to refer to the question of allotments, which has been brought before the House several times. I think that a certain amount of help can be given in that direction. I was present the other day when the hon. Member for Dumbarton Burghs (Mr. Kirkwood) put a question to the Minister of Agriculture. The hon. Member asked, in view of what the Government have said as to the likelihood of a betterment in regard to the Budget balance, that some relief might be given to the allotment workers through the Society of Friends. The Minister of Agriculture replied that he understood from the Society of Friends that, in connection with their scheme for assisting unemployed persons who were taking up allotments to obtain seeds, fertilisers and implements, they had not so far refused any application owing to lack of funds, and that they hoped that, as a result of their further public appeal, they would not find it necessary to do so. He stated, further, in reply to the last part of the hon. Member's question, that it would not be possible for the Government to provide towards the cost of the scheme. That is the position of the Government at the present moment. I think they might reconsider that position. I have a cutting here from the "Manchester Guardian," dated the 24th February, in which it is stated that the Society of Friends were making a direct appeal for help, stating the difficulties in which they were, and it goes on to say: The Society of Friends are anxious to find the means to give 75,000 to 100,000 unemployed persons the possibility to cultivate a garden or allotment. The scheme, which is worked on strictly self-help lines, provides an unemployed or impoverished man who is willing to cultivate an allotment with seeds, tools, fertilisers, etc., at half the wholesale price. Last year the Government"— that was the Labour Government— recognised the work and paid £23,000, which covered the unpaid half of the wholesale prices, plus the cost of administration. This year the economy axe has cut off this financial aid, and the Society of Friends, finding that no one else was able to save 64,000 men from disappointment and despair, are endeavouring to raise the necessary £30,000 to carry on this rapidly expanding work. I would say to the Government that, if they have any surplus at all when Budget time comes round, this is a most useful way of helping the unemployed to keep their status and character, and to be ready when the times do change, as the Government promise they will.

To show the eagerness of unemployed men in this direction, I would like to relate one or two incidents in my own constituency. During the time of the Labour Government, when Dr. Addison brought forward his scheme, which he had so much difficulty in getting through, for smallholdings, I went round to tell my people that there was some hope in this direction. I pointed out to them that it was necessary, if the scheme did come, for them to take advantage of it, and the number of men—colliers—who were eager and anxious to take up smallholdings was amazing. I directed them to write, and many of them did write in the hope that something would come of it. Last week in my constituency one of these men came to me with a letter which he had had from the Ministry of Agriculture in reply to his application. Not being familiar with these things, he thought that the matter was going on, and that there was still hope that his application would receive sanction. This is the reply that he received: I am directed to refer to your letter of the 8th instant"— that was the 8th March— and to say that, in view of the over-riding necessity for economy in national expenditure, the Government have decided that it is not possible for the time being to allocate funds for the provision of smallholdings under the Agricultural Land (Utilisa- tion) Act. The Ministry regrets, therefore, that it is not in a position to take any further action in the matter. These men are all anxious to take any opening that can be offered to them, and I hope that the appeal which we earnestly make from these benches on behalf of the unemployed will meet with some response from the Government when they get the time and the money.

7.30 p.m.

I want to turn to a matter that has been mentioned before in reference to transitional payments and the public assistance committees. My hon. Friend the Member for Ince (Mr. G. Macdonald) pointed out what is happening in his own locality. He may not be so badly placed as I am. I have been very anxious to find out what is happening, and how the money is being paid, because my desire is that at least there shall be some kind of uniformity between one district and another. It is difficult to go to any meeting and try to persuade people that the Government are determined on this and that it has to be worked when at the same time they know that there is such a difference prevailing between one district and another. May I give the figures which have led me to intervene in this Debate? From 12th November, 1931, to 22nd February, 1932, the applications for transitional payments for the whole of the country were 3,212,862; payment allowed at the maximum rate of benefit, 55 per cent.; payment allowed at less than the maximum, 35.3 per cent.; needs of applicant not enough to justify payment, 11.7 per cent. I asked the Minister to give me the district or county showing the greatest number of disallowances. Leicestershire is the highest, with 31.5 per cent., and Durham is the lowest, with 1.3 per cent. In the Lancashire Administrative County the numbers we have dealt with are 192,275; payment allowed at the maximum rate, 17.4 per cent.; payment allowed at lower than the maximum, 56.5 per cent.; and those not entitled to anything at all, 26.1 per cent. This shows a great disparity compared with the figures for the whole country and one begins to wonder whether it is altogether fair that this should be allowed to go on.

We claim that these figures prove that there is something wrong 'with the administration in Lancashire, and we are hoping that the Minister will take steps to alter it. I have had certain correspondence over this. I have been told of a man removed from one administrative county into Lancashire and his payment was reduced. That is difficult to understand. It is difficult to persuade a man who has had that experience that things are fair, and it is difficult to persuade me. I hope the Minister will recognise that there must be some uniformity in these matters. Where there are pensions or workmen's compensation awards there should be a definite scale laid down of what should be taken into consideration. There may be differences between localities in the matter of rent and cost of living, but in the case of pensions for War injuries or for long-time service or compensation awards, or anything like that, there ought to be some kind of uniformity, and the Minister ought to show that he is willing to give a sense of fairness to the whole administration. Unless he can do that, protests will constantly be coming from these benches, and we are being driven to it by the protests that we are getting from all the unions. I am constantly receiving representations that something should be done to alter what to them is a wrong state of things.

To show the feeling that prevails, I have a letter from a friend who used to work alongside me in a mine. He says that he has been a collier for 40 years and has brought up a family of eight children. Now he is out of work through no fault of his own, and they have stopped his dole because he has children who have stayed at home above the allotted age. He has three sons over 21 years of age who are helping to keep the family. He asks: "Is it fair for a man who has struck a bad patch that he should be stooped because he has children, and that there should be nothing coming from the dole or from transitional benefit?"

Cases like this, to my mind, are certainly not fair to the genuine unemployed man or woman, and they demand attention from the Minister. If there proves to be a surplus on the Budget, I trust the Government will have regard to what is being done for the unemployed man. When the Prime Minister made his appeal to the country, he said the state of the finances was such that everyone must bear his part of the burden. The burden falls very heavily on the unemployed man. The 10 per cent. cut was too much. If there is a surplus, I hope one of the first things the Prime Minister will do will be to put the unemployed man and woman back into the position in which he was before. May I also urge this. One of the things that might happen to the country is the flaunting of wealth as against poverty. I remember reading a newspaper article by a correspondent in Russia many years ago, describing the conditions there. He said there was a big banquet at one of the big palaces and in the streets were men and women starving. He wondered how long it would last. We all know what happened to Russia. What prevailed in Russia, extreme wealth on the one hand and poverty on the other, will inevitably come to this country unless those in charge of affairs try to deal more fairly with those who are down and out. I hope the Government will realise that, because we on these benches are as anxious for the country to stand firm and secure as anyone opposite.

Mr. GEOFFREY PETO

We have just heard a very reasonable and closely-argued speech, with much of which I am in cordial agreement, but I hope that, if the Budget balances on the right side, as we all hope, the main object will be to secure more employment for our people rather than to restore the cuts. I am certain that is what the nation wants, and it is particularly what the unemployed want, because it is much more vital to them than the restoration of the 10 per cent. cut. The Debate has divided itself into two parts, as is inevitable with an unemployment Debate. There have been suggestions, first of all, to secure a reduction of unemployment, and, secondly, suggestions for mitigating the hardship and despondency which is inevitably associated with unemployment. With regard to the reduction of unemployment, there has been a singular lack of fresh ideas. We have been told we have done nothing. We maintain, on the other hand, that we were returned to pass a measure of Protection for our industries which we hope and believe is going to materially improve employment. We have done so in quicker time than anyone thought was possible, and we now have to await the results.

What do the arguments on the other side amount to? Merely to the policy they pursued for two years, a more reckless expenditure on schemes to provide work and increasing the allowances for unemployment benefit. Where did that lead us? It led us to an increase of unemployment from 1,000,000 to nearly 3,000,000. It led us to the most disastrous financial crisis that this country has been faced with for many years. It seems to me extraordinary that, after the lesson of the general election, and even of the Dumbartonshire bye-election, Members should still get up and put forward views which have been hopelessly rejected by the whole country. Have they nothing new to suggest? Every now and then they throw out some idea that nothing can really be done until industry is completely reorganised. Who is going to bring forward the proposals? We have not heard any proposals for the complete reorganisation of industry. It has all been thrashed out in one of the Committee rooms by Members who lost their seats. You cannot go on putting that bluff across the country. If the Socialist party think that Socialism will help the country, why do they not bring forward a scheme? Why do they not mention any other country where it has been tried and where Socialism has produced any improvement?

I want to make a few suggestions for the mitigation of the difficulties of the unemployed and the hardships that they are suffering. I should like cordially to echo what the hon. Member said about allotments. I pressed for that when I was in the House from 1924 to 1929, and I think the Parliamentary Secretary to the Ministry of Labour and the Under-Secretary for Scotland also pressed for it. More might be done in that direction. The Parliamentary Secretary to the Ministry of Labour is sympathetic, but we want a little more than just sympathy. If the whole cost would be only £30,000 a year, the Government might help to some extent. We all know that the more taxation you put upon the country the less employment there may be for the people. I am the last person to urge reckless expenditure, but for a very small sum like that you can provide healthy employment and better food for the unemployed and a more cheerful life for them, and therefore the right hon. Gentleman the Minister might really favourably consider the suggestion.

There is the provision of rooms for the unemployed. At Bilston, the constituency which I have now the honour to represent, the urban district council, fortunately, had some empty rooms, and they placed them at the disposal of the unemployed. The rooms are run by a committee of the councillors and of the unemployed, and friends have sent newspapers, games and so on. All through the winter those rooms have made a great deal of difference to the comfort of the unemployed as compared with the discomfort of standing at the street corners in all weather, or of sitting idly 'at home as they had to do before. I think that more might be done in that direction, and I suggest to the Minister of Labour that they should pass on the idea to local authorities.

When I was in my constituency in January 'a good many people approached me, and no doubt people have also approached other hon. Members, with regard to the means test, and they told me that they had only so many shillings a week—a small sum—to support themselves and their families. When I went into the matter and they showed me their cards, I found that they had dates representing four weeks printed on their cards and that the same sum was entered against each week. In practically every case which was brought before me, a few days after the public assistance officer had investigated the case some member of the particular family had lost his job, so that the figures given to the public assistance officer no longer held good. Those poor fellows thought because it said on their cards that their allowance for the four weeks would be the same amount each week, that the sum was fixed absolutely, and that no alteration in circumstances could affect it. I told them that they could appeal to the public assistance officer and point out that since the figures had been given to him somebody had lost his job, and that therefore the position was not as had been stated. Where circumstances have altered and means have been reduced, there is every reason why the case should be reconsidered.

There is the question of men who have been in employment and have lost their jobs and who have suffered at some time or other some industrial accident, such as the loss of fingers or a hand. They say that it is extraordinarily difficult for a partially crippled man to get a job. The position was rendered worse in many cases, because the employer, as part of the compensation agreement, had promised to continue to find work for the man, and, owing to hard times, bankruptcy and so on, had not been able to continue to provide employment. Therefore, a man lost the job which was provided for him by the only employer likely to employ him. I would urge the House and the Government to tackle this problem and to try and find some way of dealing with it. It is not satisfactory that a man should be entitled under the provision of an Act passed by this House to benefits and then not be able to get them owing to the insolvency of his employer. I know that the Home Office is taking up this question, and I hope that they will succeed in obtaining a solution.

There is also the question of the training of these industrial cripples. In countries like America, Germany, and Belgium you have the employer and the employed, the trade unions and the big insurance companies, all working together on training schemes in order to restore the industrial cripple to industry. There is no reason why a man who has lost some of his fingers or suffered other injury should not be at least as efficient—and they are often more efficient—as men with every limb. In this country they are compensated according to the law, and they are generally found a job of sweeping the yard or something like that, because the employer has promised to keep them on. That is not satisfactory. I remember that the hon. Member for Chester-le-Street (Mr. Lawson), when he was Parliamentary Secretary to the Ministry if Labour, very kindly took the chair for us last summer at a meeting where the question of the training of cripples was discussed, and he showed great sympathy with the movement. I am sure that he would have done all that he possibly could to help us if his Government had not fallen, but I am also certain that my hon. Friend the present Parliamentary Secretary will show his sympathy. I hope that some scheme may be evolved. It is no credit to us in this great country, with highly organised trade unions, insurance companies, and employers' organisations, that there is practically nothing existing for training the industrial cripple and settling him on his feet again so as to be able to earn his livelihood.

These are a few suggestions which I wish to put forward. It is difficult in this kind of Debate to put forward anything new, but it is the duty of all of us to intervene if we have anything helpful to offer. I hope that more and more—and I think the feeling has been so today—the question of unemployment will get out of the arena of party politics, and that we shall all concentrate upon trying to provide employment and making the lot of the unemployed better.

Mr. LAWSON

I appreciate the way in which the hon. Gentleman the Member for Bilston (Mr. G. Peto) has spoken of the question before the House. The speech of the hon. Member for Cirencester (Mr. Morrison), in which he opened with a very full appreciation of the gravity of this great problem, almost convinced me that we were going to have from him one of those contributions which we know he is able to make, giving us something of the breadth and depth of this colossal problem. I think the House will agree that I am one of those who never, if possible, confines himself to making debating points upon this matter. I have lived in the North of England all my life, and I have noted to my grief during the last 14 years since the War ended a whole area going down, stage by stage, and great masses of men and women going into the very depths of hopelessness and despair through no fault of their own. The hon. Gentleman the Member for Bilston has just pleaded for consideration to be given to the disabled men. But the thing which has amazed me has been that you have had, first, the admission that the State should be responsible for the great mass of the unemployed, then, that there has been a tendency to thrust them back upon the local community, and then, that there has been an increased tendency to thrust them back, as in the case of the means test, upon the family. That may be, to one sitting in philosophic case in a chair, an ideal way of settling things.

The old economists wrote about the economic theory with very great ability, but when it came to actual practical application—whether it was Adam Smith, Cobden or anyone else—it was another thing altogether. I remember when I was hewing coal at the pit I used to read some of those economists, and there was an economist who was very eloquent upon what was called the law of diminishing returns. I used to think when I came from the pit that what they wrote was splendid. I remember how well they phrased their terms and reasoned their case, but when I received my pay note at the week-end what I had read did not seem to be quite as eloquent and as well reasoned as it was when I read it in the book. That is the position with regard to the means test. The country does not understand the problem, and I do not think that the House thoroughly understands it. I do not believe that we shall ever get down to fundamental principles in the solving of the unemployment problem unless and until we realise that it is a world problem. The Parliamentary Secretary will agree with me when I say that the main burden rests upon about six areas in this country and that it has rested there for a considerable number of years. Those localities are burdened down with debt. Unemployment is so widespread that families and individuals are in a lamentable state. When it comes to thrusting the weight of the burden back upon the families the result is lamentable as far as areas of that kind are concerned.

My hon. Friend the Member for Spennymoor (Mr. Batey) mentioned the fact that I had been present at a great demonstration. It was one of the most striking demonstrations I have ever seen in my life. It was in a district where men and women, whose clothing is almost threadbare, make attempts to look decent and clean and as smart as possible on a Sunday. They came in a wonderfully organised style. The crowd was so great that the police themselves were rather afraid of such a great gathering in that place, and yet the police, I believe, would be the first to pay tribute to those men and women. The gathering was associated with two counties largely representing coal and running right down to the mouths of the Tyne and the Wear, where you have shipbuilding industries, or where you once had them, at any rate, and allied heavy industries. The people came from those areas. I would ask the Government to take note of the protest which was made at that demonstration, because it really is expressive of what the people in those areas are feeling. They passed a resolution against the means test root and branch. I hope that the Government will carry out the promise of the Prime Minister 'which was mentioned by my hon. Friend, that this matter would really have to be looked into. The Prime Minister cannot do anything else. There is not a Conservative Member from the north of England who would go into those meetings and who knows the circumstances of these people, but must admit that this means test method of handling the problem has been tried and very much found wanting in its effect upon the lives of the people.

8.0 p.m.

May I develop the picture that I tried to draw, in view of the answer that was given by the Parliamentary Secretary to the Board of Trade? I hope that I shall not give any offence, but I think that his treatment of the subject might have been much more serious. The problem that he was handling might have been much more accurately understood, in which case he would not have answered in the terms and in the spirit that he did. I am sorry that he is not here. That was certainly the impression that I got. What is the situation It is all very well saying that we must have some different method of dealing with this matter, and that Cobden has been tried, and so forth. We do not care about Cobden or even about the late Joseph Chamberlain. What we know is that pits are being laid idle as a result of the German quota operations. The Parliamentary Secretary to the Board of Trade admitted, as did the President of the Board of Trade, that the German quota was discrimination against us. Why have the Germans discriminated against us? Because they want to retaliate for the new fiscal system of this Government. Mr. Lee, the Secretary of the Mining Association, which is the coalowners' association, has made that point pretty clear. He says: It is a counter measure to the tariffs. It is a purely political measure designed to force England to the conference table. That means that the miners of this country are between two fires. The Government have declared war upon other countries. If you stop the imports of a country it may be a pacific method, but it is really a declaration of war. Germany has answered that challenge by reducing our exports of coal to Germany by one half, and it is admitted that the bulk of the collieries that are being hit by this new system are in the north of England. The Parliamentary Secretary to the Board of Trade tried to get out of the argument by suggesting that this was not retaliation for the imports duties. As a matter of fact, the week after the Bill imposing import duties was passed in this House the Germans brought their new quota system into operation. If the Parliamentary Secretary has any doubt on this point, Mr. Lee, the Secretary of the Mining Association, does not doubt it, neither do those who are on the spot in the north of England. What does the "Newcastle Journal" of Saturday, 5th March, say? That is not a Socialist newspaper but a Conservative newspaper. It states that 1,000 miners are ceasing work at Dawdon Colliery. That is a colliery in the possession of the family of a Member of the present Government, the Secretary of State for Air, the Marquess of Londonderry. He is one of the owners of that colliery. His manager says that this is the result of the French quota and the German quota, very definitely. There are other collieries, Beamish, Silkworth and others which have been closed directly as a result of the operation of the quota system in Germany. I am looking for the hon. Member for Newcastle, West (Dr. Leech) who made his maiden speech with very great self-possession, which I admired. I am looking for him in order to draw his attention to certain facts. The "North Mail" says: Another reduction in the number of miners employed in Durham has taken place, and the outlook for the summer is very gloomy indeed. When the hon. Member for Newcastle West spoke about the possibilities of tariffs in their effect upon that area, I wondered whether he had been down to the mouth of the Tyne during the last few years. If he had, particularly in the last few months, he would have noticed the increasing depression that has taken place in that area. I am pleased to see the Parliamentary Secretary to the Board of Trade in his place. I will repeat what I said in his absence. I said that he did not appreciate the gravamen of the problem with which we are dealing and that if he would go into one of those areas—an area with which he is not very familiar, although he has been visiting there in what I might call a surreptitious way during the last few months—and would try to understand the gravity of the problem he would certainly have handled the matter more seriously.

Mr. HORE-BELISHA

What does the hon. Member mean by "surreptitiously"?

Mr. LAWSON

It was rumoured that he was visiting some of the areas, collecting information on behalf of the Government, but no one seemed to know when or how, or with whom he was conferring. Whether he saw the representatives of the coal owners or the steel representatives I do not know, but he certainly did not take into council as far as I can gather any of the representatives of the workers in those areas. If he had understood the gravity of the situation in areas of that character he would have handled this problem tonight in a much more serious way than he did. I would ask him to realise the fact that it does not matter twopence to us in the North of England and in the mining areas who is going to win this war of tariffs between the present Government and the German Government, but what does matter to us is that, as a direct result of the policy of the Government, pits have been closed. If hon. Members of this House are counting upon doing this, that or the other as the result of tariffs and they went to live in these particular areas, they would not be as serene as they are or as optimistic as they seem to be in regard to the matter. I so not care twopence what may be the result of tariffs or of Free Trade, but I know that these particular pits have been closed. I urge the hon. Member to bring pressure to bear upon the Board of Trade and to see that, whatever takes place, these pits have to be considered and the livelihood of the workpeople has to be taken into consideration, because of the long strain and stress that has been laid upon them.

The unemployment problem is really a, world problem. I have been a Member of this House for 12 years and I remember, and those who have been in this House for the last few years will remember, that once upon a time we were told that if we proceeded with emigration it would go a long way to solve the unemployment problem. Conservative Members may hardly believe it, but we have heard in this House expressions just as eloquent in regard to the hope held out regarding emigration as have been held out with regard to tariffs during the past few months. Next, we were told that if we had transference it would go far to mitigate the problem. It has not mitigated the problem. In the Labour Government we held the view that great things could be done by schemes of relief, and we did help 200,000 men in that respect, but we did not do what was hoped would have been done. I could quote scheme after scheme in regard to which hopes have been raised only to be dashed to the ground.

What is at the back of the minds of hon. Members who support the Government? They came here hoping that in a few months things would begin to hum. As a matter of fact they are no better than they were when the present Government came into office. The latest figures for unemployment are 2,700,000. Last September the figures were 2,811,000. What are the facts? I have asked for information regarding the people who have lost their benefits and their transitional payments. I am informed that 232,962 claims for insurance benefit and applications for transitional payment have been disallowed by the courts of referees in Great Britain. Of the applications for transitional payments submitted to public assistance committees, 377,512 have been turned down. That makes a total of 510,474. It is pointed out that these figures represent claims, not persons, and that in some cases they are duplicated. In addition, 77,000 women have been struck off benefit under the Anomalies Act. The grand total is about 600,000 claims which, of course, include duplications. It cannot be denied that a great number of the people register in order to get their Health Insurance cards stamped. Most of the men and boys admit that that is a fact. It is not an exaggeration to say that over 100,000 of those who have been turned down were registered.

Mr. BUCHANAN

The Minister says 140,000.

Mr. LAWSON

If you are going to compare the September figures with any other figures you must add that 140,000 in order to get a true estimate of the position. I take no delight in these facts, but we are being told on platforms outside that there is a reduction in the unemployment figures. People are being fobbed off with the story that an improvement is being made, whereas the real fact is that no improvement has been made, and in those areas where the Government should have helped things are actually getting worse. Take the question of the mining areas, and the iron, steel and shipbuilding areas in the north-east of England. In these districts the unemployment figure rises to 23 per cent. and 25 per cent., and in some areas actually to 47 per cent. as against 20 per cent. average for the whole country. That did not happen yesterday, it continues year after year. When this country went off the Gold Standard and we got the value of a depreciated pound, the unemployment figures fell. In October the figure in these north-eastern areas was 317,000; in November it went down to 304,000, and in December to 284,000. I was pleased indeed to see the figures going down; there was a movement for the first time for a considerable period, and these exporting areas were bound to be favourably affected by the abolition of the Gold Standard. In January the figures went up to 289,000, and in February to 294,000. We were rapidly getting back to the position when the Gold Standard was abolished. Undoubtedly, the retaliatory action of other Governments has almost neutralised the effect of going off the Gold Standard, and it is apprehended in the North that they will almost extinguish our export trade.

I hold that this unemployment problem goes much deeper than the House and the country has yet realised. The tragedy is not because men are unemployed, but because once they are unemployed they have lost their place in life and their standing in society. This problem follows us like some great shambling creature of evil which we do not seem able to get rid of. But, fundamentally, the problem has to be faced on much bigger lines. I hold that it is an international question. Why should we trouble because men have been relieved of heavy work? We only get trouble because leisure is not spread equally among all classes of the people. We only get trouble because some men are denied food and clothing whilst others are employed, well clothed and well fed. We only get trouble because some people lose their place in life and do not get the ordinary needs of life satisfied.

The real solution of the problem is a decrease of hours and an increase of standards. It does not matter to the British coalowner whether the men work seven hours, six hours, or five hours a day, as long as he knows that people in other countries are in the same position. One of the things which the Labour Government did was to get the 7½ hours Act through the Convention, thereby, putting Germany and France and Belgium and Holland and the rest of the world in a like position to ourselves as far as hours were concerned. That took hours out of the competitive market. The Government must at some time or other get down to that problem. They will have to do it. Anyone who reads the statements coming from Germany and France and the various proposals that are made will know that there is a great universal feeling arising for some international and systematic method of lowering hours and increasing leisure, and generally raising the standard of life, so that people will have more consuming power and thus assist in getting industry going again. I know that hon. Members will say that we were in office for two years and did not get the Washington Hours Convention ratified. We made a gallant attempt although we were only one-third of the House of Commons. There were great difficulties in the way. There were difficulties with employers and with trade unions, but what is the good of worrying over facts like that? One thing is certain, that the Labour Government managed to level out all the difficulties with the trade unions and with some of the employers. I was empowered, as the British delegate to the last Geneva Conference, to say that we were prepared to put it through the Convention and ratify it in the next session of Parliament.

What is happening now? I do not want to be too hard on the Government on this matter, but I am apprehensive, not merely because the policy of the Government is becoming severely nationalist and taking us out of the international arena but because the Minister of Labour himself is not paying attention to this matter. I give all credit to the staff at the Ministry of Labour. Many of them are able and efficient men, but not even the best officials are a substitute for the Minister himself in our international councils. When great Britain begins to send Ministers to these conferences Germany and France and Belgium will send Ministers, and they will begin to talk real business. But if one country does not send a Minister none of them do, they send officials, and thus neutralise the power of the International Labour Office. The more I see of these great conferences and hear expressions of opinion from workers and employers, the more I believe that unless this country and other countries take the international way of facing this great international problem, unless we and other peoples concentrate on these lines, this unemployment problem will end this Government, as it has ended other Governments, and unless it is definitely and resolutely faced it will not only end Governments but it will end Parliaments too.

The PARLIAMENTARY SECRETARY to the MINISTRY of LABOUR (Mr. R. S. Hudson)

I think I ought to begin by paying a tribute to the very restrained way in which the case has been put from the benches opposite. I will deal with one or two of the points that have been raised in the Debate, and first of all with the statement of the hon. Member for Chester-le-Street (Mr. Lawson). I hope that neither he nor the hon. Members for Abertillery (Mr. Daggar) or Workington (Mr. Cape) think that the Government do not take a very serious view of the effect of the restriction of the German quota. We are at one in that matter. The only point on which we differ is in their allegation that this restriction is due to our tariffs. I do not think I need go over the points made by my hon. Friend the Parliamentary Secretary to the Board of Trade, but I repeat that we take the most serious view of the matter, and it is not my intention in any way to minimise the bad effect the restriction is having on employment in the coal-mining industry of this country. In our opinion, we are better off by having a tariff, because it is a really good weapon for retaliation in the last resort.

The hon. Member for Chester-le-Street quoted a number of figures by which he tried to show that the condition of unemployment had worsened in this country since the National Government took office. I have never placed very great reliance on that type of argument, because in this connection figures can be made to prove almost anything. I am now going to quote a series of figures which prove the exact opposite of what the hon. Member was trying to maintain. As he took the date on which the Labour Government went out of office, I propose to take the same date, although otherwise I frankly say I would not have done so. Take the coal-mining industry. When the Labour Government came into office in June, 1929, the number of men on the colliery books was 937,000. When the Labour Government went out of office, in August, 1931, the figure had dropped to 820,000, the lowest figure in recent years. The total number of days worked that week was 3,713,000.

Mr. DUNCAN GRAHAM

It was summer time.

Mr. HUDSON

I am giving the figures for the dates selected by the hon. Member for Chester-le-Street. I agree that it was summer time, but the hon. Member took those dates and I am entitled to take them too. They are the figures of the numbers of workmen on the colliery books as supplied to the Mines Department. The hon. Member quoted the number of men unemployed. I am quoting the number employed.

Mr. LAWSON

Will the Parliamentary Secretary give us the figures for October?

Mr. HUDSON

I shall be glad to give any figures that I have. On 3rd October the total was 823,000, on 10th October 826,000, 17th October 831,000, 24th October 831,000, 31st October 832,000. As I have stated, in August the numbers were 820,000, whereas on 12th March, the last date for which I have figures, the number was 837,000, and the number of days worked, instead of being 3,700,000, was 3,900,000. So far as mining is concerned, the case is not that which the hon. Member for Chester-le-Street would have us imagine it to be. The hon. Member also referred to the International Labour Office and the Washington Hours Convention. I must say that I thought he was very brave to mention the Washington Hours Convention, because, as the House remembers, this Convention has had a very chequered career and various Governments have endeavoured to find ways of ratifying it But none of them has succeeded, and it was left to the hon. Member's late thief, Miss Bondfield, to announce with a great flourish of trumpets that the Convention would be ratified. Two Bills were introduced into this House during the late Labour Government's term of office, but, for reasons which I have been unable to fathom, those Bills never got even the pretence of a Second Reading. It ill becomes the hon. Member for Chester-le-Street to talk about delay in ratifying the Washington Hours Convention. The Government have many other very pressing matters to attend to, but as soon as those matters are out of the way the Government will give the question very serious consideration. Next, the hon. Member for Chester-le-Street referred to the question of Ministers attending meetings of the governing body at Geneva. I am happy to tell him that my right hon. Friend proposes to go to Geneva next April.

Mr. BUCHANAN

To get level with the other fellows at Ottawa.

8.30 p.m.

Mr. HUDSON

The hon. and learned Member for Central Nottingham (Mr. O'Connor) asked whether we had any knowledge of persons holding fixed assets being compelled to realise those assets by public assistance authorities. As far as I am aware that practice is not being adopted. We stated in our circular that public assistance authorities had plenty of discretion to avoid hardship by the forced realisation of assets. The hon. and learned Member asked about the date of the Commission's Report. The Commission has been meeting regularly, I understand, and when the legal duties of the chairman have prevented his attendance the Commission has sat without the chairman. We hope to receive the report in the comparatively near future. I understand that it has been decided to obtain a certain amount of evidence as to the working of the means test, a very reasonable precaution, but nevertheless we hope that the report will not be too long delayed.

The next point was one raised by the hon. Member for Spennymoor (Mr. Batey), who referred to figures that he had received to-day from the President of the Board of Education showing the number of children who had left school during the last three years. The hon. Member wanted to know how many of those have found employment. The hon. Member must realise that every year a large number of persons die and naturally go out of insurance, and their places are taken, also naturally, by the younger generation. The percentage of unemployment for juveniles is considerably less than half that for adults, and I think that something over 80 per cent. of the juveniles who are to-day unemployed have been unemployed for less than three months, which shows that the huge majority of the 900,000 have actually gone into industry.

It will be within the knowledge of the House that owing to the decline in the birth-rate during the War, there will, in the course of the next two or three years, be a considerable drop in the numbers of those leaving school, but although that will substantially benefit the position of the children of 14 to 16 years of age, there is still the grave problem of unemployment of juveniles between 16 and 18 years of age, obviously not affected now by that drop in the birth-rate. The problem is causing my right hon. Friend and myself considerable concern, and I venture to make an appeal to employers generally, if they find in the course of the next two or three years that there is a shortage of juveniles whom they can employ owing to this drop in the War-time birth-rate, that they should endeavour to make up the shortage from the boys between 16 and 18, who are at present in rather a bad way. We have endeavoured to meet the problem to a considerable extent by encouraging the provision by local education authorities of junior instruction centres, and in cases where the number of juveniles likely to attend was not sufficient to make it worth while to set up a centre, by arrangement with the local education authorities, for unemployed juveniles to attend other classes already in existence. Last year, I am glad to say, no less than 150,000 juveniles passed through the centres or the classes, and another 24,000 boys and girls attended classes belonging to the local education authorities.

When I last spoke at this Box on 3rd March I ventured to suggest to local authorities that this was one of the most valuable of their many activities and I deprecated the selection of this service as one on which to exercise any economies that might be necessary. I regret to say that since that speech we have had information that several local authorities propose to make this particular cut and I appeal to any hon. Member who represents a Division where that sort of thing is taking place, to exercise whatever influence he may have to prevent it. In any case it will be a matter for serious consideration by the Government, if this practice of cutting down these activities spreads, whether it may not become necessary to impose a statutory obligation upon local authorities to carry out this service. I do not say that it will be necessary to do so. I hope that we shall avoid the difficulty but it is a matter for consideration next autumn if the practice continues.

The hon. Member for Spennymoor raised a question about the cost of administration. Obviously, part of the increased cost is due to the large increase in unemployment compared with 1930. He asked what was the cost of the machinery set up by the public assistance authorities. I regret that I am not in a position to give that information. We have not yet got complete returns but we are getting them in and I hope shortly to be able to tell him if he puts down a question. He went on to say that the Government ought to take steps to decrease the interest on the debt. Such a suggestion, I think, comes extraordinarily badly from a Member of the Labour party because they, above all others, are responsible for the size of the debt and it scarcely lies in their mouths to say that we ought to diminish the amount of the interest. Then various Members including my hon. Friend the Member for Bilston (Mr. G. Peto)—

Mr. BATEY

Is the hon. Gentleman not going to deal with the question which I raised about the Prime Minister and the means test?

Mr. HUDSON

I have not had time to investigate that matter fully, but I under- stand that there was no actual promise made, and that the headlines in the paper to which the hon. Member was no doubt referring, and in other papers, were apparently statements taken from their context. I am informed that the statement in the headlines is not to be found in the actual verbatim report.

Mr. TINKER

Another example of the Prime Minister's vagueness.

Mr. HUDSON

Various Members, including the hon. Member for Bilston, referred to the question of allotments. It was found necessary to save a sum of £30,000 by various economy cuts; nevertheless, the Society of Friends have for this year come to the rescue, and I understand from Mr. Robson that they have secured or feel confident of securing sufficient funds to enable over 75,000 allotments to be provided this year. I think everyone will agree that that is a very fine effort indeed. I was very glad to see in various parts of the House a general impression that allotments were a sound method of spending money, because that agrees entirely with the view which I personally have always taken. My hon. Friend the Member for Bilston also mentioned the question of the training of industrial cripples. Quite obviously that is one of the problems on which we hope the Royal Commission will report. The House will remember that we made a sample analysis for the Royal Commission. I had those percentages translated into actual figures recently and those figures are extremely serious. I did not know that the hon. Member was going to raise the point, and I have not the exact figures here, but, speaking from memory, I think they show that to-day among the unemployed persons there are between 600,000 and 650,000 who may be classed as below the level of employability, and who for various personal and physical reasons would be unlikely to obtain employment except in periods of booming trade. That is obviously a serious problem which sooner or later the country will have to tackle.

The only point left for me to deal with is the needs test. I still think that a great deal of criticism on this point, both in the House and outside, is due to a complete misapprehension of the origin of the needs test and the reasons why it has been imposed. There was and is no desire on the part of the Members of the Government, or the majority in this House, to pauperise a large proportion of our population or to inflict upon them the so-called stigma of the Poor Law. The problem which faced the Government last September was to secure that transitional payments—which I would again remind the House are nothing more or less than relief paid for out of the Exchequer instead of out of the rates—were only made to persons who were really in need of such relief. For considerations of time alone, it was obvious that it would be impossible to set up new machinery under the Ministry of Labour. Even apart from such a consideration there was the difficulty of training a supervisory staff and also the question of cost. It was therefore decided by the Government that the best way was to entrust the inquiry into needs to the existing machinery of the local public assistance authorities.

Then came the next problem, which was: Could you trust the local authorities to pay out moneys, not from their own ratepayers, but from the Exchequer? It was felt that there was bound to be some risk, and, in the case of certain authorities a very considerable risk, in allowing this to be done, but it was thought that the best check against any possible extravagance or waste of national funds would be to lay down that, as far as the inquiries into means and the determination of the amount to be granted were concerned, persons applying for State relief should be treated in the same way as if they had been applying for relief out of the rates. That is the justification and origin of the relative paragraph in the Order-in-Council. It is not that that Order is due to any Machiavellian desire on our part to pauperise a large portion of the population.

As the House knows, the Government of the day went further and issued the Circular L.A. 3, which was intended to indicate to local authorities that, provided they decided each case on its own merits, they had within the framework of the existing Poor Law sufficient latitude to be able to treat each case fairly and sympathetically on its merits. My right hon. Friends the Minister of Labour and the Minister of Health have repeatedly said the same thing, both in this House, and outside, and I myself on the 26th November ventured to sum up our policy as being an endeavour to pursue a middle course so as not to allow of lax administration of national funds, but at the same time to see that the requirements of the law were interpreted in the sympathetic and sensible manner which we both desired and intended.

Taking the country by and large, I venture to think that we have no reason to suppose that the local authorities have not had due regard to these considerations in the work that they have done. We have heard of many indications of hardship. I read only the other day in the paper, a, Labour paper, of alleged hardships in London. I have taken the trouble to have them checked. The first that I come across in reading through the list of alleged hardships is the case of a single man where the income for a family of three persons is 44s. a week, and the next is a case where the income for a family of three is 60s. a week. I suggest that those are not cases of real hardship, and if that is the best case that the Labour party can put up—[Interruption.] That is the case that is put up for London.

Mr. LAWSON

I will give the hon. Gentleman one that is a scandal.

Mr. HUDSON

Indeed, in my opinion, the administration of this whole scheme has proceeded with far less friction than many experienced people believed to be possible at the outset. That cases of hardship should occur is inevitable, but the fact that they bear such a small, I would even say such a tiny, proportion to the total number of cases decided, is a matter for congratulation and shows the extremely conscientious way in which the local authorities have carried out a very onerous and a very difficult task.

I would now like to turn to a point that has been made by various hon. Members, and especially by the hon. Member for Leigh (Mr. Tinker). Hon. Members opposite have asked, as they have every right to do, for figures for Lancashire and other parts of the country showing the total numbers and the proportions and percentages of determinations at full rates, at less than full rates, and at nil, and they have been struck, as everyone must have been struck, in the answer in the OFFICIAL REPORT yesterday, at the apparent considerable discrepancies and variations between one area and another, but I venture to think that they have drawn an entirely inaccurate conclusion when they assume that these variations are the result wholly or even mainly of varying degrees of strictness in the administration of this scheme. If you get a particular area where you have a very high percentage of determinations at full rates, it may be due to administrative reasons, but even where you get anything like the normal percentage, many other causes come in.

In the first place, it must be remembered that the grant of assistance to a large number of persons on the basis of need in any particular area must have some relation to the economic conditions of that area, otherwise there would not be the large number of persons requiring assistance to rescue them from need. To take an example, if you look at London, where, owing to the great variety of industries, the percentage of unemployment has always been much lower than in other parts of the country, you would naturally expect that the results of a needs test would be entirely different from the results, say, in Lancashire, in Monmouth, or in County Durham; and what we expect, we actually find.

In the second place, public assistance is based, as the House knows, on the household as the unit. The hon. Member for Leigh thinks it ought not to be so based, I gather. I gather that a father ought not to be expected to maintain his son or to help to maintain him, or that the son ought not to be expected to help to maintain his father. I, personally, disagree, and I believe that the huge majority, not merely of this House but of the country, believe that you have to maintain, fundamentally, the family as the unit. In any case, whatever our opinions may be, the practice of public assistance authorities is to regard the household as the unit, and consequently the nature of local Industries, has a tremendous effect on results. If you get a coalmining area, where normally there is a male breadwinner as the chief support of the household, and that head of the household falls out of work, the whole resources of the household are destroyed, but if, on the other hand, you get an area like Lancashire, where the normal custom is for many members of the household to work, and especially in areas where there is a large percentage of women employed, you will find that there is a considerable amount of money going into the household, even though the male breadwinner may be temporarily stopped; and these variations have a tremendous effect on the percentages shown by the public assistance authorities in their determinations. In Lancashire in particular, I believe, where you have an area with a great deal of short time being worked and where large numbers of mills are spasmodically open and shut, even if you had an absolutely standardised administration, you would still find considerable and legitimate variations between the different areas and the different towns.

The third great cause of discrepancy, I think, arises from the variations between the scales of the various local authorities. It is clear that if one local authority's scale for a single man is 15s. 3d. and the neighbouring authority's scale is 15s., you will find in the case of the first authority a very large percentage of determinations at full rates and a very small percentage at less than full rates and in the case of the second authority you will find exactly the reverse. On paper, it looks as if there was a tremendous difference of administration, but in actual practice probably the administration is the same and the net effect on the recipients is very small indeed.

The fourth cause for these various discrepancies is the fact that the scheme is being administered by local authorities on the basis of public assistance practice, and public assistance practice, just like any other practice of local authorities, varies. Many of these variations may be real economic variations and differences in the various parts of the country. Many of them also reflect the different relations that the public assistance scales bear to the predominant wage rates in the district. Other discrepancies again arise out of the economic variations between one area and another. If you ask for an illustration, I would suggest the question of the provisions of fares for persons in search of work, and you must make a greater allowance in London for fares for persons in search of work than if they were living in some small provincial town.

Finally, rents and allowances for rents also vary, and these variations have very little to do with actual differences of administration. Further, local variations are nothing new. On the contrary, before the 1929 Local Government Act they were very much greater than they are to-day, and as long as there was only a small number of persons concerned, the subject of these variations was not a matter of any public or political interest, and the people in the districts concerned were perfectly satisfied. It is only when the numbers suddenly get greater and the question of Exchequer money arises that we get this sudden demand for uniformity. My right hon. Friend the Minister of Health has said that he is proposing to hold conferences in various areas in the next few days in order to see whether a greater uniformity cannot be introduced.

I come now to the last of the causes of lack of uniformity. It is fair to say that most local authorities have carried out their duties and their responsibilities towards the Exchequer with a great degree of care. A few authorities here and there are departing in their administration of the scheme widely from anything that might be called the letter or the spirit of the law. When you find in any particular area three or four authorities carrying out the law properly and one authority flagrantly disregarding it, obviously the ensuing variation in practice causes a great deal of embittered local comment. I have every sympathy with such complaints. We are taking the matter of these recalcitrant authorities seriously in hand.

Mr. BUCHANAN

How many are there?

Mr. HUDSON

The last thing we want is—

Mr. COVE

How many are there and where are they?

Mr. HUDSON

There is one in the close neighbourhood of my hon. Friend's constituency.

Mr. BUCHANAN

Where is that?

Mr. TINKER

Does this apply to both ends of the scale or only one end?

Mr. HUDSON

The authorities that are flagrantly acting in disregard of the law are causing discontent in the areas of the authorities that are carrying out the law. Therefore, we propose to deal with those authorities first.

Mr. LANSBURY

What is the law? You have laid down these scales.

Mr. HUDSON

They are not even carrying out the Order-in-Council which says that there are not to be two different scales, one for their own people and one for ours. If these local authorities remain contumacious, we shall have no option but to supersede them, because it is clear that the gross injustice—

Mr. COVE

Which are the local authorities?

Mr. DEPUTY-SPEAKER (Sir Dennis Herbert)

The hon. Member knows that he cannot interrupt unless the hon. Member who is in possession of the House chooses to give way.

Mr. HUDSON

If they remain contumacious we shall have no option but to supersede them, because it is clear that the gross injustice as between recipients of transitional payments in adjacent areas cannot be allowed to continue. We hope, however, that these authorities will listen to reason, and will pay heed to the representations that we are addressing to them. I will only add this further observation. I have, and I am sure that everyone has, the greatest sympathy with the unemployed, but more particularly with the man who has exhausted his 26 weeks' benefit. He has for years been induced to believe that he can go on drawing benefit indefinitely out of a seemingly inexhaustible insurance fund. Repeated warnings that this practice was leading the whole scheme into bankruptcy and disrepute have been disregarded, but the fact that the country now realises the extent to which this has gone is no consolation to the man who is thrown off standard benefit. Many hon. Members have asked me whether I do not think it hard that a man who has worked almost continuously since the War, who has been hard working and thrifty, and a good man in every sense, and is now thrown out of work through no fault of his own and has exhausted his 26 weeks' benefit, should now have to apply for transitional payment.

9.0 p.m.

I agree that it sounds, and is, hard lines, but it is worth remembering that he has been put into that position as the result of the actions of politicians for many years, and especially of the late Labour Government when they relaxed the conditions under which benefit could be drawn. Too many persons who were right outside the insurance scheme, or who did not really need benefit, have been allowed to dip into the till, until now the reserves that should have been built up to help this poor hard-working man have been changed into a staggering debt burden of £115,000,000. May I remind the House of the figures which I gave last week in answer to a question of the hon. and gallant Member for Wycombe (Sir A. Knox)? I said then that the weekly income of the fund is insufficient to meet its outgoings by £295,000, and in addition transitional payments are at present costing the Exchequer £835,000 a week. In other words, the total cost of unemployment is still at the staggering figure of £114,000,000 a year. When some hon. Members talk, as I heard them doing today, about restoring the cuts in the dole, I would remind them that the income of the fund is at present still nearly £300,000 short of the expenditure every week.

One of the disturbing features of the unemployment problem is the fact that long-term unemployment seems to be increasing at the cost of short-term unemployment, and it is long-term unemployment that is causing so appalling a drain on the fund. We had an inquiry made for the Royal Commission the other day as to what happened in 1930. It may perhaps interest the House if I gave the percentages which were published by the Commission, and converted them into figures. In 1930, 4,200,000 separate individuals drew benefit. Of these, 2,500,000 drew benefit for up to 17 weeks, and they cost the fund £21,000,000. At the other end of the scale, 107,000 persons were unemployed for a whole year, and they cost the fund £5,850,000. That great disproportion in the cost as between the short-term and the long-term unemployed renders it absolutely essential to have a needs test in the case of persons who are out of work for more than 26 weeks.

My hon. Friend the Member for Chester-le-Street wanted to know what I thought would be the future cost of unemployment under this Government. That is a question which I think it is perfectly impossible to answer. I venture to think that as our home market becomes more thoroughly organised by our home manufacturers, and the rest of the world returns to sanity and order, we shall be able to recapture some of our old time prosperity and see the unemployment figures fall. But at whatever figure you set the final total, whether you are an optimist and set it below 1,000,000, or a pessimist and think the figure will be 1,500,000 or 1,750,000—

Mr. MAXTON

Or whether you are a realist.

Mr. HUDSON

Whatever you are, whatever total figure you finally decide, it will be a colossal figure regarded from its human side. On 3rd March I suggested that we had to develop a new technique, and said that I hoped to see various experiments carried out by public-spirited persons. Some hon. Members subsequently asked me if I could give them any account of the experiments already made. I am glad to say that in the interval the National Council for Social Service have brought out a booklet, called "Work with the Unemployed," which gives particulars of several of the experiments already in operation. In conclusion I would like to quote one or two sentences from that booklet, because I believe that it is along such lines that we may bring relief to the lot of the men who otherwise would be standing idle in the market place wasting their substance and losing their capacity for useful work: The greatest need of those who are out of work is, of course, opportunity to earn their livelihood. In the absence of that opportunity they need especially two things in addition to the provision for bare maintenance made by the State. They need occupation that will develop their capacities and keep them fit, mentally and physically. And they need the chance to join in social activities that will help to maintain their self-respect. Moreover, experience has proved that the most successful schemes are not only those which the men themselves help to organise but are in many cases those which are unpretentious and inexpensive. Many have failed because they were wholly devised by some outside body and were planned on lines which did not appeal to the men and women in question. Many more successful schemes might be started if it were realised that with the co-operation of the men themselves elaborate or expensive provision is quite unnecessary. My hon. Friend the Member for Central Nottingham (Mr. O'Connor) said he hoped I would give some indication of the attitude which my right hon. Friend adopts or will adopt towards these proposals. As a final quotation, I would like to read the final paragraph of the letter which he has caused to be addressed to the Secretary, of the National Council of Social Service: For the rest, the Minister very much welcomes the action of those unemployed men who are giving services voluntarily for the benefit of others while they are in receipt of payments from public funds and until they can obtain work; and he would be very glad to know that similar action was being taken in other districts.