ECONOMIC SITUATION.

HC Deb 25 November 1932 vol 272 cc369-450

Mr. ATTLEE

I beg to move, at the end of the Question, to add the words: But humbly regret that Your Majesty's advisers, returned to power with an overwhelming majority on extravagant pledges to restore the economic position of the country, have failed to carry out their mandate, and whilst realising, as implied in the Gracious Speech, that prosperity cannot be achieved under capitalism, lack the courage to adopt the alternative socialist policy of attacking the fundamental causes of the poverty problem. 11.12 a.m.

I do not suppose that there has ever been presented to this House a King's Speech in which there was so. little hope and so much despair. I doubt if in this House we have ever had speeches made by a Prime Minister which indicated so little an idea of what he could do. The Prime Minister, in the course of the last fortnight, has given us two speeches, in one of which he told us that he was thinking aloud. I cannot say that I saw any very great signs of cerebral activity in either of those speeches. They were very familiar to me for I have heard them made by the Prime Minister before. When the Prime Minister has a problem lie is very pleased to face it and have the difficulties laid out. He tells us that we have this and that, and that they are all very difficult things. He then tells us that he has numbers of committees and experts working upon them. He generally makes a declaration that he means to face them, and he then generally gets noisy and thumps the Box and the thing passes off in smoke and nothing happens. I have heard him from that side of the House and I have heard him from this side of the House, but in those speeches there was a note of absolute and complete hopelessness. Except for the vague mirage—I am afraid it is a mirage—of the World Economic Conference there was absolutely no suggestion. On the contrary, the Prime Minister confessed that if, as a matter of fact trade revived, and if we got as much of the economic prosperity under the present system as could be expected in this country, we were going to have 1,000,000 or 2,000,000 people for whom no useful occupation could be found, and the most that we could do was to keep them alive. When I consider the speeches of the Mover and Seconder of the Address I find one or two hopeful signs. The hon. Member for Skipton (Mr. Roy Bird) in what I thought was an extremely interesting speech—indeed the two speeches were better than any I have ever heard on the Address—said: I hope, if it should be necessary, they will apply other remedies which in other times and other places and in other circumstances might have had a label attached to them which might have offended the susceptibilities of one or other section of the National Government."—[OFFICIAL REPORT, 22nd November, 1932; col. 11, Vol. 272.] I welcome that as showing that the hon. Member realises that the professions upon which the Government were returned to power were that they would try every possible means, that no method would be rejected because of its label. Hitherto we have had contributions mainly from the Conservative side, and Liberals have had to swallow a large number of measures despite the label of Protection, which they do not like. I am not quite sure what has been the Liberal contribution, unless it has been economy; and I am not sure whether the Conservatives have swallowed it. But so far we have had no contribution from ex-Labour Members who are now Members of the Government, perhaps because they have none to make and perhaps because their convictions have entirely gone. The speech of the hon. Member for Montgomeryshire (Mr. C. Davies) was notable for a frank realisation of the position. He said: Starvation is facing millions at a time when the land was never more bounteous, production easier, and transport more rapid."—[OFFICIAL REPORT, 22nd November, 1932; col. 12, Vol. 272.] Later on he said: The problem facing the rulers, statesmen and peoples of every land is the fair redistribution of the labour of all."—[OFFICIAL REPORT, 22nd November, 1932; col. 13, Vol. 272.] We have had the confession from the Prime Minister that even if all the present plans of the Government succeed they are not going to deal with the unemployment problem and with the poverty problem, and, therefore, it is time that this House began to consider the fundamental' reasons for the economic depression. At the end of last Session we had a discussion on unemployment in which we dealt with the immediate alleviations which might be applied, but we could not discuss fundamental causes. It is quite time that this House got down to fundamentals. I want to lay down one or two propositions, which, I think, will be admitted. The first is—it was also stated by the hon. Member for Montgomeryshire—that the power of producing commodities and rendering effective service was never so high in the history of the world as it is to-day. My second proposition is that there is a great unsatisfied demand for services and commodities among all the peoples of the world. My next proposition is, coming down to this country, that our capital equipment, our geographical situation and our natural resources, with the skill and energy of our people, make it possible for us to perform services and produce commodities sufficient to exchange for the food and raw materials which we require to keep a high standard of life for our people. All those propositions are true. My fourth proposition is that there is no economic obstacle in the way of the people of this country getting what they have not got now, adequate food, adequate housing and a reasonable standard of comfort. The same thing is true of other countries of Western Europe, and certainly of the Dominions and the United States of America, and of other countries, taking into consideration the varying standards of life in other countries.

When you face the position you have to find out the reasons for this economic disharmony. The question which is being asked by ordinary men and women who do not take an interest in politics is why we cannot get the material foundations for our life when nature is so provident and man so ingenious. It is not a difference in fiscal systems. These same conditions, riches and poverty, a failure to bring demand and supply together, a failure to exercise and use the resources of the country, obtain in Protectionist countries and in Free Trade countries. It is not a question of War Debts and Reparations, because you get the same phenomena among the people who won the War as in those who lost the War, and among the people who did not take any part at all in the War. It is not a question of old and new civilisations. You get the same conditions in old civilisations as in new nations, like America and Australia. It is not even the breaking down of the exchange system and the currency problems which are now being discussed at such great length. All these various considerations may have accentuated the problem, but the problem was there before the War. In post-war years we are apt to forget that boom and slump alternated before the War. All these post-War troubles have accentuated the evil, but they are not the cause. I claim that the answer was given by the right hon. Member for Bow and Bromley (Mr. Lansbury), that today is the nemesis of usury. Poverty and unemployment are the inevitable accompaniments of a capitalist system, based on private profit.

Let me define what I think are the three main causes. In the first place, it is the maldistribution of purchasing power. We have had in the course of the last century, and especially during the last 10 years, an enormous increase in the ability to produce commodities, but we have failed to get an increase in distribution of purchasing power. The capitalist system withholds from the workers the results of their labours, leaving an insufficient purchasing power among the masses of the people to buy consumable goods. The capitalist is unable to utilise more than a very limited quantity of consumable goods and therefore he is constantly putting what he draws from the economic system into the manufacture of goods with the result that the producing power of the world keeps on increasing and increasing with no pro- vision for absorbing these consumable goods. The nineteenth century was kept going by a process of lending and developing the undeveloped parts of the world, but that was a process which could not continue indefinitely. In the beginning of that century this country provided goods for these new and undeveloped countries, but some of them are now finding themselves over capitalised and over provided with capital goods, while many of them are already producing the things that they used to draw from this country. You have the system on which this country prospered during the nineteenth century coming to an end. Then there came the mighty crash occasioned by the War. The War upset the ordinary trade channels and caused production in new countries outside the immediate field of war to he vastly accelerated. Following the crash occasioned by the War came the catastrophic fall in prices, which has made the burden of interest too great to be borne. We claim that the trouble which we find to-day in the dealings between this country and the Argentine and between this country and Canada was inevitable under a capitalist system. t was, as my right hon. Friend said, the nemesis of usury, but in this case it is the nemesis of international usury.

Secondly, there is misdirection of purchasing power, due to the fact that the demand for necessities is unsatisfied because the effective purchasing power is in the hands of the few. Suppose you had an all-wise ruler of these things. Suppose you had the best man you could get and you made him director or dictator of the economic interests of this country. What would he do? He would look round and say: "What things should be produced first?" Then he would inevitably say: "I am going to deal with necessities before luxuries." If he were to direct the country in the national interests he would realise that his first duty would be to clear the slums and to build houses for the people before he put up new hotels. What do we find to-day in that respect? We find in London that grandiose hotels are being built while the slums remain and the housing shortage is widespread. While absolute waste is going on nothing is done in regard to buildings which are causing loss to the country in health and in other ways.

The third factor of the situation is that the burden of rent and interest is becoming heavier and heavier, and a huge rentier class has to be carried by the workers. Fourthly, the deciding factor as to what shall be the industrial activities of this nation, and what economic activities shall take place, is not patriotism, not any desire for doing what is best in the interests of the country, but it is invariably what will make most private profit. The capital resources of this country are not directed in peacetime in catering for the things that the people need. At a time when you cannot get money for housing except at high rates of interest you can get money to finance the "Daily Mail," and money for financing greyhound tracks and things of that kind. We have this absolute misdirection of our capital resources and at the same time we find that the mainspring of industry is private profit instead of public advantage. Yet we are told that we must carry on in this way. We are told that the only basis on which the economic life of this country can be carried on, and the only hope of recovery, is what is called "confidence." Confidence in this sense is a curious word.

We are to wait for the return of confidence, not the confidence of the workers in the system but the confidence of the moneyed classes, the investors. We have been waiting and waiting for what they call the return of confidence. We have that point of view put whenever anyone speaks from the standpoint of the City of London. The hon. Member for East Edinburgh (Mr. D. Mason) spoke the other day and the hon. and gallant Member for Wallasey (Lieut.-Colonel Moore-Brabazon) pointed out that the hon. Member seemed to be giving exactly the City of London point of view. The whole idea was that our only hope of recovery is that this country must be a paradise for the capitalist, a place where he can get a safe and big return on his money. It is this capitalist system which we see in a state of decay, and it is under that system that we have seen such an increase in prices during the last few years. The Labour Govern-merit in office were powerless because there was a. capitalist majority in this House and a capitalist majority in the country. There is a capitalist majority in this House to-day. Therefore, hon. Members may ask: "What is the use of advocating Socialism? "It is because your patriotism has broken down and your capitalist system has broken down that it is about time you learned the lesson.

The present Government claim a free hand. For a year they have seen things going steadily worse. The fact is they are at the end of their tether. What do we find to-day in this House? Attention has been called to the difference in the speeches of the Mover and Seconder of the Address as compared with the speeches of a year ago. A year ago it was youth and hope, but it was disillusion and middle-age the other day. No one can fail to notice the different tone in this House compared with that of a year ago. Hon. Members came from their constituencies all cock-a.-hoop, but it is a very different tale now. They have played their cards and have failed to take the trick. They have played with Protection and have found that it is perfectly useless.

While I agree as to the importance of the World Economic Conference, if it ever comes off, and while I recognise the evils from which we suffer, apart from the international question, it is no good waiting for something to turn up. The Prime Minister is the most complete Micawber we have ever had on the Treasury Bench. He sits there, waiting for something to turn up, and he says: "Things are very bad, but we are looking round for a little hope." He hopes on, and because of a change in the American Stock Exchange or a little flutter in the Argentine he trusts that the things that he is waiting for will turn up. It is time that this country gave a lead, and I believe that the right way is to start with the reconstruction of this country on Socialist lines. The first piece of reconstruction that will be necessary is that part which has most obviously broken down, and that is the whole mechanism of exchange. We are told that if we interfere with these delicate means of financial exchange there will be the most appalling disasters. Well, we have had the appalling disasters. What are we told by the people who profess to understand the system? There was Lord Goschen, who wrote a well-known book on exchange. He certainly understood the system. What are we told by men like Montagu Norman? He does not even profess to understand it. They confess that the system has broken down and they do not know what to do with it, but all the same we are begged to cling to it.

The whole essence of this elaborate system of exchange and currency is merely to enable services and commodities to be exchanged between the various peoples of the world, and yet it is an elaborate web at every point of which private profit must come in. I was reading the life of Lord Oxford, the other day, and I came across a passage in which he talked about the bankers and financial interests at the outbreak of the War. He described them as a lot of timorous old women. They were like a lot of spiders in an elaborate web, but that web was swept aside by the broom of war. By the end of the War the country was to a great extent run on collectivist lines, but we have allowed the capitalist spiders to spin their web again, and we are entangled in that web. The first thing we should do is to try to break through the web. If through lack of confidence we cannot establish proper trading relations between the peoples of the world by the existing mechanism, let us have another mechanism.

In the War you had imports and exports organised by the State. You had the purchase of the wool of Australia; you had a few men in an office in Whitehall distributing the whole wheat supply of the world between a dozen or more nations. That can be done. We suggest that that is what you have to do. The only way to cut through this entanglement is the bold way. I take that as a first point, because the essence of our difficulty is this: In this country you claim to be unable to utilise the services of the men of this country, and if we put forward any suggestion that it is economic waste to have idle men, idle money, and idle materials, we are met by the plea that if we try to do anything like that we shall upset the foreign exchanges. I suggest that there was some truth in what was said by the right hon. Member for Sparkbrook (Mr. Amery), and that was that as a matter of fact we are much freer to act than is thought. He was speaking of our going off the Gold Standard. I think we would have a precarious reconstruction behind a mere going off the Gold Standard. But provided we organise external trade and have a real control of imports and exports we are in the position of a country insulated from the rest of the world as far as internal purchasing power is concerned, and we are in a position in which we can utilise the services of every man and woman who is employable; and we are. in the position to do something else, and that is to turn unemployment into leisure.

As was said the other day, the problem before the world is to turn unemployment into leisure. That was obviously a problem before the Prime Minister, who admitted that there are from 1,000,000 to 2,000,000 people for whom we cannot hope to find work. The hon. Member for Merthyr (Mr. Wallhead), who is to bring forward a means of starting to do that, will he met by the statement that under private enterprise it cannot be done, and that if we shorten hours we will increase costs and will still have to compete with the rest of the world. If we cannot take advantage of nature's bounty and of the discoveries of science because of a defect in the economic system, it is time to change the economic system. I believe that if the Government boldly went out on a policy like that it would be much better than any of the indirect Ottawa Agreements. As a matter of fact it was accepted in principle when those Agreements were reached. The Dominions insisted that there should be a market here for a certain portion of their goods, which in fact amounted to setting up a one-sided barter. On the other side, they are not going to let our goods in except to give them a fair light in their market. As a matter of fact, we could by barter obtain for this country the raw material and the food that we need.

But when I come to the question of the internal side, I shall no doubt part company with right hon. and hon. Members opposite, because I hold that we must organise this country on an equalitarian basis. I hold that not merely from the point of view of Socialist theory, but from the facts of the situation to-day. The facts are that we have enormous capacity for turning out goods extremely cheaply, but only on condition that there is an enormous consumption. Therefore, unless we have an equable distribution of purchasing power we cannot get the consumption to meet that production. Every time the Government go in for economy stunts, every time they cut down the put-chasing power of large masses of the people, they are in effect killing the market for the up-to-date producer and preventing a utilisation of the successes of science. I believe that behind such a scheme we have to organise this country on a Socialist basis. If we want to approach the world with a view to getting some sanity into economic order we can do it only when we have made a start by setting our own house in order.

We had from the right hon. Gentleman the Lord President of the Council a remarkable speech the other day. He showed very clearly that in his mind he saw the danger of Western civilisation being wiped out in a war of destruction. But Western civilisation may be wiped out in another sort of war altogether, in a social war. As a matter of fact the right hon. Gentleman, although he did not carry his argument to its logical conclusion, indicated quite clearly that disarmament would only be possible in a world in which there had been a large mitigation of individual sovereignty, in which there had been a large development of international organisation. We say precisely the same thing. If we want to get rid of war the right way is the constructive way of going in for an international society.

After all our Western civilisation, with all its faults, is a repository of the learning, science, art and literature of generations, and this country is the casket that holds much of what is most precious. That is our social heritage. In the last 50 or 60 years it has become more and more the social heritage of the whole people. But the preservation of the things of the spirit depends on the provision of a material foundation. It is. not the first time in the world's history that over a large part of the globe a civilisation has been built up. There was the Roman Empire in the East and the Roman Empire in the West. Outside the danger pointed out by the Lord President of the Council, of the wiping out of Western civilisation by war, there is the danger of Western civilisation being wiped out for precisely the same reason -as the Roman Empire civilisation was wiped out—simply because the economic organisation was such that it was not worth the while of the ordinary man to make sacrifices to preserve it.

I ask hon. Members to go to their own 'constituencies and see what is happening. I would like hon. Members to realise what is happening to-day among the young men of our country. You find bright and well-educated lads saying that they have no hope at all, that they would commit a crime to get into prison rather than continue unemployed, and so forth. I do not think we realise how widespread that feeling is in this country and if it is widespread in this country, what is it on the Continent of Europe? A great deal of the trouble in Germany is due to that factor. You may yet have millions of people in revolt against a capitalist system which fails to give them their social 'heritage. It might have been thought some years ago that the whole world had been brought into the one capitalist -nexus, that there were no people at all outside the system, as there were at the time of the Roman Empire. But to-day there is a people outside it.

There is that great country of Russia with an immense population, organised on an entirely different basis from the rest of the world. It has different virtues from our civilisation and different vices. I do not agree with much of it. I believe that it disregards many things which to us are very precious, but let us remember that it is there, and that there is a rising tide of discontent throughout the West. Unless you can organise this country so as to preserve what is good in the West, and at the same time get that social justice which is the supreme virtue of Russia to-day, I believe that Western civilisation will go down. I claim in moving this Motion that we Socialists are the true preservers of Western ideas; that unless your capitalism can be brought into accord with the ideal of social justice to the ordinary man, then a great deal of what many of us hold, what I myself hold, to be most precious in our Western civilisation will go down before the irresistible rush of the discontented.

11.48 a.m.

Lord EUSTACE PERCY

I think the House will be grateful to the hon. Member who has moved this Amendment, not indeed for the Amendment itself, which savours rather too much perhaps of the ordinary opening manoeuvres of a Parliamentary Session, but for attempting to deal with a fundamental problem. I have no quarrel with the broad lines of the hon. Member's concluding remarks. I have said in this House before, though the hon. Member then did not appear to agree with me, that the question before us at present is nothing less than the preservation of Western civilisation. I think he failed to convince this House, or even himself, that his analysis of the causes of the present position was sufficient or his remedy clear. To tell the truth, after he sat down, I had as little knowledge of what the Socialist alternative is, as I had when he rose. Clearly, references to the organisation of imports and exports and vague statements that you are to organise and reorganise internal production on a Socialist basis, get one nowhere.

When the hon. Member speaks of the organisation of the whole world let us at least remember that under the old Roman Empire there was a world organisation. Then, the whole world was under one hand, but planning failed to save that civilisation. The truth is that the Labour party, after the last Election, came to the conclusion that the only thing which would restore us was to say "Socialism" emphatically and repeatedly on every possible occasion. But the mere repetition of that word does not show that you understand what Socialism is, any more than, according to the hon. Member, Mr. Montagu Norman knows what the exchanges are. I have great sympathy with the hon. Member for Bridgeton (Mr. Maxton) in having come to the conclusion that it was quite impossible to teach the Labour party what Socialism was, and that he had better clear out of it. But I do not want to waste the time of the House to-day in gibes of that kind, and I apologise for that allusion.

Let me put to the hon. Gentleman opposite an alternative way of stating our fundamental problem. It is this: that a vastly greater part of the wealth produced in Western civilisation to-day is produced by highly organised industry.

You are not going to alter that condition merely by having the capital and the control of that industry in the hands of the State rather than in the hands of the private individual. But the absurdity of this state of organised industry is that in Russia, just as much as in this country, the mass of the people can gain no interest in the wealth produced by industry unless they are employed in industry. That is the real division between the capital-owning classes and the workers in this country. As I say, the great bulk of the citizens of every country including Russia can only share in the wealth produced by industry by being employed in industry, so that organised industry is performing two distinct functions, the function of production and the function of distributing at any rate a portion of the wealth produced.

We are all—my hon. Friend the Member for Stockton-on-Tees (Mr. Macmillan) and all of us—in some degree and in some form or other in favour of a better and more scientifically planned industry for the purpose of increasing and cheapening production, because the cheapening of production is just as necessary for the purpose of raising the standard of living as for the purposes of private profit. If you eliminate private profit, that must still be your object. But every advance in the planning of industry means unemployment and that unemployment is had, not simply because it gives people leisure —which is not a bad thing—but because the unemployed man cannot get any share of the greater wealth which is produced owing to his own unemployment. That is a problem far more fundamental than any problem of private profit. I think I have presented a far more radical and terrible dilemma than the hon. Member opposite presented, one which will need a far more radical solution and far deeper thought than is given by the leaders of the Labour party to what they call their Socialist policy.

I may be wrong. Hon. Gentlemen opposite may disagree with my precise statement of the problem, but my purpose in stating it is this. The right hon. Gentleman the Member for Bow and Bromley (Mr. Lansbury) has more than once in this House and elsewhere issued an invitation to all open-minded and like-minded people to get together in the consideration of these matters. This problem is one which every economist in the country discusses and upon which he reaches no particular conclusion. It has baffled every thinker up to the present. It is not a problem that you will solve by debate in this Chamber. It is good that problems should be raised in debate here, but if you raise them with the idea that you are going to come to any fruitful conclusion on the Floor of this House, surely you are indulging in a delusion; and it is this continual attempt by this House to raise problems and to come to no sort of conclusion upon them, but to leave them hanging where they were and to end the Debate merely with a party Division—it is the feeling that that is all that this House can do which is degrading this House in the opinion of the country. Therefore, if I might, in all sincerity, reply to the invitation of the right hon. Member for Bow and Bromley, I would say that I believe the great bulk of the party to which I belong, on the back benches on this side of the House, are prepared to face any policy, however drastic, which will really deal with the fundamental issue of unemployment.

Cannot we then get together, not in Debates in the Chamber of this House, but elsewhere, in inter-party groups or whatever it may be, and really tackle the fundamental problem, not on a party or political basis, and see if we cannot arrive at some practical conclusion? After all, the purpose of Debates in this House is to get action by the Government, and may I pass from the fundamental, ultimate issues of policy to the possibilities of immediate action? That is what hon. Members opposite really want. They do not expect this Government, any more than they would expect themselves if they were in office at this moment, to start at once a policy such as that very vaguely outlined by the hon. Member who moved this Amendment.

Mr. ATTLEE

They would.

Lord E. PERCY

I think the hon. Member would have to think out his measures a great deal more before he could be said to have an alternative policy, whatever he may be said to have of alternative sentiments. We want steps taken by the Government, within the possibilities of immediate action.

There was one moment in the Prime Minister's speech on the Address when my heart sank to the bottom of my boots, and that was when he said that the Government had formed themselves into a Council of War. The experience of all history is that the Commander-in-Chief who wants a Council of War is half defeated already, and it has been a fact that every previous Government has tackled this question on the basis of a Council of War, a, Council of War extended to an Economic Advisory Council and every sort of advisory body, a Council of War which was dignified by the name of a General Staff; and I am sorry that the right hon. Member for Bow and Bromley asked for a General Staff again. That would not save us from anything. We want a Commander-in-Chief, not a Council of War, and a Commander-in-Chief, of course, on the modern model, whereby, in the sweep of modern war, the widest individual discretion has to be left to individual, subordinate commanders.

I wish to speak particularly of the problem of the depressed areas, because it is there that the pressing problem of unemployment is incarnate. The depressed areas do not cover the whole problem, but you have it there in a concrete, concentrated form, and, if you cannot deal with it there, you will not be able to deal with it anywhere. There is one thing with which I think the House will agree. Up to now we have attempted to deal with the problem of the depressed areas far too much on ordinary Government lines, through ordinary Government methods of administration. The problem of the depressed areas is nothing less than a refugee problem on the scale on which Dr. Nansen had to tackle it after the War. You have to deal with it by extraordinary methods.

I want to make three points, and I bear in mind the criticisms which have repeatedly been urged in this House against ex-Ministers taking up too much time. I have not taken up very much of the time of the House recently, so perhaps I may take a little time on these three points. The first I can dismiss in a very few words, because, I am glad to say, the Government have already taken action. My first point is that, when you are dealing with a problem of this kind, you have to concentrate an enormous volume of private voluntary effort. I hope that we are going to hear the last of a note which did come into the speech of the Leader of the Opposition the other day, when he seemed to stigmatise that kind of private voluntary effort as mere charity. That is not the right way to look at it. After all, if the expression of the individual responsibility of each man for his neighbour is to be written down as mere charity and as something unworthy, we shall have to rewrite the Sermon on the Mount in a very much more drastic way than our present system of civilisation often forces us to rewrite it.

That voluntary effort is a problem which has never been properly faced by Governments before. To secure cooperation between the Government and private effort, to mobilise private effort under general Government direction, requires a new technique of administration which has never been developed properly in this country. The measures which the Government have taken in recognising—although I should like to hear more of it from my right hon. Friend the First Commissioner of Works, because we have only had an unofficial statement on the subject, I believe—the National Council of Social Service as the focus and the co-ordinator of a great volume of voluntary effort is action on the right lines, and I hope the Government are going to develop that co-operation.

My second point is this: I have said that we must treat the distressed areas much more as a refugee problem, to be dealt with by novel and drastic action not within ordinary Government machinery. I should be the last person to, propose that we should supersede local authorities in the depressed areas. At the very moment when you are calling on voluntary effort, you want, of course, at the same time, the greatest possible volume of local effort organised by the local authorities, but nobody can look at these distressed areas without seeing that there are certain phases of resettlement in them which cannot be dealt with by the multiplicity of local authorities which at the present moment deal with public affairs in those regions.

I remember the small encouragement which I got when, some five years ago, I suggested to all the local authorities in the distressed areas in South Wales that they might consider amalgamating their education services more than at present. There is. of course, intense opposition to anything of that kind from local patriotism. But look at that jungle of authorities on Tyneside. How are you ever going to get any big policy of land resettlement or of replanning an industrial area of that kind which has been struck by the economic blizzard by merely acting through a lot of individual local authorities? I believe that the Government must take up the problem of the depressed areas through commissioners primarily appointed, not to supersede local authorities, but to provide to local authorities an alternative medium of action for matters of common interest which cannot be dealt with by each local authority separately. I believe that the Government would find that if they offered such machinery to those areas, they would have an immense demand for the services of such a co-ordinating authority.

May I give a small instance of one of the things which I have in mind. We all agree that it is intensely important to attract new industries to the depressed areas, and we know that even with the De-rating Act the level of rates tends to discourage industry from going into those areas. There is every possible objection to starting a general system of allowing local authorities to relieve new factories from rates for a period of years if they will only come inside their boundaries. There is every possible objection on grounds of general local government for doing that, but, if these areas are treated as areas which are a special problem to be dealt with in a special way, such a power could be given to commissioners, appointed in co-operation witch the Development Commission which is already established in those areas, to encourage resettlement and re-employment. That power could be given to the commissioners in agreement with the local authorities concerned. I make that suggestion to the Government as a method which they may be forced to adopt in order to deal with the problem of those areas.

Finally, I want to say a word about housing. There is no doubt that the Government's present policy—call it an economy policy if you like—is tending to increase unemployment by preventing the local authorities from undertaking certain work, while not stimulating private enterprise to undertake the work. Take the position in housing. I warmly agree with the Prime Minister and everyone who has spoken from the Front Bench that public works, whether you call them relief works or works of public importance, are not a satisfactory method of dealing with the more or less permanent problem of unemployment such as we know we are presented with. It is not a satisfactory way of dealing with it because no local scheme which is not self-supporting but based upon subsidies from rates and taxes, can represent a permanent programme. The right hon. Member for Bow and Bromley reminded me the other day of the time when he and I tried to raise money for houses in London, and I have always been grateful to him for his help. Does he remember what happened? After we raised the money, we found that we could not spend it because the late Lord Melchett instituted the whole system of housing subsidies. So long as you have a system which depends, not on your being able to raise capital, but on your being able to provide subsidies out of rates and taxes for every house you build, you will have an impermanent and spasmodic programme. which will not enlist the confidence of the worker. If we are to get that permanent development of housing which is urgently necessary, we must definitely get away from subsidies.

The Government seem to be halting between two opinions. They have restricted house building by local authorities, but they have not taken any steps to stimulate house building by other people. I do not want to go into the whole problem of housing subsidies to public housing corporations, with a guarantee by the State if they will take up building or act as public landlords for working-class houses. I am sure that housing represents the obvious immediately possible development which the Government can stimulate, and I think that they should stimulate it in two ways. They should stimulate it by the building of new houses through private enterprise organised and assisted by any way they like as long as it is not by way of subsidy. There is another way which can be undertaken by the local authorities which will give them a permanent programme extending over 10 years or even longer. That is in the policy of slum clearance.. It is for that reason that in an area like the Tyneside I so definitely want to see a special commission established for the planning or the replanning of the whole area. If on the Tyneside there were a replanning scheme for the clearance of slums, for the development of other housing areas, and for the replanning of the whole of that semi-derelict industrial area, there would be enough work to employ thousands of men for 10, 15 or 20 years. That can be done without subsidies on new houses and without extravagant expenditure by local authorities.

I think that I have indicated in what I have said in the last part of my speech that I am prepared for the most drastic action in these distressed areas. I am prepared for any action such as is suggested by the right hon. Member for North Cornwall (Sir F. Acland) in the way of the compulsory taking of land for allotments, market gardens, and so on. I am prepared for any drastic action of that kind. I would ask hon. Members of the Opposition to realise, and I would ask the Government especially to realise, that there is a demand for action on this side of the House, a demand for action unlimited by any preconceived notions or any prejudices of the past, limited only by a profound conviction that action must not take the easy and facile form of mere subsidies and mere expenditure out of rates and taxes. Such expenditure creates with one hand as much unemployment as it solves with the other.

12.14 p.m.

Mr. MAXTON

The Noble Lord's participation in the Debate has given me an idea that was far from my mind when I arrived at the House to-day. His earlier remarks made reference to myself and my severance from my Friends above the Gangway. He said that I left them because I had given up hope of converting them to Socialism.

Lord E. PERCY

Not converting them, but making them understand what Socialism means.

Mr. MAXTON

My reason for severance was a more serious one than even the revised version which the Noble Lord has now given. My hon. and right hon. Friends above the Gangway understand Socialism perfectly well. They know its implications. My reason for leaving them was that when confronted with power they refused to act from day to day in conformity with the principles of their faith, and that seemed to me a very terrible dereliction of duty both to the working class of this country and to the nation itself—a dereliction of duty which has far, far bigger consequences, I think, than merely the transference of this party from that side of the House to this. I think it has this difference. I may be wrong, but three years ago the Noble Lord and myself as Members of this House were both good Parliamentary democrats, believing that the problems of this country could be solved by the ordinary methods of Parliamentary procedure, by Cabinet Government, by Debate and by democratic machinery.

If I am not misunderstanding or reading more into his speech this morning than he intended, I take it that he has moved a tremendous distance in the direction of dictatorship and the suspension of Parliamentary Government. His speech to-day reminds me of the speeches which used to be made in this House by the hon. Baronet who represented the Smethwick Division, whose attitude at one point in his progress was very similar to that which has been enunciated by the Noble Lord the Member for Hastings (Lord E. Percy) to-day. But in discussing the argument put forward by the hon. Member for Limehouse (Mr. Attlee), the Noble Lord said he could not believe that the major problem that had to be solved could be solved by transferring the control of industry from private individuals into the hands of the State. He was prepared to discuss how that major problem could he solved, and was prepared to meet non-party groups to consider it, but he was quite satisfied in advance that it could not be solved by a transference of the economic duties of the nation from individuals to the State. He went on to ask the Prime Minister to be a commander-in-chief—to be something in the nature of a dictator.

Lord E. PERCY

With his Cabinet.

Mr. MAXTON

But Mussolini is like that, and I understand that Stalin is like that too—something in the nature of a dictator. Then the Noble Lord went on to detailed proposals of his own. Again savouring of the dictatorship, he is calling for not merely the supersession of Parliamentary Government by a dictatorial Prime Minister, but the supersession of local government by the appointment of commissioners. I agree with the Noble Lord that the essential social problem is how to solve the gap between the producing power and the consuming power of the population. He said that all other problems, housing and the dealing with distressed areas, are to be done by State action, but that the great overriding problem, of which all the others are merely detailed examples, cannot be solved by the action of the State. It seems to me that there is a tremendous contradiction there.

I take the point of view, that if the State would only act in the great overriding problem, this problem of the distribution of wealth, there would not need to be the intolerable interferences there are to-day in all the petty little details. The reason why I say the failure of my hon. and right hon. Friends above the Gangway was so serious, was that the two years of the Labour Government and the year in which the National Government have been in office seemed to me to be the last remaining period when these problems could have been solved in a sane, progressive way. Three years ago the Noble Lord never spoke in terms of a possible collapse of civilisation. That was not in his mind when he was a Member of the Government. He was absolutely confident that we were only in a temporary period of depression. The Noble Lord shakes his head, but I think it was he himself who stood at the Front Bench and announced a scheme of relief for the distressed areas in South Wales —a temporary scheme, because it was only a temporary problem.

Lord E. PERCY

indicated dissent.

Mr. MAXTON

I do not want to misrepresent the Noble Lord in any way, but I do want to put it to him and to the House that this Parliament and the nation have undergone this change in the short period of three years, that whereas three years ago the general belief was that we were in temporary difficulties, out of which we would come by ordinary ways, that we would mess about a bit, trying this and trying that, but that we would get through all right without any serious difficulty, to-day the tone is entirely different. There is now quite definitely present in the minds of the large proportion of Members in this House the idea that the crisis is something more than a temporary one, and the possibilities of our not getting out are very great indeed. If I have misread the mind of the House in that, I apologise to it, but I think that the speech of the Lord President of the Council a few days ago on the armaments question was a most depressing speech, a speech which was forecasting another war, a worse war, as being the inevitable outcome of our civilisation, not, he said, in the very immediate future, but a little later on. He is more optimistic than I am about that matter.

I think the war clouds round about us just now are very, very heavy indeed, and if war can be avoided in the years immediately in front of us I do not see any reason why it should come at the later period. He linked up the war danger, and I agree with him in that, with the fight for bread. He said that war had always, from the beginnings of time, been associated with the fight for bread, and unless it can be demonstrated to the world that the fight for bread is now past, that there is bread for everybody provided the necessary social organisation can be put down, I cannot believe the war danger has gone. The Prime Minister's speech about looking forward to 2,000,000 of scrapped humanity was terrible pessimism. "Scrap" was the word he used. He apologised for using it. It is a shocking word. That we can contemplate the possibility of having in this land for any extended period of time 2,000,000 people who are useless material is a horrible thought; because, mark you, though there may be a handful of 10,000 or so who are incapable of performing some bit of social service, that observation does not apply to the 2,000,000. I was in the Midlands during the week-end. All the arrangements for one of my meetings had been made—the selection of a chairman, the advertising and all the other business—had been carried through by three lads, all of them unemployed, who told me they had been out of work for varying periods from three years to 18 months. Those-fellows were as capable, as confident, in tackling their political activities as are the Members of this House, and to talk of those fellows as possible scrap is a shocking thing. It discloses a mood of general pessimism.

The speech of the right hon. Member for Epping (Mr. Churchill) was another evidence of it, contemplating all the possibilities of war—war—war ! And a serious thing about that speech was that in contemplating war he kept his face steadily turned to Europe. He never looked across the Atlantic to the United States of America as a point from which the war danger might come, although he and others must have realised that when we went to Ottawa we were issuing a challenge to the world, and to nobody more than to the United States. Surely the Government did not think the United States would not notice that we were having a conference at Ottawa. Surely they did not imagine that that would not evoke feelings and responses. I have often stood in the chess room watching some of the Members at play, and I said to myself sometimes: "If his opponent did not see that move, it is one which may well do the trick." But when a chess player makes a move he must assume that his opponent not only sees it but sees the significance of it, and probably sees a significance in it which the mover did not have in his mind when he made it. Looking at Ottawa, the United States were entitled to believe that it was a challenge by the British Empire against any other combination in the world.

Sir NAIRNE STEWART SANDEMAN

When the Americans have put up their tariffs at any time, or any other country has put up any tariff against us, have we taken it in that sense?

Mr. MAXTON

Yes, I think it has been general international politics up to now that when one nation has made a big new move in its general national policy the other nations have examined it and asked: "How is this going to affect us? Is it a friendly move or a hostile move?" I make no doubt about it that if a country raised tariffs heavily against us, or took any step that was a threat to our trade interests, we would regard it as a challenge, and the natural reaction would be: "What is the next move we can take to meet this?" I hope the Government are not so foolish as to think that the stiff-necked attitude of the United States towards debt settlements is not connected in any way with what was done at Ottawa.

I have spoken longer than I had intended, merely to illustrate the pessimistic attitude of leading spokesmen in this House, and have wandered into fields that are somewhat away from my normal sphere of operations, but I do say to the Noble Lord and to my hon. and right hon. Friends of the Labour party that the essence of the problem that has to be solved, and very speedily, lies in the question posed by the Noble Lord: "How are you going to make it possible for the people to consume the tremendous quantities of goods that the people can produce? How can you make the consuming power of the people as a whole synchronise with the producing power of the people?" We are getting now to the stage when the lack of consuming power is surely but slowly putting our producing power out of action. To my mind there can be no other way of dealing with the problem than by essential national effort. The Noble Lord can think if he pleases of individual activities getting us out of the present case, he may theorise in that way, but, like my hon. Friends above the Gangway, when he faces the proposition of how to deal with the problem he comes back to the central power of the State.

But the State has not merely to be ready to use this power against the poor. That is easy, and is not brave. One of the things that has always irritated me is the way in which the National Government has patted itself on the back, like this, and said: "Look at us doing our duty nobly and bravely !" [Interruption.] Well, they slap their chests, like the pirate king and sing "Ta-ra-ra," when all the time their hearts are in their boots. They say:" Look at the courageous way we are tackling our problems as compared with those fellows opposite, who ran away from responsibility." What was the brave thing you did? What was the brave thing that the National Government did? They took 2s. 9d. from people who had 17s. per week. They hit 3,000,000 of the poorest, weakest and most defenceless people in the community. What is brave about that, taking pennies from a blind man? Hitting young children. That is not courage. In the ordinary walks of life that sort of thing between individuals is regarded as blackguardism. If a big strong man hits a child, that is dirty, despicable and contemptible. If a big strong Government hits 3,000,000 poor people, including women and children, it is strong government. They say: "We deserve the congratulations of all right-thinking people in the land."

I put it to them that, if they are going to tackle their problems now, they will have to stop hitting the children. Let them face up to the great powers of this country that are refusing to allow our economic life to function smoothly, not unemployed people, but the powers of the banks and the powers of the Stock Exchange where they still gamble. They are gambling to-day on the chances that America will treat this nation badly. They are looking to that situation to see how much profit there is in it for them. There are the landowning interests. Even the Noble Lord the Member for Hastings has to recognise that the class to which he belongs may have to be handled before we shall be able to get land to build a few houses. The mine-owning interests and the mineral interests. A Commission has been working for nearly three years, since the Coal Mines Act came into operation, trying to arrange a few amalgamations. The last report I heard was that they had achieved one and a-half amalgamations, with a capable gentleman with a handsome salary arranging the amalgamations.

What does that mean? It means that competing vested interests are saying: "Oh, no! Although it may be to the interests of the State to have mining industries organised in a more efficient way, our business interest is against it, and we are not going to amalgamate, however much the State may want it." There is a vested interest challenging you. I saw in a newspaper the other day a copy of a letter sent out by, I think, a mining company in South Wales, advertising and offering Polish and German coal. Those ate the vested interests and those are the people that are making it impossible for the Government of this country to function as a Government and for the people to live in freedom, and the Government are afraid to hit them, afraid of every one of the big vested interests.

They are afraid of the banks, they are afraid of the Stock Exchange, they are afraid of the land-owning interests, they are afraid of the mining interests, and they are afraid of the railway-owning interests.

I back up the Noble Lord. Let the Prime Minister command. Do not let those interests call councils of war. The Prime Minister was reared in the same political school as I was. He knows exactly where he is. He knows precisely what he ought to do, which is not sitting there and accepting the pettifogging stuff that is outlined in the King's Speech as a strong handling of the situation. He is being untrue to every principle that he has got in him. He is funking the issue. So far, this National Government, which was returned to deal strongly with the situation, refuses to face up to the vested interests of this nation and to say: "You only function in so far as you function in the interest of the nation, and, if you refuse to function in the interests of the nation, you will be put out of existence." When you are ready to do that, then I will give you cheers for your courage, but, when you ask for my applause or for the applause of anybody else for what you have done, and for what, in the King's Speech, you propose to do, you cannot have it; you can only have the contempt that your operations deserve.

12.40 p.m.

Mr. STOREY

Although, like other hon. Members who come from the distressed areas in the North of England, I can find few constructive proposals in the Gracious Speech which will result in new sources of work and employment for people who will be displaced in our basic industries, I cannot go as far as the Amendment, with its extravagant proposals and its impracticable solution of our problems. The Government can, however, go some way to help us, further than they propose to go, particularly in one industry. I refer to one of our great national industries, shipbuilding, which is perhaps the last of our big industries to benefit by the policy which the Government are at present following. Tariffs and Imperial Preference will, I am convinced, in time help that industry, but I am appalled at the wastage of good human material which is taking place, which is growing daily, and which must continue to grow until that time comes round.

Shipbuilding has the highest percentage of unemployment of any industry, and therefore I think it should have some special attention from the Government. Agriculture has had special treatment, in assistance for wheat and meat. The iron and steel industry has had special attention and assistance with a dose of tariffs more than other industries have had, and coal has had its Coal Mines Act, although we may not like it. Is shipbuilding to be the only one of our great national industries to be left to work out its own salvation under the pressure of hard economic facts? Shipbuilders are tackling their own problems. They are tackling the problem of redundant berths in our shipyards. They do not ask for subsidies, and they do not want any system of Government control. There are constructive steps which we can take and which will help our shipbuilders to get more work into their yards. To begin with, this country could adopt a more energetic shipping policy. In 1923, the nations of the Empire declared that it was their established practice to make no discrimination between the flags of other nations and the flags of the Empire. They further said that, if such discrimination was made, they would consult how best they could meet it. Such discrimination undoubtedly exists and is growing. Why was this matter not discussed at Ottawa and why were no plans prepared to meet it?

British shipping wants no discrimination in its favour; it wants no special privileges; all that it asks is that it should receive fair play. But it may well be that, as in fiscal questions, we shall have to adopt weapons which will command fair play before we receive it. Unless this country is prepared to lose its world supremacy in the carrying trade, an energetic shipping policy must be adopted, and such a policy would have the effect of helping to stimulate ship-building here. We have at the present time much idle tonnage, and the Parliamentary Secretary to the Board of Trade, answering a question yesterday, told the House that the cure for a glut of tonnage was not to build more tonnage. But is the Parliamentary Secretary satisfied that the tonnage we have is good tonnage? Is it tonnage that is able to meet the competition of modern and efficient ships built by foreign nations under subsidy '? Surely this is a time when we should seek to re-equip our merchant fleet. We have idle berths, far too many of them. We have idle craftsmen, skilled and willing craftsmen. Is it economically sound to maintain those men in idleness when the money could be used to facilitate the scrapping of old tonnage and the building of a lesser quantity of modern and more efficient tonnage?

As I said before, shipbuilding is the industry which has the largest percentage of unemployment. We are spending many millions a year in unemployment insurance and in transitional payments, to maintain in idleness craftsmen who should be employed in building ships. We need a well-equipped merchant fleet. Are we so bankrupt of ideas that we can discover no plans by which we may use this money, which we are now paying to maintain those men in idleness, in order to find employment for them? I know I shall be met with the criticism that we should not take money from other industries, and so increase their overhead' charges and make it more difficult for them to compete in the world markets than it is now; but what are we doing at the present time? Are not unemployment insurance and transitional payments paid out of the Contributions of industry and taxes upon industry? Is not the burden already upon industry, and could we not do better if, instead of using that money to maintain men in unemployment, we used it to stimulate employment? Such a plan could be applied to other industries; why not first try it out upon shipping? That would have the effect of stimulating shipbuilding, the worst hit and the least helped of our industries. If it was successful with shipbuilding, the benefit would not end there, but would extend through many subsidiary industries, and so help to meet our present problems and reduce the cost upon the nation.

I shall be told that, if it were economic to re-equip our merchant fleet, the shipping industry would undertake the work without any help. But that argument omits one vital factor; it ignores the cost which is already upon the industry of maintaining in unemployment men who would be employed if the plan proceeded. And, even if it were to cost the nation something, would it not be worth while if we were able to remove that source of human wastage which is continuing and will continue so long as these men are kept in idleness? It is arguable that in many industries, if the money now paid for maintaining men in unemployment were used to facilitate credits and to guarantee against loss where employers are enterprising, we should build up and secure a much larger volume of work and decrease the total number of our unemployed, and, when we reflect on the great moral advantage that would result, I feel that we may ask the Government to try the experiment. It would be unorthodox; it might lead to mistakes; but would the mistakes be any greater than those we have made in subsidising unemployment? If it were to succeed, should we not have achieved something really worth trying to achieve?

I hope that the Government will be un- orthodox; I hope that they will be bold; for, if we are to resuscitate such industries as shipbuilding, we must take bold, steps, since, although we may once more revive shipbuilding into a great national industry, we have to face the fact that never again will all our vacant berths be employed, and never again will it be possible to employ all the men who look to this industry for employment. New spheres of work will have to be found for a great many of those men. Does the Gracious Speech hold out any hope for them? I very much regret to say that I can see little, if anything, which the Gracious Speech holds out to those men—indeed, nothing unless it be the reference to action on agricultural investigations concluded and proceeding. When the Government proceed to take that action, I hope they will bear con- stantly in mind the distressed areas, for, in the North of England, we have to realise that our basic industries, which up to now have employed the bulk of our people, will never again employ all the potential workers. New work will have to be found for them, preferably in those areas, and I beg the Government not to delay any longer, but to set to work to find for those men new forms of employment, not in relief works, but in new and productive industries in their own neighbourhood.

12.54 p.m.

Mr. E. J. YOUNG

Since I have been a Member of the House, I have spoken very little and have thought a good deal. I have been hopeful and disappointed in turn—usually more disappointed than hopeful—but on this occasion, when the assertion was made in the Amendment that the Government have failed in their mandate, although they have still a few years of their mandate to run, followed by a taunt, or a challenge, that the Socialist case is not taken up, I expected the leaders of the Socialist party and subsequent speakers to explain to us exactly what they wanted and exactly what Socialism was. The only inference we have had as to the meaning of Socialism is the suggestion of the hon. Gentleman who opened the Debate, that we should clear the slums, deal with the exchanges, and recondition or reconstruct industry. The hon. Member for Bridgeton (Mr. Maxton) asserted that the Labour party really did understand Socialism. I must say I doubt it. I have read and listened to Debates in the House for nearly 20 years, and I remember a memorable Debate in which Lord Melchett, the present Foreign Secretary, and Viscount Snowden took part five or six years ago. I have never on any single occasion heard a Socialist speaker tell the House what the fundamentals of their policy are. Seeing that they are suggesting now that the Government should accept the policy that they offer on account of its own failure, perhaps I may be permitted to point out what we who are not Socialists believe Socialism to be from what we have read in Socialist periodicals and books.

The clearing of slums is not necessarily a Socialist policy, although the National Government at the moment have done a good deal to retard the clearance of slums rather than to advance it. By the imposition of tariffs on building materials, for instance, they have raised the cost of building materials, and they are making it harder instead of easier to build houses. Building materials are rising in price fairly rapidly. I had a case brought to me last week in the North of England of a large town council which issued tenders for 200 houses. A big institution that controls a large number of building materials at once raised their prices and the town council resubmitted the tenders to the tenderers, inviting them to estimate the cost of foreign materials, because the British material since these tariffs have existed have risen so rapidly in price. It is not necessarily a Socialist theory to clear the slums, any more than Socialism is the only alternative to the present National Government. It is not a Socialist theory to deal with foreign exchanges. It is rather less a Socialist theory than the theory of one of the other parties. Neither is it a Socialist theory to recondition or reconstruct industry. The party of which I am a member have made proposals in detail along those lines time after time.

But Socialism is something else. The alternative that the Government are invited to accept is very different from the suggestions laid clown by bon. Members opposite. According to the Year Book that they published in 1918, the year that they became a Socialist party, they suggest that they stand for the elimination of the private capitalist, for the control of industry, and for the organisation of the nation's industries upon the basis of common ownership of the means of production. That is Socialism. It is as Socialistic as the theories of the extremists who are not represented in the House at the moment. It postulates the abolition of private property altogether. It is good in theory, although, with a good deal of electioneering experience, I have never known a Socialist go to a street corner audience and tell them those things. The capitalist system, as it is called—I prefer a bad capitalist system to a good Socialist one—does not simply mean private ownership by a few selected wealthy people. It means those who own shares in co-operative societies, building societies and all sorts of other public utility societies. If that system is destroyed, all those who are interested in it go with it. I cannot see for a moment that you can have a co-operative society running its shops in competition with State-owned shops. It could not be done.

I know we shall be told they are going to turn the whole nation into a single commonwealth, but the point that matters to the people is that the property that they own now will no longer be under their control. If you are going to destroy the system, you cannot very well buy the owners out. If you do, you re-establish them as capitalists and you are where you were when you started. If only Members sitting on the Front Bench, who really think Socialism is preferable to what they call Capitalism, would fight their battle from its Socialistic foundations the House and the country would know where they stand, but they simply make a few implications about something they call Capitalism. They tell, time after time, in exactly the same words, the same old story and hurl a few reproachful sentences at these Liberal benches, because they remember how they have all browsed in the pastures of Liberalism. Socialism is not the only alternative to the National Government. Same of us disapproved of the National Government and its tariff policy, and we came out.

Mr. MAXTON

Not very far.

Mr. YOUNG

Just far enough to establish a hiatus between us—this Gangway —and I suppose there is an almost unbridgeable gulf between us and them. We came out because we disapproved most strongly of their policy of tariffs. But we approve of some of the other things that they are doing. It was bad to introduce tariffs, and the further we go the more we shall find how bad it was. An hon. Member taunted the supporters of the National Government the other day with being pseudo-Socialists. I knew there were many brands of Sociaism. Someone once said that, like a famous brand of pickles, there were 57 varieties. I am not quite sure what a pseudo-Socialist is, but I can follow his reasoning when he suggested in a halfhearted way that the Government's supporters on this tariff question had not very far to go before they could shake hands with the official Opposition, because they were postulating State interference with trade in exactly the same way as the Labour party themselves were advocating. That is true, but one might say, conversely, that it would be as easy for the Members of the official Opposition to move over on to this side and to support the National Government. It is almost unique among the Socialist bodies of the world to find a Free Trade body. There are no Free Traders among the Socialists of Australia, and there are very few among the Socialists on the Continent.

If Socialists really believe that under their system the Government should be the sole producers and distributors, surely they are denying to the individual the right to buy where he likes and to sell to whom he likes. Surely Socialism is thoroughly consistent with Protection? I do not want to enter upon those arguments in detail, except to say that when an occasion of this kind arises and the issue is between what is called the Labour or Socialist party and the National Government, we have at least a right to know exactly what the Labour party think their Socialist policy is. They should tell us all its implications, and what they would do if they had the power to do it. On the other hand, we realise once again that the things which they have suggested want doing could be done as easily by the Conservative party, who form the majority of the National Government, or by the Liberal party, in a minority at the moment, but which in the past has been responsible for practically every reform the country has had.

I am not going to speak for very long. I belong to that gallant band of young Members who think that there are certain older Members who speak too long. It is not for us to fix their time, but I think that, at any rate, we can set them an example. On the practical side of the question, there are many things which business men believe that the Government could do at this time to help trade. One of the most important is, that the Government might advertise in the same way as business men advertise. We put up a proposal some time ago in the North of England which went something like this. The Government claim that their tariff system has brought a large number of new industries to this country. We know that at least some new industries have arrived. In the old Free Trade times we could have produced a very much longer list showing the industries which came here because they could buy their raw materials cheaply, because they had the great shipping and financial services to help them, and because they were contiguous to the Continental markets. But undoubtedly some industries are coming here because of the tariffs. The people who bring those industries here probably arrive in London. They enter into a consultation with people whom they may know, and they are told to go and explore the outskirts of London—St. Albans, Slough and round that district—but they never get further afield than that. On the Tees-side we have unlimited opportunities for new industries. We have wonderful waterways, almost unlimited land, and plenty of highly skilled labour, and we suggest that the Department of Overseas Trade should step in and help us.

It is the idea among business men who have to trade abroad, especially in South America, that if a business man wants local information he prefers to go to the American Consulate rather than to our own Consulate. That should not be. We suggest that every industrial area should be invited to prepare a little brochure explaining all the facilities which they have to offer to new industries which should be filed and registered with the Department of Overseas Trade. Our Consuls abroad should be expected to find out when new industries intended to come over here, so that the representatives of those industries could be invited by the Minister of the Department of Overseas Trade to come and inspect the various areas which we are able to show them. We believe that a great deal could be done to attract industries here, not only by advertising them among people who do not know about them, but by spreading them out fairly among the districts for which they are best suited.

At the moment the best thing that the Government could do would be to make advances—I know that it has been argued many times—to the local authorities. In my district of Middlesbrough we are flooded in the winter, and it costs large sums to drain away the floods. We have a lot of land which could be drained fairly cheaply and used for building purposes. But the long policy, the policy which ultimately will put this country on to its feet, is the policy of winning back the markets which we have lost during the last few years. You get Lancashire selling 80 per cent. of its goods abroad when trade is normal, and the iron and steel trade selling 65 per cent. of its goods abroad. These suggested remedies would help to do something to revive the industries which are languishing so badly today.

I hope that as the outcome of this Debate something definite will be done. It is true, as the Noble Lord says, that in destitute areas the populations are be- coming hopeless. Those who visit them regularly can see the stamina of the children going down year by year and the hopelessness of the older people becoming more pronounced as they realise how impossible it is to get work. When we hear a speech like that of the Prime Minister suggesting that we shall have 2,000,000 surplus unemployed, one does not know where that hopelessness will stop. The Government must stimulate and take risks and cast their bread upon the waters, for I am convinced that they will find it after many days.

1.12 p.m.

Lieut.-Colonel Sir WALTER SMILES

I also belong to the self-denying ordinance movement, of which, I understand, the hon. and gallant Member for Wallasey (Lieut.-Colonel Moore-Brabazon) is the President, to speak shortly, and my contribution to the Debate will consist of two suggestions and one warning. I would like, first of all, the House to consider the question of the trade of this country with Russia. One of my independent hon. Friends on this side of the House said the other day that there was a lot of slush talked here, and I think that there is a good deal too much sentiment talked about our trade with Russia. Many of us had friends in Russia before the Revolution. What has happened to those poor people? They are either dead or they are now living in exile. The people who are suffering now are probably the same people w ho were on the top of the first wave, and now, as in all revolutions, they eventually find themselves in some difficult position. The very same thing, I believe, happened in the French Revolution. Those most prominent in the early days of the terror finished up at the guillotine. Therefore, I do not think that we should waste too much sentiment on people in Northern Russia. Indeed, when it comes to a question of considering the people on the Black Sea or people on the Blackburn, I am for the Blackburn every time.

What have been the trade figures in respect of Russia during the past 10 years? We have taken about £127,000,000 of imports more from Russia than Russia has taken from us. It is time that this sort of thing was stopped. I am all for imitation. After all, we are now in a position to say to the Soviet Govern- ment, "Imitation is the sincerest form of flattery. You control all the exports and imports of your country, and we propose to do the same on this side. In future we want the trade to be on a fifty-fifty basis, and if you want to send £32,000,000 worth of goods into this country, we expect you to take the same from us." I understand that there are something like 160,000,000 people in Russia and that hardly one of them has a second pair of boots. I am sure that all the factories in Northampton could supply them with that second pair of boots if they were given the chance. There is a whole market there waiting for us.

Perhaps the principle cause of the economic distress in the world is not the fault of the machine so much as the fact that China and Russia are completely out of the market and that the people in those countries have a deplorably low standard of living. We cannot do anything in China. In the old days of Lord Salisbury if a British subject was ill-treated in any part of the world we were able to put things right and to see that British trade got a square deal. At the present time our Army, Navy and Air Force might be able to hold up the traffic in Piccadilly for half an hour, but they are not strong enough to make any effective protest to a big country like Russia. For that reason, the idea of this country having any conflict with the Soviet Government in the future is absurd. Those of us who have been in Russia for a very short time would say that the Russian people generally are easier to get on with than foreigners in any part of the world. In many ways a Russian crowd, with the good humoured way they treat you, are exactly the same as the crowds one meets at a football match in the north. One of the first things that the Government ought to take advantage of, now that they have denounced the Russian Treaty, is to see that in future our trade with Russia is on a fifty-fifty basis.

After hearing some of the speeches delivered in this House one feels most depressed. The hon. Member for Bridgeton (Mr. Maxton) has been giving us some Stock Exchange advice about the shares to buy if the payments to America are made. From the depressing speeches one hears one would imagine. that there are only two industries in this country likely to succeed—the gas light com- panies and the rope companies, because there seems to be nothing else for the people to do except to buy a rope to hang themselves, or to put their heads into a gas oven. I do not take such a dreary view of the situation as that. We have to-day all that we want in the way of copper, lead, tin and everything else, but there is one commodity of which we are short, and that is gold. I do not see the Secretary of State for the Colonies present. I suppose as the Noble Lord the Member for Hastings (Lord E. Percy) called the Prime Minister the Commander-in-Chief, we might call the occupants of the Front Bench the red tabs. There are only two red tabs in front of me now and the Secretary of State for the Colonies is absent. In the Gracious Speech from the Throne there was no particular mention of our Colonial Empire. Therefore, the Secretary of State for the Colonies may ask: "Why drag me in?" But of the Members of the Government he is the one man who has the chance to produce that commodity of which we are short, namely, gold.

There are two big productive and potential goldfields under his jurisdiction, one in West Africa and the new one that has been discovered in Kenya. The goldfield in West Africa has not started to produce properly owing to lack of communications and the lack of modern mining machinery. I suggest to the right hon. Gentleman that he should use all his lively energy to develop those goldfields. He need not say that when he has produced the gold no one will require it. When I used to buy seeds, I noticed on the seedsman's catalogue the words: "The man who makes two blades of grass grow where one grew before, does more for his country than all the politicians in the world." Whatever harm this National Government have done they have not made two blades of grass grow where one grew before and added to the glut in the world markets. But if we could get a man nowadays to produce 4 ozs. of gold where only one ounce was produced before, he would be doing something for his country and something to ease the present situation. Every morning I pass by the London University and when I see the young students going there I say to myself" Poor people. If one of you may be clever enough to produce a new loom which will enable one man to work 160 looms, he will not be recognised now as a man doing a service to the community; some people may look upon him as an enemy." The hon. Member for Bridgeton would probably include him in his list of the people he wants to hang on the lamp-posts of Glasgow. But if the School of Mines could produce new ideas and more economical methods of getting gold, they would be doing a great service to all the community.

Looking back on the last century of prosperity people attributed trade booms to various causes, to Watt and the steam engine, to Arkwright and the spinning jenny; but I do not put it down altogether to these or even to the enterprise of Lancashire in the Far East. If it had not been for the discovery of gold in Australia, California, the Rand, and perhaps to a smaller extent in the Yukon, we should not have enjoyed anything like the prosperity that we had. To-day, refined gold is fetching over 120s. per ounce. If we could reduce the price to 63s. per ounce, not only in England but all over the world people would be able to pay their debts. We should be able to pay America, and other people would be able to pay us, and perhaps we might find Russia paying the debts contracted under the old regime. Even Mr. de Valera might reconsider his position if he found it easy to pay. We have always said: "God is good to the Irish, but he gives the Americans the money." If the price of gold went down a bit, we might alter that slogan.

Turning to East Africa, reports suggest that a very rich, potential goldfield has been discovered in Kenya, and I understand that Sir Albert Kitson has just completed his report. I tried a week or so ago to obtain a copy from the Colonial Office, but I was told that it had not yet been issued. I would ask the Colonial Secretary that when the report is issued he will look after it and see that it is not placed in a pigeon hole and forgotten. I hope he will see that the communications are immediately forthcoming. I do not believe in the Government interfering in industry, but I think that here is an exceptional chance of producing a commodity which is very much needed. Money can be borrowed at 3 per cent. to put down all the communications that are required and should prove an excel- lent investment. I saw in the Press the other day that the Tanganyika company had applied for 6,000 square miles on which to prospect. I hope we will not have a repetition of past scandals, where big companies have got valuable concessions and have then sat on them. They have waited for other people to develop the land about, and when others have done the work and have perhaps gone bankrupt in the process these big people have stepped in and taken the cream. I hope that in any leases or powers that are given to these companies the right hon. Gentleman will see that they get on with the work at once and that no loopholes are allowed for delay, that if they are to be given prospecting rights the concessionnaires must spend a certain amount of money and prove to the Government that they have done a certain amount of work. If they find gold they should be compelled to develop the property without delay, because now is the time when every ounce of gold extracted in Kenya means a great deal to the British Empire and indeed to the whole world; and it may not be the same valuable commodity in five or six years' time. The suggestions I have made are, that there should be a fifty-fifty basis for our trade with Russia and that there should he development of the gold-mining resources of the Colonies.

I now venture a warning on another subject. In the Gracious Speech there is a reference to India. If anyone makes a suggestion about India at present one takes the risk of being taunted with trying to throw a monkey-wrench into the machinery. Some years ago when discussions and conferences were first held about the future government of India, I was almost socially ostracised for my progressive opinions. It is very different to-day. I find myself still advocating the results of the good work done by the members of the Simon Commission, and I find people with far less evidence before them proposing to go very much further. I am far from wishing to throw a monkey-wrench into the machinery. Let me take the simile of a man buying a new motor car, the best car in the world. The humble mechanic at the garage will tell him not to drive the car too hard for the first 1,000 miles, and not to step on the gas too soon. That is exactly what we are doing in India. We are asking a new car in the shape of a new constitution to climb a hill with the engine all out. I ask the Government to be careful for the first 1,000 miles or so. If the new constitution breaks down it will not necessarily be the fault of the new Indian Government but the fault of this House and the National Government for forcing a responsibility upon India for which no adequate preparation has been made.

1.26 p.m.

Mr. BANFIELD

The speech to which we have just listened makes one wonder why hon. Members do not get down to the realities of the situation. The Amendment which we are discussing places on record the regret of the Opposition at the failure of the Government to implement their pledges to bring back prosperity. Hon. Members who sit for industrial constituencies do not need to be reminded that the position of our people has got worse during the last 12 months and that discontent is more rife. Even Tory Members who sit for industrial constituencies must be aware that discontent increases day by day, and, therefore, it is not unreasonable to remind the House that the present system is unable to find employment for our young people or for our middle aged people, and that only in some partial measure does it find employment for our people at all. In the constituency which I represent two out of every five are unemployed, and one out of the remaining three is on short time. Reductions in wages have taken place until those who are employed are living in poverty and semi-starvation. All that has happened in the way of tariffs has resulted, in an iron and steel constituency like my own, in adding to the unemployment and the misery. Iron and steel is the raw material for the industries in my constituency who make nuts and bolts, and the only effect of a tariff has been to increase the price of their raw material and make it considerably harder for them to compete in the markets of the world. The result is that good Tory manufacturers, employers of labour, who declared that their works would have to close down if a National Government were not returned are now on the verge of closing their works as a result of 12 months of a National Government.

There is every reason to regret the present position. Young people between the ages of 14 and 16 years are coming into industry, and at a time when they need the protection of the State they are thrown on the labour market and exploited to a dreadful degree. About 250,000 young people between these ages are allowed by law to be worked 72 hours per week, and in many cases undue advantage is taken of the law. It appears that there is no hope for the younger people and no security for any of our people who are in employment. Over and over again men and women who have given long and faithful service, for 20 and 30 and 40 years, have been turned adrift when they get between the age of 55 and 60 because they are too old, and is is this fear, this lack of security, which is one of the most damning indictments against the present system.

It is unreasonable to expect the capitalist system to be the be-all and end-all of any system of society. Sooner or later it must outlive its usefulness and be superseded by some better system. If hon. Members will look back on the history of the world, they will find that one system has been superseded by another; and what we have to consider is whether it is possible to bolster up any longer the capitalist system or whether in the interests of the whole community we should not consider the setting up of some better system. Take the position of the worker. Under the present system he has no sense of security and fear is present throughout all his working days. He feels no responsibility in his work because the increasing introduction of machinery means that resopnsibility in a great measure is taken away from the worker and placed upon the machine. I am satisfied, after 40 years' experience, that if the worker had a sense of security and knew that his work was being directed to a good end, if he was sure that his products were being distributed properly, if he could see that the work he was doing was done on behalf of the community as a whole, you would get a service which would be far superior to any possible service that you could get under the capitalist system.

This point about the service that the people are prepared to give is of the utmost importance. In the few weeks that I have been in this House I have heard many references to what happens in Russia. I am satisfied that the people in Russia to-day are prepared to put up with a very great deal of privation and suffering because they know in their hearts that all that they are doing they are doing on behalf of the State and the community and themselves, and that their suffering is not being incurred for the private gain or profit of any individual. I heard the hon. Member for East Middlesbrough (Mr. Young) talk about a possible alternative to the present system other than Socialism. It took the hon. Member a very long time to convince the electors of this country that his possible alternative was the correct one. Even then he had to get the 'Tory vote at the last election. I am really sorry sometimes for the predicament of hon. Members opposite who sit for industrial constituencies.

Mr. YOUNG

On a, point of Order. Had the hon. Member the opposition of Liberal Members when he fought his by-election?

Mr. DEPUTY-SPEAKER (Captain Bourne)

That is not a point of Order.

Mr. BANFIELD

I was saying that I am really sorry for hon. Members opposite who sit for industrial constituencies, because they see the poverty and the misery of their constituents every day. I hear people say: "What a good thing it would be if we could revive shipbuilding." But what hope is there for people in the shipbuilding industry? The Government's tariffs are restricting the carrying trade. In the shipbuilding industry the machine is displacing human labour to a greater extent than in any other industry that I know. You can get double the number of ships turned out with considerably less than one-half of the men who were previously employed. We are all agreed that the progress of science is such that human labour, human material, is being displaced. Unless we are prepared to recognise that, we can only deal with the progress of science and invention by using it for the common good by the State as a whole; we cannot offer any hope to the millions of people who are now unemployed; we cannot offer any hope that eventually any considerable proportion of them will be absorbed again in industry. The "Westminster Bank Review," which is by no means a Socialist organ but is a very respectable paper, in an article in the August issue said: The indictment of the present world order is not that it is unjust to certain nations, but that it is ruinous to all. That is an indictment which must be answered. Capitalism can only last if it produces the goods, if it produces the work and the wages and the prosperity which the Government promised to the electors last year. The present position is that Capitalism is not producing the goods, that it cannot find the work, cannot find the wages, and increasingly day by day it is evident that it cannot find the way to prosperity. If that is so—it has been acknowledged over and over again in this Debate—surely it is time that this House looked to a possible alternative. When we say that that possible alternative is Socialism, hon. Members are inclined to answer: "Oh yes, we know; we know the 57 different varieties." But I submit that the possible alternative of Socialism is one that will have to be faced seriously.

Someone wanted to know what we mean by Socialism. I think it was the hon. Member for East Middlesbrough. We believe in Socialism because we believe that the public ownership of the means of producing wealth, the planned organisation of production for the collective good of the people as a whole, is a better system than Capitalism, which produces riches for the few, and poverty, unemployment and sweating for the many. I suggest that within that definition there are possibilities of bringing in an alternative to a system that is breaking down year by year and month by month. If we are agreed that the condition of the country is not what it should be, if we are agreed that the unemployment problem cannot be solved, that there are always to be over 1,500,000 people unemployed, that in itself is a striking condemnation of the present system, inasmuch as it means a terrible waste of human energy and material and the degradation of human life. I go to my own constituency and see at the street corners, 10, 15 or 20 men standing around, wanting work and unable to get it. When I see that terrible waste of human material, I am satisfied that I am justified in preaching Socialism. We on these benches are not afraid of preaching the gospel of Socialism in the constituencies. I am proud of the fact that I am a Socialist.

Mr. YOUNG

I did not say hon. Members opposite were afraid of preaching Socialism in the constituencies. What I said was that the Socialism they preached in the constituencies was very different from the Socialism they advocate in this House.

Mr. BANFIELD

I am unable to agree with the hon. Member. When I had the honour of standing at the recent by-election at Wednesbury, I made it plain in my address and in my speeches that I considered Socialism was the only alternative to the present system. The vast majority of the electors agreed with the view which I put to them. I am positive that many people are beginning to realise that Socialism is an alternative policy which will have to be carefully studied and in my opinion the day is not far distant when the majority of the electors of this country will send to this House a Socialist party, with a Socialist mandate to carry out that alternative policy.

1.45 p.m.

Mr. R. J. RUSSELL

If any excuse were wanted for the existence of the National Government we have had it in this House today. Listening to speaker after speaker and noting the deep pessimism which has coloured all their addresses—a pessimism which in itself is perfectly justifiable—I have come to the conclusion that in no individual party can we hope for redemption from the existing state of things. When the Noble Lord the Member for Hastings (Lord E. Percy) and the hon. Member for Bridgeton (Mr. Maxton) were speaking I thought it a pity that we could not take those two hon. Members and also perhaps the right hon. Gentleman the Leader of the Opposition, put them into a room somewhere and say to them as we locked them up," Now face your different theories honestly and when we unlock the door we shall see what sort of programme you have produced and how far it will take us." But we have at the present time a National Government composed of representatives of each of the parties of the State.

Mr. ATTLEE

No.

Mr. RUSSELL

Of course, one can say" No" to all sorts of things.

Mr. ATTLEE

We can say "No" to that statement.

Mr. RUSSELL

But it is no use setting oneself in opposition to an obvious fact. This Government contains Members of each of the parties of the State and the Government, having considered the great problems with which we are faced today, this Gracious Speech from the Throne puts before the House certain aspects of those problems. No one can deny that the most important, the most acute and in all probability the most permanent of those problems is unemployment. That problem is the centre of the Gracious Speech, and it is not an accident that with the reference to that problem there are associated other words dealing with a number of problems of such far-reaching importance that any one of them might well occupy this House for a Session, while every one of them is directly effective as bearing upon unemployment.

For instance, we find in the Gracious Speech mention of the Economic Conference, of Disarmament, of India, of agriculture. I should have thought that those problems would be quite sufficient for any Session of Parliament and I was not surprised when the Prime Minister told us the other day that we were in for a. very heavy time with legislation in the not distant future. Added to those great subjects which I have mentioned, we have also the small problem of Scotland—and we heard yesterday how small that problem is. One or two subjects are added just as mere makeweights like Rent Restriction, and then we are asked from the benches opposite why Ireland has not been included in the Speech. Surely, there never was a King's Speech more effective for its purpose than the one which we are considering to-day and I think the quality and the continuity of the Debate during this week sufficiently answer those who say that there is nothing in that Speech.

Does anyone deny that the most hopeful way of regulating employment is that the nations should come together in an economic conference? I say advisedly" regulating" employment. I believe that there is a concensus of opinion in the House that in the future it will be a question of regulating employment, which, according to our standards, must be deficient. In that conference, we shall have to see what can be done in remov- ing barriers, in controlling production, in directing distribution. It reminds me of the tribal gatherings about which we used to read, each tribe believing in the one principle or the one prejudice which its tribal tradition had established. The only way in which we can make economic progress in connection with these world problems is to get together and to examine our prejudices and to see how far we can get past those prejudices. One of the dangers which always has to ber faced in times of crisis is that we are dealing with watchwords and one thing that always hampers racial progress is the danger of principles becoming prejudices, becoming fetishes before which we worship. In the present grave condition in which the world finds itself it is no use maintaining that we are going to stick to old methods and old principles.

Someone said in this House recently that while a great deal was talked about Free Trade and Protection at the present time, neither of them touched the point. We have to realise in this House, in regard to human progress generally, that you cannot carry humanity forward on a. totem pole, that you cannot cure Naaman of his leprosy by bowing in the house of Rimmon. We have to devise new principles and adopt new methods and the best way to do that is for the nations to come together and decide how best they can help one another. We are told repeatedly that one thing which affects employment and hinders the revival of trade is the over-taxation from which we are suffering. The Federation of British Industries is never tired of bringing before Members of the House the fact that we are suffering from overtaxation. Surely if that is the case, then the other great problem of Disarmament which is faced in the Gracious Speech is of very great importance in relation to unemployment. How shall we reduce taxation better than by taking away some of the tremendous load which is due to armaments at the present time? I think that any Member of this House, if he could find a way of reducing the burden of armaments, would be only too glad to do so. That is another problem with which the Government propose to deal.

Then there is India. I am not going to enter into a discussion on the problem of India, but we all know how much a happy settlement in India, and the proper development of that country would react on trade here at home. Think of what might happen in India if we could raise the standard of living of the inhabitants of India by even 6d. per week. You could in that way expect that some hundreds of millions would annually flow back to Lancashire in a demand for our goods. Surely that is the way in which you should face your problem of unemployment. One constantly hears of suggestions, in this country and elsewhere, that one of the ways in which we can meet this question is by reducing wages and lowering the standard of living. If that were so, it would be a disaster, but the only way in which you will overtake the vast increase in production that you have in the world is by increasing consumption. The only way in which you will increase consumption is by increasing the standard of living, and the most helpful way to do that is to go to the most backward races and give them further hope by raising the standard there.

I am not going to take up much time in discussing agriculture, because it is no good elaborating upon the depressed state of that industry. We stress too much the point of view of helping agriculture for its own sake. We have to help agriculture for the country's sake—a different thing entirely. A restored agriculture means an immensely increased demand on the home market. We have been constantly told, in this House and elsewhere—and there is no one who attempts to deny the assertion —that agriculture could speedily take over 500,000 more men into employment and that that would mean an increase of between 1,000,000 and 3,000,000 people on the countryside. That, in turn, would mean such an increased demand upon our industrial centres that it would make some contribution towards the loss of export trade from which we are suffering at present.

I should like to utter a note of warning, especially to those who, like myself, are keen on this question of a restored agriculture. We make too much of the formula," We must have increased prices." There is no doubt that prices have become so ridiculous in reference to production that there will have to be some increase, but it is far more important to agriculture that you should have a secure market than that you should be constantly discussing a vastly increased price. If we can secure to the farmer a very modest profit on his present production, and at the same time secure to him that increased production will not destroy that modest profit, then the future of farming will be very much easier.

This can be done in two ways, and the Government, I believe, are trying to do it in both these ways. The first is by giving the farmer a fair show in his home market. I was surprised yesterday at the right hon. Member for North Cornwall (Sir F. Acland) referring to the question of offending our customers abroad by saying we were going to increase our quota of demand on our own market. Surely our own market and our own people are our first concern, and it is our business to find ways in which we can secure to our home producers the first call on the home market. I was glad to hear the Minister of Agriculture saying the day before yesterday that he proposed to take action on this point. Surely all of us by now realise how great an injustice is done to the producer by the difference between the consuming cost and the producing cost.

I think I can claim to be as much in touch with the question of the milk supply as most people, and during the last month or two it has been my business to find out what the producer is getting for his milk and what the consumer is paying for it. The highest price for milk to the producer that I have found has been 10d. a gallon, and the lowest price to the consumer has been 2s. a gallon. We in this country ought to consume 100 per cent. more milk than we do now, but you cannot expect that consumption to take place with that disparity in price. We can produce that 100 per cent. more milk, but something will have to be done to change the difference in prices, and for the sake of the children in the cities it is important. that this point should be faced.

Some time ago, when I was speaking in this House on the question of the quota, I said that if the wheat quota did not exceed the price of 2s. 3d. on the sack, it could not be passed on to the consumer of the loaf. A couple of months ago I found myself in a meeting where I was challenged by some bakers who were present. They said:" You supported a quota. Are you aware that to-day we are compelled to pay 2s. 3d. a sack more for our flour, and that we cannot pass it on to the consumer?" I said that I should be glad if they would repeat that for the benefit of the audience, which they did, and I then made the confession that I had stated in this House that that would happen. Following that meeting, I thought it desirable to get some actual figures, and so I went into bread shops in. different parts of the country and bought quartern loaves. What did I find? In one shop I paid 5d. for a quartern loaf, in another shop in another district I paid 6d., in another 7½d., and in another 9d.— a difference of 80 per cent. between the lowest and the highest—and I ate parts at all events of that bread myself, and could find little or no difference in it. Surely I am justified, and this House and the Government are justified, in saying that it is necessary, for the restoration of agriculture, for the proper government of the country, and for the safety of the people in our towns, that there should be a closer relation between the price to the consumer and the price to the producer.

There are other ways in which agriculture can help immediately in the question of employment. I have been spending some little time in our remoter country districts, and the other day, motoring along, I noticed that hundreds and thousands of yards of the grass verges on our roads were being carefully trimmed, but that the fences on the same roads were in a shocking state and that the ditches were unscoured; and when I looked over the fences, I found that the fields were full of thistles and other weeds. Clean roads and dirty fields will never lead to prosperity. I suggest that the Government might very well come to an arrangement with the local authorities whereby some contribution towards the cleaning of the farms might be made and that contribution become of real assistance in solving the problem of unemployment.

I was glad to hear the right hon. Member for North Cornwall refer on Wednesday to the tremendous burden of interest charges on those farmers who were compelled under the Corn Production Act to buy their own farms. To-day appeals are coming in all the time from these men, who are on the brink of bankruptcy, and something needs to be done quickly. I have lots of evidence, which I have sent to the Minister of Agriculture, of men who before they had to buy their farms were paying £300 in rent, and to-day are paying in the neighbourhood of £750 in annual charges. That is an intolerable position, and we cannot let our rural districts go down for the want of action. Within the ambit of the Gracious Speech we have the most helpful way of dealing with our greatest problem, but we are to-day offered an alternative in the form of Socialism. I am not going to stress the point which is so constantly stressed, that none of the speakers on Socialism tell us quite what they mean by it. I will put one point, and I challenge an answer. The hon. Member for Dumbarton Burghs (Mr. Kirkwood), in his eloquent and moving appeal to the House yesterday, said, in effect:" We have fought for liberty, we demand liberty, and nothing must be done to interfere with liberty." I wonder what he would do and say under a complete and rigid system of Socialism. Our character, institutions, and national life have been developed in an atmosphere of freedom, and, if that freedom goes, our character goes too.

It is from that standpoint that some of us look with dread to the preaching of the gospel of Socialism. If my friends would deal with that point, they would do more to pave the way for their propaganda than anything else. The time may come when, individually and collectively, we shall be possessed of such a measure of Christian virtue that Socialism will be possible without becoming a menace. But when that time has arrived, Socialism will be needless. I sometimes wonder what would be done by my old friends who, like myself, have been Free Traders all their lives, and who now say hard things about some of us because we have seemed to depart in a measure from the faith, if to-morrow we took away all tariffs and impediments to trade. It would produce confusion in the world. I am not justifying tariffs; I am simply saying that action of that kind taken immediately would produce chaos. What would be the result if we took the same action with regard to Socialism 4 We had an experience last year of what was happening because of some lack of confidence in the world. Whether the Government misunderstood it or not, I do not know, but the lack of confidence was there, and there was danger of a complete breakdown.

Mr. DAVID GRENFELL

Why is it happening just now?

Mr. RUSSELL

It is not happening to the same extent. We have averted it. What would happen if this Government were immediately to declare for a complete Socialist state? It would shut us off at once automatically from world supplies. It might only be temporary, but the effect in this country would be such a period of starvation and distress as is unthinkable. We are not self-supoprting, and, if I intended to bring in a system of Socialism, the first thing I would do would be to make this country self-supporting, so that when the time came for sweeping over the old system, we could escape the horrors of being unsupported from without and unable to support ourselves from within.

We are in one great danger to-day. Someone has said something about people whose eyes are in the ends of the earth. It is no use spending our time dreaming about the ideals that we would like to see; we have enough to do to face our problems as we meet them. I do not think that my hon. Friends on the Opposition benches are irrevocably pledged to what they consider Socialism. What they feel, and I sympathise with them in feeling it, is the terrible conditions prevailing to-day. I want to put it to the Government that they must not meet this crisis in any slipshod way. We have to find a way out. Tennyson, in what was much less of a crisis in the 19th century, said: You, you, if you shall fail to understand What England is, and what her all-in-all, On you will come the curse of all the land. Should this old England fall The wild mob's million feet Will kick you from your place, But then too late, too late. It is because we believe that the Government are doing their best to face without prejudice the issues that lay before them that we want to give them our fullest support. We hope that they will not only implement talk, but will implement the promises that are contained in the King's Speech.

2.14 p.m.

Commander COCHRANE

I hope that the hon. Member for Eddisbury (Mr. R. J. Russell) will not think it, discourteous if I do not follow him in the earlier part of his speech. In one remark which he made shortly before he sat down I find myself in complete agreement. That was with regard to the increased support which Socialism would get in this country if it really meant liberty or at any rate, if it did not mean the annihiliation of liberty. I wish to address myself to the dual point of the Amendment. One point is the perfunctory suggestion that the capitalist or individualist system is dead; and the other point, equally perfunctorily put forward by the hon. Member for Lime-house (Mr. Attlee), is that Socialism is the only alternative system. The hon. Member for Bridgeton (Mr. Maxton) reduced the Debate to intense gloom, and I hope that that is not going to be our attitude on this matter. I, myself, see no reason to be pessimistic, because I do not think for a moment that the capitalist or individualist system is finished. If I thought it were, I might adopt that attitude.

But I agree, in the main, with the analysis of the situation which was put forward by the hon. Member for Lime-house. There is one point, however, on which I differ from him entirely, and that is with regard to the inevitability of the present system of production. I noticed the same point in the speech of the hon. Member for Eddisbury, the idea that we have reached a certain system of production generally called scientific, and that it is impossible for us to escape from its results. I do not think that there is any hon. Member in this House who would desire to see an uncontrolled inflation of our currency. Are we, then, going to sit down and accept an absolutely uncontrolled inflation of production? It is that point with which I want to deal, because it seems to me that that is where the fallacy of the argument put forward by the hon. Member opposite lies, the idea that this thing cannot be controlled, and, therefore, you have got to try to find some other system which he says—I do not agree with him in that; it is a matter of opinion—will not be thrown out of gear by an unlimited amount of production.

I will take the question as I see it to-day. Producers are unable to find markets for their goods. That, I think, puts us in a different situation from any which we have ever had to face before. Conditions to-day are quite different from what they were, say, 30 years ago. The point is sometimes put as to whether we have to-day over-production or under-consumption. To me, that is an academic question. The contestants can argue one way or the other. I do not think that it goes to the root of the problem. The real point of substance is the potential production. Take any article in common demand. You may be certain to-day that it will be in ample supply. Suppose demand overtakes production: The production can be doubled in a, few weeks or months. But that is only the beginning of the story. If it can be doubled in a few weeks, it can be multiplied 10 or 20 times in the same period. I do not look upon this as a question of whether at this moment we have over-production or under-consumption. The important point is the undoubted and, to me, terrifying power of the machine to reproduce its species. That, I think, is a fundamental consideration to which we must direct our attention if we are to deal with the realities of the great difficulties which face us at present.

In the country to-day, and certainly in this House, the majority of people have accepted the view that we can have cheapness of imports from abroad at too high a price. We went through long and bitter experiences before we accepted that view. I would like to feel confident that we are not going through even more bitter experiences before we accept the view that we can pursue the policy of cheapness of production at home too far. Holding that view as I do, I confess that I see very little virtue in production unless it gives employment. That is where I disagree with the Mover of this Amendment because, as I said just now, he looks upon it as inevitable, something scientific, something which must be accepted. I do not hold that view and, therefore, am unable to accept his contention that Socialism would form a cure, because it has never been suggested from the Socialist benches that Socialism would tackle that point. Indeed, the speeches of Socialists are always full of the words" reconstruction," "reorganisation,"" co-ordination" and so on. For the same reason, I can find no solution for our troubles in the policy which is, commonly known as rationalisation, because it seems to me to have the same inevitable effect of glorifying production by the cheapest method.

I would ask hon. Members to consider the position in the country to-day, Go North to my own country. Go East. Go where you will. Go to one district and ask how conditions are there, and you will be told that a main industry, whatever it is, has been closed down, and that the whole district is dead. Go to another district and ask a similar question, and you will be told that such-and-such a factory is closed down, but that there are others which still kept going, and that things are not quite so bad. I would ask the House which is the better condition, which is the more satisfactory from the social point of view —a district entirely dependent on one industry where, when that industry fails, things are absolutely dead, and no one has any hope, or a district where the industries are mixed, and the people have a chance of getting a livelihood from trades and industries which are dependent on different economic circumstances? I do not think there can be any doubt that those conditions where there are alternative sources of employment are better. In the past they have been brought about fortuitously. There has been no conscious effort on the part of any Government to bring them about. I hope that it will be the policy of the Government to give some hope, not to certain selected districts in the country but to the whole country, that our industries may be spread as widely as may be throughout the whole country.

I will give another reason for that. We hear in this House arguments in favour of the creation of smallholdings. The right hon. and gallant Gentleman the Member for Caithness (Sir A. Sinclair) dealt with it at length yesterday. He, indeed, made a distinction between a holding for a man who raises pigs and a, holding for a man who raises poultry. I cannot understand any reason in logic or common sense why we should attempt to put people into smallholdings and deny, them the opportunity of alternative employment. Had it not been for the action which the Government have taken in the past year, we know that it would have been quite impossible for a man to make a living on a smallholding. Even to-day it is going to be difficult. Is it not reasonable and right that if we are to put these people in the country we should endeavour to give them every opportunity of making an independent living'? I believe that it has always been a mistake in this country to separate agriculture from our other industries, and I believe to-day, in this time of crisis, it is an appalling mistake and an untenable position.

Let me take the position of hon. and right hon. Members opposite, as I understand it. Their view is: Hand over the control of industries, banks, and the rest of it to the elected representatives of the people. Quite naturally, they expect to be among the leaders. They say:" Do that, and we will evolve a system which will provide maintenance for 'the whole people of this country." To me that connotes an arrogance of mind which is almost insupportable. I am a much more humble-minded person. If I had to direct the affairs of this country I would first do my utmost to make as many of the population as possible self-supporting, and then I might have an opportunity of being able to deal with the remainder.

It will be said:" That is all very well, but you cannot do that sort of thing, because it is not economically possible." I do not want to go at the moment into the question of costs in industry, but I would make this suggestion. If we regard the costs of productions as beginning and ending within the factory gates, or when the goods are actually delivered to the consumer, it may appear that a very large unit produces the more cheaply, but when we consider what I would call the true or the national costs of production I have not the slightest doubt that the argument is against the big unit. Consider how production is carried on to-day. Only intermittent employment can be given by the very highly developed industries. The maintenance of the workmen has to be undertaken by the State during the intervening periods. Think, also, of the cost to the individual in the insecurity which he has to suffer. I believe that the hon. Member for Eddisbury was profoundly right when he said that what was required more than anything else was a sense of security. I would only suggest that it is not beyond possibility to secure that consummation; because I think there is a mistaken idea that the great majority of the production in this country is undertaken by the very big concerns. In fact, that is not so, and I will give a few figures to show the actual position. In 1.930 there were 127,700 factories in this country. Of that number 117,000 employed fewer than 100 persons each, and 123,000 factories employed fewer than 250 persons. The total number of persons employed in factories was about 5,000,000, and out of that number 2,700,000 were employed in factories with less than 250 employés. The statistics of the total production of the country provide, perhaps, the most striking figure of all. In 1924 which is the latest year for which information is available—it is from the 1924 census of industrial production—the production, measured in value, by employers of fewer than 200 persons accounted for 44 per cent. of the total output, and the employers of fewer than 300 persons produced 48 per cent. of the total production.

I would only suggest, in conclusion, that this question is one which the Government cannot avoid, even if they wished to do so. We have now entered upon a new era of control in agriculture, industry and so on. We must have a decision from the Government as to whether that control is to be exercised in the interests of the individual or in the interests of the large concerns. I myself have no doubt that I desire the decision to be in the interests of the individual, because I believe that in that way only can we lay a solid foundation for our future prosperity. Only in that way can we get away from this sense of insecurity which is so devastating to all people in the country to-day. If I might make an appeal to my right hon. Friend and to the Government it would be that they should not forget the magnificent support received from all our people during the past year and more. I believe the overwhelming desire of the people is for economic security, coupled with economic independence. Briefly, that sums up what we 'all wish. the people of this country to have; and I appeal to the Government to grant them that economic independence and security which they so ardently desire and which they so very richly deserve.

2.32 p.m.

The FIRST COMMISSIONER of WORKS (Mr. Ormsby-Gore)

It has been customary before the winding-up of the Debate on the principal Opposition Amendment to the Address to have a brief interim reply from the Treasury Bench on the first day. I would recall at the outset the exact circumstances of this Debate. This King's Speech follows very quickly upon the conclusion of the recent Session. At the close of that Session, which is still fresh in our minds, the Government and the leaders of all parties in the House gave considerable time to a free and unfettered discussion of the major economic and social problem of the day, namely, that which revolves round the question of unemployment. This King's Speech is not a King's Speech after a Recess during which the Government have had time to prepare their full and detailed programme of legislation, and are in a position to say specifically and exactly what the legislative programme of the Session may be. It is not, unnatural, therefore, that this King's Speech should be in general terms, the more so because it is clear from the Debate to-day that the international position, both political and economic, is such that it is impossible to forecast precisely when it may be possible to take certain Bills and as to what those Bills should be.

Nevertheless, I think the Debate on the Address so far has been as helpful as was the Debate on the unemployment problem two days ago. The speech of my Noble Friend the Member for Hastings (Lord E. Percy) this afternoon was an important contribution to the discussion which we are having in the Government. He happened to touch upon two of the problems which are under immediate and present consideration. The Minister of Health, when those proposals are in their final form, will announce to the House what his policy is (a) with regard to distressed areas and (b) with regard to housing. Both subjects are under discussion. I particularly welcome what my Noble Friend said upon the subject of slum clearance.

Generally speaking, the Debate, despite the fact that it has been upon the official Opposition Amendment to the Address, has been conducted without beating up party grounds on either side, and with a profound sense that all is not well with the world and that action will have to be taken. I regret that the hon. Member for Bridgeton (Mr. Maxton) said that the National Government are patting themselves on the back and blowing out their chest. That is a little inconsistent with the earlier part of his speech, in which he emphasised, unduly emphasised, I think, what he called the pessimism of the Prime Minister's speech. You cannot be blowing your own trumpet and be a pessimist at the same time, because the two things are mutually inconsistent. To say that this is the best of all possible Governments in the hest of all possible worlds, would indeed be blowing one's trumpet and patting oneself on the back, but the Government do not take up an attitude of complacency in face of the difficulties which confront them to-day. It is a mistake to suggest that the speech of my right hon. Friend the Lord President of the Council upon disarmament, or the speech of the Prime Minister in the Debate upon the Address, were pessimistic. The whole point of them was to endeavour to get people to face facts. It is far better not to strike a note of pessimism, and I say quite frankly that I am not pessimistic; but to adopt a warning note when the circumstances require that is better than to go in for easy optimism. That is why I believe that an overwhelming majority of this House will reject this Amendment.

The Amendment is not based upon realities, but entirely upon catchwords. This talk of Capitalism and Socialism is becoming, with a large number of hon. Members opposite, so much catch-phrases. They repeat, without any justification, those old doctrines which were repeated this afternoon by hon. Members who said that under the capitalist system the decreasingly few got richer and richer and the increasingly more numerous poor got poorer and poorer. That is the Marxist doctrine. That is the fundamental thesis of Socialism. Do look at the facts of your history of this country in the last two generations. Go round the towns of this country. There are new houses and new grounds. The whole standard of living of the people has been raised by Capitalism as it could have been raised by no other system. The fundamental thesis of Marx is not borne out in practice. It is not the fact that under the capitalist system you get an enrichment of the few and the increasing poverty of the many. That is not borne out by the experience of man. The economists who preach from the Socialist platforms are like the other economists who advise this and every other Government of the world. They must go back and study, not theory, but the facts of what has been happening in the world.

I say that they are catchwords because Socialism and Capitalism can mean so many different things. To us, every act of the State is a socialistic act. Sir William Harcourt years ago said:" We are all Socialists to-day." That is true, but Socialists do not all mean what the hon. Member for Bridgeton means by Socialism. He means, by Socialism, a complete change of the existing system. The great distinction between the Opposition that sits below the Gangway and the Opposition that sits above the Gangway is that the Opposition below the Gangway believes in Socialism in our time, while the Opposition in front of me believes in Socialism in somebody else's time.

Mr. LANSBURY

No.

Mr. ATTLEE

That is quite wrong.

Mr. ORMSBY-GORE

The speech of the hon. Member for Limehouse (Mr. Attlee) carries us a good deal further than we have been carried in the academic discussions of Socialism. He said he wanted the Government to take over immediately, not merely the banks but the wheat of the world, and to take over the control of imports and exports. He went a good deal further.

Mr. ATTLEE

What I said, or intended to say, was that during the War the wheat supply of the world was controlled, but I did not suggest that this country should control the wheat of the world.

Mr. ORMSBY-GO RE

I think we must leave that to the OFFICIAL REPORT. It was one of the few suggestions he made for the Government to act on to-day. I agree that he alluded to past experience, but he said, in effect," If I were in the Government to-day, I would do this, that and the other; control imports and exports, and trade exchanges."

Mr. ATTLEE

Not the wheat of the world.

Mr. ORMSBY-GORE

Then he went on to say that he would organise this country on an equalitarian basis. Now we are getting to the older definition of Socialism. He went on to say that all the nations of the world who paid glowing tribute to the culture of Western civilisation, were threatened from without by the great alternative experiment of Socialism, as it is being carried out in the Union of Socialist Soviet Republics. I am not going to criticise Russia but I would say that the last thing that 15 years of complete Socialist rule in Russia has produced is an equalitarian basis.

After all, if there is one country in Europe to-day where privilege stands more conspicuous than in any other, it is Russia. For instance, the rulers of Russia get meat rations, and they are allowed to go into the shops and buy luxury goods, which the vast majority of the ordinary community are not allowed to do. They are allowed to travel in particular ways, where the vast masses are not. It is a country of new privileges, and a country where the privileged class is kept small. It is a privileged class of certainly not more than 2,000,000 in a population of 160,000,000, and they are ruling the people. You have these 2,000,000 people who are filled —and one must pay a tribute to them for it—with a religious enthusiasm for Socialism, and fired with a devoted determination, in spite of the appalling times, to endeavour to make a success of this Socialistic experiment; but to say that they have founded a society on an egalitarian or equalitarian basis is simply flouting the facts that are patently staring one in the face in connection with everything in Russia.

It is true that a percentage of our people are in a state of dire poverty, while there is, on the part of the capitalist world, the capacity to produce abundance; but do not let us suggest that the one great experiment in the alternative, namely, this great experiment of the Union of Soviet Socialist Republics, has yet solved the problem of poverty. In spite of the fact that they have had good climatic conditions this year, they admit in all their organs that this winter they are facing privations and hardships for all classes, privileged and unprivileged, such as they never had to face even in the famine year of 1922–23. It is clear that, in spite of the gigantic sacrifices which have been ruthlessly imposed on the masses of the Russian people during the last four years for the carrying out of the Five-Year Plan, there is dire poverty in housing conditions, in clothes, boots, food, and everything else that goes to make up anything like the standard of living demanded years ago by the people in these islands.

The hon. Member for Limehouse was quite right in saying, as he did in his opening speech, that this is the alternative, and I think that, before the people of this country are prepared to accept the theory of Socialism, they will be well advised to study, quite objectively, the broad facts of life after 10 years or more of the greatest Socialistic experiment of all time. Above all, when they make that comparison, let them remember that the experiment has been made in a country of vast size, with the greatest area of agricultural land, both developed and undeveloped, of any country in the world, and with resources in the way of oil, minerals and the like such as we have not in this country. Its coalfield may be a little smaller than ours, but still it is a big one. Moreover, the natural resources of that country are not in a high state of development, as are those which we have here, with an elaborate, complex civilisation. They have all before them, or, at any rate, they have much before them. They were able to start the experiment without having to pay one penny of compensation, and were able to do it by one act.

It is remarkable, however, that, whereas they may have succeeded in making progress in regard to one or two heavy industries—the electrical industry, for instance—when it comes to the supply of food, of animals, of things that live, everything that they have so far attempted has proved to be a, complete failure, as a result of neglect of all biological laws and of all modern biological discovery, because Nature is not based on an egalitarian or equalitarian basis.

Another point which must be taken into account before we consider such an alternative is the point made by my hon. and gallant Friend who has just spoken, that British industry is at the present day, always has been, and always will be dependent, not so much upon one or two big mass production factories as on the growing edge of industry—the small new industry beginning in a small factory and building up and launching out. We do not claim, and I do not think we shall ever claim, to lead the world in great mass production efforts, but we do claim, and always have claimed, to lead the world in the small industries.

Our problem to-day is to deal with these semi-obsolete old basic industries, and to find new industries to which the people can change over, and that is what makes me very shy of accepting the proposition that Socialism will suit our conditions as an alternative. If it does not suit Russian conditions, it will suit our conditions much less, because we have 40,000,000 people dependent for employment, in a very small island with but a fiftieth of the natural resources of the Union of Soviet Socialist Republics, upon their adaptable skill, upon the growing edge of industry, and upon new industries. Why is it that our unemployment is not actually worse in comparison than that of other countries. Let me give one instance. There are 5,000,000 wireless licences issued in this country; there are 5,000,000 wireless sets. That is an entirely new industry. It is difficult enough, as the hon. Gentleman knows, to run the Post Office under State manage-merit, but it is going to be jolly difficult for a Government to run these new industries and to organise these new industries and the growing edge of industry which is vital to the industrial and economic progress of this country.

The more we come to grips with this alternative, the more we have to recognise that undiluted capitalism, with no State interference, with no State assistance, with no State control—the old idea of the Manchester School—has passed away, that we have to live in an era of regulation, that the alternative of the State ownership and management of the means of production and exchange will only throw us back into universal poverty, and that we shall get, not an equality of ease, leisure and even reasonable comfort, but an equality of poverty, reaction, stratification and inertia. I have heard it said that the political structure of the State should be such that political questions should be dealt with by people of political experience. I am never quite satisfied that the experienced business man, when he comes into this House, makes the best politician and, when I have known even distinguished statesmen leave the House for business, I am not sure that they have been very good at business. I believe it is leading the people of the country up a blind alley if you are holding out to them the hope or the promise that, if and when Parliament runs the production and distribution of wealth, they are going to be any better off than they are to-day. My firm belief is that they will be much worse off and, because that is my firm belief, I ask the House to reject an Amendment which is based solely upon catchwords condemning the capitalist system and saying that the Government could solve the problem of poverty by substituting Socialism, whatever that may mean, in its place.

2.57 p.m.

Mr. ARTHUR GREENWOOD

One thing that can be said about this Debate is that we have returned to the discussion of economic realities. In the previous days' Debates we wandered rather from what the right hon. Gentleman admits is the real problem—that is the economic situation—and if, by our Amendment, we have done no more than provoke this discussion it will have been worth while. The right hon. Gentleman has admitted that the paramount problem facing the country and the Government to-day is the economic situation. This Government came into existence for the sole purpose of steering the country through the economic blizzard. It is not here to discuss Scottish nationalism. It is here for a much larger and more important question than that, the continuing economic crisis, and it must be judged by what it has done, and what it means to do, to deal with that situation. When one reads the Speech which has been under discussion during the past few days, it appears to us that the Government have abandoned their task. There is nothing in it that casts a single ray of hope on a dark world. There is not a, sentence that indicates that the Government have a coherent constructive policy, and if there is one thing that is needed to-day, whatever that policy may be, it should be coherent and constructive. As I see it, it is the Speech of a group of men clutching at straws.

There are two definite constructive proposals touching this problem. One is the World Economic Conference, and the other is a, paragraph relating to agriculture. It is true that there is a general phrase about taking every step to stimulate trade, but the right hon. Gentleman has explained that, because of the shortness of the Recess, the Government which was going to save the country and the world has not got its ideas in shape as to what is to happen during the forthcoming Session. I remember the Prime Minister, in our unemployment Debate, speaking of this and saying that, so far as the Government were concerned, there would not be a single day's delay. There has been delay and there is going to be further delay—delay which is not merely unfortunate but is disastrous. If, instead of meeting next April, the World Economic Conference had met last April, although it would not have solved our economic difficulties, the plight of the world, and particularly of this country and the situation to-day might have been rather better than it is.

Had the Government devoted the same amount of energy and drive to the World Economic Conference that it devoted to the question of tariffs and preferences, we might have he d the World Economic Conference in being for several months now, but they chose to limit their attention to the British Empire, though they knew that there had to be a World Economic Conference. While it has successfully overturned our fiscal system and carried through its Ottawa Agreements, the major problem of the world economic situation is still left, and we know now that not until this Session is two-thirds through will that conference meet and there will be no results when the Session that we are opening now ends next summer. The Government will go to the conference shackled with the Ottawa Agreements, which will hamper them in a way that they would not have been hampered had that conference met some months ago. The World Economic Conference is not to meet till the middle of April. There is no comfort for the unemployed or for the struggling industrialists in that.

The only other proposal for dealing with the economic situation is a rather vague and evasive paragraph about agriculture. We expected a great pronouncement from the Minister of Agriculture when he spoke the other night. We had a pronouncement that a committee had reported and that another was going to report, and there was to be a new committee appointed to watch what was happening to same scheme that the right hon. Gentleman had previously introduced. His speech was very much like that of the Prime Minister. There was a large number of words. The words of the Minister of Agriculture were not the words of the Prime Minister, whose words were whirling and turgid words, just words—nothing except," We will consider this, We will watch that." If one may judge by the speech of the Prime Minister and the speech of the Minister of Agriculture, if we are speaking about catchwords to which the right hon. Gentleman has been referring this afternoon, I would say that the catchword of this Government is" Watch and Pray." Indeed, I would spell" pray" with a" y," so far as the social services are concerned. [HON. MEMBERS:" e!"] Spelling is not my strong point. I know that the word is spelt two ways, but the catchword is" Watch and Pray." Nothing is going to come out of the immediate future to relieve the economic situation. When we look further into the King's Speech, there is not a word of any kind which deals with the economic situation.

The one thing which came out of the three days' Debate, and which has emerged to-day, is that the primary problem is that of unemployment, which the Noble Lord said this afternoon is a fundamental issue. He said, and I speak with the approval of my hon. Friends on this side of the House, that which is true. Unemployment is the outward and visible sign of an internal economic malady, and, although the Noble Lord and ourselves would not agree as to a solution, at least we are agreed that it is the primary problem which faces this country, and, indeed, all industrialised countries to-day.

I am not certain yet that the House has realised the actual facts of the case. I would go as far as to say that if 3,000,000 people in this country were suffering from a contagious physical disease the country would have been up and doing a long time ago. But they are suffering from slow starvation and deterioration, the results of which are not so dramatic as they would have been if they were suffering from, shall we say, typhus or some other highly contagious disease which would have travelled to the houses of the well-to-do and not have confined its ravages to the homes of the poor. We have to visualise the tremendous human problem there is in 2,000,000 to 3,000,000 homes in this country when there is one or more of the breadwinners of the family without work. Before that problem the Government are completely helpless.

The right hon. Gentleman has said that he objects to this pessimism, but every speech made from that Front Bench is a speech of pessimism. They realise all the horror and the tragedy of the economic situation, but we never get anything new from them except new committees and watching briefs. I remember that when I sat over there and when right hon. Gentlemen who sit on that side were on this side, every time we set up a committee we were met with howls of derision in the House, and yet the great contribution of the Minister of Agriculture is a committee's report, a committee which is going to report, and another committee which is going to watch what is happening. We have had more economic wisdom from the back benches supporting the Government than ever we have had from the Front Bench. They are people who have no responsibility and therefore may be freer to exercise their minds on the problems which they meet in their constituencies. But it is undoubtedly true that we have not had a single constructive suggestion from the Front Bench. We have had from the supporters of the Government, first, an acceptance of the gravity and reality of the problem and, secondly, an expression of opinion, as the Noble Lord said this morning, that what was needed was action. On this side of the House we are all agreed about the need for action.

The problem to-day, however difficult the solution may be—and I will deal with it in a moment—can be stated quite simply. You have in this country and in other countries people who are perfectly willing to work, who desire to work in order to satisfy the elementary human needs of life. There is the power to produce all that mankind needs to satisfy normal human needs, but sometimes the system which exists for that purpose and no other, namely, to supply and satisfy human needs, breaks down, and we have in the world to-day a volume of unemployment unparalleled since the establishment of the capitalist system. We argue that the digestive organs of the capitalist system have never fully worked. They have never been able to digest the productive results of labour, and since the War the indigestion has become chronic dyspepsia. The only solution which we have had suggested by this Government is not a solution which would put the patient right; it is bloodletting, applying the leech, a low diet.

The only solution, as far as one gathers from the King's Speech, is a scrutiny of public expenditure, which means an even lower diet. There is no solution that way. We have never had an answer to one question—which is really fundamental if we agree about the facts, as I believe we do—and that is, how is it that the system has broken down? If it is admitted that it is not working now, how are hon. and right hon. Members opposite going to put it into working order? We have had no answer to those questions, although they have been put many times from these benches. Our view is that it will not work and it cannot work under existing conditions. Therefore, we are driven to a new system. We say that the old economic mechanism is no longer functioning properly, and hon. Members opposite do not seem to know how to make it work. We say that to leave economic forces to ale play of individuals as a kind of self-regulator of the economic machine, will not do to-day. We ask, how are you going to make them work, and we get no answer. Therefore, we are driven to an entirely different conception.

The Noble Lord told us this morning that the speech of my hon. Friend the Member for Limehouse (Mr. Attlee) was vague. I do not know whether he expected him in a short speech to outline in detail the complete reorganisation of our economic and social system. At least my hon. Friend did establish his principle, with which the Noble Lord does not agree. Where the Noble Lord and I really part company is on this point: he says that most industries are to-day being conducted by highly organised units and that to transfer the capital owner- ship from individuals to the State would not make the slightest difference. There we disagree. Where the ownership rests, determines the motive with which the capital is used. It is not merely the ownership, but the objective which the industry serves. If you have a community of 45,000,000 all of whom are prepared to work for their living and they want 45,000,000 pairs of boots per year they can organise production to satisfy that need if they have all the direction of the industry, but when it is left to people who happen to be controlling the capital in the boot and shoe industry as to whether those 45,000,000 pairs of boots are made then it does not depend on the needs of the 45,000,000 of people but on whether the capital invested can get a dividend next year. Therefore the question of ownership is important, perhaps not in itself, because it makes it possible to change the motive and spirit which dominates the industry.

The Noble Lord when criticising the hon. Member for Limehouse said that his alternative would be to convert the council of action which the Government has called into being, and which sits and watches and prays, into a dictatorship with a commander-in-chief, but neither a council of action nor a commander-in-chief is of the slightest use unless the person in control has a. clearly defined objective. The Noble Lord said nothing about the objective. Having made this general criticism of a Government which he supports he went to an entirely different question, the question of distressed areas. His suggestion was some kind of an amalgam between an enormous amount of voluntary effort and what in Russia they would call a commissar, but which the Noble Lord calls a commissioner. I cannot see a committee and a commissioner working very long side by side.

Lord E. PERCY

Why not?

Mr. GREENWOOD

If we get a commissioner of the kind suggested by the Noble Lord, one who would in fact be sitting above and superseding a local authority, I do not see him being kindly disposed to any kind-hearted persons from South Wales w ho may come to help. The two principles cannot be worked together. The weakness of the case put forward by hon. Members opposite and the Noble Lord in his thought provoking speech, which interested everyone, is this, that there is a demand for action. The Noble Lord said that it does not matter what kind of action so long as there are no subsidies, but let us have action. But what kind of action? Are we to leave industries which are rotting to-day, partly through economic difficulties but largely through lack of imagination and foresight, just as they are? Is the Noble Lord prepared to take any definite stand which will undermine the authority of people who have conducted our economic system in the past and brought us to the pass in which we are to-day? If he is prepared to go some way there may be a basis which might lead him a little further along the same line.

The First Commissioner of Works has shown far less appreciation of the point of view which we represent than the Noble Lord. He told us a great deal about Russia. I would not even say that it was second-hand information. I think a good deal of it was probably third-hand. He talked about the facts. What are the facts? I hold no brief for the U.S.S.R. But what are the facts? It is no good saying that Russia is going through a hard time now. So are we. It is no good saying that people are employed at wages which would not be looked at in this country. There never were workers employed at wages which would be looked at in this country. We roust compare like with like. We must remember that this enormous number of people, 2½ times the population of this country, kept in a state of serfdom and thraldom unknown in this country for 500 years, living in a state of terror, has in 10 years evolved an economic system. It may not be a good one, but it has evolved an economic system. Under it there may be general poverty, but at least there is not the glaring, gruesome spectacle of big riches on the one side and grinding poverty on the other.

Mr. CAMPBELL

It is all grinding poverty.

Mr. GREENWOOD

In Russia to-day, at any rate, there is a far smaller volume of unemployment than there is in any other industrial country in the world. It may be that the people are poor, but their poverty is not the poverty of the days before the War. [Interruption.] It is clearly useless for hon. Members to pretend that the lot of the average Russian citizen to-day is worse than it was before the War. [HON. MEMBERS:" Yes !") Large numbers of independent observers, people from outside this country who are not interested in Russia, not interested in defending or attacking Russia, know that the economic situation among the masses of the people is better to-day than it was in the Russia before the War.

Mr. ORMSBY-GORE

Would the right hon. Gentleman compare the rations paid to the coalminers in the Donetz Basin with those which they had before the War, the rations in meat and sugar and tea? Let him give the comparative rations side by side.

Mr. GREENWOOD

As a matter of fact, there were no rations at all for them before the War, and the question is an absurd question. Rationing is a matter of the last 10 years. if the right hon. Gentleman cares to make an appointment with me when I can find out what the wages were compared with what the wages are now, I shall be delighted to do it and abide by the result. But there were no rations before the War. In Russia a measure of economic security that was unknown before the War has come. It is idle to pretend that, because of the system in Russia, even if it were not proving itself, no similar system could. possibly apply in our circumstances. When we come to the right hon. Gentleman's statement that this vast economic fabric of ours, built upon coal and iron and steel and textiles, really has to live on new industries like wireless sets and lip-stick, I ask, is that what we have been reduced to? Our economic system here must always depend upon its basic industries, and 15,000,000 wireless sets will not put this country right so long as its coal resources and its land are not being properly used.

That is the point to which I wish to come—that to-day we are not properly using our economic resources. We have idle capital, idle machinery and idle workers. That has been admitted scores of times. With grinding human need on the one hand and these resources on the other, we ask why these resources remain idle and we get no answer. We cannot believe, in view of the progress which has been made in a hundred different directions, that the problem of bringing the idle capital and the idle machinery to the idle worker presents insuperable difficulty. We have proved that it can be overcome. It is very little use for hon. and right hon. Gentlemen opposite to declaim against Socialism. The First Commissioner of Works talked about catchwords. Heavens knows the party to which he belongs has invented many in its time. But capitalism expresses something which we all understand. [HON. MEMBERS: NO."]

Lord E. PERCY

Give us a definition.

Mr. GREENWOOD

It expresses the idea of an economic system in which the primary motive is private gain. That is what it means. It might be right or wrong but that is what it is and it is no use pretending that these are merely catchwords. Capitalism means something specific. It may take different forms but as regards its root motive there is no doubt. Socialism means something entirely different. I believe that there are Members of this House who put down in certain carefully drafted forms of words —instead of leaving it to their own inspiration—the ideas which they desire to express. Production for use and not for profit means something to me and my hon. Friends on this side and it expresses something which has been adopted time and time again, not by my hon. Friends here hut by Conservative and Liberal Members of local authorities. The whole theory of Socialism may be due to us. [Laughter.] Yes, it was due to us, and we are not ashamed of it, hut the first practice of it in this country lay in the hands of Conservative and Liberal town councillors who learned the commonsense doctrine that the people can best look after their own interests.

The origin of municipal Socialism was the application of the principle "Mind your own business." In our view, that principle, which was accepted two generations ago by people outside the Labour party, is capable of infinite extension. If it be admitted that a local authority is entitled, as they have been doing for some time in many high Tory towns, to run a municipal tramway system, or, as some do nowadays, to run a regional omnibus service, what is wrong with the idea that the nation should run the railways? It is a very small step from the elaborate and large regional omnibus services of local authorities to national railways. If we accept the view that a local authority is competent to run its gas or water or electricity supply, there is nothing incongruous or absurd or impossible about the idea that the nation should own the mines from which the gas and electricity are produced.

Lord E. PERCY

Does the right hon. Gentleman think it follows that everybody else, every private individual, should be prohibited from mining coal? Because that is what Socialism means.

Mr. GREENWOOD

Most certainly, just as every private individual is prohibited from running public vehicles over the highway in those areas. I certainly accept that. What I mean is a public monopoly.

Lord E. PERCY

Hear, hear—of everything.

Mr. GREENWOOD

One of the most significant developments of municipal Socialism in recent years was that inaugurated by the present Chancellor of the Exchequer in the municipal bank at Birmingham—a very good principle for Birmingham, but very bad for every other city in the country. You cannot accept a principle like that and then suddenly say:" You must stop short at applying it any further." If Parliament admits the right of the City of Birmingham to have a publicly owned and controlled municipal bank, that means that it has accepted the principle and has no right to deny it to any other city in the same circumstances; and if you go further and visualise this revolutionary step taken by the Chancellor of the 'Exchequer and visualise every local authority In this country having its municipal bank, when you have public banking brought to that stage, what is the argument against national banking? There is no argument.

Lord E. PERCY

I do want to get this clear. I thought the right hon. Gentleman was proposing a complete monopoly of coal mining for the State. If the Birmingham Town Council has not prohibited anybody else from having a bank, does the right hon. Gentleman want the State to come into the field as an additional competitor with private enterprise, or does he want the State to establish a monopoly?

Mr. GREENWOOD

I certainly want the State or the municipality, as the case may be, to establish a monopoly.

Commander COCHRANE

How can be two monopolies? The right hon. Gentleman says he wants a State monopoly, and at the same time he wants a municipal monopoly.

Mr. GREENWOOD

I think the hon. and gallant Gentleman has misunderstood me. I said either a State or a municipal monopoly. Hon. Members must not think I do not know that they understand my meaning, because they do. They know that we want the principle of public ownership and, arising out of that, public monopolies. The point which I am putting before the House, which the House, I think, ought to consider, is that this principle of public ownership and of public monopoly has been an integral part of our system of government for 50 or 60 years, and until somebody tells us precisely the point at which we have to stop, we are entitled to say that this principle is one which ought to be given general and universal application. It is a principle which acts only on one motive, and that motive is public well-being. It may be that local authorities are not very enlightened and might not perhaps understand public well-being, but the whole principle is that they do act in the interests of the public who need the service, in the interests of the consumers of the service; that is, in the public interest.

Our criticism of the existing system is that the motive behind it is bound to be, in the last resort, the motive of private advantage. In our view, that is likely to be, in the majority of cases, inimitable to the public interest. Our case, therefore, is that we ought to supersede this system, where private advantage is the primary motive, by one where public well-being is the primary and, indeed, the only motive. We have put down this Amendment deliberately to expose the hollowness of view of people who do not accept our point of view. They have nothing to offer. They do not even say they can make the present system work.

They know now that it is not working. We have never had any clear, specific statement from the benches opposite that they can make the old system work. They have no alternative proposals of any kind. The Government are living from hand to mouth. The King's Speech contains but two proposals, neither of which can finally solve the economic problem with which we are faced.

We believe that this change is inevitable. It may be that, as in other directions, a Government led by the Lord President of the Council with a Conservative majority behind him may carry out some of the changes. We say that the change is inevitable; we see no way out of the present circumstances by dallying about or by trying small proposals here and there. We believe this change has to come and that it ought to be inaugurated without delay. In the long run the nation will be far better off if we begin to make the changes now than if we wait. I do not suppose that the National Government, although the Prime Minister knows that the present system is breaking down, will make these changes, but at least we can make our protest, and I hope that we may open the minds of some hon. Members opposite to the fact that the system in which they believe is no longer workable and that a new one must take its place.

3.38 p.m.

Mr. MACMILLAN

The Debate to-day has ranged over a wide series of topics, over the details of certain proposals for remedying the present position, and over high philosophical discussions; it has sometimes even dealt with the subject of the Amendment before the House. The right hon. Gentleman who has just spoken has advanced in an interesting speech a series of propositions, which I do not think were altogether clear in his own mind and were not wholly clarified in the minds of other Members. He began in that rather querulous tone, with which he commonly addresses the House to examine creation and, unlike. the Creator, he did not find it on the whole very good. The specific proposals which he put forward to remedy this unhappy situation did not seem to me to be altogether convincing. He attacked my Noble Friend the right hon. Member for Hastings (Lord E. Percy) for some of the suggestions which he made to deal with unemployment in the distressed areas. I hope that one particular proposal to Which he drew attention for enlisting as much private help as possible will not be treated by the Opposition as the wrong principle, but will be regarded as a useful adjunct to whatever final decisions are taken. Decency and good feeling demand that the greatest possible amount of private service, apart from the actions of the State or local authorities, should be enlisted for the solution of this problem.

Various as are the views put forward in this Debate, in the main we are, as always in these Debates, in the position of two chief divergent attitudes towards the solution of our problem, one attitude of mind which might roughly be called the deflationary and the other the expansionist. The problem is whether to bring wages and social services to the present level of prices, or to raise prices to the level of social services and wages to which we have become accustomed. In the Debate on unemployment, I ventured to call attention to the fact that in all these proposals there is always this diversity of view, and the curious fact that they were not always supported or opposed by the parties where you would expect to find support or opposition. The hon. Member for Bridgeton (Mr. Max-ton), for instance, to-day astonished me by appearing in the role of a mid-Victorian Liberal discussing the Ottawa Convention, Free Trade and so on. I expect to see 'him to-morrow in a frock coat, whiskers, and an Albert watch-chain. I much prefer the role he adopted in the latter part of his speech of a good Marxian and a 20th century attitude. To my astonishment, I found him supporting an attitude towards our foreign trade which is deflation, and is bound up with the whole principle of a deflationary fiscal policy.

Mr. MAXTON

I hope I did not mislead the rest of the House as I seem to have misled the hon. Gentleman. In my references to Ottawa I was not referring in any sense at all to the tariff aspect of the problem. I was referring to the Imperialist challenge thrown down at Ottawa against the United States of America and every other capitalist country in the world.

Mr. MACMILLAN

The only aspect of Ottawa which has been engaging the attention of the House has been the tariff, aspect. It has been practically the sole subject of Ottawa on which agreement has been arrived at in various parts of the Empire. However, I will not pursue. the matter further, except to say that, sooner or later, we have to recognise the policy to which the greater part of the supporters of this Government have pledged their faith. It is a policy which is necessarily expansion. It is very easy to call yourself an expansionist, as it is to call yourself a Christian. It is not the protestation but the way in which you carry it out. But I think it must be recognised that we have converted—if we have converted—the people of this country towards the Protectionist policy, not alone by the arguments which have been used, but by the hard logic of events, and, sooner or later, we have to see that it is impossible to combine a deflationary monetary policy with an expansionist Protectionist policy.

Sooner or later, however necessary economy may be in the first year of a Government dealing with the question of salvage, of saving us from Budgetary deflation, in the long run we have pledged our whole attitude towards these problems by a policy which is absolutely different, and demands expansion. It might well be argued that in the older capitalist period a policy of deflation combined with the policy of Free Trade would achieve all that we require, but that depends upon the argument that by cheapening goods you can necessarily sell more of them. But to-day, in the modern world, is that really true? We have rationalisation throwing men out of work. Even in this House the Lord President of the Council, by combining his office with that of the Lord Privy Seal, finds himself with some excellent unemployed ex-Cabinet Ministers behind him and is adding to the problem of unemployment. With the spread of industrialisation in the world, with the world organised now upon a competitive instead of a complementary basis, and with the drying up of the new areas in which our great capital expansion was possible, it is becoming necessary to apply a wholly different policy to the solution of our problem.

I have ventured to say this on one or two occasions, and therefore I shall not waste time by repeating it at length, but always when we approach this problem I find that though in many speeches the problem itself has been well set out yet when the speaker comes to the question of the solution his contribution is not quite so satisfactory. In the very few minutes. I have I am going to take the much greater risk of not merely making a diagnosis but of submitting one or two practical proposals to the House. I think anyone who has studied the purely monetary side of this question must admit that as long as the price level remains as it is the problem of monetary reflation is one of the most important we have to face. What the President of the Board of Trade called the slimming process, which is really a process of fitting the man to the clothes rather than the clothes to the man, is not a permanently satisfactory process to adopt. It is necessary to immediate salvage, but it is not a permanent policy. To take 1s. off the Income Tax on the profits of a business—does that give industry the power of restoring the 38 per cent. fall in wholesale prices'? Far more could be done by the restoration of the price level.

It must be admitted that some monetary policy is the first essential towards recovery, but I am very far from being one of those who think that by a monetary policy alone recovery can be secured and made permanent. You can correct the great gaps that have come between the costs of production and subsequent prices but monetary reflation alone will leave us in the position where—as not all the elements which have caused the present process have been corrected—there will be a further return to the situation from which the crisis has arisen. Monetary reflation would be, as it were, a stimulant, but it is a stimulant only. When a man is sick it may be wise to give him a stimulant, it may help him, but it does not remove the cause of his disease. Therefore, I venture to go a little further and to make two suggestions regarding causes. I am not ruling out the importance of administering the monetary stimulant, but the real causes of the disease are much deeper and will require much more drastic alterations.

I think we require at the present time a definite policy of integration of basic industries as self-governing units under the authority or with the guidance of self-elected councils. I would like, secondly, to see the creation of an investment and development board which represented in- dustry through those industrial councils. It would represent finance through some such body as the Bankers' Industrial Development Trust and represent the Government through some such body as the Imports Advisory Committee. I should like to see, thirdly, a definite policy of monetary reflation, and the direction of new money into capital modernisation and the direction, too, of present unused savings into practical and socially useful development.

That might seem an ambitious plan. How can it be put into effect? Why is industrial integration necessary? It is necessary technically; I mean in respect of a comprehensive control of the general direction of development. It is necessary to eliminate the waste and duplication of plant that is at present going on, and it is also necessary because of the whole policy to which we are now committed, the policy of abandoning the free-market and of adopting definitely the attempt to suit production to demand, the policy which the Minister of Agriculture is doing the most for in particular spheres of agriculture. It is also necessary for industry. That policy involves, if you are to have any plan, some integration of control. It is impossible to plan production to suit demand unless there s a control of what the scale of production must be. You cannot have it both ways. Either you must return to the free market and the laissez faire organisation of the nineteenth century, or you must adopt what follows from the fiscal changes that we have made.

It may be asked: Is such a programme workable? It is one to which the Government are deeply committed as regards agriculture, and it is one in which some industries have reached a very high degree of organisation. There is no technical difficulty in the Government deciding boldly to organise the coal or any other industry, and saying that within a certain time the industry must put up a scheme for its own reorganisation or, if that scheme is not forthcoming, that the Government are prepared to act on their own. That is the way the railway companies were made. Whatever one may say about the railway companies, if it had not been for the Act of 1921 the whole railway system would be in complete collapse and chaos by to-day. It may be said that it would be very dangerous and would grant a series of monopolies. Although the basic industries are so organised that there might be monopolistic control, a number of monopolies is much less dangerous than a single monopoly. A single monopoly may exploit everybody else, but it becomes clear that the market must be treated as a whole. Among the great basic industries, even if monopolistically organised, the steel trade would not attempt to exact high profits from the shipbuilding trade, or the coal industry from steel. The market as a whole would have to be considered, as the prosperity of each depends upon the prosperity of the other. Nor is it apart from possibility that the Government itself, or some controlling organisation of industry itself, should be able through the fiscal system to control any of the hardships that might accrue.

Second, and I think very important at the present time, is the impossibility of guiding finance back into industry. I gave some figures in the House some months ago. One of the most important facts about the present relation between industry and finance is that before the War industry was self-financed. It was financed from its own profits, or from the small local circle around each particular works, or from small family units. 70 per cent. of the fresh money put into industry before the War was raised from industry itself and only 30 per cent. from the London money market. Since the War the direct opposite has been the case. Of the total fresh money since the War, over 70 per cent. has been raised on the London money market and only 30 per cent. has been raised internally. The London money market was well suited and organised before the War to deal mainly with foreign loans, but it had much less to do with industrial developments, and it is not suitably organised for dealing with these. The Macmillan Committee, the Federation of British Industries, and the right hon. Gentleman the Member for Hillhead (Sir R. Horne) in his speech the other day, have called attention to this lack of technical organisation for the supply of long-term credits to industry except by the system of flotation upon a very wide scale. To-day you can borrow from the bank short-term credit, but if you want long-term credit, you have to make an issue on the market sufficiently large- to pay all the costs of underwriting and so on. If you are in a small way, there is no machinery, or, at any rate, there is a lack of machinery, for providing long term credit upon reasonable terms.

It is very difficult, at the end of a Debate like this—[Interruption]—I should exceed my rights if I were to try to talk out the Debate now—it is very difficult to sum up all that I should like to say, but this Government is a. National Government, it has great advantages, and it is in a position to do what a purely party Government is not always able to do. A National Government ought to be more flexible than a party Government. I hope it will be said of it, as of the old Imperial Guard, that it will always surrender to new ideas, but will never die. Its task is to guide us from the old to the new capitalism. It has four years in which to do its work. One year has already passed, and, as month follows month, time slips away very rapidly. So far, the first year has been necessarily devoted to the work of salvage, but the Government must now proceed to the work of construction. Its agricultural policy seems to me to be much more progressive at present than its industrial policy, and I want the Secretary for Mines to follow the example of his colleague the Minister of Agriculture. At any rate, we have to take the opportunity now, and I think that the policy which I have with great diffidence tried to outline is the kind of policy to which the Government will have to set its hand.

We cannot allow the present system to drift on, and I see, in what is now being done, indications of a determination to act on lines somewhat of this kind. But, as I say, the opportunity is now, in this Parliament, and I know that nobody will realise more than the Lord President of the Council that, if the opportunity is missed, there may be grave difficulties and disasters ahead of this country. It is very easy to say that you can overthrow the whole system; it is very easy to move a Motion such as that which has been moved from the Front Opposition bench to-day; but, if anyone could, by pressing a button, destroy the capitalist system to-day, would he take upon himself the responsibility of doing so? I think that very few men would. The hon. Member for Bridgeton might do it, but there are very few who would take that responsibility. The task of this Government and of this country is to transform, in the traditional English way, the old system into a new shape. There is a tide in the affairs of men which taken at the flood, leads on to fortune". That tide is still running, and I implore Ministers to embark upon it boldly before it ebbs.

Motion made, and Question, "That the Debate be now adjourned," put, and agreed to.—[Mr. Lawson.]

Debate to be resumed upon Monday next.

Whereupon Mr. SPEAKER adjourned the House, without Question put, pursuant to Standing Order No. 3.

Adjourned at Four o'Clock until Monday next, 28th November, pursuant to the Resolution of the House of this Day.