DEBATE ON THE ADDRESS.

HC Deb 28 November 1932 vol 272 cc487-614

[FIFTH DAY.]

Order read for resuming adjourned Debate on Amendment [25th November] to Question [22nd November]. That an humble Address be presented to His Majesty, as followeth:—

Most Gracious Sovereign, We, Your Majesty's most dutiful and loyal subjects, the Commons of the United Kingdom of Great Britain and Northern Ireland, in Parliament assembled, beg leave to offer our humble thanks to Your Majesty for the Gracious Speech which Your Majesty has addressed to both Houses of Parliament."—[Mr. Roy Bird.]

Which Amendment was, 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."—[Mr. Attlee.]

Question again proposed, "That those words be there added."

3.36 p.m.

Mr. LANSBURY

My hon. Friends and myself have no cause to complain of the manner in which our Amendment has been discussed so far. Those who were present on Friday will, I think, agree that in the main the speeches from all parts of the House consisted very largely of complaints, and of rather back-handed compliments to the Government on their work. There was hardly a speaker who expressed anything like satisfaction with the present position of the country, and, if I may be allowed to say so, we bad some very excellent speeches diagnosing the situation and putting before the House very clearly indeed the situation in which this country and the world find themselves. I think those who were present on Friday will also agree that there was a tone of almost complete pessimism among the supporters of the Government, and it is worth while pointing out how different that attitude is from the attitude which prevailed 12 months ago. All the hopefulness and all the faith in the Government's policy that were then expressed have dissipated into thin air, and from the Noble Lord the Member for Hastings (Lord E. Percy) to the hon. Member for Stockton-on-Tees (Mr. Macmillan) the speakers were unanimous in telling us, first of all, the seriousness of the situation and in putting forward, in a very extraordinary manner, first one proposal and then another for rehabilitating the condition of trade and industry. None of them agreed with the proposition put forward by the Opposition. They all, it seemed to me, wanted some measure of Government action and control, but while suggesting that, they were loud in their disapproval of anything in the nature of Socialism.

I would like, first of all, to clear one point out of the way. The Noble Lord the Member for Hastings raised the question of charitable effort on behalf of the unemployed and was rather inclined to reprove me for something that. I had said during a previous Debate. I thought that I had made it clear that, while we are willing that the victims of typhoid in Denby Valley, Yorkshire, should be dealt with and treated kindly and cured of their disease, we are not satisfied that a tainted water supply should be left to go on poisoning other people. It is surely consistent and logical that, when we see an army of men and women who are unwanted and are gradually being thrown on to a kind of human scrap heap, we should all want to do whatever is possible in whatever way is possible to stop deterioration of that kind. Only to that extent do we on these benches think that charitable effort should be brought into the field at all. The business of this House in a crisis such as that through which we are passing is not to rely on the Society of Friends or on the Churches for a cure. It is the business of the House to find the remedy, and there is no remedy in merely setting up reading rooms or places where man may mend their clothes or the boots of their children. That is not dealing with the problem in anything like the manner in which Parliament ought to deal with it, and we do not want these two things mixed up.

If any of us saw a person in need, we should want to help him, but, if we knew the cause of his need, we should want to try and remove the cause. In a bigger sense that is what we want done in regard to unemployment. During the whole of the discussion on Friday, during the two days' discussion on the Address which preceded it, and during the period when we discussed unemployment in a nonparty friendly sort of way, we arrived at no conclusion whatever as to anything practicable that could be done here and now to deal with the problem. About that there cannot be any denial from anyone. We have heard again to-day that no public works are to be started. No one on these benches—and no one is more emphatic than I am on this subject—merely wants work put forward for work's sake. We do not want to dig holes and to fill them up again. Our contention, however, is that there is in the country an abundance of good work of benefit to the whole community needing to be done, and that this is a time when that work ought to be undertaken. I am sorry to have to be repetitive, but every propagandist knows that you must be repetitive, and on this issue I want to repeat, and we shall go on repeating until the conditions change, that there is plenty of money, plenty of labour and plenty of material in the country with which to build houses, clear slums and develop agriculture in a comprehensive manner.

About that there is no question whatever, and no one from the opposite benches has up to the present put the contrary point of view; no one has yet attempted to deny our premiss. The Prime Minister and others run a hare of their own creation; they talk about what happened under the Labour Government. I remember writing to the Prime Minister and the Dominions Secretary when the Prime Minister was more or less my chief urging them to undertake the very things that I am urging to-day. I would ask Members representing mining areas if one of them would deny that the one thing needed for the mining industry is the unification of the whole coalfield? Will anyone deny that what is further needed in that industry is for the whole question of the utilisation of coal to be brought to a decision immediately? The Lord President of the Council may say that the Government have undertaken this, but I should like to ask how many centuries have to pass before a decision is arrived at. Ever since I have heard discussions about coal in the House this question has been mentioned. The right hon. Gentleman himself, when he was on this side of the House and also when he was on that side during the coal dispute, again and again said that there ought to be unification of the coalfields.

The Labour Government did not do it, and hon. Members can blame me as much as they like and say that we ought to have done it, but the Government are in the dock just now, and not me, and the Government have to answer. They are much more vulnerable than I am, because, whatever may be said against the Labour Government, the fact is that they were all the time in a hopeless minority, whereas the present Government have a gigantic majority, and, if they wanted to do it, they could do so. I repeat, especially for the Lord President of the Council, who knows it perfectly well, that there can be no solution of the coal trouble and no real improvement until the coalfield is unified. Even if I wanted to do so, I could not use harsher language about the gentlemen who run the industry than the Lord President has used because of their incapacity and because they never will unite. If we had a Government with courage enough they would take these men in hand and put them on one side and see that the industry was properly organised and dealt with in a national manner.

I have always been an advocate of the development of agriculture. The Minister of Agriculture drops down every now and then and tells us of another commission and another set of people who are going to do something or other for agriculture, but the fact of the matter is that all that the Government are depending on are more tariffs and yet more tariffs. There is no real comprehensive scheme for the re-organisation of agriculture. There is a little bit here and there, but nothing of a comprehensive nature. Further, no proposition is put forward to prevent landlords in the country being able to take advantage of the imposition of tariffs. There will be no real re-organisation of British agriculture until the land belongs to the nation again and is controlled in the interests of the nation. At present each area goes its own sweet way and agricultural Members do nothing but stand up and ask for more money. You have only to live a long while to see how history repeats itself. When sitting upstairs I used to hear the late Lord Chaplin, when Mr. Henry Chaplin, who was as consistent about reform in agriculture as the hon. and gallant Member for Bournemouth (Sir H. Croft) has been about tariffs. His plea all the time was for more and more assistance for agriculture.

That has been going on for 40 or 45 years, and agriculture is still in the plight which the hon. Member for one of the Divisions of Devonshire is continually describing to us. Land goes out of cultivation, men are driven off the soil, and still we are told that we must help agriculture further. It is said that we must in some way force up prices. That is no new song. It is as old as the hills. If a trade union were urging that wages should be forced up in an artificial manner the majority of the House would tell us it was an uneconomic proposition; but when it is a case of bolstering up agricultural prices, all we hear is that we must do something to save the industry. As a matter of fact, we shall never save the industry in that way. It is totally impossible. In this connection I would call attention to the fact that a great industrial dispute is likely to arise. I think the causes of it are being discussed today. The railway workers are faced with a demand for another reduction in their standard of living, and no one, so far as I know, on the benches opposite or around us is taking very much notice of the situation. Some time ago a committee was appointed under the chairmanship of Sir Arthur Salter, and it made certain recommendations. I am not proposing to discuss them, but long ago, directly road transport looked like reaching its present development, any far-seeing Government would have brought in a Bill to unify the whole business of transport.

Transport ought not to be left to what is called the "free play of competition." As a matter of fact, it has not been left entirely to the free play of competition, and that, I think, is something worthy of note; but it would be more worthy of note if, in order to prevent the demoralisation of the men who are now being attacked by a proposal to lower their wage standard, the Government were to compel the House to face up to the problem of how the transport in- dustry can be unified. The difference between ourselves and hon. Members opposite like the right hon. Member for Hillhead (Sir R. Horne) and the hon. Member for Stockton-on-Tees (Mr. Macmillan) is that though they want a good many of the things which we want under any scheme of re-organised industry, they want them in order to preserve the power of making private profit, while we want industries reorganised on the basis of service for the community. That brings me to the crucial point of all this business, because this is where we part company with the hon. Gentlemen who have put the following notice of motion on the Order Paper:

• "Sir Robert Horne,
• Mr. Macmillan,
• Sir Geoffrey Ellis,
• Sir Philip Dawson,
• Mr. Law,
• Mr. Caporn"—

All good, solid Tory Members of this House, real good—I was going to say something else. [HON. MEMBERS: "Go on."] No, I am afraid I might shock you. The first name is that of a serious Member, the right hon. Member for Hill-head. The Motion reads: That, in the opinion of this House, there is urgent need for a comprehensive plan providing for the organisation of national industries under the advice of industrial councils, Who said "Socialistic"? the co-ordination of financial, industrial and political policy, I hope that when the Secretary of State for the Colonies comes to reply he will tell us something about this. through the assistance of a representative investment and development Board. They must have been within earshot of Scarborough last year when the Labour Conference was being held. and the raising of prices to an economic level by methods which would include (a) controlled monetary policy, I am sorry the Chancellor of the Exchequer is not here. When I said this one day he replied: "Oh, he does not know anything about it." The right hon. Member for Hillhead does, because he is an authority on it. And listen! (b) the direction of new capital into the channels which would produce a better equilibrium in production, That is a nice long word. I do not know exactly what they mean by it, though perhaps they do; but there it is. and (c) the provision of credit facilities for desirable developments for which the necessary capital cannot be readily obtained under the existing methods of banking and issuing houses. I remember saying here on one occasion that the issuing houses, the moneylenders, and the bankers of the City of London had made such an unholy mess of things that I would sack the lot, and certain hon. Gentlemen who replied were rather shocked, but this is only a roundabout way of saying the same thing in a very polite manner. Here are hon. and right hon. Gentlemen confessing that it is not the late Labour Government who were all wrong and who brought about all these evils, but the people who control the existing banking and issuing houses. I like this phrase: desirable developments. I would like to know who is going to settle what is a desirable development. I call attention to this matter mainly because of the speeches of the Noble Lord the Member for Hastings (Lord E. Percy) and the First Commissioner of Works, both of whom made great play with the fact that we should be obliged to have a lot of officials under Socialism.

Lord EUSTACE PERCY

I never mentioned the word "officials."

Mr. LANSBURY

The Noble Lord is a little too quick. I was referring to the speeches made by him and by the First Commissioner of Works, and was dealing with both at the same time. I apologise for mixing them. We were challenged as to whether we believed in a monopoly or not. We said that we wanted industry organised, owned by the community, and so on, and my right hon. Friend the Member for Wakefield (Mr. Greenwood) was challenged immediately with the question: "Will you make it a monopoly? Will you allow private people to come in? "The Noble Lord and his right hon. Friend really ought to remember what their own party have done. Under the leadership of the Lord President of the Council, their own party, quite recently, took the whole of the electricity supply —the production and a great part of the distribution—out of the hands of municipalities and of private people. [HON. MEMBERS: "No!"] Excuse me. A firm can make its own electricity and use it, but it cannot sell electricity. It has all to be produced and sold through one channel. It is no use the Noble Lord shaking his head. That does not alter the truth of what I am saying. People can supply themselves, but they are not allowed to trade in electricity in this country. That was part of a Bill passed by the Tory Government before the Labour Government came in.

It is also true that in a hundred different directions, municipal and national, there are monopolies. There is one very famous monopoly, the Post Office, which prevents you from sending a letter except through the Post Office, and I understand that they take good care not to allow people to send their circulars except through the Post Office. The reason is perfectly obvious. From our point of view, the Post Office is an extremely good example of what Socialism in practice really means. You could not send a letter to Australia at the present postage rate without any other letters being delivered at the same time. It is because you balance the long distance letters with the short distance letters that you are able to send a letter to India, Canada or Australia at the present rate. I thought that that was really accepted. It is exactly the same, or ought to be the same, in the production of any set of goods which the nation requires.

The Noble Lord and his right hon. Friend the First Commissioner of Works have made a very great point about the sort of personal liberty that would be attacked. All through life personal liberty is curtailed. The liberty of the man who earns his living is curtailed. It is nonsense to talk about everybody having perfect freedom in this society. It is time, I think, that we had outgrown that theory altogether. There is no such thing as real personal liberty, and it is because there is not that personal liberty that we want to substitute for the archaic and chaotic competitive system of to-day, order and management for the community and on behalf of the community, which Socialism means. There is an idea that the Socialism of which we are speaking is something that is impossible of achievement in this House. I hope the Noble Lord will not shake his head at this. I think there was a sort of suggestion in the discussion that this House might not be able to carry through the kind of legislation that would be needed to establish the owner- ship either of land or of industries, and so forth. This House can do whatever it pleases. This House has got the power, whenever it cares to exercise it, to take over and to order the management of any industry. I have been one of those who have often said that this House could not possibly carry through the sort of Socialistic legislation that we want because of the waste of time that might be occupied in getting Bills through; but the present House of Commons has convinced me that, given a sufficient majority, you can do whatever you please. When I hear about dictatorship, I remember that three persons have been set up to determine whether tariffs shall be put on or off, and, to a very large extent, any discussion of their work is almost nil. No one will deny that.

We are fighting this fight for recognition of Socialism for two or three reasons, but the main reason—and I want to press this—is that hon. and right hon. Gentlemen in all parts of the House have told us not only in words but in legislation, that within the present system, within the present social order, it is impossible, first, to employ all the people who need employment, and, secondly, that it is impossible to give to those who are not allowed to go to work the maintenance that they need. Therefore, there is no way out but ours. You cannot imagine that 2,000,000 people are going to sit down and semi-starve. Hon. and right hon. Members cannot sit here and contemplate that a population, to whom has been given some measure of education, is going to accept the position that for years to come anything from 1,000,000 to 2,000,000 people are to live on 13s. or 14s. a week, and so on. No population would ever submit to that, and when you say to us, as often you do, "Who is going to manage these businesses?" I would point out that the people who manage the Army and Navy are people not on the Treasury Bench but people who are chosen for their particular jobs. And when soldiers are not at work, they are kept in decent physique, well clothed, well housed, and well fed. We say that those who support the sort of system which says to 2,000,000 workers on whom the soldiers depend for their daily bread, "You must go out and just stand outside, walk to the Employment Exchange and once a week draw a petty, paltry dole," are not the best servants of the nation.

Finally, the difference between us is simply this: We do not believe that private profit-making out of industry is the right basis on which men should produce goods. You may say to me, as has been said to me, that people produce goods because there is a demand. That may have been true years ago, but it is no longer true, because there are millions and millions of pounds' worth of goods lying waiting for consumption. They have been produced in a chaotic manner, having no relation between one set of people and another. The commodities have been just turned out without any reference to whether there is any market or not, and, in the end, because of that glut, people have to go without, and to-day are starving in civilised nations in the midst of plenty. The report just published in regard to East London shows that there are 250,000 people in that tiny area living below the poverty line. I may be told that this is a God-ordained system, that the judgment of God has produced this position of affairs, that, in a world teeming with goods, 250,000 people in that tiny area of East London are living below the poverty line.

For my part, if nothing else made me a Socialist, that would, and when I am told, "You cannot manage things through Government machinery," when I am told of what other people have failed to do in other countries, I quote what capitalism has failed to do. It has failed in the one big essential for which it exists—to produce goods for the use of the community, and to provide employment for those who need employment. It has failed utterly and abjectly to do those things, and to-day there are 3,000,000 people knocking at these doors asking this House, "What are you going to do?" It is not sufficient to say that our proposals are the wrong proposals. It is not sufficient to prove the failure of Russia. You have got to justify capitalism, to make capitalism work. You cannot do that, and, therefore, you will be bound ultimately to accept Socialism.

4.11 p.m.

Mr. J. P. MORRIS

The right hon. Gentleman the Member for Bow and Bromley (Mr. Lansbury) has delivered one of his characteristic speeches. At the outset, he stated that the speeches during this Debate were expressions of dissatisfaction at the record of the Government, and that pessimism prevailed among the supporters of the Government. He stated that the hopefulness expected at the time of the Election had been dissipated into thin air. I will endeavour to remove that fiction of the right hon. Gentleman, and to say right away that, so far as I am personally concerned, there is no pessimism, there is no dissatisfaction, and my feeling of hopefulness still remains with me. The Amendment refers to "extravagant pledges," and to the Government having "failed to early out their mandates." If I remember rightly She Manifesto of the Prime Minister contained no extravagant pledges.

Mr. BATEY

His speeches did.

Mr. MORRIS

The Manifesto clearly stated the true financial position of the country, nod the Prime Minister warned the people, if they were so foolish as to return to power that section of the Labour party led by Mr. Henderson, what the consequences would be to our economic position. In fact, I join issue at once with the official Opposition, and I deny that the Government have failed to carry out their mandate. The Manifesto issued by my leader, the Lord President of the Council, and the Manifesto issued by my right hon. Friend the Member for Darwen (Sir H. Samuel) also contained no extravagant promises. Indeed, I go so far as to say that every promise contained in all those Manifestos has either been accomplished or is in process of being accomplished.

I am entitled to ask my hon. and right hon. Friends of the Opposition what man in his right senses would have prophesied 12 months ago that the £130,000,000 of credit we received from France and America could have been repaid in the first 12 months? Am I not entitled to say to them, Is it not a wonderful achievement, with the magnificent return of foreign confidence in the stability of our country in the same period of time? Am I not entitled to say that a man would have been rash, and thought fit for a mental institution, if he had prophesied 12 months ago that we could ever have initiated a scheme of Conversion, let alone witnessed its consummation? I am entitled to ask, Have the Government failed to implement their promise to introduce legislation to restore the balance of trade? Almost the first Act of the Government was to bring to the Statute Book the Abnormal Importations Act, followed by the Import Duties Act. Both those Acts of Parliament achieved the object set out at the commencement of this Government. Have the National Government failed to make arrangements for the conclusion of advantageous agreements with the rest of the Empire? The record at Ottawa was the most wonderful that the Government have achieved.

The Government have done everything in their power to assist the agricultural industry. We have had the Wheat Quota Act, and the Horticultural Products (Customs Duties) Act, and at last we have a Minister of Agriculture who is determined and resolute to remove the causes of the depression in agriculture. The Minister of Agriculture has laid his finger on the root cause of the depression in agriculture. He has stated in this House—and I well remember the occasion of his first speech after his appointment—that the town and the countryside must sink or swim together. It was a welcome sign of the break-up of the 50 years' frost which has hung over the land. The Minister informed the House that we shall have to decide upon a reconstruction of our economics, and not only of our economics but of our philosophies. The state of agriculture is one of the root causes of the depression to-day and of the high figures of unemployment. If we could restore prosperity to agriculture, we should bring prosperity to the towns. I am certain that in our present Minister of Agriculture we have a man resolute and determined to carry out what he preaches.

Have hon. Members forgotten that we have balanced our Budget? May I point out that the budgets of France and America still remain unbalanced? How happy the people of those countries would feel if, within a short period of time, they could attack their problems as our National Government have attacked the problem in this country, and could balance their budgets! Far from regretting that the National Government have not tackled the job in a businesslike way, I am proud of what they have accomplished. What other country in the world has held on to the position in the past 12 months like this country? From the point of view of production, we have increased our position by 4 per cent., whereas every other country has decreased its production, with the exception of Japan whose production has increased by per cent. The figures of unemployment in this country are more or less stationary, whereas the figures of unemployment have risen to an alarming degree in France and America, our two chief competitors. Furthermore, in so far as exports are concerned, I find that we are the only country in the world where the volume has increased this year. There has been an increase in our exports, but the converse is the position in every other country in the world.

I should like to address a question to the Members of the Opposition. Are they aware that one of the chief causes of the depression, not only in this country but throughout the world, is the repercussions of having to pay war debts and reparations? Have they forgotten what the Prime Minister achieved at Lausanne? Are they not aware that he alone of the people there was responsible for that achievement? Are they going to blame us because America did not see fit to fall into line? I will ask them this question: If they were in power with a Socialist policy, would that have any influence in determining the action of America? I think I am entitled to say, in view of the record of the National Government, that the indictment in the Amendment is entirely unfounded. Of course, it is the duty of the Opposition to oppose, and no matter what kind of Gracious Speech bad been delivered by His Majesty there would have been the usual Amendment. The last sentence in the Official Amendment reads as follows: lack the courage to adopt the alternative Socialist policy of attacking the fundamental causes of the poverty problem. Of all the sentences in the King s Speech the one which most appealed to me was that which foreshadowed a new Rent Restrictions Bill. I want to ask the Opposition: Can they deny that the Bill will alleviate the position of poor people who are suffering from exorbitant rents?

Mr. LANSBURY

The hon. Member has asked us such a lot of questions, but this is one upon which, if he does not mind, I will ask him a question. Will he tell us what the Rent Restrictions Bill is going to be?

Mr. MORRIS

It is impossible to anticipate what any Bill may be, but if the right hon. Gentleman will listen in patience, I will suggest what might be in the Bill. I do not propose to address myself to the question of rents which may legally be charged in the case of controlled houses, under the various Rent Restrictions Acts, nor do I intend to enlarge upon the extortionate rents that certain landlords are now charging in the case of decontrolled houses. I am convinced that when His Majesty's Government frame the new Rent Restrictions Bill they will be guided by the findings of the Inter-Departmental Committee presided over by Lord Marley. That Committee issued its report in July, 1931.

I wish to call attention to what I consider is the biggest scandal in connection with housing that is allowed in this country to-day. I refer to the taking of premiums, or what is generally called in the north of England "key" money, by landlords, upon a change of tenancy, and more particularly from working-class people in regard to working-class houses. In February of this year, I put down a question to my hon. Friend the Minister of Health, asking him if he was aware that in my Division certain landlords of property were not only charging extortionate increases of rent upon a change of tenancy, but were demanding and were receiving large sums in the way of key money. The Minister replied to the effect that he could add nothing to the findings of the Marley Committee. As a result of my question, I was inundated with letters from people all over the country explaining their own experiences in this respect. The hon. Member for Leith (Mr. E. Brown) who is now Minister of Mines, but who was then the Parliamentary Secretary to the Ministry of Health, saw over 70 of those letters. I was informed that the Government would take notice of the point that I raised, and that the Marley Committee had made reference to the matter with regard to controlled houses. I took the trouble to get a copy of that report, and I studied it. I found to my dismay that, so far as controlled houses were concerned, it was a penal offence for a landlord to demand key money or premiums, punishable by a fine of £100. Not a single word was there in that report with reference to decontrolled houses occupied by the poorest of the people.

It is only on very rare occasions that a house still remains controlled on a change of tenancy. In 99 cases out of 100, the house automatically becomes decontrolled. It is a seeming paradox that the law protects one person in 100 and to the remaining 99 allows no protection against Shylock landlords. My contention is that in regard to all decontrolled houses that fall within categories (b) and (c), as laid down in the Marley Report, it should be a penal offence for any landlord to demand a premium or key money on a change of tenancy. I am not concerned with better-class houses. The people who occupy that type of house are in a position to fend for themselves, but I am principally concerned with the poor and unemployed people who, on a change of tenancy, are subject to the exactions and exploitations of unchristian and Shylock landlords. I hope that the suggestions that I have made to His Majesty's Government will be taken up, and that the Minister of Health in the framing of his new Bill will see fit to include a Clause dealing with this housing scandal. If I never do anything else in this House than be successful with a suggestion of that kind to His Majesty's Government, I shall feel that I have done something to assist the poor of our land who are not in a position to help themselves.

I shall vote against this Amendment, because the alternative policy which the Opposition say that the Government lack courage to adopt, namely, Socialism, is one which, wherever it has been tried, has been proved a failure. For another reason, I maintain that an isolated policy of Socialism in this country, and in no other country in the world, would do nothing to bridge the gap between overproduction and under-consumption about which the hon. Gentlemen who have moved the Amendment are so fond of talking. I shall not support the Amendment, because I know perfectly well that in any international advance this country must always take the lead, and set an example. Unless other countries of the world have confidence in us, our taking the lead will be of no avail. I know that if we ever have a policy of Socialism, that confidence will be dissipated into thin air.

4.30 p.m.

Mr. FRANK CLARKE

In rising to address this honourable House for the first time, after having attempted on several occasions to get in with a maiden speech, I am confident that I shall receive that indulgence which this great Assembly always extends to a "new boy," especially having kept my virginity so long. So far as this Amendment is concerned, I know of no way of judging the future but by the past, and, as regards the past, I have in my own division—one of the largest industrial divisions in the country, and certainly the largest industrial division in the county of Kent—a unique experience which I think will be of interest to the House. In the north-west corner of that division, which is an industrial urban district teeming with skilled artisans of every type—riot artisans of any particular trade, but of nearly every trade—some few years back a Socialist administration came into existence. That administration was styled by the Socialists "the first Soviet in England."

We have heard many times in this House, and also in the country, that Socialism has never been tried because the Socialists have never had a real working majority; but in this particular case they had a very strong majority, and in three years of ruthless and reckless administration they gave this urban district the highest urban rate in England, a rate of 29s. 8d. in the £. They also created at the bank, within a short period, an overdraft of £180,000, and on one Friday night found themselves in a difficulty in regard to providing the wages to pay to the council's employés. That was the state of affairs under a strong Socialist rule in an industrial area, and I think many will agree that we have seen similar experiences in the Colonies and in the crisis in this country 12 months ago. The result in that area was that large industries prepared to move away, large orders were lost as a result of the heavy rating, men were stood off from the factories in very large bunches, and, instead of the poverty line being improved under Socialist administration, it was very much damaged. That is a true example, a practical illustration.

Nevertheless, whatever may be the opinions of people in various parties in this House on the subject of unemployment, it is obvious there is a feeling at the back of everybody's mind that they would like to find a definite solution as soon as possible for this great problem. It seems to me that all parties have been very much like gallant knights of old stalking round a big dragon looking for the vital spot to aim at first. Surely, that vital spot is the tragedy of unemployed youth. The King, in his Gracious Speech from the Throne, touched this vital spot when he deplored the fact that many young people have never had an opportunity of regular employment—are, at the threshold of life, on the industrial scrap-heap, faced with idleness, with all the educational facilities of the last decade of no avail, with opportunity, enthusiasm, ambition, blighted, in a state of idleness which means to those young people perpetual despair.

If we safeguard the youth of the nation, we safeguard the future of the nation. Surely this is a starting point for some constructive ideas, and I would suggest that the Government should seriously consider the setting up, with as little delay as possible, in each petty sessional or convenient area, a body which for purposes of illustration I would call a special social council—an organisation distinct from magisterial and existing administrative authorities, and recruited from those who are willing and able to devote themselves to this section of social reform on a voluntary basis. To these social councils could be given the task of formulating measures and methods for assisting these young persons —too old for the ministrations of the education authorities, not old enough to lift themselves out of the difficulties of their position, and needing special help. These social councils should be linked together under a central authority, such as a Government Department. I would also humbly suggest that some great man with true vision for the future should be invited by the Government to come in as an adviser, if not a leader—a man who has the genius, the understanding of youth—such a man, I would suggest, as the Chief Scout, Lord Baden-Powell. On behalf of the unemployed youth of this nation, I implore the Government seriously to consider some such scheme, and if it be done, it were well that it were done quickly.

4.38 p.m.

Mr. PRICE

First of all, I would ask the House to join with me in tendering to the hon. Member for Dart-ford (Mr. Clarke) our congratulations on his maiden speech. I am sure we shall all agree that he has made himself perfectly clear, and, although I differ from him in nearly everything that he said, nevertheless I feel certain that we shall all he glad to hear him in future Debates in the House. I rise with the greatest possible pleasure to support the Amendment moved by my hon. Friend the Member for Limehouse (Mr. Attlee), regretting the failure of the Government in dealing with our great national and international problems and their lack of courage in introducing legislation on Socialist lines, and also expressing the opinion that the capitalistic system has failed.

It has been stated more than once during this Debate that we on this side of the House have failed to explain clearly what Socialism means, but, anyhow, I think the House will agree that capitalism has been explained clearly enough during the Debate, and also its inherent consequences on the great masses of the community, with poverty, unemployment and privation rampant. I propose to build up my case in support of the Amendment without touching upon the speeches that have been made from this side of the House, but citing some of the speeches that we have heard from Members and supporters of the Government, and to see how far they have admitted that capitalism has now failed to function and to provide the necessities of life for the big community which it is the duty of the present Government to control.

I wish, first, to take the speech of the right hon. Gentleman the Member for Epping (Mr. Churchill). He came down to the House to address us on the King's Speech. He commenced his speech by congratulating the Prime Minister on his recovery from ill-health. He looked at His Majesty's Gracious Speech as he sat in his corner seat, and, seeing nothing in it, he put it down, and he never said a word about it, but went on straight away as a supporter of the Government to criticise the administration of the National Government during the last 12 months. He said that the Government had failed in the four major problems affecting the nation and the world to-day. In the first place he said—these are not our words, but those of the right hon. Gentleman the Member for Epping —that unemployment had increased tremendously during the last 12 months, that taxation had been increased during the last 12 months, that obstruction of the world's trade had been intensified by the Government's policy of the last 12 months, that gold prices had gone up to a soaring height, and the pound had depreciated in value. That was the statement which was made by the right hon. Gentleman the Member for Epping on the administration of this National Government.

We listened to the Prime Minister's speech a few days ago on unemployment, in which the right hon. Gentleman admitted that unemployment was a natural outcome of our present system of society, and that we could not hope that unemployment would be cured under our present system. As a matter of fact, he forgot himself for five minutes and became once more a Socialist, declaring that only by a fundamental change of our system of society, both financially and socially, could we ever expect to deal efficiently with the unemployment problem. Surely, after listening to such hopeless speeches as these from leading Members or supporters of the Government, we need make no apology whatever for bringing forward this Amendment suggesting that the Government should bring in legislation on Socialistic lines.

During the Debate on Friday we heard a speech from the Noble Lord the Member for Hastings (Lord E. Percy). After having put in a good deal of time over a considerable period in reducing, so far as he has been able to bring pressure to bear on the Government, the social services affecting the poorest people in the land, he now comes to the House and says to us, "We know that things are bad; many of us on this side of the House are not satisfied with the Government's actions; and, if you will trust us, we are prepared to support a more go-ahead policy; but we cannot support Socialism." The Noble Lord complains that we do not make Socialism clear to him, and says that he would like to know what Socialism really is. If hon. Members opposite desire to know more as to what Socialism really means, why not ask the Prime Minister to call a special meeting of his supporters and to give them a lecture? He used to give us plenty. He is the man who made me a Socialist 26 years ago, and he has preached Socialism ever since, till he betrayed the party that made him.

We have also had a speech from the Lord President of the Council, who said Europe was at the moment in a worse state than it had been for years, and he was afraid that we should have to face another war. He told us what war would mean and how science had developed in chemicals and that kind of thing, so that one bomb as big as a nut could be dropped on a community of people and wipe them out. He said that warfare under Capitalism, to obtain markets for their produce, was so keen that he was afraid we were likely to be faced with another war. We also had a speech from the President of the Board of Trade, the Rip Van Winkle of the Treasury Bench, who, when he saw that the policy of the Government was wrong and that they had gone as far as he could support them, declared from that Bench that he would never be a party to the taxation of wheat and meat. I think that Rip Van Winkle is still asleep, and he will wake up one morning to find that his colleagues have left him and that during his long sleep the Government have imposed taxation on wheat and meat.

We on this side, who have gone through the mill and were brought up in industry where we have had to work for our living, have recognised long ago, and more now than at any time, that the capitalistic system has failed to function. We have at the moment more privation and poverty than we have had during the last 100 years. There are 3,000,000 men who cannot find employment. The only thing the Government have done for them is to reduce their pay and allowances. It is on record that unemployment pay has been reduced by £10,000,000 through the operation of the means test, benefits have been reduced by £12,500,000, increases in contribution have been imposed, on men who are working, of £5,000,000, the pay and pensions of soldiers, sailors and airmen have been reduced by £3,600,000, teachers' salaries have been reduced by £6,000,000, general educational facilities have been reduced by nearly £5,000,000, National Health Insurance benefits have been reduced by £8,500,000, married and unmarried women's benefits have been reduced and thousands of men who have paid into the insurance scheme for years are to have their old age pensions at 70 instead of 65. We on this side have now come to a definite conclusion. Nothing but legislation on Socialistic lines can bring back prosperity to the country.

I should imagine that not only the Prime Minister but the Chancellor of the Exchequer could give information to supporters of the Government as to what Socialism means. He was very proud when they municipalised the bank at Birmingham. That, with gas works, tramways and electrical works, has been a huge success when run under municipal control. The hon. Member who spoke last referred to an urban council which has increased the rates because members who believe in the Socialist theory were dominating it. But he left the other side of the picture out. I can cite the case of a council dominated by Conservatives in whose area people have recently been dying from disease, whereas if money had been spent those deaths might have been prevented. I lost a child of 12 when an epidemic visited the district where I live and that epidemic would have been prevented if there had been proper sanitary arrangements. We give credit to Socialist councils, not only at Dart-ford but all over the country, who have tremendously increased the social services.

Capitalism has entirely failed. Take the mining industry. The Government have sat still for 12 months and done nothing except compel the men to work 7½ hours for another five years, giving them no security for wages after next July. They have done nothing towards the unification or nationalisation of mines. They have done nothing to promote hydrogenation or low-temperature carbonisation. The cost of what they have done for agriculture has been placed on the shoulders of the poorest people in the country to the extent of some £50,000,000 to £60,000,000. We have argued for years that the time is overdue for agriculture to be properly organised, but the first step is to nationalise the land. Farmers and smallholders are paying a higher price for land than in any other country in the world. If you are to reorganise agriculture with our support, start at the right end and do not impose taxation on the food of the poorest.

We feel that Capitalism has totally failed, and we appeal to the Government to take a bold step in the reorganisation of our industries by introducing Socialist legislation. That is the only possible step for men and women who have to work to get a reasonable standard of living. I am not expecting in the least to convert hon. Members opposite. Nearly everyone of them represents finance, in more senses than one, and they have come here for protection. Every Act that the Government have passed has been rearing up bulwarks to maintain the privilege which has been enjoyed for centuries by the landed aristocracy. But if we fail we have a bigger authority to appeal to—the people outside. We shall go on preaching the sermon that the Prime Minister has preached for the last 30 or 40 years, till he ran away and betrayed his trust, and the trust of thousands of honest workingmen. He cannot look anyone in the face. I see him shrugging his shoulders, but he knows perfectly well that he is an uncomfortable man. He has sacrificed all the principles that he has stood for. He has sacrificed his soul for a mess of pottage. Let him do it. We do not mind him. The masses outside still have hope in Socialism, and we shall go on preaching it. Whether we fail with our Amendment or not, we shall crowd into the Lobby feeling that the teaching that we were given at our Sunday schools when boys is embodied in the policy that we stand for, which is the only policy that can bring emancipation to the great working-class masses of the world.

4.57 p.m.

Mr. DORAN

In the short time at my disposal, I shall try to refrain from, shall I say, recrimination. I have noticed in this Debate that the majority of hon. Members opposite are more concerned with vilifying Members of the Government than in providing a constructive policy which may possibly bring a little light into human progress. I cannot help being amused when I look at the would-be re-constructors of the universe, who are prepared to put the world right at a moment's notice. They consider that everything is wrong and nothing is right. The hon. Member for Limehouse (Mr. Attlee) a day or two ago told us that the Socialists are the only people in the world who have any sympathy with the downtrodden workers and who can bring about that wonderful Elysium that they call social democracy.

Mr. ATTLEE

I said nothing of the sort.

Mr. DORAN

That is what the hon. Gentleman's words conveyed, and I have them before me. I only ask him to weigh his words before he uses them. I am reminded of certain lines from the Biglow Papers: So they march in processions and get up hurrahs, And they tramp through the mud for the good of the cause, Where A sat before, B's comfortably seated, One Socialist's victorious, but the other's defeated. And they say they're a kind of fulfilling the prophecies, When as a matter of fact they're only changing offices, And the poor working-man, no matter what he axes, All that lie gets is soft sodder and taxes. If I may be permitted to say this without being nasty—for I always try to play the part of the little gentleman—I have noticed those raging waves of the sea foaming at their own shame on the rocks of the National Government. Carried about on the winds, they merely tear the bandages from the sores of Lazarus. I am going to waste no further time upon them. I am going to ask Mr. Speaker if he will kindly listen to one little constructive idea which may, after all, bring employment and contentment at least to a few thousand people in this benighted country of ours. Hon. and right hon. Gentleman opposite have told us that Capitalism has failed. If you have a pack of fools constantly throwing sand and gravel into the complex machine of industry, you will never get it to work. They remind me of the child swinging on the pendulum of a grandfather clock and complaining to his father because the clock does not keep correct time. I am hoping at a not very distant date to have something to say to these wonderful self-constituted disciples of a new Jerusalem of social democracy, but the time is not now. The time is too tragic and urgent for one to indulge in this kind of bitterness and rancour. I want, with the co-operation of every party in the House, to do something which will bring a little contentment to all independent of whatever class to which they happen to belong.

I, like many other hon. Members of the House, have travelled throughout the length and breadth of this country. We have witnessed in many towns many things which we have not liked. For instance, when I have gone to that wonderful and salubrious atmosphere of Manchester, where the sun is always shining, I have noticed in the neighbourhood many gigantic slag heaps which are really eyesores. When I visit Newcastle I see the same thing. When I go to Middlesbrough, and also to many towns in the Midlands, I see those artificial mountains of slag not only as an eyesore to the towns but as occupying many very valuable land sites. They are utterly useless to the community. In my travels, I have left Manchester and gone through the Cotswolds into Derbyshire and along the Great West Road, and I have seen thousands of gravel pits long since abandoned, many of them filled with water. They are also an eyesore to the countryside. At this moment, when the railways are so frightfully handicapped and when we know that they are so anxious to keep up their whole complement of men, I seriously suggest to the Government of this country that they should enter into an agreement to subsidise the railways and transport, that they should get into touch with the councils of these various towns, and agree to take this slag from the North in order to fill up the gravel pits in the South and thereby reclaim the land which has been lost for many years.

It may sound very foolish perhaps, but as far as I have heard this Debate, all that you have suggested is to make roads on which traffic will never travel and bridges over which traffic will never go. In other words, all that you can suggest is the digging of holes in the ground and the filling of them up again. I may be accused of being somewhat Socialistic in my ideals. [HON. MEMBERS: "No!"] But you will in a moment. I will tell you why. I suggest that, instead of paying out these terrific doles, we should put the unemployed men into their rightful occupations. It is not only foolish but, economically, suicidal to ask your electrician, cabinet maker, watchmaker or your artisan to go on to road making and thus deprive him in 12 months' time of the talent necessary to enable him to resume his rightful occupation. I mention this because at the present time hon. Members opposite are asking everybody to go on to road making. I could not make roads any more than could the right hon. Member for Bow and Bromley (Mr. Lansbury). I do not understand how a road is made. If an employer in a particular industry were granted a little bounty in respect of every type of man he took on in his rightful occupation, you would enable that private employer to put the right man in the right place and to compete successfully with the rest of the world. In the long run I believe that it would be cheaper. I do not wish to elaborate this point except to say that my friends the Socialists live in the valley of dreams. Although they talk about the failure of capitalism, they know that if they were given full power tomorrow they could not run an omnibus with success. They know that their strength lies in the glorious story they tell, and that whenever they go to the unthinking democracy and promise them a Garden of Eden upon earth, the poor devil who happens to be up against it does not ask them how they are going to do it. God help them when they do ask!

Impracticable as my scheme may seem, if you transferred those slag heaps from the north to the south you would gain extra land equal to Lancashire and Yorkshire combined. In other words, it would add two counties to the country. There are many road making firms in London who require slag for ordinary road making. The transport difficulty is a very great one, but they would be willing to purchase the slag from the Government if they could get it at anything like an economical rate. I am only making a suggestion. I leave it to the experts of the Government Departments to think out the details. The man who can show where two blades of grass will grow where one blade grew before is the man who will be of benefit to this country. It will not be the dreamers of the Socialist party.

We have recently passed the Ottawa recommendations. I am not satisfied with them. I should have liked to have seen the Government go to the Dominions and make a 20 years' contract with them, telling them that such a contract could not be interfered with by any successive Government during that time. Those of us who recollect what Lord Snowden did with regard to the McKenna Duties realise how he put business into the pockets of the foreigner and made bankrupt many of our business men, and we see the need of encouraging employers and manufacturers to put down new plant and machinery in order to develop the resources of the Empire and industry at home. I, for my part, whether my party agrees with it or not, will do my best to try to bring about an agreement with the Dominions for 20 years, and put it out of the power of these would-be Socialists to upset the economic situation of this country. That is only by the way.

I must congratulate hon. Members opposite. I am one who tries to give honour where honour is due, and I wish to take this opportunity of congratulating them. After all, there is always something good in the worst of us and always something bad in the best of us, although last Easter when I had a bad egg and offered it to my friend, asking him to take out the good and throw away the bad, he refused to take the egg. How often have I sat in this House and seen little teardrops fall from hon. Members' blue eyes on behalf of their foreign comrades, mainly German and Russian! How often have I witnessed their tremulous lips uttering pathetic nothings on behalf of their foreign friends, and how often have I seen the little teardrops roll down their pallid cheeks when they have been discussing their foreign comrades! I congratulate them now because, for the first time, they are able to spare five minutes to discuss the woes and troubles of British working men. I want to say this. I know that Mr. Speaker will kindly allow me to do so; he is very tolerant to-day because it is my birthday.

Mr. J. JONES

That accounts for a lot!

Mr. DORAN

Like the hon. Member for Silvertown (Mr. J. Jones), I am 27 to-day.

Mr. JONES

You tried to be once.

Mr. DORAN

Any man can make a try but He who fights and runs away, May live to fight another day. I have never known you chaps to fight even once, or live for another day. However, that is by the way. We can all indulge in these little quips, and we love them, but when my friends on the opposite side claim a monopoly of sympathy for the worker, I would remind them of this fact. I have gone through just as hard a mill in the industrial life of this country as any of them, and more than many of them. I agree that no man who has not been through the eye of a needle knows what it is to be really squeezed. I have been through the eye of a needle and I have been squeezed, and I know what it is to suffer in the industrial sense. In view of all this talk about unemployment I have received letters from my constituents in regard to their condition in London. I have spent four nights at St. Martin in the Fields. I have slept with the unemployed. I have lived with them, and I have eaten with them as far as I possibly could. I have slept on the Embankment with them. The only reason why I have mentioned that fact to-day is because I intend to champion their cause in this House. I never heard one covet the riches of the rich, the wealth of the wealthy. I never heard one say that he wanted to see a social revolution or the overthrow of society as we know it to-day. I lived with these men and understood them, and all they wanted was simply a sporting chance to live and to give to their children a better chance in life than they had had themselves. Is it beyond our power as a National Government to give to the people of this country some little inspiration that will guide them to the high road of their moral and physical development?

Recently we have heard statements that the Government are willing to let Germany clown to the extent of £150,00,000, until Germany recovers. I do not wish to go into the details of Germany's peculiar misery at this moment, but I can assure hon. Members that Germany's cries of poverty and misery do not impress me. She has no debenture stock, she has wiped out her internal debt by inflation, and she is only waiting for us to relieve her of her external debt and then, like a commercial Colossus, she will spread all over Europe. Then, God help us, because Socialism will not save the nation at that time. That is why I say, notwithstanding what is happening at Geneva—I am pretty sick of listening about Geneva—that there is only one League of Nations in the world that appeals to me, and that is the League of Nations known by the name of the British Empire. I am going to stand by that. Notwithstanding the difficulty between ourselves and America, which I sincerely hope will be put right in the next week or two, I say fervently and from the bottom of my heart that there is more hope for the human peace of mankind in an amalgamation between the United States of America and the British Empire than in all the pious resolution at Geneva or elsewhere.

I may be misunderstood, but I am going to say, in conclusion, that I am appealing for a fair and square deal for the workers of this country. They are our finest asset. On them our future depends. It is no use talking to me about Ottawa Resolutions, or commercial supremacy, or turning the corner and going along the highway of progress, if our people are anaemic and half starved, lacking in inspiration and bereft of that wonderful character of independence which makes Great Britain the greatest nation in the world. If we have any charity to spare, let it begin at home. Let us give our workers the first chance, and let the foreigner come afterwards. Let us, in the words of the Prince of Wales, independent of our politics, independent of our religion, independent of our feelings, come together and do something that will recreate the pride and industries of the British race on which the world depends to-day.

5.19 p.m.

Mr. TEMPLE MORRIS

I rise to address the House for the first time, and I do so with that feeling of anxiety which every new Member must experience when he makes his maiden speech. But that anxious feeling is considerably mitigated by the kindness which the House always shows and the indulgence which it always gives to new Members on such an occasion. There have been many contributions during this Debate, some general speeches and other speeches from the specialist point of view, suggesting solutions for the perplexing difficulties in which we find ourselves. To-day we have to consider very seriously an Amendment which proposes to alter the whole system under which we live in this country. The meaning of the Amendment might perhaps be better tested if hon. Members would take it seriously and assume that it passed to-night and came into operation, although I venture to say that it will be defeated.

Let us imagine what would happen if the Amendment were put into operation. It is a pity that when we consider a matter of this sort we should talk about the social records of political parties. We are dealing with something that is out to alter the whole system, and one may be apt to make a free use of illustration to emphasise one's remarks. The hon. Member for Skipton (Mr. Roy Bird), in his able speech last Tuesday, referred to two doctors who were attending a patient. He said that the doctor who had been originally called in left apparently in a state of umbrage because a second opinion had been asked for. The illustration which I would put before the House to-day is a very elementary one, but it does emphasise the point that I am endeavouring to make. I would suggest that if the patient had reached that stage of convalescence when he was at least expecting and hoping for recovery, he would be extremely ill-advised to change his doctor, and still more ill-advised to change the whole system of his cure. I would apply that illustration to the suggested remedy contained in the Amendment.

In whatever way the House cares to look at the Amendment and to test it, it seems to me that we are forced to consider one or two problems—some hon. Members may consider that they are two problems—the problem of unemployment, and the problem of economy. I would suggest that they are one problem, for this reason, that the economy which forces a man or a woman on to unemployment relief is, I would respectfully submit, nothing more or less than false economy. There are numerous people in this country who to-day are unemployed and who, naturally, have a grievance as a result. Those people as they walk about bear a certain amount of umbrage because they say that the men at the top of the industry in which they were formerly employed are not suffering as a result of trade depression. That is where the Amendment fails in its purpose. Those people might find themselves in a considerably worse state if the Amendment were carried into effect. It must never be forgotten, though people are only too apt to forget it, that it is not only the man-in-the-street, not only the working man who is feeling the troubles and difficulties of to-day, but the man at the top as well. The men at the top have had great responsibility and worry and have had certain curtailment in their salaries and emoluments. When people go round and say that you ought to reduce and turn out people, they are saying something which is not only nonsensical but unsound. I would much prefer to see salaries reduced from the top to the bottom rather than dismiss one hand in a great undertaking.

It would be amusing if it were not so extremely serious, that when you make suggestions of economy you are politiely told by people outside this House to mind your own business. When you make suggestions of economy in regard to local authorities, you are told that you are trying to conduct their affairs for them. No one denies the importance of the work of the local administrators. Every hon. Member will agree that they are an essential part of our social order, but however important, however indispensable those authorities may he they may make mistakes, and here again, in my respectful submission, the Amendment would fail in its object. If we altered our system from capitalism, which this Amendment condemns, and introduced Socialism, I do not see how Socialism would curtail extravagance by local authorities. Many hon. Members on this point of local administration have a great deal more experience than I, and I speak with the utmost respect of their wider knowledge, but it is almost the universal experience that the chief fault of the local authorities, in their ardour for the development of their districts, is that they are often regardless of the question as to how much money those developments are going to cost, and also regardless of the fact that the cost of those operations has to be borne by the ratepayers. If the Amendment were carried into effect, and it had to be tested in its true light, I shudder to think what the result would be upon the ordinary ratepayer in the great cities and towns of this country.

When one makes a speech in this House, and particularly when one makes a maiden speech, one is tempted to make reference to the Division one has the honour to represent. I do not propose to say much about the Division which I have the honour to represent in this great House, but I do say this, and with the utmost sincerity, that in my Division there are streets in which the houses are largely occupied by the unemployed, while on the borderline of the Division there is a great iron and steel works. If only that iron and steel works could be got once more into operation it would mean that the unemployed people living in those houses would once more, step by step, get back into employment. I am conscious of the fact that as the representative of that Division I am the mouthpiece of those unemployed people, and one waits with considerable anxiety for those iron and steel works once more to resume operations. They asked for tariffs and and His Majesty's Government have given them tariffs. They asked for more tariffs, and the Government have given them more tariffs. Speaking with full responsibility, I know that those who are responsible for the management of that great iron and steel concern are considerably more hopeful of starting sooner than they would have been if they had not got the tariffs for which they asked.

That brings me to the point that there is a considerable grievance among the unemployed people about the way in which work is being allocated. We are really discussing economy in this Amendment. Those who were responsible for moving the Amendment would obviously say that economy is one of the best planks of Socialism. One is always desirous of trying new experiments, but an experiment which is a colossal change, such as the Amendment advocates, is something which is not testworthy for this great country at the present time. One cannot see how those who have brought forward the Amendment can argue that under a Socialist system we should economise a great deal or reduce the ranks of the un- employed. There are men to-day who have been unemployed for 18 months and who remain unemployed, while other men who have been unemployed 18 weeks have got into employment before them, and I submit that that is wrong.

In the Gracious Speech there is a paragraph which says: any proposals for unemployed persons should … be designed to maintain their morale and their fitness to resume work when opportunities can be found. The best way to keep unemployed men fit is to reduce the period of unemployment, and the best way to reduce the period of unemployment is for the Government to establish a rota system, whereby those who are unemployed would get back to work not by a sudden jump but by the ordinary steps of a rota system.

May I be allowed to conclude on a. personal note? If I have appeared to be at all dictatorial I hope hon. Members will not think that I am trying to dictate, but that they will put it down to the enthusiastic earnestness of a beginner. The Gracious Speech from the Throne is one which will be received by thousands of people with a certain amount of optimism. We have to restore optimism in all ranks of society, and the Gracious Speech will undoubtedly encourage those who work, as indeed we all must work, whatever our opinions, with one purpose, to restore prosperity to our land and a happy and more contented people.

5.31 p.m.

Mr. BERNAYS

I congratulate the hon. Member for East Cardiff (Mr. O. Morris) on his most successful maiden speech. Being a new and somewhat nervous Member myself, my congratulations are not worth a great deal, but, at any rate, I can sympathise with him much more than the seasoned veterans of this House, because I do know the agonies which went to the production of that speech, and I congratulate the hon. Member on having so successfully overcome them. I also should like to draw the attention of the House to the terms of the Amendment. I have been waiting two days for a definition of Socialism, and I thought that at last we were going to get it from the hon. Member for Hemsworth (Mr. Price), but all he did was to refer us to the Prime Minister. Apparently, the only man who really understands Socialism is the man who has left the Socialist party, and I am a little reluctant to ask the Prime Minister the meaning of Socialism, because I have had some difficulty in understanding the meaning of the Prime Minister's speeches when explaining the policy of the National Government, and I am afraid that I should find it more difficult to understand him in trying to explain what the Opposition mean by Socialism.

The Debate has followed the well-worn track of Socialist controversies. Hon. Members opposite have spent seven-eighths of their speeches in pointing out the wickedness of the capitalist system and then, quite suddenly and illogically, have said that the remedy is Socialism. They never tell us what Socialism is. They never tell us how it is to work, and what steps they propose to take. They never tell us how they intend to proceed. It is only necessary to look at the Leicester resolutions to find out how much the present Labour programme is out of relation to the realities of the moment. The chief proposal at Leicester, I understand, was the nationalisation of the joint stock banks. No doubt our banking system is in need of some reform, but at the present moment, which is a crisis of credit, a nationalisation of the banks seems to me to be extreme madness. Before a Bill to nationalise the banks had received its Third Reading in this House such a panic might be created as to leave no banks at all to nationalise. And the Amendment has about as much relation to the present situation as the proceedings of a mock Parliament in a garden suburb. I prefer to address my remarks to an Administration which, whatever its shortcomings, is at any rate the Government end is likely to remain the Government for some years to come.

The Debate on the Address is, I understand, an opportunity to review die whole political horizon, and I regret that no Member of the Government has yet seen fit to give us that general review. In fact, the only attempt was made by the right hon. Member for Epping (Mr. Churchill). I disagree with a great deal that he said, but he did attempt to see the picture, and to see it whole. There are at least half a dozen urgent problems which the House has a right to examine in relation to the whole situation. I see the Under-Secretary of State for India in his place. Let me congratulate him upon his new appointment. I want to say a word on the subject of India, and I do not intend to be in the least provocative. I understand that this week the Round Table Conference will approach the crucial question of the safeguards. Before the Indian delegate leave this country it ought to be possible for the Government to state their views on the vital issue of these safeguards; with regard to the control of the Army and the reserve powers in the hands of the Viceroy.

Obviously, final responsibility must rest with the House of Commons, but it should be possible for the delegates when they return to India and are asked what His Majesty's Government propose to do to be able to state in broad outline what will be the leading features of the new Constitution. What the right hon. Member for Epping describes as merely cultivated and amiable gentlemen are at any rate representatives who, in regard to India, stand between the alternative of military autocracy on the one side and something approaching Chinese chaos on the other. The main hope of any successful outcome of this appalling Indian problem is surely that the offer of the Government should be so generous that it will detach from the civil disobedience movement the right wing of Congress, in which I include Mr. Gandhi, with the object of making the new Constitution work, and we should do everything in our power to facilitate that process. I realise the importance of these safeguards, but there is one safeguard more important than any other, and that is the goodwill of the Indian people without which all the most cunningly devised safeguards in the world are just scraps of paper.

There is the problem of Disarmament. The Government have shown very little indication that they are alive to the demands of the great mass of the electors for a substantial measure of disarmament. The recent proposals are in advance of anything that has gone before, but are they the last word? So far the British Government have done very little except to be generous about other people's armaments. It is like being generous with other people's money, or like the recent Economy Committee of this House, who are so generous with economies in other constituencies. What do the Government propose in regard to battleships? We cannot go on suggesting economies in submarines, aeroplanes and conscript armies, which are other people's bulwarks, and yet make no suggestions about battleships, which are our own bulwark.

There is the problem of tariffs. Tariffs have come, and much as we on these benches dislike and distrust them, it is obvious that for a few years any future policy must be devised within the framework of tariffs. When will the promises made in their name be carried out? When is this bargaining to begin? The Secretary of State for the Colonies said recently that foreign countries were tumbling over one another in their anxiety to negotiate with us. Perhaps the President of the Board of Trade, who is now in his place, can answer the question better than the right hon. Member the Secretary of State for the Colonies. Have these negotiations begun and, if so, how are they proceeding? And when will the House of Commons have an opportunity of knowing the results? Are the Government prepared at last to stand up to the high Protectionists? Obviously, if there is any proposal in this bargaining to reduce tariffs there will be a great clamour in the ranks of the high Protectionists. Is the President of the Board of Trade, who still regards himself as a Free Trader, prepared to stand up at last to the high Protectionists? Is he prepared to say that at last the retreat from Manchester has come to an end?

There is the question of a reconstruction loan. Are tariffs regarded as the main cure for unemployment? Are the Government so irrevocably opposed to the possibility of a reconstruction loan? The Leader of the Opposition has mentioned the survey of the East of London which was published this morning, a very terrible document, and more terrible perhaps because it deals with the conditions of 1929, which was regarded as a boom year. The problem of the slums has hardly been touched since the War. I suppose that Bristol in a housing sense is a typical industrial district, and there you have fine housing estates but, huddled in the centre of the town, obstinately remaining are dark and squalid streets untouched by the hand of the housing reformer. Here is an opportunity such as may not recur in our generation to clear away slums. Money is cheap, the cost of building materials is going down, and the building trade unions are in a more amiable mood. I wish the Government were more sympathetic to reconstruction proposals. The hon. Member for Limehouse (Mr. Attlee) on Friday said that the Government were like Mr. Micawber, waiting for something to turn up. As far as reconstruction proposals are concerned, they are a kind of inverted Micawber waiting for something to turn down.

In the meantime our industrial position if no worse gets no better. He would be a bold man who would say that the position to-day is essentially better than it was a year ago. I must confess that I was horrified at the speech of the Prime Minister last week, when he suggested, almost in an aside, the possibility of 2,000,000 permanently unemployed, which he described as 2,000,000 scrapped. The Prime Minister says that the Government are thinking out plans to deal with that situation. The Government have been in office 12 months. Have they only reached the thinking stage? Is there not a danger, in the series of staggering crises through which we are passing, that the Government in their anxiety to negotiate each dangerous corner should neglect the necessity of studying the map as a whole and the route that they intend to take.

There is the problem of debts. I shall say only this that it seems to one outside the ranks of the Government as if they never visualised the new situation that has arisen, as if in the months that have passed they never considered the possibility that the moratorium might end. Ministers are necessarily immersed in the details of their Departments. Mr. Wells, in a remarkable address on the wireless the other night, suggested the appointment of a Professor of Foresight. I suggest that what the Government need is a Minister of Foresight, a man whose only job it is to look ahead, to take a wide survey of our problems, to see the dangers before we reach them and to make proposals for dealing with them. We are often taunted, and naturally taunted, by Members of the Opposition with our great majority. I have never quite understood the basis of those taunts, because there is no reason why a Government with a majority of 500 should be five times as efficient as a Government with a majority of 100. It is, perhaps, five times less likely to be so efficient. But all the same I do say that the Members of the Government should sometimes recall the overwhelming support that they had in the country at the last election. There is, I believe, to-night a three-lined Whip, and that means that when the Division is taken in a few hours' time and we go into the Government Lobby, there will be a traffic block almost from end to end. Those votes in themselves are useless unless they are cashed by the Government into vision and resolution.

5.49 p.m.

Sir CHARLES BARRIE

I welcome the opportunity which this Debate offers to draw the attention of the House to the deplorable condition of shipbuilding in this country, with special relation to unemployment. I am glad and fortunate that the President of the Board of Trade is in his place, because there is no one who understand the position better or is more willing to assist than he is. I wish to offer him one or two concrete proposals which I hope may help to ease the situation. No industry in the country offers more employment to a larger number of trades than does shipbuilding. There is no trade that is scattered over the country as much as shipbuilding is, and therefore no trade better able to spread the employment over a larger area of the the country. What is the position at the present moment? There are roughly 500 shipbuilding berths in the country, of which at the moment 94 per cent. Are unoccupied. In other words, there are only 6 per cent. of the shipbuilding slips with any ships on them. On the Tyne we have the deplorable situation of 77 shipbuilding berths with one ship being built; on the Wear there are 44 berths and one ship; on the Clyde something like eight vessels are being built. So it is all over the country. There are 70 per cent. unemployed in the shipbuilding trade alone. apart altogether from the ancillary trades. In 1929 there were 440 vessels of about 1,500,000 tons being built.

What is the position to-day? There are 62 vessels of 142,000 tons being built. There are three times as many ships being built in foreign countries as we are building in this country. Let us bear in mind the key position which shipbuilding holds in this country, and how necessary it is to try to do something to get the industry started. My opinion is that a well-thought-out scheme should be produced by the Government in order to try to stimulate the industry. A scheme such as I suggest could be put into operation now; we would not require to wait until a very close examination had been made of it, because in my opinion and that of several others whom I have consulted on the subject its advantages seem to be standing out. How can this be done? I have already said that there are 500 building berths. Of course it would be too much to expect that any scheme would provide for the filling of all those berths. But my suggestion is that a three-years' programme of 1,000,000 gross tons should be started, and that encouragement should be given to shipbuilders and ship-owners to put this building programme in hand. That would roughly occupy half the berths in the country.

Alongside this building programme the other suggestion I have to make is that ship-owners should be invited to scrap 2,000,000 tons of shipping. That is in the proportion of two to one. The ship-owners should be allowed by the Government about £1 or 30s. a ton for these vessels as scrap. It may be said that that is subsidising the shipping industry, but from what I have to suggest further I hope the House will agree that it is not subsidising the shipping industry. The possibility is that there may be a profit out of it before the accounts are settled. Incidentally the breaking up of these ships would employ a very large number of men, in addition to the men who would be employed in shipbuilding, and indeed the scrap would be enhanced in value as a result of the building of the ships, because a large proportion of it would be required to make the new steel.

To finance the new tonnage which would be built I suggest that the Government should back the shipbuilders' bills to half the value of the tonnage built. The tonnage built, 1,000,000 a year, is roughly £15,000,000. I ask the Government not to advance the money, but to back the bills of the ship-owner and the builder to the extent of 50 per cent., in other words, £7,500,000 for three years. That may sound rather a large order, but if one takes into consideration the amount of money that is at present being spent on the dole, and for nothing, I think it will be agreed that at any rate one is getting something for the money. It may be asked: "But what is the use of building further ships? Are there not sufficient in the country already, and indeed too many?" That is perfectly true, but in the scheme which I suggest one gets rid of double the tonnage that one builds. There is the great advantage of the scrapping of old ships, and the mercantile marine, which is sadly in need of revival and of new tonnage, would have the advantage of that new tonnage with only half the quantity that exists now.

In addition to that the 1,000,000 gross tons of shipping would absorb 350,000 tons of steel a year. That means 1,500,000 to 2,000,000 tons of coal and coke used in making the steel and working it out. I estimate that some 50,000 to 70,000 men would be employed on this work, in the shipyards, the engine shops and ancillary businesses. The wages paid to these men would be £150,000 to £200,000 a week. The dole is at present costing the Government £80,000 to £100,000 a week. The extra £100,000 a week is £5,000,000 a year scattered throughout the length and breadth of the country. It may be said that the Government are fearful of subsidising one trade, because every other trade in the country would come along and want to be subsidised in a similar way. But, as I have said, the shipbuilding trade scatters its employment over a larger number of trades than any other industry, and automatically the £5,000,000 extra earned by these men would be scattered about and spent on so many articles that a very large number of trades would automatically revive.

What is the cost of this proposal to the Government? In the first place what we ask is that they should stand behind the breaking up of £2,000,000 worth of tonnage per annum. But for that they would have the scrap. They may not be able to sell it immediately, but they would do so in time. So far as that is concerned it costs them nothing. As I have said, the scrap would be enhanced by the fact that the metal would be used up in making steel. I ask the Government not to put up all the money for the building of the vessels, but simply to stand behind the shipowners' and the shipbuilders' bills, if necessary for five years. I have pointed out that there is a saving of £5,000,000 per annum in dole money, that is £15,000,000 for three years; so that even supposing some of the shipowners and shipbuilders were to default in a large proportion of the £22,000,000 spread over three years, they have still a good deal to come and go on. It may be said that some time ago the Trade Facilities Act attempted to help shipbuilding, and that there was a rush of building orders at that time under the Act. That was an unfortunate Act. It provided for the building of ships, but it did not do what I suggest under this new scheme, and that is the scrapping of ships at the same time.

We suggest the scrapping of two tons to one, thus clearing the market of a lot of old tonnage. In addition to the shipbuilding industry itself, may I mention some of the ancillary industries, spread over a large area, which would be assisted automatically by such a. scheme? The electrical machinery industry, the refrigerating machinery industry, boiler-making, engine-making, furniture-making, woodwork of all kinds, linen-making and the production of many other articles would be helped. Last but not least there is the immense extra earning which would conic to the railway companies and the very large amount of additional employment which they would be able to offer as a result. Here, I believe, is an opportunity for the Government to step in and without cost to provide work immediately for some 50,000 to 70,000 men over the next three years. Will they do it? So far, they have refused to put their hands in their pockets. Obviously in the present condition of things the nation could not stand indiscriminate expenditure, but under the suggestion which I am now making we would be getting something for our money. Surely it would be worth while attempting to carry out such a proposal, instead of spending the large sum of £15,000,000 on the dole during these three years.

Above all, I ask hon. Members to visualise the hope and encouragement which such a step would bring to the hearts of many men who are nearly at the desperate stage at the present time for want of work. May I say in passing that the scrapping of the old tonnage in the way I have suggested would have this great advantage. It would prevent that tonnage falling into the hands of foreigners at very cheap prices and being used to compete against us afterwards in our own markets. To allow that is a suicidal policy and we ought to take the opportunity, while building up new tonnage, of ensuring that the old tonnage is scrapped. May I say to the Parliamentary Secretary to the Board of Trade that I hope this suggestion will not be lightly put aside. Several shipbuilding association's and other bodies in the country have been considering this matter, and it has been left to me to voice their feelings and my own upon the subject. In our view, this proposal provides a definite opportunity for immediate employment of at least 50,000 men and possibly more, and their continuance in that employment for three years. We believe that it would in the end cost the Government nothing, and in view of the fact that we are all struggling to-day to find work for our people, I hope the Government will not, without very serious consideration, reject this suggestion for providing some much-needed employment.

6.4 p.m.

Earl CASTLE STEWART

The two hon. Members who last addressed the House both spoke from the Liberal benches, and I find on reference to my diary that the hon. Member for North Bristol (Mr. Bernays) belongs to the Liberal party, plain and simple, whereas the hon. Member for Southampton (Sir C. Barrie) belongs to what is known as the Liberal National party. So far as I could detect any divergence between their speeches it amounted to this—that the hon. Member for North Bristol left completely on one side the Amendment which is before the House, and dealt with India, Disarmament, and other subjects which are completely extraneous to that Amendment, while the hon. Member for Southampton confined himself to the difficulties of a single industry. What struck me about those speeches was that the hon. Member for North Bristol, who is labelled a "Liberal" pure and simple— [HON. MEMBERS "Not so simple"]—on that point I do not propose to pass any verdict. Let me put it in this way, that he is not labelled a National Liberal. He complained about the policy of this country and said that we ought to give a lead in disarmament. If there is a country in the world which has given a lead in disarmament it is this country.

The hon. Member also said that this country ought to give a lead in reducing tariffs. He seems to forget that the President of the Board of Trade in the last Government went to Geneva and tried to put through a tariff truce policy which proved futile. That policy failed completely, and the only result of the attempt was that every other country in the world immediately raised tariffs. I do not wonder that there is a section of the Liberal party who omit the word "National" when describing themselves, because they are always trying to advance the theory that Great Britain acts second or even last in matters which affect the world. In point of fact, it is Great Britain which always acts first in these matters. We acted first in disarmament and we were the first to try to secure a reduction of tariffs, but the rest of the world would not follow us. As regards the Liberal National Member for Southampton, he went into technical matters relating to shipbuilding and, while all that he has said may be correct, I would point out that he argued for special consideration from the Government for a special industry. Although he is described as a National Liberal, his speech seemed to imply that the word "National" might be omitted because, apparently, he wanted a special industry to be specially regarded by the Government. But I think that on this Amendment we have to consider national problems which demand national action, and that we are not concerned with any one special industry. The Amendment declares that prosperity cannot be achieved under capitalism and goes on to state that the Government lack the courage to adopt the alternative Socialist policy of attacking the fundamental causes of the poverty problem. In the Debate on Friday the hon. Gentleman the Member for Limehouse (Mr. Attlee) led for the Opposition, the Noble Lord the Member for Hastings (Lord E. Percy) led for this party, and the hon. Member for Bridgeton (Mr. Maxton) led for his party, and these three leading speakers were in agreement, at any rate, upon the description of the economic disease from which we and the world are suffering. If I quote the words of the hon. Member for Bridgeton, it is only because I think he put the problem most clearly. He said: How are you going to make it possible for the people to consume the tremendous quantities of goods that the producers can produce? How can you make the consuming power of the people as a whole synchronise with the producing power of the people?" —[OFFICIAL REPORT, 25th November, 1932; col. 392, Vol. 272.] If I may respectfully suggest an answer to the question, put so clearly and ably by the hon. Member, it would be this: You can only do it by the skilful direction of capital to the right uses, in the right countries. May I illustrate that answer by showing how the present desperate condition of the world is due to misdirection of capital? It is clear, to take one obvious example, that the misdirection of capital to war purposes, the building of armaments and the destruction of those armaments in a great war, led to an enormous accumulation of debt which we have upon us to-day in the form of the War Debts burden. I do not go further into that illustration because everyone realises that in the end these War Debts are going to be completely unpayable.

There has been misdirection of capital however not only in war but in peace. How many people realise that in the years before the War, one-half of the capital savings made in Great Britain were not invested in this country at all, but were invested in the Dominions or in foreign countries and that the great export industry which we have was not iron and steel, not shipping, not machinery, not wool—it was the export of capital. In 1913, we exported £54,000,000 worth of iron and steel; £127,000,000 of cotton; £37,000,000 of machinery; £37,000,000 of woollen goods and £11,000,000 of shipping. But of capital we exported no less than £198,000,000. That policy produced two phenomena. The first result was a tremendous, a completely bloated and corpulent expansion in certain exporting industries, notably coal, cotton, iron and steel, shipping and so forth, and the expansion in those industries was based, not upon 'exchange of goods for goods between the countries which we served and ourselves but upon the exchange of goods for credit. The second result was that we were able to secure a tremendous tribute which was payable to us from the Dominions and from these foreign countries and that tribute just before the War reached the tremendous dimensions of £200,000,000 a year.

If this nation had continued in the policy which it was pursuing before the War, of establishing huge investments in the Dominions and in foreign countries and receiving every year that sum of £200,000,000, and if that policy could have been pursued by us for 100 years without a break, the result would have been grotesque. The position at the end of 100 years would have been that even if our population had doubled, if it had risen from 40,000,000 to 80,000,000, we would have been drawing in tribute from our capital investments in foreign countries and the Dominions a sum large enough to provide for every family in this country no less than £1,500 a year. You would have had the rest of the world like a kind of hive in which all these foreigners and the people in our own Dominions would have been busy bees, working desperately hard to keep the British drones alive. Because, with £1,500 a year for each family in this country, how many people would have felt the necessity of remaining at work 7 We should all have put our feet on the mantlepiece, smoked our pipes, and left the others to do the work. The inevitable result happened, and it is here to-day. The bubble burst. That policy could not be pursued without the bubble bursting, and we now have to face the present position. Our exporting industries have collapsed, and are in a state of collapse to-day. Not only so, but we are not getting the interest on our money, and our capital has disappeared.

The worst thing of all is that the pressure upon the debtor countries to make the interest payments which they owe to us has been such, that all of them have been crowding into the world market with whatever goods they had to offer, with the result that, all of them being desirous to sell at once and all of them being under compulsion to sell at once, in order not to be labelled defaulters, the price of everything they have had to sell has dropped heavily and steadily over a period of years. Down has gone the price level, and that instantly set up reactions in every country in the world. The United States of America have suffered as severely as ourselves or any other country. In every country that fall in the price level set up reactions, under which taxes, rates, rents, wages, profits, all got out of gear with each other, and the whole of the exchange system of the world was put absolutely and completely out of action. The prime cause of our troubles, I suggest, has been the misdirection of capital in the past, which has produced the reactions, the difficulties, from which trade, not only international trade but our own internal trade and that of other countries as well, is suffering to-day.

If that theory be correct, I submit, first of all, that the savings of capital which we have available in this country will need careful direction in the future, and instead of allowing it to go to foreign countries, to develop Argentine railways and Argentine meat factories, it should be kept here, to develop land settlement and to build houses for our people. If I might make a suggestion with great humility to the Government, it would be that in the field of land settlement there is a very great opportunity for them. There is no industry that needs long-term capital more than agriculture, and there is no industry that I can think of in which the arrangements for providing long-term capital are less complete. In Germany, before the War, there were mortgage banks which had provided no less than £500,000,000 for investment in the land and land development. In the United States, since the War, they have set up land bank organisations which, by the year 1926, the last year for which I have the figures, had provided no less than £300,000,000 for the development of land and for agricultural purposes.

In this country I know of only one organisation to provide long-term capital for agriculture, and that is the Agricultural Mortgage Corporation. The amount of capital and debentures that it has outstanding at present is £8,000,000, and only 25 per cent. of that has gone to help smallholders. In that field, I am certain, there is an opportunity for the Government. Whether it is done by the establishment of a land bank, as has been done in other countries, or whether it is done by an extension of the powers of the Agricultural Mortgage Corporation, does not very much matter to me, nor does it matter, I think, from a technical point of view. What does matter is that some arrangement must be made, I do not say by the Government or by any form of State Capitalism or of Government guarantees or subsidies. Those who have long-term capital at their disposal— the building societies, the insurance companies, the trust companies—should be asked to get together and to see whether or not they can formulate some plan for providing long-term finance for agriculture, in the same way as long-term finance has been provided by the building societies for building houses in urban areas.

The building societies have provided no less than £300,000,000 as advances on mortgage against the building of house property in urban areas, and last year alone they brought £80,000,000 of new money into urban housing. If that can be done for urban housing, surely, at a time when the Government are bringing forward, for the first time for nearly 100 years, proposals which we believe will help agriculture and give the farmers an opportunity of making a living, this is the moment when some arrangement should be made for persons who desire to go on the land to be able to get long-term finance to get there, whether it be through mortgages or by agricultural finance companies buying land, equipping it with houses and buildings, and selling it to those who are ready to go on the land. I feel that in the direction of the internal capital savings that we have in this country we ought to be able to devise some means of financing what should again become, what it has certainly been in the past, our greatest industry.

The right hon. Gentleman the Leader of the Opposition and the hon. Member for Limehouse used almost the same phrase in their speeches. They said that to-day we are witnessing the Nemesis of usury. It is not the Nemesis of usury that we are witnessing, but the Nemesis of Free Trade. It was Free Trade that misdirected the use of our capital. It was Free Trade that sent 50 per cent. of our annual savings out to foreign countries and new agricultural countries. It is not, I say, the Nemesis of usury. No one believes in that medieval ecclesiastical theory of the iniquity of interest payment. That is not the point. The point is, Where did that capital go to? It went to those foreign countries and Dominions, with the result that it was dispersed in all the countries of the globe, which became debtor nations to such an extent that they could not pay, and cannot pay to-day, the sums that they owe to us.

The Amendment before the House suggests that the Government have done nothing to correct that position. The Government have done at least three things to correct the position, and three vital things. In the first place, by setting up a tariff protection for this country, they have at least ensured that opportunities are being created for the investment of our capital savings in industry in this country. The second thing is that the Ottawa Agreements made it more possible for our great Dominions to sell goods to us. That is of vital importance, for this reason, that the Dominions and Colonies are the countries in which we have made our greatest capital investments, for out of a capital investment abroad of over £3,000,000,000, no less than £2,500,000,000 is invested in our Dominions and Colonies. If, therefore, we wish to help them to-day, we could not do it better than by giving them the preferences which we gave them at Ottawa. The third point is that, by the conversion schemes which the Chancellor of the Exchequer has been able to put through, we have lowered the rate of interest not only in this country but throughout the world. In those ways the Government have done three fundamental things which must help in the greatest problem of all which we have to face, namely, how are we to direct our capital where it may be best used for the benefit of the nation?

I submit that it has been a failure, not of Capitalism, but of Free Trade. I submit that the evils which have overtaken us would have overtaken us even if we had had Socialism and a Socialist Government, because if they had had the sole control of all the capital in the country for the last generation, and if they had pursued the policy of Free Trade, they would have sent that capital abroad and got into exactly the same difficulties. [An HON. MEMBER: "No."] An hon. Member opposite says "No," but what have they preached on every platform at every election That the one curse to the country would be Protection, and that the one thing we must not do was to tax the working man's stomach by abandoning Free Trade.

Many of the speeches that were delivered in this House on Friday seemed to me to disclose a very unwarranted degree of pessimism. After what the Government have done and the general lines along which they are already advancing, we ought to have very much more optimism than some hon. Members have displayed. In these days we need something of that unyielding determination and that rugged tenacity of purpose which, through so many vicissitudes and over so many centuries, have always led the British people to eventual victory, and which caused Napoleon, as he rode away from Waterloo, to say, "It has always been the same since Crécy."

6.28 p.m.

Mr. GORDON MACDONALD

The Noble Lord the Member for Harborough (Earl Castle Stewart) did one thing that I feel needed doing. He got back to the Amendment. Other speakers have made reference to the Amendment in their first sentences, and then left it. The Noble Lord went further than that, and told us that the sole cause of the present deplorable position was the misdirection of capital, but he did not tell us who was responsible for that misdirection.

Earl CASTLE STEWART

I suggested that the Free Traders with their Free Trade principles had disdirected the capital to foreign countries when it should have been invested here.

Mr. MACDONALD

The Noble Lord blamed the system of Free Trade, but I should have thought that those responsible for the direction of capital were the owners of the capital.

Earl CASTLE STEWART

The Free Traders.

Mr. MACDONALD

I should have thought that even Protectionist owners were responsible for the direction of their own capital. One felt that the argument was rather a good one for the Amendment before the House, because it made it very clear that the Capitalist system had brought us to where we are to-day. The Noble Lord went on to tell us that the same system would have got us out of our difficulties. It is not my intention to follow him into what I felt was rather a fantastic description as to where we should get if that policy had continued. Like the Noble Lord, I enjoyed the first three speeches. I felt that the Amendment had done something that needed doing—it brought us back to reality. The right hon. Member for Hillhead (Sir R. Home) took us to Scotland and would have us discuss Home Rule for Scotland, and even the right hon. and gallant Member for Caithness and Sutherland (Sir A. Sinclair), although he told us that he was going to give a twist to the Debate, remained long enough to tell the people of Scotland that the fate of Scotland would be safer in Liberal hands than in Conservative hands. This Amendment has brought us back right up against reality —the reality of poverty. The Noble Lord the right hon. Member for Hastings (Lord E. Percy) delivered a far better speech from that back bench than ever I heard when he was on the Front Bench. I felt that whatever else may happen to him by being elevated to the rear, his inspiration on Friday was extremely laudable. Seldom did I listen to a more convincing or inspiring speech. I differed from much of the speech, but I felt that the Noble Lord made a sincere effort to grapple with the problem. He accused my hon. Friend the Member for Limehouse (Mr. Attlee) of not having told the House how we would apply Socialism. He even told us that the hon. Member for Bridgeton (Mr. Maxton) had left our party because he thought we were not a Socialist party. I was pleased that at the end of the Debate my hon. Friend informed him that he looked upon our party as a Socialist party.

Mr. MAXTON

I did not go as far as that.

Mr. MACDONALD

At any rate, the hon. Member's complaint was that we failed when he thought that we had an opportunity of putting our Socialism into practice. The Noble Lord made a few remarks which I could not quite understand. He told us that what we needed was not a council of war, but a commander-in-chief. I thought that that was a slight reflection on the Prime Minister. We on this side of the House look upon him as a commander-in-chief, and we were rather surprised to find the Noble Lord telling us that he was not. We always considered the Prime Minister of this Government as the man who decided policy, and we looked upon the rest of the Ministry as mere subordinates, but we are pleased to know from the Noble Lord that that is not the Prime Minister's fault, for he is not the commander-in-chief. He told us that, in addition to a commander-in-chief, inter-party groups were wanted to get together to hammer out a constructive policy which would deal with the problem. He told us that he and others on the back benches were prepared to accept any proposals, no matter how drastic, which they thought would remedy the problem. I do not see what good purpose would be served by inter-party groups, especially when we differ as to the fundamental causes of the problem. I can never understand asking doctors to get together to deal with an invalid if they differ as to the cause of the disease; they are never likely to agree as to the remedy. Though we on this side are prepared to join hands with anybody, anywhere, at any time, who agree with us as to the fundamental cause of the trouble, we do not see that we could serve any useful purpose working in inter-party groups with people who differ from us as to the fundamental cause.

I have read the King's Speech many times, and what worries me about it is that it is simply a continuation of the policy pursued hitherto. Had that policy brought prosperity in the slightest degree to the country, I could have understood the Government continuing it, but every speaker from the Conservative benches so far has agreed that things are no better; some of them have gone as far as to say that they are worse than when the Government brought in their first King's Speech. Yet the Government say, "Though our policy has not succeeded and prosperity has not come, we are going to continue it." Although it would be difficult to come to Parliament with a King's Speech that admitted failure, it would be far more courageous if the Government had come forward and said, "We thought that this policy would have brought prosperity. We thought that the various industries in the last 15 months would have shown some indication of prosperity, but since we have been proved by events to be wrong, we are prepared to change our policy. We are a National Government. We told the electorate that if our policy proved a failure, we would change it and try everything on earth." It would have shown more wisdom and courage if they had come forward and said, "We are sorry; the consequences which we expected to follow the policy that we pursued have not fructified, and therefore we shall change the policy for some other policy which we think may bring prosperity."

It is all very well to say that we have balanced the Budget. The Government did balance the Budget, but by what methods? It is easy to balance the Budget by, as my hon. Friend the Member for Bridgeton said, making an attack on defenceless millions. The only right way to balance the Budget is by balancing the burdens on the right shoulders, by distributing suffering in the right degree, and not by a method which increases the suffering of the poorest without increasing to any large extent the suffering of any other class.

Mr. PIKE

Does the hon. Member suggest that the balancing of the Budget has been at the expense of the unemployed alone?

Mr. MACDONALD

We submit that the poorest section of the nation has had to make by far too great a contribution to the balancing of the Budget. Every Member of this party believes that the Budget could have been balanced—we believe in balancing the Budget—in a far more humane way than the last Budget was balanced. Our complaint is not against the balancing of the Budget; it is against the method adopted to balance it. I am prepared, along with the rest of my colleagues, to pay tribute to the Conversion Loan, but I am concerned as to the use that will be made of the money saved. That will determine whether the conversion will be a good thing for the country or not.

We have been asked to say what we mean by Socialism in relation to industrial life. To be frank, it means in she mining community nationalisation of the mining industry. That is Socialism to us. We believe that no miner should be asked to run the risks or face the dangers of a miner's life for the purpose of providing profit and financial gain for anybody. We believe that the only justification for asking any man to work in the mining industry is that his work is necessary to provide the fuel needs of the nation. It is entirely wrong to allow any man or group of men to say that they will sink a mine at some suitable spot to get coal because they think that they can make private profit out of it. Socialism means a change in the motive of industrial and commercial activity from the motive of private financial gain to the motive of public service and the wealth of the nation. It may be said that that has been tried and failed. I do not know where it has failed.

Mr. LYONS

What about the "Daily Herald"? Does the hon. Member remember that?

Mr. MACDONALD

I cannot go into that. I often hear Russia referred to as an instance of failure. The right hon. Member for Wakefield (Mr. Greenwood) on Friday contrasted the position in Russia before the War under the Tsarist regime and to-day. He was challenged by the First Commissioner of Works to tell the House how the Donetz miners were paid before the War and now. Whatever the answer to that question might be, it would not prove the failure of Socialism in Russia. Russia to-day is in a, far better position than Russia would have been had she not made the changes that she did make. The Russian people are on the way that will lead to prosperity, whereas under the Tsarist regime they were on the way that would never have led to prosperity. There may he suffering in Russia. I think that there is, and I think that the standard of life in Russia is not as good as ours, but that is no argument against Socialism. We must realise that there is a vast difference between the position in Russia and the position in Great Britain. No one knows better than the Noble Lord the Member for Harborough that we start off with tremendous advantages as against those with which Russia started. Though it may be the greatest country in the world, it is the country which has faced the greatest obstacles and difficulties.

We shall never solve the problem of poverty and never bring prosperity to the vast masses of this country under Capitalism. We may be wrong, but we as a party stand for a change from the present system of producing for private profit. We say that that system, no matter how altered or how reorganized, cannot bring to the vast masses what a reorganised system on the lines of Socialism will bring. We look upon Socialism as the highest form of reorganisation. We may be told that if Great Britain adopted this change we should have the rest of the countries of the world opposing us, and that consequently we should not be able to do it. That is quite possible. I do not think that it will be an easy task. The kinship of the capitalists of the world is far stronger than any blood kinship that exists. The capitalists of the rest of the world are nearer in relation to the capitalists of this country than the workers of this country are to the owning classes. The capitalists of every country will do all they can to prevent the establishment of Socialism in this country. It will be a terrific task. They have done it for 15 years in Russia. In spite of the efforts of the whole world to prevent her doing it, Russia has got where she has.

The rest of the world may sabotage this country. I was surprised to hear the hon. Member for North Bristol (Mr. Bernays) tell us that if a Government, sent by a majority from the country, tried to carry out as part of their mandate the nationalisation of the banks, the banks would take such action that there would be no banks in three days. It is all right issuing threats. If we on this side said that if the Government attempted a certain piece of legislation we should organise a general strike, I know what we should hear, and I know that the Conservative party would not accept that very quietly. When I hear Liberal Members telling us that when the people of this country have in an election declared that they want this, that or the other doing, that somebody, somewhere, is not—

Mr. CURRY

My hon. Friend is not present at the moment, but I think he qualified that statement by saying "if at the present time" we were attempting to do it. He was criticising the Amendment as a contribution to the handling of the present situation—

Mr. MACDONALD

I agree, if it is at the present time.

Mr. CURRY

—but you are trying to build up a case by saying that is to happen after an election in which the considered opinion of the people has been expressed, in reply to a statement which was admittedly limited to the present moment.

Mr. MACDONALD

I appreciate the desire of the hon. Member to safeguard his friend. If his friend meant if we, as 46 Members tried to do it, then I agree that we could not do it.

Mr. CURRY

I do not know what he meant. I was only telling you what he said.

Mr. MACDONALD

I took it he meant that if we were sitting opposite with a majority of this House behind us, sent here by a majority in the country, that we could not do what we want as regards the nationalisation of the banks. I take it for granted that this is what he meant. No power in this country ought to be supported by any political party in an effort to withstand the declared will of the people, We know that we are up against a terrible task, we know that it is going to take scores of years, and that not many of those now in the House will be living when a majority in this House says, "We want Socialism." We know the difficult task confronting us, but when the majority do say that, surely everyone ought to see that the will of the majority is carried through.

The choice before the House and the country is either the building up of capitalism or its supersession—I should say, the restoration of capital or its super-session. Let me say, quite frankly, that if this Government will so restore capitalism as to bring prosperity to these shores and to bring prosperity into every home, I shall say that my conception of capitalism has been proved wrong. I want to see every household in this country living the type of life they are entitled to live. I believe that only the super-session of the capitalist system will bring that about, but if it can be shown that there is no need of that super-session, and that a restoration of the capitalist system will do it, there is no one on this side who will have any complaint to make.

6.49 p.m.

Mr. HOROBIN

There is one point in the speech of the lion. Member for Ince (Mr. G. Macdonald) on which I think it might be worth while to make an obvious comment at once. Hon. and right hon. Gentlemen on the Labour benches seem incapable of understanding what to some of us is a very obvious fact, that the banks are not some mysterious, Machiavellian people sitting somewhere in Lombard Street hatch ing plots, but people handling, not their own money but other people's— possibly some of the hon. Member's, and certainly a little of mine. When an hon. Member opposite made the very obvious point that the mere fear of a Measure to nationalise the banks might produce a crisis, he cannot be answered by the hon. Member for Ince endeavouring to treat that observation as a threat by some mysterious financiers trying to set aside the will of the majority of the people. I do not care two pins what the majority of the people of this country think ought to be done with my money because if there is the slightest chance of the majority of the people getting my money it is going to be in France to-morrow. If that is unpatriotic, then I am certainly unpatriotic. It is no answer to say that the will of the people must prevail. I have not the slightest intention that the will of the people shall prevail with my money. I may as well be frank.

I will deal next with one or two observations which do not arise immediately out of the speech to which we have just listened. What, in substance, is the meaning of this Amendment? It is to censure His Majesty's Government because they hold, by implication, the view that the troubles from which the country and the world are suffering to-day are not intrinsic and inevitable in the system of private enterprise, but are due to certain definite, limited, particular and shattering blows which that system has undergone. The Government hold that only by handling, one after the other, this series of great difficulties by methods appropriate to each one can those difficulties be overcome and can the march of progress in the economic sphere be resumed. I say advisedly "be resumed." We have had two references, which I hesitate to characterise as disingenuous, but which can only be due to inexcusably hasty reading, to the Survey of East London. I submit to the House that it is simply not fair of hon. and right hon. Gentlemen on the Labour benches or on the Liberal benches to treat that report primarily as a condemnation of the present situation. One thing which emerges from it is that to-day, after 10 years of the most appalling depression, there is less real hardship in East London than there was before the War, when we were at the top of one of our trade booms. No one would wish to minimise the condi- tions which prevail in East London, and are still more apparent in some other parts of the country, but I challenge anyone who knows East London, as I claim to do, who knows the realities in East London, to deny the fact that with all its faults, and under all the difficulties with which it has had to deal, the system of private enterprise has caused a steady and quite extraordinary improvement in the conditions of those people.

What are some of those difficulties, and how have we attempted to deal with them? Two attempts are along the lines of endeavouring to set up certain guiding principles within which private enterprise may move, such, for example, as the Pig Commission Report. I hope that others will follow. There are indications that the reorganisation of the coal industry is getting under way, and some of us hope and believe that, the reorganisation of other industries, such as the cotton industry, may shortly be taken in hand. Another of those difficulties to which I would like to refer with some discretion is one which is in all our minds at the moment in the talk on War debts. Nobody will deny that that is a grave trouble overhanging us, and though it is difficult to see how the poverty which that uncertainty causes could be cured by any Socialistic measures, I believe I shall have the whole House with me in saying that the manner in which that problem is dealt with may easily either make or mar the general policy of the country in the handling of the economic difficulties which I am endeavouring to describe. I do not propose to go into that topic in any detail, and I will make only this point: Whatever may be the exact legal position as to the payment—if any payment is about to be made—as between capital and interest, I believe that all of us in this House are perfectly sure in our hearts that, in fact, this is a capital payment. If it is any part of the winding up of an impossible situation, there is everything to be said for making that payment in as obviously a capital form as can be done.

I would like to lend my tiny support to the view which has been expressed that if—and I express no opinion upon it—a payment is to be made in about a fortnight's time, it should be made in gold. I say that without in the least wishing at this stage—because it would be inappropriate and possibly out of order—to go into the question of any eventual return to the Gold Standard; but the fact remains that if we cannot increase our imports into the United States, and they will not, I imagine, look lightly on any efforts to put an embargo on their imports to us, in the long run those payments must be made in gold, and the sooner that is brought home to everyone concerned the better. I beg of the Government that we should not lend ourselves to another five or 10 years of make-believe over War debts similar to that over Reparations, which has ruined the country and ruined the world. There is no room in this matter for sentiment. There is no room for putting our hands on our breasts and talking high-falutin nonsense on what we know is, through no action of our own, an ultimately impossible business; and if we can ensure that these payments are treated as a final winding up of an impossible situation, and paid in gold out of the Issue Department of the Bank of England by' an increase of the fiduciary issue, it will be an almost essential and highly desirable way of dealing with the matter. I beg of the Government, with all the earnestness in my power—and here, again, I believe I shall have opinion in all parts of the House behind me—that at no cost should we lend our ears to any suggestion of payment in English currency in blocked accounts, or any other silly-clever device for putting off the evil day. At no cost must we build up a bogus position in sterling similar to the bogus mark position which has been the curse of trade in Central Europe. Let any payment that has to be made be made. With that I leave that important subject.

A great deal has been said in the course of this and other Debates on the financial aspects of the Government's policy and on alleged financial evils from which Socialism is the only escape. I think the effect of a great deal of what has been said along these lines has been mainly to confuse the issue. We have heard much of the mystery of finance. It is as if someone were to say "the calculus of variations is a very difficult branch of mathematics, and therefore I am quite at liberty to pretend that two and two make six." No one will deny that there are a great many branches of finance which are, in all conscience, difficult; but there are also some simple branches of finance which still seem to be entirely beyond the understanding of some hon. Members on the Labour benches. We continually have the Government browbeaten with the assertion that there is an enormous amount of money available which, owing to some lack of decision on their part, is not being used. We hear of hundreds of millions being subscribed in a few hours. I almost apologise for taking up the time of the House in pointing it out, but it seems to be necessary, that it is ridiculous to talk of hundreds of millions lying idle in the City of London and not being used. Hon. Members who say that appear to be incapable of appreciating the very obvious difference between a conversion operation undertaken because you already owe a man a good deal of money and find you can borrow it cheaper from somebody else, and running further into debt. There is all the difference in the world between a successful conversion which still leaves you owing some thousands of millions at 3½ per cent. and running further into debt at 3 per cent., 2½ per cent. or 2 per cent., and then endeavouring to earn the interest. It is a clear gain to us to owe a thousand or two millions at 3½ per cent. when we previously owed it at 5 per cent. It would not be a clear gain to try to borrow another £50,000,000 at 2 per cent. if we found we could not use it in any way to earn that interest.

We are also being continually urged to make an effort similar to the War effort. Those who say that never seem to remember that it was the War effort which has left us with this vast burden. They are always asking us what we propose to do to cut the trammels of this usurious interest. At the same time they are rushing around to find someone who will lend them some more money. The way to get into the hands of the usurers is borrowing money for uses which will not pay the interest charges. There is another simple point which comes not only from the Labour benches, but from the Liberal benches as well. We are continually being told that there are vast sums of money which should be spent on housing. Some people seem to be not only incapable of distinguishing between £1,000,000,000 and £10,000,000, but seem to be incapable of understanding the difference between money lent to be locked up for 20 years, and money which must be repaid, if necessary, on three months' bills. You cannot build houses on three months' bills, and the money of which there is a glut is not long-term capital seeking investment, but money which is the working capital of industry and which is normally borrowed from the bank or a three or six months' commercial basis.

It gives me a certain amount of sardonic amusement to hear some hon. Members criticising the delicate, infinitely differentiated and complex financial machinery of the City for not doing things perfectly, and then showing by proposals of that sort that if they were company promoters, and the Attorney-General did not get them, their unfortunate shareholders would be wise to take their money out at the earliest possible moment. It is not true that there are sums for permanent investment running up to £ 500,000,000 lying idle. Although I am sorry to disillusion Members, there are not available sums of that description. It should hardly be necessary to say in this House that the total amount of long-term investment is probably in one year— including all depreciation and every time anyone paints a factory—only about that figure.

We are treated to ingenious schemes for investment and the improvement of the distribution of capital, but when they are all boiled down it means locking up imaginary sums by borrowing them short and trusting to luck. It never seems to enter the heads of some of these gentlemen that a Government loan may fail. That, of course, we may take as a great tribute to the Government, but it is not to be assumed that if the Government embarked upon such proposals as those they would in fact get the money. I think it is certain that if the Government, let alone the Members of the Labour party, asked for £ 500,000,000, or indeed £ 200,000,000, to be spent on proposals such as these they would not get the money. That is not due to the machinations of Mr. Montagu Norman. It would be that the bluff had been called, just as in Germany, with relation to Reparations the bluff has been called. The Reparations system continued for some years because whenever some one wanted to get out of German funds someone else was willing to come in and "hold the baby," until finally, the willing nursemaids have burned their fingers, and the whole scheme fell to the ground. And so the bluff of Government borrowing, for purposes that would not pay a dividend, but had to be financed out of the rates and taxes, paying by feeding the dog on a bit of its own tail, has been called. I venture to prophesy that no Government, or municipality, will much longer be able to go to the public and say, "Lend me large sums of money for estimable but unproductive purposes. It is true they will not pay dividends, but we will call round after Christmas, say on 1st January, and you will find the bill, a buff paper, Schedule D." That bluff has been called.

There is another point in connection with loans on which I would like to say a few words to the Government. Even supposing, on a very small scale, that it were to be the case that it would be wise to endeavour to increase the purchasing power of this country by any additional Government work, I do put it to the House that it would be ridiculous to envisage such a policy as a cure for present evils, as long as we are endeavouring to pay off money at the same time. It is ludicrous to go to the country and say, "I have a Sinking Fund to pay off debt, and I am going to borrow money at the same time." Unless and until the Government come to the conclusion that it would be wise to remit taxation by abolishing the Sinking Fund, all such proposals would be beside the mark. As to whether it would be wise, is a point on which I would not like to express an opinion. Great knowledge of the psychology of investors is needed.

I would like to make one general observation in conclusion. I believe it to be possible that a Communist organisation of society may work. It is certainly too early to say it will not. We have yet to see how the Russian experiment works out. We know that the system of private enterprise will work, not perfectly, but it does work. There is one thing which will not work, and I congratulate the Government on turning a deaf ear to it. The one thing which will not work I would like to christen "Keynes-Hatry Capitalism." A society which depends for its whole motive power on private enterprise, in its accumulation of wealth, on individual foresight; a society whose whole spirit and structure are impregnated with the wills and desires of private individuals, but which harbours within itself a whole hoard of official and unofficial burglars who descend at intervals and transmit the proceeds into their own pockets or into those of their constituents—that, once and for all has broken down. Let us have no more alternating spasms of improvised Socialism and discouraged capitalism. For the first time for some years we are now able to assist in curing depression in the only way possible within our system: by keeping confidence alive, by keeping money cheap and by keeping quiet. The Bank of England is in a position to do two of these things, and the House is in a position to do the third. I hope and pray that the Government will continue as they have usefully begun; that they will hold a ring and make it easier for industry to save itself; that they will not embark upon dangerous experiments which involve taking away money from those who, rightly or wrongly, own it and using it in pleasant confections of their own. If they continue patiently and courageously with the policy on which they have set out we may assuredly look forward with confidence not to any hurried millennium—these things do not happen in this sad world—but to the steady absorption of the unemployed into their own occupations, or into new occupations which grow up as confidence returns. Along these lines there is hope, but if that hope should turn into disillusionment I venture to say there will be no prospect of a solution along the lines of the Labour party. We shall have to turn, with whatever qualms of conscience we may have, to the Communists who sit below me.

7.11 p.m.

Captain CAZALET

The lucid speech to which we have just listened has dealt with many of the obvious and many of the subtle arguments put forward in the Debate on Friday and to-day in support of part of this Amendment. The right hon. Gentleman the Leader of the Opposition said to-day, in a very restrained speech, that the Government were in the dock. In fact, we are discussing to-day a Vote of Censure on the Government. The Amendment includes in its final sentence the suggestion that Socialism is the proper cure for all the troubles with which we are faced to-day. I think it is a poor argument in support of the National Government to turn to the Opposition and say, "What did you do during your tenure of office?" Nevertheless the gloomy fact remains that after two years of Socialism, if not with a complete majority, at least with a sympathetic majority in this House, the country decided, by an overwhelming majority, that if there was one thing it did not want it was a continuance of the Socialist Government or Socialist Measures. I think the right hon. Gentleman has forgotten that whatever may have been good in the Socialist programme has long ago been adopted, and made practicable, by the Conservative party.

We have heard a great deal to-day about the failures of Capitalism. Whatever may be the failures of Capitalism, one result is certain—the general standard of life of the mass of the people of this country is better, higher, and more comfortable than ever before, and probably is better than that enjoyed by any other people in the world. It is infinitely better than that enjoyed by the poor, unfortunate Russian people under the Soviet regime. I would add a few short sentences in defence of a position which, I believe, is a perfectly defensible one. The Government have been in office just over a year, and during that time I happen to have travelled over various parts of the world, in foreign countries, in the Dominions and in the Colonies, and never has the prestige of this country stood higher than at the present time, nor has there ever been paid to any Government such a degree of respect and esteem as that paid to His Majesty's present Government. I believe that this is founded upon very justifiable reasons. I believe that we have very definite achievements to our credit in finance and in economics—in balancing our budget and in attempting to balance the trade position, and in the recent conversion. Those have played no small part in restoring the prestige of this country.

It is obvious that a permanent cure for unemployment must be very largely dependent upon world conditions. As we are not able to control world conditions, we have been forced to take such measures as we can, and as lie within our power, to safeguard our own trade and the employment of our own people. The two principal steps we have taken to do that are the introduction of the tariff system and the Ottawa Agreements. I regard both those measures as merely preliminary steps in the reorganisation and replanning of our whole industrial system. I agree very heartily with what was said by the Noble Lord the Member for Hastings (Lord E. Percy) last Friday, that for whatever steps the Government might find it necessary to effect this replanning of our industry, however drastic and radical those steps may appear to be, and however much they offend against preconceived views of political parties in this country, there is a majority both in this House and in the country that w ill support them. Particularly I believe that this may be so in dealing with the problem of slum clearance which was discussed at some length last Friday.

In one year this country has been changed from a Free Trade country to a tariff country, and some measure of praise should be given not only to the Government but to those officials of the Government who have effected this revolution in our national life with a maximum amount of courtesy and efficiency and a minimum amount of irritation to those engaged in industry and export trade. Nothing has amazed the foreigner so much as the fact that, although we have in this House an overwhelming majority in favour of a tariff system, we have been content to put the decisions as to tariffs into the hands of an impartial and non-political body, the Import Duties Advisory Committee. Long may they remain so, is, I believe, the wish of the majority of the supporters of the National Government. Some people are inclined to dispute and to deny that there have been any advantages from the policy that His Majesty's Government have pursued. While the trade of every other country has been diminishing and in some cases has almost disappeared, this country has held its own, and in some directions has even extended its operations.

As a result of the Ottawa Agreements, orders for textiles from South Africa, for steel from Canada and for chemicals from the Dominions and Colonies have come into this country, and, though they may be matters of no great moment, they definitely will give employment to a certain number of our people through the coming winter. Those engaged in industries as a result of those orders will not be among those who would support the Amendment moved by the Opposition to-night. I have inquired into figures, and I find that, for the first 10 months of this year, England has risen from third place to first place again as the greatest exporter of manufactured goods of the world. The facts and figures justify my contention that, in the chaos in which the world is to-day, the policy of the National Government has been responsible for the fact that England has held her own. What better example could we give to the World Economic Conference that we trust will meet in the early part of next year than what has taken place at Ottawa, where the representatives of five different countries, many of whom have antagonistic trade interests, sat down together and made individual sacrifices for the mutual and general benefit.

Anyone who has been in the United States of America must have noticed the latent irritation against this country, not unmixed with pity and contempt for old England. The whole of that attitude has changed, not only in the financial and political circles in the East but throughout the great Middle West. Everywhere is unqualified admiration for what this Government has done during the past 12 months, not unmixed with envy, because the people, in America and in many other countries, realise that if they are going to put their own houses in order they will have to do the very same thing that this country has done so successfully.

I want to say a word or two in regard to the question which is uppermost in our minds, namely, the debt situation. I endorse every word of what was said by the hon. Member for Central Southwark (Mr. Horobin) both as to the desirability, if necessary, for payment, without any argument or discussion, and in gold from the Issue Department of the Bank of England. I recognise that it is difficult, and almost impossible, to understand the attitude of the public in America towards this question, which has become inextricably mixed up, first of all, with the question of Disarmament, and, secondly, with the purely domestic question of the payment of bonus to the war veterans. I was in America a few weeks ago, during the recent election, and in almost every article that dealt with the subject of War Debts, the argument used was that, if the Government of the United States is so well off that it can afford to forgive foreign countries their debts to the tune of some 14 billiards of dollars, then it can surely afford to pay the one or two billiard dollars, which it has definitely promised and legislated to pay, to the war veterans of America. I hope that nothing will be done to add permanently to the difficulties that will prevent co-operation between this country and the United States of America, because I believe that upon that, and upon that alone, can be built the surest foundation for the solution of nearly all the world problems to-day.

I believe that the view supported by many prominent persons in the United States is that a final settlement of the War Debt problem lies very much along the same lines as the final settlement of the Reparations problem, namely, by one definite cash payment, which will be well within the means of the debtor countries, and that that, once and for all, will settle the whole question. If, four or five years ago, you had asked the public of this country to forgo the whole of Reparations, you would have been experiencing the same public opinion against you as is now found in the United States. We have gradually learned that large transferences of sums of money from one country to another cannot be effected without disrupting, not only the exchanges, but the trade, of the world. I believe that the public opinion of America will very soon follow the public opinion of this country in realising that these transactions are impossible. When they do that, I do not think we shall be far from a satisfactory solution of the whole War Debt problem.

There is another matter on which I want to say a word or two. It is obvious that a satisfactory solution of the Disarmament problem would have a tremendous influence on the conditions of world trade. The right hon. Member for Epping (Mr. Churchill) told us the other day in his very comprehensive and interesting speech that if we were to look for a satisfactory solution to the Disarmament problem we must do something to remove obstacles in Europe which are to-day promoting, or may in future promote, war. I want to refer to the Polish corridor. It may seem that the question of the Polish corridor is a long way from the Disarmament problem, but, if you trace it through, you always come back to the reason for the unwillingness of France to disarm and the attitude that Germany takes up. You cannot ignore the thorny subject of the Polish corridor. As a result of it, there is no commercial treaty between Poland and Germany, and practically no trade, over the boundary of those two vast countries.

The argument has been: "Leave it alone; do not raise the question to-day. It has existed for some 12 or 13 years, and it will probably solve itself." That has been the argument used, but the question does not solve itself. Feeling to-day is more intense, and worse than it has ever been in the past. The Polish corridor has become an absolute obsession with both nations. I know that there are other danger spots in Europe, but I do not believe that there are any which are se combustible and inflammable. A satisfactory solution of the Disarmament problem is inexplicably bound up with the solution of the problem of the Polish corridor. I believe that it would have advantages for both Poles and Germans if they were to come to a more reasonable point of view upon this very thorny problem. I am convinced that, until the problem is faced and met, there will never be a satisfactory solution of the Disarmament problem in Europe, and that you will not overcome one of the chief obstacles to prosperity and to an increase of trade in Europe and the world.

I represent an entirely agricultural constituency. I have long been one of those who believe that you will never reestablish prosperity until you have a more equal balance in the economy of the country between the town and countryside. I believe that the solution of this problem is bound up very largely with the question of permanent unemployment to which the Prime Minister referred last week. Low prices and high taxation have spelt ruin for the countryside. I believe that the foundation of those twin pillars, marketing and protection, upon which a successful agricultural industry must stand, have been well and truly laid by the former and the present Minister of Agriculture. More has been done in the last 12 months than in the last half-century. I am convinced that the farmers will play their part in the future in reorganising their own industry, just as I am convinced that the Government will not cease to continue to explore every avenue, whether of tariffs, quotas or prohibition, in order to usher in a new era of agriculture, and to restore agriculture to its pristine and rightful position as the greatest industry in this country.

No aspect of the Government's activity has been more successful than that of conversion. I have said that low prices and high taxation have spoilt the life of the countryside. I believe that the Government are dealing with the former, and I hope and trust that, as a result of the successful conversion scheme, the Chancellor of the Exchequer will view, may I say with sympathy, the case of the overburdened taxpayer at the first available opportunity, namely, the next Budget. We have often been told by Members of the Government that public works have proved to be of little permanent value in dealing with this question of unemployment, and I cannot help thinking that a more satisfactory result would have accrued by leaving a greater proportion of the money in the pockets of those who have made it, and who, in my opinion, are best able to use it.

We have been twitted and taunted by right hon. and hon. Members of the Opposition as to the future. Mournful and gloomy prophecies have been made as to what would happen as the result of our tariff proposals and of the Ottawa Agreements. But, surely, the crucial test of the whole mater is this: If in five years' time these tariffs and the Ottawa Agreements have done no good, if the experiment proves to have failed, then I believe that we on these benches will be the first to admit it, and to say that some other means must be found of dealing with the situation. If, on the other hand, at the end of five years, employment has improved in this country, if the standard of living of the people has not only been maintained but improved, and based on more permanent conditions than ever before, if there is an increase in prosperity in the Dominions, by which alone the problem of emigration can be solved, and if, in consequence, there is developed a greater flow of inter-Imperial trade—if these are the results, as I confidently believe they will be, I venture to prophesy that no future Government, either in this country or in the Dominions, will contemplate abolishing, or desire to abolish, the tariffs and agreements, but rather will they bless that first National Government which had the courage, the vision and the determination to put them upon the Statute Book.

7.32 p.m.

Major MILNER

During the last few days I have had, not only some little time in which to study the Gracious Speech from the Throne, but also the opportunity of listening to or reading the speeches of a good many Members of this House. As regards the King's Speech, on this occasion the only impression that it gave me was that it was largely made up of a series of pious hopes—that, like the road to another place, it was to a large extent paved with good intentions. If the matter were not so serious, I would say that the Speech reminded me of a man of whom I heard the other day, who wrote a letter to his wife saying: Dear Jane—I am sending you £1, but not this week. That is the impression which the Speech put into the mouth of His Gracious Majesty the King gave to me—that it was marked by pious hopes and good intentions, or, as the Foreign Secretary would have said, jam yesterday, jam to-morrow, but no jam to-day. Judging from what has been said in this Debate, it seems clear, as far as the supporters of the Government are concerned, that one thing that they are doing—and about the only thing—is whistling in order to keep their spirits up. The impression which the majority of their speeches give me is that they are made with a view to endeavouring to justify the, as we think, inadequate steps of the Government in the present situation of this country.

On the very first day of the Debate we had the right hon. Gentleman the Member for Epping (Mr. Churchill) criticising the Government on every aspect of its policy except in regard to India. He told us that unemployment was worse, that taxation was higher, that obstructions to trade were greater, that the price of gold was higher than it had ever been for a long time past; and he might have added with complete justification that poverty and destitution were more widespread, that the international situation was worse, that the threat of war was coming nearer and nearer, and that the artificial feeling of confidence which was undoubtedly engendered some 12 months ago has given place in many quarters to a feeling of dread and almost of despair. It is remarkable that a year ago the Address to the Throne was moved most eloquently and capably by two of the youngest Members of this House. They told us, as did other speakers, some of them on the Government Front Bench, that youth was to be at the helm, that enterprise and action were to be the watchwords of the National Government, and so on. Last Tuesday, the Address was moved, equally capably and eloquently, by two middle-aged supporters of the Government, who were a good deal more sombre and less confident in their terms of approval. Next Session, if the present Government be in office—as to which there seems to be considerable doubt in some quarters—I anticipate that the Address will be movd by two septuagenarian supporters of the Government, and I tremble to think of the doleful tones in which they may speak on that occasion.

I submit to the House that no real progress has been made, unless it be, as the Irishman said, in a backward direction. A year ago the Prime Minister told us a somewhat similar story to that which he told the House a few days ago. There was the currency problem, he said, there was the credit problem, and every consideration would be borne in mind. Figures were being prepared, plans were in preparation, the Government were getting in touch with other nations, and so on and so forth. Last Tuesday, the Prime Minister said almost the same-thing. It is true that he discovered, apparently, for the first time, what I imagine most people had known for many years, namely, that unemployment in this country had been for a long time a very persistent and almost a permanent problem, but he went on to say, as he said a year ago in almost the same words, that there was to be a council of war, that they were going to plan, to consult, to propose, and then there was to be a strenuous Session. What we are going to do in this strenuous Session no one seems to know, and the Government least of all, unless it be, as many in this House, whether we agree or disagree, must suspect, that more economies are going to be inflicted, that there is going to be a greater cutting down of the public services, that housing is to be cut down, that schools are to be closed; and certainly it seems to me that, if the proposals with regard to the Rent Restrictions Act are to be put into force, there is likely to be an increase of rents as a result of the legislation of this Government.

It is amazing that the Government cannot yet see the vicious circle which they have set up, resulting in greater inability to purchase on the part of large masses of the people, and consequent greater unemployment in every industry. The Government issue instructions to local authorities to economise, men are discharged, they go either to the Employment Exchange or to the public assistance committee, and the only difference in the position is that, instead of a public Department paying out public money for productive work, other public Departments pay out almost as much for wholly unproductive work, while, as we have been told more than once from the Government side, the great majority of the unemployed simply rot physically and morally.

There was one constructive note, or ray of hope, in the Prime Minister's speech. He did say, "We will encourage every normal expansion of municipal enterprise." As one who served for some years on a city council, I was very much impressed by those words; but do the Government mean what the Prime Minister says, or do they not? If they do, then, as has been said in this House on many occasions, there is the work to be done, there are men to do it, and there is the cheap money with which to do it. In my own city of Leeds, to give one instance, under the present Conservative majority on the Leeds City Council not one tender has been let, for the erection of houses, and not a single slum clearance scheme has been embarked upon, during the present year. Leeds has, perhaps, an unenviable reputation in regard to its great numbers of back-to-back houses. That is a reputation which is not altogether deserved, because many of the more modern and better type of back-to-back houses have been erected about which there can be no complaint whatever; but there are some 33,000—many, I regret to say, in my own constituency—of whit a large proportion are not fit for habitation at all and ought to be demolished without delay. They are crowded and insanitary, ill-planned, rat-ridden in many cases, dangerous and unhealthy, and they have other defects which I should be ashamed to confess to the House. They number in many instances 70 or 80 to the acre, many of them have only one bedroom, and overcrowding and sub-letting are of necessity, under these conditions, rife; and I need hardly say that, in many of the streets in which these houses have been erected, the sunlight very rarely shines.

The result of that state of affairs is that in these particular areas of the city, many of them in my own constituency, the death rate is twice as high as in other more favoured parts of the City of Leeds. Why should my constituents have only one-half the expectation of life that those who live in other more favoured parts of the city have? It is not the fault of my constituents; it is the fault of the economic or social system under which they live, and of the conditions many years ago when these houses were built. In February last, a scheme was submitted to the Ministry of Health by the Leeds City Council to deal with many of these slum areas, but, if my information is correct, nothing more has been done, and, beyond a bare promise to erect a couple of hundred houses in the city, nothing seems likely to be done unless some action—and pretty determined action—is taken. Let me say, in fairness to the officials of the Corporation of the City of Leeds, that it is not their fault. On many occasions they have represented the state of affairs to those in power in the city.

What are the Government going to do to remedy the present state of affairs, with millions out of work, work to be done and money to do it with? Are they prepared to implement what the Prime Minister said or are they not? It is true that the work to which I am referring is, perhaps, more than a normal expansion of municipal enterprise. What is required is a courageous, bold and determined attack on the problem, whereby houses would be erected and slums done away with, not by the dozen or the hundred, but by the thousand. By the Housing Act of 1930, one of the most beneficent Measures ever passed if it were carried into effect, the Government are empowered, in the case of local authorities neglecting their duties and their powers, to enter upon the scene of action and carry out slum clearance schemes. If the Leeds City Council does not carry the work into effect, there is much greater justification for the Government taking it in hand themselves than for sending their Commissioners, merely to save money, to Rotherham or Durham or any other part of the country.

In our view we are engaged in a war. During the Great War, in order to kill, the entire nation was mobilised. They cut across every private interest and controlled and regulated almost every action of every private individual, and they certainly commandeered the land, the factories, and even the lives of the people, because, as many of us thought, that action was for the common good. If the nation can be organised for war, why can it not be similarly organised in these days of peace? It is because in the Gracious Speech I can find no glimmer of an intention on the part of the Government so to organise the resources of the country that I shall support the Amendment.

7.48 p.m.

Mr. WISE

I think, if there had been any wavering supporters on the Government benches, the speeches that have been delivered in support of the Amendment would have strengthened their shaking knees. They have offered us, as far as I can see, nothing more than the same policies that brought us to the verge of ruin last year. There is very little that can be controverted in the speeches of hon. Members opposite because there is nothing to controvert. On the other hand, I think on this side we have been a little prone to do what some hon. Members opposite have accused us of doing, and that is to pat ourselves on the back somewhat unduly. The problem still exists, as it existed last year, and, although certain steps have been taken to remedy it, further steps could have been taken even in the past year. We have had many speeches advocating land settlement and the drift back of the urban population to agricultural areas, but we have not yet, as far as I have heard, had any coherent suggestion as to how they are to earn a living when they get there. The difficulty can only partially be solved by a tariff system protecting the goods that they produce. The main difficulty that faces our agricultural areas is the difference between wholesale and retail prices.

Most of us feel confident that the farmer gets too little and the consumer pays too much, and the gap must be bridged in some more scientific way than is being done at present. There is nothing necessarily Socialistic about a system of monopoly, and the formation of marketing companies for the distribution of agricultural produce to the retailer would be attended with greater economy in distribution and, incidentally, with more success to the marketing company if they were given a certain form of area monopoly and were the sole purchasers of agricultural produce in their several areas. The terms on which such monopolies should be given might be that they would have to supply retailers at a fixed percentage more than they paid the producers for the goods. It would in that case be clearly in the interest of the marketing company to pay the producer as much as possible, and, in order to prevent the consumer from exploitation by the formation of any ring holding up prices, we have an obvious remedy in our existing tariffs and quotas which can be remitted at any moment in order to let in sufficient foreign goods to bring the prices down. With that safeguard, I cannot see that there is any difficulty in a series of capitalistic monopolies. They would undoubtedly be very efficient, because men working for gain work harder than if they work purely for output.

Another point which I do not think has been sufficiently stressed is the necessary increase which we must effect in purchasing power. We are suffering from a lack of purchasing power, but I do not think we have given any sufficient encouragement to the owners of purchasing power to use it. So far we have invariably collected very large sums of money from one section of the population and distributed them in some form or other, either as direct grants or as subsidies for education or building, to another. In doing that, we seem to have imagined that we are not altering the purchasing power of the country but merely putting it in different hands, but that theory takes no notice whatever of the factor of time between the collection and distribution, during which period the money collected is lying idle. Therefore, to collect large sums from one section of the population and distribute them to another is, in fact, to reduce the purchasing power of money. The best way of increasing purchasing power is to leave the money where it is and not collect it Worn the citizens into the coffers of the State.

I firmly believe that a really drastic reduction of direct taxation would cause a very considerable increase of immediate spending, and I cannot believe that there is any other way of causing such an increase. If a really drastic cut were made in the Income Tax, not a mere 6d. or a mere shilling—I think we could afford 2s.—I believe it would start consumption going from the right end. It would start it on the most expensive articles to begin with, which articles are, in fact, those that require more labour than the cheaper ones and, therefore, if a drastic cut were made, I believe the wheels of commerce inside the country would move faster than they are doing now. It is true that we cannot affect our export trade without an improvement of world conditions, but we can increase our internal consumption. Ever since we have had high direct taxation we have had growing unemployment. We have tried almost every other remedy. We have tried relief work and various schemes of one kind or another, but we have not yet tried the very simple expedient of leaving the money in the pocket of the taxpayer and hoping that he will spend it.

7.56 p.m.

Mr. CURRY

In the earlier stages of this Debate it was fashionable for hon. Members opposite to refer to the Gracious Speech as being composed merely of vague sentences, but since the Opposition have produced their official Amendment, in comparison with it the Speech becomes quite clarified, and it is the Amendment that is asked to be reduced to plain statement. I should like to congratulate the hon. Member for Ince (Mr. G. Macdonald), who attempted to define for the edification of the House the theory of Socialism. His definition, however, was very incomplete. He defined it as the nationalisation of the coal-mining industry. I represent a coal-mining division, arid I have yet to learn that that would be accepted by my constituents as anything like a complete and full definition of the theory of Socialism. The Socialists are always up against this dilemma. They seek to create a monopoly, and they cannot create a State or municipal monopoly, such as the right hon. Gentleman the Member for Wakefield (Mr. Greenwood) described, except upon the basis of compensation or purchase, and that process merely transfers the proprietor's rights in capital and reintrenches capitalism in a stronger form than it existed before. That is the one method, with the solitary exception of creating a State monopoly by a process of confiscation, and, the one being impracticable and the other merely needing to be stated to be unpopular, the Socialist party always find themselves up against that dilemma. One fact emerges from the present Debate. The official Opposition and the Government are really in agreement that we have to get down to the fundamental causes that have brought the world to its present condition.

I heard a Noble Lord tell us that we had come to this pass by Free Trade, and that if we had only refrained from developing our industries to the extent required to capitalise industry in our own Dominions all would have been well. I have heard many criticisms of Free Trade in my time, but I have never before heard it criticised by an Imperialist on the ground that you have been enabled by it to develop your Imperial resources. The Government and the Opposition are both seeking to get down to fundamental causes. I would say this to my hon. Friends on the opposite benches. I may be wrong in my estimate of them, but I have mixed fairly freely among their supporters, and I do not think that they care very much about Socialism, or, at all events, their desire for Socialism is as nothing compared with their intense desire to uplift the great masses of the people of this country.

The Government, in framing the Gracious Speech from the Throne, have indicated that they want to get down to fundamental causes and want to have an economic conference. The Economic Conference is to meet at some time next year, and, I suppose it will drag on its weary way through weeks and months. When are we likely to get any result from such a conference? On a modest estimate, we cannot get it for the next two years. If you take the other alternative of setting up Socialism, if you pursue the policy which the hon. Member for Ince invites us to do when he says "All this effort is a failure, let us take some short cut to the Socialist State," we could not get many practical results within the next few years. I would direct attention to the fact that, in whichever direction we decide to go, we are not likely to get practical results within the next few years. What is to happen in the meantime? To-day, when all parties are trying to get down to the fundamental causes, we have 3,000,000 people unemployed, and all sorts of undesirable social conditions, which, we are all agreed, should be removed. The only thing about which we are disturbed or about which we have any difference of opinion is as to whether it is to be tomorrow, next week or next year.

As sane men and women, we can see in various parts of the country many things in our social conditions which we should like to eliminate. These conditions are most acute in certain areas of the country which we have come to call distressed areas. I have the honour to represent what is the most distressed area in the distressed county of Durham. In that Division alone 63 per cent. of the insurable population is out of work, and, spread over the whole of the county, 42 per cent. of that population is out of work. When people talk of unemployment and refer to these 3,000,000 people, the great majority seem to overlook the fact that unemployment is not new to half of this country, and that we in the distressed areas, in the North and West of this Island, have suffered unemployment and distress for the last 10 or 12 years. Before the crisis of last year, during the first eight years after the War, unemployment in this country was almost steady at about 1,250,000. The great bulk of the unemployment was then concentrated in the North and West of England, and in certain parts of Scotland. One or two parts of London were suffering from unemployment, but it is true to say that London and the southern counties have not known distress and unemployment, and do not even know it to-day, as we in the North of England have experienced it in the last 10 years. It is percolating through now, because it was not grappled with when it was confined to the five heavy industries of this country, immobile by their nature, and situated north and west of a line which could be drawn across a map of England, from Scarborough in the north-east, to Bristol in the south-west. You might say, "North and west of that line are all your heavy industries and all your unemployment, and because you are unemployed, because you have this vast proportion of population without work, you can have the great privilege of maintaining them through the operation of your rating system." We have been saddled with heavy rates, which, in face of the depression, stifled our heavy industries and made it impossible for us to carry on in competition for the trade of the world.

In 1925 the Government came to the partial rescue of industry, not in these areas alone, but all over the country, and we had the De-rating Act which gave relief of 75 per cent. of the rates. The relief was given to industry wherever it was situated, but the relative disadvantage which industry in the distressed areas was labouring under was never altered, and the migration of industry and trade—that portion of it which could migrate—was not stopped. We have a great disparity in rates. In the North of England they are 23s. and 24s. in the pound and in the South of England nothing like those amounts. I seriously impress upon the Government the conviction that our unemployment problem is not entirely unrelated to our rating problem. While it may be going too far to say that unemployment, or a portion of the unemployment, has been caused by the inequality of rates as between one district and another, I think that it is true to say that we shall never see a revival of our industry and trade until we liberate trade from this incidence of rates. The De-rating Act had the effect that it merely passed over the incidence of rates on the occupiers. A large portion of the rates are paid in respect of occupation, not in respect of production, and we have not yet rid our districts in the north of the undue incidence of rates. There are three main charges for rating services. The charge for the Poor Law or public assistance, the charge for education, and the charge for highways, which in themselves constitute a great defect in our rating system. I do not think that we shall ever get out of the troubles in which we find ourselves to-day until we have removed those three charges from the local authorities of the country and spread them equally over the country through the process of national charges.

I notice that the hon. Member for Central Southwark (Mr. Horobin) has left the Chamber. I am sorry, because I wish to say a few words with regard to the contemptuous ideas which he seems to have of anybody who suggests that you can by public enterprise find employment for labour which will be. economically sound and fruitful to the community. I resent, not so much the argument of the hon. Member for Central Southwark, as the contemptuous manner in which he seemed to regard some of us who think differently. I should have liked to have reminded him that this is no temporary problem. The Prime Minister told us that in his view something like 2,000,000 people will never again find employment by the ordinary operation of the processes in which the hon. Member for Central Southwark seems to have such great faith. We cannot overlook the fact that even if we get our industries and our trade revived we cannot hope to find employment for, or to re-absorb into useful and fruitful employment, a large number of the people who are now unemployed.

Not only must we overhaul our rating system, but we must face quickly the problem of the hours of labour in this country. If we are never again to be able to absorb the unemployed people into useful industry, it is obviously our duty to examine the problem of how to distribute the leisure which will be available for the people as a whole. It is a problem which should receive the consideration, not merely of the Government, but of the trade unions of this country. I realise that it is a matter which only needs to be mentioned for one to visualise all sorts of difficulties which will crop up. But if we cannot visualise as practical politics the shortening of the working day of the productive worker and the non-productive worker, we can, at all events, earnestly set about to shorten the period of human life to be spent in industry and in work. It is our immediate approach to the solution of the unemployment problem to narrow into as few years as possible the industrial activity. In other words, increase your school-leaving age, and reduce your pensionable age in industry. It can be done by Governmental action, and it must be done if we are to turn to real account the whole of the scientific processes of the last 60 years which have culminated in labour-saving devices to such an extent that the produce of the requirements of the world can be secured without a very great amount of human labour. We must, therefore, find some method of bringing down the pensionable age and of increasing the school-leaving age.

That is why I look upon economy at die moment in our system of education as being dangerous, to say the least. It would pay this country immensely to keep the children at school one, two or three years longer if need be, rather than have them drifting away, undisciplined, without useful work to do. You are losing all the value of the money you spend on the children in the two or three years that they remain idle. There is no more distressing spectacle in all our social problems of to-day than that with which we have all become familiar, of children growing up, leaving school and growing from adolescence into manhood and womanhood without being given an opportunity of developing the capacity to earn a livelihood. It would pay the. State over and over again to increase the facilities for education above the ages at which the children now leave school, thereby saving the young people from the lack of discipline and from the heartbreaking experience of growing up a conscious burden upon others whom they would really like to help.

When we come to the question of the reduction of the pension age, the first thing that strikes one about our pension systems of all sorts is that if we are to give pensions we ought to give adequate pensions, and if we give adequate pensions we ought to make it a condition that no person in receipt of a pension shall be used either to cheapen the ordinary rates of labour or to compete with others in the search for a livelihood. It seems to me that we have one way in which we could reduce the pension age straight away, and that is in the mining industry. The mining industry, above all industries, is one in which we should seek to shorten the period of life spent in the following of that avocation. We have in the Miners' Welfare Fund a nucleus which could be used immediately to bring down the pension age and to pay pensions in that industry at the age of 60.

The Government ought to examine seriously all these avenues in order that we may find some way of turning to useful things in life values the whole of our great progress in labour saving devices. It was never intended and it is not commonsense that if someone invents a machine which allows one man to do what four men previously did, that we should throw three men on to the scrapheap and shorten the life of the other by making his work take the pace from the machine. It is not commonsense that we should simply scrap a certain section of humanity when these things happen. Rather is it commonsense to say: "This is a labour-saving device. This will give people greater leisure. Let us spread the leisure which our scientific advance has made possible over a larger number of our people." I have tried to address myself from the beginning of my remarks to the immediate problem of finding work until these practical schemes can be given effect to, and here I come up at once against the speech of the hon. Member for Central Southwark who told the House it was foolish to think we could go on spending money and borrowing money. He said we could not borrow money for social schemes. It seems to me that that is the only way that areas such as the one I represent can look forward to the next year or two with any hope.

Both Front Benches are certain that they will find an ultimate solution of our troubles by removing fundamental causes. Hon. Members opposite say that if they could get down to the fundamental causes and set up a system of Socialism, all would be well. The Government Front Bench are equally confident that if they are given time, and after consultation with other nations, they will be able to remove the fundamental causes. Therefore I am not appealing to deaf ears, I hope, when I ask both Front Benches to address themselves to what we can do in the interval. We can only fall back upon the old system of giving grants to the local authorities, in order that they may get on with useful work required in their districts. I have in my own Division small villages which, like all villages, are surrounded by any amount of vacant land, and yet the children are playing on the roads, with not even a playground available for them. There is one village where they are very desirous of turning an old quarry into a playground for the children, seeing that they have no playground, and the children are playing on the road—a most dangerous place. If the Minister of Transport wants to cut down the tremendous fatalities which spring from modern transport one of the first things to do is to make it unnecessary for the children in towns and country villages to play about the roads.

If you borrow money, and you must borrow money, it would be possible to deal with the immediate problem, but the trouble is that people say that if grants are given the taxes will be raised to an enormous extent. That is not so, really. If you raise a loan for capital development, whether for housing or productive things, you are not losing the money and you are not putting a great burden upon the taxpayer. All that we appeal for is an examination of schemes on their merits. For goodness sake do not shut the door to the advancing of money to local authorities for the purpose of carrying out necessary public works. That is the only way in which work can be brought within the reach of many people and the only way in which hope can be brought into the hearts of people in our one-time industrial areas. I make no apology to the House for my three-fold plea—for an immediate examination and revision of our rating system, for the consideration in all its details of the cutting down of the years which a human being must spend in industry, and for the immediate provision of work in our desolated districts, by the advance of public money which should be raised by public loan. I press the plea upon the House with all the enthusiasm of which I am capable.

8.24 p.m.

Miss WARD

Several of my colleagues of the northern area have made valuable contributions to the Debate on the question which is uppermost in our minds, namely, that of unemployment. There are more than a quarter of a million people out of work in the part of the world from which I come and I must con- fess to a feeling of disappointment that the Most Gracious Speech contained no reference to constructive legislation for dealing with that problem. It must, therefore, have been a great relief to hear from the Prime Minister last week that such was the intention of the Government. I feel I should apologise to the House for not being, in the words of the Prime Minister, "able to draw on my own experience" and to know that such was the intention. I found it extraordinarily difficult to obtain entrance to this honourable House, and I was not therefore in a position adequately to interpret what for need of a better term, I will call the legal phraseology.

The problem of unemployment has been stated by so many other able advocates that I hesitate to reiterate the arguments. but as I see it in my own area there are two distinct classes of unemployed persons. In the first place, there are those who may reasonably be expected to be re-absorbed into industry, and I should like to take this opportunity of congratulating the Government on the steps they have taken to promote an industrial revival, which will, if it comes, favourably affect the people in my constituency. In the second place, there remains a very large body of unemployed who, for some time to come at any rate, must be designated as surplus labour on the industrial market, and in this respect my constituency is even worse than that of the hon. Member opposite, because in one area, Willington Quay, 84.4 per cent. of the insured population is unemployed. This is due to the permanent closing down of two shipyards under a scheme initiated by the National Shipyards Association in order to concentrate the production of our shipbuilding in the more efficient and economical yards. In this area men of the highest skill, who for years have helped to build up the reputation of Great Britain as the most proficient shipbuilding country in the world, have been thrown on to the labour market. Originally the intention was that the displaced labour should be re-absorbed into those yards which were kept open, but in the shipyard in my Division, which might reasonably have been expected to have absorbed a great proportion of that displaced labour, the unemployment figure at the moment is 46.6 per cent. of the insured population. I put in this plea, that in the rationalisation of industry the men engaged in an industry which may be closed down have an equal right to consideration as to their future, as shareholders in a company which receive compensation because their particular industry is put out of action.

I turn now to another question which I am anxious to bring to the notice of the House. It has already been mentioned by the hon. Member for Southampton (Sir C. Barrie). One of the largest and best known shipyards, Swan Hunter and Wigham Richardson, are making ladders, chests of drawers, iceboxes and garden seats, in order to find employment for their indentured apprentices. As to whether the Government should come forward with a constructive policy for the shipbuilding industry the answer given to me to a supplementary question by the Parliamentary Secretary to the Board of Trade was to the effect that it was no cure for surplus tonnage to build more tonnage, but there is another side to that point of view. Let me mention one or two rather important considerations which affect the position. First, the latest available figures show that Great Britain is now only building 25 per cent. of the world's tonnage as compared with 60 per cent. in past years. This does not relate to the decline in shipbuilding but to the decline in Great Britain's position in the shipbhuilding world, and we must, as in other industries, also take into consideration the loss of labour owing to mechanisation. It is interesting to note, in passing, that if we were going to build the "Mauretania" to-day there would be a 10 per cent. reduction of labour and a 20 per cent. reduction in working time.

When trade revives, as it surely will, and when travel throughout the world becomes open again, it is not in the general interest of this country that people instead of being able to travel in such well known British ships as the "Aquitania" and "Mauretania" should seek such ships as are being built by France and Italy and other countries. It would be most detrimental to the prestige of this country. We have sacrificed our naval supremacy in the cause of peace, but I can see no reason why we should sacrifice Britain's supremacy in the shipbuilding world. Shipbuilding also plays a very important part in the carrying trade of this country, which is now drifting into hands other than those of Great Britain, probably because their freights are lower than ours. They are entering into open competition with this country, and when the time comes for an expansion of our export trade there will be an increased carrying trade, which we do not want to wake up and find has been captured by other countries as it is an essential part of our national trade. If by any unfortunate chance the shipping industry was to get into the hands of our competitors and we found ourselves no longer the carriers in the markets of the world, the time would come when their freights for carrying goods to this country and to the Dominions would rise, and we should find a corresponding increase in the price of food. I mention these few points in order to impress upon the Government the need for considering some constructive shipbuilding and shipping policy. The pleas which have been put forward have not met with the sympathetic consideration which we had hoped.

I was rather interested in the speech made by the hon. Member for Harborough (Earl Castle Stewart) who replied to the speech of the hon. Member for Southampton. He said that those who represent shipbuilding areas were asking for some special consideration for their industry, and then he went very near to asking for special consideration for the agricultural industry. I am a little more gracious than the hon. Member because I should welcome any assistance which might be given to agriculture, but I do not propose to lose an opportunity of pressing upon the Government the claims of the important industry I represent because it is one of those great basic industries which has made the prosperity of this nation, and of the Empire as a whole. I hope that the Government will give to those who are pressing for some constructive proposals with regard to the problem of our shipbuilding industry, and the surplus labour in industry, some hope that before long these claims will receive the consideration which they deserve. If I were to say what I really feel I should request that we should break up the "Aquitania" and the "Mauretania," and build the "Great Britain" and the "St. George" to sail the high seas. I am perfectly well aware that an inexperienced back bench Member is not in possession of all the facts so necessary in framing the policy of the Government, but I do beg to be told to-night that the Government are willing to consider concrete proposals. I hope, also, they will let us have some knowledge of their constructive legislation for dealing with the surplus labour on our industrial market which was hinted at by the Prime Minister in his speech last week. I would say of those areas which have been so often referred to as "distressed," that the courage and patience of our people are beyond description. But we must hold out some hope to them in the future. I ask that to-night, before the Division takes place, we shall hear from the Government who, we know, are anxiously concerned with these questions, that some of our proposals are to receive the consideration which we feel they so thoroughly deserve.

8.37 p.m.

Mr. DAGGAR

In supporting the Amendment, I shall refrain from reminding the Government of their promises and pledges, for the simple reason that, although it has long been the prerogative of all politicians to indulge in the making of promises and the giving of pledges, to remind them of these things invariably causes them to be petulant and peevish, both of which in many instances are the result of pride and prejudice. At the same time, it is necessary to remind Members of the Tory party, in the words of the Amendment, that the Government were returned to power with an overwhelming majority and that, that fact is largely due to our having tolerated in this country an unjust and absurd electoral system. If the number of votes cast for the Tory Members are divided by the number of Members who now ornament the benches opposite, we find that each Member speaks on behalf of 25,134 individuals. When an insignificant. Member on the Opposition benches makes a speech he is entitled to boast that he speaks on behalf of 130,000 individual voters. Therefore, if we had representation on these benches in proportion to the number of votes recorded for us we should be 260 strong instead of 49. Tory Members have, therefore, no need to treat any criticism of ours in a spirit of intolerance.

I am not disposed to indict the Government, but I am interested as an avowed Socialist in indicting a system for which the Tory party cannot be held responsible. The right hon. Gentleman the Member for Stafford (Mr. Ormsby-Gore) on Friday made a somewhat cheap criticism against the Amendment. He said, as most Tory apologists for the present system say, that the Amendment was" based on catchwords." I would remind the right hon. Gentleman that his leader—I think I am right in saying that up to now he has not renounced his leader—anticipated his criticism in a statement made many years ago. That statement was: One of the greatest difficulties which the propagandist of Socialism has to encounter is the incapacity of people to imagine any different state of society from that in which they live. A new social relationship, a new combination of human motives, a new mode of wealth production, is at once set aside as something beyond their vision, and consequently something that bears the stamp of the impracticable. Their consideration of Socialism therefore ends where it began. That is a statement made by the Prime Minister in one of his saner moments, when he wrote a book called "The Socialist Movement," in 1910. It was a very unkind observation to make, but obviously the Prime Minister anticipated the kind of criticism made by the right hon. Member for Stafford last week. In the Amendment a definite statement is made that the Government have failed to restore the economic position of the country. Let us examine that charge. I cannot be expected to go into it in great detail. But let us take the coal industry. I express no regret at the length of the discussions in this House on the question of agriculture. Although I come from a definitely mining area I still hold the opinion that a flourishing agricultural industry is as essential in the interests of the people of the country as is a prosperous coal industry. It may be said that the satisfactory condition of the mining industry is of paramount importance to all. Why? Because there are still in this country 50 different industries that are literally dependent on substances that are obtained from coal, Until recently one-twelfth of the population existed in virtue of an industry that is still the foundation of our whole industrial life.

We find that for the 10 months of this year, January to October, the export of all kinds of coal from this country was approximately 35,000,000 tons. That figure compares with over 38,000,000 tons in 1931. That is a decrease, for the 10 months of this year, of 3,362,000 tons, compared with the figure for the corresponding 10 months of last year. But if we compare the export trade in coal this year with 1930, when the Labour party were in office without power, we find that there is a decrease of no less than 14,500,000 tons. If time permitted I could prove that from the point of view of trade in general, from the numbers of persons who are unemployed and the number in receipt of Poor Law relief, and from the point of view of increases in hours and decreases in wages, the present Government have failed to restore the economic position of the country. Moreover there are no indications of the achievement of prosperity under Capitalism.

I am amazed at the statements made by some Members, and especially at the statements made by one Member and the presumptuous manner in which he addresses the House. He made a statement which he could not prove, to the effect that trade in this country has improved in the 12 months of power of the National Government. That statement is incorrect. Compared with 1930, when the Labour Government were in office, without power, the export trade of, this country has decreased to the extent of £,218,000,000; and yet we are told by the self-appointed educators of the class we represent that the trade of the country has improved under the present Government. Again, I want to say that I am not holding the Government responsible for the position. But it constitutes part of the social indictment of the economic system under which we live. We are told in the King's Speech that there are many young men and women who have never in their lives had the opportunity of regular employment. The word "regular" is a modification which cannot be accepted as of general application. Many of us here know young men and women who are 20 or 21 years of age and who have had no employment at all. That statement in the King's Speech must, however, be read in conjunction with the speech of one who is at least an honest Conservative, namely, the Chancellor of the Exchequer, who said: We still have to face the fact that there are going to be a large number—a million or more—of persons for whom we cannot expect to find regular employment in their own trades either this winter or next winter, or perhaps for many winters to come."— [OFFICIAL REPORT, 8th November, 1932; col. 261, Vol. 270.] If that observation is to be applied generally, it means that in any case we shall have 1,000,000 persons unemployed in this country, and I take it that it applies to every trade. That good old British newspaper "Daily Mail," the last word in progressing backwards, agrees with the Chancellor of the Exchequer. The "Daily Mail" states: Even if a large measure of prosperity returns with a trade revival there is reason to fear that there will still remain a considerable number of unemployed. It is gradually being borne in upon us that the unemployment problem has entered upon a new phase. In the past unemployment was regarded as a temporary misfortune. Thoughtful people are now beginning to fear that it may prove a permanent scourge. This is due to the wholesale introduction of automatic machinery and the growth of mechanisation on every side. Those words ought to be weighed by hon. Members who think it possible to absorb the unemployed of this country by reorganising or rationalising industry. That is a view which cannot be substantiated. The more you rationalise industry, the larger becomes the army of unemployed. The Prime Minister has told us that the unemployment problem has entered upon a new phase—which can only mean that it has become a permanent feature of the system and it is the object of this Amendment to indict and condemn that system. Only last week die Prime Minister said: I challenge any hon. Member to base an argument upon the assumption that this is only a temporary state of unemployment and that the whole body of unemployed can be treated as though they can be absorbed into ordinary industry. We have a different problem altogether."—[OFFICIAL EPORT, 22nd November, 1932; col. 35, Vol. 272.] Yet he said in 1910 that competitive industry always required a margin of workless men. The only difference between now and 1910 is that in 1910 there were only 280,000 persons unemployed whereas at present there are 3,000,000. If the right hon. Gentleman was right in 1910 in saying that unemployment was a permanent feature of the system with 280,000 unemployed, it is obviously true to say to-day that it is a permanent feature of the system, with such an increase in the number of unemployed. We hear much talk about reorganising industry with a view to absorbing the unemployed, but the reorganisation or rationalisation of industry means the introduction of improved methods of producing the articles which we require, and there are three principles in accordance with which machinery is always introduced. The first is to secure an increased output with the same number of men. The second is to get the same output with a decreased number of men and the third is to increase the output with a decreased number of men.

Various methods of increasing output have always been adopted under the existing economic system, and we are finding the effects of it to-day for the simple reason that 25 years ago when improved methods were introduced it was during a time when markets were expanding with the result that men who were thrown out of work to-day could be absorbed to-morrow. Today the introduction of machinery has an entirely different effect because conditions have changed. Machinery is being introduced with the markets of the world contracting and the extent to which they contract is reflected in the increase in the number of unemployed. This is no question of theory. Those who study the report of the recent Royal Commission on Unemployment will find there very valuable statistics which prove my point. They select the four chief industries of the country and take the first quarter of the year 1924 as being equal to 100. The figures in the first quarter of 1930 compared with 1924, shows for mines and quarries an increase of production of 2 per cent. and a decrease in the number employed of 19.4 per cent. In iron and steel there is an increase in output of 12.8 per cent. and a reduction in the number employed of 23.4. In the leather, boots and shoes industry, the production has increased by 8.5 per cent. and the number employed reduced by 14.5 per cent. The case of the engineering and shipbuilding industry is slightly different because while there has been an increase in output of 25.7 per cent. the number Of men employed has increased by 7.4 per cent.

The "Times" which is not a Socialist newspaper, and can be relied upon, at least, to state the facts without unduly colouring them, published an article recently entitled "The Allies of Industry" which showed that between 1924 and 1930 the net output per employé in the petroleum refining industry went up from £503 to £926 and in the Scottish coalfields—and the mining industry is the last industry in which the most optimistic would anticipate such an enormous change—it was said that almost the same tonnage of saleable coal was raised in 1930 as in South Yorkshire, with the labour of 22,619 fewer workers. That proves that the more you introduce machinery the greater your army of unemployed. The problem of unemployment is insoluble under Capitalism. Increased productivity of labour under the present system is bound to aggravate the situation and will continue to do so. So will any effort made to reduce the purchasing power of our people. If anything has aggravated the problem it is the fact that since 1920 the workers have suffered wage reductions amounting to over £ 1,000,000,000.

Whatever hon. Members opposite may say it is an economic contradiction of Capitalism that the workers are poor because at the end of the week they do not receive sufficient in the form of wages to buy back the wealth which they have already created. The productive forces in society cannot be controlled by private individuals, and in order to maintain prices or wages, those productive forces must be controlled. We, as Socialists, say that in a society with an economic system the object of which is to produce for use and not for profit, there is no need for the productive forces in society to be controlled.

This would be a very appropriate opportunity for the President of the Board of Trade to come in and sing his yearly song. In 1925, which was the first time that song was sung, we were told that there were 15,000,000 capitalists in this country, and that was used as an argument for the maintenance of the present system. The President of the Board of Trade then said: "What a prosperous country we are, with 15,000,000 people having to their credit in the savings banks and the Post Office £ 777,000,000." If you divide that amount among 15,000,000 people, you will find that we had 15,000,000 bloated capitalists with a capital of £50 each, which, if invested, would bring in the enormous amount of 1s. per week. Professor Clay, the economist—and he is not a Socialist economist—pointed out that while that was true with regard to the 15,000,000, there were 537 capitalists in this country with an aggregate capital of £670,000,000, or approximately £1,250,000 each, and that if that was invested, they would receive in income approximately £1,000 per week—in other words, 537 persons with a weekly income of 20,000 times more than the 15,000,000 small capitalists.

The song is parodied every year, and the last time we heard it sung we were told that it was not £777,000,000, but that it was no less than £2,000,000,000. If that were divided among the 15,000,000, it would mean 15,000,000 bloated capitalists with a capital of £133 each; and there are 103,000 Surtax-payers who have an annual income of £570,000,000. Such a division of wealth is, in my opinion, no evidence of prosperity, but constitutes an indictment of the present system. Again, it is interesting to note that the capital of a large number of companies in this country since 1925 has been written down to the extent of £80,000,000. That again is no evidence of the need for perpetuating the system which makes that absolutely imperative, alongside of the fact that the industries in this country, or some of them, have since 1920 been subsidised to the extent of no less than £160,000,000. That is a part of the indictment of the system under which we live, and while many Governments in the future might have an opportunity of supplanting the present system by peaceful methods, there is still a danger, comfortable as some hon. Members of this House may feel, of the same catastrophe overtaking this country as has overtaken another very prominent country, and peaceful revolution being made impossible by the crass stupidity of the people who have been put here to legislate on behalf of the nation as a whole.

9.0 p.m.

Mr. BOULTON

The right hon. Gentleman the Leader of the Opposition, as well as most of the hon. Members who have spoken from the Opposition benches, has criticised the Gracious Speech for not telling us more. In fact, the right hon. Gentleman told us that it contained nothing as to the intentions of the Government. That, I think, depends on what you read into it. I congratulate the Government on the brevity of the speech and the line they have adopted. The main line of policy has been laid, and if there was ever a time when the Government ought to reserve to themselves a free hand to meet a quickly changing position, that time is now.

I do not wish to refer to the question of War debts and the position that has arisen with America except to say that I agree with much of what my right hon. and learned Friend the Member for Hill-head (Sir R. Horne) said when speaking on this subject. Anyone who has studied this problem must realise that a payment such as is now contemplated would have very prejudicial effects on the world position, and particularly on America herself. But if payment is to be insisted upon, I cannot think there can be much doubt as to what the position of the Government should be. In that event, I agree with my right. hon. and learned Friend the Member for Hillhead when he said, "Ship gold." Disagreeable as that would be, I do not think it ought to perturb us too much. Let us remember that half the world is willing to take sterling and that all the raw materials that are necessary for our requirements come from sterling countries. Our Empire is large and self-sustaining and is able to feed us, and I contend that we can afford safely to ignore gold and rely on a commodity basis. Why not leave gold alone, except for paying our debt to America? When the problem is further explored, I believe ways and means may be found which will enable us to arrive at a satisfactory agreement with America, and not only so, but one that may prove to be of considerable benefit to the Empire as a whole.

The question of unemployment and the distress which inevitably follows must continually occupy our minds and cause every hon. Member of this House grave anxiety, though one would have thought from the speech of the right hon. Gentleman the Leader of the Opposition that it was only he and his friends who either understood or ever gave a thought to this problem. I am quite sure that the workers of this country realise, just as much as every hon. Member in this House realises, that it is only through the employers of labour that the back of unemployment can be broken. I wonder if hon. Members opposite are really sincere when they state that the tariff policy of the Government has failed. Surely they are a little previous in coming to their conclusions. Tariffs in due time will be judged by their results.

Although the results from the measures taken for the protection of industry must necessarily take time to fructify, there is a definite indication of recovery in certain trades. The iron and steel trade, it is true, is still terribly depressed, but even in that industry there are signs of recovery. In the ancillary trades, the lighter trades of cutlery and tool making and so on, which so materially affect the Division which I have the honour to represent, and in which area over 60,000 people are unemployed, there is a definite improvement. Some factories are even starting to work overtime, and men and women are beginning slowly to get back to work. Men who have been out of employment and men who have been having only two days a week are now being employed four days a week. Only a fortnight ago one of the largest cutlery firms in Sheffield told me that they had secured a contract which they had been trying to obtain for years. It had always previously gone to Germany, and they had secured it only by the aid of the import duties. I only mention that as one concrete example as to what is taking place. I do not wish to exaggerate, but it is taking place, and it is beginning to put new heart into those who have been forced into idleness for so long. But those who go about the country deriding every constructive effort that is being made to assist industry are doing an ill service to those whose interests they profess to have at heart.

I welcome the reference in the Gracious Speech to agriculture for the obvious reason that we cannot have a prosperous country without a prosperous agriculture. Agriculture is more wrapped up with manufacturing industry than many people seem to realise. The world depression in agriculture is an important factor bearing on the iron and steel trade. These two industries are closely allied, and any assistance that can be given to agriculture and any improvement in agriculture will have its repercussions on the iron and steel trade, which so largely provides the material and the means for tilling the soil. The great trade depression has brought this—I believe for the first time —forcibly to the minds of those in the industrial areas. I was told that it was no use talking about agriculture in my division, which is purely industrial and contains a large number of very poor people, but I was greatly encouraged, when I spoke on this question, by the intense interest that was shown. It would be well if more was heard about agriculture in the large industrial areas.

The measures referred to in the Gracious Speech for assisting unemployed persons, and particularly for maintaining their morale and their fitness to return to work when opportunities occur, will be warmly welcomed. I have always felt that the worst feature of this tragic condition of unemployment is the awful depression which inevitably comes from enforced idleness, and we can realise how hard it must be to bear. There is no reference in the King's Speech which I more gladly read than this: It is still necessary to exercise careful supervision over public expenditure, both national and local. There is no more important subject which the Government will be called upon to consider and which so directly bears upon the question of employment. The Government have made a bold and successful start in the masterly way in which they have put through the Conversion schemes and I should like to add my humble tribute to the Chancellor of the Exchequer for his great achievements. If we are to reconstruct on solid and sound foundations, national finance must loom largely in the future. An expenditure of upwards of £ 1,000,000,000 a year, including money spent by local authorities, is beyond the capacity of this country to bear, even in normal times. The increase of direct taxation compared with 1913–14 is some 460 per cent., while indirect taxation has risen by 220 per cent. So long as we continue to make levies on capital and call it revenue we can only view the position with grave anxiety. We are sometimes told that no good purpose is served by comparing present day conditions with those of years ago. I do not hold with that view because there are certain fundamental principles which apply to-day equally as much as they applied 50 or 80 years ago.

However much many of us may differ from the politics of Mr. Gladstone, it will be admitted that he was one of our most successful Chancellors. The fundamental principle on which he built his finance was that the least possible money should be asked by the State and the most possible money should be left in the pockets of she individual so as to give individual enterprise as much free play as possible. In his day fourteen-fifteenths of the national income was left in the pockets of the people. What is the position to-day? With our huge Budget of upwards of £ 800,000,000, one-third of the national income in handled by Government officials. What I mean is, if we can by bold methods cut down the call on the taxpayers and ratepayers by £ 100,000,000 a year, that amount would be free to flow into the channels of industry, and in 10 years we should have a vitalising amount of £1, 200,000,000 increase in working capital. The burden of taxation is one of the chief factors bearing on the unemployment problem. The Income Tax, for instance, is not a class question. It has became an industrial question. The foundation of the social services, unemployment relief, and so on, is based on a sound and prosperous industry. Destroy the foundation, and these benefits must fall to the ground.

I believe the thinking people of this country are more concerned and anxious about the general question of the reduction of expenditure than almost any other—reduction by Government, but more particularly by local authorities. I would urge my right hon. Friend the Chancellor of the Exchequer to direct his attention in this direction. The lavish expenditure on all sides by local authorities is a matter of common concern throughout the country. I believe the whole trouble has come about by capital flirting with Socialism. The extravagance in local government expenditure is simply neutralising any savings made by the Chancellor. The private roads of the great estates of the past would not compare with the tarred and gravelled miles of democracy, and if the tax and ratepayers are to receive any substantial relief from a burden which cannot indefinitely be continued, we must have a wise—I use the word advisedly—but a far greater pruning down both by Government and local authorities than has yet, evidently, been contemplated; and will have to be enforced. This I believe to be an essential step towards real financial reconstruction and an essential step towards the recovery of employment.

9.16 p.m.

Sir WILFRID SUDDEN

Listening to every Socialist speech in the Debate on Friday and to-day I had hoped to see adumbrated exact principles, reinforced by proper examples, in support of the Amendment which is on the paper, which deals with the alternative Socialist policy for attacking the fundamental causes of the problem of poverty. Instead, no complete proposal has been put forward from the Opposition benches in support of their policy. What do the facts of history teach us about the theories they hold? I have read most of what has been written in the French, German and English tongues on this subject. If this were an academic discussion, and we were surveying past experiments in Socialism as a contribution towards the well-being of the working classes of other generations, including the experiments in France and Germany, in Egypt and in China, I could bring forward proof that applications of the theories which to-day go by the name of Socialism have in no single instance made for the well-being of the working classes. What are the vital centres that deal with the well-being of the working classes of any generation? First religion, second health, third education, and fourth work and employment. Those are the four tests that must be applied by any of those who accept the responsibility of governing and guiding the classes which are the basis of any population.

What contribution has Socialism made to modern life? Take the French experiment made during the Victorian era. The biggest thing the Socialists in France had to offer was the establishment of municipal workshops, and very foolishly they were run. What was the best contribution made in Germany? The best contribution was Bismarckian, and by the rule of iron Bismarck somehow joined together, paradoxical though it may seem, the confederation which eventually gave a kingdom and an Emperor to a modern State, and the 1914–18 war was the direct result of that interesting social experiment in Germany made by the power of Bismarck. It is interesting to search history for definite proof of the working of these paradoxical and peculiar theories which are thrust upon this House as a serious contribution towards curing the ills of which we have become heir. The times and the occasion are worthy of a higher contribution from those who, although they may be in Opposition, perforce carry some responsibility for the well-being of the country, and I for one, reviewing the 13 months' work, offer my meed of praise for what it is worth to the Government for what they have indeed accomplished. The Opposition do not say anything about the legacy we received from them as a result of the 1926 intervention, the legacy we have received on account of their interpositions in Statecraft or organisation in their last administration, and they do not remind us of what we are to carry for 20 years as a result of what they did in their little problem of interspections when they held the portfolios of office.

It is well, therefore, that the public should know that their quasi "cure all ills" intervention, that this shall I say patronising intervention, should be dealt with on its proper merits and in a proper fashion. We may take Russia as a very fine example of the introduction of Socialism into the realm of morals. We can take that interesting experiment into consideration also if it be a matter of health; but if perforce education is to be considered we can go back to the generations in which the essence of Communism was to be found in the barbarism of the days when the community did not wear clothing and the club was the method of arranging any little disparity of viewpoint that might arise. That is the communal life, which is the very essence of Socialism. We want to be very definite in our views in respect of what can be offered in regard to education, for education interplays on morals, health, and work. When next we come to the question of work I am not in the slightest degree apologetic in regard to the marvellous work done by the Government in the last 14 months. To my mind a little wider intermixation of viewpoint might possibly have been helpful. It is possible that the contribution from hon. Gentlemen of the Liberal party opposite, who are conspicuous by their absence at the moment, might have been even more helpful than it has been, but such assistance as they did offer has been, I think, helpful, and in the difficult days in which we are it is essential. I am also, frankly, a little sorry that those who hold a reformed Socialist view and are now a part of the Nationalist Government have not been more conspicuous in their contributions of practical schemes.

Whatever may be the remedy necessary to deal with the position in which we find ourselves, it is vital that contributions from every point of view in economic thought should be joined in an effort to provide a solution for the difficulties with which we are confronted. I am sorry that by reason of the legacy we received from the last administration we have not been able to do more than we have done in dealing with the grim spectre of unemployment. It is vital that we should tackle that problem if we, as a nation of craftsmen, are to carry the responsibilities that we do carry, the responsibilities of the civilisation of the world. It may well be that those who have these large gold deposits may consider that they are the vital factors in the consideration of world affairs, but the factor of craftsmanship remains and dominates the world, and I give my full meed of praise to those leaders of trade unions who have done so much to bring together the viewpoint of the soulless limited liability company shareholders, and that of the skilled and unskilled men and women craftsfolk who together achieve the product-ion of commodities which are essential in civilisation.

I give a full rimed of praise to them, I repeat, for the fact does remain that it is the craftsmanship by which this country is going to be, as in the past, the keystone of the arches of the civilisation in the nations. What are the actual things which concern us in respect of craftsmanship? An hon. Member who spoke from those benches produced the old argument that machinery was against the well being and the productive employment of the craftsman. I want to say that in respect to that matter when we really take the trouble to note how the cheapening of the product has increased the market and upraised the standard of comfort of the people concerned, the argument of the early Victorian period still holds good in these modern days of development, namely, more production the cheaper the commodity and the more use of the same. It may well be that certain features of unemployment, such as density of population in certain areas and such problems as the immovability and elasticity of labour are very vital. I would also welcome the introduction into this Debate of those who, represent the modern universities so that they might say something in respect to a finer liaison between the technical institutions and the universities, because, if we are to retain the magnificent title we possess of having the greatest craftsmen in the world, the technical schools and universities must be brought closer together and become more highly organised than at present.

Some suggest tariffs and others Free Trade, but to-night I want to say in this House that neither the one nor the other is good enough or sufficient to deal with all this problem. There are the questions of the density, type, health and age of population, and of organised elementary, secondary, technical and university education, and there is the proper consideration of the difficulties in connection with the limited liability company. In the olden days an employer of labour was able to know, and did know, the capacity of every employé he possessed, and the relationship and association between them was happy and contented, more frequently than not, but we came to the day when the workers themselves began to own shares and to dominate the capital of organised labour, namely, labour skill, and when the workers are capitalists of organised labour, then, indeed, trouble comes, and we shall never solve unemployment until there is a real third party in industry joining the craftsman and the limited liability company shareholders together, so that those who understand the needs of the consumer may pay attention to the viewpoint of the producer as well. Not one word has been said in our Debates on unemployment about these vital issues. I am hoping that in due course, when the Government have, to a greater extent than at present, found it possible to unravel the international tangles and when they have considered that industry after all cannot, be in any watertight compartments, but must be both Imperial and international, then with the splendid move forward that has been made with the consent and helpful assistance of every section of political view, a more practical and efficient consideration of these definite issues in regard to unemployment will be made.

9.30 p.m.

Mr. NUNN

The argument in favour of the Amendment on the Paper has been dealt with so fully that it is hardly necessary at this hour to do more than mention just one point, which I beg leave to bring before the House. Most hon. and right hon. Gentlemen who have spoken from the Opposition benches have in some parts of their speeches mentioned their regret that nothing immediate has been done to deal with unemployment. I think it was the right hon. Gentleman the Member for Wakefield (Mr. Greenwood) who on Friday went to some length to point out that if the World Economic Conference had been held at an earlier date it would have been more helpful to unemployment. I think he said that in putting off that conference until April next or later it held no hope for unemployment. If that is so in regard to the Economic Conference, how much more so is it in regard to Socialism? If Socialism is the remedy for the present condition of unemployment, how does it meet the desire of hon. Gentlemen and right hon. Gentlemen opposite to get an immediate remedy applied? Is there any hope that Socialism will be introduced as the system of this country within a measurable period? I see an hon. Member on the opposite bench nods his head. He is a greater optimist than I am. If I thought Socialism would cure unemployment, I am almost disposed to say I might welcome it, but I see no prospect whatsoever of Socialism being introduced as a practical policy in this country within measurable distance. If hon. Gentlemen on the opposite benches want an immediate cure for unemployment, surely they have to make use of the machinery which exists at the present moment, which happens to be the National Government? I submit to them that, instead of more or less academic argument about the value of some future Socialism when we are sprouting feathers on our shoulder-blades, they would be better employed in applying themselves to seeing how they can better use the machinery which exists at the present moment

I do not propose to say anything more about Socialism which seems to be entirely up in the air, but I will occupy a few moments in dealing with one or two more practical matters. I am speaking, as so many other speakers have spoken, as one of the representatives of the distressed areas of the North. I happen to be in the position of knowing something of the problem from long residence and connection with the depressed North Eastern area, and my present position, as a representative for the West Cumberland distressed area, gives me knowledge of the other side of the country as well. When we first saw the Gracious Speech from the Throne, the members of our group were disposed to be disappointed that there was not anything more in the nature of a concrete proposal in the Speech for dealing with the problem of our area and of the distressed areas generally. But on calmer reflection I am disposed to think that it is probably all to the good that there is nothing more definite laid down in the Gracious Speech. After all, one of the most undesirable and fruitless persons that one can encounter in ordinary life is the person who makes promises with no intention of keeping them. That type of person is much more dangerous than the person who makes no very definite promise but who is known to intend to do the best he can. The Government are in that position. They are not making any wild promises, but they are giving a general undertaking to do the best that is possible with the situation.

I was very much struck with that portion of the Gracious Speech, and with the Prime Minister's remarks, which showed that the Government intend to pay a good deal of attention to that very unfortunate portion of the population which has little hope of getting back into permanent employment. In the north of my Division are some coal mines. As a direct result of the trouble with Ireland, those coal mines have practically ceased to function. While the Irish dispute lasts my coal-mining population are, it appears, going to suffer heavily. One realises that that is the result of carrying out the national policy, and that the national policy cannot be changed just to suit the needs of a special area. When one understands that the Government intend to pay particular attention to the needs of those people who are passing out from industry, one feels hope that those who are displaced from work through what has happened between this country and Ireland will have their interests looked after.

My other problem is more acute. It is the problem of an old-established industry which shows every sign of never getting back to the position which it once occupied. That industry is the iron-ore industry. In the west of Cumberland we are proud of the fact that we produce the best hematite in this country. I think that there are only three areas in the country where hematite is produced. There is West Cumberland; a considerable amount is produced in Glamorganshire, and a small amount in the Forest of Dean. Since the War, some 24 ore mines have passed out of operation in West Cumberland, in which area I include what is known as the West coast area, which overlaps into the constituency of my hon. Friend the Member for Workington (Mr. Cape), and a little bit of the northern portion of Lancashire. Those 24 mines are now flooded. Those who know what the flooding of an iron-ore mine means know that there is very little opportunity, although the mines are by no means worked out, of those mines ever being worked again. In addition, the flooding of those mines puts further expense upon the mines which are being worked, because the water finds its way from mine to mine. The men who are working in the iron-ore mines are very largely engaged in pumping out the water which comes from the unused mines. We have eight mines left with a potential output of 1,550,000 tons of iron-ore per year.

During the past year—I am taking the figure for 1931—only 700,000 odd tons of hematite ore were produced in this country. We imported from abroad over 2,000,000 tons. If we take the figures for previous years, their effect is even more striking because the world-wide depression affected the figures for last year. Something has to be done for an area which is existing, and has for some time existed, upon that one industry. Whole townships and villages, closely populated areas, built up simply upon iron ore, are now derelict. They have within them some of the finest men you can find anywhere in the country. An extremely fine type of man is the iron-ore miner. He is bearing his present distress with tremendous courage. There could be nothing more disheartening than to feel that those men have nothing to which to look forward. We hoped, when the iron and steel trade got its tariffs, that that would automatically mean prosperity to iron-ore mining in this country, but the foreign import is continuing. I submit that the Government should consider the plight of this industry.

It is not only a question of the present day. If this industry should pass out altogether, and—God forbid that it should happen !—if we should have another war, where are we to get the iron ore? If it should happen that these mines are completely flooded out, it would take years to get them back into production. In addition to that, if we let our own industry pass away, we shall have no means whatever of putting a check on the price of the foreign imported article. I submit that the Government should give very serious consideration to this matter. In conjunction with representatives of the industry I have been considering a proposal which has already been laid before the Government, that a quota should be set apart of so much per cent. in all iron and steel manufactured in this country. It would be described as British iron and steel, containing so much per cent. of British ore. That seems to be a reasonable suggestion. I am informed by the industry that, if the suggestion were carried out, there need not necessarily be any increase in the price. The question would merely be that of getting the full production of which the mines are capable. In bringing this matter to the notice of the Government I do so in the hope that, although at present that suggestion might not be practicable, it might be possible for the Government to make full inquiry and to adopt some other suggestion. All I ask is that we who are staunch supporters of the National Government may feel fully confident that our people, who have entrusted us with the task of looking after their interests, may know that the Government are truly the guardian of those interests.

That is the contribution that I wish to make to this Debate to-day. In bringing some little practical matter before the notice of the House and the Government, one is likely to do more good to the working people of this country who are so distressed than in discussing farfetched theories of Socialism, a motheaten dectrine which has been abandoned by all up-to-date thinkers. It holds no hope whatever for the industrialists of this country. We, who are members of the National party, feel a considerably keen interest in those industries.

9.44 p.m.

Sir STAFFORD CRIPPS

The hon. Member for Whitehaven (Mr. Nunn), who does not like the moth-eaten theories of Socialism, has advanced a most novel idea. He suggests that an industry should be protected by a quota or a tariff—an idea quite as old, and even older than Socialism.

The SECRETARY of STATE for the COLONIES (Sir Philip Cunliffe-Lister)

More successful.

Sir S. CRIPPS

So far all the countries of the world are in a worse position than they have ever been, and the right hon. Gentleman the Secretary of State for the Colonies considers that that is success. I am afraid that he must indeed be an optimist. We were criticised by the hon. Member for Whitehaven because we were considering the problem from the fundamental point of view, and not merely from the surface point of view. The hon. Member says that this country, fortunately or unfortunately, is saddled with a National Government, and, therefore, we as an Opposition should try to make suggestions which the National Government were likely to carry out. We did that. We spent three or four days at the end of last Session trying to make suggestions which could be carried out within the existing system, but those suggestions, unfortunately, met with no response, and now we are dealing with the problem which was posed by the Prime Minister himself when he stated that, as far as he could see, there were 2,000,000 people permanently on the scrap-heap as regards employment in this country. That is a problem which we believe this House ought to face, apart altogether from the point of view of whether any remedial measures can be taken in the immediate future. It was stated, I think by the hon. Member for North Bristol (Mr. Bernays), that the Government may, in carefully watching each corner that they turn, forget the general direction in which they intend to steer. We are trying to bring back to their minds the direction in which they should steer.

One thing is clear, and, indeed, has not been disputed by anyone, and that is that at the present time Capitalism as a system is wholly incapable of providing employment for the people of this country. Whether that is because Capitalism is being run in the wrong way or not remains to be seen, but that fact is perfectly clear at the present moment, and the arguments which have been addressed to the House against the Amendment—that is to say, against the substitution of a system of Socialism—have not been based at all upon any satisfaction with the existing system. Not a single Member has got up to point out how the existing system is going to re-absorb the unemployed—not a single Member from the Front Government Bench or from anywhere else; and the only argument that has been advanced against Socialism is not an argument upon the merits of the case, but an argument upon a fear or distrust of the alternative of Socialism. No one has sought to answer the argument which was put forward by my hon. Friend the Member for Limehouse (Mr. Attlee). Many people have said, "What is this Socialism?" It is a very easy way to dispose of an argument, when you do not know how else to meet it, to say, "I do not understand it." But I think that most hon. Members in this House really know quite well what Socialism means.

Mr. PIKE

On this side?

Sir S. CRIPPS

On that side, certainly. They all recognise, all their speeches have recognised, that something has to be, or ought to be, done in the present circumstances. We find nothing in the Gracious Speech which touches this real and fundamental difficulty. Out of the fog of the Government's depression, a few vague suggestions emerge, and nothing more—a few good intentions; and they are all based upon the theory that Capitalism must be clung to at all costs. That is the fundamental attitude which the Government have taken up throughout. They stated at the last election that they were prepared to inquire into every means of solving the difficulty. Some of their followers, like the Noble Lord the Member for Hastings (Lord E. Percy), have said that they are quite prepared to face the problem, that if there is no other way they will accept Socialism; but the Government have not inquired into it, and that seems all the more extraordinary considering the Prime Minister's former history. It is that position of the refusal to inquire into the alternative, or to deal with its merits, that we challenge, and I hope that the Colonial Secretary, when he replies to-night, will deal with the point on its merits, and tell us why on its merits Socialism is worse than the existing system of Capitalism, because that is what we have been waiting to hear.

The First Commissioner of Works, who wound up for the Government on Friday, told us that undiluted Capitalism was a thing of the past. What exactly diluted and undiluted Capitalism are we are not quite certain, but, as that was a Government statement, perhaps the right hon. Gentleman will explain it also. The First Commissioner of Works told us that we had to live in an era of regulation. That means, I imagine, that a certain number of Socialist expedients must be resorted to in order to temper Capitalism. Then he went on to state, in one of the most remarkable passages of a remarkable speech, that the Government envisaged the problem with which they were faced in these words: 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."—[OFFICIAL REPORT, 25th November, 1932; col. 430, Vol. 272.] Are we to understand—no doubt the right hon. Gentleman will tell us this too—that the Government have determined to scrap the steel industry, the coal industry, the cotton industry, and all the other basic industries of the country, and turn over to the manufacture of wireless sets, gramophones, toys, and things of that sort? If that is the spirit in which the Government are facing their problems, we venture to point out to them that they have gravely mistaken what the problem is. The problem as we see it was posed far more accurately by the Noble Lord the Member for Hastings, who, I think, agreed with the view that we take, that the real problem arises from the impossibility, through under-consumption, of distributing the products of labour. That is a problem which cannot be tackled by starting the manufacture of wireless sets or gramophones.

The regulation which has been spoken of by several Members, and which, in fact, nearly every Member who has asked for anything has asked for in some degree—whether it be of the nature of a tariff, or the regulation of monetary matters, or the regulation of trading, or the regulation of shipbuilding; in some way or other every hon. Member who has made any suggestion at all has made the suggestion that the Government should step in and regulate—we believe that all those methods of regulation have already been tried, and they have proved a failure because, so long as the basic principle of private enterprise remains, They can never succeed. That basic principle is to be found in two things—first, internal competition between different producers In the same industries; and, secondly, the production of goods for the purpose of profit, and not because they are wanted by the nation. So long as those two incidents of production continue, we believe that no regulation by the Government can be affective. Indeed, it has been tried in such a case as the coal industry. Measures have been passed to enable the export of coal to take place at a price which will not in itself yield the producer a profit. Vast quantities of coal are exported by means of the quota system at prices far below the cost of production. It is made up by higher prices being charged internally. But that system of attempting to control has in itself entirely broken down because of the internal competition between the mines. It is now a said the mines must be amalgamated and, when the mines are amalgamated sectionally, you will get sectional competition between the Durham area and the Midland area, and it will he said that we must amalgamate all the mines into one huge block. The next and obvious step will be that the nation must control that amalgamation. So, directly you start with this method of control, if you are going to bring it to anything like a logical conclusion you will have to go the whole way with control, and we believe that, is what will eventually be found to be the case and that, if once you adopt what, I suppose the First Commissioner of Works would call undiluted Capitalism, you have to proceed by regulation until you have complete State control.

The problem as I see it, when one comes to deal with State control, is that you have two matters to deal with which are rather different in their nature. First, and perhaps most important, you have to be able to secure, by a sufficiency of exports of the kind that best pay the community as a whole, a sufficiency of food and raw materials brought into the country by barter or exchange. Having secured that, internally you must provide, as far as possible, as wide and as large a consuming market by means of a fair and even distribution of the products of industry. That is to say, you must divide the work among those who are willing to work, so that they have a maximum of consuming power and also that their labour is shared and their leisure is shared. I think that is the obvious desire of everyone, and to do it by any successful means for the rehabilitation of industry.

So far as the external trade of the country is concerned, one of the first things that the Government attempted to do when they came into power was what they called to balance trade, that is to say, to bring about a balance between imports and exports as a whole and, in order to do that, they thought it advisable to impose tariffs as a measure of control. Every action that they have taken in order to try to bring about that balance of trade has been some action of interference by the Government with what otherwise would be the free play of the economic circumstances of the particular individual. Again, that is a system which is bound, in our opinion, to fail. You may put on tariffs in order to try to stop imports, but what will decide the question whether particular goods are imported or not is whether the importer makes a profit out of them. That is the motive power that will decide the importations, a power and a motive which has nothing to do with the national good or with national desirability. You acknowledge that when you put on tariffs to try to stop them.

We say that, once you acknowledge the position that you have as a Government to control exports and imports in order to regulate the external trade of the country, you have to take over the whole control of both those operations, that is to say, you have to have what is tantamount to a foreign trade monopoly, and it is only in that way that you can se- cure the export of the goods that pay the nation best and secure that only those goods are imported which are in the best interests of the nation. You may try to do it by coal quotas or by putting subsidies on exports, as many countries do, but all those methods fail in the end because you leave, standing behind, the motive of private profits which actuates every particular deal. That is what we believe to be the logic behind the Socialist conception of the State controlling imports and exports.

The failure of tariffs to accomplish that object is, I think, perfectly clear throughout the world. It is not only in this country. It is an expedient which has been tried for numberless years throughout the world, and it has never succeeded in bringing about that regulation that is desired. Let me take an example. There are many Conservative Members of the House, and many Conservative people outside, who believe that Russian timber ought not to be imported into this country. I disagree, but there are many who believe it. The people who actually import Russian timber are in many cases some of those very Conservative people, and they do it because it pays them to do it. The motive for the importation is not some political theory. It is the profit that is made by the importation, and that may run either with or counter to the best national interests. So long as you leave that factor, we believe that, in times when the difficulties of external trade are so great and so complex as they are at present, you cannot bring about any proper solution. There is this other aspect of it. By the imposition of tariffs you are necessarily and designedly arranging that a particular business should make profits. It is upon that theory that tariffs are based, as far as encouraging home industries is concerned. The community as a whole pays for those extra profits.

If it is right that the Government should step in and arrange that a particular business should get profits, why is it not right that the community should have the benefit of the profits so earned? Surely there can be no argument that justifies any particular set of individuals earning, by reason of Government action, a particular reward when it is withheld from other individuals, and that is why time after time people say: "The in dustries in my area ought to have protection because other industries have had protection." You must inevitably get up against that incident of a tariff policy so long as the motive of private profit remains. You may try to regulate it as you like, but you will never regulate out the wrong motive or regulate in the right motive until you eliminate private ownership in industry altogether. The Noble Lord the Member for Hastings rather suggested in his speech that the only difference in the elimination of private enterprise by the transfer of capital from the private individual to the State was that the profit would go to the State instead of to the private individual. As we see it, the difference is far more fundamental than that, and is one which has a tremendous reaction upon the consuming power of the population, which is the point at which we think one should try to attack the problem of unemployment.

In private enterprise wages are looked upon as part of the cost of production and unless, after wages have been paid, there remains over some further profit, no production will take place in the particular industry. The hon. Member laughs. I am not talking about the day after. I think that everybody knows and acknowledges that if profit ceases in an industry under private enterprise, the industry itself will cease sooner or later. That is a fairly well acknowledged rule I should have thought. When, on the other hand, the industry is in national hands the question of the payment of wages is not a question of cost at all. It is a question of the distribution of part of the national income, because as long as the State acknowledges, as it does in this country, that it has to find maintenance, either through work, or in some other way, for every individual in the country, what is paid to any particular producer is his share of the national income, whether he gets it for work or whether he gets it for idleness. It is his share of the national income. If he can produce work for it, the nation will be benefited. That, I should have thought, was a perfectly clear proposition.

Lord E. PERCY

If he is idle, how does he get it?

Sir S. CRIPPS

Under the existing system—

Lord E. PERCY

Under the new system?

Sir S. CRIPPS

Under the existing system the nation acknowledges the liability to maintain everybody in this country. By law it has done so since the days of Queen Elizabeth. Under the new system it will acknowledge precisely the same liability either to support through work, or, if there is not any work, through maintenance. Therefore, every person who is capable of work, every adult and indirectly, of course, others through their adult relatives are entitled to, and do in fact, draw some portion of the national income.

Lord E. PERCY

So we are to have the dole stills?

Sir S. CRIPPS

Certainly, but the Noble Lord does not imagine that when you pass into a system of Socialism or anything else you can immediately absorb 100 per cent. of your working population, because I am sure that if he does he is the only person who thinks that way. Very well, we are agreed about it.

Lord E. PERCY

But you have not solved the problem.

Sir S. CRIPPS

I should have thought that even the Noble Lord knew that if you had what was the maximum of employment you must always have a certain amount of unemployment owing to movement in industry. It is an absolutely indispensable feature. [HON. MEMBERS: "No!"] Very well, perhaps Members who think that you do not will look out for some instance where it has happened. I was trying to point out that in the nationalised industry the distribution of wages is part of the distribution of the national income, and, taking that as a whole, if one considers the external trade of the country, it does not matter whether the goods you export would, under a capitalist system, show a profit or not. It is wholly immaterial. You can look upon the whole country as a single business, and the fact that coal is exported at less than the price of wages, plus material, is wholly immaterial to the country provided the exports will purchase the imports which are required. Therefore, because you have not the motive for producing private profit, you are able to keep on producing goods which are wanted, although in a capitalist system they would not show a profit on production. That is a very vital and far-reaching difference, because it enables you to produce goods which are admittedly wanted, but which, at the moment, do not show a profit.

Let me take the present case of housing. Under the existing capitalist system it is admitted that thousands of houses are wanted, that thousands of men are idle, that tons of goods are available and that the money is there, but there being no motive for house production, not being private profit-earning, no houses are produced. That is why at this moment houses are not being produced. If it were immaterial whether a profit were made or not, and if it were of greater benefit to the State to see that those materials and those men were employed, then houses would be produced and, when produced, would be used. What we do not understand is why a system which prevents the production of desirable commodities which are wanted by the people of the country is better than a system which would allow their production.

Taking that instance, I should like the right hon. Gentleman the Colonial Secretary to explain to us whether it is that capitalism is showing itself better able to cope with the needs of the population of this country in housing than Socialism. A suggestion which is made is, "Oh, get the Government to do it. Make the Government build." That is the breakdown of Capitalism. To get the Government to do it is the acknowledgment of failure by Capitalism, unless it is the new type of diluted Capitalism, and, for all I know, that may be Socialism. But when we get the definition of the term from the right hon. Gentleman the Colonial Secretary we shall know. I have given that instance because, in my submission, it is a practical case where the difference between the Socialist conception of industry and the capitalist conception of industry is clearly shown for the benefit of the community. After all, the theory that one nationally produces things only for profit of course must have long gone by the board. Nobody imagines that we produce roads for profit. The old days when the toll was put on in order to make a profit upon the bit of road which had been built disappeared decades ago. We build roads now because they are wanted by the people, and not because they make a profit. We put down drains and sewers because the people want them, not because it pays the local authority to do it, and there is no reason why industry should not be looked upon in exactly the same way as an essential service of production for the community.

It would not really make any difference to the people in an industry whether it was looked upon from that point of view or not, but it would make this practical difference so far as consumption and consuming power was concerned that so long as there was a demand for those goods the State would produce them, and out of the total national income which arose from all the productive industries there could be shared out, in the form of wages or whatever other payments were necessary, all that was available. If it is going to pay this country—it is not so comic a thing as some people seem to think—If it is going to pay this country to export coal, as it does at the present time, a long way under cost price, why should the miners wages pay for that? If it is a matter of national interest why should not the nation shoulder the burden of the export of cheap coal. It is done in order that we may get wheat, raw material and other commodities. Under a system of nationalisation the miners wages could be put upon a fair basis, quite irrespective of whether on some book-keeping account or not it happened, theoretically, to show a profit on a capitalist system. [Laughter.] Hon. Members are very amused. I am glad that they are amused, because they may be less amused when the system comes to be carried out.

The only real argument against Socialism is the argument of the vested interests. The owners of vested interests in this country take up, as far as I can see, this attitude: "We have always owned these industries. We have always owned the money. We have always had the power. It is the duty of the Government to preserve these things for us. If you have to put a wheat subsidy on the bread of the people, you must do it in order to preserve our agriculture. If you have to put a tariff on steel to make the price of steel go up, you must do it to preserve our steel industry. If you will do sufficient of that, then we will provide employment as far as we can for the population." The mass of the population are not owners of vested interests, and we believe that from their point of view they would prefer that the State had the vested interest in all industry and in the land as well, and that the State in the exercise of the powers of controlling those industries and that land should make that fair and equitable apportionment of the national income which would, we believe, largely increase the consuming power of the population and provide the larger market that is required as the first step towards undoing the harm of unemployment.

10.20 p.m.

Sir P. CUNLIFFE-LISTER

The whole House, and, indeed, the country if they read the speech of the hon. and learned Member for Bristol East (Sir S. Cripps) as I hope they will is deeply in his debt for having given us so clear and so full, and to me so illuminating an account, of what Socialism will do if it comes in our time. The hon. and learned Member has been very frank, and we know now that it makes no difference at all in a Socialist State whether an industry is carried on at a profit or a loss. Indeed, I gather from the hon. and learned Member that it is rather desirable that it should be carried on at a loss than at a profit in order that your social system should be run for the greater comfort of the people. But having realised that this is the Socialist way of attacking the fundamental causes of the poverty problem the country will be slower than ever to adopt Socialism as the way of salvation; and it will not last very long if ever it is adopted. Whatever may be one's view of the Debate we shall all agree that it has given us some very interesting maiden speeches. I listened with great interest to the speech by the hon. Member for Dartford (Mr. Clarke), very concise and to the point. There was an admirable speech by the hon. Member for Cardiff East (Mr. O. Morris) and a most interesting speech by the hon. Member for Tottenham North (Mr. Doran). I am afraid that it is not possible to adopt all his constructive suggestions or to remove all the slag heaps in his constituency.

I have been wondering how this amazing Amendment to the Address came to be put down; and I think I have the solution. We can all remember that when we were much younger we used to engage on a Sunday afternoon or evening in the pleasant practice of singing hymns, and I can imagine the Labour party meeting round a harmonium, if that is their instrument, to decide upon the hymn they were to sing. I can imagine one member saying, "Let us have one we all know," and then one of the more genial members, like the hon. Member for Dumbarton Burghs (Mr. Kirkwood) saying "Yes, but let us have one in which the Wee Frees can join. It does not matter if they sing it in a different tune." And so we get this amazing Amendment to the Address, and we have a sort of hymn of hate which they have been singing for the last two days.

We are charged in this Amendment with having made extravagant pledges. Of all the extraordinary charges brought against the Government the charge of making extravagant pledges is the last that could possibly be made. A less rosy prospectus than that which was presented by us to the electors at the General Election it would be hard to imagine. I have read again the Election Address and Manifesto of the Prime Minister and of the. Lord President of the Council, and I am bound to say that I have to look very closely to find any pledge, certainly any extravagant pledge. We went to the electors after having done a number of most unpopular things, for which we were violently attacked by the Opposition—things which they pledged themselves with unlimited extravagance to undo at the first possible moment. Our pledge, not a very extravagant one, was to stand by and to carry on those measures as long as the need lasted. We pledged ourselves to keep the Budget balanced, to do what we could to improve the balance of trade and to try to make agreements for more Imperial trade. We made a pledge, if pledge it be, that we would take the hard road together, and we gave one pledge which no doubt the Opposition regard as very extravagant, the pledge that we would not run away from our job.

We won. The only words in the Amendment with which I can agree are those which state that we won by an overwhelming majority; but we certainly did not win that majority on extravagant pledges. We won, I think, because people were very tired of extravagant pledges from whatever quarter they came, and because politicians greatly underrated the character and common sense of the people, who really wanted in a difficult time to be told the truth. We won really without any pledge of any sort or kind. Yes, but who are these people who are charging us with extravagant pledges? There is a proverb about glass houses.

HON. MEMBERS

How about the Prime Minister?

Sir P. CUNLIFFE-LISTER

He has learned, and has told the people with great frankness, that there are things which many promise and believe in and which are found to be quite impracticable when one has had the experience of trying to carry them out when in office. But the difference is that the Prime Minister now tells the country the truth while hon. Members opposite go on making the extravagant pledges. Here is an example in Mr. Arthur Henderson. He was not extravagant enough, so the party opposite turned the poor man out, and the hon. and learned Gentleman who has just spoken is now competing for the past. This is what Mr. Henderson said: With regard to unemployment, Labour will make that the supreme question in the first month of its existence, if returned to power. Labour does not pretend that you will never have unemployment again, but that it will be reduced to a minimum. Then here is Mr. Johnston: The Labour Government within a few months of their assuming office will make such a hole in the unemployment figures by increasing house-building, reducing the hours of work, increasing pensions and so on, that the remaining number who are left will be easily manageable. For people who wrote that kind of stuff in 1929 and who are prepared still, in reduced numbers, to stump the country talking that kind of stuff and worse, to charge us with making extravagant pledges, is almost a travesty of the truth.

Thė next charge made in this Amendment—I will address myself to it with precision—is that we have failed to carry out our mandate. That again is a very remarkable charge to be hurled at us. I have been listening to Debates in this Parliament for the last year and I understood that the charge brought against us in every Debate on every Measure was, not that we failed to carry out our mandate, but that we were grossly exceeding it in every respect. We could not do both. What have we done? What were the pledges which we gave? Let us see how a year of our work has compared with a year of the work of hon. Gentlemen opposite. This is their charge and not mine—that we failed to carry out our pledges. We gave a pledge to balance the Budget. That has been done. [HON. MEMBERS: "Has it?"] Hon. Gentlemen seem to have very inaccurate historical knowledge. They seem to be under some misapprehension as to the exact date on which we went into office. I thought we were dealing with the pledges which we gave at the Election.

Mr. BUCHANAN

Will you give another pledge for the next Budget?

Sir P. CUNLIFFE-LISTER

We shall certainly go on doing our best.

Mr. BUCHANAN

So did they.

Sir P. CUNLIFFE-LISTER

I hope the hon. Gentleman will give us as good a measure of support as he gave them. But we have certainly balanced the Budget and we are being challenged to-day on what we have done. We said that we would deal with the trade balance. We have done that. Hon. Gentlemen opposite may sneer at us to-night because we have done it by tariffs. I do not quite know how else they would have done it and the test is whether we have succeeded or not. Let me give the House the figures for the first 10 months of this year as regards the trade balance. In the first 10 months of this year we have reduced the adverse trade balance by no less than £ 86,000,000. That is the more remarkable because that 10 months includes the first quarter of the year, during one or two months of which the duties were not operating at all and during which, naturally, there was considerable importation in anticipation of the duties. In the first quarter— January, February and March—the reduction in the adverse trade balance was only £4,000,000 but taking the whole 10 months, including that quarter, we have reduced the visible adverse trade balance by £86,000.000. The House will remember the way in which the Opposition proposed to deal with it. They said, "The trade balance—what does it matter?" Indeed their observations were on very much thė same lines as the sort of thing that we have had to-night—that though you had not to pay much for your food and your raw materials it did not matter whether you exported at a profit or not.

What were they going to do? To mobilise our foreign investments—the invisible trade balance on which the right hon. Gentleman the Member for Darwen (Sir H. Samuel) laid such particular stress. I think that both sections are completely in unity on this point. They were going to mobilise our foreign investments, realise them, and pay away our capital as long as we could. [HON. MEMBERS "No."] Then perhaps, on some future occasion, we may have explained to us how the mobilisation of foreign investments was going to be used to pay the difference in the trade balance, without getting rid of those investments. Otherwise it seems to have been a singularly irrelevant suggestion. We had a plan by which we proposed to deal with the trade balance, and that was by trying to get a better equilibrium between imports and exports, and we have succeeded to the tune of £86,000,000.

Then we were told, and not the least by the right hon. Member for Darwen, "Well, you can do that, but, if you do that, you will very seriously damage your export trade. Imports pay for exports," or exports pay for imports, whichever it be. It is a very remarkable thing—and after all, it is the experience of facts that really counts in these matters—that we have reduced the trade balance by £86,000,000, but what has happened to our export trade? We have been exporting at the most difficult time, probably, in the world's history, when there are barriers against us everywhere, when it is very difficult to get paid, when you do not know where the exchanges are moving, and it is very difficult to get the exchange to pay. It is just as well that we should have the facts about how our export trade has been dealt with, and I have been at some pains to get the official figures from the Board of Trade. Eliminating price changes, the volume of exports of United Kingdom goods in the first nine months of this year was greater than in the corresponding period of last year, and for manufactured articles the increase during the year was 3 per cent., an actual increase of 3 per cent.

What is more, you have to compare our position with that of other countries. Everybody in this House, I think, knows that we were all very anxious because we were gradually losing, and we had indeed lost, our position as the greatest exporting country in the world, and other countries were far exceeding us in the race. We had, I think, fallen to third place as an exporting country, while the relative decline in our exports was much greater. What, in fact, has happened under this regime? We have recovered first place as an exporting country, and so far from this carefully considered policy of redressing the balance of trade damaging our export trade, we find that we are in a better position than we were before and that our position as an exporting country is better than that of any other country in the world.

Sir HERBERT SAMUEL

Surely the right hon. Gentleman is not going to leave out the most important of all the facts in this connection, namely, the influence of our having gone off the Gold Standard.

Sir P. CUNLIFFE-LISTER

I do not think it in the least accounts for all this. But do I understand that the right hon. Gentleman has always been such a keen advocate of our going off the Gold Standard? I thought he was one of the keenest supporters of our remaining on it, and I always understood that, according to him, nothing in the world could countervail the baleful influence of a tariff. I have no doubt that, as the thing goes on and as the tariff continues working, he will find some other reason for our success. Not only has this policy balanced and restored, or gone far to restore, our balance of trade, and not only has it unquestionably assisted us in the home market, and made it, possible, as every one with practical experience of tariffs knew it would, to compete more favourably in other markets, because you have a larger volume of production, but it has raised a very considerable amount of revenue. The revenue which is being raised is something in the region of £30,000,000 a year. When we get the Socialist Government in, is the whole of that to be abolished, is all Protection to be withdrawn?

Sir S. CRIPPS

No. I thought I explained to the right hon. Gentleman that we should have export and import boards to regulate the export and import of commodities.

Sir P. CUNLIFFE-LISTER

For a quarter of an hour the hon. and learned Gentleman proceeded to attack us because we had destroyed freedom.

Sir S. CRIPPS indicated dissent.

Sir P. CUNLIFFE-LISTER

I remember the words, and "freedom" was the word which the hon. and learned Gentleman used. I remember turning to the President of the Board of Trade when he said it, and saying, "It seems to me an extraordinary thing if Socialism is going to mean freedom," but apparently it is not, and we are going to have the freedom of import and export boards. We are, in fact, going to have complete Protection under the Socialist Government. That will no doubt endear the hon. and learned Gentleman still further to the right hon. Gentleman the Member for Darwen. The next definite pledge we gave was that we would do our best to help agriculture. We have given Protection—and advisedly given Protection—to, a large number of agricultural products. We have instituted a policy of getting wholesale prices back to the economic level on which farming can be made to pay, in the words of the Socialist manifesto.

Mr. DAVID GRENFELL

That is the Prime Minister's statement.

Sir P. CUNLIFFE-LISTER

And the Prime Minister is doing it to-day, and. the Labour party are busy attacking him for doing it. A very sound policy it is, and a policy which I should have thought everybody who cared in the least for the industrial population would support. We do not expect the Labour party to care very much for agriculture; they never have; but I should have thought that they would have done so in the interests of the industrial population. At last this country and the world at large have realised the fundamental truth that the primary producers buy about one-half of the manufactures of the world, and that unless farming is paying, unless we can get an economic price level for the primary commodities which are produced in the world, we cannot possibly restore industrial trade. I am glad to say that we are carrying out that pledge. The market prices in meat have already moved in the last week or 10 days, and I see a definite sign that the price level is rising and that that policy is beginning to succeed.

As for control, the right hon. Gentleman is wrong when he says that it means the maximum of Government, control, and that once you start this business you have to go on from the very beginning to the end. If he will study any of those cartel schemes in working, if he has looked at the tin scheme or the sugar scheme and at what is being done for meat, he will find that there is no necessity for Socialist import boards, or for putting the ordinary producer, the ordinary trader and the ordinary distributor out of business—not in the least. What we do is to get a reasonable equilibrium between supply and demand, to see that the market is working favourably, that it is not glutted, and then we need no interference with people who are conducting business in the ordinary way. When we can get that reasonable control of a market without a drastic interference with the ordinary channels through which trade flows—because those people know the business, and because those channels are pretty useful—I very much doubt whether it is necessary to do more. We had some experience in the War of a. complete system of Government control, with the Government running things, and that did not lead to cheapness of production or sale. Therefore, we can perfectly well get this equilibrium of supply and demand without any of the Socialist paraphernalia which the hon. Gentleman would seek to impose.

Then we also gave a pledge that we would try to make trade agreements within the Empire. We have made those Agreements, and the House has expressed its opinion upon them. I am not going back on the long Debates on the Ottawa Agreements, but two points were made in the Debate on Friday by hon. Members speaking from the Opposition Front Bench. One said, "Your carrying trade will suffer by what you have done." It seems to me that that showed a curious ignorance of the effect of Empire trade on British shipping. If there is one kind of trade which will help British shipping, because the great bulk of it is carried in British ships, between ports into which those ships are free to pass on their lawful occasions without any differential duties against them and in favour of anybody else, it is the trade which passes between one port of the British Empire and another. I cannot conceive of any trade which can be developed with better advantage not only to our manufacturers and our people here but to the whole of our shipping trade throughout the world than trade within the British Empire.

The other objection raised was that something we had done at Ottawa was going to mar the World Conference. That question has been raised before, and I dealt with it myself in speaking on the Ottawa Bill. So far from what we did at Ottawa being any block to a World Conference, it has given a lead to the world. We have shown that the countries of the British. Empire with all their diversity of interests can unite in a partnership for freer trade. We have shown that a tariff can be made an instrument of reasonable Protection. We have laid down the principle that arbitrary barriers are to be got rid of as quickly as financial conditions permit. We have given a lead with a practical policy to get an economic level of commodity prices. Every one of those things the world needs, and the world can well follow our example. I am perfectly certain that if the Ottawa Conference had failed it would have been idle to attempt to hold the World Conference. Can we suppose that if the countries of the British Empire had failed to come to an agreement at Ottawa the countries of the world, including the British Empire, could have come together a few months afterwards and made an agreement? I do not believe there is a single country in the world that would not have said, "If the British Empire cannot come to an agreement, what is the good of 100 other countries coming together to make trade agreements?"

It was also said by one of the speakers that we should find it impossible to conduct negotiations with foreign countries. My right hon. Friend the President of the Board of Trade is finding no difficulty in entering into negotiations with foreign countries. If he has a difficulty it is to know which to deal with first. There are three or four foreign countries already in negotiation, and others ready to come in and if I may venture without impertinence to compare the situation of my right hon. Friend, with these countries anxious to deal with him, and see what share they are to have in this market, once they know that they can deal with the biggest market in the world—if I may compare that situation with the situation in which some right hon. Gentlemen found themselves when trying to negotiate the tariff truce and nobody would go across the street to talk with them, I do not think the challenge that Ottawa made foreign negotiations impossible will stand the test of much criticism.

I could deal with other matters on which we have given pledges, but I think I have said enough to make this claim to the House. We are not in the least satisfied. We are going on. We believe that we are working on the right road and on the right principle. We want the help of anyone who will give us help in that work, but, so far from having failed in this short and difficult year to fulfil our pledges, I venture to say that no Government has done so much in so short a time. If there is one thing which the world needs to-day it is confidence. I think we have done something to restore confidence in this country, the confidence of our people in themselves, the confidence of other countries in this country, and, perhaps, not a little to help other countries to have confidence in themselves. If this Amendment were to be taken seriously, and anybody thought it was going to be carried out, what would be the effect on confidence either in this country or in any other country in the world?

Finally, we are challenged because we have not got the courage to adopt Socialism. Frankly, I admit that charge. Neither we nor this country have the courage to adopt Socialism, if courage be the right word to be used by people who showed such a signal example of it 12 months ago. Though they, fortunately, no longer have the control of policy, they have the control of something. They have, or had, the control of a daily newspaper, and I am interested always to see

how people practise what they preach. I wish, instead of being told something that might happen 40 years on, we had been given an account of the Socialist party and the Trades Union Congress owning a newspaper and not conducting it, I gather, very successfully, at, least from a capitalist point of view. Of course, if it does not matter whether you conduct business at a profit or a loss, that is all right, but I gather that the trade unions who subscribed to the funds for the "Daily Herald" did think it mattered rather whether the paper was conducted at a profit or at a loss. If I am not wrong, I gather that a very convenient arrangement was come to by which the business management of the, newspaper was handed over to a highly successful capitalist undertaking, and it has run the business side of that enterprise with signal success ever since. That is a very good example of how successful hon. Gentlemen are in carrying out their principles in practice.

I cannot help thinking that this Debate and this Amendment are really rather academic. This is a Debate on a subject in which nobody is in the least interested to-day. It is a Debate at a moment when the needs of the time transcend all party issues, and when certainly no one is going to serve even their party interests best by bringing forward an Amendment of this kind. We shall go forward with our task. At a time of national need and world crisis, the hon. Gentlemen opposite might have played their part, but they chose to show their courage by running away—[HON. MEMBERS: "Nonsense!"]—and the country showed its opinion of their courage at the last General Election. The House will show its opinion of their courage to-night, and, in showing its opinion, will reflect the sentiments of the people of the country and anticipate the judgment of the future.

Question put, "That those words be there added."

The House divided: Ayes, 39; Noes, 431.

Division No. 1.]	AYES.	[10.56 p.m.
Adams, D. M. (Poplar, South)	Buchanan, George	Davies, Rhys John (Westhoughton)
Attlee, Clement Richard	Cape, Thomas	Edwards, Charles
Banfield, John William	Cocke, Frederick Seymour	Graham, D. M. (Lanark, Hamilton)
Batey, Joseph	Cripps, Sir Stafford	Greenwood, Rt. Hon. Arthur
Bevan, Aneurin (Ebbw Vale)	Daggar, George	Grenfell, David Ross (Glamorgan)
Griffiths, T. (Monmouth, Pontypool)	Logan, David Gilbert	Tinker, John Joseph
Groves, Thomas E.	Lunn, William	Wallhead, Richard C.
Grundy, Thomas W.	McEntee, Valentine L.	Watts-Morgan, Lieut.-Col. David
Hall, F. (York, W.R., Normanton)	Maclean, Nell (Glasgow, Govan)	Williams, Edward John (Ogmore)
Hall, George H. (Merthyr Tydvil)	Maxton, James	Williams, Dr. John H. (Llanelly)
Jones, Morgan (Caerphilly)	Milner, Major James	Williams, Thomas (York, Don Valley)
Kirkwood, David	Parkinson, John Allen
Lawson, John James	Price, Gabriel	TELLERS FOR THE AYES.—
Leonard, William	Salter, Dr. Alfred	Mr. G. Macdonald and Mr. John.
NOES.
Adams, Samuel Vyvyan T. (Leeds, W.)	Chamberlain, Rt. Hon. N. (Edgbaston)	Gilmour, Lt.-Col. Rt. Hon. Sir John
Agnew, Lieut.-Com. P. G.	Chorlton, Alan Ernest Leofric	Gledhill, Gilbert
Altchison, Rt. Hon. Cralgie M.	Christie, James Archibald	Glossop, C. W. H.
Albery, Irving James	Churchill, Rt. Hon. Winston Spencer	Gluckstein. Louis Halle
Alexander, Sir William	Clarke, Frank	Glyn, Major Ralph G. C.
Allen, William (Stoke-on-Trent)	Clayton, Dr. George C.	Goff, Sir Park
Applin, Lieut.-Col. Reginald V. K.	Cobb, Sir Cyril	Goodman, Colonel Albert W
Apsley, Lord	Cochrane, Commander Hon. A. D.	Gower, Sir Robert
Aske, Sir Robert William	Collins, Rt. Hon. Sir Godfrey	Graham, Sir F. Fergus (C'mb'rl'd, N.)
Astbury. Lieut.-Com. Frederick Wolfe	Colman, N. C. D	Granville, Edgar
Astor, Maj. Hn. John J. (Kent, Dover,)	Colville, Lieut.-Colonel J.	Grattan-Doyle. Sir Nicholas
Atholl, Duchess of	Conant, R. J. E.	Graves, Marjorie
Atkinson, Cyril	Cook. Thomas A.	Greene, William P. C.
Bailey, Eric Alfred George	Cooke, Douglas	Grenfell, E. C. (City of London)
Baillie. Sir Adrian W. M.	Cooper, A. Duff	Gretton, Colonel Rt. Hon. John
Baldwin, Rt. Hon. Stanley	Copeland, Ida	Griffith, F. Kingsley (Middlesbro', W.)
Baldwin-Webb, Colonel J.	Courtauld, Major John Sewell	Guest, Capt. Rt. Hon. F. E.
Balfour, George (Hampstead)	Courthope, Colonel Sir George L.	Gunston, Captain D. W.
Balniel, Lord	Craddock, Sir Reginald Henry	Guy, J. C. Morrison
Banks, Sir Reginald Mitchell.	Cranborne, Viscount	Hacking, Rt. Hon. Douglas H.
Barrie, Sir Charles Coupar	Craven-Ellis, William	Hall, Capt. W. D'Arcy (Brecon)
Beauchamp, Sir Brograve Campbell	Croft, Brigadier-General Sir H.	Hamilton, Sir George (Ilford)
Beaumont, M. W. (Bucks., Aylesbury)	Crooke, J. Smedley	Hammersley, Samuel S.
Beaumont, Hn. R. E. B. (Portsm'th, C.)	Crookshank, Col. C.de Windt (Bootle)	Hanley, Dennis A.
Belt, Sir Alfred L.	Crookshank, Capt. H. C. (Gainsb'ro)	Hannon, Patrick Joseph Henry
Benn, Sir Arthur Shirley	Croom-Johnson, R. P.	Harbord, Arthur
Bennett, Capt. Sir Ernest Nathaniel	Cross, R. H.	Hartington, Marquess of
Bernays. Robert	Crossley, A. C.	Hartland, George A.
Betterton, Rt. Hon. Sir Henry B.	Cruddas, Lieut.-Colonel Bernard	Harvey, George (Lambeth, Kenningt'n)
Bevan, Stuart James (Holborn)	Culverwell, Cyril Tom	Harvey, Major S. E. (Devon, Totnes)
Birchall, Major Sir John Dearman	Curry, A. C.	Haslam, Sir John (Bolton)
Bird, Ernest Roy (Yorks., Skipton)	Davidson, Rt. Hon. J. C. C.	Headlam, Lieut.-Col. Cuthbert M.
Bird. Sir Robert B. (Wolverh'pton W.)	Davies, Edward C. (Montgomery)	Hellgers, Captain F. F. A.
Borodale, Viscount	Davies, Maj. Geo. F. (Somerset, Yeovil)	Henderson, Sir Vivian L. (Chelmsf'd)
Bossom, A. C.	Davison, Sir William Henry	Heneage, Lieut.-Colonel Arthur p
Boulton, W. W.	Dawson, Sir Philip	Herbert, Capt. S. (Abbey Division)
Bowater, Col. Sir T. Vansittart	Denman, Hon. R. D.	Hills, Major Rt. Hon. John Waller
Bower, Lieut.-Com. Robert Tatton	Denville, Alfred	Hoare, Lt.-Col. Rt. Hon. Sir S. J. G.
Bowyer, Capt. Sir George E. W.	Despencer-Robertson, Major J. A. F.	Holdsworth, Herbert
Boyce. H. Leslie	Dickle, John P.	Hope, Capt. Hon. A. O. J. (Aston)
Bracken. Brendan	Donner, P. W.	Hope. Sydney (Chester, Stalybridge)
Braithwaite, Maj. A. N. (Yorks, E.R.)	Doran, Edward	Hopkinson, Austin
Braithwaite, J. G. (Hillsborough)	Dower, Captain A. V. G.	Hore-Belisha, Leslie
Brass, Captain Sir William	Drewe, Cedric	Hornby, Frank
Briant, Frank	Duckworth, George A. V.	Horobin, Ian M.
Briscoe, Capt. Richard George	Dugdale, Captain Thomas Lionel	Horsbrugh, Florence
Brocklebank, C. E. R.	Duggan, Hubert John	Howard, Tom Forrest
Brown. Col. D. C. (N'th'l'd., Hexham)	Duncan, James A. L. (Kensington, N.)	Howitt, Dr. Alfred B.
Brown. Ernest (Leith)	Eastwood, John Francis	Hudson, Capt. A. U. M.(Hackney, N.)
Brown, Brig.-Gen. H.C. (Berks., Newb'y)	Edmondson, Major A. J.	Hudson. Robert Spear (Southport)
Browne. Captain A. C.	Elliot, Major Rt. Hon. Walter E.	Hume. Sir George Hopwood
Buchan, John	Ellis, Sir R. Geoffrey	Hunter, Dr. Joseph (Dumfries)
Buchan-Hepburn, P. G. T.	Elliston, Captain George Sampson	Hunter, Capt. M. J. (Brigg)
Bullock, Captain Malcolm	Elmley, Viscount	Hurd, Sir Percy
Burghley, Lord	Emmott, Charles E. G. C.	Hurst, Sir Gerald B.
Burgin, Dr. Edward Leslie	Emrys-Evans, P. V.	Hutchison, W. D. (Essex, Romford)
Burnett, John George	Entwistle, Cyril Fullard	Iveagh, Countess of
Butler. Richard Austen	Erskine, Lord (Weston-super-Mare)	Jackson. Sir Henry (Wandsworth, C.)
Butt, Sir Alfred	Erskine-Bolst, Capt. C. C. (Blackpool)	Jamieson, Douglas
Cadogan, Hon. Edward	Evans, Capt. Arthur (Cardiff, S.)	Janner, Barnett
Caine, G. R. Hall	Evans, David Owen (Cardigan)	Jesson, Major Thomas E.
Campbell, Edward Taswell (Bromley)	Evans. Capt. Ernest (Welsh Univ.)	Joel, Dudley J. Barnato
Campbell-Johnston. Malcolm	Everard, W. Lindsay	Johnston, J. W. (Clackmannan)
Caporn, Arthur Cecil	Fade, Sir Bertram G.	Jones, Sir G. W. H. (Stoke New'gton)
Carver. Major William H.	Fermoy, Lord	Jones. Henry Haydn (Merioneth)
Cassels, James Dale	Fielden, Edward Brocklehurst	Jones, Lewis (Swansea, West)
Castlereagh, Viscount	Fleming, Edward Lascelles	Ker, J. Campbell
Castle Stewart, Earl	Fox, Sir Gifford	Kerr, Lieut.-Col. Charles (Montrose)
Cayzer, Sir Charles (Chester, City)	Fraser, Captain Ian	Kerr. Hamilton W.
Cazalet, Thelma (Islington, E.)	Fremantle, Sir Francis	Kimball. Lawrence
Cazalet, Capt. V. A. (Chippenham)	Galbraith, James Francis Wallace	Kirkpatrick, William M.
Cecil. Rt. Hon. Lord Hugh	Gault, Lieut.-Col. A. Hamilton	Knatchbull, Captain Hon. M. H. R.
Chaimers, John Rutherford	Gibson, Charles Granville	Knebworth, Viscount

Knight, Holford	Newton, sir Douglas George C.	Skelton, Archibald Noel
Knox, Sir Alfred	Nicholson, Godfrey (Morpeth)	Slater, John
Lamb, Sir Joseph Quinton	Normand, Wilfrid Guild	Smiles, Lieut.-Col. Sir Walter D.
Latham, Sir Herbert Paul	North, Captain Edward T.	Smith, Sir Jonah W. (Barrow-In-F.)
Law, Sir Alfred	Nunn, William	Smith, Louis W. (Sheffield, Hallam)
Law, Richard K. (Hull, S. W.)	O'Connor, Terence James	Smith, R. W. (Aberd'n & Kinc'dine, C.)
Leckie, J. A.	O'Donovan, Dr. William James	Smith-Carington, Neville W.
Leech, Dr. J. W.	Ormsby-Gore, Rt. Hon. William G.A.	Smithers, Waldron
Lees-Jones, John	Patrick, Colin M.	Somervell, Donald Bradley
Leighton, Major B E. P.	Peake, Captain Osbert	Somerville, Annesley A. (Windsor)
Lennox-Boyd, A. T.	Pearson, William G.	Somerville. D. G. (Willesden, East)
Levy, Thomas	Peat, Charles U.	Soper, Richard
Lewis, Oswald	Penny, Sir George	Sotheron-Estcourt, Captain T. E.
Liddall, Walter S.	Percy, Lord Eustace	Southby, Commander Archibald R. J.
Lindsay, Noel Ker	Perkins, Walter R. D.	Spears, Brigadier-General Edward L.
Lister, Rt. Hon. Sir Philip Cunliffe	Petherick, M.	Spencer, Captain Richard A.
Little, Graham-, Sir Ernest	Peto, Geoffrey K. (W'verh'pt'n, Bilston)	Stanley, Lord (Lancaster, Fyide)
Llewellin, Major John J.	Pickford, Hon. Mary Ada	Stanley, Hon. O. F. G. (Westmorland)
Llewellyn-Jones, Frederick	Pike, Cecil F.	Steel-Maitland, Rt. Hon. Sir Arthur
Lloyd, Geoffrey	Potter, John	Stevenson, James
Locker-Lampson, Rt. Hn. G. (Wd. Gr'n)	Powell, Lieut.-Col. Evelyn G. H.	Strauss, Edward A.
Locker-Lampson, Com. O. (H'ndsw'th)	Power, Sir John Cecil	Strickland, Captain W. F.
Lockwood. John C. (Hackney, C.)	Pownall, Sir Assheton	Stuart, Hon. J. (Moray and Nairn)
Loder, Captain J. de Vere	Procter, Major Henry Adam	Stuart, Lord C. Crichton-
Lovat-Fraser, James Alexander	Pybus, Percy John	Sueter, Rear-Admiral Murray F.
Lyons, Abraham Montagu	Raikes, Henry V. A. M.	Sugden, Sir Wilfrid Hart
Mabane, William	Ramsay, Alexander (W. Bromwich)	Summersby, Charles H.
MacAndrew, Lieut.-Col. C. G. (Partick)	Ramsay, Capt. A. H. M. (Midlothian)	Thomas, James P. L. (Hereford)
MacAndrew, Capt. J. O. (Ayr)	Ramsay, T. B. W. (Western Isles)	Thomas, Major L. B. (King's Norton)
McCorquodale, M. S.	Ramsbotham, Herwald	Thompson, Luke
MacDonald, Rt. Hon. J. R. (Seaham)	Rankin, Robert	Thomson, Sir Frederick Charles
MacDonald, Malcolm (Bassetlaw)	Ratcliffe, Arthur	Thorp, Linton Theodore
Macdonald, Sir Murdoch (Inverness)	Ray, Sir William	Titchfield. Major the Marquess of
Macdonald, Capt. P. D. (I. of W.)	Rea, Walter Russell	Todd, Capt. A. J. K. (B'wick-on-T.)
McEwen, Captain J. H. F.	Reed, Arthur C. (Exeter)	Touche, Gordon Cosmo
McKeag, William	Reid, Capt. A. Cunningham.	Train, John
McKie, John Hamilton	Reid, David D. (County Down)	Tryon, Rt. Hon. George Clement
McLean, Major Alan	Reid, James S. C. (Stirling)	Turton, Robert Hugh
McLean, Dr. W. H. (Tradeston)	Reid, William Allan (Derby)	Vaughan-Morgan, Sir Kenyon
Macmillan, Maurice Harold	Remer, John R.	Wallace. Captain D. E. (Hornsey)
Macpherson, Rt. Hon. James I.	Rentoul, sir Gervals S.	Wallace, John (Dunfermline)
Magnay, Thomas	Renwick, Major Gustav A.	Ward, Lt.-Col. Sir A. L. (Hull)
Maitland, Adam	Rhys, Hon. Charles Arthur U.	Ward, Irene Mary Bewick (Wallsend)
Makins, Brigadier-General Ernest	Roberts, Aied (Wrexham)	Ward, Sarah Adelaide (Cannock)
Mallalieu, Edward Lancelot	Roberts, Sir Samuel (Ecclesall)	Wardlaw-Milne. Sir John S.
Mander, Geoffrey le M.	Robinson, John Roland	Warrender. Sir Victor A. G.
Manningham-Buller, Lt.-Col. Sir M.	Ropner, Colonel L.	Waterhouse, Captain Charles
Marsden, Commander Arthur	Rosbotham, S. T.	Watt, Captain George Steven H.
Martin, Thomas B.	Ross, Ronald D.	Wayland, Sir William A.
Mason, Col. Glyn K. (Croydon, N.)	Ross Taylor, Walter (Woodbridge)	Wells, Sydney Richard
Mayhew, Lieut.-Colonel John	Rothschild, James A. de	Weymouth, Viscount
Merriman, Sir F. Boyd	Ruggles-Brise, Colonel E. A.	Whiteside, Borras Noel H.
Mills, Sir Frederick (Leyton, E.)	Runciman, Rt. Hon. Walter	Whyte, Jardine Bell
Mills, Major J, D. (New Forest)	Runge, Norah Cecil	Williams, Charles (Devon, Torquay)
Milne, Charles	Russell, Albert (Kirkcaldy)	Williams. Herbert G. (Croydon, S.)
Mitchell, Harold P.(Br'tfd & Chisw'k)	Russell, Alexander West (Tynemouth)	Wills, Wilfrid D.
Mitchell. Sir W. Lane (Streatham)	Russell, Hamer Field (Sheffield, B'tslde)	Wilson. Clyde T. (West Toxteth)
Mitcheson, G. G.	Russell, Richard John (Eddisbury)	Wilson, G. H. A. (Cambridge U.)
Molson, A. Hugh Eisdale	Rutherford, Sir John Hugo	Windsor-Clive, Lieut.-Colonel George
Monsell, Rt. Hon. Sir B. Eyres	Salmon, Major Isldore	Winterton, Rt. Hon. Earl
Moore, Lt.-Col. Thomas C. R. (Ayr)	Salt. Edward W.	Wise, Alfred R.
Moore-Brabazon, Lieut.-Col. J. T. C.	Samuel, Sir Arthur Michael (F'nham)	Womersley, Walter James
Moreing. Adrian C.	Samuel, Rt. Hon. Sir H. (Darwen)	Wood. Rt. Hon. Sir H. Kingsley
Morgan, Robert H.	Samuel, Samuel (W'dsworth, Putney)	Wood, Sir Murdoch McKenzie (Banff)
Morris, John Patrick (Salford, N.)	Sandeman, Sir A. N. Stewart	Worthington, Dr. John V.
Morris. Owen Temple (Cardiff, E.)	Sanderson, Sir Frank Barnard	Wragg, Herbert
Morris-Jones. Dr. J. H. (Denbigh)	Scone, Lord	Young, Rt. Hon. Sir Hilton (S'v'oaks)
Morrison, William Shepherd	Selley, Harry R.	Young, Ernest J. (Middlesbrough, E.)
Muirhead, Major A. J.	Shaw, Captain William T. (Forfar)
Munro. Patrick	Shepperson, Sir Ernest W.	TELLERS FOR THE NOES.
Nail, Sir Joseph	Simon, Rt. Hon. Sir John	Captain Margesson and Mr. Blindell.
Nation, Brigadier-General J. J. H.	Sinclair, Maj. Rt. Hn. Sir A. (C'thness)

Question put, and agreed to.

Main Question put, and agreed to. Resolved, That an humble Address be presented to His Majesty, as followeth:—

Most Gracious Sovereign,

We, Your Majesty's most dutiful and loyal subjects, the Commons of the United Kingdom of Great Britain and Northern Ireland, in Parliament assembled, beg leave to offer our humble thanks to Your Majesty for the Gracious Speech which Your Majesty has addressed to both Houses of Parliament."

To be presented by Privy Councillors or Members of His Majesty's Household.