INDUSTRIAL COUNCILS BILL.

HC Deb 23 February 1934 vol 286 cc647-732

Order for Second Reading read.

11.5 a.m.

Mr. BERNAYS

I beg to move, "That the Bill be now read a Second time."

I could have wished that someone with more industrial experience and greater Parliamentary skill had been in charge of the Bill, but, owing to the luck of the Ballot, it has fallen to me to make the first speech in its favour, and I hope that any defects which may appear will be put down to my own inadequate advocacy and not to faults in the Bill itself. The object of the Measure is to encourage the formation of industrial councils. These industrial councils are to consist of employers and workpeople in equal numbers, and their primary object is the sanctioning and enforcement of wage agreements. If I had called the Bill the Trade Boards Extension Bill it would have encountered very little opposition, for trade boards are now admitted to be an unqualified success. In 1909, in certain trades like match and chain-making, where there were sweated labour conditions, trade boards were set up consisting of employers and employés in equal numbers whose job was then and is now to come to agreement on wage rates, and when such agreement is reached, subject to the approval of the Minister, it is made obligatory on the whole industry. It is indisputable that to many trades that Act has brought a higher standard of living and has minimised the risk of industrial stoppages. It was indeed so successful that immediately afterwards there was a demand for its extension to other industries.

I am glad to think that it was in my own constituency in Bristol that this movement first took root. A round table conference of capital and labour was summoned in the years just before the war by a leading pottery manufacturer, at which resolutions were passed which were subsequently incorporated in the Whitley Commission. That Commission was appointed in 1917 under the presidency of Mr. Whitley, and it recommended the setting up of industrial councils to promote co-operation in industry, and it added: Organisation is needed whereby arrangements and agreements made for the industry may be effectively carried out. What happened? The Government gave these industrial councils a status but refused to give sanction to their agreements, and the object of the Bill is to give sanction to those agreements voluntarily arrived at in an industry which has a joint industrial council. The machinery of sanction is Clause 4, where it is provided that if a voluntary agreement has been reached it shall be presented to the Minister for his sanction, and, if he thinks fit to give his sanction, the Order is then to lie on the Table of each House of Parliament for forty days so that it will be possible for Parliament to challenge it, and, if it thinks it necessary, revoke it. The Bill differs in one important respect from Bills of the same nature which have been brought forward in the past. They have included a Clause giving power to the Minister to sanction all decisions of a joint industrial council. That is perhaps a rather sweeping proposal and might lead to many complications. It would also open the scope of the attack on the general principle, so that I have in this Bill limited the area of ministerial sanction to wage agreements. Where the Minister under the Trade Boards Act has the power to call the representatives of an industry together and enforce a minimum wage, those who support the Bill want to give him power in any other industry that may ask for it to give legislation sanction to wage agreements. In the Trade Boards system the initiative may come from the Minister; here it can only come from the industry itself.

Let me deal with some of the objections which may be brought against the Bill. It will be argued that it destroys the voluntary system of coming to wage agreements in industry. It does not do that at all. It is entirely permissive. The point may be raised that in some industries, where there are now joint industrial councils, they do not deal with wage agreements. That is true in the boot and shoe industry, but there is no objection in that industry to a joint industrial council dealing with wage agreements. There is much to be said for the joint industrial council as the machinery for dealing with wage agreements. It can keep in continuous review the whole of an industry; it is not like a conciliation committee, which is called together for a particular purpose and then disbanded, it is in continuous existence. A more formidable objection is that it may be argued that the proposals in the Bill involve compulsory arbitration. I do not think that they do anything of the kind. The Minister only acts after joint voluntary action on the part of the industry; and may I draw attention of hon. Members to the additional safeguard in Clause 4, Sub-section (3). They will see there that a special Order is only to have effect during such period as shall be specified in the Order. In other Bills which have been brought forward the Order has been for an indefinite period, an unlimited period, and it may be argued that after a few months one side to the agreement might wish to withdraw and that the Minister would then have the power to hold them to the agreement. That is not a valid objection to this Bill. The Order automatically ceases at the end of each specified period.

Some alarm may be caused by Clause 5, Sub-section (5) where, in the event of proceedings in court, certain technical questions of wages may be referred to the industrial court. But I would draw attention to the fact that the industrial court is only brought in after actual proceedings have been taken, and it is acting not for the industry but for the High Court. It may be thought that this is to a limited extent compulsory arbitration. It will be perfectly easy to make the industrial court simply assessors, simply acting in an advisory capacity. In any case it is a question which could be very well dealt with in Committee. Neither in intention nor in fact is the Bill to be construed into sanction of the principle of compulsory arbitration.

It may be said that in Clause 5 the employer is liable to penalities but not the employé, and the question may be asked what about the right to strike, ought not that to be taken away? The employer under the Bill has complete rights to refuse employment, and why should not the employé have equally the right to withhold his labour? There is nothing revolutionary in this Clause: it is all in the Trade Boards Act. I do not know what attitude the official Opposition are going to take towards the Bill, but I would remind them that a large part of the Bill I have taken straight out of the Rates of Wages Bill which I think was approved by the Trades Union Congress.

I come now to what may be the main objection to the Bill, which is the giving of legislative sanction to wages agreements, I believe that that is vital. Without it it is possible for an employer to break away from any agreement that may be reached, and there would follow all the disastrous results of undercutting which often leads to a race in starvation. I think that most joint industrial councils are agreed on the necessity for compulsion. I have here a resolution of the quarrying industry: The National Joint Industrial Council for the quarrying industry has always realised that there are a number of small quarry owners outside its influence who are prepared to take advantage of economic circumstances to obtain workers on terms enabling them to engage in destructive competition. This in its turn affects the trade, the consequential ability to pay the standard rates of those firms who have previously honoured the joint agreements. I have here a letter written to me by an employer in my own constituency, the Bristol Pottery, Fishponds, Bristol, bearing out the same point. He says: Our Joint industrial Council has worked extremely well for something like 17 years. The almost daily contact between employers and operatives on the various committees has educated both sides in a way which amply justifies the hopes of those who have been responsible for initiating the Whitley Councils. The one great drawback, however, has been that when we come to a decision—an agreement as to wages or any other matter—we have no power to make it binding on the industry as a whole, and the result is, I think there is no doubt about it, that the leaders of the trade unions are correct when they say that many employers are paying less than the agreed wages. This has been made more possible by reason of the terrible amount of unemployment. There are employers and operatives who do not belong to their respective Associations. It is therefore imperative in my view that the industrial councils should have the power to make their decisions binding on the industry as a whole. That was written by Mr. T. B. Johnston, one of the leading manufacturers in Bristol. It is vital that agreements in industry should not be sterilised by a minority. I am sure it will be argued by the Minister that industrial councils are weak, that sometimes they have been disbanded, and that frequently their operations have been suspended. Why have they been weak? For no other reason than that the Government have refused to make them strong. Employers have been able to break away from the industrial councils and the industrial councils have been powerless to take action. It is in order to make industrial councils strong that we have brought forward this Bill. The minority are fully protected in Clause 4, Sub-section (6). The House will see that every Order has to be laid before each House of Parliament. If that savours too much, as opponents may argue, of Government control of wages, I suggest that it would he possible for the machinery of appeal to be that of the Minister giving notice that he intends to sanction a wage agreement, and that would give a period of time when interested parties, who may wish to make objections to the Minister, would have that opportunity before the Order has the sanction of law. That, I believe, is the procedure of the trade boards, and I cannot see why it cannot be extended to another range of industry.

It will be argued that the voluntary system of wage agreements is working well. In some cases no doubt it is. My hon. Friend the Member for West Swansea (Mr. L. Jones) will speak with great authority this afternoon on the steel industry. I believe that there voluntary wage agreements are working very well. The Bill will not alter that arrangement in the least. Though voluntary wage agreements are working well in some industries, they are certainly not working well in others. I have mentioned two industries, the quarrying industry and the pottery industry.

Mr. ALEXANDER RAMSAY

The hon. Member has quoted a letter from an individual employer in the pottery trade. Is he in a position to tell the House what the Pottery Council have decided regarding the Bill?

Mr. BERNAYS

This letter is from a leading member of the pottery industry, dated February 21st, and I understand that the pottery industry is in favour of the general principle of the Bill. I do not know whether it is in favour of the details of the Bill, but that does not matter. What I am arguing is the general principle of the Bill and the giving of legislative sanction to wage agreements. If the pottery industry has amendments to put forward my hon. Friend will have an opportunity of moving them. It may be argued that these industries are small industries. But there is the boot and shoe industry wanting legislative sanction to wage agreements. It is a very powerful industry, and hon. Members who are in a position to speak for it know how serious is undercutting in that industry, and how powerless the manufacturers are to prevent a breach of agreements. The Lancashire weavers are petitioning at this moment for legislative sanction for their wage agreements and no doubt we shall have powerful arguments from my right hon. Friend the Member for Darwen (Sir H. Samuel) on that subject later in the Debate. Here is one way of satisfying that demand.

I come to the Amendments on the Paper. The hon. Member for Moss Side (Sir G. Hurst) proposes to move that the Bill be read a Second time upon this day six months. I cannot imagine a Bill promoted by a Liberal that the hon. Member would support and so I do not propose to take up time in discussing that Amendment. But there is also what is, I believe, called a reasoned Amendment in the name of several hon. Members who will be able to speak with power and authority on industry. I hope that in moving their Amendment, however, they will not try to infuse into the Debate any party spirit. I hope that jokes will not be made about the Liberal party or suggestions put forward that this is a Bill to reunite and revivify the forces of Liberalism. It is nothing of the kind, and I hope that in this Debate we shall be able to get away from mere party bickering.

The Bill has support in all quarters of the House. The Motion is to be seconded by my hon. Friend the Member for Oldham (Mr. Hamilton Kerr) and other Conservative Members will, I understand, support it. Part of it has had support from the Trades Union Congress and when a similar Bill, of a far more sweeping character than this, was introduced in 1924 it had support of a remarkable character. I notice among the names of those who went into the Division Lobby in favour of that Bill that of the present Foreign Secretary and also that of Miss Bondfield who was at the Ministry of Labour. The Bill also had the support of the present Attorney-General and, most important, it had the support of my right hon. Friend the Lord President of the Council. The only Members who voted against that Bill were the 16 Members of the Independent Labour Party. If there is a diehard opposition to this Bill then it will be interesting to see a union of the extreme Conservatives and the extreme Socialists—a union of the wreckers.

The revolver that has been put into the hands of the hon. Members who are to submit the reasoned Amendment is loaded with blank ammunition. As a Motion for rejection it is very moderately worded. It speaks of other forms of joint machinery already in effective operation. It does not follow that voluntary arrangements already in operation should not continue. The Amendment also says that the Bill is designed to give special authority to agreements made through one single form of joint organisation. We are not wedded to one form of joint organisation. I think that the joint industrial council is a very good form, but obviously there are other forms. But I am glad to see that this reasoned Amendment does not attack the general principle of the Bill which is that of legislative sanction for wage agreements. I take it therefore that the hon. Members whose names are down to that Amendment are in favour of that general principle.

The Government, I believe, cannot leave the position as it is. There are the demands I have mentioned from industries for legislative sanction to wage agreements and this question has now been put right into the centre of the picture by the demand of the Lancashire weavers. Here we have a section of a great industry, which has always been regarded as the Gibraltar of the voluntary system, demanding a change. Successive Governments in the past have been able to point to a great industry like this and to say, "How well it works". But it is not working well. The whole mind of industry is changing, and, with the change of mind in industry, surely the mind of the Government towards industry must change. What answer are the Government going to give to the demand of the Lancashire weavers? I hope we shall not have merely another of those Charming and soothing speeches from the Minister of Labour that have always been heard in this House, on Bills of this kind, ever since the Whitley Commission. Surely the time for soothing speeches, for vague promises of inquiry, for deputations and for agitation is over and the time for action has now come. If the Government will not accept this Bill will they bring in a Bill of their own?

I offer this Bill for what it is worth as a "peace in industry" Bill. We have many industrial advantages in this country and not the least of them is our power of adaptability to new conditions. It is for all to see on the Great West Road which now cuts its way through a new industrial England. There we see a new workshop of the world where products are being turned out with speed and efficiency that were undreamt of a decade ago. That and other areas of the country, reflect the resource and energy of our people which have enabled us to withstand the economic blizzard better than any other nation in Europe, or perhaps in the world. We have adaptability. We have great natural resources. We have a skill in industry, and a pride in craftsmanship unequalled perhaps by any other race, and we have a political freedom that is unchallenged and, I believe, unchallengable. One thing we have not got, and that is peace in industry. At any moment the economic life of the country may be brought to a standstill by the paralysis of an industrial stoppage. I believe that the central idea of this Bill, the legalisation of wage agreements and the prevention of the disastrous effects of undercutting, is a step, if a short one, towards the promotion of peace and concord in industry. At any rate, it is in that spirit that I have brought it forward, and in that spirit I ask the House of Commons to give it a Second Reading.

11.35 a.m.

Mr. HAMILTON KERR

I beg to second the Motion.

As the hon. Member for North Bristol (Mr. Bernays) said, in his admirable speech, this Bill is essentially a non-party Measure. Its principle has found support among hon. Members of all shades of opinion in this House—like the King in Sir William Browne's epigram: The King to Oxford sent a troop of horse, For Tories own no argument but force; With equal care, to Cambridge books he sent, For Whigs allow no force but argument. For once hon. Members representing these rival factions are united in supporting the principle of the Bill.

The hon. Member for North Bristol stressed in his speech peace in industry, and few thinking people will deny that one of the chief problems in the world to-day, if not the most outstanding problem, is the relation between capital and labour. Upon the happy solution of that problem depends not only the strength and fitness of our economic structure, but, I firmly believe, our continued survival as one of the leading exporting nations of the world. It is essential to have some form of machinery whereby that economic structure can be made to work smoothly, and I believe that in this question the personal relationships between capital and labour form a very outstanding problem.

During the 19th century, in the industrial revolution, great numbers of our population found their way from the countryside to the mine, to the mill, and to the forge. Great towns sprang up, often mere rows of mean brick dwellings such as Disraeli described in his novel, "Sybil." The suburb of Wodgate, which he pictured under those industrial conditions, gave rise to the growth of the trade unions, those great institutions pledged to defend the elemental rights of the working man. Under those conditions the pleasant relationships which so often bound employer and employé together were broken down. Too often the employer thought merely of the workman under his charge as a name on a register, and the employé thought of his employer as a man devoted solely to the accumulation of vast dividends. How different from England of the 18th century, when the good employer would often ride round his estates on his cob, know the names of all his tenants and the ages and numbers of their children, and, when sickness came, send down medicine from the manor house.

It is, I firmly believe, that element of personal co-operation and relationship which is so essential to industry to-day. Nobody would accuse Signor Mussolini of being a sentimentalist. The Italian Dictator, inspired with the ideals of Augustan Rome, is essentially a realist, and he was the first to see that capital and labour must have some form of machinery whereby economic conditions could run smoothly. As far back as 1925, employers and employés signed a pact between themselves, known as the pact of the Vidoni Palace. In 1927 followed the Charter of Corporations, and by 1932 no fewer than three-quarters of the employers and employés in Italy had joined the respective syndicates set up under that Charter. As a form of machinery it has worked extremely well.

May I give the House one specific instance? Not long ago, in the town of Prato, a brick and tile firm were compelled to shut down owing to the cancellation of a large building order. The head of the workmen's syndicate approached the employers' syndicate, and implied that the workmen would be willing to carry on if the shops in the town gave credit. The employers' syndicate approached the Corporation, which is the focal point of the local administration, and an inter-syndical committee was set up, through which it was arranged that the banks would provide credits for that firm should the building societies give a specific number of orders to it. In return shops in the town would give credit to the workmen. In one year that firm had set itself on its feet again, and had repaid the debts and obligations which were then contracted. In Spain one of the few measures which endeared General Primo de Rivera to his compatriots, was the setting up of the Comitès Paritarios, conciliation committees between employers and employés.

It may be said that I have been giving examples of countries under dictatorial Governments. Let us turn to Canada, where, perhaps, tradition and the freer air of the prairies breed more Liberal institutions. As far back as 1907, the Industrial Disputes Investigation Act was passed into law, and during the period 1907 to 1926, 640 cases were brought up. Of these, 450 were considered, and in only 37 cases did strikes ensue. In the re maining 192, either the questions at stake did not come within the terms of reference of the Committee or there had been some misapprehension in application.

In this country likewise, as the hon. Member for North Bristol said, we have our forms of conciliation. We have the Agricultural Wages Acts and the Railways Acts. Likewise, in the Civil Service, there are the Whitley Councils, which embrace all the great Departments of State and I understand that no fewer than 50 Industrial Councils are already in operation and none working more effectively than in the Gas Light and Coke Company, whom we see operating only a stone's throw from here, in Westminster. There the industrial council have successfully for many years settled conditions governing wages, hours, and labour, and the industry has further carried that principle into the useful fields of profit sharing, and likewise into an awards committee. In this committee the workmen, having ideas for inventions, submit their plans, and the firm has found useful numerous propositions such as new designs for valves, wall hangings, and "Safety First" devices.

This Bill, as the hon. Member for North Bristol said, does not lay down the principle of compulsory arbitration, and no critic can possibly conjure up the sinister picture of a dictator, the hub and focal point of a spider's web of bureaucratic control. It merely seeks to give the force of law to agreements voluntarily entered into and voluntarily submitted to, by the industries concerned. Few people will deny that in this world to-day we are passing through a phase of economic evolution. The ever-increasing duress of foreign competition is compelling individual units to merge their interests into large groups. Where those units stand outside this pressure, we see obvious signs of economic distress, low wages, internal competition, price-cutting, and all the evils which follow from disunity. This Bill only seeks to give legal force to agreements entered into by the industries concerned.

Mr. LEWIS JONES

Will the hon. Member point out, for my information at any rate, where in the Bill there is any safeguard that the agreements come to must be the decisions of the majority in the industry?

Mr. KERR

That is not specified in the Bill. The conception was to make the Bill as flexible as possible, in order to obtain as much support as possible from hon. Members in this House, and any point which could be raised, such as this, could be successfully dealt with in Committee. When Theodore Roosevelt annexed Panama for the purpose of building the Panama Canal, occasional qualms of conscience attacked him at the White House. But Attorney-General Knox said to him: Mr. President, let not so great an enterprise suffer from any taint of legality. We seek to obtain the status of legality for these councils at the present moment. This does not imply any dictatorial powers. We feel that those who seek to reassure their judgment by precedents will find ample examples of machinery of this nature abroad. I say to hon. Members who sit on the Labour benches, defenders of Labour's interests, that surely no Measure could be designed to suit their interests better than this one. It is, we feel, a solution drawn typically in the English tradition to deal with a large and ever increasing problem: one which we must face as conditions present them-selves to-day.

11.46 a.m.

Sir GERALD HURST

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

My hon. Friends who moved and seconded the Second Reading put their case so eloquently and persuasively that I hope the House, before it forms a judgment, will consider it in the cooler light of what is actually contained in the Bill rather than be swayed by sentiment to accept it. The hon. Member for North Bristol (Mr. Bernays), who is known and respected by us all as one who has made sacrifices for freedom, has spoken with the eloquence which is always at his command, and I have the greatest respect for the arguments that he put forward. I do not think he was quite fair to me in describing me as a wrecker and as being led to move my Amendment simply because he is a Liberal. As my hon. Friend the Member for Oldham (Mr. H. Kerr) said, it is not a party Measure, and I do not oppose it because the hon. Member who moved it is a Liberal or because Liberals are supporting it, but because representing as I do an industrial constituency, and having lived most of my life in the industrial north, I look at it from the point of view of one who re- gards with a certain amount of suspicion any extension of State interference. As a matter of fact, the views I am hoping to express this morning are much more in accordance with the great age of Liberalism than those that have been expressed by my hon. Friend the Member for North Bristol.

I think that to-day one has to throw the balance of proof on the advocate of an extension of State interference, and before we support a very rigid and drastic scheme of State interference with industry, such as is the basis of this Bill, we ought to feel satisfied that the Bill has the support of the mass of employers and employed in industry. No evidence has so far been brought forward that this Bill enlists that support or anything like it. Indeed, except in a few minor cases, there has been no expression of support in the country for the Bill. I should like to point out also the great differences between the arguments of my hon. Friend the Member for Oldham and the hon. Gentleman who moved the Motion. The latter said that England stands at the head of all the world in trade organisation and adaptability and that we must therefore blaze the way for other countries to follow. My hon. Friend who seconded said that schemes are already in operation and working splendidly in Spain and Italy. The two arguments are inconsistent. In those autocratic countries which the mover said are backward in so many ways there are many instances of State interference on the lines of this Bill.

I do not want to enter into dialectics, however, but to get to the Bill itself. It seems to me to be based on two ideas. The first is that wherever a bare majority of members of a conference—who are convened in indefinite numbers—agree upon an industrial council, the Minister of Labour may, without there being any right of appeal, appoint an industrial council. As an hon. Member who interrupted pointed out, the fact that there is a bare majority of those who were convened to this assembly deciding in favour of an industrial council does not prove that there is any majority in the industry in favour of it. The second point is that where on the recommendation of an industrial council the Minister makes a special order, there is no appeal at all. One of my hon. Friends said that everybody in the trade would be fully protected because the order would be laid before Parliament, but no referendum to the trade itself is provided for. There is no easy machinery for a revision of the rates of wages which are established, and I think I am right in saying that a rigid scheme of wages, exceedingly difficult to revise, may be enforced without general consent and without any condition precedent having been fulfilled whereby there has been a real referendum to the employers or employed.

The scheme in the Bill is open to a great many criticisms. It is entirely unilateral. Assuming that you have a rate of wages laid down in a particular industry, the employed can recover in the courts any difference between the wages paid to them and the standard rate fixed by the order, but there is no obligation upon labour or upon any labour organisation to abide by the wages that have been fixed. That is what makes revision almost inevitable. If trade improves, the employed will want a higher rate. They are not bound by rates which have been established, because they can strike or give notice, and there is no guarantee that they will continue to work. Frequent revisions of standard rates of wages must lead, not to peace in industry, but to recurrent friction between employers and employed. Secondly, the sanction is extremely weak. The sanction now sought for by many of the Lancashire weavers is different from the sanction which is included in this Bill. The only sanction of a wage agreement is that an employé can sue the employer for the difference between the wage which the employer pays and the standard rate fixed. There is no other sanction at all. There is no machinery by which employers in the industry can enforce an agreement against weak selling or undercutting, and no machinery by which the State can intervene; and if in fact the employed agree with the employers to accept a lower rate of wages, that will be paid unless and until the employed concerned choose to take the matter to the courts.

I am not saying that it is a specially good thing to have a sanction, but, if you take the view that these agreements should have a sanction, surely you want a real sanction and not the very illusory, partial and easily evaded sanction which is contained in the Bill.

Mr. MANDER

Is the hon. and learned Gentleman saying that the Bill is much too moderate?

Sir G. HURST

I say it is a very weak Bill in itself, but it can be strengthened in Committee and it is for that reason that I do not want to dwell at length on these two points. The two points I have mentioned as being the great difficulties in the Bill, even if it were a good Bill, are that it is unilateral in nature and that there is no sanction at all. Such sanction as there is different from the sanction desired by the Lancashire weavers. I am not, however, basing my Amendment on what are admittedly Committee points, although they are important points. I base it on larger issues of policy. First of all, I do not think I am misrepresenting by hon. Friends when I say their Bill envisages a period when practically all industries will have wages fixed by this machinery. My submission is that this rigid system of wage fixing, in a particular way, without regard to the habits and the wishes of a great many of our leading industries, is wrong. The Trade Boards Act of 1909 was devised for industries where the wages were exceptionally low, and although I recognise that there are many differences in detail between this scheme and that of the Trade Boards Act the underlying principle is the same. In my contention the great British industries have already devised their own ways of fixing wages, and if those ways are unsatisfactory they are quite capable of devising other ways, and if they want legislative sanction for them they have only to come to the Government and they will get it. In most cases the leading British industries have not based their system of wage fixing on the lines and the machinery of this Bill. As was stated in the Balfour Report of 1929: These joint industrial councils are not the most firmly established or generally accepted type, and they are not adopted or accepted in any of the great exporting industries. I suggest that those industries are so well organised, both on the side of the employers and of the employés, that it can be left to those industries under the processes of natural growth to arrive at their own schemes of salvation. They are the people best qualified to carve out their destiny, and they are in most cases willing to do so, and if their plans require legislative sanction, as may be the case in Lancashire, no doubt they will get it. It is better to have schemes emanating from the industries themselves than to have a rigid cast iron system imposed upon them which is different from that which has been the result of natural growth, and which at the moment, so far as I know, has no support from any of the big staple industries of this country. That is my first objection to the Bill on broad principles, as distinguished from what might be called Committee points.

Mr. MANDER

Is the hon. and learned Member aware that no less than 23 industrial councils and bodies covered by this Bill have definitely asked for the powers which we are seeking here?

Sir G. HURST

I think it is well known that those 23 bodies represent a very small proportion only of the industrial life of this country. They are mostly concerned with very small industries. The big staple and exporting industries have not adopted nor shown any indication of wishing to adopt this machinery. Further, I say that in many cases this system must prove unsuitable. We want the greatest elasticity in wage fixing, because times change so quickly. An Order may be made for a year or two years, but the conditions of trade may change in a few weeks or months, and it is far better to leave changes to be made by the industry itself rather than adopt the much more elaborate and difficult method of arriving at a wage system which this Bill envisages. When there is a sudden dislocation of trade, a sudden impact of bad times, it is a good thing if employers are able to say to their workpeople, "We are unable to pay what has heretofore been the standard rate of wages, but we are willing to do practically without profits if you will consent to a reduction of wages." That is the course which has been followed in many trades, not in any sense with a view to undercutting.

How many employers in Lancashire and Yorkshire have been able to keep their mills going and their employés at work because they were not hampered by rigid, cast-iron State-regulated wages? I do not know whether my hon. Friends have read that excellent work on West Riding life "A Modern Tragedy," recently published by Miss Phyllis Bentley, in which she describes the immense hardship suffered by employés in the West Riding because employers, with the best will in the world, were unable to maintain their businesses by reason of the fact that their employés were not allowed by their unions to accept lower rates of wages. There have been many cases where, on the impact of bad times, employers and employés have been willing to work on a lower standard of remuneration, than they would have been able to do if we had had this universal and rigid code in operation.

We need the greatest possible elasticity in place of rigidity. A rigid code impedes progress. Wages are based on existing methods of work and machinery and conditions and hours of labour. All progress in industry depends upon breaking away from existing methods, and if a new machine or a new device is invented it may be desirable to alter the conditions on which wages are based. It is difficult to alter them where trade unions are strong, but it is possible; we should only make things harder if the wage rates could only be altered by first of all persuading an industrial council, and then the Ministry, and going through all the long process which the machinery under this Bill would involve. In many cases a rigid wage system leads to unemployment. A great trade may be carried on in a big town, where rates are high and the cost of-living is also high, and at the same time in rural areas such as we still get in Lancashire and Yorkshire in which mills have been established. An employer in the village could pay wages which, although nominally less than the wages in the town, provide just as good a standard of living for the employés, and, as margins are so small, it might be that any raising of wages would prevent the employer in the village from keeping his men at work. That might happen if there were a rigid code of wages imposed upon a large industry.

It is quite true that under the Bill areas can be delimited, but it is unlikely that we should get an area narrowly limited where a large section of the county is engaged in the same trade. It is known that minimum wages tend to become maximum wages, and to fix minimum wages, as under this Bill, may very well produce the same results. That is a source of danger, and it is a very great source of danger if, in addition to laying down rates of wages, steps are taken for their enforcement unless at least 80 or 90 per cent. of those in an industry are behind the scheme, and there is no guarantee of that in the Bill.

I come back to the Balfour Report, which stated that joint industrial councils were open to grave objections on several grounds. At the present time labour is so well organised that, as regards the great trades of England, it cannot be said that labour cannot compete on equal terms with employers. I believe the old principle of individualism, which has done so much for the North of England and British industry generally, is not yet exhausted. Labour and capital are now well organised, and are able to devise their own schemes for fixing wages, and if those schemes need legal sanction they can get it, if they have the support of the great mass of industry; and I regard this Bill, although it is, of course, based on the highest motives, as really opposed to the true interests of the country. Although the old Manchester School had its evils, there is a great deal to be said for its view that men are best left unimpeded by the State to work out their own salvation, and that is particularly true in these days, when they are organised in groups which enjoy the greatest capacity to bargain. This Bill would be a direct reversion to the policy of undue State interference from which we in this country emancipated ourselves long ago, and which is one of the evils from which foreign countries suffer to-day. While adopting the more reasoned form of the Amendment which stands on the Paper next to my own, I think that this Bill ought to be rejected upon the more general ground that it is not for the good of industry.

I tender an apology to the House because I shall not be able to stay throughout the Debate, as I have to argue at 2 o'Clock in another place. It is not because of any discourtesy on my part. I commend my Amendment to the House as being more consistent with the grit, initiative, independence and self-reliance which has been the main factors in giving British industry the supremacy that was attributed to it by the hon. Member for North Bristol who moved the Second reading of the Bill.

12.6 p.m.

Lieut.-Commander BOWER

I beg to second the Amendment.

I can assure the hon. Member for North Bristol (Mr. Bernays) that there will be no remarks about the reunited Liberal party. I regard this Measure as an entirely non-party one, and I would like to advance one or two objections against it in a general way. The hon. Member for North Bristol talked about agreements being sterilised by minorities; the Bill is very likely to have the effect of agreements being Hitlerised by majorities, which in my opinion will not be very large majorities. The negotiating machinery of industry has been built up over a very long period of time upon the voluntary principle, and we attach the very greatest importance to that word "voluntary". There is already joint machinery in industry which does not take the form of joint industrial councils, and that is true of some of the greatest industries in this country, such as iron and steel, shipbuilding and engineering. I am particularly interested in iron and steel, as I represent a constituency which includes a large portion of Tees-side. I do not propose to refer to that industry at the moment, because another hon. Member will deal with it with greater knowledge and experience than I can.

The leaders of that and other considerable industries are perfectly well aware of the recommendations of the Whitley Committee, but they have not chosen to adopt that method. They prefer to continue with their own arrangements, which have been built up, and have mostly worked successfully, over a long period of years. Although those industries have shown no desire for this form of organisation, the Bill proposes that the Minister of Labour shall be compelled, upon the application of a single organisation, to call a meeting with a view to establishing joint industrial councils. Such a provision would very much limit the power of discretion which the Minister of Labour at present enjoys. It is a most important point that the very strength of joint bodies is due to the fact that they were born from a general desire in the particular industry for such bodies to exist and to function, and to consist of employers and employed voluntarily associated for the purposes of the industry. No such scheme can possibly succeed unless it is organised upon that voluntary basis, and I cannot see how compulsory action such as is envisaged in the Bill can be compatible with the voluntary principle.

I admit that there is a distinct need for an examination of certain of the working conditions and of wages, and so on, but I cannot see that the situation as it exists in the country to-day justifies the imposition of this form of joint machinery for great industries which in many cases have their own forms that time has proved to be extremely successful. Think what would be the attitude of some of those big industries if the Bill were passed into law. What would be the position of the Minister of Labour? He would have buzzing around him the objections of the great and powerfully organised industries which would have a perfectly genuine grievance, and which would be entitled to object to what they would be bound to regard as very undesirable and high-handed interference with the self-government which workers and employers have built up.

Many industries which have joint industrial councils have separate machinery for the settlement of wages questions. In some cases this is because the machinery existed before joint industrial councils were thought of, and in other cases very likely because it was considered expedient to keep those highly controversial questions of wages separate from other matters of joint concern to the industry. This divorcing of wages and other matters has been a feature in many industries where joint industrial councils have been most successful. Experience has shown that many joint industrial councils which have failed and lapsed have done so because too much attention has been paid to wages to the detriment of many other questions with which they hoped and expected to deal. I believe that this desire for compulsory powers largely emanates from those councils which have not been very successful. They have been too weak to command the confidence of their industries, and to enforce voluntarily their agreements, and which are not representative enough to enforce their decisions upon minorities, which may be very considerable minorities. It would be very much better for them to examine the reasons which have led to this lack of agreement, and to try to alter their policy or to strengthen their organisation in order to deal with the position. The poorer success of certain organisations cannot possibly justify the rather excessive compulsory powers which are now being sought.

There appears to be no majority among employers or employés organisations in favour of this Bill, and there must be very weighty reasons for the general reluctance which undoubtedly exists to adopt the proposal. Those very weighty reasons require careful examination before legislation of this kind is contemplated. The Bill would have the effect of excluding certain industries which desire the powers contained in the Bill, but which have not chosen to set up joint industrial councils. There are industries in which special circumstances require careful investigation in order to find out why agreements are not being carried out. Upon this depends the whole question of cellective agreements, which have become a very valuable part of our national life and of our industrial heritage. But here, again, because in certain cases you have a failure, and a failure which requires investigation, I do not think that these compulsory powers are really justified.

These are my principal objections to the Bill. I shall be very interested to see what the attitude of hon. Members opposite is going to be. I am aware, of course, that, despite the hostility to proposals of this character, in 1925, the Trades Union Congress passed a resolution by a very large majority approving the Bill of that time. The Bill, which was introduced by Mr. Murrell, in 1924, and received a Second Reading, but was not passed because of the Dissolution of Parliament, was supported by the Labour party generally.

Mr. MANDER

And the whole of the Conservative party.

Lieut.-Commander BOWER

And the whole of the Conservative party. But I am interested in the attitude of hon. Members opposite for the reason that, for the last two years, I have sat and listened a good deal, and talked very little, and heard them putting forward that they are a Socialist party. I would like to quote to them these words spoken 10 years ago by Mr. Thurtle: I rise as a Socialist, to move the rejection of this Bill. I preach Socialism in my constituency and I see no reason why I should not advocate it in this House. As I see this Bill, I am bound to say that fundamentally, it is the very antithesis of what I consider to be Socialism. The basis of this Bill is that you should split industry into two sections, employed and employers. That, I know, is in accordance with present day facts. There are two such divisions in industry, but this Bill makes a very large assumption that that division has got to continue. It assumes that you are going to continue to have employers and employed, and it seeks by means of the Clauses and provisions in this Bill to perpetuate that division of the two classes. The Labour Movement, as I understand it is fundamentally opposed to that kind of division. We want to see it obliterated as early as possible, and we are not prepared to assist in a Measure of this sort which seeks to perpetuate that division."—[OFFICIAL REPORT, 30th May, 1924; col. 780, Vol. 174.] I want to know whether that sums up the attitude of hon. and right hon. Gentlemen opposite to this Bill. It seems to me that if it does, I shall have the pleasure of walking through the Lobby with them to-day.

12.19 p.m.

Mr. HICKS

I appreciate, as I am sure we all do very much, the very efficient and effective manner in which the Bill was introduced by the hon. Member for North Bristol (Mr. Bernays). There has been for a long time a rather insistent demand by a number of people for the legal registration of certain decisions. Industrial councils have for many years been actively engaged in promoting the legislation of agreements, but in some cases it has been more successful than in others. The present Bill is certainly limited to special orders on rates of wages, but, as I say, there has been an agitation for a number of years on the lines that once an agreement has been entered into between employers and workpeople, it should have legal sanction. The trade unionists in this country, in the main, have worked on the principle of educating the public generally to the necessity of recognising arrangements entered into between employers and workpeople. There was passed in this House many years ago what is called the Fair Wages Resolution, which every employer of labour has been generally asked to observe, and municipal authorities throughout the length and breadth of the country have been asked to adopt a similar type of resolution. I think that, in the main, so far as the major industries are concerned, at any rate, that has been largely observed. The observing of the Fair Wages Clause has been considered by trade unionists to be the most effective way of working, but I think there is something to be said for the question of a general and/or national recognition of agreements entered into between employers and workpeople.

This is a very old industrial country, and the organisations of employers and workpeople are very old. I happen at the present time to be the general secretary of a union which was started more than 100 years ago. The Stonemasons' Society has existed since 1833, and from then to the present time there have been agreements between employers and workpeople. I have known in my own experience very definite requests on occasion, such as: "How is it that, once we have gone through elaborate arrangements in approaching the employers, spent an immense amount of time and money, and a good deal of skill, in negotiations in order to arrive at some understanding as to what should be an economic adjustment between employers and employed, and then we are not able to get the matter more extensively recognised? How is it that we are not able to say, 'This is a national decision, and should be nationally observed.'" The industry with which I am at the present time associated had some part in helping to promote a national arrangement between employers and workpeople. We ourselves have been the victims of a good deal of unfair competition. Everyone seems to regard our industry as being one in which people who happen to be successful in a crossword puzzle, can set up as master builders, and that this is a fair sport. So far as rates of pay, hours of labour and general conditions are concerned, there is a good deal of violation of agreements. Therefore, there has been a desire for a long period to see whether more could not be done in the direction of getting national recognition for national decisions than appears to be the case at the present time.

But I must say, with regard to this Bill, that I would like to be more convinced than I am at the present time that it would accomplish what it sets out to accomplish. Candidly, I feel apprehension, in view of the character of this House, as to the kind of Bill which would emerge from Committee, if ever it got there. Whatever may be the intentions of the Proposer and Seconder of the Bill, if it were submitted to a Committee, it would be competent for any Member to move Amendments to change its character. I am not satisfied that the Bill is capable of meeting the points in question. The subject of arrangements with employers is a matter of very great concern to all those who have to make those arrangements. It may be relatively easy for a political representative not immediately associated with industry to say how things should be organised and arranged, but those who have the immediate responsibility for dealing with employers in regard to wages, hours and conditions in industry know that the position which has taken many generations to build up is something that we are not able lightly to change, and that it must be a matter of very serious concern and very keen investigation before any substantial change could be agreed to. It is a matter more of general education.

Industrial peace is best obtained when we get industrial observance and recognition of what has been mutually negotiated, and it is generally when agreements which have been negotiated are violated by one side or the other, that industrial disturbance takes place. Mutual agreement is usually recognised as being the thing to aim at, and, while neither side is able to get all that it sets out to accomplish, it is usually possible to effect an equitable arrangement. I listened with great interest to the hon. Member for Oldham (Mr. H. Kerr), and was inclined to agree with his argument in the early part of his speech, but I must say that certain of his references disturbed me. I can hardly appreciate the argument of the hon. and learned Member for Moss Side (Sir G. Hurst) as regards the desirability of flexibility of wages, when I remember his attitude on the question of fixing prices. I am unable to marry those two ideas together, and I am wondering how the hon. and learned Member would convince me that such a thing is necessary or desirable. He would have to go much deeper than his rather skeleton observations about the Agricultural Wages Board being responsible for unemployment. I am sure the hon. and learned Member will agree that a number of other factors are responsible. It is a very superficial way of examining the matter.

This Bill is a composite Measure consisting partly of the original Bill submitted by the Association of Joint Industrial Councils, and partly of the Rates of Wages Bill introduced in 1931 by Mr. Hayday. The Trades Union Congress and the Association of Joint Industrial Councils had a good deal of discussion on this matter, which in 1931 eventuated in the introduction of the Rates of Wages Bill, with the blessing, I think, of both those organisations. The original Bill of the Association of Joint Industrial Councils proposed to provide for direct registration of voluntary agreements. The present legal position of the trade unions will have to be very extensively considered by them in the event of such a proposal as this receiving final endorsement. Their present position in law may be seriously disturbed, and questions may arise as to whether they are contracting parties and whether they would become suable for any breach. These are matters which cannot be lightly passed over, because they are fundamental from the point of view of these organisations which have been built up with so much care. Then there is the possibility of penalties for breaches. It is very easy to say that such penalties may not be inflicted upon workmen if they contravene any of the Clauses of the Bill, but it would be competent, if the Bill goes to a Committee of the House, for the Committee to add provisions for imposing those penalties upon workmen for breaking any of the so-called voluntary agreements. Mr. Hayday's Bill provided that the Special Order should only apply to rates of wages, and that it should be submitted to the Minister by the parties following the conclusion of a voluntary agreement.

The present Bill repeats the comparable Clauses of the Bill introduced on behalf of the Association of Joint Industrial Councils, and provides for the establishment of joint industrial councils wherever practicable and expedient. I presume that it is not intended to set up a joint industrial council in, for instance, the railway world, where one would say sufficient machinery exists for ordinary needs, and I presume that cases such as that would not be covered by the provision as to its being practical and expedient. Clause 3 of the Bill defines the primary object of an industrial council as being to provide for the sanctioning and enforcement of wages. That differs from the earlier Bill of the Association of Joint Industrial Councils, which defined the primary object as the consideration of different matters concerning their respective industries. The present Bill comes much nearer to the old point of view of the Trades Union Congress than the original Bill. The Trades Union Congress, when they were discussing this matter, were not of opinion that the Bill should be limited to those who are already covered by joint industrial councils, but considered that, if such a thing was good for industry, it ought to be available also for those who were outside joint industrial councils if they thought fit to make an application. Apparently the provisions of the present Bill are limited to joint industrial councils.

The criticism which we have heard this morning in regard to the possibility of an agreement being come to by perhaps a narrow majority of the joint industrial councils, without the overwhelming majority of the people in the industry being consulted, must also receive very serious consideration. The Rates of Wages Bill introduced on behalf of the Trades Union Congress by Mr. Hayday laid it down that representations to the Minister must be joint representations from employers and workpeople, and must represent a majority of the people in both categories—that is to say, the employers must represent a majority of employers in the industry, and the workpeople a majority of the workpeople. Anything less than that would not conduce to that democratic balance which is generally desirable. Moreover, Mr. Hayday's Bill provided for the making of an Order by the Minister only upon joint application, but it would appear that, if the present Bill were approved, a majority decision of the joint industrial council might be the basis of the application.

I do not want to take up any more time in discussing this matter, but would only say that the very fact of this Bill having been introduced, and the experiences recounted by hon. Members who have taken part in the Debate, will of themselves be of educational value in calling attention to the fact that, while there are good employers, there are people who violate those standards and conditions which one would ordinarily expect to be respected. That in itself may be a very good effect. We are not able to support this proposal, and we do not admit that the Bill in its present form is the best way of dealing with the matter. Much more propaganda, and more extended, among industries which are not included is necessary and the opinion of those generally responsible for running industry should be consulted more than appears to have been done. I am not condemning the Bill, because I have myself taken some part in discussion with the Association of Joint Industrial Councils. Those for whom I speak ask the House not to proceed with the matter further, though we have no desire to stop the hon. Member or anyone else from urging the necessity of more extensive consultation between workpeople and employers so as to get the greatest common measure of agreement in the largest possible range of industries. We believe that by that means we shall be able to get recognition of each others claims and rights, but we are compelled to oppose the Bill because we believe that it is not the right method and that this is not the right time to deal with the matter.

12.38 p.m.

Mr. L. JONES

I am convinced that this is a bad Bill. I want to deal with the suggestion that there will be an alliance of diehards against it. I am a very keen advocate of closer understanding and conciliation between employers and employed, and for a long period I have spent practically the whole of my time engaged in this particular class of work. The success of the conciliation system that exists in the iron and steel trade can to a certain extent be attributed to my own attitude towards this question. I work in a district where we are proud that our system of wages is one of the best in the steel trade and where our hours of labour are shorter that anywhere else. My attitude towards the Bill, therefore, is not in any way influenced by the fact that I am antagonistic or unsympathetic to a better understanding between employers and employed. The hon. Member for North Bristol (Mr. Bernays) claimed for his own constituency the authorship of this idea of joint industrial councils. I am afraid his history is very faulty. There was in existence a board of conciliation in South Wales where wages and conditions were discussed long before it obtained in Bristol.

The Bill proposes to give the Minister of Labour power to form joint industrial councils. The Minister already has all the power he desires to encourage the formation of such councils. It is suggested in one of the earlier Clauses that, if an association of workmen or employers approaches the Minister of Labour, he can take steps to convene a conference of people in the industry or trade with a view to the formation of a joint industrial council. A very small trade union would be entitled to approach the Minister to convene a conference, and only a minority of those interested in the industry might attend it. A majority of that minority might decide to form a joint industrial council, and there is nothing in the whole of the Bill which safeguards the right of the majority.

Mr. MANDER

Has not the hon. Member overlooked Clause 2: and the Minister, if he is satisfied that the joint industrial council is desired by the industry, may approve the establishment of such industrial council. The Minister must be satisfied.

Mr. JONES

I am satisfied that that is so, but there is nothing in the Bill at the moment to ensure that a council can only be formed at the request of a majority of either the employers or employés. Every speech that has been made to-day has dealt with the fact that the majority wanted to force any agreement come to on a recalcitrant minority. The Bill is not clear on that point. What is clear is that the Association of Joint Industrial Councils wants the Bill because it is languishing for lack of power. The hon. Member for East Woolwich (Mr. Hicks) gave the point of view of the Trades Union Congress on the Bill. His organisation and my own people have been negotiating on wage matters for a considerable period of years. My antagonism to the Bill is not on the principle of conciliation. The Trades Union Congress itself has been afraid time and again, when these Measures have been before the House, that at some given moment the Trades Union Congress, or a trade union, might be involved in some legal dispute. They have been fearful of being drawn into the law courts for alleged breaches of agreement. They have been rather concerned about losing their immunity from legal action. They do not like, and never have liked, in all the Bills that have been before the House, with the exception of the Rates of Wages Bill of Mr. Hayday, the fact that they are limited to the consideration of those wage agreements which are approved by joint industrial councils.

The hon. Member for North Bristol pointed out that he had incorporated in his Bill the Bill of Mr. Hayday. It is true in the main, but with what appears to be a slight but very important alteration. The Trades Union Congress opposed previous Bills on this matter because the legal enforcement was only to apply to agreements with joint industrial councils. The speakers in favour of this Bill have emphasised the fact that they have incorporated within the Bill Mr. Hayday's Bill of 1931. It is true that every Clause of that Bill is in this Bill at the moment, but they have altered it in this respect. Wherever in Mr. Hayday's Bill agreements as between associations were referred to the words have now been altered to agreements by joint industrial councils. Therefore the objection of the Trades Union Congress must be as strong to-day as it was in the old days, because, in industry generally, where you have not industrial councils but successful conciliation boards throughout the country, whether in the shipbuilding industry, the iron and steel industry or the metal and other industries, your agreements are made between the workers, in this particular case the trade union, and the employers' organisation. If we have had to deal with a grievance with the organisation represented by the hon. Member for East Woolwich we have not gone to the whole Board, but have met as associations and the agreements have been signed by the hon. Member and myself, and so it is as between the trade union and the employers' organisation in all these big industries. That is why the Trades Union Congress very wisely and rightly put in their Bill of 1931 agreements between associations. Therefore, I cannot understand why the promoters of this Bill were so tactless as to weaken the Bill by inserting the words "Joint industrial council," instead of leaving the words as they were in the original Bill of the Labour party in 1931 to apply to agreements as between associations.

The Bill has been introduced by the hon. Member for North Bristol. I should imagine that its birthplace is nearer to Wolverhampton. I cannot help feeling that there was a desire probably to get the support of the Labour party for the Bill, and that that is why they introduced into the Bill the Rates of Wages Bill with slight variations. The main intention of the Bill is to force Joint Industrial Councils into every industry throughout the country. That is the mood of the Association of the Joint Industrial Councils. Those who have read their literature for the last few years will know their object. It has been suggested this morning that there is nothing in the Bill to affect the organisation of conciliation machinery in other industries. The House will know that it is the intention of this Association to go further. They issued a report, and in the appendix there is the following paragraph: The existence in certain large industries of conciliation machinery similar to, but not identical with, the Whitley machinery, is a difficulty which cannot be immediately over-come. Unless these industries, and they include the railways, iron and steel, cotton, engineering and coal mining, can see in the Whitley idea something superior to the machinery which they have in operation in their own industry, they cannot be expected to lay down the old and take up the new. In conciliation machinery which is 30 or 40 years old in some cases, these older industries employing scores of thousands of workpeople are supposed to learn from the pottery trades of Bristol and others how to deal with labour problems within their own industry. If the introduction of this Bill is, first of all, to force industrial councils on industry of the type approved by the Association of Industrial Councils itself——

Sir HERBERT SAMUEL

The Bill says exactly the opposite, and why does the hon. Gentleman say it?

Mr. JONES

I do not know to what the right hon. Gentleman has referred. Perhaps he will repeat it.

Sir H. SAMUEL

Clause 2, Subsection (1) says that if the Minister is satisfied that the Industrial Council is desired by the industry—— he may take action, and not otherwise.

Mr. JONES

The right hon. Gentleman will forgive me for saying that there is nothing in this Bill which insists that a joint industrial council shall be asked for by the majority of the people in the industry. I come to something else which will prove that there is something rather strange in this Bill. Take the Trade Unions Bill of 1931. It contains a very satisfactory definition of an Association. It is very strange that if you read this Bill you will find no definition at all of an association. The Bill introduced by the hon. Member for Wolverhampton East (Mr. Mander) last year contained a definition of "association". There is no definition to-day. It may be accidental that it is not there. When the Trades Union Congress put the Bill forward last year they had the following definition: The expression of 'association of employers' means, in relation to any trade, an association or associations of employers whose members include persons employing among them a majority of the persons employed in the trade. The expression 'association of employés' means, in relation to any trade an association or associations of employés whose members include a majority of the persons employed in that trade. There is also a definition of "association" in the Insurance Act of 1920 which asks for a majority of the people concerned. The Member for East Wolverhampton in the Bill which he introduced in 1932 did not use the legal definition which had been adopted in the Insurance Act of 1920, but the following definition: The term 'association' includes any association, trade union or society or other body of persons whether corporate or incorporate. I suggest definitely, therefore, that there was some object in view when that de- finition was introduced, so as to make it apply to a minority, or make it possible to apply to a minority even of employers or employed. There is something very strange in the fact that on this occasion, although the word "association" was defined in the Bill of that year, it is not defined at all in the present Bill. I suggest seriously to the House that it will not do, and that there is a definite object in leaving out of this particular Bill any definition of the word "association." If the hon. Member for North Bristol wants to form joint industrial councils in various industries, there are proper methods by which it can be done. Let us be frank about it; it cannot be done by this method. If you are to encourage the formation of joint industrial councils, the least we can ask, at any rate, is that you should, first of all, make sure that you have a majority of the employers and employés in a particular industry before you can dictate to the people in the industry what they shall do and what standard of wages they shall pay.

The second part of the Bill deals with the legal enactment of wages. I suggest that we are treading on very dangerous ground. Reference has been made to the Balfour Committee. The Balfour Committee was very careful to point out that if and when joint industrial councils put forward a suggestion of legal orders as to wages agreements they could only deal with the standard of wages of the lower-paid men.

Mr. MANDER

Has the hon. Gentleman overlooked the statement made by the Balfour Committee in this connection, which says: It appears to us that it may be desirable at some later stage to give the sanction of law to agreements made by the councils, but the initiative in this direction should come from the councils themselves. It has now come from the councils themselves.

Mr. JONES

I know from the literature that has been issued that certain paragraphs have been chosen from the Balfour Report. I know that that particular paragraph was in the Balfour Report, but the Balfour Committee on the 29th January, 1929, said that the Industrial Councils Bill as it stood was open to grave objections and that if those objec- tions were to be overcome it would only be by limiting the scope of the compulsory powers sought by those Councils for the fixing of minimum rates of wages for the lower paid workers in such cases where the wages were exceptionally low within the meaning of the Trade Boards Act, 1929.

There is, therefore, no connection between the paragraph quoted by the hon. Member and the one that I am quoting. I agree that the application has come from the joint industrial councils, but from less than 50 per cent. of them. It would be very interesting to know how many work-people are represented in the application put forward by the joint industrial councils. The fixation of wages rates is a very intricate and delicate job. In a particular steel works you may have 200 or 300 different rates of wages, all fixed on a tonnage basis. Those rates may differ with the size of the furnaces and the conditions of employment. When you have rates of wages running to three places of decimals it is impossible to expect Order after Order to come to the table of this House for the approval and sanction of the House. It may be suggested that that is not necessary unless the joint industrial councils approve of it. Let the House imagine what might take place at a particular meeting of a joint industrial council. The application may be made by a majority, and that majority may be from one side.

Mr. MANDER

It must be a joint application.

Mr. JONES

I am very much surprised if I have made a mistake.

Sir G. HURST

You have not. You are right. Look at line 15, on page 1 of the Bill, and it will be seen that the request may be made by an association of employers or an association of workers. It is alternative and not joint.

Mr. JONES

I know the Bill very thoroughly, as I know all Bills dealing with this subject, and I hardly thought it possible that I had made a mistake. If we are at any time going to enforce legally, wage agreements, then I beg the House rather to accept the Bill of the Labour party. If we are to have the legal enforcement of wage agreements, then by all means give me the Bill introduced by Mr. Hayday in 1931. The Trades Union Congress showed excellent draftsmanship. They knew what they were after, and they produced a Bill in the House without trimmings and frills and, much as I oppose the legal enactment of wages agreements, I would much prefer that Bill to the Bill now before the House. You cannot have common conditions in industry, and the best that you can hope for is to enact legally that the minimum wage of common labour throughout industry generally shall be at a certain figure. I hope the House will reject the Bill. If we pass it to-day and it goes to Committee upstairs, I am sure that its fate will be the fate of another Bill which was referred to by the right hon. Member for Epping (Mr. Churchill), and that it will be hanged, drawn and quartered. I think it is one of the worst Bills of an industrial character that has been introduced into this House for many years.

1.0 p.m.

Mr. MANDER

My hon. Friend and I were thinking of two things with regard to the applications to be made. It is true that in line 15, page 1 of the Bill in connection with the request for the formation of a joint industrial council, the application can be received from one side only, but the real point and the important point is that any application for the fixation of a wages rates must be a joint application made by both sides in the industry. That is the fundamental point. My hon. Friend was referring to another point, which is important but quite a minor point and does not deal with the statutory fixation of wages. I should like to assure him that there is nothing sinister in the omission of any particular words in the definition of an association. The Bill is very limited in its scope. The object is to enable certain industries which have joint industrial councils now and which jointly desire, through the employers and the employed, to give statutory authority to wages that they have agreed upon, to be able to do so. It is a very simple, a very natural and a very proper desire.

My hon. Friend and other hon. Members have suggested that there is a danger that attempts may be made to form joint industrial councils in large industries all over the country which do not want them, because there already exists excellent conciliation machinery of many years standing. There is no intention to do that and no likelihood that anything of the kind would happen. The Minister himself could veto it. He has to be satisfied that a joint industrial council is desired by the industry and, of course, he would not be satisfied where excellent machinery exists at the present time. The hon. and learned Member for Moss-side (Sir G. Hurst) made a very interesting speech, but it seemed to me to be a very contradictory one. It was a thoroughly reactionary speech, in the best sense, if I may use that term. He is entirely opposed to the principle of the Bill, and I suggest that the logic of his argument would lead him to oppose collective bargaining in industry altogether. He is not strictly in favour of trade union agreements on a large scale because they would cut right across the argument that he was using. One respects an opinion of that kind, but it is entirely out of touch with the vast majority of opinion in the country now. He said that the Bill went much too far and also that it was much too weak, and he wanted it to be strengthened.

The hon. and learned Member and other hon. Members made valuable and important points, all of which could be dealt with in Committee and put right. If they are seriously concerned to improve the Bill and want to get the various points that they made incorporated in the Bill, they can do so, but if they were merely putting the points in order to try and defeat the Bill, of course, the position is quite different. The hon. and learned Member for Moss-side suggested that there were very few people who really wanted a Bill of this kind. Let us see exactly what people have been asking for it. I will give a list of certain joint industrial councils. I do not say that they are all committed to the terms of this particular Measure, but certainly these joint industrial councils at one time or another have asked for the general principles of this Measure.

The list includes the asbestos manufacturing industry, the boot and shoe manufacturing industry, the bobbin and shuttle making industry, the cast stone industry, the cement industry, the cooperage industry, the coir mat and matting industry, the electrical contracting industry, the flour milling industry, the furniture, warehousing and removing industry, the glove making industry, the granite and road stone industry, the heating and domestic engineering industry, the hosiery manufacturing industry, the lock, latch and key industry, in my own constituency, the match manufacturing industry, the needle, fishhook tackle, etc., industry, the packing of textiles industry, the paint, colour and varnish industry, the pottery industry, the quarrying industry, the seed crushing and compound cake industry, and the wallpaper industry; and there are at least ten other industrial councils who have signified their desire for further powers which have largely gone out of existence because they could not obtain them as the whole of their efforts have been made futile by the absence of any statutory powers.

The question of a majority decision has been raised. It is clear that there must be a large majority of employers and employés in agreement on an industrial council before any statutory sanction could be given to an agreement. It is a matter for discussion as to whether it should be two-thirds or three-quarters, or 80 per cent. That is a point which can be discussed in Committee, and I agree that it is of the utmost importance. But if you have 90 or 95 per cent. of the employers and employed in an industry agreeing on certain wage rates it is grossly unfair to allow a small disloyal percentage of employers, who will not agree, to interfere with the whole of a great industry. It has been suggested that we should get rigidity and that it would be difficult to alter an agreement. I submit that that argument, put forward by the hon. and learned Member for Moss Side, is quite unsound. Every agreement sanctioned under this Measure would be terminable by notice, just as a trade union agreement is terminable at the present time. There would be no more difficulty under the Bill than there is under collective agreement between employers and employed.

Mr. L. JONES

After legal enactment?

Mr. MANDER

Yes. The hon. Member for East Woolwich (Mr. Hicks) made a speech which disappointed me very much. It was a thoroughly reactionary speech, a Conservative speech in the worst sense, a very timid speech. At heart the hon. Member is really in sympathy with the idea of the Bill but he is afraid as to what might happen to it in Committee. He seems to be afraid of any bold movement forward which by statute would secure to workers in certain industries of this country the wages upon which they have agreed. He was rendering no service to the Labour party by such a weak, timid and reactionary speech. Little has been said during the debate about the real difficulty the Government have now to face, which they cannot avoid dealing with, and that is the request by the employers and employed in the weaving industry of Lancashire for statutory sanction of their wage rates. I am sure that the Government are sympathetic, but sympathy is not enough. The Minister of Labour in the present circumstances will not be able to avoid taking definite action on these lines. He must come to some decision. He has been asked to do it by an important section in Lancashire, and timid as is the Government, afraid as they are of reactionary employers, the Minister of Labour is now in a position in which he must act. I want to know his answer to all those joint industrial councils who are asking for these powers. What is he going to say to them? Is he going to give them kind words and good intentions, or do something effective? What is to be his answer to the weaving industry of Lancashire?

This Measure is a typical example of the way in which we in this country deal with industrial and social matters. The first stage is that individuals who have progressive and forward ideas voluntarily experiment and carry out certain proposals up to a certain stage. After experience has been obtained over a number of years, and in a variety of different sections, there comes a movement to come to Parliament to ask for statutory sanction on a limited basis to the successful voluntary action taken by employers and employed. We have reached that stage to-day, and we shall be acting on well-known British evolutionary lines if we take this modest step forward and give employers and employed what they are asking for, that is, an opportunity to secure to their particular industry wage rates which they have unanimously agreed should be paid.

1.12 p.m.

Mr. DOBBIE

I can assure the hon. Member for East Wolverhampton (Mr. Mander) that there is no timidity on these benches in opposing this Bill. Let me congratulate the hon. Member who moved the Second Reading on the admirable way in which he dealt with the situation, but his speech was largely counteracted by the speech of the hon. Member who seconded the Motion. His reference to Mussolini was such that we on these benches could not have any great confidence in the scheme, and I was waiting to hear him bring in Herr Hitler as an advocate of this kind of proposal. Many promises and assurances have been given in the speeches which have been made this morning, but one would rather have seen them in the Bill itself. The Bill, we are told, is: For the purpose of facilitating concord between employers and workers. The first essential in securing concord and harmony and good will is an intimation by the employers of this country that they are prepared to accept direct trade union negotiations. Until that is done we shall not get very far on the way to concord, harmony and goodwill. In Clause 1, Sub-section (2) it is proposed that: The Minister shall, when requested by an association of employers or an association of workers in any industry, or in any other case where it appears to him to be practicable, convene a conference of persons representative of associations of employers and of associations of workers in that industry with a view to the establishment of an Industrial Council for the industry concerned, and the Minister at the request of any such conference shall afford such assistance as may be practicable. The Bill to us gives indication of an effort to undermine the trade union movement. There is no intimation here that the workers' representatives who may be appointed would be trade unionists. We have been told that the Clause does not mean that, but the indication is that a section of the workers and of the employers could have a conference and by a majority decision, which might easily be a minority decision of the workers, decide to set up a council. We say that councils of this description, set up in the way indicated, under the patronage of the employers, might be manned by people who are not free agents in the matter. Until the employers in industry accept the principle of collective bargaining and methods of fixing wages and conditions of employment by trade union agreement, it is a waste of time to talk about the setting up of councils of this kind.

Clause 2 says: Where an Industrial Council has been formed or is proposed to be formed in any industry, a copy of the draft constitution and rules of such Industrial Council shall be forwarded to the Minister, and the Minister, if he is satisfied that the Industrial Council is desired by the industry, may approve the establishment of such Industrial Council. In our opinion that places too much power in the hands of the Minister. We have been assured by the hon. Gentleman who introduced the Bill that we can depend upon the Government. In response to a question we were told we could be assured of the safeguard of the Government. One can say definitely that with the record of this Government in its treatment of the workers, one cannot place much confidence in or much dependence on the action or attitude of the Government in regard either to machinery or the treatment of the working classes of the country. Sub-section (3) of Clause 2 says: Where an Industrial Council for any industry has been approved by the Minister, it shall be recognised as the official channel of communication in all matters affecting the industry between His Majesty's Government and the employers and workers in that industry. Whatever the assurances of the hon. Gentleman who introduced the Bill, we say that this Sub-section gives to the industrial councils a power which the organised workers will never willingly accept. It says that when an industrial council for any industry has been approved by the Minister, it shall be recognised as the official channel for communication in all matters affecting an industry between the Government and the employers. That is clearly an indication that power is given which the trade unionists cannot in any circumstances accept. The primary object of an industrial council under this provision is to provide for the sanction and enforcement of rates of wages. Again the trade union movement can never stand for that. If the council agreed to a reduction of wages the Government would have power, or the council would have power through the Government, to enforce that reduction. We say in regard to negotiations that every case must be discussed and decided on its merits, and the workers must always retain to themselves the right to defend their status and standard by the withdrawal of labour if necessary. This is definitely a challenge to the trade unionists, on their right to withdraw labour in an emergency or dispute.

Mr. MANDER

Not at all.

Mr. DOBBIE

The hon. Member who interrupts may not think that is the meaning of the Clause, but clearly and definitely that is a power which the Clause would give.

Mr. MANDER

Amend it.

Mr. DOBBIE

I am not talking about Amendment but about the Bill as it is. There is no use anyone interjecting and telling me to move Amendment. The Amendment that I would move would be to delete every Clause in the Bill.

Sub-section (6) of Clause 4 says: Every Special Order shall be laid before each House of Parliament forthwith and if an address is presented to His Majesty by either House within the next subsequent forty days on which that House has sat after the Order has been so laid, praying that the Order may be annulled. That is the Clause in which it is said that the workers are safeguarded by the Government. I shall not repeat the observation I made giving my opinion of the Government, and of its desire to safeguard the workers. Sub-section (5) of Clause 5 says: If in any proceedings under subsection (2) of this section any question arises as to whether any person is an employee for whom a rate of wages is sanctioned by a Special Order the court may if it thinks fit refer such question to the Industrial Court for decision and pending such decision may stay the said proceedings. My reading of that Sub-section is that it is compulsory arbitration, arbitration under which the workers would be bound to abide by the decision of the Court. The trade union movement up to the moment has never agreed to compulsory arbitration, and I hope it will never do so. We must preserve to ourselves in the last instance the right to defend the wage standard and conditions of our men by a withdrawal of labour if necessary. That must always be the attitude of the trade union movement. There is nothing in this Bill to prevent a minority of the workers, with a majority of the employers, either in the railway or the min- ing industry, having a conference and deciding, with the sanction of the Minister of Labour, to set up an industrial council dealing with those two industries. There is nothing in the Bill to prevent it. There is all the opportunity given to them. Because of these things, because of this lack of fundamentals, because of what we believe—I shall not use the word "deliberate," but because of what seems to us a direct intention to undermine the power and strength of the trade unionists of this country, which up to the moment have proved an excellent negotiating machine on behalf of the workers, we are opposing the Bill.

1.25 p.m.

Mr. MOLSON

This Bill has received a remarkable amount of support from moderate men of all parties. It is from the two extreme wings—those who represent the vested interests of the employers and those who represent the vested interests of the trade union negotiators—that the only criticism has come. I was astonished at the reactionary attitude of the hon. Member for Rotherham (Mr. Dobbie) in what he said about the inalienable right of the wage-earners, in the last resort, to withdraw their labour in order to insist upon a certain standard of living. Although this has no bearing on the Bill, I would say that I feel that, in industrial matters, we are still in the state that we are in international matters as regards arbitration and settlement. That a representative of the Labour party who, in international matters, no doubt stands for arbitration as an alternative to "the dread arbitrament of war," should, in industrial matters, insist that disputes are never to be settled by an independent tribunal, but that in the last resort the workers must always——

Mr. DOBBIE

I have never said that they should not be settled by an independent tribunal. I hope the hon. Member knows the difference between an independent tribunal and a council with arbitrary power to arrive at decisions.

Mr. MOLSON

That is precisely the point which I was making. Although the hon. Member suggests that in particular cases he would be willing to refer to a tribunal—reserving to himself the right to agree to a question being so referred or not—in the last resort, if he were not satisfied with it, his trade union would not be prepared to accept the decision of that tribunal. That is precisely the attitude of certain people as regards the League of Nations and compulsory arbitration in international disputes.

Mr. DOBBIE

I would refer the hon. Member to the National Wages Board of the railwaymen. For 14 years that has been in operation on the basis of which I have spoken and there has never yet been any difficulty.

Mr. MOLSON

That is why I was so much surprised that the hon. Member, who belongs to an industry which has been comparatively free from trouble, at any rate during the last few years, should have made the remark which he did make. However, I apologise for dealing with this point because it does not arise out of the Bill, which contains no element of compulsory arbitration.

The hon. Member referred to Clause 5 (5), and the question of the reference to the Industrial Court. If he reads that Sub-section more carefully he will find that it only refers to a determination of whether a particular individual council comes within the scope of the agreement which in the earlier part of the Clause is made compulsory upon the employer who, once that agreement has been entered into, will be under the obligation to pay that rate of wages. I hope that if there is a Division upon the Bill, although the reception given to it by the Socialist party has not been very warm, they will not, at any rate, oppose it in the Lobby. It is a sincere and genuine effort to make a small step forward in order to give industry the opportunity of organising itself with a view to promoting peace and concord. I think the Socialist party would take a very grave decision if, when an attempt is being made from another quarter of the House, to bring about those results for which they are supposed to stand, they went into the Lobby against the cause of peace and conciliation.

As to the criticisms that were offered by the hon. and learned Member for Moss-side (Sir G. Hurst) a number of them were purely Committee points. He objected to some of the detailed provisions of the Bill but the important point which he raised against it was that it would result in the imposition upon industries which did not want it of a machinery which would set up a rigid system of wages. As several speakers have emphasised the same point, namely, that the Bill is going to impose something on industry and as, oddly enough, that is what is said in the reasoned Amendment, may I point out that the Bill from beginning to end is permissive? It provides in the first place that if a request is made for the formation of a joint industrial council the Minister shall convene a conference of persons representative of the industry. The hon. Member for West Swansea (Mr. L. Jones) said there was danger that this joint industrial council would be set up by a minority of the industry. It is true that a minority of an industry can ask that a conference should be called. I cannot see that there would be any harm in allowing the initiative to be taken by a small section of an industry, but, under the next Sub-section, it is only if a majority of the members who attend that conference express their desire for the formation of an industrial council, that a draft constitution and rules are to be prepared. If there were strong opposition to the formation of a council in an industry one may be certain that the opponents of the proposal would attend the conference.

After the draft constitution has been put forward the Minister has then power to satisfy himself that it will really represent the desire of the industry as a whole, and only in such cases will he approve of the draft constitution and rules. Even at that point there is still full provision for any dissentient section of the industry to bring its objections before the Minister. Therefore I can only regard the suggestion made in a number of the speeches, that there is some power in this Bill to impose arbitrarily upon an industry a particular mechanism for the settling of disputes, as being due either to a failure to read the Bill or to a deliberate desire to misrepresent it.

The second important point made by the hon. and learned Member for Moss Side was that if a joint industrial council enjoyed the powers provided in the Bill, wage rates in that industry would be unduly rigid. To those who take the view that wage rates ought not to be rigid, surely the present state of affairs is just about as unfortunate as it can be. If in the circumstances which he suggested there should come a great change in the conditions of any particular industry, how much more likely would employers be amicably to secure some small or large, temporary or permanent reduction in the remuneration of the workers if they were constantly meeting round a table where there was full disclosure of the exact situation of the industry. As things are at present, as we know from bitter experience, it is only at a time when it is necessary to ask for a reduction in wages that something in the nature of an ultimatum is sent at the last moment. With provisions such as are contained in the Bill, I suggest that there would be constant negotiation and frank discussion between both sides, and that you would then be far more likely to have an opportunity of both raising and lowering wages in accordance with the conditions of the industry, according to whether the industry was more or less prosperous. That would be done easily through the machinery that would be provided.

The hon. and learned Member also objected to the whole idea of a majority being able to coerce a minority, but in what has now become the most progressive industry in the country, that of agriculture, we find that the voluntary schemes which were first introduced have now had to be abandoned. The hop marketing scheme, a very similar instance, and one which had no legal force, broke down owing to the fact that there was a very small minority of hopgrowers who took advantage of the scheme, by which 92 per cent. of the industry were loyally abiding, by slightly underselling them, and so in that case it was necessary for Parliament to give compulsory powers in order to coerce the minority. Just as that was found to be necessary in the case of agricultural marketing, so I believe it will prove to be necessary in the case of industry.

I cannot see who are going to suffer from this Bill unless it is that small section of employers who are not prepared to pay the rates of wages which have been agreed upon between representatives of employers and employés and who are perpetually undercutting their more enlightened competitors. We are constantly hearing of the danger of undercutting from abroad, and of the difficulties that are being caused by Japanese and other foreign competition. Surely this Bill affords us a means of making certain that the same kind of undercutting and unfair competition shall not take place in this country.

1.39 p.m.

Sir J. WALKER SMITH

The last speaker cannot see who are likely to suffer from the provisions of a Bill of this kind. I will do my best to enlighten him, and I think he will soon concede that many would suffer very considerably indeed, both employers and operatives in industry generally, if a Bill of this character received statutory effect. The Bill reveals a very imperfect understanding of the industrial relationships between employers and operatives. The motives behind the Measure are, of course, perfectly good, but by the means proposed the benevolent objects that it is desired to achieve certainly would not be achieved. Indeed, the results would unfortunately be quite the contrary. It is made clear from the Title of the Bill that it is desired to encourage the formation of industrial councils and to legalise voluntary agreements. The legalisation of voluntary agreements has been freely stressed, and it is one part of the provisions of the Bill that merits considerable attention.

The main trouble that I find is that the Bill premises Government intervention and direction. In cases of this kind there are alternative results of Government intervention and control: either when the State steps in and intervenes all other persons concerned step out and leave the so-called State to muddle on its own way, and to make its own mess in its own inimitable way; or, on the other hand, once the State, in the form of a Government department, is given a certain amount of authority, power, and influence, the parties concerned then begin to manœuvre for an advantageous position, and from that moment there is a tendency to upset the balance which previously existed, a balance which resulted from the desire of both parties to honour and observe the agreement into which they had of their own free will entered, and the whole spirit of mutual confidence and of a desire to reconcile conflicting views from that moment ceases.

I fail to find any particular virtue in the provisions for giving legal effect to industrial agreements. It does not necessarily follow that agreements are of less value or less valid because they have not received statutory effect or because they have not the sanction of the law, the police force, or the armed forces of the Crown behind them. I do not suppose there are many in this House who would claim that the British Constitution is less valid or valuable because it has not the sanction of a written Constitution, and similarly in my experience is it found with industrial agreements freely entered into between employers and operatives. They know, and I think it is an advantage that they do, that there is no legal sanction behind their agreements. They know they must depend upon their own efforts and their own attempts to find an amicable modus vivendi. They know they have entered into the agreements in the spirit of mutual compromise and respect and good will, with the result that these agreements immediately become more and more binding, have greater validity, and are of greater advantage to industry the longer they continue.

From the very beginning of this Bill I find features that are fundamentally undesirable. Under Clause 1 there is a duty placed upon the Minister of Labour to intervene. That, I think, is fundamentally bad. In the person of the present Minister of Labour we are extraordinarily fortunate, but everyone must know quite well that with compulsion of this kind the term "Minister of Labour" is merely a euphemistic expression for officials in the Government service. I have no desire, estimable though these gentlemen may be, to leave industries in the hands of people who, whatever their qualifications, have certainly no experience in industrial relationships. I have no desire at all for State intervention in matters of this kind, and I am surprised to find that there is such a clamant demand for State intervention in industrial affairs in all sections of the House which, upon other matters of industry, have shown themselves consistently anxious that the State should not intervene——

Notice taken that 40 Members were not present; House counted, and 40 Members being present—

Sir J. WALKER SMITH

I am pointing out the undesirable provisions which are to be found in Clause 1. Sub-section (2) of that Clause enables the Minister to call a conference. It is not a conference of representatives of an industry; he has to call a conference when requested by an association of employers or an association of workers in any particular industry, that is to say, by any sectional body representative either of employers or operatives, provided they happen to be engaged in any particular industry. Further, the Minister can, without being requested by a small section of employers or operatives, call such a conference himself. The convening of a conference requested by a small independent group belonging to any industry is the commencement of action, for from that moment, as we leave ourselves in the hands of a Government Department deputed to deal with it, we are fairly sure to have some results. It seems a sequitur that some kind of industrial council will be formed as a result of a conference being convened. Once an industrial council has been formed by what I may describe as hole and corner methods, the council from the first is dominated by the Government Department concerned. From that moment it is unable to change any of the provisions of its constitution and rules without the sanction of the Government Department. It is so provided in Clause 2, Sub-section (1, c): The constitution and rules of any Industrial Council may be modified or revoked with the approval of the Minister in such manner as may be prescribed. From that moment all the freedom, elasticity and good will that attaches to the present joint councils will disappear. Further, in Sub-section (3) of Clause 2 there is a certain bait to induce sections of industry to form these new industrial councils under the provisions of this Bill; and, at the same time, there is a warning to those who do not form a council under the Bill, but who prefer to proceed with their industrial relationships in the free and open manner under which they are conducted at the present time. It is provided that Where an Industrial Council for any industry has been approved by the Minister, it shall be recognised as the official channel of communication in all matters affecting the industry between His Majesty's Government and the employers and workers in that industry. That is really a promise and a threat—a promise to those who care to come in and suffer the domination of the Government Department concerned in these matters, and it is a warning to those who do not do so that they will not be officially recognised by the Government in any industrial questions that might arise. Clause 3 is the most important in the Bill. It says: The primary object of an Industrial Council shall be to provide for the sanctioning and enforcement of rates of wages. I am surprised that there should be such a number of industries which are anxious that there should be statutory powers of the kind contemplated. They certainly are not necessary. There exist councils in all those industries which have had the energy and desire to form them. All these questions of wages, hours and conditions are at present dealt with perfectly freely and with a measure of elasticity which would certainly be denied them if they were subject to the provisions of this Bill. I have read a long list of industries which are anxious to have industrial councils under the provisions of the Bill, but I cannot but think that they are singularly incompetent, or perhaps they are very anxious that someone else shall do their work for them instead of meeting together and attempting to adjust their own differences and to appreciate the respective positions of employers and operatives in their industries, and forming a binding and thoroughly satisfactory council themselves. It may be necessary for some industries, but it is certainly not necessary for any industry which has the will and the desire to enter into friendly relationships between employers and operatives.

It is Clause 4 of the Bill that so gravely concerns me. It will strike a deadly blow at the efficient organisation of many important industries. In order that I may explain precisely wherein the danger lies, it will be necessary for me to take as an illustration some particular industry which I can regard as a concrete case. I will explain the conditions that apply to the building and constructional industry. I take that industry because it is a very large and important industry, employing as it does nearly 1,000,000 operatives. In that industry a National Joint Council has existed for a good many years. They prescribe and enforce by their joint action and under voluntary agreements, wages, hours and conditions of labour. It is provided that these wages shall fluctuate with the fluctuations in the index of the cost of living. There are certain standard rates which are prescribed, and there is a variety of grading, and to each locality a certain grading is allocated. All these matters are reviewed year by year; indeed, the body responsible is in almost continuous session adjusting the appropriate grade rates for the localities. In the fixing of these grade rates, which vary throughout the country, all conditions are taken into consideration which it is necessary to observe for the purpose of securing that appropriate and delicate adjustment—conditions such as house rents and the necessity for travelling long distances from work.

Indeed, the National Joint Council of the Building Industry have gone much further than that. They have machinery under which they prevent disputes from arising in any locality from any cause whatever, and in those sporadic cases where disputes do occur and trouble is threatened they have an arrangement whereby the area of trouble is circumscribed, and their joint efforts and their joint machinery are brought to bear upon that circumscribed area of trouble and the difficulties are invariably resolved. They are in almost continuous session on matters concerning demarcation, concering the gradual mechanisation of the industry and, indeed, all matters which affect the industry generally and tend to their mutual advantage. This Council is working perfectly at the present time in such a way as might well be regarded as a model for all industries.

It has taken years of patient labour to bring this machinery to its present state. There is in this industry, as in all industries, a certain craft and a certain specialist interest which it is difficult to reconcile with other special and craft interests. Under this Clause of this Bill there is an inducement for all the special and craft interests to form independent and industrial councils; a strong temptation to them to leave the main industrial council and form their own special craft councils. It is so provided; they are induced to do so. We are bound to recognise that these specialist and craft interests are very strong, and very often they would be ready to proceed in rather a short-sighted manner which, though appearing to serve best their sectional interests, might at the same time prove to be to the ultimate detriment of the industry as a whole. If, as a result of the inducements of a Measure such as this, a number of these small industrial councils were formed in the one industry, each of them would be able, under a further provision, to obtain special Orders for the allocation to any particular area of special rates of wages, hours and conditions of labour. The whole arrangement of the building industry would become absolutely chaotic. We should substitute discord and chaos for the harmony and order which at present prevail. Nothing could do a well-regulated and well-ordered industry greater harm and greater disservice than a Measure of this kind.

In any case, I submit that such a Measure as this is premature, and this particular Measure is most undesirable. It is premature inasmuch as some reform in regard to Parliament's relationship to industries is necessary before any Measure of this kind could have the slightest hope of successful operation. It is no use putting a new patch of this kind upon an old garment. I do not deny that some changes are required in regard to Parliament's relationship to industry. I look forward to the time when there may be some national central council charged with the duties of fostering, regulating and generally directing and improving the industries of the country, sincerely hoping that it may be an autonomous body independent of Parliament although deriving its powers from Parliament. That I regard as a step in the right direction, but until some radical alteration of that kind is made any supplementary activity of this kind is worse than useless and is a danger and a deterrent to progress. I submit that a Bill of this kind is undesirable in any case, as it would strike a blow at industrial self-reliance and industrial confidence and the sense of responsibility between employers and operatives. It would strike a discordant note, would tend to separate rather than weld together employers and operatives, and would too, I am satisfied, substitute the shadow of Government incompetence and interference for the substance of self- reliance and mutual respect which obtain in most industries in this country at the present time.

2.3 p.m.

Mr. ALEXANDER RAMSAY

I, too, want to oppose the Bill, not so much on the rather intimate grounds put forward by so many hon. Members who have dealt with particular Clauses and recommendations as on the more general grounds concerned with the principle behind the Bill. I think it is unnecessary and unworkable, and I honestly believe that if it were passed into law it would, in the end, do a great deal more harm than good. We have been invited to consider this Bill as if it were something presented to us in the light of conditions which have not existed before. I suggest that it is absolutely impossible to discuss this question until we place it first in its historical background and second in its industrial background. What is the historical background? The hon. Member who moved the Bill talked about the state of tension existing to-day, and the necessity to do everything we possibly could to maintain peace in industry, and so on. In 1916, when the state of tension in industry was incomparably greater than it has ever been since or, probably was before, this country took a step in order to discover what could be done to improve the relations in industry. The Whitley Committee was appointed to investigate and did so, and the representations of that body were accepted by the Government of that time and by Governments since, and during the years from 1917 to 1921 there was a gradual and effective growth of joint industrial councils.

Let us consider for a moment how far the mandate of the Whitley Committee differs from the pretentions of the Bill. What were the terms of reference of the Whitley Committee? They were

1. "1. To make and consider suggestions for securing a permanent improvement in the relations between employers and workmen.
2. "2. To recommend means for securing that industrial conditions affecting the relation between employers and workmen shall be systematically reviewed by those concerned, with a view to improving conditions in the future."

Clause 1 of the Bill embodies a purpose that is entirely the same. The Bill proposes to set up a body to do exactly what the Whitley Committee was appointed to do. What were the Committee's recommendations? To put them briefly, they were the establishment of industrial councils in order to consider the various ways in which views could be exchanged, and personal relations made more intimate. The Committee definitely said that in their conviction the relations in industry, as expressed through a joint council, could not be put upon a cash basis. The Bill professes to do the very thing which was subject to this extremely efficient investigation, and says that industrial relations must be put upon a cash basis. The Bill is therefore a direct denial and contradiction of what was recommended by the Whitley Committee, was accepted not by one but by several Governments, and has since been applied and maintained.

The hon. Member for North Bristol (Mr. Bernays), in moving the Bill, asked that it should be examined in a nonparty spirit, and he suggested that those who were opposed to it would probably be the wreckers and the diehards of the Tory party. I do not recognise myself in either of those categories, but, if I were, I am perfectly willing to associate myself with the hon. Member for East Woolwich (Mr. Hicks), and others who have spoken from the Opposition benches. Diehards and wreckers we may be in this matter, but we are doing it from some experience. Some of those who have supported the Bill have yet to cut their industrial teeth to enable them to speak with the authority which they have assumed upon this question. Why put the responsibility on to us? In 1924, a Liberal Member brought forward a Bill embodying the principle. In 1924 and 1930, this question was a shuttlecock banded about among the Joint Association of Industrial Councils, the Trades Union Congress General Council, the Ministry of Labour and Parliament, and it was impossible to make any real headway in the issue that we are discussing to-day.

The situation would lead one to reflect that there is certainly more than one side to the question. In 1930, a new Sir Galahad entered the arena, in the person of the hon. Member for East Wolverhampton (Mr. Mander). In June, 1930, under the ten minute rule, he brought in a Bill embodying this principle, and in December of the same year he re-introduced it. In May, 1931, he secured a Second Reading for it, and in May, 1932, he introduced the Bill again. To-day we have the same lady, slightly moth-eaten and dressed in a new gown, handed over to the chivalrous care of his hon. Friend the Member for North Bristol. I do not suggest that because the hon. Member for East Wolverhampton has been so intimately and so long associated with the Bill, that it is necessarily a bad Bill.

Mr. BERNAYS

I think that one point has escaped the notice of the hon. Member, one which I was particular to make in my speech. This is not the same Bill as that of my hon. Friend the Member for East Wolverhampton (Mr. Mander).

Mr. RAMSAY

I accept any correction as to the actual phraseology which I used, because I am speaking without wishing to be tied down to the precise words. I was dealing with the principle embodied in the Bill, and I suggested that it was one for which Liberals, and the hon. Member for East Wolverhampton in particular, have been fighting for years.

Mr. MANDER

And for which the Conservative party voted unanimously in 1924.

Mr. RAMSAY

Then we are entitled to say, as I suppose we must, that the party is a great deal more die-hard to-day than it was in 1924. I do not think that we should be prepared to dispute that on its merits. I want to put it to the House that the Bill is unnecessary. In the broad, general structure of industry, there are two main classes. There is the class of industry where there is no organisation on either side, and where it is desirable that the State should take steps for the protection primarily of the workpeople. In this class of industry, trade boards are doing their job extremely well to protect the interests of the workpeople. In the other class, there is some measure of organisation on both sides, and you have to leave the organised employers on the one side and the trade unions on the other to do their job.

I am not at all clear what the supporters of the Bill want. If they want what is stated in Clause 3, merely to fix wages, why bother about another Bill? Why not say that the circumstances are suitable for extablishment of trade boards and be done with it. You have all the machinery there if you can satisfy the conditions. If you are only concerned with wages, that seems to be the method. An hon. Member has raised another question. He dealt with cotton, perhaps inferentially more than directly. He rather indicated that the Bill was to be used as a kind of machine through which to prevent the price of cotton breaking in the cotton industry, and in order to keep up a standard of prices, so that the trade as a whole might benefit. I am not going to suggest that that is not a desirable object, but, if that is the object, why not tell the House so, and why not let us approach it from another direction so as to get a machine for the job which would be a great deal more efficient that this Bill?

Mr. MOLSON

Do I understand the hon. Member's argument to be that trade boards are working satisfactorily in extremely badly organised industries, and that that is some reason why, in better organised industries where organisations exist on both side to come to voluntary agreement among themselves, those agreements should not be made compulsorily applicable to the small outstanding minorities who are under-cutting those voluntary agreements?

Mr. RAMSAY

If my hon. Friend will have patience for about two more minutes, I shall be able to satisfy him on that point. The point which I have made so far is that if you are dealing with wages there is the trade board machinery, and, if you are dealing with some result which you hope to get from the manipulation and the control of wages, you will get a much better result by approaching it through a machine designed to cover that particular question. Let us examine the working of this proposed council and its relation to the trade board. I would like, at this stage, to point out to some of my hon. Friends the danger, of which they appear fully conscious, that if this Bill were passed, it would be an absolute death-knell to trade unionism in respect of all workers covered by its machinery. I believe in trade unions. I believe that a man who works in industry works not for cash alone, and that there are all sorts of conditions impinging themselves upon his daily life which are even as important in industry as wages, and those conditions can only be protected for him by the vigilance, skill, and experience of his trade union leaders.

I think there is another risk. The trade board—and now I come to the point raised by my hon. Friend—is a body nominated by the Minister. It comes to a certain conclusion, and that conclusion, having been laid on the Table, may be given statutory effect, and the Minister is responsible. The Crown can do no wrong. There the matter rests. But take a council under this Bill. The representatives of the workpeople are, probably, in some cases trade union officials. They may be representing skilled trade unions and unskilled trade unions. They come to certain conclusions which are given the force of law, and become what I regard as a contract. But suppose some fine morning a foreman says something to a man in a shop which the man does not like, or suppose the employer tries to introduce a piece-work system which the men do not like, and suppose the result is a stoppage of work. In my view, a trade union acting as representatives of the workpeople in this matter would be laying themselves open to an action in the courts and probably severe penalties, which they would not like to meet. Therefore, I am suggesting, on that ground, that those who know the structure of industry and how it works, should hesitate before they accept haphazard methods of this kind.

I want to make one more point. My hon. Friend who seconded the Bill made great play about the efficient work which was being done by industrial councils, and I think he mentioned the Gas, Light and Coke Company in particular. The eulogistic words he addressed in respect of that company could be applied to a great many other industrial councils operating throughout the country. They are doing extremely well, but I would point out to my hon. Friend that they are working outside the scope of any provisions in this Bill, and why not let them go on doing the job for which they were created, and which—I pay my own tribute—has been done in a very efficient way? Many of those councils are concerned with the affairs of public authorities. What is going to happen to such a council under this Bill? Imagine a council dealing with the electrical industry, perhaps generating plant. You have a council with a dozen honest men on one side and a dozen equally honest men on the other side, with a neutral chairman, and because one man on one side has a predilection in a particular direction, and, getting a majority for it, they come to a conclusion which, in due course, becomes law. That council may be representing a big public authority which has five or six other industrial councils on its hands, each dealing with a different phase of industrial work. Does it follow that because the electrical industry council comes to a certain conclusion, that must automatically be applied to the tramway men, the sewerage men and the park men? Of course not. It follows that no public authority dare adopt a wage standard unless that standard is undoubtedly related to the conditions of all its other employés.

Finally, there is another conclusion, that nobody in a public authority is entitled to spend the ratepayers' money except the body which has been popularly elected for that purpose. On this question a very vigorous propaganda has been carried out on the other side. I have only one question to ask, and I address it to the Minister. We have had references this morning to the pottery council. I would like my right hon. Friend the Minister to tell the House, if he has the information, whether it is not the fact that the pottery council, the oldest, strongest, probably the most estimable industrial council in the country, has not only objected to the machinery of the Bill, but to the principle of the Bill? If he answers in the affirmative, as I think he will, then he will have produced a powerful argument against the acceptance of the Bill. I see in this Measure a good many mischievous possibilities. I think it is an undesirable interference with the free play of industrial forces on both sides, and, for these reasons, I support the Amendment.

2.22 p.m.

Mr. PICKERING

In listening to most debates in this House I must confess that I have sometimes been very much moved by the arguments of the other side, but in this Debate, though I have listened, I think, to every speech but one in opposition to this Bill, I have not received a single gleam of light. The opposition seems to me to be—I do not like to use the word—entirely factious, and merely diehard, from whatever benches it comes. It seems to be afraid of making any change, and for no reasons given. I have listened to speech after speech prefaced by the words "I will give reasons to show why this would be disastrous," but I have heard no reasons given, only many prejudices stated and many possibilities imagined.

With regard to the opposition from the official Opposition, judging from the speech made by the hon. Member for East Woolwich (Mr. Hicks), from which speech I gathered nothing, I must suppose that the opposition really is due to a lurking fear that a Bill like this is not congruent with principles of Socialism. But the Labour party have got to decide at the present time whether they are to be a Socialistic or democratic party, and I think, because they have not yet made up their minds which it is to be, that there was this hesitancy and confusion in the speech of the hon. Member for East Woolwich. The speeches from other hon. Members, those whom I must designate the "diehards ", seem to be inspired by a mere fear of the State doing anything. Use has been made of the words "State intervention", as if it were a new thing. Of course, the term "State intervention" has various meanings. When it means a sudden action on the part of the State which has not been prepared for, which is not desired by a majority of the people, when it means some interference on the part of the State in what has hitherto been left freely to the people concerned, it may be a had thing; but our laws are more or less State intervention—they are merely the expression of voluntary arrangements by a majority of the people concerned. This Bill merely asks that what is desired, what has been prepared for by voluntary organisation, shall be put into statutory form in order to defeat the end of a few reactionary and troublesome people. I do not think that anything more reasonable could be asked for.

I hear such statements as that this will be the death-knell of trade unionism. Why should it be the death-knell of trade unionism? Is it because a majority of two-thirds of the trade unions in a certain industry, and two-thirds of the employers, have asked for and received the sanction of the law to some agreement which they have entered into regarding wages? Do people imagine that once such an agreement has been legalised no change henceforth is ever to take place? That would be simply ridiculous. For one thing, the time for which the agreement is legalised will be in accordance with the circumstances of the case, and an opportunity will always be left for giving notice to have the legalised agreement revised. Trade unionism will still function, and I think it will grow stronger and more effective than ever when once the agreements which these industrial councils come to can have statutory recognition.

The hon. Member for Barrow (Sir J. Walker-Smith), in his endeavour to find something against the Bill, mentioned a list of industrial councils which were in favour of it, and had the temerity to suggest that these represented very small and unimportant industries. May I say that in the City of Leicester, which is not altogether unimportant, and the interests of which are not altogether unimportant, the Chamber of Commerce, which represents the great industries of Leicester, has asked me to do all that I can to support this Bill? The boot and shoe industry is a great industry; the hosiery industry is a great industry; and I feel that the hon. Member, in his desire to oppose the Bill, must have been very careless indeed about the weapons he has chosen. Again, he spoke of the terribly harmful effect which what he called rigid agreements would have. He said a good deal about elasticity. For certain purposes elasticity is a very good thing, but, if I were slipping off a cliff, I would sooner have a good strong rope, which would stop at a certain point, than a piece of elastic to depend upon. There must be a limit to elasticity, and there comes a time when you want something which will not stretch any longer, for fear of disastrous consequences. At present these industrial councils are elastic; that is to say, all that they decide binds only those who are within the agreement, and those who are outside can do as they like. Now they are asking that what they have decided upon should be made compulsory—in other words, that the elasticity should be put an end to, and that what they have agreed upon should be made compulsory on all those concerned in the industry. I think that that is necessary if the whole scheme is not to break down altogether.

The hon. Member for Barrow spoke of the building industry, and said that this principle of elasticity has worked there. We have to admit, of course, that there were certain difficult people who would not do as others did. What was done there? There you had a circumscribed area, or, in other words, a proscribed area. The hon. Member was playing the part of the ancient Roman—a very ancient Roman indeed—who preferred proscription to law; but we prefer legal methods to methods of proscription or circumscription, whichever term you like to use. I do not think there is anything in the Bill to which any reasonable man with experience of the circumstances can possibly object. It is not the fruit of any one party or any one point of view; it is the fruit of experience, the fruit of voluntary arrangements entered into by employers and employed in the great majority of our industries, and a time has come when all that good work which has been done is in danger of breaking down. Therefore, the House is asked to take a step forward. It is not asked to go in for State intervention. There is a danger in State intervention when it means the State interfering where the ground has not been prepared, and making people do by law what they would not do voluntarily. Here we have a state of things in which the majority are willing that this should be done, and they ask that it should be made compulsory on the obstructive minority.

2.32 p.m.

Mr. CROSSLEY

I am, in principle, a supporter of this Bill, but, unlike the hon. Member for West Leicester (Mr. Pickering), I should have said that the speeches in opposition to it, and particularly the speech of the hon. Member for West Bromwich (Mr. A. Ramsay), were certainly not factious. On the contrary, the speech of the hon. Member for West Bromwich was a very well reasoned speech. I disagree with the hon. Member much more in his illustrations from mythology, when I think he represented the modern Sir Galahad as leading a lady several times to this House until eventually she became somewhat moth-eaten. It is perhaps unnecessary to remind the House that the original Sir Galahad was par excellence the virgin knight, and, although a lady might be passée or on the shelf, she certainly cannot be moth-eaten.

I only want to say one thing to the House. I do not believe that this Bill has any real relation to the problem which is now before the weaving section of the cotton industry. It is right that the House should understand that point, because several hon. Members have mentioned the weaving section of the cotton industry in this connection. The problem in North East Lancashire is a problem of employers or employed, or both. In many cases it is a problem of employers and employed coming together, the one approaching the other. The employés may say to the employer, "If you will keep your mill running, we will take a lower rate of wages"; or the employer may say to the employés, "If you will take a lower rate of wages, I shall be able to keep my mill running." It is highly desirable that that problem should be solved, but it is not the problem which is before the House to-day. Indeed, the Bill in its present form, with the sanctions in Clause 5, might even make the problem in North East Lancashire more difficult than it is to-day, because that problem must be met by imposing some sanctions not only on the employers but also on the employed; and how that is going to be done is a very difficult and very important major question of, I hope, Government policy which may in the near future come forward. In general principle I am agreed with hon. Members who have supported the Bill that it is an effort to obtain better relations between employers and employed in a large number of industries.

2.36 p.m.

Colonel WEDGWOOD

My natural instinct on meeting a Bill like this which, of course, involves putting people into prison, a Bill brought forward by private Members, would be to vote against it, but on this occasion the Bill is already completely dead. The Government and the Opposition have united to kill it and the organisers of employed and employers have also united to kill it.

Mr. MARTIN

Have the Government announced their intention of killing it.

Colonel WEDGWOOD

That can be assumed. The Bill being in a moribund condition, it seems to me, coming from a family of potters, that I may as well say something in its favour. Several speakers in the Debate have referred to the pottery industry and its attitude towards this scheme. I am not interested in the attitude of the pottery industry towards the scheme, but I am interested in the operations of the Whitley Council in the pottery industry, and I think it is only reasonable that I should explain the enormous benefits that the Whitley Council in the pottery industry has conferred upon that industry and the difficulties that the Council is facing at present in meeting the situation of universal slump and depression. We have amicable co-operation between the trade unions and the entire body of employers. The pottery industry is a particularly difficult industry to regulate by any joint body because the wages, in the overwhelming majority of cases, are piece wages, and piece wages are notoriously more difficult to fix than wages by the hour.

Up till 1929, when the trade was fairly good, the Council operated. They issued their decrees as to conditions in industry, and those decrees were obeyed. But, as trade got worse and worse, and people got more nearly on to the rocks, gradually suspicion spread that certain employers were not carrying out the agreement. Normally, with a strong trade union, anything in the nature of dishonourable cuts in wages would be stopped, but, as trade got worse, the position of the trade unions got worse. I do not know what percentage of the workers in the pot banks now are in trade unions, but certainly not enough to prevent secret arrangements being come to between a few unscrupulous employers and men, and more particularly girls, who are anxious to get a job at any price.

The trade union is unable to find out even in the case of its own members what wages are actually being paid. A girl taken on perhaps at half her proper wage knows that her only chance of keeping the job is to keep the wage that she is getting secret, and, when you have the pressure of unemployment such as you have at present, it is inevitable that unscrupulous employers should take on people below what the Whitley council has fixed as the rate of wages. I am all for competition. I believe that in the pottery industry competition in design, competition in marketing, competition in keeping down overhead charges, and even competition in the cost of production, is all to the good. It helps the industry. But when competition becomes, as it is becoming increasingly in the pottery industry, a question of how far you can undercut the standard rate of wages, how many people you can employ below the proper wage, you get an extraordinarily strong case for making the decision of the Whitley council not merely honourably binding upon every member of the council but legally binding.

I do not like this sort of legislation. The speech of the hon. Member for East Woolwich (Mr. Hicks) ought to have been made by me, and he ought to have made the speech that I am making now. We live in an inverted topsy-turvy world. In the same way this piece of legislation, which is purely socialistic, is brought in by the only surviving Liberal in the House and is opposed by the Labour party. Adversity makes strange bedfellows. When Wolverhampton and North Staffordshire get together Lancashire must look to her laurels. This Debate has been a most useful one. The Bill has not the ghost of a chance. When you have the employers against it as well as the working-classes, there is no hope for a measure like this. I beg the hon. Member below the gangway to realise—

Mr. MANDER

It is not my Bill, it is the Bill of the hon. Member for North Bristol (Mr. Bernays).

Colonel WEDGWOOD

The Bill which the two hon. Members are bringing forward will never have a chance until, first of all, they realise the root objection of trade union leaders to legislation such as this, and, secondly, persuade the Trades Union Congress to vote in favour of it. It is essential that people promoting legislation such as this should realise the natural objection of trade union leaders to it. The more the State takes on the functions of a trade union the less is the scope for the trade union. That is, I think, an accepted general principle. It is arguable—and I do not propose to argue it—that if we had never had legislation in this country to limit the hours of child labour trade unions, having to do that work for themselves, would have been stronger than they are to-day. In the same way, it is arguable that if we had not had Health Insurance and Old Age Pensions the trade unions, having to carry on, just as they used to do, all their thrift work, would have been stronger than they are to-day. The advance of the State in doing the work of the trade unions pro tanto cuts down the need for and the utility of trade unions.

The Trades Union Congress, faced with a Measure such as this, have to consider, on the one side, the difficulties of the pottery trade union in trying to keep wages up to the Whitley council level, and on the other hand the risks of injuring trade unionism as a whole by making the existence of a trade union secretary less and less necessary. That is one of the things you have to realise. I was delighted with the speech of the hon. Member for East Woolwich to-day, because it is so easy to pretend to be in favour of a Bill like this and to damn it behind the scenes. There we had a perfectly frank and open statement of the trade union side of the case, and you have to alter that decision before you can ever go forward with your Bill. As far as the employers are concerned, you will find that in the pottery industry a good many feel, as I do, with the damnable and increasing suspicion which some of us have when any of our fellows are not playing the game but are undercutting wages and breaking their bond with the Whitley Council, that it is driving more and more employers into a realisation that until they can make the decisions of the Council legal and binding co-operation between workers and employers is failing of its purpose. Along both of those lines we have to go. You always get a minority of bad employers against you, and when that position arises it is easy to deal with it.

The difficulty is in dealing with people who do not understand that the problem has been developing and growing for the last ten years, and that just as we had to wait for years before we got the Trade Boards Act, so we may have to wait years and have any amount of debates like this, educating the people in the country, before we shall make out a case strong enough to get this compulsory legislation. The objections one has to the trade boards, strong as they are, are objections, which, I believe, are always met, and can be met, in legislation like this infinitely better when you get the Whitley Council dealing with the question and not a Government Department. I shall be glad to see this Measure take the place of the trade boards, and to see it passed into law after it has obtained the real support of the trade union leaders, and when it has a sufficiently educated employing class to realise that the only way to keep up their standards and to avoid cut-throat competition, so as to bring their bad eggs into line with the good ones, in order to destroy the suspicion, bitterness and progressive under-cutting going on in the pottery industry to-day.

2.50 p.m.

Mr. MARTIN

I do not know why the right hon. and gallant Gentleman the Member for Newcastle-under-Lyme (Colonel Wedgwood) said with such great emphasis and vehemence that the Government were going to reject and kill the Bill. He must be very clever if he has discovered that fact by the expression upon the faces of the quartet on the Front Bench. I can imagine hon. Gentlemen on the Front Bench sitting round a card table playing poker by the cast of their countenances. I should like to see my right hon. Friend the Minister of Labour (Sir Betterton) get up and give some encouragement to the principle embodied in the Bill. I would refer to the point which may have influenced hon. Members against the Bill, namely, the suggestion that there is too rigid a code being set up. The words in Clause 4, Sub-section (2, b)— The variation in any manner and during any period specified are so wide that all those arguments of rigidity are inviolable. We have a strong case for saying that it is sufficiently elastic to meet a great many of the objections put up by hon. Members on all sides of the House. It was most interesting to find the spokesman of the Labour party speak in the way that he did. He used some rather interesting expressions. He talked about the "balance and proportion of the democratic principle," and used it as an argument against the Bill. It is particularly interesting to me, and, at the same time, rather galling when one considers that in the great northern coalfield the miners' trade unions have been threatening a general strike if all the members employed in the pits did not join the trade union. For a spokesman of the Socialist party in this House to get up and talk about the balance and proportion of the democratic principle is absolutely too hypocritical for us to consider it a reasonable argument in this Debate.

I suggest that the Government might at least admit the principle of the Bill. It is that with which I and a great many other hon. Members are concerned, and not so much with the details. Many of the arguments have been points of detail and Committee points. The hon. Member for East Wolverhampton (Mr. Mander) who has been so constantly announced as the father of the Bill went a little too far in stressing the fact that many existing industrial councils had asked for it. I am not so much concerned with that fact as with the broad principle, which I heartily support, and to which I hope the Minister, in his reply, will be able to give his support.

2.53 p.m.

Sir H. SAMUEL

There have been many periods in our recent history when the nation has been gravely concerned by serious industrial conflicts which have broken out in one industry after another, and in such periods questions such as the one which is being debated in the House to-day would attract the keenest attention on the part of Parliament and of the country. To-day we are living in a time when these conflicts are for the most part quiescent. That is because the condition of trade is so bad and unemployment is so great that the working classes are almost helpless in face of any industrial difficulties. A Bill such as this seems at the moment to be not called for and unnecessary, but, if trade were to revive and if prices were to rise and the cost of living were to increase, you would certainly have in one industry after another powerful movements for bettering the conditions of the working-class. You might have strike after strike in various industries and then the country would ask "Why has not Parliament legislated in some way so as to avoid these industrial disputes?" They are most deleterious to the prosperity of the nation; they embitter relations between employer and employed; they are a clear sign of an ineffective industrial system. We should not be deterred from action at the present time by the fact that in general over the range of industry matters are not acute; but we should, in this period of comparative calm, take such legislative measures as may be necessary to provide the machinery required in circumstances that may be different.

There is one case now in Lancashire where there is very serious unrest owing to precisely such difficulties as those touched upon by this Bill, and as a Lancashire Member I should like to refer to it. I do not agree with the senior Member for Oldham (Mr. Crossley) who has suggested that the Bill has no near relevance to the present Lancashire situation. I will give my reasons later for expressing that view. First, let me point out a precise example of what does now happen in industry, which makes the questions raised by this Bill not academic but very actual. A year or so ago there was a very grave industrial conflict in the cotton industry in Lancashire. There was a prolonged labour dispute and hundreds of thousands of people were out of work for many weeks. Apparently, that dispute could not be resolved, but ultimately Mr. Leggett, on behalf of the Ministry of Labour, intervened. He held prolonged sittings with the two sides and finally succeeded in inducing them to come to an agreement for the settling of wage rates and the conditions of employment.

Lancashire heaved a sigh of relief and the people went back to work, or such as them as still had work in the extreme condition of trade depression in Lancashire. It was thought that the trade would then work smoothly, but it has been found that here and there in various towns in Lancashire, in the weaving industry, employers are not observing the agreement, and the trade unionists are not strong enough to enforce it. As a consequence, the agreement arrived at, after such a great struggle and so much difficulty, is being steadily undermined. In my own constituency of Darwen there has been proceeding for several weeks a dispute affecting some hundreds of workpeople. The precise point of the dispute is, that the workers allege that an employer has departed from the terms of the agreement entered upon at the Midland Hotel in Manchester, and the workpeople have been brought out on strike. Whether the allegation is correct that the agreement has been broken and whether the workpeople are justified in coming out on strike, are matters of controversy; but the fact remains that the whole of the conciliation machinery of Lancashire has been brought into operation, the central associations of employers and operatives have met together in an endeavour to settle the question, but a complete deadlock has been reached. Meanwhile, the places of the operatives who have been brought out on strike have been taken by other workers, and some hundreds of persons are at present unemployed there.

Mr. CROSSLEY

Is it not true, and will the right hon. Gentleman not agree with me, that in very many instances where it is suggested that an agreement has been broken, it has not been broken by the employers but by the operatives?

Sir H. SAMUEL

I was coming to the hon. Members argument that the Bill would not apply in the case of Lancashire. I want the House to realise precisely what the situation is. The situation in Darwen is not unique, because in many towns in Lancashire a similar situation exists. The employers who are observing the agreement, when they go to sell their cotton cloth on the Manchester Cotton Exchange, find that they are being undersold by competitors, not because those competitors are more efficient or cleverer manufacturers, or more skilful buyers and sellers, but because they are paying less wages for the same work that the better employers are paying. That is a very grave situation, and it must be dealt with, otherwise we shall have this unrest in Lancashire growing and the whole system of collective bargaining will break down completely.

As the right hon. and gallant Member for Newcastle-under-Lyme (Colonel Wedgwood) said, collective bargaining has hitherto rested for its enforcement really upon the strength of the trade unions. Employers and employed come together and arrive at an agreement. Wage rates are fixed, and then it is left to the trade unions to take action if any employer undercuts the agreed rate. That has worked fairly successfully over the country as a whole and is still working fairly successfully in many industries, but in other industries it has not been so successful. The trade unions are much weaker in their membership because of the events of the last few years, while the trade depression which has caused so much unemployment, is weakening their position still further, because workers know that if they come out on strike, as has happened in Darwen, their places can be taken at once by those who are now in the ranks of the unemployed. Therefore, it has been found that trade unionism is no longer an effective weapon to make collective bargaining actually operative and enforceable. That is the essence of the present situation.

The hon. and learned Member who moved the rejection of the Bill said that labour is so well organised that no steps need be taken to supplement its efforts, but that is not so. Whereas employers have hitherto, by a strange paradox, relied upon the trade unions to enforce agreements upon their competitors, they can no longer, in fact, do so. The hon. and gallant Member who seconded the rejection of the Bill said that collective bargaining is a very valuable feature in our industrial life, and I think that is the universal opinion in this country now. Its establishment has been one of the great achievements in our industrial organisation and I think that Britain may take pride that in this matter, as in so many others, she has given a lead to the world; but now the whole system is in danger of collapse. The hon. Member for Oldham asks, is not the collapse due to the fact that employers and employed have agreed to work on lower terms. That may be so sometimes, but sometimes it is not so. It was not so in Darwen, for example. Furthermore, even if it were so, that would not render inoperative a Bill such as this. If a collective agreement was reached and was given statutory authority, that is to say, that any one who departed from it would be liable to a penalty, there might conceivably be collusion between employers and employed in an effort to defeat the purpose of the agreement, but if a Bill such as this were on the Statute Book anybody could take proceedings, such things could not be concealed, and it is not probable that any employer would be willing to face the risk of being prosecuted for an infringement of an agreement of that character.

Mr. THORNE

What would be the position where agreements were made obligatory and an employer said that he could not afford to pay the wages and keep his works going? What would prevent him from closing down his works?

Mr. CROSSLEY

What would arise in a case such as this, where an employer said: "I am going to close down my works." This is a case which happened the other day. Then the operatives come along and say: "We will take 20 per cent. lower wages if you will keep the works open." Those operatives are not going to take action, because they are the very people who have asked that the wages should be lowered. That is a situation that I want the right hon. Gentleman to face, and that is a situation with which this Bill does not deal.

Sir H. SAMUEL

Let me take that point. It would not be left only to the operatives employed in that particular mill to take action. The people aggrieved would be the operatives and the employers in the other mills who would wish to maintain the collective agreement, and it would be left to them to take action. With regard to the point raised by the hon. Member for Plaistow (Mr. Thorne) I am surprised that a trade unionist should have raised that, because it means the abandonment of the whole system of collective bargaining.

Mr. THORNE

My point was, that an agreement may have been arrived at and the employers say that they cannot pay the rates and they close down the works.

Sir H. SAMUEL

That may or may not mean that the agreement was a wrong one to have arrived at. It would have to come before the joint authority of the trade and the employers concerned would have to say: "We cannot bear this heavy burden which has been imposed upon us. We must have a modification". The argument of the hon. Member is that in the coal mining industry, for instance, if a particular group of miners in a pit were willing to accept 20 per cent. less wages rather than have the pit closed, he would accept it as valid. His whole argument goes to the root of collective bargaining. If it is right for one factory, or one pit, to do this, it is right for everybody. If one pit accepts 20 per cent. less in wages then the neighbouring pit must do the same, or be driven out of competition, and so over the whole range of industry collective bargaining would collapse. It must be uniform, otherwise, it cannot be enforced.

Mr. CHARLES EDWARDS

There are cases in the mining industry where it has been done.

Mr. MARTIN

May I point out to the right hon. Member that in the Bill it says: Any employé … may recover such sum from his employer. The right hon. Gentleman has not met that point.

Sir H. SAMUEL

The point of substance is whether this kind of agreement, if statutory, can be enforced. I say that there is no difficulty in enforcing it, just as there is no difficulty in the case of agreements made under the Trade Boards Act, which are enforced without difficulty. If this particular Bill had been on the Statute Book 10 years ago, or if it had been on the Statute Book owing to the persistent efforts of my hon. Friend the Member for East Wolverhampton (Mr. Mander), a few years ago the Lancashire case could never have arisen, because the Bill would have effectively prevented such under-cutting as now exists. The hon. and learned Member for Moss Side (Sir G. Hurst) said that the State ought never to intervene at all in any such matters. The principle of the Bill is not new. In 1906 there was a great agitation against sweated industries, which were a scandal to the whole nation; and the Home Office—I was Under-Secretary of State at the time—took the matter up and sent out Mr. Ames to Australia to examine what had been done there for the suppression of the sweated system. He made a report showing the practical measures that had been taken, and which had been successful. We introduced a Bill, and the Trade Boards Act was passed in 1909, and in fact killed the sweated system, and the scandals which then existed do not now occur. It has worked well, and I do not think there is an individual in the country who would now wish that Act to be repealed. It applies only to the unorganised trades. It was assumed that the trade unions would be able to make collective bargaining effective, but, in fact, they are not now able to do so, and you get the under-cutting which is prevalent, and which may destroy the whole system.

Some hon. Members oppose the Bill because they object to "a rigid, cast-iron system being forced upon industry". An hon. Member connected with the iron and steel trade said that they had their own methods with which they were content, which had worked well, and that it was unnecessary to force them into a system such as this, which they did not desire. An hon. Member, speaking on behalf of the building trade, said that they had an industrial council, but did not desire it to deal with wage rates in this way. These hon. Members have not realised that the Bill is purely an adoptive Measure. It forces nothing on anyone. The Bill says that the Minister, "if he is satisfied that an industrial council is desired by an industry," may approve the establishment of such a council. Those few words dispose of some hours of speech-making this afternoon. If the industry does not in fact desire a council, if in South Wales, for instance, the iron and steel industry, or the building industry, or whatever it may be, does not desire a council, it need not have one. In fact, in those circumstances, an industry cannot have one. Or if it desires one but does not desire it to deal with wages, it does not make an application dealing with wages. The whole matter is entirely in the hands of the industry itself. There is no question whatever of the State forcing any system upon it. It is an adoptive measure.

Then the question was raised, how is it to be ascertained whether or not an industry is in favour of a council? There are no provisions in the Bill. That is a question of the constitution of the industrial council and its rules, and it could not be dealt with in the detailed provisions of the Bill itself. But I have no doubt that the rules would provide that it would have to be clearly established that a very substantial majority of employers and employed would desire an Order of this kind before such an Order could be made. It has been asked whether there would be sufficient elas- ticity for modifications if circumstances changed. Of course there is ample provision for elasticity, as in the Trade Boards Act, and for amendment when conditions require.

I personally am strongly opposed to any measure of compulsory arbitration. I have always been so opposed. If the Bill included a provision for compulsory arbitration I should be against it. But it does not. The Bill is the opposite of compulsory arbitration. It requires that both employers and employed should voluntarily come in and make applications jointly, and the only people who are coerced are not the great body of employers or employed, but minorities that might seek to undercut the agreement arrived at and so make the whole process futile. It is not a measure for Government intervention and control.

The hon. Member for Moss Side made a plea for liberty. Liberty is not the same thing as anarchy. Liberty involves government, but self-government in accordance with the wishes of those who are governed. That is precisely what the Bill proposes. It is not a Measure for the limitation of liberty; it is a Measure for the enlargement of liberty. It is exactly like the Early Closing Acts, dealing with shops, which impose compulsion upon a minority to close their shops at certain hours, but by compelling them and restricting their liberty it enlarges enormously the liberty of the great majority of the shopkeepers and their assistants, who desire shorter hours but cannot get them because their voluntary efforts are defeated by a minority who would keep the shops open and compel the others by trade competition to keep their shops open also. The law intervenes there and at the request of the majority compels the minority, and thereby in the aggregate enlarges liberty. So it would be under this Bill.

Lastly, what is to be the attitude of this House to the proposal? The Labour opposition, through its spokesman, the hon. Member for East Woolwich (Mr. Hicks) struck a very uncertain note. Towards the end of his speech the hon. Member, evidently with some searching of conscience, said he hoped the House would not regard his speech as hesitating and halting. Qui s'excuse, s'accuse. He knew well that it was hesitating and halting, and consequently he asked that it should not be so regarded. He said that one objection of the trade unions to the Bill was that they feared they might be liable to be sued if this became law. But this Bill in no way touches the Trade Union Acts in general which fix, whether well or ill, the legal status of the trade unions. They would remain precisely the same after this Bill had been passed, as they were before its passage.

The hon. Member's only other objection was, in substance, that the Bill might perhaps be altered in Committee; that he could not trust the present House of Commons, and that it might emerge from Committee in a state in which it would be deleterious to the trade unions. Therefore, he thought the Bill had better be rejected on the Second Reading. If that argument is to hold good, no desirable Bill from the hon. Member's point of view should ever be passed in this House on Second Reading for fear that in Committee it might be spoiled. But we still have the Report stage and the Third Reading, and I feel certain that the House will not regard that as a valid argument. The hon. Member's speech was not merely hesitating and halting. It was inconsequent and inconclusive, timid to the last degree, and the Labour party which has prided itself on taking a strong constructive position on all matters of social reform and labour legislation to-day has simply faded away.

We have still to learn from the Minister of Labour what is to be the attitude of the Government. I would impress strongly on the right hon. Gentleman the urgency of the Lancashire case. If not this Bill, then what? It seems to me that there is an opportunity this afternoon on a Private Member's initiative for the passage of this Bill, for its modification if you wish in Committee, and dealing with all the small points that have been raised, and its immediate employment for the settlement of this urgent Lancashire case. If not this Bill, I trust the right hon. Gentleman will tell us specifically and directly what is the policy of the Government. We have from the Front Bench in these days so many speeches which are fair words leading to nothing. It is said that the ordinary affairs of life could be conducted with a vocabulary of a few hundred words. Many of the speeches that we hear from the Treasury Bench, particularly from the Board of Trade and the Ministry of Labour, could be condensed into three words, and the three words are "sympathy," "difficulty" and "consideration." The Government regard a matter with great sympathy; the subject, however, is surrounded with difficulties, but they assure the House they are giving it the most careful consideration. Sometimes with a flash of originality and even of genius, a Minister will change the order and say that the Government are giving careful consideration to the matter; that the House can be assured that they regard it with great sympathy, but that after all it is a matter of great difficulty. There is no other variation. We seldom get, whether on cotton, or on shipping, or whatever it may be, anything but those three words to which the Government vocabulary appears to be limited.

I earnestly hope it will not be so to-day. The nation in these times is eager for constructive action. It is becoming impatient with Parliament. Question after question is being pushed aside. There is no energy or drive. That is why so many electors are indifferent to politics and distrust all parties. When the National Government was formed it was hoped that with vigour, energy and foresight it would take a grip of these various questions, propose definite policies, and push them forward until they were carried into effect. I trust on this occasion at all events the spokesman of the National Government will give us a speech couched in that key.

3.20 p.m.

The MINISTER of LABOUR (Sir Henry Betterton)

I was interested to hear the right hon. Gentleman the Member for Darwen (Sir H. Samuel) say he thought it was improper to say you are giving either sympathy or consideration to a matter or that you regard it as a matter of difficulty. When he was in the Government, not so very long ago, as far as I remember, that was almost invariably the answer that he himself gave.

Mr. THORNE

It all depends on which side of the House you are.

Sir H. BETTERTON

The hon. Member for North Bristol (Mr. Bernays), who introduced the Bill, began by making an apology for what he said was his lack of Parliamentary experience. I can only say, having listened to his speech, that no such apology was necessary, for I thought—and I think I am speaking with the common consent of the House—that he put the case for the Bill with a power and a skill which left absolutely nothing to be desired. At any rate, he may be satisfied that the discussion which we have had now for the whole of the day has been extremely interesting and valuable to everyone who has listened to it.

The first thing that is clear above all others from the discussion as it has proceeded is that there is a very wide divergence of opinion between hon. Members who are all equally entitled to speak on this matter. There is no common agreement at all as to whether this Bill is desirable or not, and the speeches in this House to-day have reflected what I believe is the view of industry as a whole and of the country outside as a whole. Therefore, it is idle to pretend that there is a common agreement as to this Bill. It really does not carry you any farther, I think, when hon. Members like the hon. Member for East Wolverhampton (Mr. Mander) describe the hon. Member for East Woolwich (Mr. Hicks), who was then leading the Opposition, and the hon. and learned Member for Moss Side (Sir G. Hurst), and the hon. Member for West Swansea (Mr. L. Jones)—and I think he would like to include the Government themselves—as weak, timid, and reactionary—

Mr. MANDER

I am afraid the right hon. Gentleman entirely misunderstood me. I was referring solely to the hon. Member for East Woolwich (Mr. Hicks).

Sir H. BETTERTON

It is so easy to say that everyone who does not agree with you is timid and that every point of substance against the Bill is a Committee point and that you can alter it in Committee. If the result is that you give a Second Reading to a Bill which you anticipate may be so modified in Committee that it is altered out of all recognition, then you really have to consider whether such a Bill should receive a Second Reading at all. The Bill itself is what the House has to consider. We have to consider whether, first of all, it will achieve the object which is claimed for it, and, secondly, we have to consider another factor, namely, whether in passing this Bill we are really going to help and strengthen the system, with which we all agree, of joint industrial councils, because joint industrial councils have done in the past and are doing at present most valuable work. They have very many advantages. They have, for instance, a settled constitution, they have regular meetings, and they have a very comprehensive character with regard to their scope. I would certainly say or do nothing which I thought would injure the value of industrial councils. The more industrial councils there are, the better I think for industry, and I should be the first to recognise that in those industries where they have been set up they have done most valuable work.

But I think this is also true, that it is not every industry in which an industrial council is the most appropriate method or system for dealing with that particular industry. Many industries are not suitable. If it be said that the cotton industry desires a joint industrial council or that any section of it desires one, all I can say is that I have not heard that desire expressed. If I had I should have been the first to welcome it. As far as I know, that industry has no intention of setting up one, and the same applies to other industries of equal importance. The right hon. and gallant Gentleman the Member for Newcastle-under-Lyme (Colonel Wedgwood), whom we hear far too seldom and who is one of the oldest and most experienced Members we have, really went to the root of this matter. He said, in effect, that no self-governing machinery in any industry will be effective unless it reflects the desires of both parties to the industry. In other words, you cannot impose upon an industry any system, whether an industrial council or anything else, and expect it to work unless the industry itself and both sides desire it. The Debate to-day has shown how far that is a fact of universal application and truth.

Of course, there is no interest that I, as Minister of Labour, have or can have more than seeing in every industry suitable joint machinery to settle disputes. There is nothing one desires more than to see that set up or in operation. I would remind the House of what has been stated by more than one Member that this is not the only machinery for this purpose which exists in this country to-day. I am now speaking more particularly of wages. There are, as we know, in some industries a trade board, to which the right hon. Member for Darwen referred. I have myself set up two new trade boards this year. They were asked for by both sides of the industries concerned, and they are working extremely well. They were set up as a result of a joint application. The House must remember, when we are talking about wage rates in connection with joint industrial councils, that some of the most successful councils—the one in the boot and shoe trade has been referred to—do not deal with wage rates at all. There is entirely separate machinery to deal with wages. The council deals with many other things the settlement of which is essential to the welfare of those engaged in the industry, but wages do not happen to be one of them. There is another point in the Bill to which I want to refer. Clause 2, Sub-section (3), says: Where an industrial Council for any industry has been approved by the Minister, it shall be recognised as the official channel of communication in all matters affecting the industry between His Majesty's Government and the employers and workers in that industry. That is one of the most important Clauses in the Bill. I will tell the House what my experience has been when I have asked joint industrial councils for their opinion and advice on matters of great importance. From time to time recently the question of a forty-hour week has been raised in the House. The suggestion was that a forty-hour week should be made statutory, and, if possible, made international by an international convention. I asked the joint industrial councils what they thought about it. I said, in effect, "Will you please tell me how you think this proposal would affect your industry and give me what advice you can"? In practically every case—there were only two or three exceptions—the answer I got from the employers was," Please apply to the Employers' Confederation," and the workers said, "Please apply to the Trades Union Congress, because that is a matter they have in hand." In both cases I was referred to the separate organisations of the two sides.

Here is another instance. It has been my painful and rather laborious duty to read through the evidence given before the Royal Commission on Unemployment Insurance. I found that on some important points in connection with unemployment insurance the Commission asked the 45 or 50 joint industrial councils what they thought of certain specific proposals which the Commission were then considering. The experience of the Commission was precisely the same as mine. Excepting in a very few cases—seven or eight I think—the joint industrial councils said, "If you want our views you must ask, on the one hand, the organisation of the employers, and on the other hand ask for the views of the Trades Union Congress." That shows that the proposal in this Bill that where a joint industrial council exists it shall be recognised as the official channel of communication in all matters affecting the industry is something which would not be tolerated by either of the parties in an industry, and really would do anything but strengthen the position of these councils, which I want to strengthen and maintain. I do not think I need go through the Bill in detail, but for these reasons—and there are others—I really cannot commend the Bill to the House as one which would be at all likely to further the objects which they and I have equally in view. So far from helping it would have the very opposite effect.

The right hon. Member for Darwen and I think my hon. Friend the Member for Oldham (Mr. Crossley), referred to the position in the cotton industry, particularly in the manufacturing sections in Lancashire. Substantially what the right hon. Member for Darwen said was perfectly true, and I accept it. Both sections of that industry, employers and operatives, came to me and pointed out what was happening in the industry, and it is as the right hon. Gentleman described it. You have, on the one hand, employers who appear to be breaking their agreements and on the other, operatives who are, under the stress of circumstances, breaking theirs. That is the situation, and I agree with the right hon. Member for Darwen that unless that situation is corrected it is going to lead to chaos in the industry, and the right hon. Gentleman will realise that the result may be a most serious one. It is obvious to anybody and everybody who is concerned to maintain peace in industry that this is a matter of the gravest possible concern at the present time. The right hon. Gentleman asked me a question as to the specific manner in which we propose to deal with this situation. I am not prepared to tell at this moment, and I could not tell him—I wish I could—what we are doing and what we shall propose in connection with this very serious situation. I can assure him and the House that I appreciate to the full, and no one does so more, the seriousness of the situation in Lancashire. I accept what the right hon. Gentleman said as to the inevitable consequences, and I can assure him and the House that the Government will take such steps as they can and as are practicable to ensure that this most dangerous of situations will be brought to an end.

Sir PERCY HARRIS

Can the right hon. Gentleman tell the House whether, failing the passing of this Bill, he proposes to bring in his own constructive Measure?

Sir H. BETTERTON

That is exactly the question which was asked by the right hon. Gentleman the Member for Darwen, and to which I cannot answer at the moment more specifically than I have done.

Mr. PICKERING

Are the Government not prepared to make use of this Bill?

Sir H. BETTERTON

There is nothing in this Bill at all which will help. So far as I know there is no inclination on the part of the cotton organisations to have a joint industrial council. The Bill does not touch in the remotest degree the situation in Lancashire, nor, so far as I can see, is there anything in it which would enable me or the Government to deal with the situation as it is in Lancashire. The matter is in the hands of the House, and with that recommendation I propose to leave hon. Members to take their own course.

3.38 p.m.

Lord EUSTACE PERCY

I warmly agree with my right hon. Friend the Minister of Labour, that what we are considering is this Bill, and that it is no good, beyond a certain point, saying that objections to the Bill are merely committee points, and that we can pass the Second Reading in an irresponsible spirit, no matter what can be made of the Bill upstairs. I agree, but at the same time I think it is important to the House to take a Bill like this in its setting. While in part the Bill follows the same lines as previous Bills that have been introduced, it is to-day introduced in nothing like the same spirit as it has been introduced before. One of the factors which sap public confidence in this House is that our discussions sometimes appear to the public like a series of disconnected happy thoughts. That is particularly liable to be the appearance of Friday afternoon Debates, and that was the character more or less of those industrial council Bills which have been introduced on various occasions during the last seven or eight years.

It is not the case to-day. At the present moment, there is a great body of opinion—including, I think, that of the great majority of the members of this House of all parties, from the most extreme right to the most extreme left—that the immediate problem of the future is the deliberate organisation of, at any rate certain of the basic industries of this country. You may see that belief, as I have said, in every section of opinion in this House, most strongly in some sections when they come to deal with agriculture and in other sections when they approach manufacturing industry. But when the Minister of Labour talks about the divergencies of opinion which have manifested themselves in this Debate, do not let those superficial and immediate divergencies of opinion about the Measure before us, detract from the growing impression of the volume of opinion behind the proposition that some industrial reorganisation of this kind, deliberately undertaken by industry, with the knowledge, sanction and support of Government, is the essential next step in the policy of the future.

Any policy of that kind has three aspects. One is the economic aspect—regulation of production, concentration of production on the most efficient units of production, and so on. The second is the wages. How are you to secure such wage agreements in industry as will prevent the kind of situation which we have in Lancashire at the present moment? Thirdly, there is the educational side of the problem. How are you going to organise the recruitment of industry so as to ensure to industry the trained skill it requires? Those three problems have all been before this House during the early months of this Session. We have had an educational debate on a Friday entirely from that point of view. We had only yesterday an interesting attempt on the part of the Government to reorganise and rejuvenate a great industry, the North Atlantic shipping industry, by regulation of production and amalgamation of interests, and, I hope, by concentration of production on the most efficient lines.

To-day we are dealing with the problem of wages. This problem of agreements within industry is perhaps wrongly described as merely a problem of wages. It is a problem of securing in industry, at any rate in the basic industries, which we are primarily considering, some organisation which can interpret the opinion of the industries, both employers and employed, on many questions of policy beside the question of wages. Let me at this point remind the House, especially my hon. Friends who belong to the same party as I do, that in concentrating our attention on this matter of industrial reorganisation, we are only pressing forward the policy which was announced to us some months ago by my right hon. Friend the Lord President of the Council when he stated that the next task before the Government was to deal with certain basic industries, and I think he mentioned the iron and steel industry, the coal industry, the cotton industry and shipbuilding, but he did not mention that which I would personally add, namely, the building industry. Therefore, in asking the attention of the House to this great problem, we are only following the lead, and I hope strengthening the hands, of the National Government.

Of all these three phases of the problem, this one of the representative organisation of employers and employed in industry is of the greatest importance, and, if we wanted a proof of its importance, we have only to take the speech of the Minister of Labour. I thought that it was the most deadly exposure of the relations between employers and employed in industry as it exists at the present day that I have ever heard. Here is a Government considering policy, and considering that vitally important suggestion, whether impracticable or otherwise, of the establishment of a 40-hour week. That proposal must affect in the most divergent way the different industries which we have to consider. There is clearly no general industrial unanimity about a reduction of hours and the establishment of a 40-hour week. How can there be? Does anyone suppose that it is the same in the cotton industry as in the iron and steel industry or the shipbuilding industry? Of course the Minister of Labour and the National Government, in considering a question of that kind, must have the representative advice of each industry, and my right hon. Friend has just told us that there is no way in which he can possibly get it. He writes to the iron and steel industry asking, "What would be the effect on you of a reduction of hours of labour?" The reply which he gets is: "Oh, refer to the employers' organisation; refer to the Trades Union Congress." Yes, that is precisely the position in which we are—that we can get no industrial advice, that the National Government have no organised method of obtaining the advice of industry, that all they can appeal to is some semi-political body like the Trades Union Congress—

Sir H. BETTERTON

I am afraid that I did not make myself clear to my Noble Friend. What I said was that I asked the joint industrial council in each case to tell me what they thought would be the effect on their industry. I did that on the assumption that they could speak for their industries as joint industrial councils, and give me the benefit of their advice. I went on to say that I was disappointed, inasmuch as, with hardly an exception, they were unable to give me the effective view of the industry.

Lord E. PERCY

Then my right hon. Friend did not mislead me at all, for that is precisely what I have stated—that the joint industrial councils as they exist now are not capable of giving him that information because they are so much under the control of national and semi-political bodies, especially the Trades Union Congress. In some cases they are not even allowed to deal at all with the question of wages, and in general they dare not give their views on questions of national policy as it affects their industry. Of course we all know that that is in fact the situation. I remember that, when the Labour party were about to introduce a Bill for raising the school-leaving age to 15, a great employer of labour came to me and asked me whether I would confer with the workers in his industry, with whom he had been conferring, in order to launch a campaign for part-time education rather than a one-year raising of the school-leaving age, as being much more important to the working man and to that particular industry. I said, "Of course, it is no good me trying to do that. I am a Conservative and an ex-president of the Board of Education. Your workers will not accept me as an impartial education authority." He said, "No, I think they would." A few days afterwards he sent me a letter saying, "You were quite right. While the representative council of workers in my business are entirely with me in my educational policy, yet they say, after all, this is a matter that has already been decided by the Labour party, and they cannot, therefore, take any individual line of their own on a question of policy as it affects their industry."

That is what we are up against the whole time. The Minister of Labour says that shows the uselessness of joint industrial councils. Surely not. It shows the uselessness of joint industrial councils which enjoy no statutory recognition whatever, and that is the real issue that we have to face in all these three departments of reorganisation. Can an industry set its own house in order without definite statutory recognition by the State for certain purposes in order to give the industrial organisations set up by the industry reality and force and give them strength to stand against those outside semi-political interferences of policy-mongering bosses which are the curse of this country and which have reduced every democracy in Europe to ridicule and ruin in the last few years? That is the issue that we are facing at present. Can any of this policy of industrial reorganisation be carried out unless this House takes the responsibility of giving statutory powers to the appropriate industrial organisation?

I should be very sorry if this Bill, instead of focusing what I believe to be the united support of the vast majority of the House for that proposition, should break it up and introduce petty divergencies. I quite understand why the Labour party apparently are inclined hesitatingly to oppose the Bill. They realise that to establish real self-government in industry and to have industrial self-governing bodies which are recognised by the Government, however voluntary they they may be, might seriously interfere with that national machine organisation of the Labour party, the Trade Union Congress, and might weaken the power and the unity of the Labour movement. I understand and very largely sympathise with their difficulties, and I will give them the most favourable consideration that I can but I should hope in all other sections of the House the minor difficulties of this Bill will not break up the united support of the House for that principle.

After all, what are the objections made to the Bill in itself? The objections that I have heard amount simply to this. You are imposing one particular type of wage negotiating machinery on industry. That really is not true. The Minister of Labour spoke of a joint industrial council as if it was some sort of genus, an institution the nature of which was carefully and statutorily defined. But a wage negotiating machinery is any organised body which represents both sides of the industry equally. That is, in fact, the only definition of a joint industrial council which is given in the Bill. The organisation of that joint industrial council may be varied. I do not see why almost any of the wage negotiating institutions which have been mentioned should not enter any scheme of joint industrial councils. It is true that there is a Sub-section in the Bill, which I regret, which says that so far as possible the Minister of Labour shall try and make these joint industrial councils uniform for the whole country. I do not see the object of that provision, but I think it is a Committee point and does not touch the principle of the Bill. I do not suppose that there is any crasser individualist in this House than I. I do not like this development towards organisation. I should hope to stop organisation short of all those small firms in this country which could hardly be said to belong to organised industry which are the greatest strength of this country. I should like to confine difficult organisation of this kind to the basic industries, and make it looser and more flexible as we came to the finishing and the lighter industries. We have to look forward in the immediate future to an enormous expansion of individual labour, but the fact that I do not like this kind of development should not blind the eyes of practical statesmen to the fact that in certain great basic industries almost throughout the whole nation such organisation is becoming increasingly necessary, and that something on the lines of this Bill is absolutely essential in order to establish that real self-government in industry without which

Words added.

Second Reading put off for six months.

The remaining Orders were read, and postponed.

those industries cannot meet their problems. It is in that spirit that I shall support my hon. Friend in the Lobby.

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

The House divided: Ayes, 44; Noes, 87.

Division No. 122.]	AYES.	[3.58 p.m.
Adams, Samuel Vyvyan T. (Leeds, W.)	Griffith, F. Kingsley (Middlesbro', W.)	Ramsay, T. B. W. (Western Isles)
Agnew, Lieut.-Com. P. G.	Hamilton, Sir R. W. (Orkney & Zetl'nd)	Rea, Walter Russell
Beaumont, Hon. R. E. B. (Portsm'th, C.)	Harris, Sir Percy	Robinson, John Roland
Birchall, Major Sir John Dearman	Janner, Barnett	Samuel, Rt. Hon. Sir H. (Darwen)
Cadogan, Hon. Edward	Johnstone, Harcourt (S. Shields)	Sinclair, Maj. Rt. Hn. Sir A. (C'thness)
Caporn, Arthur Cecil	Law, Richard K. (Hull, S. W.)	Smiles, Lieut.-Col. Sir Walter D.
Chapman, Sir Samuel (Edinburgh, S.)	Leckle, J. A.	Strauss, Edward A.
Conant, R. J. E.	Liewellin, Major John J.	Sugden, Sir Wilfrid Hart
Crossley, A. C.	Mabane, William	Sutcliffe, Harold
Denman, Hon. R. D.	Mander, Geoffrey le M.	Watt, Captain George Steven H.
Dickle, John P.	Martin, Thomas B.	Wedgwood, Rt. Hon. Joslah
Emrys-Evans, P. V.	Mason, David M. (Edinburgh, E.)	Wood, Sir Murdoch McKenzie (Banff)
Evans, David Owen (Cardigan)	Molson, A. Hugh Elsdale
Evans, Capt. Ernest (Welsh Univ.)	Nation, Brigadier-General J. J. H.	TELLERS FOR THE AYES.—
Foot, Dingle (Dundee)	Percy, Lord Eustace	Mr. Bernays and Mr. Hamilton Kerr.
George, Major G. Lloyd (Pembroke)	Pickering, Ernest H.

NOES.
Adams, D. M. (Poplar, South)	Groves, Thomas E.	Pownall, Sir Aesheton
Attlee, Clement Richard	Hacking, Rt. Hon. Douglas H.	Procter, Major Henry Adam
Baillie Sir Adrian W. M.	Harvey, George (Lambeth, Kenningt' n)	Ramsay, Alexander (W. Bromwich)
Balfour, Capt. Harold (I. of Thanet)	Heneage, Lieut.-Colonel Arthur P.	Rankin, Robert
Batey, Joseph	Hope, Capt. Hon. A. O. J. (Aston)	Remer, John R.
Bowater, Col. Sir T. Vansittart	Howitt, Dr. Alfred B.	Ross, Ronald D.
Boyce, H. Leslie	Hudson, Capt. A. U. M. (Hackney, N.)	Runge, Norah Cecil
Braithwaite, J. G. (Hillsborough)	Hume, Sir George Hopwood	Russell, Alexander West (Tynemouth)
Brocklebank, C. E. R.	Hutchison, W. D. (Essex, Romf'd)	Salmon, Sir Isidore
Castlereagh, Viscount	Jackson, Sir Henry (Wandsworth, C.)	Sandeman, Sir A. N. Stewart
Cautley, Sir Henry S.	Jenkins, Sir William	Shaw, Helen B. (Lanark, Bothwell)
Chapman, Col. R. (Houghton-le-Spring)	John, William	Sinclair, Col. T. (Queen's Unv., Belfast)
Clayton, Sir Christopher	Jones, Morgan (Caerphilly)	Smith, Bracewell (Dulwich)
Cocks, Frederick Seymour	Lloyd, Geoffrey	Smith, Sir J. Walker- (Barrow-in-F.)
Cooke, Douglas	Locker-Lampson, Com. O. (H'ndsw'th)	Somervell, Sir Donald
Craddock, Sir Reginald Henry	Lockwood, John C. (Hackney, C.)	Southby, Commander Archibald R. J.
Croft, Brigadier-General Sir H.	MacAndrew, Lieut.-Col. C. G. (Partick)	Spens, William Patrick
Dagger, George	Macdonald, Gordon (Ince)	Stanley, Rt. Hon. Lord (Fylde)
Davies, David L. (Pontypridd)	McEntee, Valentine L.	Stourton, Hon. John J.
Davies, Maj. Geo. F. (Somerset, Yeovil)	Maitland, Adam	Thomson, Sir Frederick Charles
Davison, Sir William Henry	Margesson, Capt. Rt. Hon. H. D. R.	Thorne, William James
Dobble, William	Mayhew, Lieut.-Colonel John	Tinker, John Joseph
Edwards, Charles	Mills, Sir Frederick (Leyton, E.)	Touche, Gordon Cosmo
Erskine, Lord (Weston-super-Mare)	Morgan, Robert H.	Ward, Lt.-Col. Sir A. L. (Hull)
Evans, Capt. Arthur (Cardiff, S.)	Moss, Captain H. J.	Wills, Wilfrid D.
Fielden, Edward Brocklehurst	Nall-Cain, Hon. Ronald	Wilmot, John
Goff, Sir Park	Nunn, William	Worthington, Dr. John V.
Goodman, Colonel Albert W.	O'Donovan, Dr. William James
Gower, Sir Robert	Peake, Captain Osbert	TELLERS FOR THE NOES.—
Grimston, R. V.	Penny, Sir George	Lieut.-Commander Bower and Mr. Wise.

Main Question, as amended, put, and agreed to.

Whereupon Mr. SPEAKER adjourned the House, without Question put, pursuant to Standing Order No. 2.

Adjourned at Seven Minutes after Four o'clock, until Monday next, 26th February.