UNEMPLOYMENT.

HC Deb 22 March 1934 vol 287 cc1392-528

3.40 p.m.

Mr. LAWSON

I rise to draw the attention of the Government to great areas in this country which are affected by persistent unemployment in the basic industries, and also to ask whether the Government have any policy for those areas and those industries, and, if so, what that policy is. When the unemployment figures were last announced we were informed that the unemployed totalled 2,317,000, being 71,000 less than a month before and 538,000 less than a year before. We on these benches welcome those reductions not only as much as, but perhaps even more than, almost anyone in this House, because in many cases we come from areas where they scan the economic horizon anxiously for signs of any improvement in the situation; but I think the House should clearly understand that recent improvements, acceptable as they are, touch these great areas and these great industries so little that to the people there these recorded reductions in unemployment are little more than a legend. Indeed, it is very difficult to get the people to understand that there has been any improvement at all, and I have deliberately drawn attention to these figures because they mask grim and dangerous facts.

The figures and facts show that not only is unemployment persistent on a wide and lamentable scale in those areas, but that there is now abundant proof that no mere ordinary change is going to touch the unemployment problem in those industries. The same issue off the "Gazette" that gave us these figures also printed some other startling figures. May I say here that in the "Ministry of Labour Gazette" this country has a journal which is almost unrivalled in the world. It is a credit to those responsible for its publication, and it is a credit to the country for having the courage to state the facts fully, revealing its own disabilities without attempting to cover them up. I wish that could be said of most other countries, because then we should be in a better position to estimate the conditions elsewhere. The facts given in the "Gazette" show that out of the 2,317,000 unemployed there are 932,000 in benefit, there are over 1,000,000 who have claims to transitional payments, there are 240,000 who have neither benefit nor claims to transitional payments, and there are some 143,000 who are not insured. That makes 1,384,000 out of benefit. It seems to me that that is a growing number.

Because there are more than 1,000,000 people who are out of benefit, that does not mean that those people have been out of work more than 26 weeks, but we are told that there are 921,000 who have been out of work more than three months, and of these 437,000 have been out of work more than a year. One must not overlook the significance of that figure, because it is only two or three years since the number who had been out of work for more than a year was little more than 100,000. I have said this before, but the House will forgive me for repeating it that I very well remember, in a defence of this country in an international labour conference, how I explained that our unemployed figures did not represent a standing army, and the pride with which I pointed out that at the most there were 100,000 who were unemployed for 12 months or more. Now that figure is 437,000, so that "the hard core "apparently is not merely getting harder but is becoming bigger.

To get a true estimate of this problem we must carry our minds back to 1928, when the country was shocked out of its indifference or, I should say, its ignorance by a certain public personage, whom we are not entitled to name here, who went into these areas of which I have spoken and whose statements were so significant that the whole of the Press made its way to the North-East Coast, to South Wales and other parts of the country. The revelations of the Press at that time were such that the Government finally set up the Industrial Transference Board. It will be remembered, too, that a Mansion House committee was set up. The whole country was stirred as it had seldom been stirred since the War. Well-intentioned people and well-to-do people expressed themselves very kindly towards the people in those areas, and I also know that quite poor people were so moved that they gave things they almost could not afford to give. In some cases, too, villages were adopted. Will the House believe it, it came to me almost as a shock to realise that at that time, when the House and the country were so moved, the figures of unemployment were only 1,100,000 when the Transference Board issued its report. I have gone through the whole of the figures for the year 1928, and the average is only 1,250,000. To-day the figures are more than 2,250,000.

I shall ask leave to trouble the House with a certain number of figures, because the further one examines the situation by comparison with what it was at that time, the more one is impressed with the fact that, although things are infinitely worse than they were then, the Government do not seem disturbed as compared with the Government that set up the board. This is what the committee said in their report dealing with the general figure of 1,100,000 unemployed: These figures are themselves sufficient to dispel any illusion that the problem is of small dimensions or is amenable to any single remedy or universal panacea. The Industrial Transference Board, in reporting, said: We have accepted as a fact the existence of a problem of surplus labour in certain industries. They went on to say what the main factors are. Those factors are fairly well known by this time. They said: It would be unwise if, on the basis of information in the possession of the Ministry of Labour and the Mines Department, any figure below 200,000 were taken as the permanent surplus in the industry. And by 'surplus' we mean the difference between the present insured personnel of the industry and the number of workpeople who can count with reasonable certainty upon obtaining their livelihood from the industry. To this figure there must be added a probable permanent surplus in shipbuilding, iron and steel and heavy engineering. In these industries at the end of May, over 100,000 men were wholly unemployed. I have looked up the figure and, as far as it can be assessed for the shipbuilding, iron and steel, and heavy engineering industries, it is twice as large as it was at that time. The board also said: It seems probable also that ultimately certain sections of the textile industry must he prepared to face a permanent contraction of personnel. That is only a slight indication of the situation, because as, I have said, an analysis of the figures is not altogether possible. In the mining world the figure for unemployment was 245,000. It must be remembered that according to the evidence given before the Unemployment Commission there were something like 175,000 workers out of the mining industry. They have gone out by transference, by the operation of Section 18 of the Mining Industry Act, which restricts the number of people who can come in, and by emigration. In spite of that fact, the figure of unemployment in the mining industry at the time when the report was sent out, which was in January, 1928, was 246,000. That was 21 per cent. The last figure that we have is 265,000 or 25.9 per cent.

It is very striking to take areas in the mining industries. In 1928 in Wales the unemployment figure was 26.4 per cent.; to-day it is 36.3 per cent. In Durham 24.4 per cent.; to-day 27.4 per cent. Cumberland 8.6 per cent.; to-day 35.3 per cent. Yorkshire 16.5 per cent; to-day 26.2 per cent. Lancashire 22 per cent.; to-day 24.3 per cent. Scotland 21 per cent.; to-day over 24 per cent. One can follow that method of comparison from any angle. I have figures for all the divisions in the Ministry of Labour. In the north-eastern division the figure was over 290,000 in 1928; to-day it is over 485,000. In Scotland it was over 138,000; it is now nearly 360,000. In Wales it was over 119,000; it is 216,000 to-day. Hon. Members from northern constituencies would be staggered if they made a comparison of the present position of the towns with the period when the position was supposed to be disastrous. That comparison would show that Gateshead had 8,000 unemployed in 1928 and that it has 13,000 now. Middlesbrough had over 6,000; it has now over 17,000. Newcastle had 17,000; it has now 26,000. Shields had nearly 8,000; it has now over 14,000. Sunderland had 10,000; to-day it has 26,000. Stockton had 4,000; to-day it has 11,000.

I hope I have not wearied the House with those figures. I want to bring home the fact that not only were conditions bad in 1928, but, because of the persistence of the physical and mental attrition of the people, things are much worse now, and from the point of view of unemployment they are definitely worse. There is even more striking evidence from Mr. Wilfrid Eady, the chief representative of the Ministry of Labour who, in giving' evidence, made it clear that the mining industry could not employ more than from £900,000 to 950,000 workers. That was in 1931. In order to make sure on that point, I had better read the paragraph containing his evidence. He said: There has been indeed a marked contraction in the field for employment offered by coal; the insured population has decreased by nearly 175,000, and despite this the continuous unemployment recorded in the industry has remained high.…The continuous unemployment in the industry, therefore, almost certainly indicates a personnel no longer required and no longer able to count on making a living in the industry; it is indeed doubtful whether the industry can expect to give a livelihood to more than 900–950,000 persons. The House will understand the significance of that statement if I say that, according to the last published figures, there are 790,000 miners engaged in the mining industry. That is well over 100,000 less than the minimum estimate of the Ministry's representative. Then that representative went on to say that production was being concentrated in cotton, and that, though the diversity of demand in cotton did not permit the process going beyond a certain distance, all the indications at present pointed to a large surplus of personnel no longer required by the cotton trade to enable it to meet the effective demand for its products. Then he gives similar facts concerning shipbuilding, heavy engineering, steel smelting and rolling, and speaks of the concentration that was introduced in those industries. He winds up by saving: It will be evident to the Commission that this attitude, that trade and employment for these basic industries must one day recover, and that the same personnel would be required, in the same places and to the same extent as before, has had a profound influence on the treatment of unemployment and the makeshift developments of the insurance scheme for several years. It was a policy of 'tide-over,' with prosperity always waiting 'just round the corner.' Such a diagnosis and treatment can, unfortunately, no longer be accepted.

An HON. MEMBER

What was the date?

Mr. LAWSON

The evidence was given on 8th January, 1931. Those figures, and the recent evidence of the chief representative of the Ministry, I submit, reveal a very grave state of things in certain parts of this land. Some of us have almost despaired of ever getting this House to pay attention to this matter, but we have suddenly found an ally in an unexpected quarter. I do not suppose that the "Times" has become an ally of Members who speak for the distressed areas because they love us, but, upholding the great traditions of a great public journal, the "Times" has had a representative investigating conditions in those areas, and he has supplied articles which are roughly accurate, and, however much we may question some of the details, certainly almost perfectly mirror the condition of things in those parts of the land. I do not want to trouble the House with many more quotations, but there ought to be put on record at least one or two. I think that the House will agree that what the representative of the "Times" says of Durham would equally apply to the whole of the North-East, as I think he intends it should, to Wales, and also Lancashire in many parts, Scotland, and, indeed, to little pockets of various parts of the country. He says: There are parts of Durham where one feels strongly, and sometimes angrily, that London has still no conception of the troubles that affect the industrial North. In London and the South, for every 86 men working there are 14 men out of work. In the whole county of Durham, no small area, for every 63 working there are 37 out. In the south-west of the coalfield, round Bishop Auckland, for every 42 working there are 58 out. In Jarrow, a formerly prosperous shipyard town of 32,000 inhabitants, for every 25 working there are 75 out. These places are helpless. Resentment exists among thoughtful people against the comfortable South because it is alleged that the South governs in ignorance. That is a more peremptory way of putting what Members of all parties from those areas have said in this House before. These people have grown to regard their situation mechanically, and the grasshopper of effort is a burden to them, but it is wrong to say that they are demoralised. The young may be so attacked, those who have never had family responsibilities, those who (too many of them) have hardly ever known employment since leaving school. Husbands and fathers past the age of 35 have been hardened by 15 or 20 years of steady work. Idle now, they have tightened their belts and settled down grimly to hang on, still hoping. I do not want to spend much time in supplementing that description, except to say that the visitor to those pars must be struck by the fact that this lamentable state of things does not show itself upon the surface personally among the people. I have often been impressed by the fact that the discipline of the older industries and the grinding toil leave its mark upon those who have been employed in them almost more than does the military system itself. Like the soldier who, years after his service has finished, still bears the marks of his discipline and drill, you can see the marks of this service in industry upon the older men of those areas. And, indeed, the spirit is one which is a tribute in itself to the race of which we are proud. I have met men and women, who will very often say—indeed, it is quite a regular saying—when you ask them how they are getting along, "It is no good crying." Indeed, there is a humour that is almost as moving to tears as it is to laughter. I heard last Christmas of a group of men standing in an Employment Exchange, and one said that he had been standing there for two years, that that was his second Christmas he had been at the Exchange, and he complained whimsically that they had never given him a calendar.

Sometimes the effect upon the younger ones is even more striking, and in some ways more pitiful. The Minister of Labour gave me some figures this week showing that the number of unemployed men and women below 20 years of age was 279,000–12 per cent., I think the Minister said, of the whole body of unemployed. If it be true that there is any reluctance, perhaps, in individual cases to go to other parts of the country, at least that is not my experience. They have transferred themselves until that way has been blocked. They have been transferred by the Ministry of Labour, It is said that there are almost as many Durham-speaking people in the Yorkshire coalfield as there are Yorkshire-speaking people there. They went there in great numbers. Those who represent the Kentish coalfield will agree that a great number of Durham men are in that coalfield. Those who know anything about the hotels round London know that many of them are almost staffed by boys and girls from the north-east, and from Wales and Scotland. I know nothing more pathetic than the anxiety of parents, and the anxiety of boys of 14 and 15 years of age who leave their homes. I have sometimes heard better-placed people compare this with the fact that they have to lose their sons when they go far distances to school; but that is not a right parallel.

When a boy leaves his parents to go to a public school, his parents know that he is going to a place of great traditions and under influences, sometimes of great masters, of watchful masters, and, at any rate, he is coming home in the holidays to see his people. But when the mother and father in Durham, Wales, Scotland, or Lancashire, send their 14–year old boy away, they do not know where he is going; they do not know just what care is going to be given to him. They do not know at all when he is coming back, except that he may get a holiday in the summer and perhaps sufficient money to come back. I am sure that my hon. Friends here, as well as. I, could tell the House of very moving instances of parents who have let their boys go, wondering and worrying as to where they have gone, and what are the conditions under which they are working. Some of us who represent the coalfields have almost had to be a sort of foster-father to some of these boys scattered about these parts. They do very well on the whole, but that way is almost blocked now. The Minister of Labour is doing his best, and, indeed, is doing magnificent work. His representatives, the officials, we take it for granted, give splendid service to the best of their abilty. They have even a kind of organisation which is supposed to give some supervision. I see that the "Times" speaks as though there is a reluctance on the part of girls to go into domestic service. There are thousands, to my knowledge, who have left the part of the country from which I come, and I think it will be agreed that these boys and girls from all parts are ready to do so, but that way is blocked out. I understand there is a doubt about it. There is certainly, however, only a trickle from those parts, and it is not really touching the edge of the problem, because I am assured that there are actually more now in the unemployment section than there were at the time the Transference Board began.

The Government, I suppose, will be asking us what we propose in the face of this situation. Quite frankly, I do not know whether it is worth while proposing anything. We had three days' Debate in this House, and it will be remembered that the House was practically turned into a Council of State, almost irrespective of party. Frankly, I thought that something would come out of it. Great lists of proposals were put in, but nothing has been heard of them since. They do not seem to have had the slightest effect upon the Government. I hope that the Government will not try to suggest that the Unemployment Bill is going to touch the problem, because it is not intended to touch it. It does not at all meet, and I do not think the Minister would claim that it is intended to meet, the problem of giving work. Indeed, the Minister of Labour cannot be expected to do that; it is not his job; but, strangely enough, there is nobody throughout the whole range of the Government who is responsible for work-finding. I want to-day to suggest that this problem is serious enough to demand the setting up of something in the nature of a Ministry of Industry.

I see that the "Times" proposes that we should have a kind of director of operations on the field, and even that would be an improvement, but I confess I am tired to death of people who merely come to supervise us in these areas, without any hope of a direct result, and there can be no hope of a direct result unless this House makes someone responsible to the House and to the Cabinet. I suggest that the Government really cannot any longer avoid taking that step. One of the first things that such a Minister or representative of the Government should do would be to make up his mind whether the Government are going to continue to allow without protest, and without, if necessary, using the influences and powers which they have at their disposal, employers to settle down anywhere they like, without regard to social conditions and social amenities. The Government have taken, through the Ministry of Agriculture, powers designed—whether they will be effective or not is another matter—to keep people on the land and to redirect people to the land; but, while the Government are trying to give direction to agriculture, they wash their hands clean of ordinary industrial operations which affect the whole nation even more deeply than, or at least as deeply as does the agricultural side.

Take the development of this great London here. We find it to be a kind of great amorphous mass which is rapidly becaming industrialised, and that, in time, is going to have a profound and I venture to say a regrettable effect upon this country. I know very well some of the reasons which have sent industries down to these parts. It is not due to rates. The great universities have made excellent industrial surveys, which have not, I think, up to the present time, received due attention. The figures are there. The Balfour Committee on Industry and Commerce gave us valuable reports; they are all there. That is not what is wanted. In this London area it is not a question of rates, because the surveyors all agree that that factor is not now operating. I will tell the House why employers come down here. It is partly because they think it is more pleasant in the South, and, quite frankly, it is partly because they want cheaper labour. There is no doubt about that. All I can say is that they are making a rod for their own backs. The whole industrial experience of labour is that you have a race of such a type that it will collect and organise and demand full value for its work, and that must come about even in these parts. Then, when you have this great area industrialised, it will be without any order or organisation.

We say, and I think it is agreed by observers and thinkers far beyond the range of the Labour party—they are in every party; they sit in various quarters of the House as well as on these benches—that it is high time that the Government took upon themselves the direction of industries to the paths which they think are most useful. Townsmen will forgive me if I say that I think there are parts even of these old industrial areas—and it is shown by this report—where there is a sort of core of definite employment. There is a tendency to say that the coal trade is down. That is rubbish. Certain pits work out, but there the industries are, and the humorous thing about it is, as I think all my friends will agree, that even in these distressed areas you will find people almost weeping in sympathy for other people in the same area who are much worse off than they are themselves, situated, so to speak, in pockets. My people in North-West Durham are sometimes very sympathetic about the people of Bishop Auckland, only a few miles away; but they are out in the open.

There you have, as I have said, populations drilled and disciplined by industry, belonging to a craft. Along the Tyne, the Mersey, the Clyde and other great rivers there are large areas where the people are great craftsmen, and out in the more rural areas you have settled populations in the villages. I do not say that all those villages will continue to maintain the same number of people, but I do say that it is far better for the future of this country that people should be settled in rural towns than that they should be allowed to settle and agglomerate in large towns and cities. If I may speak personally, I have always said that the best part of the little education that I ever received was received under very sparse conditions, almost before I began to think, when I could feel the wind, and look on the sea and back at the mountains, and feel at any rate that, though we lacked material things, we had the elements of God's good things to affect us. There are things which the Transference Board itself suggested. It is very striking to see how they examined all the proposals for the raising of the school-leaving age, for pensions at 60, and other subjects on which they speak and on which I have spoken in strong terms—drainage, afforestation and allotments.

There are conditions which are a scandal to the land. Everybody is realising that the conditions as regards slums are indefensible now. I do not know what the Government's plans are as far as that is concerned, but, having regard to the needs of the population of this land, I think there ought to be a much more valiant effort to meet that trouble and to encourage men to get houses than is being made at the present time. Again, take the drainage question. There is one matter, at any rate, in which in our part of the country we do excel in the midst of all our troubles. We may lack many things, but at least we have water. I will not attempt to go into the history of that matter, but we have water, and there are some places where there is too much water. Many of my northern friends, like myself, coming through the area round Doncaster to the South of England, know that twice a year the train seems to be going through the Atlantic. People are leaning out of the windows; someone has come along through the fields in a boat. People lean out of the higher windows and get their groceries, and great masses of the workmen's houses are flooded and their furniture is spoilt. So it goes on, and the representative of an area like that is here to-day. I understand that the Government have put a Bill through, but is anything being done quickly to make a scandal like that a thing of the past?

Mr. MOLSON

May I tell my hon. Friend that a scheme for £500,000 has just been approved?

Mr. LAWSON

I am very pleased to hear that, but how far will the £500,000 go to achieve the end? I think my hon. Friend will agree with me that we can see from the train almost endless acres that have been practically destroyed in recent years by those floods. One could give quite a number of instances where the Government really could get to work, but the first thing necessary is that somebody should be made responsible for doing it. The Unemployment Grants Committee has been destroyed. That was one way, at any rate, in which the Minister could indirectly give some little help. It is no good the right hon. Gentleman, or whoever speaks for the Government, saying that this, that and the other thing has been done. Whatever has been done is almost like a drop in the ocean, and is certainly not observable by anyone.

I would only say in conclusion—I am sorry I have taken up so much time—that, as regards the question of cost, to which the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) addressed himself the other night, I gather from the Minister that the cost of Unemployment Insurance itself in the past few years since 1920 has been almost £915,000,000; but that takes no account of Poor Law expenditure for the able-bodied unemployed; it takes no account of the financial burden due to works, factories, pits and business houses closing down—a financial burden which has weighted down whole populations with a gloom and hopelessness which must be seen to be understood. As a boy I remember going through the streets of a very busy town in the North, and I used to visit it, after the week's work, in my manhood. I remember very well the busy crowds in the streets and in the marketplace. I refer to South Shields, which the right hon. Gentleman the President of the Board of Trade will remember very well in those days. It was the busiest little town almost in the world, with, the brightest main street. If you go down King Street now you will see half the shops closed, and will have your heart broken. Jarrow used to have its great works with crowds of men hurrying to and fro. Now it is dead. It is the same in other great areas, in Wales, for instance—in Merthyr, where great family fortunes were built up. They served the purpose of money-getting, but are now left desolate and hopeless. So I ask the Government, I ask the House, and from this House I appeal to the country on behalf of the stricken people of these stricken areas.

4.30 p.m.

Mr. DICKIE

I should like to begin by complimenting the hon. Gentleman on the very human note which he has introduced into his survey of the problem. At the same time I very much regret that beyond a proposal for the creation of a separate department to deal with unemployment, he made very little in the way of any constructive suggestion as to how we were to deal with the problem. I could not quite follow him in his references to emigration. I rather understood him to say that some of our troubles were due to emigration, but anyone who makes an examination of the figures will, I think, agree that during the post-War period our troubles have been largely due to the almost complete cessation of emigration. I regret also that he should have taken as his starting point for the purpose of comparison the year 1928. He ignored entirely the fact that for a couple of years we had a Socialist Government in office. However, I will not dwell on that.

I rise to join with him in his appeal to the Government for a bolder, a more vigorous and a more constructive policy in dealing with this very tragic problem of unemployment. I am prepared to agree that the Government during its 2½ years of office has done very well. It has restored confidence. We have got rid of the aftermath of the crisis of 1931 and the Chancellor of the Exchequer has some good news in store for the country in a few weeks time. The figures of unemployment are coming down, but, in my judgment, not nearly fast enough, and, now that the financial position has been stabilised, I think that by wise and prudent direction the Government can do a very great deal to accelerate that process. The abnormal unemployment is a question of the distressed areas, and the distressed areas is a question of the wealth-producing areas, those areas on which Great Britain has depended in the past for its prosperity.

In previous Debates on unemployment so much has been said about the distressed areas that it seems exceedingly difficult to say anything new, but the South of England, and South of England Members, have not up to the present realised fully the plight of the stricken areas in the North. On more than one occasion in discussing the matter with representatives of the more prosperous areas I have stressed the demoralising effect upon the individual of a long and unavailing search for work. I have pointed out how skilled craftsmen, the backbone of industrial Britain, morning after morning tramp from place to place looking everywhere to find a job, meeting everywhere with the same response, told everywhere, "No hands are wanted," and compelled at night to return to their wives and families and report that there was nothing doing. My listeners have always listened sympathetically, and on more than one occasion it has evoked this response, "Terrible. Nothing could be worse for any man." But there is something worse, and it is this. There comes a time when it dawns upon him that it is useless looking for a job in these particular areas and that in the existing scheme of things there is no place for him. Till that moment he has lived hoping against hope but has continued to believe in hope. He has been torn between fear and hope, but hope up to this has triumphed. When he realises the utter futility of making any further effort, hope has failed, and he finds himself enrolled in the army of those whose final refuge is dumb despair. That is the history of the individual. It is not the case of a single individual, but of whole battalions of them in the hard-hit areas in the North-Eastern corner of England.

The causes of unemployment are not local. They are national. In Durham or in Glamorgan we can carry our fair share of that particular burden without complaint, but we cannot indefinitely carry upon our backs whole communities of unemployed workers and their families whose likelihood of reabsorption into the particular industry in which they have been trained is practically negligible. In a question to the Minister of Labour on 7th March I indicated that our problem was the worked-out coalmine, the derelict steel works and the redundant shipyard. The answer, in my udgment, showed clearly that, although something was being done, that something was not nearly enough and that the Government are not nearly so alive to the gravity of the situation as they ought to be.

I and other Members representing distressed areas have endeavoured to get the Government and south country Members to realise the terrible plight of the county of Durham. But I am afraid we have not succeeded as well as we might have done, and, like the hon. Gentleman who has just spoken, I am very glad in? deed to see that the Press has come to our aid. I commend not only to South country Members but to Members of the Government the series of three articles which have appeared in the "Times" newspaper during the present week by a special correspondent who is investigating the condition of things in Durham on the spot. I do not agree entirely with the writer. I do not agree with the heading, for instance—"Places without a future." If by that he means that Durham has no future, I think he is entirely wrong, because, no matter what the achievements of modern science may be, the foundation of Britain's industrial revival must rest upon coal for many years to come, and the chief asset of Durham is an abundant supply of that mineral. He is right, however, if he means that in Durham there are places which have no future, and I imagine that that is what he wishes to convey. In one striking passage in yesterday's article, pregnant with meaning, he goes direct to the root of the whole matter. Having dealt with the question at some considerable length, he sums it up in these significant words: It is the problem of saving whole communities from desolation, and it grows more intense. That is the conclusion of a visitor, a stranger and a completely disinterested observer, and the tragedy of it is that it is literally and absolutely true.

Let me give two illustrations from Durham. They are not drawn from my own constituency, because I am happy to say that, thanks to the policy of the National Government, unemployment is steadily declining in my own constituency. We are not dependent entirely upon coalmining. We have iron and steel works and ancillary industries, and that helps very considerably. I prefer to draw my illustrations in one case from a completely coalmining area and in the other from a shipbuilding area. In the constituency of Bishop Auckland there are several districts where the pits are closed down. Some of them have been closed down for years. While in this industry it is foolish to dogmatise, yet it is a hundred to one against them ever being re-opened. In those districts almost the whole of the population is in receipt of some form of State assistance, and no less than 75 per cent. of the workers have been so long unemployed that they have exhausted their right to insurance benefits and are in receipt of transitional payment. It is no fault of theirs. They could do nothing to prevent the disaster that has befallen them. They are the unfortunate and the unwilling victims of an economic situation which they were powerless either to control or to influence.

The other illustration that I desire to give is the shipbuilding town of Jarrow. I mention it particularly, because I served my apprenticeship there, and I know the conditions intimately. This town of 30,000 inhabitants depends almost entirely on the one industry of shipbuilding, and not only that, but almost entirely upon the activities of one firm. When I was there it gave employment to 5,000 or 6,000 workers. It built some of the finest vessels in the Navy and hundreds of ships for the mercantile marine. To-day its gates are closed, its slips are empty, its machinery is idle. This hive of industry which gave thousands a livelihood has become the graveyard of their hopes. The place is derelict. The people who provided the capital to keep it going have lost their money. Many humble, thrifty people have lost their life savings. No one knows whether they will ever recover a, penny of them. That is bad enough, but it is not the worst. The worst is the human tragedy that lies behind it, for the whole town has gone dereliet with the works and 70 per cent. of its working population are on the dole.

These are my two illustrations, and I want to ask the Government one or two questions regarding them. I should like to know whether the Government, as the central authority, accept responsibility for dealing with these derelict communities. I should like to know whether they regard it as a matter of purely local concern calling for such assistance as is given everywhere through the recognised State assistance channels. In short, I should like to know: are these derelict communities to be regarded as a national or a local responsibility? I put it to the Minister who will reply that no Government can contemplate with equanimity the prospect of keeping whole communities of unfortunate people out of State funds, nor should any Government lay itself open to the charge of doing so without a very big and whole-hearted effort to solve the problem in some way which will restore the self-respect of the unemployed and get something for the State in return for the money expended. It is said that you are leaving these people to exist on State assistance, call it dole or whatever you like, until they die. That is the position with which the country and this House is faced.

Yesterday the Lord President of the Council repudiated with some warmth the charges of complacency which have been levelled against the Government for their alleged inaction in various directions. I have not the slightest desire to associate myself with any charges of that character, but I do ask the Government to believe that those of us who are urging them to take some further steps towards a solution of this problem are not advocating wild schemes of expenditure in unproductive channels. I remember, in my early studies of political and economic matters, reading that during the period of the French Revolution the understanding of economics was so crude and elementary that they set people to work filling pails with water from the Seine and pouring it back, and paid them. During the period of the Irish famine hunger-stricken people were set to dig holes in the ground and fill them again. During the course of this Parliament one Member of this House—I think the hon. Member for North Tottenham (Mr. Doran)—suggested that we might be Seprived of our slag heaps, and that they should be sent to fill the hollows of the ground in the South of England, thereby giving work at both ends and revenue to the railway companies. In the Debate on the North Atlantic Shipping Bill some Members on the other side of the House seemed to think, because the building of Curiarders promoted employment, that was a sufficient reason for embarking on their construction.

Those of us who are pressing the Government to embark on something in the way of a wise and prudent expansionist policy are not advocating schemes of that character, but we believe there is a wide field in which the Government can do much to stimulate employment in the sphere of State activity by giving private enterprise the security that will encourage it in dealing with this complex problem. It would take too long to indicate the directions, but I would like to mention one or two. May I say to the President of the Board of Trade, in particular, that it is not in the national interest that the industries of a whole town should be thrown on the dole by the operation of any private concern. I agree, as one who has been brought up in close contact with shipping matters, that the capacity of the shipyards is greater than is needed to meet the demand, but it is one thing to close a shipyard here and there where there are other industries, and another to shut up a yard on Which a whole community depends. The loss to the State is bound to be infinitely greater than can be compensated by the gain to any private corporation, and, much as I dislike Government interference, I think the Government should intervene in the case of Jarrow if the shipping authorities propose to close the yard and sterilise it for 40 years.

Another direction in which I think the Government might help is that of land settlement. In the county of Durham and indeed in my constituency, the Society of Friends is doing a very useful work in setting unemployed workers on allotments for the purpose of rearing poultry and raising other agricultural produce. I should like to ask the Government if they could not consider extending this very useful work under the aegis of the State. The foundations having been Laid by a voluntary organisation, it appears to me to provide an opportunity for the Government to develop it and make a beginning in the process of colonising England which is a more pressing and more profitable enterprise than that of which we have heard so much, the colonising of the open spaces of the Empire, though that is a good work in its way, but in my judgment it will take generations to achieve.

Then there is the question of shipping. It cannot be gainsaid that we are losing our hold on the carrying trade of the world. It is due largely to the growth of economic nationalism which we all deplore, but no matter how we deplore it it is there, and we must face it and make up our minds whether we are to sit down under it and see our shipping undermined, or whether we are to fight these people with their own weapons. I hope the Government will make up their minds speedily as to what course of action they will pursue in the interest of shipping and shipbuilding alike. There is the very urgent question of housing. In my own constituency only; a month ago when I was there we had just effected a clearance scheme—and I am glad to see the Minister of Health here—by which we had replaced a number of old houses by 79 new houses. There were 75 tenants displaced and there were the 79 houses available. Those who were displaced had of course the prior claim, leaving four houses available for new applicants. There were no less than 550 applicants. That will demonstrate to the House how serious is the housing shortage in the County of Durham.

The hon. Member for Chester-le-Street (Mr. Lawson) has mentioned other directions, canals, afforestation, bridges. There are many bridges in the County of Durham that need renewing, and that would not be unproductive expenditure. Within our own borders we can do these things without departing from the policy which rightly aims at the expansion of our export trade. In my judgment, there is no single cure for unemployment. The attack on this disease must be conducted on many fronts, and nothing which can contribute even in a minor degree should be neglected or overlooked. Let me remind the House that the manner in which this country has faced its difficulties in the last 2½ years has won the admiration of the whole civilised world. By a spirit of sacrifice and power of organisation unprecedented in the history of the world we have turned a deficit of no less than £170,000,000 into a prospective surplus of between £30,000,000 and £40,000,000. We shall indeed blush with shame if we fail to turn the same qualities of our race in the direction of finding a solution for this great, complex and difficult problem of unemployment.

4.56 p.m.

Mr. J. P. L. THOMAS

I am glad it has been possible for the House to debate this question of unemployment before rising for the Recess as it gives the Government an opportunity of giving a message of increasing confidence in the future. I should like to add my quota of praise and congratulation to the Government for their policy which has brought about the improvement in this country as a whole. If I may be forgiven for not following the hon. Member for Chester-le-Street (Mr. Lawson) in his more general study of unemployment and may confine myself to the particular, I would like to remind the House that by no means the least marked of the successes of the Government has been the effect of its policy on the progress of employment in agriculture. The figures which are issued every month from the Ministry of Labour do not, of course, include the numbers of agricultural workers, which appear annually, but it is very encouraging to learn that at the last available date there was for the first time since 1924 an increase instead of a decrease in the number of agricultural workers in employment.

That is the case in regard to agriculture as a whole, but, if the House will not consider my outlook too parochial, it may be of some interest to hon. Members to know how the particular county, of which I represent a part, has fared from the point of view of employment. I take my own constituency for this reason only, that Herefordshire can claim to be as largely dependent on agriculture and its allied trades as any county in Great Britain. It is interested in every possible branch of farming, corn growing, poultry farming, sugar-beet and a large acreage of fruit and hops, and, above all, in stock raising and the rearing of pedigree herds. It is, as the House knows, impossible to obtain separate figures of the employment in these particular branches of agriculture, but beyond any doubt the majority of these branches are now in a more prosperous condition and are employing more labour than they were a year ago, while the hop industry, which employs more labour than almost any other branch of British agriculture, is increasing the number of its permanent workers quite apart from the different kinds of casual labour to which it gives work at certain seasons of the year. We are, however, faced with a very disquieting fact in regard to this particular county. I learn from the local authorities that while the number of persons employed in agriculture has declined by 9.9 per cent. in England and Wales during the last period of five years from, 1928 to 1932, for which figures are available, in Herefordshire it has fallen by no less than 17.8 per cent. which is nearly double the average figure of the fall for England and Wales as a whole. There must be a reason for this striking discrepancy, and I think the explanation is probably this. If we examine the figures we find conclusive evidence that there has been a steady flow of agricultural workers from the country in order to obtain work in industrial, and, I should like to emphasise, insurable occupations. This is borne out in the increase in the insured population of Hereford, which shows in the same period an increase of 17.4 per cent. against a national figure of 8.8 per cent., that is to say double the national average. The city of Hereford alone accounts for nearly two-thirds of this increase, and it is an increase which this city is by no means able to bear.

The only industries of any size are building, brick and tile works, cider making, fruit canning and jam making. With the exception of the tile and brick works every one of those industries is wholly dependent on the products of agriculture. Most of them, I am glad to say, are showing improvement in employment, thanks to the policy of the National Government. The tile works alone are employing 40 per cent. more men and women since a tariff was put upon foreign imports of that commodity. But, none the less, in this connection it is worth pointing out that the steady drift of workers from the uninsured industry of agriculture into the insured industries of the town, such as road making, building and haulage, in order that they may qualify for unemployment benefit, has the result that there is being created a permanent surplus of insured labour out of all proportion to the needs of the City of Hereford, and that gives a completely false picture of labour conditions in the urban districts of the county.

I would not be in order in this Debate if I discussed the advisability of an unemployment insurance scheme for agricultural workers. I can only say that these are facts and figures which the Unemployment Commission will have to take very seriously into consideration, as I am sure they will do, when they come to consider this particular question at an early date. One of the main contributory causes of agricultural unemployment in Herefordshire is undoubtedly the depressed state of the livestock industry. As I have said, it is not possible to obtain separate figures of unemployment for any particular branch of agriculture, and therefore to those of us who represent agricultural constituencies the only way of obtaining first-hand information is to find out the facts for ourselves by visiting the farms in our areas.

I have toured my constituency pretty thoroughly during the last six months to find out the state of employment in the villages and on the farms of Herefordshire. On the arable farms, in the hop yards and in the orchards, I found increased employment and renewed confidence in the future. But any satisfaction that I have felt from realising that the increase of employment and prosperity is due to the policy of the National Government, is considerably tempered by the terrible depression of unemployment which I found in those villages and on those farms which are wholly dependent on livestock farming. The Government have done much for agriculture, but this industry, and particularly the beef section of it, has largely failed so far to respond to the steps which have been taken. Again I cannot now put forward suggestions for further legislation to help our livestock breeders, but I hope the Government will realise that by taking action to help this industry, not in a few months time but now, it will be taking a tremendous step towards ending one of the chief causes of the drift of agricultural labour from the country side into the towns, and will also bring about a substantial reduction in the figures of agricultural unemployment, for the amount of labour needed in livestock rearing, especially in the breeding of pedigree cattle, is far greater than many hon. Members are perhaps aware.

The House has been patient with me in putting forward what may appear to be a purely local problem, but I make no apology for having done so. I believe that this problem of finding employment for the agricultural worker has to be faced, and is being faced, not only in Herefordshire but in every agricultural constituency in the land. In this Debate those who support the Government and hon. Gentlemen opposite may possibly speak mainly of the very pressing troubles of the great industrial areas, of unemployment in coal mining, in the iron and steel, cotton and wool industries, but I feel it is well that the House should remember that in dealing with agriculture, and more especially with the problem of finding work for the unemployed and uninsured agricultural worker, hon. Members are dealing not only with the oldest industry, but with an industry which, in spite of all new-comers, is still the greatest and the most important employer of labour in this land.

5.7 p.m.

Mr. E. J. YOUNG

The hon. Member for Chester-le-Street (Mr. Lawson), who opened the Debate, diagnosed very accurately and vividly the causes of unemployment. Then he seemed to suggest decantation instead of a remedy. I expected something more from him as the representative of a party which has made special claims for a number of years to be expert on this particular question. But after he had spoken of the mobility of labour and of the transfer of labour from the north to the south, as one of the causes of trouble, he seemed to have little more to say. I have in my hand a book which was published only five years ago by the party which now forms the official Opposition in this House. It contains a foreword by the Prime Minister. I think that if the official Opposition, through the mouth of its spokesman, had suggested simply the same programme as it suggested five years ago, it would have stated a far stronger case than that which has been put forward to-day. One of the first things suggested by the Labour party in those days as a remedy for unemployment was the raising of the school-leaving age. That was mentioned by the hon. Gentleman to-day. Then the book mentions pensions for the veterans of industry. The Labour party support that proposal to-day. But when they had an opportunity of trying out these things they failed to do so.

The programme which was put forward in those days by the Labour party and the programme of public works put forward at the same time by the Liberal party, were very similar. A quarrel arose as to who thought out the proposals first, but in the opinion of some of us the introduction of a measure of national reconstruction is still the first thing that has to be done before normal trade gets on to its feet again. Shipbuilding, iron and steel, and other trades are still in a bad way. We cannot hold our own in the foreign markets. We have lost trade, and unemployment has followed. Then as taxes have risen the problem has become more acute.

There are some things which can properly be done by the State but will never be done by individuals. All of us have received lately a copy of an article which has been published in the "Surveyor and Municipal and County Engineer," written by a very distinguished authority, who points out that no fewer than 7,000 bridges are required to replace bridges which exist to-day. In many cases these bridges were built by the railway companies to carry the farm carts of 60 years ago, but they will not carry the heavy motor traffic of to-day. We cannot expect the railway companies to replace these bridges for the benefit of their competitors. This is truly a national job. Business men know that if it is necessary to go a long way round with transport in order to keep on the main roads it adds considerably to the costings and often makes all the difference between securing a contract and losing one.

Then we have the problem of the old level-crossing gates. The increase of railway traffic has necessitated their being closed longer every day but the demand of modern road transport is that they should be open more frequently. Surely that is a sufficient case for the Government at least to investigate. It represents a very serious part of the transport problem, and the solving of it would go a considerable way towards alleviating unemployment in the heavy industries. It may be that the Government are not acquainted with the fact that the consituencies represened by my hon. Friend the Member for West Middlesbrough (Mr. K. Griffith) and myself can supply the Government with all the bridges that are required. If we supplied the bridges we should be assisting the mining industry also very considerably. If the Government would like an introduction to the proper authorities we should be glad to arrange one. I suppose that usually a Member addressing this House speaks of things that affect his own constituency most, but, apart from that, it must be admitted that in these days it is very necessary, in the interests of heavy road traffic, that broken-down and unsafe bridges should be replaced by better ones. At least the Government should take that matter up. Apart from the immediate advantage gained increased revenue would come to the State from the greater efficiency of transport.

The most encouraging thing we have heard for some time is that the Government are at last going to have a great housing drive. I only wish that the Government had not imposed a tax upon the materials of which houses are built and had not made the building of houses for the poorer people more difficult than it need be. A very big problem was suggested by the hon. Member for Chester-le-Street when he spoke of the industrial south taking the place of the industrial north. I did not agree with him when he said that the factor of rates does not make a serious difference. It does make a considerable difference. But I believe that the development of industry on the outskirts of London is due more to the industries which come here from abroad than to those which migrate from the north to the south. Lord Ashfield only a few days ago, in a speech at the London School of Economics, said that in the last 10 years 9,000 new factories had been built in Greater London, and that an increased population of 950,000 had assembled here. One can understand that quite easily, because people do come here for the purpose of getting this market. I expect some hon. Members would say that they have come here because we have tariffs. Yet great firms like Singer's, the Thomson-Houston Company, and dozens-of others, came here before we had tariffs, because they had here the world's cheapest raw materials and an excellent shipping service to help them. Anyhow these new industries are coming here to-day.

About a year ago I made the suggestion that the Government might invite the local authorities of the big industrial towns of the north and other parts of the country to prepare a little brochure showing exactly what facilities they had to offer to foreigners who wanted to set up in business in this country. It is the most natural thing in the world that the foreigner should come over here and make straight for London. He would be directed by whoever he consulted to go on the outskirts of London and possibly he would never learn anything about the facilities for transport and the suitability of the land for his trade until perhaps he had built his factory, when it would be too late to look around.

We are told that our Consular Service abroad is not as efficient as the American Consular Service. It is very often stated among business men that if they really want to know something of importance they go to the American Consulate in preference to the British Consulate. I think that is quite true. Would it not be possible—and here is a little job for the Secretary for the Overseas Trade Department, as I do not think he is a very busy man really—to instruct the Consulates abroad to keep their eyes open for business men who are likely to come to this country and to pass on the information to the Secretary for the Overseas Trade Department, who could make a point of officials from his Department meeting those people who come here and laying before them the offers which the different localities are prepared to make. I believe that that is done in some of the American States. I am told that when a man moves from one State to another he is invited to see exactly what different parts of the State have to offer. I believe that it would make a considerable difference to the distressed areas about which so much sentiment has been talked to-day but, with very few practical proposals.

There is another thing upon which the Government might ponder. They have lately engaged upon a campaign of raising food prices. The representatives of the agricultural areas are quite elated, but the representatives of industrial areas are equally depressed. The idea has been that by increasing prices you can improve the agricultural position, put more people to work in agriculture, and bring it into a flourishing condition again, but that in itself reacts upon the industrial areas through diminishing the purchasing power of the people. The problem to-day is that people cannot buy the goods which they produce, and the warehouses and the shops are overstocked. Those stocks can only be set in motion by improving the purchasing power of the people who produce them. Some of us believe that it may, in certain circumstances, be wise to increase prices, but not in that particular way of fixing the increase by law. It does not matter so much if, as a result of healthy competition, prices go up for the goods which the people have to sell when trade is sufficiently busy to place in the hands of the people the larger amount of purchasing power which permits them to pay the increased prices.

We as a Liberal party have claimed for five years past—and the Labour party also, although they appear to have fallen by the way and to have surrendered it—that there are certain times when, and conditions under which, the Government can assist the public. We believe that at the present time it would not be unwise to have another survey. The Liberal party made a very comprehensive survey a few years ago, and most of the data is as valuable now as it was in those days. If the Government would put as many of those public works into operation as they possibly could, they would certainly, in the first place, make employment. It would not be employment merely for a couple of years on that particular form of work, for immediately we employed our people, paying them wages instead of unemployment pay, we should increase their spending power, which would stimulate industry in every direction. The fact that we should be reducing the rates which fall on industry, and other charges as well, would allow the business men to tender for contracts which, under other conditions, would be hopeless. In many cases we believe that it would bring back trade. The men engaged on emergency work would eventually be able to move from that temporary work back to the occupations to which they belonged.

We as a Liberal party believe that to be one of the things which, sooner or later, will have to be done. In Æsop's Fables we are told the etory of the fox who came along and saw the boar sharpening his tusks on a tree. He said, "Why are you doing that? The hunters are not present." The boar replied, "No, but when the hunters are present I shall have something more to do than sharpen my tusks." I suggest that sooner or later it will have to be done, and when trade improves we shall need the facilities which I have mentioned. We shall need good roads and bridges, and good houses for our people, and the 101 things which make so much difference between success and failure in industry. It is far better to provide these things now when we have plenty of labour at our disposal, an abundance of raw material, and capital upon which we can lay our hands. It is far better to keep our house in order while trade is slack than wait until trade has fully revived and then find that we have not time to do it.

5.22 p.m.

Mr. DAGGAR

Most of us on these benches will expect the customary statement that the number of unemployed in 1933 was fewer than in 1932 or 1931. We shall expect reference to be made to the fact that there were more in employment in 1933 than in the years 1932 and 1931. The reply to such observations is very simple and reasonable, and, I hope, very effective. When we point out that there were more unemployed in 1933 than there were in 1930 and 1929, and also that the number of persons in employment in 1933 was considerably fewer than in the years 1930 and 1929, we shall probably be told that the number of unemployed is greater in other countries than in Great Britain. That will be no satisfaction to the unemployed in this country. As has been truthfully stated: The figures may rise; the figures may fall, from month to month. But the massive problem remains. I desire to deal more particularly with the depressed areas, which were appropriately described by a correspondent of the "Times" yesterday as being— Places without a Future. At the risk of being described as a pessimist, I would remind the hon. Member for East Middlesbrough (Mr. Young) of the observation made in the "Manchester Guardian" of yesterday: If Britain as a whole could get back to 1928, say, we should not be doing so badly. But even if that could be done, is that enough for those areas which already in 1928 were suffering acutely from a distress which luckier districts are even now only just beginning to appreciate? It cannot satisfy them and should not satisfy us, if we have any regard for fair dealing, that these places should be left for ever in the shadow of a cloud which, whatever mild trade revival is now coming, will never blow away. I also question whether this House fully appreciates the position in the depressed areas of this country. If there is one fact Munich, more than another, should compel attention to be paid to these places it is that, in every one of the areas where persons are dependent upon unemployment insurance benefit for their existence, they are existing on meals which do mot exceed 2d. a day. That is the position in my Division. If it is necessary to prove the existence of these depressed areas, it can be done by stating that in 1933 there were over 67,000,000 meals provided for the children of the unemployed, and 54,000,000, or 80.6 per cent., of those meals were provided free. Another fact, if facts are necessary, is that the amount paid out in public assistance in 1920 was only £4,000,000, but last year the amount paid-out was £15,000,000, an increase of £11,000,000 during the period.

I wish particularly to deal with South Wales and endeavour to prove that these areas are getting worse, and are bound to become worse as the area of privation is automatically extended. Take the position of those working in the mining industry in South Wales. If the purchasing power of those who are fortunate enough to be in employment is decreased, it means that there is less at their disposal to assist those who, in many parts of South Wales, have been idle since 1920. If the wages payable to miners in South Wales are decreased, it increases the distress among the people in the areas to which I have already referred. The total wages paid to the miners in South Wales in 1924 was £46,000,000, and in 1932 the total wages paid was only £23,000,000, a decrease during that period of £23,000,000. At the present time, in view of the agreement which was signed in 1931, there is a recorded trading deficiency of £8,209,000. Such a condition, bad as it is, cannot last for long. It is a problem of derelict mining townships. On the 18th December, 1933, the number of unemployed, insured and uninsured, on the registers of Employment Exchanges, expressed as percentages of the estimated numbers of insured workers at July, 1933, were, for Monmouthshire 38.3, and for Glamorganshire 36.8, as compared with Durham's percentage of 35.4, Lancashire 20.8, and London a mere 10 per cent. Compared with Great Britain with an average of 17.8 per cent., there was a difference in Monmouthshire of over 20.5 per cent. and in Glamorganshire of over 19 per cent.

I have had the opportunity with some of my colleagues of examining the figures supplied by the public assistance officer for the Glamorgan County Council relating purely to the county rates for public assistance purposes in Glamorganshire and Monmouthshire. On the 31st March, 1932, the rate for this purpose in Glamorgan was 7s. 10d., last year 8s. 1.75d. and this year 8s. 5d. In Monmouthshire in 1932 the rate was 5s. 6.75d., in 1933, 6s. 8.23d. and for this year they are budgeting for a rate of 7s. 0.54d. The public assistance officer points out that The rate for public assistance in Glamorgan is nearly three times the average rate for the English counties, and more than twice the national rate average in each year. The position is the same in regard to the county of Monmouth. The public assistance officer makes a statement which is obvious to those who come from South Wales, namely, that the explanation is due to the collapse of industry, particularly the mining industry. My hon. Friend the Member for Chester-le-Street (Mr. Lawson) made reference to two industrial surveys. One of those surveys had reference to the conditions in South Wales and the report was published in 1932. The survey was made for the Board of Trade by the University College of South Wales and Monmouthshire. It takes the whole of the population of the industrial region as contained in the four counties of Glamorgan, Monmouth, Carmarthen and Brecon. This is what the report says: The prosperity of these four counties before the War attracted a large volume of labour from outside. Before 1921, however, the tide began to turn, and between 1921 and 1931 a nett loss by migration of 242,000, or 12.3 per cent. of the 1921 population, has taken place in the four counties and their population has actually decreased by no less than 70,000. This startling change is due to the depression in the industry of the region which has set in 6ince the collapse of the post-War boom. In spite of that enormous migration the Survey says: Our examination of coal mining has shown that there still remain at least 30,000 men whose labour is no longer necessary for carrying on that industry. That is not the worst feature. That deals with only one industry, but, as the Survey points out, there is a surplus of unemployed in other trades. It says: In 1930 there were about 478,000 insured workers in the region. Yet it would be unreasonable to deduce that there exists therefore a total surplus of insured workers numbering 70,000. Later the report says: The surplus of insurable workers available for new industries and services, if development takes place, is perhaps in the neighbourhood of 40,000. The surplus to be transferred, if decay continues, we shall not attempt to estimate. But it is obvious that the problem of transfer, in the latter event, will be of great magnitude. In the four counties I have mentioned the inhabitants are dependent upon two or three industries—coal mining, iron and steel melting, rolling and puddling, tin-plate manufacture and the distributive trades. In the Survey it is stated, on page 11, that: In every one of these industries and trades at every date from June, 1927, to December, 1930, the unemployed form a larger percentage of the insured in South Wales than in Great Britain. Used in this connection, what a tragedy lies beneath the word "surplus." Are these areas to be considered as permanently derelict? Are the people in those areas, unemployed men, women, boys and girls to be allowed simply to deteriorate and die?

Let me take another view of the same problem. Take Great Britain. The report of the Royal Commission on Unemployment Insurance shows that between 1901 and 1911 the numbers of persons engaged in the coal mining industry increased by 250,000, but between June, 1923, and June, 1930, the number so engaged had decreased by 174,000. In dealing with coal mining and other industries that had expanded before the War the Report of the Royal Commission" says: It is clear that we cannot rely on the great pre-war export industries to absorb the labour displaced by labour-economising invention, or even to absorb their proportionate share of the natural increase in the population. The percentage numbers of insured workers recorded as unemployed in the mining industry at the end of July, 1923, was only 3 per cent., whereas in July, 1933, it had increased to the enormous figure of 38.7 per cent. In July, 1927, the figure was 21.5. The lowest figure since July, 1927, was in July, 1930, when the percentage was 18.9. In my opinion, for what it is worth, for anyone to rely upon the recovery of the mining industry as a means of recreating industrial activity in these areas is a huge mistake. I am not alone in that opinion. For instance, as far back as the 6th January, 1926, His Majesty's Government at that time set up a board to deal with the facilitation of the transfer of unemployed miners. The report was issued on 26th June, 1928, but for some reason or other it has been ignored. The report contains the following statement: The apparently static or even contracting demand for British coal, is due in part at least to external conditions over which this country has no control. The effective demand for the time being seems to range around 250,000,000 tons a year. The volume of output necessary to meet this demand is now being obtained with an employed personnel of under 950,000, doing the full time work of about 850,000. The insured personnel of the industry in July, 1927, was 1,164,380. That was at a time when the output of coal was about 250,000,000 tons a year. Last year the personnel of the mining industry in Great Britain was only 772,000 a reduction of 392,380. In South Wales in 1927 the number of persons employed in the mining industry was 176,173, and in 1933 131,664, a reduction of 44,509.

I submit to the House for its consideration that, with the continued introduction of machinery, the concentration of production by amalgamation, improved methods of production, organised marketing, the general rationalisation of the industry, together with the adoption of more economical methods in the consumption of coal in the production of gas, electricity, iron and steel, the position is bound to become increasingly worse every year. Let me give a few illustrations of what I mean. In 1931 in the coal mines of Great Britain the amount of coal cut by machinery was 77,000,000 tons, equal to 35 per cent. of the output. Last year that figure had increased to over 88,000,000 tons and the percentage to over 42. In South Wales the amount of coal cut by machinery was in excess of 13 per cent. Scotland gives a clear example of the extent to which machinery is used in the mining industry, one of the last industries that would have been looked upon 10 years ago as being capable of permitting such an introduction of machinery. The Scottish coal field raised in 1930 almost the same tonnage of saleable coal as South Yorkshire with the labour of 22,619 fewer persons, this result being achieved with the aid of just over five times as much horsepower per person employed underground, double the number of conveyors and less than half as many ponies.

Take the amount of coal necessary to produce electricity in this country. We find from the figures that in 1932 the increased units generated over the period 1921–22 was 179 per cent., whereas the increase of coal and coke used during the same period was only 56 per cent. The Secretary for Mines made a very interesting reply to a question that was put to him on the 20th December last year. He said that: The quantity of coal carbonised at gas works and used for the generation of electricity at steam stations belonging to public supply undertakings in 1913 and 1932 was 22,750,000 and 27,500,000 tons respectively. At the pre-War rate of consumption per unit of production, it is estimated that an additional 20,000,000 tons of coal, approximately, would have been required in 1932."—[OFFICIAL REPORT, 20th Dec, 1933, cols. 1329–1330; Vol. 284.] In the production of a ton of finished steel in 1922–24, 31 cwts. of coal were required, but in 1930 that was achieved by only 23 cwts. of coal. There is a saving of 8 cwts. of coal on every ton of finished steel. One of the chief shipowners of Cardiff has said that his steamers which used to burn 34 tons of coal per day are now reduced to 26 tons, without any diminution of steam. We have been discussing lately the need for the Navy to go back to coal. It is supported by the coalowners of this country who, as a result of electrifying their pits, have decreased the demand for coal by 8,000,000 tons per year. I have a photograph here of low temperature carbonisation works in Italy. The oil in this plant is distilled from Welsh coal and was used by the car which recently won the 1,000 miles race in Italy. That is an interesting fact which should be borne in mind by the coalowners. An hon. Member the other day referred to Admirals and Generals as being dumb individuals. I suggest that he has not yet made the acquaintance of the British coalowners.

I contend that people living in distressed areas like Dowlais, Merthyr, Abertillery, Blaina, Nantyglo, Abercarn, Cwmcarn and Ebbw Vale, are no more responsible for the conditions in these areas than those who reside in Bewley and Bournemouth. Every hon. Member will agree with that statement. We shall also agree in asking the Government to state their policy to deal with conditions in these areas. The Financial Secretary to the War Office last week referred to the creation of a Royal Defence Corps, and said that they were to be used in an emergency to protect vulnerable points in this country from any attack by persons of ill will. I do not know what was meant by that statement, but I do know that you cannot expect continuous good will amongst people living in these depressed areas. It is a simple matter for those who are in a position to purchase the things they require to be contented. The recent circular of the Ministry of Health was not sent out with very good grace. It pointed out that the 5s. 10½d., which was suggested by the Medical Council as just sufficient to maintain a man, should be reduced by 9d. per week. That is not going to maintain good will among the unemployed in these areas. We can only expect good will by deserving it and by informing the country what we propose to do with regard to unemployment and to those suffering from its effects. Reference has been made to the articles which have been appearing in the "Times." Let me read an extract from one of them: England is beginning again to think in terms of prosperity, and may even deceive herself into imagining that at home, if only she holds what she has gained, everything everywhere is going to come right. That is not so. There are districts of England, heavily populated, whose plight no amount of general trade recovery can ever cure, because their sole industry is not depressed but dead. It would be a failure of humanity to forget them, a failure of statesmanship to ignore them. That is true of South Wales. And let me emphasise that with improved methods of production the position is bound to become worse in depressed areas. I am anxious to know what the Government, are going to do. I thank the Government for allowing three Ministers to be present during this Debate. We regret the absence of the Prime Minister, but after the explanation given by the Lord President of the Council last night we can understand why be is not here. The right hon. Gentleman has been Prime Minister since 1929 and is tired. Those who were associated with him in 1929 know that that was a quality which developed during the period 1925 to 1929, but we are pleased to know in the words of the "Daily Express," that he has condescended to visit England at least once ill three years.

5.52 p.m.

Mr. SUTCLIFFE

When this subject was debated about 12 months ago the prevailing note on the Opposition benches was one of gloom. On that occasion things were certainly rather different from what they are to-day. We had just balanced the Budget, not with a very large margin, and our figures of unemployment were still large, and had not-begun to show the improvement that they have shown since. But, surely, the difference to-day is very great as compared with what it was 12 months ago, that is taking the country as la whole. The hon. Member for Chester-le-Street (Mr. Lawson) says that things in the County of Durham-are bad. We know they are bad, and let me say how much I appreciate the sincerity and moderation with which the hon. Member opened the Debate. But if you take the country as a whole surely some notice must be taken of the fact that nearly 750,000 people have been found jobs during the year 1933. That fact has been skipped over by hon. Members in their recital of the state of affairs. There is no doubt that the improvement throughout the country as a whole has been very considerable. There is la changed outlook in some districts. In fact, in some districts there are few unemployed, and conditions are totally different from those of 12 months ago. It is no exaggeration to say now that there is definite hope for the man who signs on at the Employment Exchange that he will obtain work, at any rate in many parts of the country.

Like other hon. Members I have read the articles which have been appearing in the "Times," and there is no doubt that conditions are extremely bad in some parts of the country. The figures of unemployment are still very great. I do not know how this is to be cured. It is an almost insoluble proposition—at any rate, it is an extremely difficult one—because in some of these areas industries are dead, and probably can never be revived. In that case there is bound to be a large number of permanently unemployed. Let me refer to Lancashire. There, unfortunately, the number of unemployed is still tragically high, though, not so bad as in those areas to which attention has so far been drawn. The condition in Lancashire is largely due to the menace of Japanese competition; and in that connection] welcome the statement made last night by the Secretary for the Overseas Trade Department. He was asked if he could make a statement as to the action the Government would take arising out of the breakdown of the negotiations with Japan. In saying that it wras not possible to do so at the moment, he went on to say: But that does not mean that the Government are not fully alive to the gravity of the situation. They are giving it the gravest consideration. We have no intention of standing with arms folded and allowing matters to take a course detrimental to our interests."—[OFFICIAL REPORT, 21st March, 1934; col. 1351, Vol. 287.] I welcome that statement as showing that the President of the Board of Trade and the Cabinet as a whole are determined to keep before them the question of the Lancashire cotton trade and Japanese competition. I do not propose to elaborate that point further, because, after all, we are discussing not one particular area but unemployment over the country as a whole. I see no reason why unemployment figures should not decrease, or rather, to put it in a better way, why the figures of employment should not go on increasing from month to month during the next year. There is definite hope of that. Still, we have a very long way to go, and it will be some time, I fear, before anybody can view the situation with anything approaching complacency. We have to consider what we can do to expedite the recovery which is taking place in the normal course of business at the present time. What can the Government do? The Government can do a good deal in helping work which is semi or wholly of a productive character. A good example of that is to be seen in the help which is to be given to the giant Cunard liner, help which is given only on the condition that the two lines are amalgamated, which will make for increased efficiency and the elimination of competition, so that where two lines have been losing money one line may hold the market, so to speak, and go forward satisfactorily. That alone will employ some thousands of men who have been unemployed for a year or so.

Then there is the great slum clearance scheme, which has been described as the greatest bill of health this country has yet considered. It is reputed that this will employ over 100,000 men in one way and another during the time that these houses are under construction. But, even so, there is still plenty of scope for other work. I am referring particularly to work which can be undertaken by local authorities. I do not favour a return to the old system of the days of the Unemployment Grants Committee, nor do I approve of millions being spent on roads or in other ways, which are to a large extent unproductive. We have enough roads of that kind for the present. I refer to the great arterial roads in the country. Figures have shown us that there are more accidents on these roads to motorists themselves and to other users, than there are on any other roads. In fact, these great arterial roads tend to become more and more a sort of racing track. We know that all such expenditure failed. It was only a temporary palliative, and last July the Chancellor of the Exchequer said in this House that capital expenditure of that kind had failed, while the President of the Board of Trade on the same evening added that such capital expenditure over the last 14 years had made little impression on the numbers of the unemployed. In the same Debate, however, the Chancellor of the Exchequer said that he thought there was some ground for the view that necessary public works should be accelerated, but only with adequate preparation and examination.

That was in July last, and much has happened since. We have gone a good way since then towards restoring the financial position. There has been improvement; there is greater optimism throughout the country, and financial strength is greater. The local authorities have economised during the last two years and are in a better position now than previously. The time has come when many local authorities feel themselves in a position to carry out works of public importance and especially is this so in matters connected with public health. There is much that the local authorities can do, and much that they ought to do at the moment, if they are given more freedom and if some of the existing restrictions are removed. Now, surely, is the time when they should be allowed to expand and to put in hand works which have been held up during the last two years. I am not advocating anything reckless or on a gigantic scale. Whatever is done must be carefully supervised, as the Chancellor of the Exchequer urged on the occasion to which I refer. Many local authorities however think that they are in a position to afford such development while at the same time keeping an eye on the rates.

It may be asked to what kind of works I refer in this connection. I wish to mention one or two classes of work which would, I think, improve the state of the public health in this country. I noted the other day a scheme which was put forward jointly by the trade councils of London and Manchester. I am not often in favour of schemes put forward by trade councils, but some good schemes do come from them, on occasion. This particular scheme was for the cleansing and improvement of rivers, especially in industrial areas. The position in this respect, as some of us are aware, has become a serious menace especially since the hot dry weather of last summer. Many houses in industrial areas overlook these rivers and there are hundreds of thousands of houses in the immediate vicinity of rivers. In many places during the past year the smell which has arisen from the rivers has been highly offensive and must have been very injurious to health. That is always likely to he the case in those districts especially when the water is low. The accumulation of years of effluent from mills and so forth ought to be cleared away from those rivers as soon as possible, otherwise this will develop into an even more serious menace to health than it is at present.

We have also heard about schemes for the prevention of flooding, for the deepening of rivers and the widening of ditches and streams so as to avoid floods. Although that is useful work, I suggest that the other work which I have just mentioned is more important in the interests of health and ought to come first. Then, perhaps, more progress might be made with the provision of telephones. The present Postmaster-General has done a great deal, and the Post Office has never stood in such high admiration as it does to-day, thanks largely to his initiative. But even more might be done in the extension of the rural telephone system. The Electricity Commissioners have shown the way by running electricity lines throughout the country. Again, what about the newly-developed districts outside our great industrial cities and towns? Are we making certain that they have all the amenities which they ought to have? Are we sure that local councils are using their powers under the Town Planning Acts? Are we certain that recreation grounds and parks are being laid out and libraries provided in sufficient numbers? If we are not careful in that respect we shall find huge new towns joining on to already huge towns without any of the amenities which are the due of every citizen.

Lastly, there is the question of dealing with dangerous places on our roads. I refer to roads in towns and to country cross-roads and other places which have for long been scheduled as dangerous, but the improvement of which has been held up waiting for grants from the Government. Surely, the time has come to put into operation some of the schemes already existing for remedying defects of this kind in the roads, especially as accidents continue to occur at these very spots because there is no money available locally for dealing with them. All these things I suggest would be helpful, if the Minister of Health would look more favourably upon these schemes and if the Government, at the same time, would grant loans on more favourable terms. I mean by that at a lower rate of interest. In that way local authorities would be encouraged to go ahead with much-needed schemes.

While all these proposals would be very helpful I suppose that, as regards Lancashire at any rate, the main remedy must lie eventually in obtaining new industries. How to secure new industries is the difficulty. We have heard this evening about the movement of industry to the South and no doubt industry is and has been for some years moving in that direction. I think that is due very largely to the lure of the green fields. The new manufacturer to-day is very ready to start his works among green fields and all that adds enormously to the cost. Roads and houses have to be provided, and eventually we find villages and towns growing up, while at the same time there is a loss of the amenities of rural England in the country places which are so valuable round our cities and large towns.

I do not think that the question of cheaper labour enters very much into it. Indeed I was always under the impression that labour was dearer in London and the South than in the North. I think that the Opposition are not correct on that point, and that the movement of industry towards the South is due largely, as I say, to the green fields, and also to the transport facilities, which are much better as a whole around London, or are, at any rate, imagined to be much better than they are elsewhere. There is also the fact that the South of England is nearer to London and the centre of activity. However, as we see, that movement has grown and is rapidly growing. What is to be done? The Lancashire Development Council have been doing all they can to obtain new industries for Lancashire. Their task is very difficult. They have met with a certain measure of success but not with such success as we would like to see.

There is one way in which the State can help, and that is by placing orders in distressed areas. It should be borne in mind that an order placed in a distressed area does infinitely more good than an order placed in another area where distress is not so great. I am not suggesting that the Government have not helped in that way in the past but I hope that the consideration which I have mentioned will continue to be kept in mind. I do not take a pessimistic view as to the future, but I ask that the Government should in the ways I have enumerated try to expedite the improvement which has undoubtedly taken place, and which, in my opinion, will continue, and that they should help to the best of their ability developments on the lines I have indicated.

6.10 p.m.

Mr. PEARSON

This Debate should be valuable, because it is meant to be more specific than other Debates on this subject have been. The general problem of unemployment has been before the House on many occasions, but to-day we are trying to focus the attention of the Government on the distressed areas. I think that the general policy of the Government in regard to trade revival has been sound. In its working it has been gradual and slow, but sure. The hon. Member for Chester-le-Street (Mr. Lawson) gave the comparable figures of 1928 and 1934. I would rather he had dealt with the figures of 1930 and 1931 and compared them with the figures of 1934. We would then have a general comparison between the work of the late Government and the work of the present National Government in this respect.

The reduction in the figures of unemployment is hopeful. A great deal of confidence has been restored in this country, but yet, in certain defined areas, there has been no real change. We still have languishing industries and people who are helpless and hopeless. I pay a tribute to their wonderful courage, fortitude and patience. In none of these distressed areas has there been any real or serious crime, which is a remarkable thing when we consider the difficulties under which they are labouring. The people look to the Government to do something for them. It is no exaggeration to say that 99 per cent. of the people who are drawing the dole, or are on transitional payment, would infinitely prefer work. The people of the North are of a sturdy and independent type. They have borne the burden and heat of the day in building up those heavy industries which have made this country industrially great. To-day they fear that they are being forgotten.

It has been said that the South does not understand the industrial North. I think, generally, it is the feeling among Northern Members that the South seems to have a different psychology and a different understanding of the problems which we have to face. Reference has been made in this Debate to articles which appeared in the "Times." It is a remarkable tribute to that journal that it has been so widely read by Members of this House, and, I suppose, by the general public. That shows the important influence which it has upon public opinion, and I am sure it has done a great deal of good in drawing the attention of the Government to the problem of these very distressed and very dejected areas. I want to pay my tribute to the "Times" and to the man who was responsible for writing those articles.

I speak for the most distressed area in the most distressed county, and I plead with the Government to do something to help us. We have at least 76 per cent. of men unemployed, 23 per cent. of women and no less than 119 per cent. of juveniles. I am chairman of the juvenile advisory committee, and I know exactly the difficulties we have in finding work for these young people. Over the three categories we have an average of 74 per cent. unemployment. I know the Government have done something in the way of making block grants and in giving special grants to these areas, and also by way of transfer schemes, for all of which we are thankful. I suggest, however, that it is a serious thing to talk about transfer schemes, for they tend to break up community life and to leave towns derelict. People have the roots of their being in these areas. The Minister of Health, in talking about slum clearance and rehousing of the people, referred to that very desirable thing when he said that people long to live in the parts where they have been brought up and that rehousing them in their areas ought to be encouraged.

It is a serious thing, too, for local government. We have schools and other amenities established, and housing estates that have been recently developed. All these things are a burden upon the rates and have to be borne by people who are distressed where industries have entirely failed. In a sense it is a case of the poor living on the poor, and it is a heavy burden for them. When industries drift to the south there is the expense of setting up new communities when old communities are already established elsewhere. The drift draws away from other areas, skilled men who have been brought up around an industry and trained in the industry, and who want to use their skill and ingenuity in the work to which they are used. There is also the problem of the younger people and apprentices who are getting no opportunities in life to do something to make themselves useful citizens. If the Government could be made aware of the problem on the spot, I am sure they would devise ways and means of helping these distressed areas. I was interested to read what was said by the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) when he was speaking the other night on the wireless in the series "Whither Britain?" He said: If Parliament had to sit in turn in Durham, Liverpool, Glasgow, Newcastle, Cardiff, and carried Ministers along with it, we should long ago have had measures which indicated a comprehension of the despair which unemployment has created during the past 12 years and of the ravages of its canker. Is it not possible for a Cabinet Minister, say, the Minister of Labour, or the President of the Board of Trade, or perhaps a sub-committee of the Cabinet, to take counsel in those areas with industrialists, local authorities and chambers of commerce with a view to finding a solution? I believe that co-operation between these bodies and Members of the Government directly in the area would do a great deal towards helping to find some solution of the problem. After all, it is a chronic malady, and we have to use drastic remedies to put it right. The Minister of Health set a very good example when he went round the slum areas to see the conditions in which people were living. It gave him knowledge of the problem at first hand and helped him, I have no doubt, in bringing forward the Act which is doing so much in the clearance of slums. If my suggestion were adopted, there would be less talk of London ruling and more complete and sympathetic understanding between north and south.

My own area is a specific case where the Government could do something. The hon. Member for Consett (Mr. Dickie) referred to a town where he said he served his time in tine shipyard, and he spoke of the great naval work that has been done there. I think there is no town in the country which has so much naval history as the town I represent, and it is to that area that I want to draw the attention of the Government. Jarrow has made a great contribution to the Navy. During the War it did a great deal in building ships, and it played a very important part in the prosecution of the War. The yards have been specially designed for naval work and men particularly skilled in naval work are living in the area, but they are now languishing and drifting about. Their skill can be utilised, and ought to be utilised because, if another war ever broke out, places of that sort would be required and men of that type would be needed. The Government cannot afford to ignore that problem. They might even consider the question of developing aircraft in the area. There is always a possibility in that direction, and when you get your attention fixed upon those areas for specific remedies, you do a great deal towards finding a solution to the unemployment problem.

There is another scheme which I would like to suggest. It is really a productive scheme, and has been before the Government already. The River Tyne Commissioners are keen on developing the river. There is what is called the Jarrow Slake, a wonderful waterway which could be developed. The Commissioners made application to the Government during the time of the Unemployment Grants Committee and were promised a grant, but the Economy Act came into operation and they were unable to get it. They are still anxious to go forward with the scheme, which would provide a great deal of work and help to revive the town's life. If we could get a grant from the Government for that scheme, it would not only do good by giving employment, but would develop the. Tyne and make it into a first-class port. When people read about the grants made to the Cunard Company or to some other companies in Belfast, they naturally feel that something ought to be done in areas that are really languishing, and which could get on very well if the Government came to their assistance.

The money spent on transitional payments could be well utilised in providing productive work in the area and in helping to keep up the morale and the health of the men. We all recognise the demoralising effect of enforced idleness, and no more distressing picture can be drawn than that of a man without work, without hope of any immediate return to employment and with diminishing resources. It crushes the spirit of the man, and makes him an easy prey of those who would exploit his position for political purposes. Our country, which is foremost in recovery and an example to the world, ought also to be the foremost in reconstructive work.

6.24 p.m.

Mr. KINGSLEY GRIFFITH

I should like to congratulate very heartily the hon. Member for Chester-le-Street (Mr. Lawson) on the way this subject was brought before the House. The moderation of his statement gave additional force to his remarks in bringing to our attention a picture which, however we look at it, is bad enough. If there were any complacency left as to the position, those who heard that speech should feel complacent no longer. The only two speeches that showed any measure of complacency came from the hon. Member for Hereford (Mr. J. P. L. Thomas) who has, I suppose, been helped in the particular agricultural industry of his constituency. The other came from the hon. Member for Royton (Mr. Sutcliffe), who seemed completely to misunderstand the subject of the Debate. That subject is the condition of the basic industries and the special unemployment there and in the distressed areas. All that the hon. Member had to say was that if these industries were bad, it was a great pity, and that he supposed there was bound to be permanent unemployment there. Yet, after that he said he was not a pessimist. If he lived in the areas under discussion he would be bound to be a pessimist if he came to that conclusion.

Mr. SUTCLIFFE

I know those areas very well indeed. I was speaking about the cotton trade, which is depressed, and at the same time, I wished to draw attention, in order to counteract something that had been said, to the fact that there was some improvement throughout the country as a whole.

Mr. GRIFFITH

The hon. Member is entitled to call attention to the general improvement as an offset to those areas to which attention has been called in this Debate, but for them at present it is difficult to see any hope whatever. If there were any disposition to complacency, it could be cured most easily by reading the Debates that have taken place on this subject since 1928. I take 1928 partly because it is the year when I came into the House, and partly because it was taken by the hon. Member who opened the Debate. Since then there must have been scores of Debates on this subject, and when I think of the way in which in every one of those Debates Members have risen full of sincerity and, what is more, full of ideas, and have brought them forward as their contribution to the council of State on this great subject, and that after all these Debates and all these suggestions, unemployment is twice as bad as when we started, that fact is a great reflection. It is not so much a reflection on this Government, or the Government before, or the Government before that, as a reflection upon this House unless the reproach is remedied.

It is a reproach on Parliament as an institution that a difficulty can be faced like that for so many years, that there are so many people having ideas as to how to get it right, and yet at the end of it all things are twice as bad. The year 1928 was rightly chosen by the hon. Member for Chester-le-Street. It marked the era when the Industrial Transference Board by its report for the first time convinced the country that they had a problem of unemployment to face which could not just be left to be dealt with by insurance in the hope that, being largely a matter of seasonal and cyclical fluctuations of trade, it would not be the same people out of work for any length of time, and that one could leave the natural revival of trade to absorb those who, for the time being, were unemployed. After the report of that board any such suggestion became impossible. At least 400,000 men were indicated as being cast out, as it were, from industry, at any rate the kind of industry they had known. It is further worth observing that that very period of 1928, when these figures were arrived at, is chosen by Sir Arthur Salter in his book "Recovery" as the peak year of prosperity, and one which we are only likely to see again with a great deal of luck.

Therefore, we have to take it as established, at any rate for present purposes, that at least these 400,000 men, and probably an additional number now, are not going to be treated adequately by the ordinary methods of insurance, or by any revival of trade that can be expected in the ordinary course of events. I emphasise that particularly, because, when special emergency measures are proposed from these benches, or the benches above the Gangway, or anywhere else, there is always the calm, orthodox economist who says, "All these are quack remedies; all you want to do is to wait for the normal revival of trade." We have to recognise that here is a problem which no mere revival of trade can deal with. Unless we take the optimistic view of the hon. Member for Royton, these men are bound to be permanently unemployed. Either the men have to be taken to other industries, or the industries have to be taken to the men. Obviously it must be the one or the other. I would ask hon. Members, of the Conservative party in particular, however enthusiastic they may be for the new fiscal system evolved in this country, to realise—if they will go so far with me—that there are limitations, at any rate, to the extent to which that method can cure this problem. It would be idle to deny that in certain industries and in certain ways additional work can be created by this method, in particular places.

I have before me an interesting publication issued by a very well-known firm in the iron and steel trades. It is called "A Special Review of the Iron and Steel Trades in 1933." That industry is supposed to have benefited a great deal from duties, and I want to consider, because it is one of the distressed industries, how much has been done by that method in that sphere. The document is evidently drawn up by somebody who believes in tariffs for the iron and steel trades. It says: Of a variety of causes which have contributed to the steady revival of the British iron and steel industry, a revival which, apparently, has not yet reached its zenith, the most decisive factors have been the rebirth of confidence and the operation of the Import Duties. Then it goes on to say that such considerations as the influence of cheap and abundant credit and the natural impulse towards expansion after a prolonged period of restricted trade cannot be excluded from any survey of the origins of the revival. That is an addition wisely made, and I recall that Mr. Beckett, when addressing his bank, pointed out that people had gone without things for so long that a time came when they had to replenish, and that this was an important factor in the revival. After consulting the left-hand column of this page, where the authors of this publication are certainly saying that tariffs have helped, when we turn to the right-hand column we find another side of the picture. It states: Unfortunately there has been no substantial recovery of the export trade. The world markets have been in the grip of a stubborn economic nationalism. Currencies and credits have been deranged, lofty tariff walls, import quotas and licences, and restrictions on the export of currencies have all tended to hold up the free exchange of goods which is the basis of international trade. It has been a suicidal policy which has not yet been abandoned. That is the curious position in which all of us tend to drift when we consider particular industries—to recommend for ourselves the policy on the left hand column of the page, which we find to be not only no good for the world, but suicidal when it is adopted by other people. I recommend this curious contract of views to the President of the Board of Trade, because it is going to be a very difficult obstacle in his way if he tries at any time seriously to bring down these great foreign affairs by bargaining on our side. Which industries in this country will be ready to make the sacrifice? Quite obviously, and from my own position as Member for one of the Divisions of Middlesbrough I am bound to sympathise with them, the iron and steel trades will not want to make the first step and be led as a lamb to the slaughter. Everybody will take the point of view, "If bargaining has to be done, take the tax off some other industry but not mine."

I do riot want to argue the general question, but obviously we shall have an off-setting—I will put it no higher than that—in the difficulty of regaining our foreign trade, against what we are gaining in the home market. I suggest that under the present closed system of marketing we cannot look forward to anything like the prosperity which we enjoyed under Free Trade. That is an important consideration to be borne in mind. Turning over two pages of this same publication I find the heading: "Shipbuilding: Lowest Tees output in 20th Century." Figures are given for the Tees, Tyne and Wear which show that whereas the tonnage launched there in 1932 was 78,273 tons, in 1933 that figure had fallen to 41,633 tons. That is an offset to the policy which is at the present moment being pursued. We cannot expect to maintain our production of ships when the whole function of ships in the world is being reduced by means of a world policy.

Therefore, from the present policy we can expect nothing more than a very limited improvement, and only in a few special trades, and yet surely something has got to be done. The unemployed in these areas, who admittedly are not going to be absorbed by any ordinary revival of trade, must have a special effort made for them, unless we take the pessimistic view and condemn them to a life-time of unemployment. I am not going in detail into the programme of public works put forward by the Liberal party, partly because it has been referred to by the hon. Member for East Middlesbrough (Mr. Young) and partly because the original supporters of the programme, which was put forward in 1929, and which I still regard as a very sound one, are now spread so widely over different parts of the House that I feel that the whole of this Assembly must be permeated with these ideas. Nobody is suggesting works of no remunerative value and of no benefit. The works which we have suggested will increase the wealth and the well-being of this country, and when labour is plentiful and capital is cheap is the very time to undertake such works. After all, it is not such an unheard-of suggestion. At the moment, while we are having this Debate, other great nations faced with similar problems are making efforts which, I suggest, are far in advance of what we are attempting. President Roosevelt in America and Herr Hitler in Germany are embarking, not without a very considerable measure of success, upon the very proposals made from Liberal and Labour Benches in the past. Unless something of this kind is done, we are passing upon the men who are the subject of this Debate—whatever may happen to other people—a sentence of industrial death. I do not see how we can expect the workers in Durham and in South Wales, some of the finest workers in the country, to accept a message of that kind.

It is more than this National Government which is on trial. Although it may be suggested that, with its great assemblage of talent from different schools of thought, it should have special advantages and special prestige in dealing with this subject, it is not the National Government alone that is on trial, but the whole constitutional machinery of this country. We are apt to think that because the various Fascist bodies in this country, run by enterprising gentlemen and wearing coloured shirts, operate on a small and insignificant scale that therefore they are to be despised. I do not think it for a moment. I take such movements, very seriously. We have seen the battle of liberty fought and lost in other countries, and we have no right to assume that we have any special privileges for winning it here. The danger in those movements does not lie in the genius of their leaders or the colour of their shirts, but in the fact that there is something at the back of what they say. There is this much—that this great problem, presented in the Industrial Transference Board's report as long ago as 1928, still remains not only for solution but practically untouched, and when a problem of that magnitude faces a political institution for a number of years and the political institution returns no answer, then the political institution itself comes to be called in question.

We are dealing to-night with no less a question than whether we can save Parliamentary government for this country. If this problem remains without adequate solution for a few years more then, it matters not what Government may be in power, all those, dark devious and adventurous ways of trying to gain prosperity, even at the sacrifice of liberty, will have given to them the greatest impetus and the greatest advertisement that they could possibly desire. But I believe an effort can yet be made. I believe that this Government, if it musters its resources, and will do what lies in it to do, can even now produce a programme for dealing with these hopeless individuals which would not only be of enormous service to the distressed areas but would create a revival of confidence in this House as the governing institution in this country, and might thereby dismiss, I hope for ever, the dreams of tyranny and dictatorship which have overwhelmed other countries, and are dimly threatening our own land.

6.43 p.m.

The PRESIDENT of the BOARD of TRADE (Mr. Runciman)

The Debate this afternoon has had many familiar features, but I am sure that no one who has sat here since Question Time could fail to observe how wide has been the expression of sympathy with the distressed areas which has come from all parts of the House. My right hon. Friend the Member for Carnarvon Boroughs (Mr. Lloyd George) was expressing the view, only yesterday or the day before, that if only Parliament met in Northumberland or Durham it would be more familiar with the problems we have discussed to-day and, I presume, much more sympathetic. I wish it did meet in Northumberland, because that would save some of us a good deal of travelling, but it is quite unnecessary that it should meet there for this purpose, for, no matter from what part of the country hon. Members come, they have realised, partly out of their own knowledge, and partly from information that has been given to us recently in abundance in the Press, that the miseries of the distressed areas are the most tragic in the whole of our Imperial problem. Fortunately, there is an isolation of this misery in a few areas, but it is most intense where it does exist, and the House as a whole is well alive to the misery which is there.

Our business, however, is not to give expression to our sympathy merely in words but to confer together with the object, if we can, of adding to the activity in the basic industries, for, be it observed, every one of these distressed areas is dependent upon the basic industries for its prosperity. When they were prosperous in the past it was very largely because they were highly specialised. They did their work in two or three main channels of trade. They produced a small number of commodities amazingly well. They concentrated upon the problems of those separate industries, and the result was that in times of prosperity they added very greatly to the economic equipment of other great industries, and had a wonderful effect on our export trade.

What are the basic industries which have been receiving consideration here to-day, and are constantly in the minds of all those who are dealing with these problems? First and foremost, of course, is coal. Whether we go down to the valleys of South Wales, to the plateaus of Durham, or the lower coalfields of Northumberland, we find the same results wherever collieries are old and are gradually passing out of their first efficiency. I must confess that in South Wales there are some areas which seem to baffle not only statesmen but social reformers of a more hopeful temperament. What is going to happen to areas like the Ehondda Valley no man can foresee, if the Rhondda is likely to go on being dependent upon basic industries, and only basic industries, for its existence. As to the value of some of the suggestions made by the right hon. Gentleman, I do not mind turning the Rhondda Valley into a prosperous agricultural community, if it will do a great deal to enable people who are fastened there, and who cannot get away, to augment their little incomes, and in some cases to maintain their homes, which they have known all their lives, and which we should not wish to see transferred. I do not exaggerate what can be done by that development, but I say without the least hesitation that in the districts where there are most allotments and gardens you have the greatest degree of satisfaction and content.

There is no doubt about the psychological effect of those little aids to the daily employment, and in many areas where markets are not too far remote it is remarkable how much may be produced, even out of a quarter of an acre. We are very much alive to what has been done in the production of poultry in the last 20 or 30 years. In some areas immediately after the War there were a great many people who thought they would use their gratuities or their little savings safely and profitably in the poultry business. A great many of them lost on it, largely because they did not go about it in the right way. The poultry organisations could have taught them a great deal about profitable poultry production. I know from my own knowledge that a considerable number of people who did not know a very great deal about the subject have been able to make a profit since the War because they have acted under the best technical advice. Competent people may choose to run a little intensive farm, but you must put brains into it, and where brains are put into those little holdings it is surprising what the output can be. I do not know whether the House realises that, when we are talking about subjects like poultry and wheat in contrast, we are really talking about the major and the minor. Wheat is not the major production of this country now. Why, the production of poultry is four or five times as great in value and in volume as all the cornstuffs that we grow on our land. That is an example of what has come from ingenuity and new development, and by adapting what is known by the specialist to the needs of those who are not scientific at all, but who are very good practitioners.

The one outstanding feature of the problem that we have under consideration is its localised nature. The hon. Gentleman who made such an admirable speech in opening this discussion said that he thought this House could not realise what were the troubles of the North. I might also add that they know very little about the troubles of South Wales. On the whole, there is to-day a far more sympathetic public, prepared to support any practicable proposals for the amelioration of the condition of our people, than at any other time. That is true not only among those who are interested locally, but among those who are falsely accused of making political capital out of those miseries, and they are to be found in every class of the community. You need not go to the archiepiscopal palace to find sympathy. Everyone with a normal heart, and a normal equipment and knowledge as to what is the state of our people, is quite capable of expressing full sympathy and of stating exactly what their feelings are. But what is the good of sympathy if it is not to take some practical shape?

I mentioned, just in passing, one small amelioration of our people when I spoke of the poultry farm. What I want to know, and I am asking for the answer and devoting all my time to the problem, is what we are to do in regard to ships, shipbuilding, coal, and iron and steel. If we knew the answer to that, we need not have any more Debates in this House about the distressed areas. Everybody knows that if shipping were prosperous there would be very little permanent poverty on the Tyne. There would be employment in our shipyards, as there used to be in the days when labour was imported to the Tyne shipyards in order that we might keep going an eight-and-a-half hour or nine-and-a-half hour day. Now, with a very much smaller number of hours in the week in those industries, there are singularly few people employed in the shipyards at all. There are two or three yards where vessels are being constructed at the present time. Why are there not more? For the very simple reason that orders are not being given by shipping companies or by shipowners for new ships. Why are there not more orders from the shipping companies or the shipowners? Because international trade has so shrunk since the War that there is nothing like full employment for the vessels that are already afloat. Why, then, should new vessels be ordered to take their places?

I gather from some of the arguments that I have heard that there is a view that the Government have had something to do with the shrinkage of world trade. Before I sit down I shall be able to show that the policy for which we have been responsible has led to an expansion. Let us come to each one of those trades one by one, and let us take shipping first of all. What are we to do with shipping that the shipowners are not able to do for themselves? One thing is clear; there are no ships, certainly none in this country, able to make a profit at the present time; but without a profit it is certain that vessels must, of necessity, be laid up more and more. Every now and again there comes a little flutter in the freight market and some of the vessels are taken away from their buoys, but never all, and until they have nearly all been absorbed it is hardly likely that new orders will be given in the shipyards. That is a very dismal prospect, and it is quite time that we were discussing the problem of shipping. I have no doubt that if I had been in a hurry about shipping problems I should have been accused in some quarters of having a partial sympathy, but I hope that I will not be accused of that now. I am going to discuss shipping problems, and to deal with them quite independently of what may be my personal connection with them.

One of the first things is that employment on the north-east coast was mainly, but not entirely, dependent on the building of tramp ships in the past. There were one or two yards that were famous for the production of great liners. Among them were Messrs. Swan & Hunter, who built the "Mauretania," but the main output of those yards was tramp shipping. If tramp shipowners are able to make ends meet in the future, they will undoubtedly be able to place orders for new ships. I wonder whether we have been hanging on to our older and less efficient ships far too long, and whether it might not have been as well for us to dispense with them and use the capital thereby accumulated—very little it would be—to place orders for new and up-to-date tonnage. I do not want to weary the House with details of comparisons, but it is a remarkable fact that during the last 10 years there has been an amazing improvement in the design of hulls and the body form of ships, in the design of their engines, and of the auxiliary machinery to help propelling power, that it is possible now to build vessels at a comparatively small capital cost per ton. A 400–foot ship can be built for roughly £85,000, and the vessel when she is running is a knot faster than her competitor of 30 years ago, and on a consumption of coal which is as much as 25 per cent. less. I do not think that I am exaggerating when I quote those figures to the House.

What is the inference to be drawn from that? It is that it would be as well for us to get rid of our less competent ships and to replace them with new and up-to-date ships. We might have to sell half a dozen to provide one new one, and that one new one would provide employment in the shipyards where she was constructed, and in the marine engine works where her engines were constructed. She would come out and be run at a profit where her predecessors were run at a loss. It is only by the Mercantile Marine running at a profit that such new construction can be maintained. Let us look at the matter from the point of view of those who are to be employed, and take no concern about the profits of the companies that are to own these vessels, or the dividends that may be forthcoming to the shipyards. We are thinking of nothing but the employment of the people. There is really good ground for taking a new survey of the industry with a view to ascertaining whether, by some change of our shipping policy, we could add to the number of orders that would be placed in our yards.

Let me turn to another class of ships, the big passenger ships. Even if they are built on the Tyne, they do not last for ever; they wear out, and they are wearing out now, in a good many fleets quite rapidly, and during the last few years there has been quite a few of them built. Enterprising owners have placed orders for new passenger ships to take the place of the old, but the pressure on our lines by higher quality vessels now being built in foreign yards, in comparison with those that were built a few years ago, and the competition on routes that we regarded as peculiarly our own—like the Indian route—lead one to the conclusion that those yards must be filled with passenger ships, and with good ships and better ships than you find under any flag in the world. In regard to the ship which is now being built on the Clyde, it is of the highest class, and I make no comment on the size of that vessel or on her construction. What has been done by the Government is an indication of the fact that the Government are very much alive to the necessity of doing everything they can to foster the employment of our people in this great basic trade.

Now I come to the iron trade. The hon. Member for West Middlesbrough (Mr. Griffith), who has just addressed the House, represents one of the most important iron and steel towns in the United Kingdom. I could not gather from his speech whether he wished to maintain the Steel Duty or not. I do not press him for an answer.

Mr. GRIFFITH

I will certainly give the right hon. Gentleman an answer. As long as the tariff system exists in this country, I, like most other Members, will try, to get my pickings out of what is going, but if I could get back to the Free Trade system that we enjoyed before, I would do it to-morrow, because I believe that it would be for the interests of those whom I represent.

Mr. RUNCIMAN

I thank my hon. Friend for his answer. I wonder what he means by "pickings."

Mr. GRIFFITH

I will certainly tell the right hon. Gentleman. I believe that to be an unprotected industry when all other industries are protected may well be the very worst position that an industry can be in. Foreign competition will be focussed against you, and therefore I should certainly not want to take off the duties on products produced in Middlesbrough to-morrow, if there was a general protective wall everywhere else. That would make artificial competition against industries in which I was interested. If I could have general Free Trade, I would have it to-morrow.

Mr. RUNCIMAN

I thank the hon. Gentleman for his candour. When he speaks of the inconvenience that an industry that is unprotected has when it is surrounded by industries that are protected, I ask him to think of the parallel case as between countries. I think he really put his finger on one of the things that have been obvious for the last three years.

Mr. GRIFFITH

Why only three years? Did it not start before?

Mr. RUNCIMAN

Yes, I dare say it did start before, but we made up our minds to make a change two years ago, and, if necessary, we are ready to go further. Let us see where we stand now with regard to the iron and steel industry. The hon. Member sees in his own constituency the hardships of people who go down to the gates and discover that they are not open, and that there is no work in sight. Bridge building has largely fallen off, the rolling of boiler plates and ship plates is done not so much in Middlesbrough as it is in some other districts in Durham, and that is done to a minimum. What can be done to bring that up again? Let me take the case of bridges. I say nothing about the bridges on the roads in this country, which are in the care of my hon. Friend the Minister of Transport. We did a good turn for the North Country when we negotiated the Storstrom Bridge contract and obtained the placing of it in the North Country. It will be one of the finest bridges in the world, certainly one of the longest. There would have been no order for that bridge if we had not put our whole weight into obtaining it.

That is something the Government have done. I have no doubt that if we can go on keeping up that export trade in bridges and producing them cheaply enough, we shall make the world feel it had better buy bridges here than anywhere else. Now is there any reason why Dorman, Long and Company, the particular builders who produced the Storstrom Bridge cannot produce cheaply enough? They cannot be exploited by anyone who is selling coal at too high a price; they have their own coal. They cannot be exploited by anyone who is selling iron ore too dearly; they have their own iron ore. Certainly none of the basic industries can plunder them, because they already are provided with all that they require. The reason why they have been able to produce these extraordinarily cheap bridges is partly because of their skill, and partly because we have been able to give them an advantage in our fiscal arrangements and negotiations which they would not otherwise have had.

It really is absurd to suppose that the iron and steel industry has not benefited largely from our fiscal policy. You have only to go to Sheffield to see it. There you will see works which were lying almost idle only three years ago now working to between 90 and 100 per cent. of their capacity, producing steel for all sorts of industries and selling it at prices which are not extortionate. Indeed, by working up to very nearly 100 per cent. of capacity they have been able to produce cheaper than ever before. Turn, if you like, to the Midlands, and you will find the more highly developed iron and steel trades are now working on a profitable basis. There has had to be a lifting of whole works from one area to another, or else works have had to be closed up altogether because they could not run at a profit. It is the right, and the duty, of those who control our industries to plant them in the areas where they have the best chance of succeeding. That economic pressure is one of the best tests that anyone could devise. Now, the iron and steel industry does not consist solely in the production of bridges, but also iron and steel of the qualities used in the Midlands, and steel plates for ships, and the raw materials of many industries. The iron and steel trade produces the raw material for our engineering industries; and we still remain the greatest engineering country in the world, with the largest exporting trade.

I do not know whether any of my hon. Friends imagine that by the policy we have practised in the last three years we have done harm to the export trade. If they do, let me disillusion them at once. There has been a very remarkable change in some of these basic industries. We find that the export of iron and steel and manufactures increased, as between 1932 to 1933, from £28,000,000 to nearly £30,000,000. Manufactures of non-ferrous metals have gone up from just under £7,000,000 to just over £12,000,000. I turn to vehicles, one of the greatest and most growing and prosperous of our export industries. The export of vehicles has gone up from £20,700,000 to £21,700,000. And so on through the list. The wool trade has gone up from £24,000,000 to £25,500,000. I know that is a satisfaction to my hon. Friends below the Gangway.

Now there is one very serious exception, and here I come to another great basic industry—the cotton trade. I cannot say that the cotton trade is holding its own or gaining ground in foreign trade. The problems of the cotton manufacturers and exporters are peculiar to themselves. I regret I was unable to be in the House last night when the subject was raised on the Adjournment—an inadequate opportunity I may say; but I was in close touch: indeed, I was advocating at that moment the use of greater research in the textile industries—I hope a subject not un-germane to our discussion here this afternoon. The truth is that in the cotton trade you have not one problem but about 50; and one thing common to all of them is that whenever the standard of efficiency falls below a certain level the cotton trade, being one of the most sensitive in the world, reflects that fall in the figures. Do not let the House run away with the idea that it is because of the inefficiency of the cotton industry that there is this misfortune of shrunken export demand. You find it running through nearly all sections of the cotton industry, but it occurs especially in the coarser section.

Now what can be done for that? Some, I know, think the one thing is to hurry along and denounce our treaty with Japan and regard the thing as solved. That would only be the beginning of our troubles. It may be necessary for us to revise our commercial relations with Japan, but do not let us be hurried into doing what may be of more harm than good. Japan is a great purchaser of the products of some of our export trades; she is one of the most important customers of one of our Dominions for raw material in the purchase of wool from Australia. Her purchases of wool from Australia are the next in quantity to our own enormous purchases. We have to bear all these facts in mind, and if I am not able to come down every day with an answer ready-made to show what is going to happen Co bring about an increase in the export trade in cotton, the House will believe me that it is not because I lack the zeal, but because I would rather act with certainty and discretion, and avoid making mistakes. I am more anxious to act with discretion and in full communion with those who can speak for the cotton trade than I am anxious for mere Parliamentary advantage.

These troubles by which we are surrounded, in the big basic industries, are a constant worry to us. They take, in some districts, the form of whole towns being out of work. Far and away the most striking of these misfortunes is to be found in the town of Jarrow. I know Jarrow very well. I know it from the time of my childhood. Some of the ships built for my firm were built at Jarrow, by Palmer's. I have followed the record of that great firm for many years past. What were the causes of its decline? Far too much was pulled out of the profits by those who were controlling it in the days of its great prosperity. Such an undertaking can only be carried on by having at your command large reserves. You must be able to make your purchases on a large scale, and to run risks in the taking of orders, and, above all, you must be able to tide over periods of depression. Unfortunately, they had not fat on which to live during the lean years. What has been the result? Palmer's has closed.

I have been looking into the Jarrow problem, and the conclusion I come to is that there is nothing to be gained by giving Jarrow the impression that Palmer's can be revived. I do not think shipowners are likely to give orders to Palmer's at the present time. The precarious financial position of Palmer's—because the firm is in the hands of the Receiver, I understand—makes it impossible for orders to be given. Would it not be very much better to make a clean sweep of that as a shipyard, and throw open to the world for sale what is one of the finest and most convenient sites anywhere in Europe? You have deep water right up to the quays; you can bring up by rail or water all your raw material. If new industries could be attracted and the ground made available, it would be possible to plant there some of the most prosperous of our new industries. How are we to get them there?

It is often a dangerous thing to discuss in too great detail the misfortunes of these areas. Do not let us give the dog a very bad name. It is true the Jarrow rates are up to 17s. 9d. in the pound. They would be far less if other arrangements were made about rate burdens, and they could be reduced if more people were employed and new works could be set up. Let us point out advantages. In other parts of the country development associations have been set up which have been advertising advantages—the advantages of South Lancashire, for instance. After all, South Lancashire is very well in its way, but why cannot we make Tyneside a little more attractive by advertisement? There is a development association there, but the local authorities are not backing it up. I do appeal to them to join hands, believing they are all involved in the prosperity of that industrial area, and they all ought to do their best to attract into that area new industries which are on the look-out every day in the week for particulars of good sites where raw material is close at hand, where fuel is handy, and where the rates of labour are right and so on. I suggest that Jarrow people should not only do their best to develop their area and make it well known by advertisement; they should do their best to work in the closest possible communion with other local authorities. Maybe the other local authorities are a little standoffish, but under pressure I think they would get rid of that unfortunate tendency. If we regard Jarrow—as we should—as being something more than a purely local problem, we shall see them through their-troubles before very long.

I should like to point out how much can be done in the employment of labour by the development of new industries. The House has not discussed very much what has been done under the horticultural orders. The protection we have given to flowers grown in this country and vegetables cultivated here has had a great deal to do with the state of Cornwall at the present time. In Cornwall there are a very large number of unemployed miners. A considerable number of those are now employed on farms where intensive culture is conducted on a very large scale. Only the day before yesterday I had the pleasure of an interview with some of the horticulturists of Cornwall, and from figures they gave me it was amazing to find that on a farm of 600 acres, under intensive culture of the highest type which was impossible profitably on that scale a few years ago, the wages bill in the course of the year was no less than £35,000. The class of labour employed there was formerly employed in the Cornish mines. These are changes that are all to the good, and they do show that under guidance, and with pressure and assistance, we can foster these new industries and may find actually better ways of employing our people than the basic industries on which we have relied in the past.

Would the House permit me to say a word or two with regard to our Trade Agreements? I desire to do so, because I am sure the House does not wish to be at all unjust in its judgment on these Agreements. I am sure that there is no desire in any quarter to belittle them, and I do not want to over-praise them, but I want to point out the good that has come from them. Let me tell the House what has happened in the case of cotton piece goods. I take cotton first, because I think it is the most difficult of all our industrial problems at the present moment. Under the Swedish Trade Agreement we have seen a growth in the exports of cotton piece goods from the United Kingdom. As between the six months ending in December, 1932, and the six months ending in December, 1933, there has been a growth from 7,159,900 to 10,535,600 square yards. I venture to say that that is a direct result of our Trade Agreement with Sweden.

In the case of Norway, the increase is not so marked, but there is an increase already, and it will be more, because the Norwegian Agreement is coming to fruition. Denmark, in the six months ending December, 1932, bought 15,400,000 square yards, and in the corresponding six months of the following year the figure rose to 23,160,000. In the Argentine, where the influence on our cotton trade has been rather indirect than direct, there has been a rise in sales from 66,000,000 to just on 80,000,000 square yards in the same periods; and even in the case of Finland, one of our small customers, there has been a con siderable percentage rise during the last six months. In coal we have seen a con siderable rise. In some areas, and in South Wales in particular, they do not appear to have obtained any benefit from our Trade Agreements—

Mr. DAGGAR

None at all, or certainly very little.

Mr. CHARLES EDWARDS

I have not seen any.

Mr. RUNCIMAN

The time may come when it will be felt in South Wales, as undoubtedly it is being felt on the North East Coast. I am not exaggerating when I say that an increase of over 3,000,000 tons on our export coal alone in the course of 12 months is directly due to the Scandinavian Agreements which we made. I could take one industry after another and show the effect of our policy.

There is one thing that I would like to say. I regret that, in the course of answering a question a few days ago, I blurted out a preposition with perhaps undue emphasis. I said that everything was going up. It was very nearly correct. I propose to repeat it by saying that the woollen and worsted trade is going up, motors are going up, machinery is going up, rayon is going up, leather manufactures are going up—and so I might go down the list. How much of that do we claim has been directly due to our influence? I must say we are entitled to claim a great deal. We have seen all over the world a tendency to shrinkage proceeding month by month more acutely—

Sir HERBERT SAMUEL

No, not at all; not recently.

Mr. RUNCIMAN

There has been a great shrinkage in every European country. I would like to know what the exception is.

Sir H. SAMUEL

Not recently.

Mr. RUNCIMAN

I do not know how the right hon. Gentleman can know that. Taking the year 1933, we have a better record, and certainly a better record in manufactured exports, than any country la the world.

Major Sir ARCHIBALD SINCLAIR

The right hon. Gentleman said that in every country trade is shrinking. That was his first statement. There was a report produced by the Economic Committee of the League of Nations, referring to the last quarter of last year, which showed that in 21 out of 27 countries unemployment was going down.

Mr. RUNCIMAN

I am talking about the export trade, and I think we may very well be proud of the fact that, while others cannot stem the stream, we have been able to do so. It may be that there is still a very large number of people unemployed, and I agree that that is ultimately the best test. The employment of our people is, and ought to be, the test of our prosperity. But I say that we are not likely to aid prosperity by attempting to run all industry as a State concern. One thing that we can do is to give our industrialists and manufacturers a chance. What we can do for our transport people remains to be seen, but I trust it will lead to the opening of trades now closed against us. I am positive that we are not ruined. Our energy is not exhausted; our ingenuity has not come to an end; and if, by the application of character and ability to our problems, we can succeed in holding our heads above water, it will be a state of things of which any country in the world would have reason to be proud.

7.25 p.m.

Miss WARD

First of all, I should like to congratulate the right hon. Gentleman on his very clear and concise statement; and, if I may say so as a fellow-Tyne-sider, I think Tyneside will take very great comfort from the information that he has given with regard to shipping. I hope that before very long the right hon. Gentleman will be in a position to give us a clear statement of the decision of the Government on this matter, and to indicate to us what the line of policy will be. I know that, when the North country people read in the Press tomorrow the report of the right hon. Gentleman's speech, they will feel that there is some very real hope for the future.

I rise specifically to ask whether the Government will consider the possibility of expediting the placing of the Admiralty contracts which are due to be allocated after the confirmation of the Navy Estimates last Monday? I do so for two reasons. In the first place, in the light of all the indications of a trade revival, I would venture to suggest that this is the psychological time at which to give every stimulus that is possible to our basic industries. The President of the Board of Trade must, very rightly, derive great satisfaction from the trade figures, but we know that he is aware of the great disparity between the manufacturing figures and the figures for the basic industries, and he must also be very disquieted by the slowness of the world trade revival. It seems to me that, outside of definite policy control, there is very little material advantage that the Government can give to our basic industries, and I see in the placing of Admiralty orders a very valuable contribution to these industries.

If I might elaborate the point very shortly, I would like to refer first of all to shipbuilding. It must have been of enormous benefit to the shipbuilding industry to have had in our yards all over the country orders to the value of £25,000,000 as a result of the naval contricts placed in accordance with the 1912–13 and 1913–14 programmes. That was very different from the sum of roughly £7,500,000—though I know there are still two cruisers to be allocated—under the 1932–33 and 1933–34 programmes. The difference in overhead charges must have been simply colossal, and, when we went out to try to obtain orders in competition with world shipbuilding, the advantage to our yards of having those Admiralty orders must have been enormous. It does seem to me that we need every possible encouragement when we are fighting for our very life to try to obtain contracts in competition with other shipbuilding countries, which have subsidised industries, and that the placing of Admiralty contracts at this moment might be of the utmost benefit.

I should like also to refer very briefly to the iron and steel industry. Thanks to the Government's policy of Protection, and to the real attempt which has been made by the industry itself to reorganise on the best possible lines, the iron and steel industry is slowly emerging from a state of very real trade depression, and I feel that, if we could find some method of stimulating it at the right moment, we might do much to press it on towards regaining its former position in world trade. In a minor degree the same applies, of course, to the coal-mining industry. At the moment when we should implement our Trade Agreements in the best possible way, offering the best possible class of coal, properly graded, and that we should, above everything else, maintain a reasonable price, for the national benefit, for the benefit of the collieries, and for the benefit of the miners' wages, it is essential that everything possible should be done to keep the coal-mining industry alive. I could go on over the whole range of industries, but I think I have said sufficient to indicate that I hope that the Government will consider this one suggestion.

If I may anticipate criticism, it may be said that this is an unusual procedure; but I venture to say, I hope without offence, that what the man in the street is wanting at the moment is definite and direct action. I cannot see that there could be any risk, and I am sure that, at any rate on the North-East Coast an announcement by His Majesty's Government that they would accelerate the placing of these orders would be welcomed with tremendous acclamation. My second reason for asking for this expediting of orders is that we are losing such a large number of skilled men from the shipbuilding industry. I am not now referring to all branches of engineering, including marine engineering, but, so far as shipbuilding itself is concerned, over the last three years we have lost 40,000 men—that is to say, 20 per cent. of the total shipbuilding population registered at the exchanges as shipyard workers. This is a tremendous loss to the industry.

I am not going to-night to enter into the very vexed question of allocation of Admiralty orders, but I have been waiting for a very long time for the opportunity of referring to the position of shipbuilding in Northern Ireland. I have no desire to tread on the susceptibilities of the Northern Irish Members, because we all work as one country under one Government, but it is only right that I should lay before the House the very legitimate grievances of shipbuilders in this country because, if we are going to operate as one country, if we have co-relationship in the financial arrangements as between Northern Ireland and this country, it is only fair that, so far as our basic industries are concerned, we should have equal competitive terms for trying to obtain contracts. I should like to explain the position. Over the last 10 years, under the Loans Guarantee Act, the Northern Irish Government was guaranteed something like £12,000,000, and the amount that has been repaid is something in the nature of £3,500,000. I have frequently seen statements in the Press that the guarantees are not made to shipbuilding as such and of necessity there is no pressure put on anyone to build in Northern Irish yards, but I think a very ordinary survey of the situation, and common intelligence, must bring one to the conclusion that, if shipowners desirous of extending their fleets but short of money can go to any yard in Northern Ireland and obtain long-term credits, they are more likely to place their orders in Belfast than in this country.

In the few months preceding the end of 1933 there were nine orders placed in Belfast compared with one on the Tyne and, in terms of iron and steel alone—I am trying to look at this over the whole range of industries—it was something like 40,000 tons of steel to Belfast compared with 3,300 tons to the North East coast. Worked out in terms of employment, it meant 50,000 men weeks in iron and steel alone for Belfast orders, compared with something like 4,000 men weeks in iron and steel alone on the North-East coast. An examination of the figures of unemployment in Belfast, in Scotland and on the North-East coast might, I think, assure the Government that, if we are to keep all our areas going and to give everyone some share of prosperity, there are on the books of Belfast, according to the Ministry's index, which I have consulted recently, something like 4,000 unemployed shipyard workers compared with 30,000 on Clydeside and 31,000 on the North-East coast, and, if you take iron and steel, coal mining and marine enginering as well, the unemployment on the North-East coast is greater than in the whole of Scotland in these industries. The question of Northern Ireland causes legitimate grievance to shipbuilders in this country, and I should welcome a plain statement as to exactly what the position is with regard to the money that is being guaranteed, and whether the Government could not consult Northern Ireland and see whether there could not be some common policy in order that orders should be fairly competed for and, when there are any Admiralty orders going, that they should be fairly and logically placed.

To turn to another point, I have had very strong representations from the Boiler Makers Union, which is the chief union for shipyard workers in my Division, and they are extremely anxious that in the training centre, which is situated in my constituency of Wallsend, an opportunity should be given to the shipyard workers to learn the process of electric welding. I have tried to argue their case with the Ministry of Labour, and I was told that the negotiations between the shipyard workers and the employers' federation were very delicate negotiations, and the Ministry of Labour did not feel that they could make any statement on the matter. It is no business of mine to interfere in trade relations between employers and employés, but, as the dispute is as to whether there should be a new union or whether the electric welders should belong to one of the old unions, I cannot see that they will be in any way affected by the creation of the new electric welders, whether they belong to one of the old unions or to a new one, whatever may be decided as the result of the negotiations. All over the North-East coast you have large groups of skilled shipyard workers who may have worked for 10 or 20 years at their trade, and now they see, as the result of an entirely mew process, the chance of ever obtaining employment in the future, however prosperous the industry may become, absolutely negligible, and it seems to me that their contention that facilities should be offered at the training centre to teach electric welding is a most admirable suggestion.

I was told that it was quite impossible to turn out finished electric welders. I have gone into that extremely closely, and I rind that many young men who have been trained lat these establishments have done admirable work and are now earning first-class wages. I am all for fighting tooth and nail to the utmost of my capacity to persuade the Ministry to lay out the necessary money. Surely any capital expenditure is justified if you are able to create in a body of industrial workers, who slowly see their work slipping away from them in the future, a new life and give them a chance of becoming skilled workers in this new process, which is obviously going to be the process for shipbuilding in the future. It seems to me that that is a Very definite contribution to the great problem of unemployment. I hope that we shall before long have from the Government a definite statement as to what their proposals are with regard to those persons who will not be able to find employment in their normal industries again. We are thoroughly satisfied with the progress that the Government have made on normal commercial lines but what every one wants—the trade unionist, the industrialist, the taxpayer and individual Member of Parliament—is a strong constructive policy on the lines already suggested by the President of the Board of Trade.

7.39 p.m.

Mr. MABANE

Until the speech of the President of the Board of Trade this Debate had a certain elegiac quality. I am sure his speech must have increased the admiration of all Members of the House for one who combines the quality of the highest business acumen with a gift of oratory that we must all envy. He infused a spirit of optimism into the Debate which is justified and which had previously been missing. It has been continued by the hon. Member who has just spoken. So far the Debate has been conducted mainly by representatives of the depressed areas. I am not such a representative and I do not interpret the Debate as one merely confined to the interests of the depressed areas. Unemployment, surely, is a problem which concerns all parts of the country and to which Members representing all parts of the country can contribute. This is the first time that I have intervened in a-Debate specifically concerned with the problem of unemployment.

In the past I have felt that, however anxious we might be for some spectacular method to be employed for solving the problem, the wise have recognised that any spectacular method was likely to provide results which would not be permanently beneficial. Almost up to the present moment the Government has been compelled to concentrate its attention on rebuilding the foundations of national prosperity in order that, when the time came for putting the superstructure on the rebuilt foundations, the foundations might hold secure. In effect, the positive work of restoring the national wealth of the country has not yet begun. Fortunately, in the rebuilding of the foundations of national prosperity there has been some alleviation of unemployment, but, substantial though that alleviation has been, we must all agree that it would be wrong for Parliament now to rest content. The time, surely, has just come when positive instead of mere negative action ought to be undertaken.

In past Debates I have indicated that I should like positive action to be undertaken earlier rather than later. I am one of those who have been given the title of "expansionist," and I am not ashamed of that title. It has not implied any lack of appreciation of the work of the Government, and particularly of the Chancellor of the Exchequer, that I have, together with some other hon. Friends, endeavoured to remind them at all times that, as soon as the moment comes when positive action could be undertaken, it should be undertaken. I was impressed by the declaration of the Prime Minister on 16th February last year when he referred to the work of the Government as divided into two parts, "first in contracting and then in careful and scientific expansion." At various times since then I have pressed him to say when the second part of that work the expansionist part, would begin and precisely what was the nature of the expansion that would be undertaken. I had rather the expansion was undertaken earlier than later, but I am sure that if the House and the country can look forward to an expansionist policy being pursued vigorously from now on, and then we shall have no cause to complain. The House can take comfort in the fact that there are encouraging signs that the time for mere economy has past and that, instead, our actions are to be guided by a broader optimism. Having passed through the necessary period of economy, the Government seem prepared now to spend, and many, perhaps the majority, of Members will agree that there are many directions in which the Government can spend money wisely so that the national well-being can be promoted both profitably and substantially. Some of those ways involve direct action by the State and some involve assistance to private industry. Various methods have been detailed in this and previous Debates.

If I may turn to a different topic, I have always understood that Members can best contribute to these Debates by making suggestions for action in directions which have not hitherto been contemplated, and that, in so far as they have experience in particular directions, the Government are anxious that they shall draw on their experience in order to make specific proposals. It was in the hope and belief that I have a specific and practical proposal to make that I have intervened in the Debate.

I think it will be generally agreed that industrial revival must start in the retail shops. The consumer is the ultimate arbiter of our industrial destiny. If the consumer refuses to buy goods, or if he has no money wherewith to buy goods, the retail distributor has no orders that he can pass on to the manufacturer, the manufacturer has no orders that he can pass on for raw materials, and industry languishes. Retail distribution, in short, is the key to the industrial situation. If by any means we can increase the volume of goods sold in the retail shops, the benefit must be felt throughout the whole of our industrial organisation, and the effect on employment must be substantial. It is surprising how little attention has been given to the basic problem of distribution by the Government or the House of Commons. Attention has usually been concentrated on the productive side of industry. Not long ago efforts were concentrated on increasing production. Now that it has responded to the stimulus of invention and effort and conditions of glut have arisen, efforts are being made to restrict and control production. The distributive trade has not come into the picture at all. That is a grave mistake. A very material contribution to the solution of our present difficulties could be made if proper attention were given to it.

There is a bad tradition in this matter. It has been almost a habit to regard the retail distributor as a curious sort of parasite whose sole purpose it was to buy goods and, without adding any effort of his own, to sell them at an exorbitant profit to a defenceless public. He has been regarded as a creature against whom the public must be protected. That is wrong and a dangerous view—dangerous because as long as it is held there can be no proper approach to this question of distribution.

There may be an explanation of this curious attitude to the problem of distribution. Not long ago distribution was in the hands of the small shopkeeper-craftsman, and grocer or Manchester warehouseman, who set out to supply the raw materials for home industry. The evolution from this rather primitive stage to the present has been rapid, and statesmen, perhaps, have not realised the significance of the great new process of distribution that has sprung up under their noses. To-day the distributive trade is the largest single industry in the country by the tests of numbers employed and of turnover. It is the real key to the industrial situation, and yet no consideration is given to it by the Government as an ally in the important task on which they are engaged of reducing unemployment. I want to urge therefore as a practical suggestion that this state of affairs should be immediately remedied and the business of distribution exalted to its proper place in the economic hierarchy so that in collaboration with the Government the distributive industry may make the valuable contribution it is able to make towards the solution of the problem with which we are occupied to-day.

I am anxious to impress on the House the magnitude of the problem. It is estimated that the gross retail turnover in this country is £1,800,000,000. If means could be found to enable that vast sum to be spent more economically and efficiently, there can be no denying that the effect on industry and therefore on employment must be very considerable. I have given very careful consideration to this problem, and I have been guided by my own experience as a retail distributor, and I am satisfied that, largely because the problem has been neglected in the past, the possibilities of increasing the efficiency and economy of retail buying are enormous. I want to indicate the sort of gain that I think might be achieved. Let me take both the general and a particular example. At present £1,800,000,000, as I have said, is spent annually in the shops of this country. If, by means that I will suggest, the prices could be reduced by 10 per cent., then the same amount of goods would be purchased for £1,620,000,000, and there would be £180,000,000 left over for further purchases. That is a prodigious sum, and nobody will deny that if you could put £180,000,000 into circulation applied to the purchase of consumable goods that otherwise would not be purchased, you would apply a tremendous stimulus to manufacturing industry apart from the enormous influence on the standard of living.

If I may now take a particular example, I will take that of a working man with £3 to spend in the course of a year on the purchase of boots for himself and family. Suppose he spends 12s. a pair for boots and therefore buys five pairs. If, as I suggest, they can be reduced to 11s., he can still have his five pairs of boots and 5s. over to spend in some other manner and provide excess employment in another industry. Such a change I believe is definitely possible, and in no other direction is there such a useful opportunity of securing real and tangible benefits to the community.

Sir JOHN HASLAM

I do not want to interrupt the hon. Member unduly in his elaborate programme, but on the question of the profits of the retail trade has he gone into the question whether it is possible to reduce prices by 2 per cent. in the grocery or provision trades? The most any organised body of people ask for in profits on any commodity is 15 per cent. gross. They do not get it but they ask for it, and yet he is building an elaborate case to show that profits can be reduced 10 per cent. As one who has devoted a considerable portion of his life to the trade, I can only say that he is wrong in his calculation.

Mr. MABANE

I Have not referred in the least to profits, but perhaps the hon. Member will let me develop my argument. The one way it cannot be done is by abuse of the retailer, or by endeavouring to police him with consumers' councils and the like. The approach must be different. The Government ought to set out to secure the distributors of this country as worthy and valuable allies. They are ready to respond to the invitation. Whatever may have been the case in the past the distributors of this country to-day include some of the best, most far-sighted, and successful men of business in this country, as eager as anybody to play their part in an effort to restore the national position. I want to ask the Government to enlist their aid in a more definite and concrete manner than has been attempted in the past.

There are two matters on which I wish to make definite suggestions. The first is the broad general matter of co-ordination between producer and distributor. At present there is no sort of co-ordination save by the accidental method of competition, yet quite clearly it is the producers who can best guide production into the channels into which it ought to go, and who can best indicate how that which is produced can be brought to the use of the consumer. Waste and inefficiency result from this absence of co-ordination and to some extent the prices to the public are enhanced. I suggest therefore that it would be wise to create, in collaboration with organised producers and distributors, a body whose business it would be to create co-ordination between the two parties. However unfortunate may be the results of co-ordinating committees in other spheres, here it would be valuable to the community.

The second aspect of the problem is more detailed and particular. It is concerned with the actual methods of distribution. Modern distribution is really an upstart industry. In many respects it inherited from the past chaos and inefficiency. In many respects its methods are still empirical. As many of us engaged in it know, there are many varieties of method of distribution. Some are highly efficient and some, with a surface appearance of efficiency, are inefficient, and it is time that they were examined. I suggest to the Government that the time is at hand when it will be worth while to appoint a Royal Commission as wise and powerful as can be chosen to investigate the whole problem and make recommendations which I am satisfied would be most valuable to the industry as a guide for future development. Such a commission would discover many ways in which the action of the State, not in any sense by control or interference, but by careful assistance, can contribute to the results I want to see. There is no denying the fundamental truth of the thesis I am stating, that if the costs of distribution are reduced there would be a great benefit to industry and also the money of the people would go a good deal further. If more orders are passed on to industry more employment is given both in the direct manufacturing industries and in the basic industries.

I hope the House will feel that, although I have touched on a subject that is novel, I have not been avoiding the subject of this Debate. I am one of the few who, being directly concerned with the distributive industry, recognise its vast importance in the industrial process, and that may excuse my insisting that this House should give it proper consideration. I am satisfied that if the House is not prepared to break new grounds in its search for the solution of this problem of unemployment the pessimistic predictions made last week by the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) may come true. It may be true, unless new ground is broken that there will be a core of unemployment up to 1,000,000 men lasting for 10 years. But I have not lost my optimism, and I do not believe it is true. If I have attempted to break new ground and to bring to the notice of the House an aspect of the problem that is not ordinarily brought to its notice I am sure in the belief that it is in the interests of the unemployed that some attention is given to what I have said. If that is done, then I shall not have made my effort in vain.

8.0 p.m.

Mr. CHARLES BROWN

I was very much interested in the attempt which the right hon. Gentleman the President of the Board of Trade made to reply to the speeches on my hon. Friends the Member for Chester-le-Street (Mr. Lawson) and the Member for Abertillery (Mr. Daggar). It does not need very much to cheer the drooping spirits of supporters of the National Government in these days if they can be cheered by the speech of the President of the Board of Trade. I am always interested in the surveys which the President of the Board of Trade makes periodically of the trade and industry of the country. The right hon. Gentleman was perfectly entitled to make all the capital he could for the Government out of what they had been doing during the last two and a half years, but some of his arguments astonished me, especially when he was dealing with what he called the basic industries. For instance, he told us that the Trade Agreements into which the Government have entered have been responsible for an increase in the export of cotton piece goods to the extent of several million yards. When he mentioned that fact there came into my mind the figure of the export of cotton piece goods from this country in 1913. If my memory serves me right it was well over 7,000 million yards in 1913. At the present moment the figure is less than 3,000 million yards. I tried to make a calculation as to how long it will be before the Government make up what has been lost between 1913 and 1933, and I estimate that it will be a century before they accomplish that object.

The other reference which the right hon. Gentleman made, to coal, seemed to me to be almost on a par with what he had to say about cotton. He cleverly evaded the main point at issue in this Debate. My hon. Friend the Member for Chester-le-Street opened the Debate with a very moving description of the condition of the distressed areas, and recounted the attitude of various Governments towards this problem in the last six or seven years. My hon. Friend made special reference to the year 1928, and I heard someone behind me suggest that he should have talked about 1930 and 1931 and not 1928. I think my hon. Friend was quite right to talk about 1928, because even in official documents and among supporters of the National Government the most we get in the way of optimism is that at some distant time in the future, it may be five, 10 or 20 years hence, we are to get back to the prosperous condition of 1928, which is now said to have been the most prosperous post-War year. All that we are now led to hope for is that if all the plans of the Government turn out as they expect, if everything to which they turn their hands proves as effective as they hope, at some time in the future we may get back to something like the conditions in 1928.

My hon. Friend the Member for Chester-le-Street was quite entitled to point out that even then there were more than 1,000,000 unemployed in this country, and that even then there was the problem of the distressed areas. Nothing that has fallen from the lips of the President of the Board of Trade suggests in the slightest degree that the Government are turning their attention to this special problem of unemployment. Take the statement made by the Parliamentary Secretary to the Ministry of Labour some time ago when speaking on the Unemployment Bill. He had to tell us that we had reached a stage in the economic life of the country where it had to be confessed that 15 per cent. of the unemployed cannot be kept within an insurance scheme of any kind. These people are talked about as people who "fall out of insurance." Someone has used the expression "surplus labour" this afternoon, and has commented on the tragedy wrapped up in that phrase. There is just as much tragedy behind the statement that certain people cannot be kept within an insurance scheme.

I want to comment on some other remarks that the Parliamentary Secretary made on the same occasion. He gave us what some may call an explanation of the problem of unemployment, but I call it a description. He told us that unemployment arose from three main causes: one, fluctuations in individual industries; two, the trade cycle; and, three, decaying and dying industries. That is a very good description of what happens. But it is not an explanation of unemployment; it is a very picturesque description. Will the Parliamentary Secretary tell us later why there are fluctuations in individual industries? Will he tell us what is the explanation of the trade cycle? Will he tell-us why some industries decay and die? Will he explain those processes rather than merely describe them for us? I shall be very glad to hear him. It is not for me to explain them, but I am entitled to call attention to the results of the causes which he so admirably describes. We all know very well that the main problem in the distressed areas arises from the decaying and dying industries. There are no new industries.

I was surprised at the speech of the President of the Board of Trade this afternoon. He was quite entitled to make it and he did so because the spirits of his followers need cheering up. I was surprised that a man with his wide knowledge of trade and industry should attempt to cheer up the spirits of his followers by talking about growing daffodils to replace the dying cotton industry and the dying coal industry. That was what he did in effect. All these things about growing flowers are admirable in their place, and we like to see them go on, but to put that forward as something calculated to make any serious impression upon the problem of the distressed areas is wholly beside the mark. It may play a minor part but no more.

So far as the Government are concerned there is no evidence that they are in any way turning their attention seriously to the problem of the distressed areas. They are banking for the moment on what I call the general recovery that is taking place. In the early days of the National Government, when things were going worse than when the Government came in, we were told that the worsening conditions were due to world causes. The Lord President of the Council talked like that; we were told that the worsening conditions were due to world causes over which the National Government had no control. Now that there is a general recovery and we are sharing in it, the National Government comes along and says, "Oh, look, we are doing this," whereas in fact it is the general recovery in which we are sharing. The Parliamentary Secretary to the Ministry of Labour shakes his head. Of course he wants to take credit for the Government to which he belongs. That is quite natural, and I understand his pride when on some public occasion he calls attention to the fact and attributes it entirely to what the National Government have done. We know, however, that the recovery at the moment is quite general and that we are sharing in it. My point is that the Government are relying on that to deal with the problem of the distressed areas and with the hard core of unemployment.

My hon. Friend the Member for Abertillery spoke of the industrial survey of South Wales. Other surveys have been made. There has been a survey made of Lancashire, another for the north-east coast and another for the south-west of Scotland, and they all have been published by the Board of Trade. All the conclusions of these surveys are drawn on the assumption that at some time in the future we may have prosperity on the 1928–1929 level. Even if we have that, we are told that we shall still find in Lancashire 150,000 adult workers who will never again get a job, 105,000 in the south-west of Scotland, and 83,000 on the north-east coast. The Government know that even when the policies they are pursuing have fructified to the full, when we have shared in the world recovery to the fullest extent, this problem will still remain.

Knowing these facts we are entitled to ask what are they going to do about it? Have, they any definite proposals to deal with this hard-core, long-term unemployment? Up to the moment we have no evidence that they have any proposals and we are entitled to indict them for their lethargy and complacency. Someone last night asked what precisely "complacency" meant. It is evident that the Government are complacent on the problem of the distressed areas. I cannot find any other word with which to describe their attitude. They are doing nothing with the problem at the moment. They are playing for time, waiting for the general recovery to expand and develop. Perhaps they are entitled to anticipate that, but the whole course of capitalist industry only tells us that even if there is what is called a trade boom, it will be followed by another slump, and probably a worse slump than we have ever seen.

I do not want to be a pessimist. I try to be as optimistic as I can in view of the general industrial conditions. But I cannot shut my eyes to the whole history of capitalist industry. That has been the whole story, for the last 100 or 120 years, of what are called trade cycles. We know that booms are followed by slumps and that periods of prosperity are followed by periods of depression. What are the Government doing to prevent a period of prosperity being followed by depression? Are they going to allow things to take their course and pay no attention whatever to this long-term unemployment in the basic industries which we have in our midst? I suggest that they might raise wages all round and increase the consuming power of the great masses of the people. They might shorten the working day and reduce the length of the working life, and they might, in addition, plan and regulate the rest of the industries of our countries and prevent these periodic waves of prosperity followed by adversity, and along those lines they might make some impression upon the long-term unemployment which inflicts such unnecessary hardship and misery upon so many hundreds of thousands of our fellow countrymen.

8.17 p.m.

Mr. LOFTUS

I do not propose to deal with the problem of the distressed areas, because it is part of the larger problem of permanent unemployment. I agree with the hon. Member for Mansfield (Mr. C. Brown) that trade cycles and periods of prosperity will be followed, under present conditions, by periods of slump and increasing unemployment. Therefore, while we welcome the very-great reduction in unemployment figures during the last 12 months, and congratulate His Majesty's Government upon them, we cannot close our eyes to the fact that under present world conditions that improvement may not be permanent, and that, even if it is permanent, mechanisation may displace a great many of the hands who would be re-employed in the same trade output and also the vital point that there will come some time a period of decreasing trade and probably rapidly increasing unemployment in future years. Looking at the problem as a whole, it appears to me that we have not sufficient facts on which to frame a long-term programme for unemployment. We do not know definitely the basic fact whether modern science and modern mechanisation is displacing more men than the new industries can re-absorb. We do not know definitely the rate of the displacement, and I suggest that the first information required is to get some committee composed of such men as mathematicians, technical experts and engineers to ascertain the effect of modern mechanisation and modern scientific machine production, whether it is displacing men at a much more rapid rate than they can be reabsorbed in new industries and whether that rate keeps on increasing. Such a committee as I suggest could in two, three or four months present a report. It could examine conditions in the United States, Germany and this country, and, if we had such a report, we could frame our long-term policy when we had the facts before us.

I believe that mechanisation and the application of science to industry to-day is displacing employés at a much greater rate than they can be reabsorbed in new industries. I remember that two years ago the New York or the Washington correspondent of the "Times" pointed out that if in 1932 America suddenly attained the maximum output of 1928 and 1929, 6,000,000 people would not be reabsorbed into industry. That meant that in three years in one country alone 6,000,000 people had been displaced by the machine. I believe, from conversations I have had and inquiries I have made in all sections of industry, that this displacement of the human element by the machine is proceeding at an ever-increasing velocity. I suggest that it is quite possible that we have merely entered a new era. It is possible that those are right who say we have entered a new era of potential abundance. For thousands of years humanity and the governors of nations and of mankind have had one fear. They have been obsessed with the fear of scarcity. They have had to face the fact that only by intense effort would they secure a bare sufficiency. It has been suggested, and I believe it is true, that during the last generation science and scientific machinery have suddenly created this new world of potential abundance, and that for the first time in human history it has abolished the fear of scarcity but that our minds to-day are still full of the old ideas and are not attuned to this new world, and that that is the cause of the despondency and the unemployment of to-day. I suggest that it is quite possible that it is the realisation of this fact, the realisation in a dim unconscious way of the idea of potential abundance, that is responsible for what we call economic nationalism, that each nation in this unconscious way realises the power modern scientific machinery is giving to them and therefore is resolved to produce the utmost possible wealth for its own use and consumption, and that whatever we do we cannot reverse this tendency which we call economic nationalism.

I find that there is a tendency in certain journals, in certain speeches and even in certain speeches by economists, to speak as if the object of the economic activity of man fostered by Governments is to find employment for everybody. I suggest, pressed down and suddenly faced with this terrible problem of unemployment, we are apt to distort our views and to think that the object of our economic activity, to be aided and fostered by the Government, is to find the maximum employment possible for all.

It was pointed out long ago by Adam Smith that the only object of economic activity was consumption. I feel that the whole world is so harried by this problem of unemployment that it is apt to forget this very necessary dictum of Adam Smith. As regards the remedy suggested, we hear much of rationalisation. That, of course, means the installation of more efficient and better labour-saving machinery. If the object of rationalisation is to produce increasing abundance and consumption, it is an excellent object, but, if it is put forward as a cure for unemployment, it is obviously going to produce rather increased unemployment.

We hear also much of national planning. It always appears to me that the weakness of national planning is that it is concerned with production. It plans production. It tries to solve the problems of production. I submit that the problems of production are solved. The very fact that we all have in sight this potential abundance proves that it is not production that we must concern ourselves about, but rather the problem of increasing consumption, increasing purchasing power concurrently with that constantly increasing efficiency of production given by science and machinery. It is also suggested that we should have public works developed by loans. Again, that is an attractive policy. It is a policy which is approved by hon. Members, provided those public works are reproductive. That policy, recommended by the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) in his wireless speech the other night, does give purchasing power, as is being given in America to-day, but the loans have ultimately to be repaid. That is the fatal flaw, for when they are repaid it means taking away purchasing power and producing another economic crash.

I will not deal with the other remedy which is occasionally put forward, namely, the nationalisation of production, because the same objection applies. Production is efficient. Production under private initiative, controlled by private enterprise has used science and mechanics and has itself given us this abundance, or this potential abundance. Finally, there are some who go so far as to suggest the destruction of labour-saving machinery. That idea would command no sympathy in any assembly in the world. The whole object of man from the beginning of time has been to save labour, from the time he invented the wheel, and we must welcome the enormous achievement of the human intellect working to achieve that dream of humanity, the production of abundance with an ever decreasing amount of human labour.

The constant pressure of this problem has perhaps made us fail to realise that the present world-wide unemployment is not a sign of the defeat of man but merely a sign of the triumph of human intellect over material things. The fact is, that we have to face the lesser problem, to us, of arranging purchasing power, so that it can use this potential abundance. There may be a flaw between the power to produce and the power to consume, and it may be due to the fact that less than a century ago, say, 50 years ago, most production was done by human energy. Roughly it balanced out that wages and salaries, interest, rents, and so on, paid for the energy spent in producing the product, but to-day more and more the human factor, who consumes, counts less and less, while the power of the machine is growing more and more. The machine is not paid wages and does not purchase and does not consume.

Therefore, I suggest that possibly there is some gap between the total distribution of purchasing power in every possible way—wages, salaries, dividends, rents, interest and everything else—and the total cost under the present system of the articles produced. That should be a matter for inquiry. In the other House the vice-chairman of Imperial Chemical Industries moved a Resolution that there should be such an inquiry, but the Resolution was defeated by three votes. As a means of dealing with the unemployment problem that Resolution is the first and most necessary step. The problem of increasing purchasing power concurrently with productive power, the power to consume the constantly increasing output, is the only real problem that we have to overcome. It is the foundation of all other problems. The problem of peace and war would be largely solved if we solved our economic problem. If we do not solve it, if there should exist this disparity between the total purchasing power and total costs, it seems to me that we must inevitably drift into danger of war.

It will mean that the big manufacturing countries, the United States, Germany, Japan and ourselves, with ever-increasing scientific help and ever-increasingly efficient machinery, will produce more and more, and if there is not sufficient purchasing power to buy those ever-increasing products, or the imports exchanged for these products, these countries must get rid of them by exporting them to foreign markets on credit. They will develop foreign markets and we know what that development means. It means that in such a country as China you will get a scramble between Japan, the United States and ourselves. We know what has happened in Manchuria. That struggle will become greater and greater, for two reasons, that the markets will diminish. Markets are diminishing all over the world owing to economic nationalism, and the competition to find an outlet for the sale on credit of the goods in these lessening markets will increase more and more, owing to the increasing efficiency of the machine. The competition will get more and more bitter. Therefore, I feel that the gap to-day between purchasing power and the increasing power to produce is really the cause of nearly all our troubles, especially of the danger of war in the effort to export the surplus products of the manufacturing nations on credit to ever-diminishing markets. I beg the House to forgive me as a new Member for detaining it so long.

8.35 p.m.

Mr. LEONARD

In listening to the closing remarks of the hon. Member for Lowestoft (Mr. Loftus), I thought that I was reading again some of the pages from a book by Karl Marx. With one or two exceptions the excellent speech that he has made to-night could quite well have been made from these benches.

Mr. LOFTUS

The hon. Member will excuse me interrupting, but throughout my political life and in all my speeches I have denounced the Marxian doctrine and fought it on every possible occasion.

Mr. LEONARD

I am surprised that the hon. Member should have taken up so much of his ideas, but notwithstanding these opening remarks of mine it is only fitting that I should compliment the hon. Member on the speech he has made, on the manner in which he has built up his arguments and linked them together in such a complete sequence that the speech has been understood and appreciated by hon. Members in all sections of the House. In the Lobby I heard an expression of opinion that we on these benches are too much inclined to introduce the question of unemployment for discussion, and I seem to remember that the Lord President of the Council himself in a leaflet which he wrote, or it might have been in a foreword to a pamphlet, complained that the Labour party was the first party to make unemployment a political question. I am not in the least sorry that the Labour party has made unemployment a political question, but having said that I want to express my opinion that I do not think unemployment should be a political question at all, it should be an industrial question. If industry was organised on a proper basis of representation of the units required to conduct an industry, then it would not have the political aspects it has now.

We have heard the appeal of the President of the Board of Trade to give industry a chance. I do not know that anyone can say that industry has not had a chance to satisfy the requirements of the people of this country or throughout the world. All the advantages of invention and science have been placed at their disposal, but, nevertheless, whilst these advantages should have been permitted to percolate through to the common people unemployment exists, which means starvation and privation in every country and more so in those countries which are very wealthy. In addition, working people have been appealed to by those who are called the captains of industry. They have appealed to the common people to allow their wages to be reduced in the holy cause of keeping the British nation on the industrial front. No one say say that the so-called captains of industry have not had many advantages. But industry to-day is not concerned with blood and bones; it is concerned with balance sheets. Until such times as we can get a new conception of what are the real values from a national standpoint we shall be in the sorry mess in which we are at the present time.

After the War there was established in this country a Ministry of Reconstruction, whose duty it was to endeavour to get for the nation all the advantages of the co-ordination which had been brought into being in the need to prosecute the War to what was called a successful conclusion. The advantages then were apparent hut, nevertheless, they have been allowed to escape in the succeeding years. The important fact that the machine was not only capable of producing commodities but of producing leisure as well, apparently escaped the attention of those in control of industry, and until the thing called capitalism realises that industry must allow a greater amount of leisure to attend the lives of the common people, until industry realises that a great deal of the values which are now created are not at the present time reaching the common people, we shall still flounder in the position in which we are to-day.

The Government can help in this matter. The first thing, obviously, is to come to the succour of those who are discarded by industry. There is the question of housing. I see no reasons why a much bolder attitude should not be adopted towards the question of housing. It was preposterous to read in a report covering a survey of the housing conditions of this country, proposals put forward that houses which have long outlived their usefulness should now be brought under review for the purposes of reconstruction. A more farsighted view would have been to recognise that houses, like everything else, have been going back, and that we should take the opportunity of creating in this country better housing conditions than exist at present. In this connection the Government should consider the possibility of creating credits, in the form of currency, because what is created in this way are actual and tangible assets, they will remain long after the expenditure involved and would redound to the credit of the Government and the people. One of the greatest difficulties the Government will have to face is the banking and financial interests, who are not prepared to allow any extension of activities in this direction.

The President of the Board of Trade is apparently quite pleased that this is the only country whose export trade has increased. I cannot see anything to be pleased about in that. There are two words which have been prominent in the newspapers recently, "interdependency" and the need for "interchange," and these two words put aside any satisfaction we may have with regard to the fact that this country is the only, one which is going ahead. There is another matter which has not been touched upon yet—I refer to India. If this Government would look at the toiling millions of Indians, look at their needs and endeavour in an active manner to give them the chance of satisfying those needs, it would do as much as anything I know to set the wheels of industry going in this country. There are millions there under the domination of the moneylenders. The moneylender is one of the greatest pests in that great country to-day. If these men and women who are subject to interest charges up to 300 per cent. were relieved of that incubus, it would do a great deal to bring happiness to the Midlands of England and from there as a matter of sequence to other parts of the country.

I do not want to speak disparagingly of the Development Councils which are operating up and down the country but I do not look with so much hope as the President of the Board of Trade does, to those councils as a means of creating employment. Apparently they are being urged to indulge in an advertising campaign, one against the other, each hoping that some perambulating industry will look kindly towards its part of the country and move its works into that location. I do not think we can look with much hope in that direction. In any case such a method would create its own difficulties. We have already had the case of the movement of railway workshops. We have seen the movement of large bodies of men who have been taught to look upon the part of the country where they have been born and bred as capable of sustaining them throughout their lives. We have seen the railway workshops moved from one place to another leaving in their train much anxiety in the households of those who have previously given good service to the railways.

I suggest that at least the question of India ought to receive more consideration than it has received up to the present and that the activities of the money-lending element which is one of the main features of life in that great country should be attended to as one of the ways of allowing us to get out of our difficulties. I would finally insist that the logic of the machine is increased leisure and that the values produced by the machine ought not to be allowed to go to the advantage of the few who take from it at the present time such great sums. I say that ways and means should be found of seeing to it that the products of the machine, which cannot be won unless men and women work, do not go in that way but that the part of those men and women in the work of production should be recognised that the wage policy started in the past by the Government in the form of reductions should be reversed. By that means we would help to rebuild the industries of the country.

8.50 p.m.

Mr. KENNETH LINDSAY

I find it rather difficult to get back to the very excellent speech of the hon. Member for Chester-le-Street (Mr. Lawson) in opening this Debate. Of course, if this is going to be a "free for all" Debate each hon. Member can put forward his own pet views on unemployment and that is what has been going on for some time. I understood, however, that the purpose of the Debate was to try to concentrate on a most difficult problem before which most of us might well feel a little humble. I am told that hops are looking up in Herefordshire. We have heard various details from various constituencies. But I maintain that this is a problem bigger than any individual Member's constituency. It is one which we have to analyse in a scientific manner even though it means being a little inhuman. Already to-day the "Times" articles have been quoted at great length. I want to quote the only part of those articles which seems to me to matter excellent though those articles were. Speaking of one of the four or five surveys made in different parts of the country the "Times" correspondent says: The survey is admirable, but it stops short of recommendations, and naturally concentrates on the past and not the future. Here is a sick man, with pulse, temperature, and symptoms all recorded"— I do not agree with that— with numerous nurses engaged in trying to relieve his pain; but no one doctor in charge of the case, no one there to advise a full course of treatmnt, his reputation staked on the patient's recovery. Nobody's reputation, at the present moment, unless it be the National Government's is at stake, on this issue. But I do not think it is a question of party. Each successive Government has tried to tackle this problem and, as has been well pointed out by hon. Members opposite, we have not made much impression on it. I am not so much impressed by the speech of the right hon. Gentleman the President of the Board of Trade. It is all very well. Heaven knows that most of us on these benches are grateful. We agree with the redirection of the channels of trade and entirely disagree with the bankrupt policy of Free Trade and public works put forward by the hon. Member for West Middlesbrough (Mr. K. Griffith) and the bankrupt policy put forward in the vague platform which we had issued last week by the right hon. Gentleman the Leader of the party below the Gangway opposite. That does not seem likely to help at all at this moment. The people of the country are striving for something specific and definite, yet once more these vague statements of general aims are put before the country. That is not going to help.

I want to ask the Government one or two questions. I do not know the answers, but from the point of view of scientific analysis I think if we ask a few more questions, we may be on the right way to getting answers, and it is in that spirit that I ask my questions. I have jotted down a list of some of the industries which can be termed "good" industries, that is industries with about 10 per cent. or under unemployment— anything from carpets and scientific instruments, to shirts, collars and hosiery, and even gas, water and electricity, motor-vehicle manufacturing, woollens and worsteds, and electrical engineering. All have about 11.5 per cent. In other words, they are fairly normal. Some hon. Members opposite seem to think that we had only 5 per cent. of unemployment before the War. We had not; we had something like 10 per cent. The probability is that we could not accurately determine what it was because we had mot the figures, but it was nearer 10 per cent. than 5 per cent. So, in most of those industries which I have indicated, we have what I would call normal unemployment. Those industries employ several millions of people.

Coming to more specific points we know that the unemployed are in certain industries and we know that they are in certain localities. We also know how the incidence goes by ages. We know that although the general rate is something like 21 per cent., the rate of unemployment between the ages of 55 and 64 is 30 per cent. We know also that about 500,000, about a quarter of the total of 2,000,000 men unemployed, have been unemployed for over one year. On the whole, I think if we are going to talk about the core of unemployment we ought to know what the core is. We have been wandering a bit in this Debate, and I want to bring the House back to that point. I am going to suggest, that the core consists of people between 50 and 60 years of age in Scotland, Wales, Durham and on the North-East coast. It is in specific industries; it can be located.

It has no real relationship to any insurance scheme. I am not sure that it has any relationship to the new Public Assistance Board except that some of us hope that this board will be able to take a wider view than any single local authority is able to take and deal with unemployment in a more constructive way than by just giving the unemployed a weekly something or other. In fact it is common knowledge in the North at present that the Ministry of Labour are themselves, if I may say so, becoming "fed up" with the mere business of doling out week by week certain sums of money. They are enlisting the services of a number of their younger men in all kinds of constructive schemes within the ambit of their own job to try and do something besides the mere giving out of money week by week. We have had Mansion House Funds, Board of Trade Surveys, derating of industry, industrial transference and migration.

What is the next step? The President of the Board of Trade has not answered that key question. I do not ask it with any measure of criticism, because it is far too big a problem to make any sort of foolish party capital or any foolish individual capital out of it. The question is whether the points such as those made in the third article in the "Times" are to be answered by any one person or not. There was a suggestion yesterday for a separate Ministry of Defence. Can the Cabinet in its surveys of this problem come to grips with the new type of problem which is created. My own bias is something like this. There are a great many people who can run departments and departments have to be run, but there ought to be a superior body whose only job would be some sort of co-ordination, not for co-ordination's sake, but because the problem needs tackling from several different angles. It was tackled by the right hon. Gentleman from only one angle. I suppose we are to have an answer from another Minister later from another angle. Is there any necessity for fresh machinery or is the present constitution and function of the Cabinet capable of taking hold of this problem or not?

We have heard of some of the difficulties of the North and the South. It is not a question of markets, transport and so on, but a question of people not wanting to start fresh industries in some of the more desolate parts of Scotland and the North. There is a feeling in the House and the country that we should make a more progressive move in regard to the basic industries. I refer to coal, cotton, iron and steel, and ships. It is clear to everyone that the basic definite unemployed core is in those industries. If we cannot tell what is going to be the labour demand in the mining industry or in iron or steel, or in cotton, a month hence or six months hence, how are we going to make any sort of provision and state our problem in concrete terms?

It is easy to say there is an improvement We all Know and welcome the fact that certain blast furnaces and mines are working again. Within the limits of certain trade agreements and of the confidence that it is gradually coming back, that can be done, but some of us believe that when confidence has had its full run we shall still have this big problem. We want to see costs brought down to an absolute minimum; we want to be absolutely certain that we have the most efficient marketing organisation in the basic industries. I do not speak from practical experience in a matter like this. I am just taking the experience of the best practical minds in those industries as one meets it in reading directors' speeches and so forth. I can say that, reading them together, it is perfectly clear that there is a great deal of room for improvement in the organisation of the basic industries which, after all, would give us some knowledge of the future labour demands.

Secondly, I think we ought to decide on what principle we are going to subsidise. If we say we will give £9,500,000 to make two liners go across the Atlantic where one went before, it may be a good thing. We say we are going to do something for housing, and I would point out to hon. Members opposite, and especially to hon. Members on the Liberal benches, that the housing policy of the Government is a little more subtle than just public work or allowing private enterprise to work. It is allowing private enterprise to go as far as it possibly can on a certain line and bringing in the whole resources of the State and the local authorities where it is thought most important and to get some sort of State subsidy. Personally, I back the Government's housing policy with a little fresh direction later on. What about the other industries? What are we going to subsidise? Are we going to subsidise old age? There are 1,000,000 insured workers between 55 and 64; 291,000 unemployed workers between 55 and 64; and 717,000 employed workers between 55 and 64. There is practically no juvenile unemployment in London. On the other hand, we have the bad areas and the problem of the juvenile, and the whole question of getting back people from 14 to 18. I am not suggesting that this is the way out, but you could spend £10,000,000 there just as well as anywhere else. We want to know what the principle of subsidy is to be on this question.

The further point, which I was glad to see the right hon. Gentleman develop, is the whole question of smallholdings. It is believed by a number of people that smallholdings can be further developed. From the experience of the poultry grower in Lancashire and certain experiments by the Society of Friends in this country and Scotland, there is enough evidence not to go fool-hardily into the sort of scheme into which we went after the War, when vast sums of money were spent with no real return, but to go on sound and scientific lines. Finally, I believe that we need some further device in the way of administration to deal with this problem. The Minister of Labour is full up with the new Public Assistance Board and the working of the insurance scheme, and the President of the Board of Trade is full up with trade agreements and so forth, but is there no need for somebody like a colonial administrator who goes out into different parts of the Empire and tackles a specific problem? Is there not something like that problem on the North-East Coast, in parts of Scotland, and in other parts of the country? I may be talking at random, but it seems that there is such a problem.

We have had the surveys and the Transference Board, but we have still got this solid core. We are all in favour of experiments in improving the marketing organisations of the various industries so that we can once more go out into China, India, the Far East, and Africa, and do what we can to improve the shipping and the contract services on which our export trade has been based. That is outside the ambit of this Debate. But, to come back to this solid core, is there not the need for some piece of fresh machinery? As there was a need for detailing the Lord Privy Seal to go round Europe, is there not a need for detailing some Minister to take this on as a specific problem for the National Government? No other Government could tackle it—not the Labour Government.

We have had excellent speeches of analysis, but we have not had a single constructive suggestion. We had a long speech from an hon. Member from South Wales proving, in elaborate language, that we are living in a mechanical age. We do not want to go back to a period of bankrupt Government. I think it should be the province of the National Government, during the next two years, after building up this basis of confidence in the country, to tackle afresh the basic industries and the maladministration and partial administration of this problem of unemployment, which has nothing to do with pre-War conditions, and is an entirely new problem. Here it may mean pensioning, here keeping children at school, here smallholdings, here starting fresh industries. I hope that some fresh device will be put forward by this Government to give real hope to the people, whose lot everyone in this House deplores and for whom there is equal sympathy from all sides. But we do want something in the nature of a piece of fresh hope of a practical kind, and I think it can only come from a fresh piece of Government machinery. If private enterprise and the building up of confidence could do it we should not be appealing to the Governments-it is easy to appeal to the Government; but it has come to this, as the hon. Lady said: It is the only hope left.

9.7 p.m.

Mr. DAVID REID

I had no intention of intervening in this Debate, and I do so under some disadvantages, but I have been told that the hon. Lady the Member for Wallsend (Miss Ward) chose to pass some strictures on the way in which the shipbuilding industry is conducted in the north of Ireland. I would like to bring the House back, once and for all, to the realities of that situation. If the hon. Lady had told me she proposed to raise this question I should have been present to hear what she said, but she did not do BO, and I am afraid that I, like other people, went to have some dinner. However, I have done my best to collect the substance of what she said. I really wish the House would remember one thing. Nobody in the north of Ireland wanted Home Rule. It was forced upon us, it was put down our throats. Not a single Member from the north of Ireland voted in favour of the Act of 1920, but we were compelled to take Home Rule. Many hon. Members on the Liberal benches had advocated Home Rule for Ireland for many years, and now, when they find that it has had consequences which they did not expect, they are annoyed. Another thing, under the system of finance set up by the Act of 1920, no money is voted by this House for the support of the Government of Northern Ireland. All the money employed in the support of the Government of Northern Ireland is the product of taxes raised in the north of Ireland. Not a single penny of British money goes to the north of Ireland.

Parliament having set up a Government in the north of Ireland and given it-wide powers of legislation, that Government has chosen to continue the Trade Facilities Act after the British Government had decided to discontinue it. That is the whole basis of the complaint here. Nothing else has been done. The hon. Member for Dumbarton Burghs (Mr. Kirkwood) several times made the suggestion that when an unemployed man was taken on at a shipyard in the north of Ireland the firm were paid by the Government the amount which that man would have drawn as unemployment pay. That is simply fantastic; nothing of the kind ever happens. To satisfy the hon. Member for Dumbarton Burghs we made a specific inquiry on that point, and showed him the telegram which we received in reply, and he very honourably said, "I am satisfied that I am wrong, and I will not raise that question again." The one and only thing that has been done is that the Government of Northern Ireland continued the use of the Trade Facilities Act for shipbuilding purposes after the British Government had given it up.

There is another thing to which I would call the attention of the hon. Lady. The President of the Board of Trade pointed out in his speech that the trade of the North-East Coast is the building of tramp shipping. They built the "Mauretania," which was a remarkable achievement, and one of which every Britisher is proud, but she is about the one outstanding liner ever built on the North-East Coast. On the other hand, the shipbuilding trade in Belfast is mainly concerned with liners. I think nearly every ship under construction to which the Trade Facilities Act has been applied is a liner, and presumably the contract for her would not, in any case, have gone to the North-East Coast. Therefore the hon. Lady has no basis for her complaint.

There is one complaint which could be made with great justification. As far as I know, and I have been told on high authority, nearly all the large owners of tramp shipping run their businesses as private concerns, and one thing which is killing tramp shipping more than anything else is the Death Duties, It is quite impossible for any private firm, or for any individual owning a fleet of tramp ships, to put aside a sufficient sum for depreciation and also to set aside a sum which will enable Death Duties to be paid, without the firm being simply milked of working capital. It is a repetition of what has happened in the case of large agricultural estates. Every penny of what would be working capital is drained from the firm, which is frequently working on a bank overdraft and cannot stand a period of bad trade.

I would again point out once and for all that nothing has been done in the way of subsidising any shipbuilding firm in the North of Ireland. All that has happened is that we have given some shipping companies assistance under the Trade Facilities Act, though not by any means all the ships under construction in Belfast have had such assistance, and many are being built on the ordinary commercial basis. I understand, also, that the hon. Lady suggested that there were tremendous outstanding liabilities in this connection. I suppose she is not acquainted with the way in which ships are ordinarily paid for, that is, by a considerable proportion of the purchase money being discharged by bills spread over a period of time. To the best of my belief, the Northern Ireland Government have not lost a single penny by any of the advances and guarantees which they have given. Even if there had been a loss, no liability would devolve upon this country; but, as far as I know, they have chosen their risks with so much discrimination that there is no loss whatever. I repeat that this country has insisted that the North of Ireland shall be in many ways a self-governing community. It gets no relief whatsoever in the way of subsidy from this Government. No money has been spent in Northern Ireland but what remains in Northern Ireland. What money is risked by the Northern Ireland Government in giving guarantees is her own revenues. The hon. Lady has no right to find fault with the Government of Northern Ireland. She might find fault with the British Government for not adopting a policy which she likes.

9.16 p.m.

Mr. BOOTHBY

I am sure that in all parts of the House we have been most delighted to hear the tremendous defence put up by the President of the Board of Trade for the transition of this country from a Free Trade to a Protectionist basis, so far as its commercial policy is concerned. He described the transference from the neutral market which we had lost, to the home market of this country, which is now becoming almost as powerful. I cannot help reminding him that some of us in this House were aware of that fact for some time before he became aware of it. It was fairly obvious, even by 1924, that we were losing at a very rapid pace the neutral markets, upon which we had built up our commercial prosperity before the War, and that steps would have to be taken sooner or late?—some of us hoped sooner rather than later—to achieve a domestic market to take the place of the neutral market that we were losing. Better late than never. Those of us who have advocated what is loosely termed Protection, in other words the substitution, for neutral markets that we had lost, of the home market, which many of us regard as equally, and potentially even more, valuable, have been completely justified by results. I do not think that hon. Members on any side of the House would deny that.

We can all join in congratulating the right hon. Gentleman most sincerely upon the success of his policy of trade agreements with foreign countries. It is as yet much too early to arrive at a final judgment upon the value of these trade agreements, but, so far, results have been extraordinarily encouraging. I hope hon. Members will not think that I am unduly biased or partial if I say that I regard the trade agreement recently negotiated with Soviet Russia as potentially the most hopeful of the lot. To whatever extent we may have regained access to our own home market, the fact remains that as a nation we must ever be a considerable importer of raw materials. In order to pay for those raw materials we must export, and in order that we may obtain the maximum employment in this country it is desirable that our exports should be as much as possible in the form of capital goods. I believe that in the immediate future—I am not taking a long view—after our own Dominions, Russia will provide incomparably the best and most hopeful outlet for that export of capital goods from this country.

I would say this to my right hon. Friend: I believe that if we are to reap the full benefits of the trade agreement that we have signed with Russia, we shall have to have a fairly expansive and generous policy, so far as export credits are concerned. Whatever view we may hold about the past record of the Soviet Government in regard to pre-revolution debts, we must agree that they have never yet defaulted upon a debt incurred by them selves, and I submit to my right hon. Friend that they cannot possibly afford to do so. They are the only country in the world where the credit of the whole Government would be completely destroyed in the eyes of the world if they were to default upon a debt incurred by themselves. Our experience of them for the last 10 years can be compared with the loss that we have suffered in connection with Germany, and should go to show that we can probably give credits in respect of goods exported to Russia with greater confidence for the next few years than to any country in the world.

Yesterday I attended a luncheon given in honour of the Soviet Ambassador, and the Secretary for the Overseas Trade Department was present and made an admirable speech. The chairman of Guest, Keen and Nettlefold's, Sir John Beale, was in the chair, and in the course of his remarks he made a strong plea to the Government not to make profits out of the export credits scheme, but to do their very best for the traders of the country. He said that he was all in favour of profits as applied to individuals, but he was strongly opposed to profits when applied to a Government, and he did not know what the Government were doing in messing about with profits as far as the export credits scheme was concerned. He thought that the Government might very well give greater facilities in that direction, and in connection with Anglo-Russian trade. I would point out to the President of the Board of Trade that those observations were roundly applauded by an immense audience of industrialists drawn from every section of the industry of this country. I would ask him to direct special attention to this aspect of the question, because the success of the Russian Trade Agreement will, I believe, depend very largely in the near future upon the extent to which we are able to afford credit facilities. In the export of capital goods, credit is essential, and no one knows that better than the right hon. Gentleman. We have granted credit in the past, sometimes up to a period of 15 or 20 years, for example, in respect of railway development in South America. Now we have a great hope in respect of railway development in Russia. If we are to gain what we ought to gain, and that is the maximum trading advantage from the trade agreement, we ought boldly and courageously to go forward with a policy of export credit.

I would turn for a moment to one rather hard-driven aspect of our economic policy. It has been stated that financial policy always lies at the very root of economic policy. It has always done so in this country. I would like to congratulate the right hon. Gentleman, as an expansionist like the bon. Member for Huddersfield (Mr. Mabane), and the Government upon the success which is inevitable from an expansionist financial policy. Mr. McKenna has repeatedly told us for the last few years that as soon as we got cheap and abundant money in this country we should begin to see an industrial revival. We have cheap and abundant money to-day, largely as a result of the policy adopted at long last by the Chancellor of the Exchequer and by the Treasury, and the result is an immediate sign of a revival of prosperity. I submit-that whatever else we may have to say about the conditions that may, and undoubtedly do, exist in the distressed areas, we ought not to minimise the extent of the very genuine and real industrial revival that has occurred inside this country during the last 12 months. It is very real, and so far from being exaggerated there has been a tendency to minimise it.

I have attributed this very largely to the ending of that accursed deflation which went on year after year, draining the very life-blood out of the industry of this country and reducing us to an anaemic, weak and helpless condition. The turn came immediately we left that Gold Standard to which we ought never to have gone back, and which, ironically enough, the first National Government was formed to prevent us from leaving. Thank God it did not succeed. I would only say that the results which attended upon the reversal of our financial policy have been as satisfactory as even the most sanguine of us who believed they would be successful dared to hope.

I should like to say a word on the question of industrial policy and organisation. We hear a great deal to-day about planning, and it is very necessary. I am one of those who do not think that industry can be planned successfully by the Government. I believe that industry, in the long run, will have to work out its own salvation and to plan itself, although I do think the Government can give industry facilities it does not possess at the moment for carrying its plans into effect. But before the Government dares to tender advice to industries about planning and how they should organise themselves, I think they might well turn their attention to the planning and organisation of themselves. We had a very interesting Debate yesterday in this House on the organisation and co-ordination of the defence Services of this country. I submit to-night to my right hon. Friend the President of the Board of Trade that the question of the organisation and planning of the economic Departments of the Government is far more urgent and far more necessary than the question of the co-ordination and organisation of our defence Services.

I would suggest to the right hon. Gentleman that if, instead, of being President of the Board of Trade, he were still at the head of a great industrial organisation in this country, he would never tolerate for a single moment the present haphazard Government organisation so far as economic affairs are concerned. He would never endure the slipshod method, the total lack of co-ordination that exists at present. He would never stand such gross, such palpable inefficiency in a business that he tolerates in the Government. I listened with great interest to the Under-Secretary of State for Air when he was introducing the Air Estimates. He submitted that it was undesirable to transfer the control of civil aviation from the Air Ministry to the Board of Trade; and the grounds for his doing that were, he said—and I will read his words: The Board of Trade, if I may say so without disrespect, is already the Pooh-Bah of Government Departments. It is responsible for the overseas trade, for industries and manufactures, for patents, for commercial relations, for the mercantile marine, for public companies, for bankruptcy, for mines, for petroleum and a whole host of subordinate activities. It is almost a miracle —said the the Under-Secretary for Air, a Member of His Majesty's Government— that it discharges its immensely wide and varied responsibilities so efficiently."—[OFFICIAL REPORT, 8th March, 1934; col. 2040, Vol. 286.] I want to ask my right hon. Friend whether he really thinks that he can, as President of the Board of Trade, preside over these manifold and multitudinous and wholly unrelated and unconnected Departments efficiently.

Some time ago, when he was head of the Socialist Government, the Prime Minister set up an Economic Advisory Committee, consisting of the best economists in the land. It was supposed to meet frequently and to advise the Government. We have hardly heard of it since. I do not know whether it still exists. Then there was an Imperial Economic Committee that came into existence. Some of us thought it would be rather valuable, but it came and it went—it disappeared. I should like to ask whether the Government are giving any attention to the proper organisation of the economic side of administration in this country at all. There is an admirable man, Sir Frederick Leith-Ross, who has the title of Chief Economic Adviser to His Majesty's Government. He has a private secretary, but that is all. He has no staff of any kind, and he is marooned half-way between the Board of Trade and the Treasury, and neither Department knows to which he belongs. I should like the Minister of Labour, if he replies, to devote some attention to the economic organisation of the Government, which is much more important than the subject of the co-ordination of the defence Services. There are all these commissions hanging about Whitehall paddling their own separate canoes un-coordinated, undirected, without any vigorous central direction at all.

Does not my right hon. Friend think it is highly desirable to set up immediately, here and now, at least an Economic Committee of the Cabinet, to correspond to the Committee of Imperial Defence, to be presided over by the Prime Minister and in his absence by the Lord President of the Council, to contain Sir Frederick Leith-Ross and any other experts that may be necessary, and to contain also the Chancellor of the Exchequer, who is ultimately responsible for the main financial policy of this country; and, underneath that Cabinet Economic Committee, whether it is not desirable to consider the merits of establishing not only a Board of Trade, but also a Board of Industry. As my right hon. Friend who opened the Debate in that admirable speech this afternoon suggested, such a Board would take over some of the activities which now come under the Board of Trade, including the Department of Transport and the Department of Mines. I do seriously press this question of organisation and co-ordination. In the War we made continuous and constant changes in the organisation of government. After the War, under the direction of the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) several new Ministries were established—in 1921 and 1922—and the whole machinery of government was reorganised. Vast changes have taken place since then in the whole of our industrial and economic make-up, but no further changes in organisation or personnel have been made in Government Departments; and I suggest most seriously to the Government that this is a question to which they ought to devote their immediate attention.

With regard to the particular industries which my right hon. Friend the President of the Board of Trade mentioned, the heavy industries—and I stress particularly coal, cotton, and iron and steel, about which we read so much in the Press—I do not think the Government can reorganise or plan those industries, but I do think the Government ought very seriously to consider whether it may not become necessary in the near future to give those industries the power which it is absolutely necessary they should have if they are to organise themselves and to make themselves efficient. At the present moment it is impossible, even if a large majority in some of those industries—particularly I am speaking of cotton, iron and steel, and coal—decide upon a particular course of reorganisation or amalgamation to make real progress if there is a minority. If there is the slightest minority, and there will always be a minority, then the whole scheme is held up and delayed. I believe it to be a great need in our industrial organisation, and I believe it will become necessary to meet that need sooner or later, and I hope it will be met sooner rather than later, that the Government should give all industries power to carry through schemes of reorganisation that are approved in those industries by substantial majorities.

A last point I would submit is with regard to the flow of investment in this country, which I believe to be of immense importance. At the moment the Treasury has imposed an embargo on foreign issues in the City of London. I do not think that that is either necessary or desirable. I think that that embargo ought to be raised, because it is holding up exports from this country and international trade generally, it serves no useful purpose, and is unwarranted by the economic facts of the situation. But it will become, and I think it has become, desirable for the Government to exercise some sort of control over the flow of money into investments generally. I think that the Government ought to consider lifting the embargo immediately and at the same time setting up an advisory committee or board to advise the Treasury when it may become necessary to place an embargo upon a certain type of issue, and when it may become necessary to invite the co-operation of the City of London, which would gladly follow the advice of such a board or committee if it were sufficently representative and responsible as to when to encourage the flow of investment into another type of issue. The whole kaleidoscope of economic affairs is changing so fast that we have to adapt our machinery and methods of government, not once every 10 years, but once every six months, to the moving scene, and that is what some of us think the Government are failing to do.

On the question of public works, I still unrepentantly believe that there is a great field for wise constructive expenditure by the Government in this country. We all of us admire the work which the Minister of Agriculture is doing, but some of us are beginning to wonder whether he is the only one who is really going to do any constructive work of value in the Government. For my part I would rather he had begun at the selling end than at the producing end. He will have to fetch up lat the selling end before he has done with the organisation of agriculture. He is doing a great deal by his activity, and I would go so far as to say that it is better to have misjudged activity, or even misguided and wrong activity, at the present moment, than no activity at all. He has put a spirit into the agricultural industry which it has not had for 10 years past, because the people in the industry believe that there is at the head of the Ministry of Agriculture a man who cares, who minds, and who wants to do something. It is impossible to exaggerate the psychological effect of that fact. I wish that people could believe it of every other Department in the State.

Over the whole agricultural industry there is a great field for State activity and wise expenditure. Drainage, afforestation and allotments have been mentained, and I would add telephones and electricity. Electrical development in the rural districts of this country is miles behind that of many countries in Europe at the present time. You have only to go even to Switzerland to feel quite ashamed of the progress we have made with regard to electrical development. Then there is the question of milk, to which I know the Government are directing attention. The consumption figures for fresh milk per head of the population in London are shameful when they are compared with the consumption figures of almost every European country. Even Belgium, consumes nearly twice as much milk per head of the population as we do.

With regard to housing, there is no question that until quite recently there has been great public disappointment in this country at the record of the Government. The withdrawal of the 1924 housing subsidy is seen in retrospect to have been a profound mistake, and I still believe emphatically that the Government will never really get to grips with this question of housing until they have established a national housing corporation in this country to take in hand the whole question and press forward with the will and vigour that the country wishes to see on the whole question of slum clearance, the reconstruction of slum areas, and the construction of new houses. Expansion and reconstruction are called for at the present time. The resources are there, and the money is there as it has never been before. Money is cheaper at the present moment than it has been for 20 years in this country, and it is a pity not to make some use of it. Is the will there? That is what some of us want to know. If so, then we must have a theme, and we must have a leader to announce the theme and machinery of government which will be able to carry out the theme. I wish I could be quite sure that we have any one of these three.

The salvage work is being done, and well done. The country now demands from the Government a courageous and constructive policy—not a few palliative measures hastily designed to meet temporary emergencies or temporary agitations as time goes on. I am absolutely certain that the country now demands this constructive economic policy over the whole field, and I am equally certain that in two years' time this Government will be judged by the electorate on their failure or success—and it is still open to them to have either—in devising such a policy and in also devising the means to put it into effective execution.

9.40 p.m.

Mr. SUMMERSBY

I agree wholeheartedly with my hon. Friend the Member for East Aberdeen (Mr. Boothby) in so far as he recommends an expansionist policy; but when he goes on to recommend, as others have recommended, the appointment of boards and commissions, I cannot agree with him. I have a very real idea as to what should be done with Royal Commissions, committees and boards. I would like to give traders and farmers and industrialists the opportunity of running their own businesses and of getting business in the way that they think best. I should not have intervened in this Debate had it not been for the speech of my hon. Friend the Member for Huddersfield (Mr. Mabane), who always poses as an expansionist and then proves that he is just the opposite. I rather hesitate to refer again to anything so domestic as the retail distributive trade, after the speech to which we have just listened, but, as my hon. Friend the Member for. Huddersfield said, it is a very important trade, and employs a tremendous proportion of the people of this country. He went on to say that he thought it would simplify the position very greatly if retail prices could be reduced by a certain percentage, though how that can be married with an expansionist policy I do not know. It necessarily follows that, if the merchant or retailer sells his goods at lower prices, his turnover falls proportionately, and he must decrease his expenses. His main expense is his wage bill, and, if he decreases his wage bill, it must mean unemployment. But we are not talking about increasing unemployment; we want to increase employment.

I would like to endorse the remarks of my hon. Friend with regard to the false economy which has been practised, and of which I think the most idiotic example of all was the cessation of giving prizes to the pupils in London County Council schools. By doing this the supporters of the Government have put themselves in a very invidious position, by leaving it open to the Opposition party to give them back and say, "Look what we have done." That measure was adopted in order to withdraw money from circulation and increase employment, rather than do the very opposite. I doubt very much whether, when we talk about commissions, committees, boards and so on, the matter is ever studied from a psychological point of view. For instance, a man embarks on the building of a works, or a factory, or anything else that he has to provide. After all the trouble that he has to go to in finding the site, finding capital, and so on, he discovers more often than not that the unnecessary restrictions inflicted upon him by the London Building Acts or by local by-laws make his task almost impossible, and to add another in the form of fresh committees or fresh advisers would Be almost the last straw.

Another point that is not often referred to, and is certainly not often realised, is that the small man or the moderate-sized man has very much greater difficulty in financing his business or his works than the large man. It is comparatively easy to obtain £500,000 or to float a company for that amount, but if a man wants to find £10,000, however good his schemes may be, and however sound his experience, it is a very difficult matter. There is tremendous scope for some consideration; to, be given as to how banks could be encouraged to help to finance the small and moderate-sized man. To think that by decreasing prices we are going to increase employment, is entirely a wrong policy.

9.46 p.m.

Mr. RHYS DAVIES

I do not think the official Opposition need apologise for raising once again the very human problem of unemployment. I have for some years past thought that all Governments in industrial countries will be measured as to their capacity in Statecraft by the number of people who are out of work within their territory. I do not think I have listened for some time to a more challenging speech than that of the hon. Member for Chester-le-Street (Mr. Lawson), and I am certain that I have never listened to a more polished or a more feeble effort than that of the President of the Board of Trade in reply. I notice that, when this Government is in any difficulty, when it is seriously challenged from this side of the House, it always puts up the most innocent-looking Ministers to reply. I do not say that they are innocent, but they look it. I do not think it will be unfair to the Minister of Labour to say that he, above all, is the Minister who can say the nastiest things in the nicest way. The President of the Board of Trade is, on the other hand, a master hand at uttering a large number of sentences without meaning very much.

This is a very important subject from our point of view, and we expected a very much more comprehensive and clear reply from the Government than we have received. The President of the Board of Trade tried to ride off and, if the country is to believe every word that he has told us about the state of industry and commerce, everything seems now to be beautiful in the garden. Imagine replying to a discussion of this kind by flying about like a butterfly among daffodils growing in Cornwall and talking about advertising Jarrow-on-Tyne to attract more trade there. Those are about the only pieces of real contribution to debate that we got from the right hon. Gentleman. He told us about some daffodils growing in Cornwall and that they ought to display huge advertisements, "Come to Jarrow- on-Tyne."That is not worthy of this very important occasion.

I think the contribution of the hon. Member for Lowestoft (Mr. Loftus) was a very admirable one indeed. The hon. Member for Middlesbrough West (Mr. K. Griffith) told us that, unless the unemployment problem is settled, unemployment as an issue will ultimately become a challenge to democracy. Unemployment is not so much a challenge to democracy as to private enterprise, and, if one point has emerged in this discussion more than anything else, it is not the failure of the Government to deal with unemployment, but the fact that the Government have come to the conclusion that they have no right to intervene in the affairs of private enterprise, which causes unemployment. The hon. Member for East Aberdeen (Mr. Boothby) put his finger on the spot. He spoke of the power of the Government over the Army, the Navy and the Air Force and asked that they should put as much enthusiasm into industry and commerce to solve unemployment as they are putting into the Fighting Services. The Government own those three Services and can command and call them to their aid for any purpose, but with regard to the coal, engineering and shipbuilding industries, the Government, according to the right hon. Gentleman's own confession, cannot do anything at all except respond to their claim for tariff walls to protect them. That, in fact, is the one important thing which has emerged from this Debate.

The hon. Member for Kilmarnock (Mr. K. Lindsay) said that this was not an issue for each individual Member of the House of Commons, but it was a national problem. I have a situation growing in my division which is contrary to everything that the right hon. Gentleman has tried to picture. Coal mines are being shut down and are being flooded because two or three companies cannot agree to a co-operative pumping scheme. Ten years ago there were 10,000 men, women and boys in and around the coal mines there. To-day, there are fewer than 2,000. Factories and workshops are being closed down and four urban councils out of five are becoming almost as derelict as Jarrow-on-Tyne. The people that I represent cannot believe what the Government say about a reduction in unemployment through the mouth of the right hon. Gentleman. Take the case of Lancashire. I notice that the right hon. Gentleman, in order to get away with it as it were, began to talk about Japan, He has met the ginger group of the Tory-party for Lancashire and has told them some secrets. There are other Members for Lancashire here, and we also should like to know exactly what has happened between the Government and Japan. However that is not the problem we are dealing with to-night.

Let me explain what is happening in Lancashire. I think the right hon. Gentleman must be unaware of it; otherwise, he would not have used the glowing words that he did. Lancashire represents 10 per cent. of the population of the country. The textile trade is the biggest factor in the exports of this country. The Government, except for a visit of two days by the right hon. Gentleman to Manchester, has never taken very much notice of that 10 per cent. of the population. Let us see what is happening in that county, and perhaps the right hon. Gentleman will contrast these figures with his own statement to-night. The number of persons drawing public assistance within the area covered by the Lancashire County Council was 22,506 on 2nd April, 1932. That is after this Government came into being, and after it had altered the fiscal policy of the country. On 2nd January, 1933, the figure had grown to 28,442, and on 10th March this year it had increased to 33,079. That is within the area of the county council of Lancashire.

Money payments increased from £6,251 per week in April, 1932, to £9,891 for the second week in March, 1934. When, therefore, the Minister of Labour speaks of the figures on the unemployment register, I hope that he will take it from me that I am as certain as I stand here that the figures covering unemployment taken from the register of the Exchanges to-day have very little relation to the number of persons out of work in this country. If the figures of unemployed persons in Lancashire have declined in any respect according to statistics provided by his Department, that decline in the register of unemployed has been reflected in an increase in the number in receipt of public assistance in the county. The one almost cancels the other out in that way. Let me take him a step further to the city of Manchester, which, of course, is in Lancashire and a very important city. Let us see what has happened there. These figures in relation to public assistance give a very fair indication of the state of affairs in any part of the country. The hon. Gentleman talked of depressed and distressed areas. The whole of Lancashire, more or less, is rapidly becoming depressed and distressed. In the city of Manchester on 10th March, 1934, there were 56,980 persons in receipt of public assistance, an increase of 3,042 on the corresponding week in 1933. In addition, there were 5,862 in receipt of indoor relief; and the grand total runs to 62,842 on public assistance in one city. I say, therefore, that the words of the right hon. Gentleman indicating an improvement in trade consequent on the change in fiscal policy have not the faintest relation to what is happening in Lancashire.

Let me turn to Liverpool to see how the new fiscal policy operates there. For the week ending 10th March this year there were 44,780 persons relieved, as compared with 39,000 odd in the corresponding period of the previous year. I now come to Wigan, which covers part of my own Parliamentary division, under the Lancashire County Council. These are the facts that people have had to face for a long time past. In the Wigan area the cost of relief to the able-bodied and their dependants went up from £546 per week in 1930 to £2,330 per week in 1933, an increase of 327 per cent. That is what is happening in Lancashire, and the reply of the Government to-day, I repeat, is not worthy of the situation. Let me pass on to something else about Lancashire. I wonder whether the Government have really taken heed of some of the social and human factors in the situation. I have never been foolish enough to blame Governments for everything that is happening. I will admit right away that the scientist has stolen a march on the statesman, and the medical fraternity too have upset the whole of our economic calculations by their splendid efforts to maintain human life. We have been told from the bench opposite more than once that in the last half century the average length of human life has been extended by 12 years. While the average age has been thus extended, we have raised the school-leaving age only by two years. There ought to be some relationship between the age of leaving school and the average age attained. These are some of the promlems that ought to be taken into account.

Let me go back to Lancashire, because it is rather a strange commentary while the Lancashire folk were the last to abolish the half-time system the other day we found the Lancashire County Council suggesting that the school-leaving age should be raised to 15. That is an excellent sign, and I believe that, in spite of all propositions for building bridges and work schemes, there is nothing that would help to alleviate the unemployed problem more immediately and with greater effect than the raising of the school-leaving age. I know some of the difficulties, but, in spite of all that, it is indeed one of the first issues to which Governments will have to attend in the near future. There are 60,000 children coming out of the schools in Lancashire every year, and as one hon. Gentleman said a few moments ago, it is clearly insisted in this document the Industrial Survey of the Lancashire Area, to which I would also like to pay a tribute—that there must be 160,000 adults in the County of Lancashire who can have no hope of being absorbed in industry again in the county. That is a very serious question. I am told authoritatively that 25 per cent. of the unemployed in Lancashire can be accounted for between the ages of 18 and 24. I do not know enough about the cotton industry to say how that comes about, but I know that the hon. Member for Lowestoft was right in one respect. He made a statement which was full of truth, that it is possible to increase production in this country and still find ourselves with a larger number of unemployed than ever—that is to say by mechanisation and rationalisation.

I come, therefore, to something that is very important in this respect. I have never been able to understand why Governments, whatever their political colours, do not say to themselves, "We have solved the problem of production and now we ought to reduce the hours of labour." If we think seriously of the future of our people we ought to try that method. There ought indeed to be an immediate reduction of hours of labour. The Minister will know how the number of persons employed in coal production in Lancashire is declining. During the last 10 years the number of miners has decreased from 113,000 to 68,000. That is where we are now. The situation in that county as will be seen is becoming very serious. I trust now that the Minister of Labour will let out the secret that he gave to what is called the "Ginger Group" of the Lancashire Tory party yesterday upstairs.

I ought to add a few words about the complaints that are made by Lancashire people against the Government. The Government secured a great deal of support from Lancashire in the last general election. In this Parliament there are only five intelligent Members from the whole of Lancashire—five Labour Members out of 60. All the others are presumed to support the Government more or less. Quite seriously, on the facts of the case, whatever the new fiscal policy may have done for daffodils in Cornwall, the effect of the Government's policy has indeed made a tremendous difference against the staple trades of Lancashire. I have no hesitation in saying that. [HON. "MEMBERS: "No, no!"] The answer will be given at the next General Election and that will be a very much more effective answer than I can give. There are spots in Lancashire, in the cotton belt as it is called, that are at the moment as depressed as anything that is to be found in the mining industry. I would not like to start a competition as to who has most poverty in his area. That would be a very foolish thing to do. Nevertheless it is worth while reminding ourselves of two or three other factors in connection with this county.

It amazed me when I looked into the figures when the President of the Board of Trade was talking about poultry-keeping, another very important point he made. Here we are in the Parliament of the greatest Empire the world has ever seen, an Empire on which the sun never sets, and the President of the Board of Trade, in charge of all the commerce and banking and bankruptcy and all the rest of it, tells us how many people are being employed in the poultry industry. That is a wonderful contribution. I would tell the right hon. Gentleman that the poultry industry employs a very small number of people. It is almost like the brewing industry in that respect. I have looked up the figures since the right hon. Gentleman talked about agriculture. Lancashire is a very large county and there is a great deal of agriculture there, but it has astonished me that there are less than 3 per cent. of the people engaged in agriculture.

I agree with the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) in his cry of "Back to the land," but when we talk of getting our people back to the land we have to understand one thing, and that is that the land is not quite as free for this purpose as some people imagine. That is one of the problems about the land. I wish that county councils and local authorities were very much more energetic and had more power to let the people go back to the land, especially those who have enthusiasm for employment on the land. We ought very seriously to consider what we are doing with our land policy. This very important county, as already stated, represents 10 per cent. of the population of this country, and until recently has been responsible for the biggest single item in the export trade of this country.

I repeat that I was exceedingly disappointed with the speech of the President of the Board of Trade. It was a beautiful speech; the vocabulary was excellent; the grammar was correct; the personality was simply glorious and splendid. But in the end there was no meat at all in the fare. Consequently, I hope that when the Minister of Labour replies he will tell us what is in the mind of the Government about the biggest problem of all that confronts the nation. I hope I have done one thing at any rate, and that is to provoke him to give us a greater hope than the President of the Board of Trade did when he spoke.

10.13 p.m.

The Minister of LABOUR (Sir Henry Betterton)

The hon. Member for Chester-le-Street (Mr. Lawson) certainly need make no apology on behalf of himself or his party for having initiated this Debate. In the course of many years I have heard a great many speeches on this subject, or on subjects analogous thereto, but the Debate to-day has been one of the most interesting of all, and perhaps one of the most fruitful that we have had for a long time. The hon. Member opened the Debate in a speech of really moving eloquence, in which he described from first-hand knowledge the grim realities of the position in the county in which he lives. The problem which he stated, the problem of what we should do, and can do and ought to do for the distressed areas, is a problem which has perplexed the intelligence of many of us who for years past have done what we can to deal with the matter.

It is a striking and a fortunate coincidence that during the past three days there has appeared in the "Times" newspaper a series of valuable, informative and wholly sympathetic articles. I have no doubt that they will be read by thousands who will not read the report of our discussion here to-day. I think the facts ought to be known. I am very glad that the hon. Member raised this discussion this afternoon.

In listening to the Debate this afternoon one or two things struck me, as, I think, they must have struck other hon. Members. One of the things is that whatever the Government can do—and they have done much, and are proposing to do more, as I will show—there can be no real, I was going to say solution, but there can be no real alleviation of the problem unless we have, at the same time, the unanimous co-operation of people outside Parliament and outside the Government living in the localities, or indeed who may not live in the localities but who may desire to help in whatever way they can to deal with this matter. I refuse absolutely to take a defeatist view of the problem. I do not believe that either the present facts or the prospects justify anyone taking a view so pessimistic. The hon. Gentleman the Member for Abertillery (Mr. Daggar) used the very striking phrase "derelict mining townships," and I do not think that it is any use really trying to conceal the fact that there are, up and down this country, it may be in Durham, South Wales, Cumberland, Lancashire, or indeed in Scotland, mining villages where it is hopeless to expect that those who have lived there all their lives, as indeed almost certainly did their ancestors, can hope to obtain a living in the future in the trade and in the industry in which they have spent their lives and in which they have been brought up. Therefore, we have to consider how we can deal with such a problem.

It is very relevant to consider how this problem arose, and until you realise how it came about, and have all the facts before you, it is difficult even to suggest a method of dealing with it. It is no mean problem. I should think that our ancestors, on a much more limited scale, were faced with exactly the same problem when the iron industry left Sussex. They were, I am sure, faced with precisely the same problem in eastern England when the weaving industry left Norfolk and went to Lancashire, on a much more limited scale it is true, but still it has been a recurrent phenomenon not only in industrial England, but in other industrial countries of the world. It is the movement from one area to another and from one industry to another, as industry leaves and changes. Why does it arise here and why is it so pressing? The reasons are clear. The first reason is that, largely owing to the War, we had an artificial stimulus in certain industries and trades; the coal trade was one, and shipbuilding was another. As a result of the War, we have now to face a position which, normally, would perhaps have taken three generations to develop, and would have solved itself almost imperceptibly as time went on.

We have this problem compressed into 10 years instead of three or four generations. Still, the problem is there and we have to face it. The first thing that I would say is, that you cannot begin to consider what you can do or what you ought to do for the depressed areas or how you will deal with what is not inaptly called the hard core unless you consider the problem in relation to the problem of industry as a whole. What is the position in regard to industry as a whole? Here I am going to part company with the hon. Member who has just spoken. Beyond any question there has been a most marked and striking improvement in the condition of industry during the last 12 months. What we must try to do is to ensure that those who live in depressed areas shall take their place in the stream which is growing and that we shall give them all the opportunities we can to ensure that they will get employment, if possible, as opportunity offers and as employment improves.

What has happened in the last 12 months in regard to employment? There can be no dispute about the figures, in spite of what the hon. Member opposite says. I am not going to enter into any argument about the causes, but I will give the indisputable fact about the causes which have brought about the result I am going to describe. The numbers of those in employment at the end of February—although I am not in a position to say what the next figures will be, I have no reason to think that they will not show a further improvement—were 625,000 more than they were a year ago. We are doing no good to the unemployed and we are not helping matters in the least by trying to belittle or minimise the improvement. I only wish to state it as a fact, and it is not helping anybody or anything to suggest that things are worse than they are. It is necessary to look facts in the face and to know what those facts are. Not only has there been this very large increase in the numbers of those in employment but during the same period there has been a very considerable diminution of those unemployed. The numbers of those who were unemployed at the end of February this year compared with the end of February last year were down by 539,000.

The significant thing is that that improvement in the figures of unemployment is not confined to any particular trade or industry, as students of the Ministry of Labour Gazette will discover. I welcome the tribute which the hon. Member for Chester-le-Street paid not only to that publication but to the skill and fairness and the complete accuracy with which those who are responsible for it get it out. The decreases in unemployment are spread over every industry which we catalogue—there are just over 100—with the exception of about four, and they affect all the large basic industries. In coal mining, taking the country as a whole, unemployment is down by 34,000, engineering by 81,000, and the hon. Member for East Woolwich (Mr. Hicks) will rejoice just as much as I do to know that the figures of unemployment in the building trade are down by one-third, or some 89,000. Even in the textile trade, and I am fully alive to all the troubles and anxieties in the textile trade, the unemployment figures are down by 27,000, even without counting cotton and wool.

The next point I want to make is that not only have these industries shared in the improvement but that every part of the country has also shared. In London and the South East, for instance, as compared with a year ago the decrease is 133,000, in the Midlands 120,000, in the North-East 138,000, in the North-West, which includes Lancashire, 76,000, and in Scotland by 39,000. I anticipated that the hon. Member for Westhoughton (Mr. Rhys Davies) would have something to say with regard to the figures for Lancashire and the North-West area. I have before me some very significant figures which ought to be known. First of all, let me say that if you take the country as a whole there are only 13,000 able-bodied persons in the whole of England who are in receipt of relief who are not also registered for unemployment. Therefore, when you say that the figures of those who receive relief have gone up these figures are included in the figures of those registering for unemployment; and for a good reason. Public assistance authorities, almost universally, make it a rule, it is a very proper rule, that before they grant relief it shall be a condition precedent that the applicant is registered for employment.

The hon. Member for Westhoughton asked what is the effect of the fiscal policy of the Government on Lancashire. I will tell him what the results have been during the last three years, and he must judge for himself whether it is due to the fiscal policy of the Government, whether it is due to a policy which has so largely retained our own markets for workers in our own country, and whether this improvement is due to the fact, which is universally admitted by every country except our own, that confidence has now been secured; a confidence which is felt not only by ourselves but by every other country.

Mr. RHYS DAVIES

I take it that the right hon. Gentleman does not dispute any of the statistics which I gave?

Sir H. BETTERTON

I do not but I should like to look into them. Obviously there is this difference between the hon. Gentleman's figures and my own. We are really not comparing like with like. The figures which I gave are the figures of the applicants registering for work. The figures which he gave may Include dependents in the applicants' families. Let me give the figures however with regard to the persons who have registered for work. Take Manchester, one of the places mentioned by the hon. Gentleman. In Manchester in February, 1931, the percentage of unemployed persons registered for employment was 19.1 per cent. of those insured. In 1933, in Manchester, that 19 per cent. had fallen to 17.7 per cent., and in 1934 it had fallen to 15.1 per cent. That is not unsatisfactory progress in the course of those three years.

Then we come to Westhoughton, the constituency which the hon. Gentleman represents. In February, 1931, there were in Westhoughton 32.9 per cent. persons registering for work at the Employment Exchanges. In 1933 that figure had fallen to 28 per cent., and in 1934 to 25 per cent. We have dealt with Manchester and with Westhoughton, which is the next most important place, and now we come to Lancashire as a whole. In February, 1931, the percentage of unemployed in the county as a whole was 30.5 per cent. In 1933 that had fallen to 25 per cent., and in 1934 to 21.8 per cent. Therefore, when hon. Gentlemen opposite say that nothing has resulted from the policy which we have adopted, they are flying straight in the face of facts which are manifest, obvious and indisputable. There is another point which has been raised by the hon. Member for Chester-le-Street, and I am sure he will be as glad as I am at the information which I am about to give him. He thought than no real impression had been made on the depressed areas, because, he said, the number of those who had been out of work for a long time, 12 months and over, was just as high now as it ever was, and that there was no sign that those men who had been out of work so long were coming back into employment.

Mr. LAWSON

I rather emphasised the fact that they were more than four times now what they were nearly three years ago.

Sir H. BETTERTON

If the hon. Member says so I accept it at once, but my hon. Friend the Parliamentary Secretary tells me that those figures are not correct.

Mr. LAWSON

I am quoting authoritative figures supplied by the Ministry of Labour.

Sir H. BETTERTON

I do not dispute that for a moment if the hon. Gentleman says so. It is satisfactory to note that during last year the numbers of those who have been out of work for 12 months and over have very considerably fallen, and that the number now is about 45,000 fewer than it was seven or eight months ago. I am not saying for a moment that that is as high as we should like, but it shows that the influence of the general trade improvement is beginning to be reflected where it is bound to be reflected last, namely, among those who have been out of work for a long time.

I said a moment ago that it would be useless to attempt to deal with this problem of the depressed areas except in relation to the general trade position of the country. I said that the problem before the Government, and particularly the problem before the Ministry of Labour, is how best to secure that those who live in depressed areas can be brought into the stream of ordinary industrial employment and so take their share in the industrial recovery. There are two ways with which the hon. Member for Chester-le-Street is very familiar in which I think we can help and are helping those in depressed areas to take their place in this stream. The first, of course, is through the ordinary machinery of exchanges, and I know the hon. Member will be the first to agree what valuable work the exchanges up and down the country have done to help men both in depressed areas and in other areas to take their place in industry. The next observation I want to make really arises largely out of the speech of the hon. Member for West Middlesbrough (Mr. K. Griffith) with regard to the whole question of transference. He said that the problem had been untouched, and he seemed to think that the policy of transference had come to a full stop after the report of the Transference Board was made four or five years ago.

Mr. GRIFFITH

I did not mean to say that it stopped then. I meant to say, as the hon. Member for Chester-le-Street (Mr. Lawson) said, that it had been gradually decreasing as far as I can make out and that the channels were silting up.

Sir H. BETTERTON

If that is what the hon. Member said, I accept it at once. The report of the Transference Board stated that the policy should be the dispersal of the heavy concentration of unemployment by the active encouragement of movement from the depressed areas to other areas. That policy was for some years carried out and as a direct result no fewer than 120,000 persons were moved from the depressed areas to other parts of England where conditions were more favourable. The hon. Member said that sufficient had not been done, but where depression sets in suddenly and acutely, as it did three years ago, one cannot move men from a depressed area to another area if the only result is to put out of work somebody in the other area. That illustrates what I said a moment ago, that the whole question of the depressed areas and of transference is inseparably bound up with the general trade position of the country. As that trade position improves so shall we be able to transfer men from one area to another. In many cases, indeed, the men transfer themselves.

A final observation which I wish to make also arises out of the speech of the hon. Member for Chester-le-Street and out of the observations of my hon. Friend the Member for Kilmarnock (Mr. K. Lindsay). He said that there was need for fresh machinery. He thinks something more should be done by the Government to help those in the depressed areas, that some further efforts should be made to deal with this "hard core." Having had a rest from discussing the Unemployment Bill, Heaven forbid that I should introduce it now, but I think I should be in order in pointing out that the first Clause in Part II of that Bill states that the Unemployment Assistance Board is charged with the duty of promoting the welfare of persons under the board and in particular the maintenance and re-establishment of their employ-ability. As the Minister responsible for that conception in the Bill I tell the House that I shall be most seriously and grievously disappointed unless the activities of the board do result in a great deal more being done than has ever been done before for the people in the distressed areas.

The hon. Member for Kilmarnock spoke about the need for fresh machinery. I entirely agree with him, and, as I say, it will be a great disappointment to me unless that fresh machinery is provided in the Bill now before the House. When considering the categories of persons in depressed areas with whom we have to deal it is quite clear that the younger men, who are ready and anxious to take their place in industry, fall into one category, while in another fall the much more difficult and, in a sense, more pathetic cases of men who are at an age when they are unlikely to get work outside their own districts or, possibly, outside their own industries. With regard to the first category I trust and believe that the board will use the facilities which the Bill will give them to enable these younger men to keep themselves in a condition of physical fitness such as will enable them to take their part in industry when the opportunity arises. Judging from my experience since I have been at the Ministry of Labour, I have no doubt that that opportunity will be welcomed, as it is now and as it has been in the past, by thousands of young men who are only too anxious to take advantage of the opportunities provided in the various camps and training centres of the Ministry. I have visited those centres over and over again, and the one complaint I have heard, indeed, it is the only complaint I have heard is, "Why do you limit our stay here to three months; why cannot we stay longer or come back?"

In the case of the men who are of an age when this sort of help will be of no use, the board will have a considerable opportunity to link up the various organisations. I again refer to the speech made by the hon. Member for Kilmarnock, who spoke about the various organisations which exist for the very purpose of helping these men. Among the societies of which I cannot speak too highly is the Society of Friends, who have done and are doing work of incalculable value by enabling men to obtain allotments. I have done my best to help them as far as I can. We are doing our utmost, by taking such steps as will result in general improvement in industry in which the depressed areas must share, and secondly by setting up this very machinery to which I have just referred, in order to help those who, for one reason or another, will be unable to get their place in the general improvement.

10.46 p.m.

Mr. BATEY

The Minister of Labour has delivered a delightful speech, but he has failed to face the real issue of this Debate. The Debate was arranged in order that we might know what the Government propose to do with the hard core of unemployment. All that the Minister of Labour has said to-night is, "Let these people get into the stream of employment." I come from a part of the county of Durham where there is no stream of employment for those men to get into. What are the Government going to do with them? If the Minister has read the three articles in the "Times," he will realise that in the south-west part of the county of Durham there is no stream of employment, and that the men who are employed there are doomed to helplessness and to hopelessness.

Let me remind the Minister what the "Times" correspondent says in regard to the South-West part of the county of Durham. I stress this because it is near to my division, and some of my own electors are in that part of the county. He says: In the administrative areas round Bishop Auckland the proportion of the unemployed who are on transitional payments ranges from 74 to 84 per cent. The proportion who have been out of work continuously for more than 12 months ranges from 60 to 77 per cent. What are the Government going to do with those men? What steps do they propose to take to help them? In the unemployment index for February for that part of Durham, there were unemployed in Bishop Auckland 53.4 per cent. In Crook there is a percentage of unemployed of 42. For the city of London the unemployed figure is only 2.9 per cent., yet all we get from the Minister in reference to those facts and to the huge amount of unemployment which seems at the moment as if it is immovable is, "Let those men get into the stream of employment." If that is the policy of the Government, those districts are to be in the same position next year as they are to-day, and there is no hope for them. There is no hope for them in the speech of the Minister of Labour.

I was interested in the speech of the President of the Board of Trade also. I have heard him deliver many speeches, but I never listened to him when he failed to face the real issues of a Debate as he failed to face them to-day. To those of us who come from the county of Durham, which has such a mass of unemployment, and from South Wales and from Scotland, all that the President of the Board of Trade had to say was, "There are the trade agreements." He seemed perfectly satisfied with the trade agreements. I am not going to say that these trade agreements with Denmark, Norway and Sweden have not done a little good, but I want the President of the Board of Trade to realise that the increase in the total export last year, over 1932, was only 169,125 tons—a mere flea-bite. In 1932, the total export of coal was 38,898,801 tons. Last year the total export was 39,067,926 tons, an increase of only 169,125 tons. And the President of the Board of Trade, when he is dealing with this question, seems satisfied with the Trade Agreements with Germany, Norway, Sweden and Finland.

I want the right hon. Gentleman to keep in mind the huge decreases that have taken place in other European countries' importation of coal from this country owing to the policy of this Government. Germany records an enormous decrease in the purchase of coal between 1933 and 1931—a decrease of no less than 1,500,000 tons. France decreased her purchases of coal betwen 1933 and 1931 by about 2,000,000 tons; Belgium showed a decrease of 500,000; Italy, 1,250,000 tons; Ireland, 1,250,000 tons; and the Netherlands, 750,000 tons. There are these huge decreases, although we were told in regard to many of these countries two years ago that the Government were negotiating agreements with them. Whatever has happened to those negotiations, the fact is that those countries are purchasing much less coal from this country. It has ended in an increase of export last year of a mere 169,125 tons. I want to submit that we have a right to say to the President of the Board of Trade and to the Minister of Labour that that is not sufficient for this Government, and we have a right to ask those two Members of the Cabinet to-night to tell us what steps the Government are going to take to relieve the situation.

When Labour went into office in 1929, it made a Cabinet Minister responsible for finding employment. Unless the present Government are prepared to make somebody responsible for finding employment, and unless they take steps to find employment, we shall be in the same situation as we are in to-day when the end of the present Government comes. May I remind Members of the Government on the Front Bench that they have been two and three-quarter years in office, and that in the county of Durham we are worse off to-day than we were when they took office? Unless they take some steps to relieve the situation, when the time comes they will be judged, as the Lord President of the Council once said they would be judged, namely, on unemployment. Unless they take more effective steps than they are taking-to-day, that judgment, when it comes, will be a most severe one.

10.55 p.m.

Mr. MACMILLAN

My excuse for delaying the House lat this late hour is the vast importance of the subject of the Debate. I understood that the Debate was to take a slightly different form from that which it has taken. If an attack was to be made upon the Government for their policy during the last two and a half years, then, given especially the character of the counsel for the prosecution and the record of the prosecution, there was no doubt that the Government would have no difficulty in repelling the attack. I think that every Member of the House must have been impressed by the skill and power of the defence made by the President of the Board of Trade and by the Minister of Labour in their two speeches delivered officially on behalf of the Government, and dealing with the record of their work for the last two and a half years.

It is just because I and many other Members hold in such appreciation the work of the Government during these two and a half years that we confess to some feeling of disappointment at the statement of the President of the Board of Trade. I had rather hoped that he would look more to the future and less to the past. I agree with him in his claim to credit for the Government, because, even when some things are partly fortuitous, since bad luck is charged against the Government, so equally good luck should be credited to them. But while I agree with all that, I had rather hoped that we might have had, not a defence of the Government, but a declaration of future policy. That, I think, was what the House was waiting for, and I am convinced that is what the nation was: waiting for.

The Lord President of the Council, last night I think, disclaimed any feeling of complacency from the point of view of the Government, and, of course, we quite accept that. I do not in the least attack the speech of the President of the Board of Trade as being a complacent speech, though I think it might be said to have verged upon a consciousness of rectitude, which is not always dissociated from him. If I may say so, he always makes me feel that, if he were a boy at school, and by some misfortune at the prize-giving there was no prize for him, he would have been able to remedy the omission by claiming one for himself. Certainly this afternoon I cannot believe that he really gave us—possibly because he wished not to deal with rather delicate matters—the advantage of a serious account of future Government policy; or, if future Government policy can only be found in the speeches which he and his colleagues have delivered, then I am afraid that the country will be very disappointed on reading those speeches to-morrow.

There are two vital problems. There is the problem of the great trades which are giving work, and which, we thank Providence, are giving more work to-day than they have given in the last three years; but the right hon. Gentleman knows, as everybody knows, that there is also the vital problem of the best kind of organisation for the great basic trades of this country—shipbuilding, iron and steel, coal and textiles. Reference has been made to-day to some articles that have recently appeared in the "Times" on conditions in the county of Durham, but I thought that a much more important article from this point of view was one which appeared a few days before, entitled, "A Frame for Industry," dealing with the conditions of reorganisation of basic industries, and I rathed hoped that we should have had from the President of the Board of Trade some account of the policy of the Government in its relation to that problem, indicating in what direction it intends to guide its policy, whether in the direction of leaving these things to be settled by industries entirely for themselves or whether by giving a helping hand and some enabling powers to industry to govern itself. Whether the Government have found it possible or not to make a statement of policy here to-night, outside the House, among its supporters and among other classes, there is a very strong feeling that some more powerful direction of Government policy is required in the direction of the reconstruction and reorganisation of British industry.

It is commonly thought, and it is frequently said, that reorganisation will lead to unemployment. I do not believe that. I think reorganisation may reveal unemployment. We may find as the result of reorganisation that there are certain sections of our population which cannot look to find employment again in the trades which they have followed in the past, but to-day what is the use of telling us that you can cure this problem by asking Jarrow to advertise its virtues for some other industrial purpose, or by just skimming over all the problems that are involved in the movement of industry and trying to move men from one part of the country to another? There are all kinds of difficulties which reorganisation of the basic industries will reveal, but, if for the first time we can make a really sound calculation of what is the likely employing capacity of a reorganised coal industry, textile industry or iron and steel industry, it seems to me that for the first time we shall be in a position to devise a scientific policy for a remedy of the unemployment which we see startlingly revealed.

We have far too much to-day of large numbers of men who are returned as coal miners, boiler makers or the like who will never again find employment in those industries, and all this is covered over by the figures, which reveal, of course, great unemployment in particular industries but do not reveal the human problem involved in the fact that these large numbers of men can never get employment again in the industries to which they are nominally attached. The problems that may arise are enormous. We tried to deal in the Parliament of 1924–1929 with the de-rating method. That was one of the main purposes, the idea of attracting new industries to the older industrial settlements. It largely failed for two reasons, one because in modern conditions, power is so much more mobile than in the past. It is no longer so necessary to place light industries, at any rate, in near relation to coal. Secondly it failed because in the Southern area the importance of being near the market overcomes some of the advantages which the older industrial areas had.

It may be that a much stronger policy than advertising the virtues of a derelict shipyard as a place to put a gramophone factory will be required. After all, to-day there is an enormous wastage in the right of an individual manufacturer to put his plant in a rural area and then expect the community to erect schools and set up a water supply and have a housing system, and it may be, as we pursue this policy of reorganisation and the reorientation based on the knowledge that it reveals, that we shall have to take great powers in the hands of the State to direct in what localities and areas fresh industrial development will be allowed. There are all these difficulties which, if it were not a very late hour, one could deal with at considerable length.

While nobody feels more strongly than I the proud record of the Government in the last two and a-half years, and nobody claims more than I do that they have done in those years what no other Government could have done in laying firmly the foundations for progress, yet I am bound to say that I did not find—perhaps I have been too hopeful—in the speech either of the President of the Board of Trade or of the Minister of Labour that ringing lead to the nation for which I think the nation is looking. We who sit for industrial seats as supporters of the Government find ourselves in a somewhat difficult position. Rightly or wrongly, we look forward to the next election and know that on the record we are able to achieve and the policy we are able to devise will depend the fortunes of our party. We have great difficulties before us. We may be beaten by our opponents and co-ordinated out of our seats by our friends. The only thing I hope is that we shall not lose our seats by our own failure.

11.6 p.m.

Mr. MOLSON

I confess I heard the speech of the President of the Board of Trade with great disappointment. Apart from his defence of his own policy, which was not necessary for his supporters, there was the declaration on behalf of the Government that there was no need to do anything for the planning of industry. I agree if that means the direct interference of the Government but I hope it does not mean that he will be unwilling to follow the example of his namesake—as far as the Christian name is concerned—in the Government, in giving assistance to industry to organise itself. I do not agree with everything which has been done by the Minister of Agriculture, but I cannot help contrasting the fact that for reasons which appear to him to be good the Government are prepared to go on subsidising beet-sugar, which has so far exacted an unproductive expenditure of £40,000,000, with the fact that the President of the Board of Trade appears to be unable to obtain the funds necessary to carry out a positive policy, if not of the same kind, at any rate showing equal energy.

I was disappointed also with the speech of the Minister of Labour. I think it is perfectly true, as the right hon. Gentleman said, that the drift of industry from one part of the country to another is no new phenomenon, and I have no doubt there was great distress in the past when the textile industry drifted from Norfolk to Lancashire, and if purely economic forces are left to exert their influence I have no doubt that the population of the country will decline. The population of this country never began to increase rapidly until the time of the industrial revolution, and sooner or later, when the exports markets disappear, I take it the population will decline, but that can only be slowly and after a very painful period of readjustment. All our social services at present are tending to prevent that readjustment from taking place as automatically as it would be done, and the purpose of this Debate was to ask the Government if they did not feel that in the case of the hard core of unemployment, and undoubtedly in the depressed areas, the time has come when medical treatment is no longer adequate and something in the way of surgical treatment must be applied. Apparently the Government has no plan.

There is one point with regard to the future which has not been mentioned before. I should not like the Debate to conclude without one or two figures having been brought forward dealing with this aspect of the problem. There are now 150,000 boys and girls who are unemployed, 105,000 who are registered; and from this year onwards there will be great increases in the number of children leaving school. On 31st March of this year there will be 55,000 more children looking for jobs than were looking for jobs at this time last year. In 1935 the increase is going to be 115,000; in 1936, the increase will be 306,000, and in 1937 the increase will be 443,000. And that is not going to be spread evenly over the country. It is going to be concentrated in what are already congested areas. At present three-quarters of the juvenile unemployed are congregated in three Welsh counties, in six Northern English counties and in industrial Scotland. Therefore, I suggest that even with the problem as it is facing us to-day there is very little chance of the unemployed in the distressed areas being absorbed by any revival of industry of which there is any sign at the moment. During the next few years we are going to have this great influx of children leaving the schools and going into the labour market-to seek employment, so that in two or three years' time the problem is going to be far worse than it is now.

The speech of the Minister of Labour made one thing quite clear, as I understood him. One speaker at an earlier stage said there were only two alternatives, either to take the people in the distressed areas to jobs, or to take jobs to the people in the distressed areas. I understood the Minister definitely to express the view that nothing could profitably be done by the Government to encourage industries to go into the distressed areas, and that what we must rely upon is the drift, either natural or artificial, of people from the distressed areas into other parts of the country as industry revives.

I am not sure that it is possible to do anything to encourage any industries to set up in the depressed areas. The reason for the drift South is fairly well recognised. First of all there is proximity to London, the great pleasantness of the surroundings for both employers and employed, the attraction of the "green field" as a site for a new factory and also the burden of the rates, although that has been very much diminished by the De-rating Act. On the other hand, I hope that the Government will not altogether dismiss from their consideration the possibility of trying to encourage industries to go to the depressed areas. I raised this matter two years ago on the 14th April, 1932, when I was able to quote a figure by Mr. Raymond Unwin, who estimated that the capital cost of transporting one industrial worker into an agricultural area and establishing him there was somewhere in the neighbourhood of £450, apart from the cost of the factory. That is simply the cost to the local authority and the State for the housing and rates and the various amenities that are necessary.

We have had three Ministers present to-day during a great part of this Debate, and we are deeply grateful to them for being here. What struck me was that all three of them regarded this matter from different points of view. There is the President of the Board of Trade, whose job it is to try to bring industrial activity back to this country; there is the Minister of Labour whose task is to administer the Unemployment Insurance Acts; and there is the Minister of Health whose job it is to pick up the final casualties in the industrial system. Just as the Minister of Labour has decided to supersede the old Poor Law as far as the able-bodied unemployed are concerned and to administer it from the centre, in order to be able to get a more comprehensive view of the whole problem, so I hope it will be possible, following the suggestion of the leading article in the "Times," to try to co-ordinate as far as these particular areas are concerned, the various activities represented in this House by those three Ministers who have been on the Front Bench today.

As industry becomes more concentrated, so the problem of the permanent core of unemployment will become worse. The Minister to-day referred to the core of unemployment as being purely regional. It is not purely regional. Even in coalmining areas like Doncaster which are not depressed there is gradually emerging now the problem of the miner who is unemployed and is perhaps 45 years of age, and who has no prospect of getting back to work again. This problem is only partly regional. It is partly occupational and partly a question of age. I hope that the Government will be prepared to consider the matter in all its aspects, and that the fact that they were not able to come forward with any very great and definite proposals this afternoon does not mean to say that they have given up all hope of anything better than a policy of drift.

Question put, and agreed to.

Bill read the Third time, and passed.

The remaining Orders were read, and postponed.

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1. ADJOURNMENT. 16 words